Case Digest (G.R. No. 126102)
Facts:
Lufthansa German Airlines v. Court of Appeals and Don M. Ferry, G.R. No. 108997, April 21, 1995, Supreme Court Second Division, Narvasa, C.J., writing for the Court.
Petitioner Lufthansa German Airlines sold private respondent Don M. Ferry a first-class, open-dated ticket on 16 May 1985 for travel San Francisco/New York/Paris/Frankfurt/Manila. The ticket did not show a carrier for the San Francisco–New York leg but bore the letters “LH” for the Paris/Frankfurt/Manila portion, indicating Lufthansa for those legs. Ferry sought endorsement in San Francisco on 3 June 1985 so he could use Trans World Airlines (TWA) for the San Francisco–New York segment; Lufthansa’s San Francisco agent, Mrs. Ingrid Egger, told him no endorsement was necessary for that segment and explained the endorsement procedure if he sought a different routing. Ferry then requested a different routing omitting New York/Paris; Egger wrote “LH only” in the restriction box to reflect the new routing.
Ferry later booked, through Baden‑Baden GmbH (a Lufthansa‑appointed travel agent), a Cathay Pacific (CPA) flight Frankfurt–Hong Kong–Manila for 12 June 1985. At Frankfurt Airport on 12 June, the CPA agent said Lufthansa endorsement was required; Lufthansa ticket agent Petra Wilhelm told Ferry that, because of currency restrictions, authorization from Lufthansa’s Manila office was needed and that obtaining it would take time, which would prevent him boarding the CPA noon flight. Wilhelm rebooked Ferry on a Lufthansa flight to Bangkok and a Thai Airways connection to Manila that same afternoon; Ferry arrived in Manila the next day.
Ferry filed a complaint for breach of contract on 1 April 1986 in the Regional Trial Court (RTC) of Makati, Branch 145. Lufthansa answered and filed a compulsory counterclaim. On 25 July 1988 the RTC (Judge Job B. Madayag) awarded Ferry US$75,000 actual damages, US$75,000 moral damages, US$25,000 exemplary damages, US$25,000 attorney’s fees, interest from filing, and costs. The Court of Appeals, in CA‑G.R. No. 22494, affirmed the RTC’s judgment (Court of Appeals decision promulgated January 29, 1992 per the record). L...(Subscriber-Only)
Issues:
- Did the Court of Appeals err in affirming the trial court’s rejection of Lufthansa’s witnesses and in treating the trial court’s credibility findings as conclusive?
- Did Lufthansa breach its contract of carriage by refusing or failing to endorse Ferry’s ticket to Cathay Pacific and by thereby denying carriage for the Frankfurt–Manila portion?
- Was Lufthansa’s breach attended by bad faith or willful misconduct sufficient to justify awards of moral and exemplary damages?
- Were the RTC’s awards of US$75,000 actual damages for unrealized profits, US$75,000 moral damages, US$25,000 exemplary damages, US$2...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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