Title
Philippine Air Lines vs. Court of Appeals
Case
G.R. No. 92501
Decision Date
Mar 6, 1992
Passenger's luggage lost by PAL; court ruled airline negligent, awarded damages, and rejected Warsaw Convention limits due to bad faith.

Case Digest (G.R. No. 177927)
Expanded Legal Reasoning Model

Facts:

  • Incident and Circumstances Surrounding the Loss
    • On April 17, 1985, plaintiff Isidro Co, accompanied by his wife and son, arrived at Manila International Airport via Philippine Airlines’ Flight No. 107 from San Francisco, California.
    • Upon arriving at the baggage retrieval area, plaintiff claimed his nine checked-in pieces of luggage using the corresponding claim checks.
    • Plaintiff successfully located eight pieces of luggage but failed to locate the ninth piece, identified by claim check number 729113.
  • Initial Action and Documentation
    • Plaintiff immediately notified the defendant airline through its employee, Willy Guevarra, who was in charge of the PAL claim counter.
    • Willy Guevarra prepared and signed a Property Irregularity Report, a printed document acknowledging the missing luggage, and requested the plaintiff to sign the report as well.
    • As part of standard procedure, the officer collected all nine claim checks, including the one corresponding to the missing item.
  • Description and Valuation of the Lost Baggage
    • The lost item was a Samsonite suitcase, approximately 62 inches in length, valued at about US$200.00.
    • The suitcase contained various personal effects purchased by the plaintiff and his wife during their stay in the United States.
    • Additional items, brought into the suitcase as gifts from friends abroad, were estimated to be worth between US$500.00 and US$600.00, while invoices showed the value of personal effects at US$1,243.01.
  • Plaintiff’s Pursuit of a Remedy
    • After repeated personal visits and inquiries at the defendant’s office, the plaintiff’s dissatisfaction led him to secure legal counsel.
    • On April 15, 1985, plaintiff’s lawyer sent a demand letter via Rebecca V. Santos, manager of the Central Baggage Services, urging prompt resolution.
    • On April 17, 1985, Rebecca Santos replied acknowledging that the airline had been unable to locate the missing baggage and extended apologies for the inconvenience.
    • Despite the acknowledgment, the airline failed to locate the luggage or to render any payment compensating the loss.
  • Judicial Proceedings and Award
    • On May 3, 1985, noticing the airline's inaction, plaintiff filed a complaint seeking damages.
    • The Regional Trial Court of Pasay City found the defendant liable and rendered a judgment on June 3, 1986, awarding:
      • P42,766.02 by way of actual damages,
      • P20,000.00 by way of exemplary damages,
      • P10,000.00 as attorney’s fees,
      • Costs of the suit.
    • The Court of Appeals later affirmed the decision of the trial court in toto.
  • Petitioner’s (Airline’s) Grounds for Petition for Review
    • The airline contended that its retrieval baggage report was a fabrication.
    • It argued that the limits under the Warsaw Convention, which restrict liability for checked-in baggage to US$20.00 based on weight, should have been applied.
    • The petitioner also challenged the award of actual damages, exemplary damages, and attorney’s fees, asserting that these amounts were not substantiated under the applicable law.

Issues:

  • Authenticity and Probative Value of the Baggage Retrieval Report
    • Whether the airline’s retrieval report, which played a central role in contesting the claim, was a fabrication.
    • Whether the burden shifted to the airline to produce corroborative evidence proving the veracity of its report.
  • Application of the Warsaw Convention
    • Whether the limits of liability imposed by the Warsaw Convention, particularly the US$20.00 cap based on weight, should be applied in this case.
    • Whether the plaintiff’s failure to declare a higher value or pay additional charges before the flight invokes such limitation.
  • Assessment of Damages and Awarded Sums
    • Whether the trial court and appellate courts erred in awarding actual and exemplary damages, along with attorney’s fees, considering the factual findings.
    • Whether these awards are justified based on the evidence of negligence and bad faith on the part of the airline.
  • Reviewability of Factual Determinations
    • Whether the issues pertaining to the factual determinations by the lower courts are reviewable on a petition for review, given that they involve matters not clearly set forth as questions of law.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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