G.R. No. 222428 - Coca-Cola Bottlers Philippines, Inc. vs. Commissioner of Internal Revenue

On 2 August 1976, petitioner Philippine Airlines, Inc. (PAL) operated Flight 477 from Cebu to Ozamiz City with a routing of Cebu-Ozamiz-Cotabato.
Private respondent Pedro Zapatos was one of 21 passengers on this flight.
About fifteen minutes before landing at Ozamiz, the pilot received a radio message that the Ozamiz airport was closed due to inclement weather and was instructed to proceed to Cotabato City instead.
Upon arrival at Cotabato, the PAL Station Agent offered the passengers three options:

Flight 560 was to stop over in Cebu, but only six seats were available due to confirmed passengers. Priority for these seats was determined by check-in sequence at Cebu. Zapatos checked in as passenger No. 9, thus not entitled to priority.

Zapatos opted to return to Cebu but was denied accommodation on Flight 560.
He insisted on getting priority over confirmed passengers but was refused on the grounds of force majeure (weather-related airport closure).
He attempted to stop the departure of Flight 560 to retrieve his personal belongings (including a camera valued at ₱2,000), but PAL personnel ignored his plea.
PAL issued him a free ticket to Iligan City, which Zapatos accepted under protest.
Zapatos was left stranded at Cotabato airport without transportation, food, or accommodation despite the ongoing conflict with Muslim rebels nearby.
He eventually purchased a ticket to Iligan City himself and hired a car to reach Ozamiz City via crossing the bay in a launch. His personal effects were never recovered.

PAL denied unjustifiably refusing accommodation, explaining the lack of seats and adherence to priority rules based on check-in sequence in Cebu.
It justified the diversion as a force majeure due to inclement weather affecting safety.
The trial court ruled in favor of Zapatos, awarding:

Actual damages ₱200 (transportation, food, accommodation), ₱48 (fare from Cotabato to Iligan), ₱500 (transport from Iligan to Ozamiz), and ₱5,000 for loss of business opportunities;
Moral damages ₱50,000 for mental anguish and discourteous treatment;
Exemplary damages ₱10,000;
Attorney’s fees ₱3,000; and costs.

The Intermediate Appellate Court (now Court of Appeals) affirmed the trial court’s decision.
PAL filed a petition for review before the Supreme Court raising:

Whether the Court of Appeals can find PAL negligent on a substantive question not raised or proven at trial;
Whether the awards of actual and moral damages were contrary to evidence and jurisprudence.

Whether PAL can be held liable for negligence and damages on a matter neither raised in the complaint nor proven at trial.
Whether the Court of Appeals erred in awarding actual and moral damages despite the evidence and established legal principles.
Whether PAL’s responsibility in the contract of carriage extends to caring for passenger comfort and convenience during forced diversions caused by fortuitous events.
Whether the award of moral, exemplary, and actual damages was justified and reasonable under the circumstances.