Case Summary (G.R. No. 185891)
Factual Background: Bookings, Travel and the Alleged Cancellation
In March 1997 Sampaguita Travel made reservations and issued four round-trip Cathay Pacific tickets (Manila–Hong Kong–Adelaide–Hong Kong–Manila) for the Reyes family. Record locators/PNRs were generated in various permutations. The party flew to Adelaide on 12 April 1997 without incident. One week before the scheduled return, Wilfredo reconfirmed the return reservation with Cathay Pacific in Adelaide and was told the reservation remained “okay as scheduled.” On the scheduled return date the check‑in counter purportedly advised that only Sixta Lapuz had a confirmed reservation. The family was allowed to depart Adelaide for Hong Kong, but in Hong Kong only Sixta was admitted onto the Hong Kong–Manila flight allegedly because the flight was fully booked. The remaining family members were flown to Manila on the next day’s flight. Wilfredo reported the incident to Sampaguita Travel and later, through counsel, the respondents demanded damages from Cathay Pacific; suit followed.
Parties’ Positions on Liability and Reservation Records
Cathay Pacific asserted that its computerized system reflected multiple and confusing PNRs created by Sampaguita Travel (and some entries from Rajah Travel), and that certain return sectors were not ticketed or confirmed (e.g., Wilfredo’s PNR lacked a valid ticket number within the prescribed period and thus was subject to cancellation; the PNRs for Juanita and Michael allegedly did not exist in its system). Cathay Pacific claimed it accommodated the respondents where possible and blamed Sampaguita Travel for the confusion, pleading a cross‑claim. Sampaguita Travel maintained it secured confirmations from Cathay Pacific and issued tickets only after confirmation, denied causing cancellation, characterized its relationship with respondents as one for services (booking/ticketing), and filed cross‑claims and counterclaims.
Stipulated Facts at Pre‑trial
The parties stipulated, among other matters, that respondents did not deal directly with Cathay Pacific or obtain tickets directly from it; Cathay Pacific replied promptly to communications; the tickets enabled departure from Manila to Adelaide; the respondents’ failure to board the return flight (except Sixta) was allegedly due to Cathay Pacific’s cancellation at Adelaide; multiple PNRs were created by Sampaguita Travel; travel agents act as booking/sales/ticketing arms and do not control airline operations; reconfirmation is typically done directly with the airline; cancellation of flights is within airline control unless initiated by the agent at passenger request; and Cathay Pacific had advertised that reconfirmation was generally unnecessary, though it qualified the statement in some cases.
RTC Findings and Disposition
The RTC found that respondents held valid tickets enabling outbound travel but did not have confirmed reservations for their return flights; Sampaguita Travel’s multiple PNRs contributed to confusion. The RTC concluded there was no basis to establish liability for Cathay Pacific or Sampaguita Travel because the cancellations were not shown to be without justified reason, and respondents’ claims for damages were unsubstantiated. Accordingly, the RTC dismissed the complaint and the counter/cross claims.
Court of Appeals Decision
The CA reversed in part and awarded P25,000.00 each in nominal damages to three respondents (Wilfredo, Juanita, Michael), dismissed the claim of Sixta for lack of cause of action, and denied awards of actual, moral, exemplary damages and attorney’s fees. The CA reasoned that: (1) the issued tickets constitute a written contract of carriage and create an expectation of carriage on the specified flights; (2) refusal to transport passengers on the date on their tickets amounted to a breach of the contract of carriage even if subsequent accommodation occurred; (3) Sampaguita Travel’s contractual relation with respondents was a contract for services, subject to the diligence of a reasonably prudent person (good father of a family standard), and the travel agency’s lapses in handling PNRs and ticket numbers evidenced negligence; (4) respondents failed to prove actual damages with competent evidence and thus were not entitled to compensatory damages; (5) moral and exemplary damages were not warranted because Cathay Pacific’s conduct was not shown to be fraudulent, wanton or in bad faith; (6) nominal damages were appropriate to vindicate the respondents’ rights for the technical injury and delay experienced; and (7) Cathay Pacific and Sampaguita Travel were jointly and solidarily liable for the nominal awards.
Supreme Court Analysis and Legal Reasoning
The Supreme Court affirmed the CA’s disposition with a modification as to Sampaguita Travel’s solidary liability. Key analytical points:
- Cause of action and standing: Sixta had no cause of action against either defendant because her rights as a ticketed passenger were not violated—she completed her travel as ticketed.
- Contract of carriage: The Court reiterated that an airline ticket is a written contract of carriage (common carrier under Article 1732), creating an expectation that a passenger holding a confirmed ticket will be carried on the flight and date specified; denial to board on that basis can constitute breach even if the passenger is later accommodated.
- Contract for services and standard of care: Sampaguita Travel’s role was contractual for services (booking/ticketing) and governed by the ordinary standard of diligence (Article 1173). Evidence of incorrect or cancelled ticket numbers and multiple PNRs supported a finding of negligence by the travel agent.
- Proof of damages: The Court applied the rule that actual damages must be proven with reasonable certainty and competent evidence (receipts, documentary proof). Responden
Case Syllabus (G.R. No. 185891)
Case Citation and Court
- Supreme Court of the Philippines, Second Division; G.R. No. 185891.
- Reported at 712 Phil. 398.
- Decision promulgated June 26, 2013.
- Decision penned by Justice Perez; concurred in by Carpio (Chairperson), Brion, DeL Castillo, and Perlas-Bernabe, JJ.
- The petition assails: (a) the Court of Appeals Decision dated 22 October 2008 in CA‑G.R. CV No. 86156; and (b) the Court of Appeals Resolution dated 6 January 2009.
Parties and Nature of the Case
- Petitioner: Cathay Pacific Airways (Cathay Pacific).
- Respondents/Plaintiffs below: Juanita Reyes, Wilfredo (Wilfi) Reyes, Michael Roy Reyes, Sixta Lapuz (Sixta), and Sampaguita Travel Corporation (joined as respondent in the petition).
- Nature of suit: Complaint for damages filed by respondents against Cathay Pacific and Sampaguita Travel, arising from an alleged cancellation/refusal to honor return flight bookings — essentially a breach of contract of carriage claim against the airline and a claim in negligence (contract for services) against the travel agent.
Factual Background — Reservations, Tickets, and Travel
- Travel reservation made by respondent Wilfredo Reyes with Sampaguita Travel for a family round-trip Manila–Hong Kong–Adelaide–Hong Kong–Manila, travel period 12 April 1997 to 4 May 1997.
- Sampaguita Travel issued four Cathay Pacific round‑trip airplane tickets for the Manila–HongKong–Adelaide–HongKong–Manila itinerary.
- Record locators / PNRs associated in the source material:
- Reyes, Wilfredo — J76TH
- Reyes, Juanita — HDWC3
- Reyes, Michael Roy — H9VZF
- Lapuz, Sixta — HTFMG
- Outbound travel (12 April 1997) proceeded without incident: Wilfredo, Juanita, Michael, and Sixta flew to Adelaide.
- One week prior to scheduled return, Wilfredo reconfirmed the family’s return flight with Cathay Pacific office in Adelaide and was told the reservation was "still okay as scheduled."
- On the day of departure from Adelaide:
- At Adelaide check‑in counter, Wilfredo was told they did not have confirmed reservations; only Sixta’s booking was confirmed.
- Due to Wilfredo’s pleas, all four were allowed to board the Adelaide–Hong Kong flight.
- At Hong Kong:
- The Reyeses were again informed of the problem.
- The Hong Kong–Manila flight was fully booked; only Sixta (whose booking was confirmed) was permitted to board to Manila.
- The Reyeses (Wilfredo, Juanita, Michael) were finally accommodated on the next day’s flight and returned to the Philippines after an overnight delay at the airport.
- Upon return to the Philippines, Wilfredo reported the incident to Sampaguita Travel and was informed Sampaguita claimed Cathay Pacific cancelled the bookings.
- On 16 June 1997 respondents, through counsel, demanded damages from Cathay Pacific. After exchanges and no resolution, respondents filed the Complaint for damages.
Pleadings, Claims and Relief Sought
- Plaintiffs/Respondents prayed for:
- P1,000,000.00 as moral damages;
- P300,000.00 as actual damages;
- P100,000.00 as exemplary damages;
- P100,000.00 as attorney’s fees.
- Cathay Pacific’s Answer:
- Alleged confusion and multiple/conflicting bookings made through two travel agencies — Sampaguita Travel and Rajah Travel Corporation — as reflected in various PNRs.
- Listed PNRs appearing on its system: H9V15, HTFMG, J9R6E, J76TH, and H9VSE and provided detailed descriptions of these PNRs and their booking/ticketing histories.
- Specifically alleged: Wilfredo’s J76TH lacked a valid ticket number input within prescribed period (no ticket sold), thereby justifying cancellation; HDWC3 and HTFMG for Juanita and Michael did not exist on its system.
- Cross‑claimed against Sampaguita Travel; counterclaimed for attorney’s fees.
- Sampaguita Travel’s Answer:
- Denied causing cancellation; maintained it made necessary reservations and issued tickets after confirmation by Cathay Pacific.
- Explained respondents had two PNRs each because confirmations were made one flight segment at a time.
- PNRs Sampaguita identified as covering confirmed bookings included: H9V15 / J76TH (Lapuz), H9V15 / HDWC3 (Wilfredo), H9V15 / H9VZF (Michael Roy), HTFMG (Juanita).
- Asserted it acted only as booking/sales/ticketing arm; filed cross‑claim against Cathay Pacific and counterclaim for damages.
Stipulation of Facts at Pre‑Trial
- Agreed facts between parties included:
- Plaintiffs did not deal or make bookings directly with Cathay Pacific, nor obtain tickets directly from Cathay Pacific.
- Cathay Pacific promptly replied to all communications sent by plaintiffs through counsel.
- Plane tickets issued to plaintiffs were valid, permitting departure from Manila to Adelaide; plaintiffs’ inability to board the return flight was due to alleged cancellation by Cathay Pacific at Adelaide, except for Sixta whose booking was confirmed.
- Several reservations and bookings were made by Sampaguita Travel through the computer reservation system; each such request generated a PNR.
- Sampaguita Travel, as travel agent, acts as booking/sales/ticketing arm and has no participation, control, or authority in airline operations.
- Reconfirmation practice is typically done directly with airline, not travel agent.
- Cancellation of flights is within airline control unless passengers request agent to cancel.
- Cathay Pacific advertised that passengers need not reconfirm their flight, though it qualified that reconfirmation may be necessary in some cases.
Trial Court (RTC) Disposition and Findings
- Regional Trial Court rendered judgment dismissing plaintiffs’ complaint for lack of merit; dismissed defendants’ counterclaims and cross‑claims likewise.
- RTC findings:
- Respondents possessed valid tickets but did not have confirmed reservations for return trip to Manila.
- Multiple PNRs opened by Sampaguita Travel created confusion in bookings.
- No basis to establish liability on part of either Cathay Pacific or Sampaguita Travel because cancellation was not without justified reason.
- Claims for damages were denied for lack of substantiation.
Court of Appeals Ruling
- The Court of Appeals reversed in part and ordered Cathay Pacific to pay P25,000.00 each to respondents as nominal damages (the decision covered three of the four Reyeses; Sixta’s claim later found to lack cause of action).
- Sampaguita Travel’s liability as to nominal damages was addressed on appeal (see Supreme Court modification below).
- Cathay Pacific’s motion for reconsideration at the CA was denied, prompting the petition to the Supreme Court.
Issues Assigned by Petitioner in the Supreme Court Petition
- Cathay Pacific contended that the Court of Appeals committed errors, framed as: A. Whether CA erred in holding Cathay Pacific liable for nominal damages despite