Case Summary (G.R. No. 185891)
Key Dates
– March 1997: Travel reservation made
– April 12, 1997: Departure from Manila to Adelaide via Hong Kong
– May 4, 1997: Scheduled return flight from Adelaide to Manila
– June 16, 1997: Demand letter for damages sent by respondents
– October 22, 2008: Court of Appeals decision
– June 26, 2013: Supreme Court decision
Applicable Law
– 1987 Constitution of the Philippines
– Civil Code of the Philippines (Articles 1173, 1370, 1732, 2194, 2220, 2221)
– Rules of Court, Rule 130, Section 9 (parol evidence rule)
Factual Background
Respondent Wilfredo Reyes booked round‐trip tickets for himself, his wife, son, and mother‐in‐law through Sampaguita Travel. Four Cathay Pacific tickets were issued covering Manila–Hong Kong–Adelaide outbound and return segments. Outbound travel on April 12, 1997 proceeded without incident. One week before their return, Wilfredo reconfirmed the booking in Adelaide and was told it remained “OK as scheduled.” On May 4 the family presented for check-in but only Sixta Lapuz’s reservation was confirmed; the others were said to be unconfirmed. Pressed to board the Adelaide–Hong Kong flight, all four were allowed to embark. In Hong Kong, only Sixta could continue to Manila on the fully booked flight. The remaining three returned to the Philippines the next day on the next available flight.
Procedural History
Respondents filed suit against Cathay Pacific and Sampaguita Travel for actual, moral, exemplary damages and attorney’s fees. The Regional Trial Court dismissed the complaint and all cross-claims and counterclaims for lack of merit. On appeal, the Court of Appeals awarded each of the four passengers nominal damages of ₱25,000. Cathay Pacific sought review before the Supreme Court.
Issues
- Whether Cathay Pacific breached its contract of carriage and thus was liable for nominal damages.
- Whether the Court of Appeals relied on unproved matters.
- Whether Sampaguita Travel should be held liable for the booking errors.
- Proper quantum of nominal damages and application of stare decisis.
Contract of Carriage and Breach
Upon issuance of a ticket confirming flight segments, a binding contract of carriage arises (Civil Code Art. 1732). Respondents held valid, confirmed tickets for both outbound and return flights. Despite reconfirmation assurances, Cathay Pacific refused to honor three return reservations in Hong Kong. The initial refusal constituted a breach of contract of carriage, even though respondents were ultimately transported the following day.
Contract for Services and Agency Negligence
The relationship between respondents and Sampaguita Travel was a contract for services. Under Civil Code Article 1173, the agency owed the diligence of a “good father of a family.” Cathay Pacific’s booking records showed Sampaguita Travel failed to input or maintain correct ticket numbers and allegedly created fictitious bookings. This negligence rendered the agency liable for damages arising from its failure to secure and maintain confirmed reservations.
Proof of Damages
Actual Damages: Respondents offered no competent evidence (receipts, contracts) to establish pecuniary loss with reasonable certainty; Wilfredo’s alleged ₱300,000 loss was corporate, not personal.
Moral and Exemplary Damages: These require proof of bad faith or malice (Civil Code Arts. 2220, 2221). Cathay Pacific promptly informed passengers of booking issues, accommodated them where possible, and addressed their complaints in writing. No evidence of fraud, wantonness, or malice justified moral or exemplary damages.
Nominal Damages
Nominal damages vindicate a technical breach in the absence of proven actual loss (Civi
...continue readingCase Syllabus (G.R. No. 185891)
Procedural History
- Respondents filed a complaint for damages against Cathay Pacific Airways and Sampaguita Travel Corp. after their return flight bookings were allegedly cancelled.
- The Regional Trial Court dismissed the complaint and all counterclaims and cross-claims for lack of merit.
- On appeal, the Court of Appeals awarded P25,000.00 nominal damages to each respondent except Sixta Lapuz.
- Cathay Pacific petitioned the Supreme Court for review, assailing the award of nominal damages and arguing lack of fault.
Facts
- In March 1997, Wilfredo Reyes booked a family trip (four passengers) to Adelaide via Sampaguita Travel and paid for round-trip tickets Manila-Hong Kong-Adelaide-Hong Kong-Manila.
- Sampaguita Travel issued four Cathay Pacific tickets with record locators J76TH (Wilfredo), HDWC3 (Juanita), H9VZF (Michael), HTFMG (Sixta).
- Outbound flight on 12 April 1997 proceeded without incident. One week before return, Wilfredo reconfirmed with Cathay Pacific in Adelaide and was told “still okay as scheduled.”
- On 4 May, at Adelaide check-in, only Sixta’s reservation was confirmed; the others were uncategorized. Wilfredo pleaded and the family boarded to Hong Kong.
- In Hong Kong, the three (Wilfredo, Juanita, Michael) were denied boarding on the fully booked flight to Manila; Sixta boarded. The three flew home the next day.
- Wilfredo reported to Sampaguita Travel, which blamed Cathay Pacific for cancellation; a demand letter was sent on 16 June 1997.
Contentions of Cathay Pacific and Sampaguita Travel
- Cathay Pacific: Booking confusion arose from multiple PNRs generated by Sampaguita Travel and Rajah Travel; no valid ticket was input for Wilfredo’s return seat, and Juanita’s and Michael’s records did not exist in its system. It insisted cancellations were justified.
- Sampaguita Travel: It secured confirmed bookings and issued tickets only after confirmation; held itself merely as agent;