Case Summary (G.R. No. L-28773)
Procedural History and Issues on Appeal
Both parties filed appeals contesting the trial court’s judgment which awarded Ortigas:
- ₱100,000 moral damages,
- ₱30,000 exemplary damages,
- ₱20,000 attorney’s fees and costs.
The main issues raised:
- Defendant (Lufthansa) argued that it was denied due process due to the trial court’s denial of its last motion for postponement, the striking out of its witness’ testimony (Ivo Lazzari), and the excessiveness of the damage awards.
- Plaintiff (Ortigas) contended the damages awarded were insufficient.
- Secondary issue: Whether Lufthansa was wrong in failing to provide first class accommodation on a confirmed and validated first class ticket, aggravated by discriminatory conduct.
Extensive Trial Proceedings and Postponements
- The case was filed in December 1963, with a trial period extending to September 1966.
- There were 24 scheduled hearings, many postponed. Postponements were caused by:
- Plaintiff's motion (for business reasons including travel and counsel availability),
- Joint motions for settlement negotiations,
- Defendant’s counsel’s repeated requests due to preparation, unavailability, and witnesses’ reluctance.
- The trial court repeatedly warned defendant’s counsel that further postponements would not be granted (labeled "last time" or "definitely last time").
- Defendant’s witnesses from Rome and Hongkong attended prior hearings, but on September 28, 1966, they failed to appear, and defendant sought postponement with an unsubstantiated motion citing that the witnesses could not come.
Denial of Defendant’s Motion to Postpone September 28, 1966 Hearing
- The trial judge denied the motion for postponement due to lack of specific reasons and repeated delays over a proceeding pending almost three years.
- Defendant’s counsel failed to give a valid explanation on the date of hearing despite the motion filed four days before.
- Defendant’s position was that airline employees had to assume additional duties due to leave of other personnel, making their attendance impossible without disrupting public service.
- Plaintiff opposed, describing the reasons as insufficient and alleging that the witnesses purposely avoided inconvenience of traveling to Manila.
- The trial court’s denial was upheld as a proper exercise of discretion considering the history and circumstances.
Striking Out the Testimony of Witness Ivo Lazzari
- After denial of postponement, the plaintiff moved to strike Lazzari’s incomplete testimony, since cross-examination was unfinished due to witness absence.
- Defendant did not effectively oppose this motion after verifying cross-examination was incomplete.
- The court granted the motion, and the case was deemed submitted for decision based on evidence presented.
- This was a logical procedural consequence of denying postponement and was found not to be a grave abuse of discretion.
- The right to cross-examine witnesses fully is indispensable in civil cases and due process under the Constitution, and failure to complete cross-examination due to party fault renders the incomplete testimony incompetent.
Contractual Breach and Discriminatory Conduct Facts
- Ortigas bought a first class Pan American ticket and subsequently changed it to TWA with first class confirmed from New York to Hongkong via Rome.
- The Alitalia office in Rome, under airline pooling arrangements governed by IATA regulations, validated and confirmed his first class reservation on Lufthansa flight LH 646 at the Rome airport for November 18, 1963.
- Ortigas was present at check-in, luggage accepted, and instructed to be at the terminal.
- However, on the day of flight at the Lufthansa counter, he was told there was no first class space and his seat was assigned to a Belgian passenger.
- Despite Ortigas’ protests and requests for other accommodations or airline alternatives, the airline’s employees refused proper assistance and insisted he take economy class, promising first class transfer at subsequent stops which were not honored.
- This treatment humiliated and embarrassed Ortigas, caused him stress exacerbating his heart condition, and was done after Lufthansa personnel examined his Filipino passport and still preferred a Caucasian passenger over him without any lawful basis.
- Ortigas’ repeated complaints to Lufthansa offices at intermediate stops were ignored; only at Bangkok was he offered a first class seat, which he declined in protest.
Legal Analysis on Liability of Lufthansa
- The Court found a valid, binding contract existed between Lufthansa and Ortigas for first class carriage, breached willfully by Lufthansa.
- The breach was aggravated by bad faith, deception, and discriminatory conduct:
- Confirmed reservation was wilfully disregarded,
- False assurances were made to Ortigas to maintain him as passenger,
- The airline favored a European passenger despite Ortigas’ first class pay and confirmed ticket,
- The discriminatory conduct was based on nationality/race, damaging Ortigas' dignity.
- The Court reinforced that common carriers have a strict duty to carry passengers as per contract and the utmost obligation to avoid discrimination against Filipino passengers.
- The discriminatory acts violated Philippine public policy and justified damages both moral and exemplary under Articles 2217 and 2220 of the Civil Code.
Precedent Cases on Moral and Exemplary Damages
- Northwest Airlines v. Cuenca: Award of damages for being forcibly downgraded to tourist class after boarding with a first class ticket.
- Lopez v. Pan American World Airways: Similar breach and bad faith in airline's failure to notify cancellation and forced downgrade.
- Air France v. Carrascoso: Bad faith in forcibly ejecting first class passenger in favor of a white man lacking better right; moral damages affirmed.
- These cases support Ortigas’ claims for damages arising from contract breach coupled with bad faith and discrimination.
Assessment and Modification of Damage Awards
- Trial court awarded ₱100,000 moral damages and ₱30,000 exemplary damages.
- The Supreme Court reviewed evidence and increased moral damages to ₱150,000:
- Due to the repeated breaches at multiple flight stops (Rome, Cairo, Dharham, Calcutta),
- Ortigas’ personal status and heart ailment increasing his suffering,
- Comparison with precedent damage awards where lower sums were awarded for isolated incidents.
- Exemplary damages were increased to ₱100,000 to serve as an effective deterrent against racial discrimination and breach of contract by airlines.
- Attorney’s fees award of ₱20,000 and legal interest were affirmed.
On Due Process and the Denial of Postponements
- The trial court’s denial of defendant’s motion to postpone and the striking out of evidence did not constitute a grave abuse of discretion.
- Defendant’s failure to timely and adequately explain w
Case Syllabus (G.R. No. L-28773)
Procedural History and Parties’ Appeals
- This case involves direct appeals from both plaintiff Francisco Ortigas, Jr., and defendant Lufthansa German Airlines, arising from a decision of the Court of First Instance of Manila.
- The trial court condemned defendant to pay plaintiff ₱100,000 as moral damages, ₱30,000 as exemplary damages, interest on both sums from the commencement of the suit, ₱20,000 as attorney's fees, and costs.
- Plaintiff claimed the damages awarded were insufficient, while defendant contended that it was denied its full day in court and contested the amounts awarded.
- Defendant’s appeal focused primarily on three alleged errors: denial of its motion for postponement on September 24, 1966; the striking out of testimony of its witness Ivo Lazzari, and the damage awards.
- Plaintiff’s single ground for appeal was that the damages awarded were less than entitled.
- The central issue among both appeals was the amount of damages awarded.
Trial Proceedings and History of Postponements
- The complaint was filed on December 24, 1963; after a pretrial and partial stipulation of facts, trial hearings began.
- The case was set for hearing on twenty-four occasions from April 27, 1964, until September 28, 1966, including one cancellation due to the trial judge's illness on August 25, 1966.
- Postponements occurred at the instance of both parties:
- Plaintiff moved and obtained postponements three times, supported by defendant’s consent, due to urgent business and counsel unavailability.
- Four postponements were agreed upon jointly, primarily to allow negotiations for settlement.
- Defendant moved for or caused at least ten postponements because of counsel’s absence, witness availability, or preparation needs, often with court indulgence.
- The trial court imposed warnings forbidding further postponements due to repeated delays.
- Despite ample warnings, defendant sought a postponement on September 24, 1966, alleging its witnesses from Rome could not attend the September 28, 1966 hearing.
Denial of Defendant’s Motion for Postponement and Trial Court’s Actions
- Defendant’s motion for postponement lacked a detailed explanation for the witnesses’ unavailability and was opposed by plaintiff.
- Trial court denied the motion on September 27, 1966, stating no reason was shown for witness absence.
- Defendant’s counsel orally moved for reconsideration on September 28, 1966, without specific reasons, which was promptly denied.
- Plaintiff then moved to strike the testimony of defendant’s only witness, Ivo Lazzari, citing incomplete cross-examination due to absence.
- The trial court granted the motion, struck Lazzari's testimony from the record, and declared the case submitted for decision.
- Defendant filed a written motion for reconsideration on October 19, 1966, attaching telegrams and letters explaining the absence of their witnesses due to extraordinary workload and personnel shortages.
- Plaintiff opposed the motion citing lack of proper verification, hearsay basis of defendant’s claims, and bad faith in deliberately avoiding trial.
- Trial court resolved to deny defendant’s motion for reconsideration as well.
Consideration of Defendant’s Claim of Being Denied its Full Day in Court
- Defendant contended that denying the postponement and striking out of unfinished testimony constituted grave abuse of discretion.
- Examination of the lengthy trial history demonstrated that the case had been pending for about three years with numerous postponements, many attributable to defendant.
- There was ample time for defendant to have ensured availability of witnesses; claim that witnesses could not attend due to workload was rejected as untenable and lacking diligence.
- The court held that absence of witnesses on its own does not justify postponement unless supported by affidavit evidencing materiality and due diligence, per Rule 22, Section 4.
- Striking out Lazzari’s testimony was a consequential and proper action after denial of postponement, as cross-examination was left incomplete due to defendant’s own failure.
- The right to full cross-examination in civil cases is inviolable and incomplete testimony due to party’s fault is incompetent.
Facts Surrounding the Breach of Contract by Defendant (Lufthansa)
- Ortigas, a Filipino passenger holding a first class validated and confirmed ticket, was denied first class accommodation by Lufth