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 Summary (G.R. No. 154155)

Background and Case Development

On April 17, 1985, Isidro Co arrived at Manila International Airport aboard Philippine Airlines Flight No. 107 from San Francisco, California, with nine pieces of checked-in luggage. Upon arrival, he successfully retrieved eight pieces but could not find the ninth item, a Samsonite suitcase containing personal effects valued at approximately $1,243.01, plus additional items worth an estimated $500 to $600 from friends. Co reported the missing luggage to PAL's claims officer, Willy Guevarra, who filled out a Property Irregularity Report acknowledging the loss.

Following the incident and subsequent unfruitful attempts to resolve the issue directly with the airline, Co escalated the matter through a formal demand letter sent on April 15, 1985, urging PAL to make amends, which met with no effective response. Co subsequently filed a complaint against the airline for damages on May 3, 1985.

Ruling of the Regional Trial Court

The Regional Trial Court of Pasay City ruled in favor of Co on June 3, 1986, determining that the airline had not fulfilled its obligations regarding the safeguarding of Co's luggage. The court awarded Co a total of P72,766.02, which included actual damages, exemplary damages, and attorney's fees.

Court of Appeals Decision

The Court of Appeals upheld the Regional Trial Court's decision, rejecting the airline's arguments that the retrieval report was fabricated and that the limits set forth in the Warsaw Convention regarding liability for lost luggage should apply. The appellate court found that substantial evidence supported Co's complaint and that PAL had failed to establish the necessary diligence in safeguarding the luggage.

Legal Arguments and Analysis

In its petition for review, Philippine Airlines argued three primary points: the legitimacy of the baggage retrieval report, the applicability of the limits of liability under the Warsaw Convention, and the appropriateness of the damage awards. The Supreme Court noted that factual determinations made by the lower courts generally remain unreviewable unless extraordinary circumstances arise. The Court also reaffirmed that Philippine laws govern the liability of common carriers concerning lost luggage, specifically citing provisions from the New Civil Code that emphasize the responsibility placed upon common carriers to exercise extraordin

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