G.R. No. 212136, October 04, 2021
KLM ROYAL DUTCH AIRLINES, Petitioner, v. DR. JOSE M. TIONGCO, Respondent.
D E C I S I O N
Petitioner KLM Royal Dutch Airlines (petitioner/KLM) assails the April 10, 2013 Decision,1 and the March 27, 2014 Resolution2 of the Court of Appeals (CA/appellate court) in CA-G.R. CV No. 00884-MIN which affirmed with modifications the January 16, 2006 Decision3 of the Regional Trial Court (RTC/trial court), Branch 10 of Davao City.
The Antecedent Facts:
In October 1998, respondent Dr. Jose M. Tiongco (Dr. Tiongco), a prominent surgeon and one of the founders of the Medical Mission Group Hospital and Health Services in Davao City, was invited by the United Nations - World Health Organization (UN-WHO) to be a keynote speaker in the 20th Anniversary of Alma-Ata Declaration to be held in Almaty, Kazakhstan from November 27-28, 1998. Thus, Dr. Tiongco secured his visa for Kazakhstan and purchased tickets for his flights.4
There being no direct flight from Manila to Kazakhstan, Dr. Tiongco had to fly to Singapore via Singapore Airlines where he would then take two connecting flights to Almaty on board petitioner KLM, his main carrier. Below was his travel itinerary:5chanrobleslawlibrary
On November 25, 1998, Dr. Tiongco arrived at the Ninoy Aquino International Airport in Manila for the first leg of his two-day flight to Almaty. He went to the counter of Singapore Airlines and checked-in a suitcase containing a copy of his speech, resource materials, clothing for the event, and other personal items. Singapore Airlines departed from Manila as scheduled. Upon arrival in Singapore at 9:30 in the evening, Dr. Tiongco proceeded to the KLM counter to check in for his flight to Amsterdam, Netherlands. KLM flight no. KL838 departed at 11:35 in the evening as scheduled.6
DESTINATION AIRLINE FLIGHT DATE ETD ETA Manila-Singapore Singapore Airlines SQ75 Nov. 25, 1998 1800 2130 Singapore-Amsterdam KLM KL838 Nov. 25, 1998 2335 0600 Amsterdam-Frankfurt KLM KL1765 Nov. 26, 1998 0820 0935 Frankfurt-Almaty Lufthansa
LH3346 Nov. 26, 1998 1025 2205
Dr. Tiongco then boarded Lufthansa German Airlines (Lufthansa) from Frankfurt to Instanbul. As instructed, he approached a Turkish Airlines employee who introduced him to a certain Miss Chizem, an employee of Lufthansa who, in turn, gave Dr. Tiongco a new boarding pass. She also assured him that his checked-in suitcase will be transported in the same flight.10
DESTINATION AIRLINE FLIGHT DATE ETD ETA Frankfurt-Instanbul Lufthansa
LH3454 Nov. 26, 1998 1235 0435 Instanbul-Almaty Turkish Airlines TK1350 Nov. 26, 1998 1930 0439
Ruling of the Regional Trial Court:
WHEREFORE, this Court hereby sentences Defendant KLM to indemnify Plaintiff the following, to wit:KLM filed a Motion for Reconsideration36 but it was denied by the RTC in its Order37 dated May 30, 2006. Hence, KLM appealed to the CA.
1. Nominal Damages in the amount of P3,000,000.00;
2. Moral Damages in amount of P3,000,000.00;
3. Exemplary Damages in the amount of P5,000,000.00;
4. Attorney's Fees in the amount of P1,600,000.00.
Cost against Defendant KLM.35chanRoblesvirtualLawlibrary
WHEREFORE, the Appeal is PARTLY GRANTED. The Decision dated January 16, 2006 of the Regional Trial Court, Branch 10, Davao City, is AFFIRMED with MODIFICATION that KLM Royal Dutch Airlines shall pay Dr. Jose M. Tiongco the following:KLM sought for reconsideration40 but it was denied in the CA's Resolution41 dated March 27, 2014 for lack of merit.
1) The awards of moral damages, exemplary damages and nominal damages are hereby reduced to P1,000,000.00, P300,000.00 and P50,000.00, respectively;
2) All of these amounts shall earn interest at the rate of 6% per annum from January 16, 2006. Thereafter, the interest rate of 12% per annum shall be applied from the finality of this Decision until fully satisfied;
3) The award of attorney's fees shall be reduced to the amount equivalent to 20% of the total amount adjudged to Dr. Tiongco, and;
31. Whether or not there is legal basis to support the findings of the trial court and the CA that KLM's actions were attended by gross negligence, bad faith and willful misconduct to justify the award of moral and exemplary damages.In essence, the main issue for resolution is whether KLM acted in gross negligence, bad faith and willfull misconduct in relation to the loss of Dr. Tiongco's suitcase so that the latter can be entitled to award of damages.
32. Whether or not the CA committed reversible error when it ignored the fact that the trial court awarded attorney's fees in the dispositive portion of its decision only and did not explain the reason for its imposition in the body of the said decision.
33. The amounts awarded to respondent as moral and exemplary damages are excessive, unconscionable and unreasonable.43chanRoblesvirtualLawlibrary
The issues raised in the instant petition are factual in nature which are not subject to review under Rule 45 of the Rules of Court.
a. Rule 45 petition is limited to questions of lawHowever, the rule is not without exception. In Medina v. Asistio, Jr.,50 the findings of fact of the CA may be passed upon and reviewed by this Court in the following instances:chanroblesvirtualawlibrary
Before proceeding to the merits of the case, this Court deems it necessary to emphasize that a petition for review under Rule 45 is limited only to questions of law. Factual questions are not the proper subject of an appeal by certiorari. This Court will not review facts, as it is not our function to analyze or weigh all over again evidence already considered in the proceedings below. As held in Diokno v. Hon. Cacdac, a re-examination of factual findings is outside the province of a petition for review on certiorari to wit:chanroblesvirtualawlibraryIt is aphoristic that a re-examination of factual findings cannot be done through a petition for review on certiorari under Rule 45 of the Rules of Court because as earlier stated, this Court is not a trier of facts. xxx The Supreme Court is not duty-bound to analyze and weigh again the evidence considered in the proceedings below. This is already outside the province of the instant Petition for Certiorari.b. Rule 45 petition is limited to errors of the appellate court
There is a question of law when the doubt or difference arises as to what the law is on a certain set of facts; a question of fact, on the other hand, exists when the doubt or difference arises as to the truth or falsehood of the alleged facts. Unless the case falls under any of the recognized exceptions, we are limited solely to the review of legal questions.
Furthermore, the "errors" which we may review in a petition for review on certiorari are those of the CA, and not directly those of the trial court or the quasi-judicial agency, tribunal, or officer which rendered the decision in the first instance. It is imperative that we refrain from conducting further scrutiny of the findings of fact made by trial courts, lest we convert this Court into a trier of facts. As held in Reman Recio v. Heirs of the Spouses Agueda and Maria Altamirano etc. et al. our review is limited only to the errors of law committed by the appellate court, to wit:
Under Rule 45 of the Rules of Court, jurisdiction is generally limited to the review of errors of law committed by the appellate court. The Supreme Court is not obliged to review an over again the evidence which the parties adduced in the court a quo. Of course, the general rule admits of exceptions, such as where the factual findings of the CA and the trial court are conflicting or contradictory.49 (Citations Omitted.)
(1) When the conclusion is a finding grounded entirely on speculation, surmises or conjectures; (2) When the inference made is manifestly mistaken, absurd or impossible; (3) Where there is a grave abuse of discretion; (4) When the judgment is based on a misapprehension of facts; (5) When the findings of fact are conflicting: (6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) The findings of the Court of Appeals are contrary to those of the trial; (8) When the findings of fact are conclusions without citation of specific evidence on which they are based; (9) When the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondents; and (10) The finding of fact of the Court of Appeals is premised on the supposed absence of evidence and is contradicted by the evidence on record.51 (Citations omitted.)Upon careful perusal of the issues raised by KLM, the Court finds that these are factual in nature which is beyond our jurisdiction in a petition for review on certiorari. The arguments it posited in the petition are also noticeably similar to those raised before the CA. Thus, to give due course to the petition necessitates an evaluation all over again of the evidence presented by the parties which were already thoroughly reviewed by the RTC and the CA.
KLM is liable for breach of contract of carriage.
A contract of air carriage is a peculiar one. Imbued with public interest, common carriers are required by law to carry passengers safely as far a human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard for all the circumstances. A contract to transport passengers is quite different in kind and degree from any other contractual relation. And this is because its business is mainly with the traveling public. In invites people to avail of the comforts and advantages it offers. The contract of carriage, therefore, generates a relation attended with a public duty. Failure of the carrier to observe this high degree of care and extraordinary diligence renders it liable for any damage that may be sustained by its passengers.59chanRoblesvirtualLawlibraryConsidering that a contract of carriage is vested with public interest, a common carrier is presumed to have been at fault or to have acted negligently in case of lost or damaged goods unless they prove that they observed extraordinary diligence.60 Hence, in an action based on a breach of contract of carriage, the aggrieved party does not need to prove that the common carrier was at fault or was negligent.61 He or she is only required to prove the existence of the contract and its non-performance by the carrier.62
Bad faith on the part of KLM was duly established.
The awards of moral and exemplary damages are proper.
Article 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.Guided by the foregoing, the Court modifies the award of moral damages from P1,000,000.00 to P300,000.00 in favor of Dr. Tiongco pursuant to our pronouncement in Kierulf v. Court of Appeals67 that "[t]he social and financial standing of a claimant of moral damages may be considered in awarding moral damages only if he or she was subjected to contemptuous conduct despite the offender's knowledge of his or her social and financial standing."
KLM liable for temperate, not nominal, damages.
The [Warsaw] Convention does not operate as an exclusive enumeration of the instances of an airline's liability, or as an absolute limit of the extent of that liability. Such a proposition is not borne out by the language of the Convention, as this Court has now, and at an earlier time, pointed out. Moreover, slight reflection readily leads to the conclusion that it should be deemed a limit of liability only in those cases where the cause of the death or injury to person, or destruction, loss or damage to property or delay in its transport is not attributable to or attended by any willful misconduct, bad faith, recklessness, or otherwise improper conduct on the part of any official or employee for which the carrier is responsible, and there is otherwise no special or extraordinary form of resulting injury. The Convention's provisions, in short, do not "regulate or exclude liability for other breaches of contract by the carrier" or misconduct of its officers and employees, or for some particular or exceptional type of damage.75
Imposition of attorney's fees and legal interest was proper.
Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except:An award of attorney's fees under Article 2208 demands factual, legal, and equitable justification to avoid speculation and conjecture surrounding the grant thereof.79 It is therefore required for the courts to clearly and distinctly set forth in their decisions their factual findings for the basis of the award.80 The Court's pronouncement in Benedicto v. Villaflores81 elucidated the rationale on why courts must explain their decision for granting attorney's fees:chanroblesvirtualawlibrary
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
It is settled that the award of attorney's fees is the exception rather than the general rule; counsel's fees are not awarded every time a party prevails in a suit because of the policy that no premium should be placed on the right to litigate. Attorney's fees, as part of damages, are not necessarily equated to the amount paid by a litigant to a lawyer. In the ordinary sense, attorney's fees represent the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter; while in its extraordinary concept, they may be awarded by the court as indemnity for damages to be paid by the losing party to the prevailing party. Attorney's fees as part of damages are awarded only in the instance; specified in Article 2208 of the Civil Code. As such, it is necessary for the court to make findings of fact and law that would bring the case within the ambit of these enumerated instances to justify the grant of such award, and in all cases it must be reasonable.82chanRoblesvirtualLawlibraryThe Court agrees with KLM that the RTC failed to elaborate why Dr. Tiongco is entitled to the award of attorney's fees. Admittedly, it simply made a categorical statement that "other just and equitable reliefs were likewise prayed for by Plaintiff".83 The RTC then merely stated the amount thereof in the dispositive portion.
In any event, when petitioners interposed an appeal to the Court of Appeals, the appealed case was thereby thrown wide open for review by that court, which is thus necessarily empowered to come out with a judgment as it thinks would be a just determination of the controversy. Given this power, the appellate court has the authority to either affirm, reverse or modify the appealed decision of the trial court. To withhold from the appellate court its power to render an entirely new decision would violate its power of review and would, in effect, render it incapable of correcting patent errors committed by the lower courts.86chanRoblesvirtualLawlibraryIn Eastern Shipping Lines, Inc. v. Court of Appeals,87 the Court laid down the guidelines in determining the appropriate legal interest, to wit:chanroblesvirtualawlibrary
II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:However, these guidelines were modified pursuant to Bangko Sentral ng Pilipinas Monetary Board (BSP-MB) Circular No. 799, Series of 2013, which took effect on July 1, 2013.
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable ce1iainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.88chanRoblesvirtualLawlibrary
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages.Applying the above-mentioned guidelines, the Court modifies the legal interest to twelve percent (12%) per annum from January 16, 2006, the date of the RTC Decision, until June 30, 2013, and six percent (6%) per annum from July 1, 2013 until full payment.
II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.
When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages, except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.
When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.
And, in addition to the above, judgments that have become final and executory prior to July 1, 2013, shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein.90chanRoblesvirtualLawlibrary
the awards of damages and exemplary damages are hereby reduced to P300,000,00 and P100,000.00, respectively;
temperate damages in the amount of P50,000.00 is awarded to Dr. Jose M. Tiongco in lieu of nominal damages;
the attorney's fees which is equivalent to 20% of the total monetary awards is maintained for being reasonable; and
the total monetary awards shall bear interest of twelve percent (12%) per annum from January 16, 2006, the date of the RTC Decision, to June 30, 2013, and six percent (6%) per annum from July 1, 2013 until full payment.
* Designated additional Member per raffle dated September 22, 2021 vice J. Inting who concurred in the assailed Decision.
1Rollo, pp. 41-63. Penned by Associate Justice Jhosep Y. Lopez (now a Member of this Court) and concurred in by Associate Justices Edgardo T. Lloren and Henri Jean Paul B. Inting (now a Member of this Court).
2 Id. at 65-68.
3 CA rollo, pp. 88-93. Penned by Judge Jaime V. Quitain.
4Rollo, p. 42.
8 Id. at 43.
12 Id. at 43-44.
13 Id. at 44.
15 Records, pp. 383-388.
16 Id. at 393.
17 Id. at 389-390 and 392.
18 Id. at 549-550.
19Rollo, p. 44.
20 Records, pp. 1-7.
21 Records, pp. 49-65; 99-110; 43-48.
22Rollo, p. 45.
23 Records, pp. 49-65.
25 Records, pp. 99-110.
26 Id. at 43-38.
27 Id. at 204, 206.
29 Id. at315-318.
30 Id. at 315-318.
31 CA rollo, pp. 88-93.
32 Id. at 90-91.
33 Id. at 91.
34 Id. at 92-93.
35 Id. at 93.
36 Id. at 94-110.
37 Id. at 111.
38Rollo, pp. 41-63.
39 Id. at 62.
40 CA rollo, pp. 319-347.
41Rollo, pp. 65-68.
42 Id. at 9-36.
43 Id. at 13-14.
44 Id. at 14-33.
45 270 Phil. 108 (1990).
46Rollo, pp. 20-25.
47 See Gatan v. Vinarao, 820 Phil. 257, 265 (2017), citing Miro v. Vda. De Erederos, 721 Phil. 772 (2013).
48 721 Phil. 772 (2013).
49 Id. at 785-787.
50 269 Phil. 225 (1990).
51 Id. at 232.
52Pascual v. Burgos, 776 Phil. 167, 184 (2016).
53 See Id.
55Japan Airlines v. Simangan, 575 Phil. 359, 372 (2008).
56Spouses Fernando v. Northwest Airlines, Inc., 805 Phil. 501, 520 (2017).
57 CIVIL CODE, Article 1733; Loadstar Shipping Company, Incorporated v. Malayan Insurance Company, Incorporated, 809 Phil. 736 (2017).
58 346 Phil. 831 (1997).
59 Id. at 835.
60 CIVIL CODE, A1iicle 1735.
61Air France v. Gillego, 653 Phil. 138, 149 (2010).
63 Supra note 45.
64Air France v. Gillego, supra note 61 at 153.
65 Id. at 153-154.
66Spouses Fernando v. Northwest Airlines, Inc., 805 Phil. 501, 527 (2017).
67 336 Phil. 414, 427 (1997).
68Francisco v. Ferrer, 405 Phil. 741, 751 (2001), citing Areola v. Court, 306 Phil. 656, 677 (1994).
69Philippine Hawk Corporation v. Lee, 626 Phil. 483, 499 (2010).
70 CIVIL CODE, Article 2199.
71 1. In the carriage of passengers the liability of the carrier for each passenger is limited to the sum of 250,000 francs ... Nevertheless, by special contract, the carrier and the passenger may agree to a higher limit of liability.
2. a) In the carriage of registered baggage and of cargo, the liability of the carrier is limited to a sum of 250 francs per kilogramme, unless the passenger or consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that sum is greater than the actual value to the consignor at delivery.
b) In the case of loss, damage or delay of part of registered baggage or cargo, or of any object contained therein, the weight to be taken into consideration in determining the amount to which the carrier's liability is limited shall be only the total weight of the package or packages concerned. Nevertheless, when the loss, damage or delay of a part of the registered baggage or cargo, or of an object contained therein, affects the value of other packages covered by the same baggage check or the same air way bill, the total weight of such package or packages shall also be taken into consideration in determining the limit of liability.
3. As regards objects of which the passenger takes charge himself the liability of the carrier is limited to 5000 francs per passenger.
4. The limits prescribed .. shall not prevent the court from awarding, in accordance with its own law, in addition, the whole or part of the court costs and of the other expenses of litigation incurred by the plaintiff. The foregoing provision shall not apply if the amount of the damages awarded, excluding court costs and other expenses of the litigation, does not exceed the sum which the carrier has offered in writing to the plaintiff within a period of six months from the date of the occurrence causing the damage, or before the commencement of the action, if that is later.
72Northwest Airlines, Inc. v. Court of Appeals, 348 Phil. 438, 450 (1998).
73 Id. at 451.
74 Supra note 45.
75Northwest Airlines, Inc. v. Court of Appeals, supra at 450-451.
76Philippine National Construction Corporation v. APAC Marketing Corporation, 710 Phil. 389, 395 (2013), citing ABS-CBN Broadcasting Corp. v. Court of Appeals, 361 Phil. 499 (1999).
78 CIVIL CODE, Article 2208.
79 See Bun v. Bank of the Philippine Islands, 828 Phil. 152 (2018).
80 CIVIL CODE, Article 2208.
81 646 Phil. 733 (2010).
82 Id. at 741-742.
83 CA rollo, p. 93.
84United Coconut Planters Bank v. Spouses Uy, 823 Phil. 284, 293 (2018).
85 502 Phil. 521 (2005).
87 304 Phil. 236 (1994).
88 Id. at 252-254.
89 716 Phil. 267 (2013).
90 Id. at 282-283.cralawredlibrary