**Facts:** Rafael Carrascoso, a Filipino civil engineer and a member of a group of 48 Filipino pilgrims, embarked on a journey from Manila to Rome with a ‘first class’ ticket issued by Air France through its authorized agent, Philippine Air Lines, Inc., on March 28, 1958. The ticket was for a round trip from Manila to Rome, beginning March 30, 1958. Carrascoso traveled first class from Manila to Bangkok, but upon reaching Bangkok, he was forcibly asked to vacate his seat for a ‘white man’, as claimed by Air France’s Manager, which led to a commotion and eventually Carrascoso’s relocation to the tourist class after considerable resistance and with much embarrassment.
Carrascoso filed a complaint against Air France, and the Court of First Instance of Manila ruled in his favor, awarding him moral and exemplary damages, and a refund for the difference between first class and tourist class fares for the segment of his trip from Bangkok to Rome, along with attorney’s fees and costs of suit. Air France appealed to the Court of Appeals, which slightly modified the refund amount but affirmed the lower court’s decision in all other respects. Air France then appealed to the Supreme Court on certiorari.
**Issues:**
1. Whether Carrascoso’s first class ticket guaranteed him a seat in first class for the entire duration of his journey.
2. Whether the Court of Appeals made complete findings of fact on all issues properly before it.
3. Whether there was bad faith on the part of Air France in compelling Carrascoso to vacate his first class seat, justifying an award for moral damages.
4. The admissibility and competency of evidence regarding the purser’s note and the procedural propriety of awarding exemplary damages and attorney’s fees.
**Court’s Decision:**
The Supreme Court affirmed the decision of the Court of Appeals, holding that Carrascoso was entitled to the first class seat as explicitly shown in his ticket, which was a result of a valid contract between him and Air France. The Court found no merit in Air France’s allegation of incomplete findings by the Court of Appeals. On the issue of bad faith, the Supreme Court concurred with the lower courts that the forceful ejection of Carrascoso from his seat to accommodate another passenger constituted bad faith, supporting an award for moral damages. The Supreme Court found no error in admitting testimony regarding the purser’s note as part of the res gestae, and upheld the award of exemplary damages and attorney’s fees as justified.
**Doctrine:**
1. A written document (e.g., a ticket issued by an airline) speaks a uniform language and holds more reliability than oral testimonies meant to alter the written agreements.
2. Bad faith in the performance of a contract, manifest in willfully causing inconvenience or embarrassment to a party, justifies an award for moral damages.
3. Declarations made spontaneously by witnesses concerning a startling event are admissible as part of the res gestae.
4. Exemplary damages may be awarded in cases where the defendant’s act is wanton, fraudulent, reckless, oppressive, or malevolent.
**Class Notes:**
– Essential elements in breach of contract cases: valid contract existence, breach of said contract, and resulting damages.
– The principle of bad faith extends to acts that contravene the tenets of good morals, customs, or public policy, causing damage to another.
– Res gestae refers to statements made by participants or witnesses following a startling event which may be admissible as evidence.
– Exemplary damages serve as a deterrent to grievous wrongdoings and are awarded in addition to compensatory damages when the act is performed in a manner that is grossly reckless, fraudulent, or malevolent.
**Historical Background:** The case epitomizes the evolving standards of fairness and equality in commercial transactions, and the judiciary’s role in ensuring justice and accountability in service industries, especially in post-World War II Philippines when international travel began expanding significantly. It reflects the early challenges faced by consumers in the airline industry and establishes key precedents in consumer protection, contract enforcement, and the imposition of moral and exemplary damages for breaches of contract conducted in bad faith.
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