G.R. No. 92288. February 09, 1993 (Case Brief / Digest)

### Title: British Airways, Inc. vs. The Hon. Court of Appeals and First International Trading and General Services

### Facts:

This case revolves around a dispute between British Airways, Inc. (petitioner) and First International Trading and General Services Co. (private respondent), a domestic recruitment agency. The crux of the dispute is the failure of British Airways to transport 93 contract workers to Jeddah, Saudi Arabia, despite the payment and confirmation of their airfare by the workers’ principal, ROLACO Engineering and Contracting Services.

The timeline of events is as follows:
– In February 1981, ROLACO sent a telex to the private respondent, requesting the recruitment of Filipino workers.
– In March 1981, ROLACO paid British Airways for 93 tickets for the workers to be transported by March 30, 1981. When British Airways informed the private respondent that it received payment for the tickets, the latter instructed its travel agent to book the flights. British Airways failed to transport the workers, forcing the private respondent to incur additional expenses to purchase tickets from other airlines.
– In June 1981, a similar incident occurred with another batch of 27 workers, resulting in only partial transportation and subsequent additional expenses for the private respondent due to British Airways’ inability to confirm and maintain bookings.

The private respondent initiated a legal action against British Airways for damages in the Regional Trial Court of Manila, leading to British Airways’ eventual appeal to the Court of Appeals. Both lower courts ruled in favor of the private respondent, prompting British Airways to escalate the matter to the Supreme Court through a petition for review on certiorari.

### Issues:

1. Whether the private respondent had a valid cause of action against British Airways for damages arising from the latter’s failure to transport the contract workers.
2. Whether there was a perfected contract of carriage between British Airways and the private respondent.
3. Whether the appellate court erred in awarding actual damages to the private respondent.

### Court’s Decision:

The Supreme Court affirmed the decision of the Court of Appeals, with a modification on the award of actual damages. The Court held that a valid cause of action existed due to British Airways’ breach of contract and bad faith in failing to transport the workers despite confirmed booking which is essentially considered a contract “to carry” under Philippine law, perfected by consent of both parties. The Supreme Court recognized this as a consensual contract perfected upon agreement, notwithstanding the absence of physically issued tickets. The breach of such a contract gave rise to the private respondent’s right to seek damages.

However, the Supreme Court modified the award of actual damages. It decreed that since all expenses had been reimbursed by the workers’ principal to the private respondent, the claim for actual damages was unsubstantiated. Nonetheless, it affirmed the awarding of moral and exemplary damages due to the bad faith exhibited by British Airways in its repeated failure to fulfill its carriage obligations.

### Doctrine:

The Supreme Court’s decision reiterates the principle that a contract of carriage, or a contract “to carry”, is consensual and perfected by mere consent, manifesting when a carrier accepts the fare for transportation. This decision underscores the obligations of common carriers to operate not just with due diligence but with utmost good faith, especially when time is of the essence in the fulfillment of their contractual obligations.

### Class Notes:

– **Contract of Carriage**: This is a consensual agreement that is perfected by the consent of both parties – the passenger (or the entity acting on their behalf) and the carrier. It imposes reciprocal obligations, primarily the carrier’s duty to transport the passenger to a specified destination for a price.
– **Cause of Action for Damages**: Arises when there is a breach of contract and bad faith in the part of the carrier, particularly when there is a failure to transport as agreed upon.
– **Doctrine of Actual Damages**: These damages must be duly proved with a reasonable degree of certainty. A claimant is entitled to an adequate compensation only for the pecuniary loss that has been duly proved (Art. 2199, Civil Code of the Philippines).
– **Moral and Exemplary Damages**: Awarded in cases of bad faith or fraud. Bad faith entails a failure to meet contractual obligations with deliberate intent or gross negligence.

### Historical Background:

This case reflects the complexities and legal implications of international labor migration, a significant aspect of the Philippines’ socio-economic landscape. The legal framework addressing the rights and obligations of recruitment agencies, foreign principals, and carriers is critical in protecting Overseas Filipino Workers (OFWs). This decision aligns with the broader legal principles protecting labor rights and ensuring accountability in the recruitment and transportation process for employment abroad.


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