CHINA AIR LINES, LTD., PETITIONER, VS. COURT OF APPEALS, JOSE PAGSIBIGAN, PHILIPPINE AIR LINES, INC. AND ROBERTO ESPIRITU, RESPONDENTS.

These consolidated petitions seek the review of the decision of
respondent court in CA-G.R. No. 53023-R entitled “Jose E. Pagsibigan, Plaintiff-Appellant, vs. Philippine Air Lines,
Inc. and Roberto Espiritu, Defendants-Appellants; China Air Lines, Ltd., Defendant-Appellee,”^[1] the dispositive
portion of which declares:

“WHEREFORE, except for a modification of the judgment in the
sense that the award of P20,000.00 in favor of the
plaintiff shall be in the concept of nominal damages instead of exemplary
damages, and that defendant China Air Lines, Ltd. shall likewise be liable with
its two co-defendants in a joint and solidary
capacity, the judgment appealed from is hereby affirmed in all other respects,
without costs.”^[2]

The challenged decision of respondent court contains a synthesis
of the facts that spawned these cases and the judgment of the court a quo
which it affirmed with modifications,
thus:

“On June 4, 1968,
plaintiff Jose E. Pagsibigan, then vice-president and
general manager of Rentokil (Phils.)
Inc., a local firm dealing in insecticides, pesticides and related services
appurtenant thereto, purchased a plane ticket for a Manila-Taipei-Hongkong-Manila flight from the Transaire
Travel Agency.  The said agency, through
its Cecille Baron, contacted the Manila Hotel branch
of defendant Philippine Air Lines which at that time was a sales and ticketing
agent of defendant China Air Lines.  On
June 6, 1968, PAL, through its ticketing clerk defendant Roberto Espiritu, cut and issued CAL Ticket No. 017991 for a
Manila-Taipei-Hongkong-Manila flight.  According to the plane ticket, the plaintiff
was booked on CAL CI Flight No. 812 to depart from Manila
for Taipei on June 10, 1968 at 1720 hours (5:20 p.m.), Exhibit A.

“On June 10, 1968,
one hour before the scheduled time of the flight as stated in his ticket, the
plaintiff arrived at the airport to check in for CI Flight No. 812.  Upon arriving at the airport, the plaintiff
was informed that the plane he was supposed to take for Taipei
had left at 10:20 in the morning of
that day.  The PAL employees at the
airport made appropriate arrangements for the plaintiff to take PAL’s flight to Taipei
the following day, June 11, 1968.  The plaintiff took said flight and arrived in
Taipei around noontime of the said
date.

“On July 8, 1968,
the plaintiff, through counsel, made formal demand on defendant PAL for moral
damages in not less than P125,000.00 for what the
plaintiff allegedly suffered as a result of his failure to take the flight as
stated in his plane ticket.  (Exhibit E)
After a series of negotiations among the plaintiff, PAL and CAL failed to reach
an amicable settlement, the plaintiff instituted this action in the Court of
First Instance of Rizal, on September 22, 1969.  In his complaint, plaintiff prays for the
recovery of P125,000.00 as moral damages and
P25,000.00 for and as attorney’s fees. 
The moral damages allegedly arose from the gross negligence of defendant
Roberto Espiritu in stating on the plane ticket that the time of departure was
1720 hours, instead of 1020 hours which was the correct time of departure in
the revised summer schedule of CAL.  Plaintiff claims that by reason of his
failure to take the plane, he suffered besmirched reputation, embarrassment,
mental anguish, wounded feelings and sleepless nights, inasmuch as when he went
to the airport, he was accompanied by his business associates, close friends
and relatives.  He further averred that
his trip to Taipei was for the
purpose of conferring with a certain Peng Siong Lim, president of the Union Taiwan Chemical
Corporation, scheduled at 9:00 a.m. on
June 11, 1968.

“Defendant Philippine Air Lines alleges in its answer that the
departure time indicated by Espiritu in the ticket
was furnished and confirmed by the reservation office of defendant China Air
Lines.  It further avers that CAL had not
informed PAL’s Manila Hotel Branch of the revised
schedule of its flight, nor provided it with revised timetable:  that when the travel agency sought to
purchase the ticket for the plaintiff on CAL CI Flight No. 812 for June 10,
1968, Espiritu who was then the ticketing clerk on
duty, checked with the reservation office of CAL on the availability of space,
the date and the time of said flight; that CAL’s Dory
Chan informed Espiritu that the departure time of
Flight No. 812 on June 10, 1968 was at 5:20
in the afternoon of said date. 
PAL asserted a cross-claim against CAL
for attorney’s fees and for reimbursement of whatever amount the court may
adjudge PAL to be liable to the plaintiff. 
Defendant Espiritu adopted the defenses of his
co-defendant PAL.

“Defendant China Air Lines, for its part, disclaims liability for
the negligence and incompetence of the employees of PAL.  It avers that it had revised its schedule
since April 1, 1968, the same to be effective on April 20, 1968, and the said
revised schedule was adopted only after proper petition with and approval of
the Civil Aeronautics Board of which all airlines, including defendant PAL,
were notified; that both printed copies of the international timetable and of
the mimeographed notices of the official schedule and flight departure
schedules were distributed to all its sales agents, including PAL; that after
the effectivity of the new time schedules.  PAL’s Manila Hotel
office had been issuing and selling tickets based on the revised time schedule;
and that, assuming that the plaintiff is entitled to recover damages, the liability is on PAL
and not on CAL.  A cross-claim was likewise asserted by CAL
against its co?defendant PAL.

“After due trial, the Court a quo rendered
judgment laying the blame for the erroneous entry in the ticket as to the time
of departure to defendant Roberto Espiritu, ticketing
agent of defendant PAL, and that no employee of CAL contributed to such
erroneous entry.  It was further ruled
that the plaintiff had no reason to claim moral damages but may be entitled to
recover exemplary damages.  The dispositive portion of the decision makes the following
adjudication:

‘WHEREFORE, premises considered, judgment is hereby rendered
sentencing the defendants Philippine Air Lines, Inc. and Roberto Espiritu, to pay to plaintiff Jose Pagsibigan
jointly and severally, by way of exemplary damages, the sum of Twenty Thousand
Pesos (P20,000.00) plus Two Thousand Pesos (P2,000.00) as reimbursement for attorney’s fees and the costs.

‘The complaint is dismissed with respect to the defendant China Air
Lines, Ltd.  The cross-claim filed by
defendant PAL and Espiritu against defendant CAL as
well as the cross-claim filed by the defendant CAL against defendant PAL and Espiritu are also hereby dismissed.’ “^[3]

From said decision of the court below, all the parties, except
China Air Lines, Ltd. appealed to respondent court which, however, sustained
the ruling of the trial court denying Pagsibigan’s claim for moral damages.  It concluded that Roberto Espiritu
did not act with malice or in
bad faith in making a wrong entry of the time of departure on the ticket, and
that the mistake committed by Espiritu appears to be
an honest one done in good faith.

Respondent court also ruled out the claim for exemplary damages
for lack of legal basis.  Nonetheless, as
earlier noted, it awarded Pagsibigan P20,000.00 as nominal damages, under Article 2221 of the Civil
Code, for the vindication of a legal wrong committed against him.

As regards the liability of the parties, respondent court held:

“There can be little question as to the liability of PAL and Espiritu for the damage caused to the plaintiff due to the
erroneous entry in the plane ticket made by the latter.  They seek to justify the erroneous statement
as to the time of departure on the ground that such was the time given by Dory
Chan to Espiritu when the latter called up for the
reservation in favor of plaintiff.  Aside
from the fact that Dory Chan had vigorously disclaimed having given such
information to Espiritu, We are convinced that, as
the trial court had found, CAL
had no share in the error committed by Espiritu in
indicating the time of departure of Flight No. 812.  PAL had shown through the testimony of Carmen
Ibazeta Gallaga, ticket
representative of PAL at the Manila Hotel Office, that they received circulars
and timetables of airlines in the PAL main office.  It further appears that on two occasions,
defendant PAL cut and issued tickets for CAL
based on the new schedule even before June
10, 1968.  As a matter of
fact, the other entries of time departures in the ticket issued to the plaintiff
are in accordance with the
revised schedule, and that the only error therein was with respect to the
departure from Manila on June 10, 1968.

“However in proving that the fault lied with Espiritu, defendant CAL derives no solace nor gains an advantage.  It may not claim exemption from liability by
reason thereof.  Espiritu
was an employee of PAL and whatever negligence was committed by him is
attributable to PAL.  It is an admitted
fact hat PAL is an authorized agent of CAL.  In this relationship, the responsibility of
defendant PAL for the tortious act of its agent or
representative is inescapable. x x x

x x
x

“A similar principle is recognized in our Civil Code in its Art. 2180 x x
x. 
Unlike in the doctrine of respondeat superior,
however, the Civil Code permits the employer to escape this liability upon
proof of having observed all the diligence of a good father of a family to
prevent the damage, We find the evidence of defendant
CAL to be insufficient to overcome the
presumption of negligence on its part
for the act done by defendant
Roberto Espiritu. (Emphasis supplied)

“The liability for the damage sustained by the plaintiff should,
therefore, be borne by all of the defendants in a joint and solidary
capacity (Art. 2194). 
The liability of an employer under Art. 2180 is primary and direct. x x x

x x x

“It appearing that defendant CAL, as employer or principal, did not contribute to
the negligence committed by defendants PAL and Roberto Espiritu,
its liability to the plaintiff could be passed on to said defendants.  Defendant CAL,
however, did not take an appeal and did not, therefore, take exception to the
dismissal of its cross-claim against defendants PAL and Espiritu.  This serves as an obstacle for a rendition of
judgment favorable to CAL on its
said counterclaim.”^[4]

In its
petition for review on certiorari in G.R. No. L-45985, petitioner
China Air Lines, Ltd. (CAL) relied on the
following grounds:

1.  A principal can not be
held liable, much less solidarily, for the negligence of the sub-agent, where the former never participated in, ratified
or authorized the latter’s act or omission.

2.  Dismissal of the
cross-claim of petitioner against the private
respondents Philippine Air Lines, Inc. and Roberto Espiritu
will not prevent the release of the petitioner from liability to the private
respondent Pagsibigan.

3.  The award of damages was
unwarranted both legally and factually.^[5]

On their part, petitioners Philippine Air Lines, Inc. (PAL) and Roberto Espiritu
made the following submissions in
G.R. No. L-46036, to wit:

1.  The respondent Court of
Appeals erred in not holding that respondent China Air Lines, Ltd., being the
principal, is solely liable to respondent Pagsibigan.

2.  The respondent Court of
Appeals erred in awarding respondent Pagsibigan the
sum of P20,000.00 as nominal damages.^[6]

In G.R. No. L-45985, respondent Pagsibigan contends, by way of refutation, that CAL’s liability is based on breach of contract of
transportation which was the proximate result of the negligence and/or error
committed by PAL and Espiritu, that even assuming
that CAL has no share in the negligence of PAL and Espiritu;
the liability of CAL does not cease upon proof that it exercised all the
diligence of a good father of a family in the selection and supervision of its
employees.  Traversing such contentions, CAL
argues that it can not be made liable under Article 2180 of the Civil Code because of the absence of
employer-employee relationship between it and PAL.

On the other hand, in G.R. No. L-46036,
respondent Pagsibigan claims that PAL is liable under
Article 1909 of the said code which holds an agent responsible not only for
fraud but also for negligence which shall be judged with more or less rigor by
the courts, according to whether the agency was or was not for a
compensation.  PAL, however, maintains
that for lack of privity with Pagsibigan,
the suit for breach of contract should have been directed against CAL.

What surfaces as a procedural
maneuver taken by respondent Pagsibigan in the course
of the proceedings in these cases has confused the real issues in the
controversy subject of both petitions before us.

Respondent Pagsibigan has opted to seek redress by pursuing
two remedies at the same time, that is, to enforce the civil liability of CAL
for breach of contract and, likewise, to recover from PAL and Espiritu for tort or culpa aquiliana.  What he has overlooked is the proscription
against double recovery under Article 2177 of the Civil Code which, while not preventing recourse to any
appropriate remedy, prevents double relief for a single wrong.

To avoid inequitable effects under such confluence of remedies,
the true nature of the action instituted by respondent Pagsibigan
must be determined.  A careful perusal of
the complaint of respondent Pagsibigan will readily
disclose that the allegations thereof clearly and unmistakably make out a case
for a quasi-delict in this wise:

“4.  That at all
pertinent times particularly in June of 1968, defendant China Air Lines Ltd.
has been operating regular scheduled flights to and from Manila, and has
offered accommodations thereon through, among others, defendant PAL as its authorized sales agent
and/or ticketing agent, such that China Airlines Ltd. is here impleaded as being the
principal of defendant PAL;

“5.  That at all pertinent times,
particularly in June of 1968,
defendant Roberto Espiritu has been in the employ of
defendant PAL at its sales
counter at the PAL Manila Hotel branch office and is here impleaded
as defendant as being the proximate malfeasor
in this cause of action;

x   x  x

“12.  That
plaintiff missed the initial Manila-Taipei leg (CI Flight 812) on June 10, 1968, as set forth in his
ticket (Annex ‘A’) solely and exclusively by reason
of gross incompetence and inexcusable negligence
amounting to bad faith of defendant PAL – acting, through its sales
representative, the defendant Roberto Espiritu, of
its Manila Hotel branch office – in the discharge of its duties as sales agent
and/or ticketing agent for defendant China Airlines Ltd. as principal;

“13.  That as a direct
result of culpable incompetence and negligence
of defendant Roberto Espiritu as sales representative
of defendant PAL, plaintiff was unable to attend to previously scheduled
business commitments in Taipei x x x resulting in direct and indirect prejudice to plaintiff that has yet to be fully
assessed:” (Emphasis supplied)^[7]

x   x  x

Had the intention of respondent Pagsibigan
been to maintain an action based on breach of contract of carriage, he could have sued CAL
alone considering that PAL is not a real party to the contract.  Moreover, in cases of such nature, the
aggrieved party does not have to prove that the common carrier was at fault or was negligent.  All he has to prove is the existence of the
contract and the fact of its non-performance by the carrier.^[8]

The records disclose that the trial court delved much into the
issues of who was at fault, and its decision is primarily anchored on its
factual findings regarding the civil
liability arising from culpa aquiliana
of the erring party, to this effect:

“Plaintiff said that the erroneous entry in his ticket which
made it appear that his CAL flight of June 10, 1968 was to be at 5:20 in the afternoon was due to the fault or
negligence of PAL’s Roberto Espiritu,
a co-defendant herein, as well as the employees of the defendant CAL.  In making CAL
co-responsible, plaintiff appears to rely on the doctrine that the principal is
responsible for the act of an agent done within the scope of the agency.

“There is no proof extant that any of the employees of CAL
had contributed to the erroneous entry in plaintiff’s CAL
ticket for Taipei which placed his
time of departure to 5:20 o’clock in
the afternoon of June 10, 1968.  Only defendant Roberto Espiritu
appears to be solely and exclusively responsible for such error and therefore
the conclusion becomes inevitable that CAL
must be absolved from any blame because defendant Roberto Espiritu
who committed the error is not an employee or agent of the defendant CAL.”^[9]

It,  therefore, becomes
evident that respondent Pagsibigan, having sensed
that he can not hold CAL liable
on a quasi-delict, decided on appeal to instead make a sinistral detour, so to
speak, by claiming that his action against CAL
is based on a breach of contract of carriage.

We can not permit respondent Pagsibigan
to change his theory at this stage; it would be unfair to the adverse party who
would have no more opportunity to present further evidence, material to the new
theory, which it could have done had it been aware earlier of the new theory at
the time of the hearing before the trial court.^[10]

There is indeed no basis whatsoever to hold CAL
liable on a quasi-delict or culpa aquiliana.  As
hereinbefore stated, the court a quo absolved CAL
of any liability for fault or
negligence.  This finding was shared by
respondent court when it concluded that defendant CAL did not contribute to the negligence
committed by therein defendants-appellants PAL and Roberto Espiritu.

Respondent Pagsibigan insists that CAL
was barred from proving that it observed due diligence in the selection and
supervision of its employees.  This
argument is obviously misplaced.  CAL is not the employer of PAL or Espiritu.  In Duavit vs. The Hon.
Court of Appeals, et al.,^[11] we have
stressed the need of first establishing
the existence of an employer-employee relationship before an employer may be
vicariously liable under Article 2180 of the Civil Code.

With respect to PAL and Espiritu, they
disclaim any liability on the theory that the former is merely an agent of CAL
and that the suit should have been directed against CAL
alone.  There is no question that the
contractual relation between both air lines is one of agency.  Suffice it to say, however, that in an action
premised on the employee’s negligence, whereby respondent Pagsibigan
seeks recovery for the resulting
damages from both PAL and Espiritu without
qualification, what is sought to be imposed is the direct and primary liability
of PAL as an employer under said Article 2180.

When an injury is caused by the negligence of an employee, there
instantly arises a presumption of law that there was
negligence on the part of the employer either in the selection of the employee or in the supervision over him after such
selection.  The presumption, however, may
be rebutted by a clear showing on the part of the employer that it has
exercised the care and diligence of a good father of a family in the selection and supervision of his
employee.^[12]

Hence, to escape solidary liability for
the quasi-delict committed by Espiritu,
it is imperative that PAL must adduce sufficient proof that it exercised such
degree of care.  PAL failed to overcome the presumption.  As found by respondent court, CAL had revised
its schedule of flights since April 1, 1968; that after the Civil Aeronautics
Board had approved the revised schedule of flights, PAL was duly informed thereof and, in fact, PAL’s Manila Hotel branch office had been issuing and
selling tickets based on the revised time schedule before June 10, 1968.

PAL’S main defense is that it is only an agent.  As a general proposition, an agent who duly
acts as such is not personally liable to third persons.  However, there are admitted exceptions, as in
this case where the agent is being sued for damages arising from a tort
committed by his employee.

The respondent court found that the mistake committed by Espiritu was done in good faith.  While there is no evidence that he acted with
malice, we can not entirely condone his actuations.  As an employee of PAL, the nature of his
functions requires him to observe for the protection of the interests of
another person that degree of care, precaution and vigilance which the circumstances justly demand.  He committed a clear neglect of duty.

Ergo, for his negligence, Espiritu is
primarily liable to respondent Pagsibigan under
Article 2176 of the Civil Code.  For the
failure of PAL to rebut the legal presumption of negligence in the selection and supervision of its employee, it is
also primarily liable under Article 2180 of the same code which explicitly
provides that employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their assigned
tasks, even though the former are not engaged in any business or industry.

Under the aforesaid provision, all that is required is that the
employee, by his negligence, committed a quasi-delict
which caused damage to another, and this suffices to hold the employer
primarily and solidarily responsible for the tortious act of
the employee.  PAL, however, can demand
from Espiritu reimbursement of the amount which it
will have to pay the offended party’s claim.^[13]

On the issue of damages, we agree, except as to the amount, that
nominal damages may be awarded to respondent Pagsibigan
to vindicate the legal wrong committed against him.  It appearing that the wrong committed was
immediately rectified when PAL promptly booked him for the next morning’s
flight to Taipei where he arrived before noon of June 11, 1968 and was able to attend his scheduled
conference, and considering the concept and purpose of nominal damages, the
award of P20,000,00 must accordingly be reduced to an
amount equal or at least commensurate to the injury sustained.

WHEREFORE, the decision of respondent Court of Appeals is MODIFIED
accordingly.  China Air Lines, Ltd. is
hereby absolved from liability. 
Philippine Air Lines, Inc. and Roberto Espiritu
are declared jointly and severally liable to pay the sum of P10,000.00 by way of nominal damages, without prejudice to the
right of Philippine Air Lines, Inc. to recover from Roberto Espiritu
reimbursement of the damages that it may pay respondent Jose Pagsibigan.

SO ORDERED.

Melencio-Herrera, (Chairman), Paras, Padilla, and Sarmiento, JJ., concur.

^[1]
Penned by Justice Conrado M. Vasquez, with Justices Delfin FL. Batacan and Jose B.
Jimenez concurring.

^[2]
Rollo, G.R. No. L-45985, 57.

^[3]
Ibid., id., 41-46.

^[4]
Ibid., 53-57.

^[5]
Ibid., id., 13-14.

^[6]
Ibid., G.R. No. L-46036, 29, 35.

^[7]
Joint Record on Appeal, 9, 12; Rollo,
G.R. No. 45985, 62.

^[8]
Cangco vs.
Manila Railroad Co., 38 Phil. 768 (1918); Sy vs.
Malate Taxicab & Garage, Inc., 102 Phil. 482
(1957).

^[9]
Joint Record on Appeal, 105; Rollo,
G.R. No. 45985, 62.

^[10]
Lianga
Lumber Co., et al. vs. Lianga Timber Co.,
Inc., et al., 76 SCRA 197 (1977).

^[11]
G.R. No. 82318, May 18, 1989.

^[12]
Layugan vs.
Intermediate Appellate Court, et al., 167 SCRA 363 (1988).

^[13]
Art. 2181, Civil Code; Malipol,
etc. vs. Tan, et al., 55 SCRA 202 (1974); Lanuzo
vs. Ping, et al., 100 SCRA 205 (1980).