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

China Air Lines versus Court of Appeals

The Case

This is a consolidated petition for review on certiorari of the decision of the Court of Appeals in a case for damages arising from an erroneous entry of the departure time on an airplane ticket. Jose Pagsibigan sued Philippine Air Lines, its ticketing clerk Roberto Espiritu, and China Air Lines for damages after he missed his flight to Taipei. The case matters because it clarifies the nature of the action, the liability of an agent and its employee for a quasi-delict, and the proper measure of nominal damages.

Procedural History

Pagsibigan filed a complaint for damages in the Court of First Instance of Rizal. The trial court rendered judgment holding Roberto Espiritu, the ticketing clerk of Philippine Air Lines, solely responsible for the erroneous entry, and ordered Philippine Air Lines and Espiritu to pay Pagsibigan jointly and severally P20,000 as exemplary damages, P2,000 as attorney's fees, and the costs. The complaint against China Air Lines was dismissed, and the cross-claims were likewise dismissed.

All the parties except China Air Lines appealed to the Court of Appeals. The appellate court affirmed the ruling but modified it: it eliminated the award of exemplary damages and instead awarded P20,000 as nominal damages, and held China Air Lines solidarily liable with its two co-defendants. China Air Lines then filed a petition for review on certiorari, docketed as G.R. No. L-45985, and Philippine Air Lines and Espiritu filed their own petition, docketed as G.R. No. L-46036. The two petitions were consolidated before the Supreme Court.

Facts

On June 4, 1968, Jose Pagsibigan, then vice-president and general manager of Rentokil Philippines, purchased a plane ticket for a Manila to Taipei to Hongkong to Manila flight from Transaire Travel Agency. The agency contacted the Manila Hotel branch of Philippine Air Lines, which was then a sales and ticketing agent of China Air Lines. On June 6, 1968, Philippine Air Lines, through its ticketing clerk Roberto Espiritu, issued the ticket. It stated that Pagsibigan was booked on China Air Lines Flight 812 to depart Manila for Taipei on June 10, 1968 at 5:20 in the afternoon.

On June 10, 1968, one hour before the scheduled departure, Pagsibigan arrived at the airport to check in. He was informed that the plane he was supposed to take had already left at 10:20 in the morning of that day. The Philippine Air Lines employees at the airport arranged for him to take a Philippine Air Lines flight to Taipei the following day, June 11, 1968, and he arrived in Taipei around noontime of that date.

On July 8, 1968, Pagsibigan, through counsel, made a formal demand on Philippine Air Lines for moral damages of not less than P125,000. After negotiations among the parties failed, he instituted the action on September 22, 1969, praying for P125,000 as moral damages and P25,000 as attorney's fees. He claimed that the erroneous entry was due to the gross negligence of Espiritu, and that by reason of his failure to take the plane he suffered besmirched reputation, embarrassment, mental anguish, wounded feelings, and sleepless nights, since he was accompanied to the airport by his business associates, close friends, and relatives.

Issues

• Whether or not China Air Lines may be held liable, much less solidarily, for the negligence of Philippine Air Lines and its employee Espiritu.
• Whether or not Philippine Air Lines, as agent of China Air Lines, is solely liable to Pagsibigan, or whether it may escape liability on the ground that it is merely an agent.
• Whether or not the award of nominal damages in favor of Pagsibigan was proper, and in what amount.

Applicable Provisions

Article 2176 of the Civil Code provides:

Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

This provision is the basis for the primary liability of Espiritu for his negligent act.

Article 2180 of the Civil Code provides:

The obligation imposed by the preceding article is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company. Guardians are liable for damages caused by minors or incapacitated persons who are under their authority and live in their company. The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions. 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. The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in Article 2176 shall be applicable. Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody. The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage.

This provision is the basis for the primary and solidary liability of Philippine Air Lines as employer of Espiritu, unless it proves that it observed the diligence of a good father of a family.

Article 2177 of the Civil Code provides:

Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant.

This provision bars double recovery for a single wrong, which is relevant to Pagsibigan's pursuit of two remedies at the same time.

Article 2221 of the Civil Code provides:

Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.

This provision is the basis for the award of nominal damages to Pagsibigan.

Ruling

On the first issue, the Court held that China Air Lines cannot be held liable on a quasi-delict. The Court found that the complaint of Pagsibigan clearly made out a case for a quasi-delict, and that the trial court and the Court of Appeals both found that China Air Lines did not contribute to the negligence of Philippine Air Lines and Espiritu. The Court also rejected Pagsibigan's attempt to change his theory on appeal to one of breach of contract of carriage, since it would be unfair to the adverse party who would have no more opportunity to present further evidence. The Court stressed that China Air Lines is not the employer of Philippine Air Lines or Espiritu, and that an employer-employee relationship must first be established before an employer may be vicariously liable under Article 2180.

On the second issue, the Court held that Philippine Air Lines cannot escape liability on the ground that it is merely an agent. The Court ruled that in an action premised on the employee's negligence, what is sought to be imposed is the direct and primary liability of Philippine Air Lines as an employer under Article 2180. When an injury is caused by the negligence of an employee, a presumption of law arises that there was negligence on the part of the employer either in the selection of the employee or in the supervision over him. The presumption may be rebutted by a clear showing that the employer exercised the care and diligence of a good father of a family. Philippine Air Lines failed to overcome the presumption. The Court also held that Espiritu is primarily liable under Article 2176 for his negligence, and that Philippine Air Lines is also primarily liable under Article 2180, with the right to demand reimbursement from Espiritu.

On the third issue, the Court held that nominal damages may be awarded to vindicate the legal wrong committed against Pagsibigan, but reduced the amount from P20,000 to P10,000. The Court considered that the wrong was immediately rectified when Philippine Air Lines promptly booked him for the next morning's flight and he was able to attend his scheduled conference, and that the award must be equal or at least commensurate to the injury sustained.

Doctrine

A quasi-delict under Article 2176 requires fault or negligence causing damage to another, with no pre-existing contractual relation between the parties. The employer of the negligent employee is primarily and solidarily liable under Article 2180, and the presumption of negligence on the part of the employer may be rebutted only by a clear showing that it exercised the diligence of a good father of a family in the selection and supervision of its employee. An agent who acts as such is not personally liable to third persons, except when the agent is sued for damages arising from a tort committed by his employee. A party cannot change his theory on appeal, as it would be unfair to the adverse party who would have no opportunity to present further evidence. Nominal damages under Article 2221 are awarded to vindicate a violated right, not to indemnify for loss, and must be commensurate to the injury sustained.

Disposition

The Court modified the decision of the Court of Appeals: China Air Lines was absolved from liability, and Philippine Air Lines and Roberto Espiritu were declared jointly and severally liable to pay Pagsibigan P10,000 as nominal damages, without prejudice to the right of Philippine Air Lines to recover reimbursement from Espiritu.

Remember This

The single line worth memorizing is that the employer's liability under Article 2180 is primary and direct, and the presumption of negligence may be rebutted only by proof of the diligence of a good father of a family. Examiners like to use this case to test the distinction between a quasi-delict and a breach of contract, the liability of an agent for the tort of its employee, and the proper measure of nominal damages.