PAN AMERICAN WORLD AIRWAYS, INC., PETITIONER, VS. INTERMEDIATE APPELLATE COURT, AND EDMUNDO P. ONGSIAKO, RESPONDENTS.

Upon the following facts, found to have been satisfactorily
established by the evidence, to wit:

1) that Edmundo P. Ongsiako,
“with one piece of checked-in luggage, was a paying passenger on the * *
PAN AM Flight 842 that left Manila for Honolulu, Hawaii, U.S.A., at about 12:30
p.m. on June 8, 1978, with Los Angeles, California, as his ultimate
destination;”^[1]

2) that at Honolulu, Ongsiako “discovered that his luggage was not carried
on board ** ; (i)t was left at ** PAN AM’s airport
office in Manila where it was found
a week later;”^[2]

3) “a PAN AM employee in Honolulu,
instead of helping him search for his bag, arrogantly threatened to ‘bump him
off’ in Honolulu should he persist
in looking for his bag;”^[3]

4) that “(o)ffers to forward the
luggage to ** (Ongsiako) in Los
Angeles or San Francisco
were refused, firstly because, by the time it was found, ** (Ongsiako) was about to leave Los
Angeles, and secondly, ** (Ongsiako)
was not sure where he would be staying in San Francisco;”^[4]

4) that “(v)erbal complaint was made
first at PAN AM’s Honolulu airport
office, then at Los Angeles, but
written complaint was made on July 20,
1978; and

5) that “(o)vertures towards
settlement were rejected for being too inconsequential,”^[5]

PAN AM (Pan American World Airways, Inc.)
was sentenced by the Court of First Instance of Rizal,^[6]
on complaint of Ongsiako, to pay to the latter:

“1.  P9,629.50
representing cost of plaintiff’s plane ticket as actual damages;

2.   The equivalent in pesos
of $400 at the current exchange
rate as temperate or moderate damages;

3.   P350,000.00 as moral
damages;

4.   P100,000.00 as exemplary
damages;

5.   P25,000.00 as attorney’s
fees;

6.   Costs.”

On appeal taken by PAN AM,^[7]
the Trial Court’s judgment was affirmed by the Intermediate Appellate Court,
with the sole modification that the award of actual damages was reduced to
P4,814.75 and that of exemplary damages, eliminated.^[8]

From this judgment of the appellate tribunal, in turn, PAN AM has
taken an appeal on certiorari to this Court.  After receiving the private respondent’s
comment on the appeal petition, the reply thereto and the rejoinder to the
reply, the Court resolved on March 4, 1985 to give limited due course to the
petition as regards the sole issue of moral damages
and required simultaneous memoranda from the parties,^[9]
which have since been submitted.

Article 2220 of the Civil Code says that moral damages may be
awarded in “breaches of contract where the defendant acted fraudulently or
in bad faith.” So, proof of infringement of an agreement by a party,
standing alone, will not justify an award of moral damages.^[10]
There must, in addition, as the law points out, be competent evidence of fraud
of bad faith by that party.^[11]
If the plaintiff, for instance, fails to take the witness stand and testify as
to his social humiliation, wounded feelings, anxiety, etc., moral damages
cannot be recovered.^[12]
The rule applies, of course, to common carriers.^[13]

This Court finds that these basic legal principles have been
correctly applied by both the Trial Court and the Intermediate Appellate Court in light of the proven facts.  Said the latter, on this precise matter:^[14]

“In the present case, men of reasonable perceptions will not
disagree with the conclusion that plaintiff suffered mental anguish, anxiety
and shock when he found that his luggage did not travel with him.  What traveller
would not suffer from such feelings if he found himself in a foreign land
without any article of clothing other than what he had on?  The injury thus suffered by plaintiff is one
that would arise generally, in the special circumstances of this case; it
follows as a matter of course.  PAN AM
breach of the contract was the substantial cause in bringing about the harm or
injury to the plaintiff.  We adopt here
the ruling of the court a quo:

‘The Court believes and so holds that
there is sufficient evidence of gross and reckless negligence amounting to bad
faith on the part of
defendant.  If defendant was not sure
that it could transport plaintiff and his luggage to Los Agneles,
it should not have accepted plaintiff who was a waitlisted passenger.  It is not a valid excuse on its part to claim
that plaintiff checked in at the last minute and that there was insufficient time
to load his bag in the plane.  In fact,
that makes the position of defendant even more untenable, because in accepting
and holding on to plaintiff as its passenger, probably to fill in cancelled
bookings, although it knew or must have known that the bag of plaintiff might
not be loaded on time, it was guility of conduct
amounting to bad faith.  x x x Accepting last minute
passengers and their baggage with no definite assurance that the carrier can
comply with its obligation due to lack of time amounts to “negligence so
gross and reckless as to amount to malice or bad faith” (Fores vs. Miranda, L-12163, March 4, 1959; Necesito vs. Paras, L-10606-06,
June 30, 1958, cited in Lopez, et al. vs. PAN AM, supra).’ (Record on Appeal,
pp. 23-25)”

Also a propos and also not
otherwise shown to be erroneous are the observations of the Trial Court on this
precise point:

” * * (A) PAN AM
employee in Honolulu, instead of
helping him (Ongsiako) search for his bag, arrogantly
threatened to ‘bump him off’ in Honolulu
should he persist in looking for his bag. 
This happened in the presence of several people, thereby subjecting
plaintiff to indignity, embarrassment and humiliation which aggravated his
health – his blood pressure, in this case. 
It is difficult enough to be in a foreign country, worse if one’s
belongings are missing, and worst, if instead of being helped, he is shouted at
and threatened to be ‘bumped off’ as in this case.  This must have been a very distressing and
painful experience to plaintiff which justifies a finding of bad faith and an
award for moral damages in his favor. 
Considering the financial standing of plaintiff who heads a corporation
with a paid-up capital of 2-­1/2 Million Pesos and the anguish, anxiety,
wounded feelings, shame and humiliation which he suffered as heretofore
discussed, the Court assesses moral damages in his favor in the amount of
P350,000.00.”

PAN AM assails this award of moral damages as without evidentiary
foundation, or at the very least, excessive. 
It argues that no such arrogance or boorishness was displayed by the PAN
AM people at the Honolulu Airport, that what simply happened was, citing Ongiako’s own testimony, that when Ongsiako
could not find his luggage and asked for help, showing them his baggage tag and
ticket, one of the PAN AM employees there, “instead of helping ** (him)
looked at their watch and said, you better get up or you will be late on your
flight, I am sorry I cannot help you, there are so many people waiting for
their turn * *.”^[15] It claims, too, that even the Court of
Appeals itself declared that it was “not satisfied with the adequacy of the
evidence related to the ill-treatment suffered by the plaintiff at the hands of
PAN AM Honolulu airport office employees. 
** ”^[16] The quotations from the transcript and
judgment of the Appellate Court are out of context.  The record of Ongsiako’s
testimony reveals that he did say that “the PAN AM employee embarrassed **
(him) in Honolulu by shouting at **
(him),” a statement that he reaffirmed twice,^[17]
and that that employee even refused to look at his baggage tag.^[18]
As regards the Intermediate Appellate Court, it also did say that it was sustainiing “the full award of moral damages,”
but that it did not find that the evidence was adequate to establish that the
conduct of PAN AM was so “wanton, reckless, oppressive or malevolent”
as to justify an award of exemplary damages, a ruling that is not essentially
inconsistent with Ongsiako’s version of the
occurrence.  In any event, even accepting
PAN AM’s version of the occurrence at face value, it is clear that none of the
PAN AM employees exerted the least effort to assist Ongsiako
in his predicament, despite his appeal for help; that not one of them even
deigned to look at Ongsiako’s baggage tag, or listen
to his problem, or give assurances that something would be done about his
difficulties, or otherwise show any sign of sympathy or commiseration; that
instead, they looked at their watches — an impolite and dismaying gesture of
impatience, to be sure, considering the circumstances — and told him he could
not be helped because there were other people waiting for their turn — to be
served, of course, like Ongsiako, as they had a right
to expect as paying passengers — and that it was best if he just went to his
plane so as not to miss his flight. 
Surely, these acts of callous indifference to the plight of a person in
a foreign land could not be less distressing, depressing or disheartening to
the latter, or judged less harshly, simply because not attended by any shouted
remarks.

All things considered, the Court is satisfied that moral damages
have been correctly granted.

WHEREFORE, the petitioner’s appeal is DISMISSED, and the
judgment of the Intermediate Appellate Court, AFFIRMED in toto.  Costs
against the petitioner.

Cruz, Gancayco, Griño-Aquino,
and Medialdea,
JJ., concur.

^[1]
Rollo, p. 23

^[2]
Id.

^[3]
Id., p. 94

^[4]
Id., p. 23

^[5]
Id.

^[6]
In Civil Case No. 33820, the decision having been rendered by Judge (now Court of
Appeals Associate Justice) Ricardo J. Francisco on February 3, 1981 (Rollo, pp. 79-96)

^[7]
Docketed as AC-G.R. CV No. 68438

^[8]
Rollo, pp. 23-29.  The decision was written for the Second Civil
Cases Division by Camilon, J., and concurred
in by Pascual and Jurado, JJ.  It was promulgated on October 18, 1984.

^[9]
Rollo,, p. 162

^[10]
Francisco v. GSIS, March 30,
1963; Verzosa v. Baylon, L-14192, April 29, 1960, 107 Phil. 1010

^[11]
Coscolluela v. Valderrama,
L-13757, Aug. 31, 1961

^[12]
Francisco v. GSIS, March 30,
1963, 7 SCRA 577

^[13]
Fores v. Miranda, L-12163, March 4, 1959; Soberano v. Manila Railroad, 18 SCRA 732; Laguna Tayabvas Bus Co. v. Cornista,
11 SCRA 18; Lopez v. Pan American World Airway;s,
Inc., 16 SCRA 431; Verzosa v. Baytan, et al., supra, 107 Phil. 1010

^[14]
Rollo, p. 28

^[15]
Id., pp. 175-176

^[16]
Id., p. 176

^[17]
TSN, Jan. 10, 1980, p. 17; Feb. 6, 1980, pp. 4-5

^[18]
TSN, Jan. 10, 1980, p. 10