LUFTHANSA GERMAN AIRLINES, PETITIONER, VS. INTERMEDIATE APPELLATE COURT AND SPOUSES HENRY H. ALCANTARA AND TERESITA ALCANTARA, RESPONDENTS.

This is a petition for review on certiorari decision of
the then Intermediate Appellate Court* dated May
31, 1984, affirming with modification the decision of the then Court of First
Instance of Manila, Sixth Judicial District, Branch XXIV, and the resolution
dated June 18, 1985 denying the motion for reconsideration of the said
decision.

The antecedent facts of this case are as follows:

On January 21, 1979, respondent Henry H. Alcantara shipped
thirteen (13) pieces of luggage through petitioner Lufthansa from Teheran to
Manila as evidenced by Lufthansa Air Waybill No. 220-9776-2733 (Exhibit
“A”, also Exhibit “1”). The Air Waybill discloses that the actual gross weight of the thirteen
(13) pieces of luggage is 180 kilograms. Respondent Henry H. Alcan­tara did not declare an inventory of the
contents or the value of the luggages when he delivered them to Lufthansa.

On March 3, 1979, the thirteen (13) pieces of luggage were
boarded in one of Lufthansa’s flights which arrived in Manila on the same
date. After the luggages arrived in
Manila, the consignee, respondent Teresita Alcantara, was able to claim from
the cargo broker Philippine Skylanders, Inc. on March 6, 1979 only twelve (12)
out of the thirteen (13) pieces of lug­gage with a total weight of 174
kilograms (Exhibits “20” and “20-A”).

The private respondents advised Lufthansa of the loss of one of
the luggages and of the contents thereof (Exhibits “B”, “C”
and “D”). Petitioner
Lufthansa sent telex tracing messages to different stations and to the
Philippine Airlines which ac­tually carried the cargo (Exhibits “3”,
“5”, “7”, “9”, “11”, “12”,
“13” and “14”). But
all efforts in tracing the missing luggage were fruitless (Exhibits
“4”, “6”, “8”, “10”, “12” and
“17”).

Since efforts to trace the missing luggage yielded nega­tive
results, Lufthansa informed Henry Alcantara accordingly and advised him to file
a claim invoice (Exhibits “18” and “19”).

On September 24, 1979, the private respondents wrote the
petitioner demanding the production of the missing luggage within ten (10) days
from receipt (Exhibit “E”). Since the pe­titioner did not comply with said demand, the private
respondents filed a complaint dated May 7, 1980, for breach of contract with
damages against the petitioner before the Court of First Instance of Manila,
Sixth Judicial District, Branch
XXIV.

The petitioner filed its answer to the complaint alleging that
the Warsaw Convention limits the liability of the carrier, if any, with respect
to cargo to a sum of 250 francs per kilo ($20.00 per kilo or $9.07 per pound),
unless a higher value is declared in advance and additional charges are paid by
the pas­senger and the conditions of the contract as set forth in the air
waybill expressly subject the contract of carriage of cargo to the Warsaw
Convention. The petitioner also alleged
that it never acted fraudulently or in bad faith so as to en­title respondent
spouses to moral damages and attorney’s fees, nor did it act in a wanton,
fraudulent, reckless, oppressive or malevolent manner as to entitle spouses to
exemplary damages.

After trial, on November 18, 1981, the trial court** ren­dered its decision, the dispositive portion of
which reads as follows:

“WHEREFORE, judgment is hereby rendered in favor of
plaintiffs, spouses Henry H. Alcantara and Tere­sita Alcantara, and against Lufthansa
German Airlines.

“(1) Ordering defendant to
pay plaintiffs the sum of P200,000.00 for actual damages, with interest thereon
at the legal rate from the date of the filing of the complaint until the
principal sum is fully paid;

“(2) Ordering defendant to
pay plaintiffs the sum of P20,000.00 as attorney’s fees; and

“(3) Ordering defendant to
pay the costs of suit.

“SO ORDERED.” (Rollo, pp. 62-63)

The petitioner appealed to the then Intermediate Appellate
Court. On May 31, 1984, the appellate
court promulgated its decision, the dispositive portion of which reads:

“WHEREFORE, PREMISES CONSIDERED, the decision appealed from is
hereby AFFIRMED with the modifica­tion that the amount of P20,000.00 awarded as
attor­ney’s fees shall be
deleted, the costs to be borne by the respective parties.

“SO ORDERED.” (Rollo, p. 39).

Its motion for reconsideration having been denied, the petitioner
filed the instant petition.

The main issue in this case is whether or not the private
respondents are entitled to an award of damages beyond the lia­bility set forth
in the Warsaw Convention and in the Airwaybill of Lading.

The petitioner contends that the Republic of the Philip­pines is
a party to the “Convention for the Unification of Cer­tain Rules Relating
to International Transportation by Air”, otherwise known as the Warsaw
Convention. After the Senate of the
Republic of the Philippines, by its Resolution No. 19 of May 16, 1950,
concurred in the adherence by the government of the Philippines to the said
Convention, and after the government of the Republic of the Philippines
formally notified the government of the Republic of Poland of such adherence on
Novem­ber 9, 1950, Presidential Proclamation No. 201 signed by the late
President Ramon Magsaysay on September 23, 1965 made public the adherence of
the Republic of the Philippines to the said Warsaw Convention which applies to
all international trans­portation of persons, baggage or goods performed by
aircraft for hire. Since the contract
between the petitioner and respond­ent Henry H. Alcantara embodied in
Airwaybill No. 220-9776-2733 is one of international carriage by air, it is
subject to the Warsaw Convention, which in Article 22 limits the liability of
the carrier with respect to checked baggage to a sum of 250 French francs per
kilo (equivalent to US$20.00/kilo) unless a higher value has been declared in
advance and additional charges are paid by the passenger. Respondent Henry H. Alcantara having
admitted that he did not declare the value or contents of the missing luggage,
the liability of the petitioner is therefore limited by the Warsaw Convention
and the Airwaybill to US$20.00 per kilo.

The petitioner further argues that the award of P200,000.00 as
actual damages is not borne by evidence. It insists that the testimonial and documentary evidence of respondent
spouses failed to indicate the actual value of the alleged contents of the mis­sing
luggage and have not presented actual proof as to the con­tents, total weight
and value of the missing luggage as well as the actual damage they suffered
(Rollo, pp. 88-89, 95).

On the other hand, the private respondents maintain that the
petitioner, as found by the trial and appellate courts, waived the benefits of
the Warsaw Convention when it offered a settlement in the amount of $200.00
which is much higher than what the Convention prescribes and never raised
timely objections during the trial to the introduction of evidence regarding
the actual claims and damages sustained by respondent Alcantara.

The private respondents also claim that in the trial of the case,
they proved a loss of P200,000.00 and an expense of $15,000.00 in vainly trying
to locate the missing luggage all over Europe and the trial court awarded less
than what was proven (Rollo, p. 118).

The petition is without merit.

The loss of one luggage belonging to the private respondents
while the same was in the custody of the petitioner is not dis­puted. The contract of air carriage generates a
relation attended with a public duty. Neglect or malfeasance of the carrier’s em­ployees could give ground for
an action for damages (Zulueta v. Pan American World Airways, Inc., 43 SCRA 37
[1972]). Common car­riers are liable
for the missing goods for failure to comply with its duty (American Insurance
Co., Inc. v. Macondray & Co., Inc., 39 SCRA 494 [171]).

In Alitalia vs. Intermediate Appellate Court (192 SCRA 9 [1990])
where petitioner Alitalia as carrier failed to deliver a passenger’s (Dr.
Felipa Pablo’s) baggage containing the papers she was scheduled to read and the
materials which would have enabled her to make scientific presentation
(consisting of slides, auto-radiograms or films, tables and tabulations) in a
prestigious in­ternational conference in Rome where she was invited to partici­pate
in the conference, extended by the Joint FAO/IAEA Division of Atomic Energy in
Food and Agriculture of the United Nations, as a consequence of which she
failed to participate in the conference, this Court held that the Warsaw
Convention does not exclude liabi­lity for other breaches of contract by the
carrier. Thus:

“The Convention does not thus operate as an exclu­sive
enumeration of the instances of an airline’s liabi­lity, or as an absolute
limit of the extent of that liability. Such a proposition is not borne out by the language of the Convention,
as this Court has now, and at an earlier time, pointed out. Moreover, slight re­flection readily leads
to the conclusion that it should be deemed a limit of liability only in those
cases where the cause of the death or injury to person, or destruc­tion, loss
or damage to property or delay in its trans­port is not attributable to or attended by any wilful misconduct, bad
faith, recklessness, or otherwise im­proper conduct on the part of any official
or employee for which the carrier is responsible, and there is otherwise no
special or extraordinary form of resulting injury. The Convention’s provisions, in short, do not ‘regulate or
exclude liability for other breaches of contract by the carrier’ or misconduct
of its officers and employees, or for some particular or exceptional type of
damage. Otherwise, ‘an air carrier
would be exempt from any liability for damages in the event of its absolute
refusal, in bad faith, to comply with a
contract of carriage, which is absurd.’ Nor may it for a moment be supposed
that if a member of the aircraft complement should inflict some physical injury
on a pas­senger, or maliciously destroy or damage the latter’s property, the
Convention might successfully be pleaded as the sole gauge to determine the
carrier’s liability to the passenger. Neither may the Convention be invoked to justify the disregard of some
extraordinary sort of damage resulting to a passenger and preclude recovery therefor
beyond the limits set by said Convention. It is in this sense that the Convention has been applied, or ignored,
depending on the peculiar facts presented by each case.

x x x                                      x x x                                         x x x

“In the case at bar, no bad faith or otherwise im­proper
conduct may be ascribed to the employees of petitioner airline; and Dr. Pablo’s
luggage was even­tually returned to her, belatedly, it is true, but with­out
appreciable damage. The fact is,
nevertheless, that some species of injury was caused to Dr. Pablo be­cause
petitioner ALITALIA misplaced her baggage and failed to deliver it to her at
the time appointed – a breach of its contract of carriage, to be sure – with
the result that she was unable to read the paper and make the scientific
presentation (consisting of slides, autoradiograms or films, tables and
tabulations) that she had painstakingly labored over, at the prestigious
international conference, to attend which she had tra­veled hundreds of miles,
to her chagrin and embarrass­ment and the disappointment and annoyance of the
organizers. She felt, not unreasonably,
that the invi­tation for her to participate at the conference, extended by the
Joint FAO/IAEA Division of Atomic Energy in Food and Agriculture of the United
Nations, was a singular honor not only to herself, but to the Univer­sity of
the Philippines and the country as well, an opportunity to make some sort of
impression among her colleagues in that field of scientific activity. The opportunity to claim this honor or
distinction was ir­retrievably lost to her because of Alitalia’s breach of its
contract.

“Apart from this, there can be no doubt that Dr. Pablo
underwent profound distress and anxiety, which gradually turned to panic and
finally despair, from the time she learned that her suitcases were missing up
to the time when, having gone to Rome, she finally realized that she would no
longer be able to take part in the conference. As she herself put it, she ‘was really shocked and distraught and
confused.’

“Certainly, the compensation for the injury suf­fered by Dr.
Pablo cannot under the circumstances be restricted to that prescribed by the
Warsaw Convention for delay in the transport of baggage.

“She is not, of course, entitled to be compensa­ted for loss
or damage to her luggage. As already
mentioned, her baggage was ultimately delivered to her in Manila, tardily, but
safely. She is however enti­tled to
nominal damages – which, as the law says, is adjudicated in order that a right
of the plaintiff, which has been violated or invaded by the defendant, may be
vindicated and recognized, and not for the pur­pose of indemnifying the
plaintiff for any loss suf­fered – and this Court agrees that the respondent
Court of Appeals correctly set the amount thereof at P40,000.00.”

In the case at bar, the trial court found that: (a) peti­tioner airline has not successfully
refuted the presumption esta­blished by Article 1735 of the Civil Code that the
loss of the luggage in question was due to the negligence or fault of its
employees; (b) the contents of the missing luggage of private respondents could
not be replaced and were assessed at P200,000.00 by the latter; (c) respondent
Henry Alcantara spent about $15,000.00 in trying to locate said luggage in
Frankfurt, Germany, London, United Kingdom and Hongkong; (d) there being no
evidence to the contrary, the foregoing assessments made by private respondents
were fair and reasonable; and (e) private respondents were unable to present
ample evidence to prove fraud and bad faith and are therefore not entitled to
moral damages under Article 2220 of the Civil Code (Rollo, p. 61).

On the other hand, the Court of Appeals found that the lower
court’s award of P200,000.00 as actual and compensatory damages is well based
factually and legally (Rollo, p. 37) except as to the deletion of attorney’s
fees due to the absence of findings of gross and evident bad faith (Rollo, p.
39).

Under the circumstances, there appears to be no cogent reason to
disturb the factual findings of both the trial court and the Court of Appeals.

Furthermore, the respondent court found that petitioner waived
the applicability of the Warsaw Convention to the case at bar when it offered
private respondent a higher amount than that which is provided in the said law and failed to raise
timely ob­jections during the trial when questions and answers were brought out
regarding the actual claims and damages sustained by Alcantara which were even
subjected to lengthy cross examination by Lufthansa’s counsel. In Abrenica v. Gonda (34 Phil. 739), this Court
held:

“x x x (I)t has
been repeatedly laid down as a rule of evidence that a protest or objection
against the admission of any evidence must be made at the proper time, and that
if not so made it will be under­stood to have been waived. The proper time to make a protest or
objection is when, from the question addressed to the witness, or from the
answer thereto, or from the presentation of proof, the inadmissibility of
evidence is, or may be inferred.”

“It is also settled that the court cannot disregard evidence
which would ordinarily be incompetent under the rules but has been rendered
admissible by the failure of a party to object thereto. Thus:

‘x x x The acceptance of an incompetent witness to testify in a
civil suit, as well as the allowance of improper questions that may be put to
him while on the stand is a matter resting in the discretion of the
litigant. He may assert his right by
timely objection or he may waive it, expressly or by silence. In any case, the option rests with him. Once admitted, the testimony is in the
case for what it is worth and the judge has no power to disregard it for the
sole reason that it could have been excluded, if it had been objected to, nor
to strike it out on its own motion.’ ” (Cruz v. CA, et al., 192 SCRA 209
[1990] citing Marella, vs. Reyes, 12 Phil. 1). (Emphasis supplied).

WHEREFORE, the petition is Dismissed and the questioned
decision and resolution of the appellate court are Affirmed. No costs.

SO ORDERED.

Gutierrez, Jr., (Chairman), Davide, Jr., and Romero, JJ., concur.

Feliciano, J., on leave.

* IAC, First Civil Cases Division,
Justice Ma. Rosario Quetulio?Losa penned the decision with the
concurrence of Acting Presi­ding Justice Ramon G. Gaviola, Jr. and Justice
Eduardo P. Caguioa.

** Judge Augusto M. Amores penned
the decision.