PHILIPPINE AIRLINES, INC., PETITIONER, VS. COURT OF APPEALS AND PEDRO ZAPATOS, RESPONDENTS.

This petition for review
on certiorari seeks to annul and set aside the decision of the then
Intermediate Appellate Court,^[1] now Court of Appeals, dated 28 February
1985, in AC-G.R. CV No. 69327 (“Pedro Zapatos v. Philippine Airlines, Inc.”) affirming the decision of the then
Court of First Instance, now Regional Trial Court, declaring Philippine
Airlines, Inc., liable in damages for breach of contract.

On 25 November 1976,
private respondent filed a complaint for damages for breach of contract of
carriage^[2] against Philippine Airlines, Inc. (PAL),
before the then Court of First Instance, now Regional Trial Court, of Misamis
Occidental, at Ozamiz City. According
to him, on 2 August 1976, he was among the twenty-one (21) passengers of PAL
Flight 477 that took off from Cebu bound for Ozamiz City. The routing of this flight was
Cebu-Ozamiz-Cotabato. While on flight
and just about fifteen (15) minutes before landing at Ozamiz City, the pilot
received a radio message that the airport was closed due to heavy rains and
inclement weather and that he should proceed to Cotabato City instead.

Upon arrival at Cotabato
City, the PAL Station Agent informed the passengers of their options to return
to Cebu on Flight 560 of the same day and thence to Ozamiz City on 4
August 1975, or take the next flight to Cebu the following day, or remain at Cotabato and take the next
available flight to Ozamiz City on 5 August 1975.^[3] The Station Agent likewise informed them
that Flight 560 bound for Manila would make a stop-over at Cebu to bring some
of the diverted passengers; that there were only six (6) seats available as
there were already confirmed passengers
for Manila; and, that the basis for priority would be
the check-in sequence at Cebu.

Private respondent chose
to return to Cebu but was not accommodated because he checked-in as passenger
No. 9 on Flight 477. He insisted on
being given priority over the confirmed passengers in the accommodation, but
the Station Agent refused private respondent’s demand
explaining that the latter’s predicament was not due to PAL’s own doing but to
a force majeure.^[4]

Private respondent tried
to stop the departure of Flight 560 as his personal belongings, including a
package containing a camera which a certain Miwa from Japan asked him to
deliver to Mrs. Fe Obid of Gingoog City, were still on board. His plea fell on deaf ears. PAL then issued to private respondent a free
ticket to Iligan City, which the latter received under protest.^[5] Private respondent was left at the airport
and could not even hitch a ride
in the Ford Fiera loaded with PAL
personnel.^[6] PAL neither provided private respondent with
transportation from the airport to the city proper nor food and accommodation
for his stay in Cotabato City.

The following day,
private respondent purchased a PAL ticket to Iligan City. He informed PAL personnel that he would not use the free ticket because he
was filing a case against PAL.^[7] In Iligan City, private respondent hired a car from the airport to
Kolambugan, Lanao del Norte, reaching Ozamiz City by crossing the bay in a
launch.^[8]
His personal effects including
the camera, which were valued at P2,000.00, were no longer recovered.

On 13 January 1977, PAL
filed its answer denying that it unjustifiably refused to accommodate private
respondent.^[9] It alleged that there was simply no more
seat for private respondent on Flight 560 since there were only six (6) seats
available and the priority of accommodation on Flight 560 was based on the
check-in sequence in Cebu; that the first six (6) priority passengers on Flight
477 chose to take Flight 560; that its Station Agent explained in a courteous
and polite manner to all passengers the reason for PAL’s inability to transport
all of them back to Cebu; that the stranded passengers agreed to avail of the
options and had their respective tickets exchanged for their onward
trips; that it was only the private respondent who insisted on being given
priority in the accommodation; that pieces of checked-in baggage and
handcarried items of the Ozamiz City passengers were removed from the aircraft;
that the reason for the pilot’s inability to land at Ozamiz City airport was
because the runway was wet due to rains thus posing a threat to the safety of
both passengers and aircraft; and, that such reason of force majeure was a
valid justification for the pilot to bypass Ozamiz City and proceed directly to
Cotabato City.

On 4 June 1981, the trial
court rendered its decision^[10] the dispositive portion of which states:

“WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendant Philippine Air Lines, Inc. ordering the
latter to pay:

(1) As actual damages, the sum of Two Hundred Pesos (P200.00)
representing plaintiff’s expenses for transportation, food and accommodation
during his stranded stay at Cotabato City; the sum of Forty-Eight Pesos (P48.00)
representing his flight fare from Cotabato City to Iligan City; the sum of Five
Hundred Pesos (P500.00) representing plaintiff’s transportation expenses from
Iligan City to Ozamiz City; and the sum of Five Thousand Pesos (P5,000.00) as loss of business
opportunities during his stranded stay in Cotabato City;

(2) As moral damages, the sum of Fifty Thousand Pesos (P50,000.00 )
for plaintiff’s hurt feelings, serious anxiety, mental anguish and unkind and
discourteous treatment perpetrated by defendant’s employees during his stay as
stranded passenger in Cotabato City;

(3) As exemplary damages, the sum of Ten Thousand Pesos
(P10,000.00) to set a precedent to the defendant airline that it shall provide
means to give comfort and convenience to stranded passengers;

(4) The sum of Three Thousand Pesos (P3,000.00) as attorney’s fees;

(5) To pay the costs of this suit. “

PAL appealed to the Court
of Appeals which on 28 February 1985, finding no reversible error, affirmed the
judgment of the court a quo.^[11]

PAL then sought recourse
to this Court by way of a petition for review on certiorari^[12] upon the following issues: (1) Can the Court of Appeals render a
decision finding petitioner (then defendant-appellant in the court below)
negligent and, consequently, liable for damages on a question of substance
which was neither raised in the complaint nor proved at the trial? (2) Can the Court of Appeals award actual
and moral damages contrary to the evidence and established jurisprudence?^[13]

An assiduous examination
of the records yields no valid reason for reversal of the judgment on appeal;
only a modification of its disposition.

In its petition, PAL
vigorously maintains that private respondent’s principal cause of action was
its alleged denial of private respondent’s demand for priority over the
confirmed passengers on Flight 560. Likewise, PAL points out that the complaint did not impute to PAL
neglect in failing to attend to the needs of the diverted passengers; and, that
the question of negligence was not and never put in issue by the pleadings or proved at the trial.

Contrary to the above
arguments, private respondent’s amended complaint touched on PAL’s indifference
and inattention to his predicament. The
pertinent portion of the amended complaint^[14] reads:

“10. That by virtue of
the refusal of the defendant through its agent in Cotabato to accomodate (sic)
and allow the plaintiff to take and board the plane back to Cebu, and by
accomodating (sic) and allowing passengers from Cotabato for Cebu in his stead
and place, thus forcing the plaintiff against his will, to be left and stranded
in Cotabato, exposed to the peril and danger
of muslim rebels plundering at the time, the plaintiff, as a consequence,
(have) suffered mental anguish, mental torture, social humiliation, bismirched
reputation and wounded feeling, all amounting to a conservative amount of
thirty thousand (P30,000.00) Pesos.”

To substantiate this
aspect of apathy, private respondent testified^[15] –

“A.   I did not even notice that I was I think
the last passenger or the last person out of the PAL employees and army
personnel that were left there. I did
not notice that when I was already outside of the building after our
conversation.

Q.   What
did you do next?

A.    I
banished (sic) because it seems that there was a war not far from the
airport. The sound of guns and the
soldiers were plenty.

Q.   After
that what did you do?

A.    I
tried to look for a transportation that could bring me down to the City of
Cotabato.

Q.   Were
you able to go there?

A.    I
was at about 7:00 o’clock in the evening more or less and it was a private jeep
that I boarded. I was even questioned why I and who am
(sic) I then. Then I explained my side
that I am (sic) stranded passenger. Then they brought me downtown at Cotabato.

Q.   During
your conversation with the Manager were you not offered any vehicle or
transportation to Cotabato airport downtown?

A.    In
fact I told him (Manager) now I am by­-passed passenger here which is not my destination what can you
offer me. Then they answered, “it is not my fault. Let us forget that.

Q.   In
other words when the Manager told you that offer was there a vehicle ready?

A.    Not
yet. Not long after that the Ford Fiera
loaded with PAL personnel was passing by going to the City of Cotabato and I
stopped it to take me a ride because there was no more available transportation but I was not
accommodated.”

Significantly, PAL did
not seem to mind the introduction of evidence which focused on its alleged
negligence in caring for its stranded passengers. Well-settled is the rule in evidence that the protest or
objection against the admission of evidence should be presented at the time the
evidence is offered, and that the proper time to make protest or objection to
the admissibility of evidence is when the question is presented to the witness
or at the time the answer thereto is given.^[16] There being no objection, such evidence
becomes property of the case and
all the parties are amenable to any favorable or unfavorable effects resulting
from the evidence.^[17]

PAL instead attempted to
rebut the aforequoted testimony. In the
process, it failed to substantiate its counter allegation for want of concrete
proof^[18] –

“Atty. Rubin O. Rivera – PAL’s
counsel:

Q.   You
said PAL refused to help you when you were in Cotabato, is that right?

Private respondent:

A.    Yes.

Q.   Did
you ask them to help you regarding any offer of transportation or of any other
matter asked of them?

A.    Yes,
he (PAL PERSONNEL) said what is? It is
not our fault.

Q.   Are
you not aware that one fellow passenger even claimed that he was given Hotel
accommodation because they have no money?

x x x x

A.    No,
sir, that was never offered to me. I
said, I tried to stop them but they were already riding that PAL pick-up jeep,
and I was not accommodated.”

Having joined in the
issue over the alleged lack of care it exhibited towards its passengers, PAL
cannot now turn around and feign surprise at the outcome of the case. When issues not raised by the pleadings are
tried by express or implied consent of the parties, they shall be treated in
all respects as if they had been raised in the pleadings.^[19]

With regard to the award of damages affirmed by the appellate
court, PAL argues that the same is unfounded. It asserts that it should not be charged with the task of looking after
the passengers’ comfort and convenience because the diversion of the flight was
due to a fortuitous event, and that if made liable, an added burden is given to
PAL which is over and beyond its duties under the contract of carriage. It submits that granting arguendo that negligence exists, PAL cannot be liable in damages in the
absence of fraud or bad faith; that private respondent failed to apprise PAL of
the nature of his trip and possible business losses; and, that private
respondent himself is to be blamed for unreasonably refusing to use the free
ticket which PAL issued.

The contract of air carriage is a peculiar one. Being imbued with public interest, the law
requires common carriers to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons,
with due regard for all the circumstances.^[20] In Air France v. Carrascoso,^[21] we held that –

“A contract to transport passengers is quite different in kind and
degree from any other contractual relation. And this, because of the relation which an air carrier sustains with the
public. Its business is mainly with the
travelling public. It invites people
to avail of the comforts and advantages it offers. The contract of air carriage, therefore,
generates a relation attended with a public duty x x x x” (underlining
supplied).

The position taken by PAL
in this case clearly illustrates its
failure to grasp the exacting
standard required by law. Undisputably,
PAL’S diversion of its flight due to inclement weather was a fortuitous
event. Nonetheless, such occurrence did
not terminate PAL’s contract with its passengers. Being in the business of air carriage and the sole one to operate
in the country, PAL is deemed equipped to deal with situations as in the case
at bar. What we said in one case once
again must be stressed, i.e., the relation of carrier and passenger continues
until the latter has been landed at the port of destination and has left the
carrier’s premises.^[22] Hence, PAL necessarily would still have to
exercise extraordinary diligence in safeguarding the comfort, convenience and
safety of its stranded passengers until they have reached their final
destination. On this score, PAL grossly
failed considering the then ongoing battle between government forces and Muslim
rebels in Cotabato City and the fact that the private respondent was a stranger
to the place. As the appellate court
correctly ruled –

“While the failure of plaintiff in the first instance to reach
his destination at Ozamis City in accordance
with the contract of carriage was due
to the closure of the airport on account of rain and inclement weather which
was radioed to defendant 15 minutes before landing, it has not been disputed by
defendant airline that Ozamis City has no all-weather airport and has to cancel
its flight to Ozamis City or by-pass it in the event of inclement weather. Knowing this fact, it becomes the duty of
defendant to provide all means of comfort and convenience to its passengers
when they would have to be left in a strange place in case of such
by-passing. The steps taken by
defendant airline company towards this end has not been put in evidence,
especially for those 7 others who were not accommodated in the return trip to
Cebu, only 6 of the 21 having been so accommodated. It appears that plaintiff had to leave on the next flight 2 days later. If the cause of
non-fulfillment of the contract is due to a fortuitous event, it has to be the sole
and only cause (Art. 1755 C.C., Art. 1733 C.C.) Since part of the failure to
comply with the obligation of common carrier to deliver its passengers safely
to their destination lay in the defendant’s failure to provide comfort and
convenience to its stranded passengers using extra-ordinary diligence, the
cause of non-fulfillment is not solely and exclusively due to fortuitous event,
but due to something which defendant airline could have prevented, defendant
becomes liable to plaintiff.“^[23]

While we find PAL remiss
in its duty of extending utmost care to private respondent while being stranded
in Cotabato City, there is no sufficient basis to conclude that
PAL failed to inform him about his non-accommodation on Flight 560, or that it
was inattentive to his queries relative thereto.

On 3 August 1975, the
Station Agent reported to his Branch Manager in Cotabato City that –

“3. Of the fifteen
stranded passengers two pax elected to take F478 on August 05, three pax opted
to take F442 August 03. The remaining
ten (10) including subject requested that they be instead accomodated (sic) on
F446 CBO-IGN the following day where they intended to take the surface
transportation to OZC. Mr. Pedro
Zapatos had by then been very vocal and boiceterous (sic) at the counter and we
tactfully managed to steer him inside the Station Agent‘s office. Mr. Pedro
Zapatos then adamantly insisted that all the diverted passengers should have
been given priority over the originating passengers of F560 whether confirmed
or otherwise. We explained our policies
and after awhile he seemed pacified and thereafter took his ticket (in-lieued
(sic) to CBO-IGN, COCON basis), at the counter in the presence of five other
passengers who were waiting for their tickets too. The rest of the diverted pax had left earlier after being assured
that their tickets will be ready the following day.”^[24]

Aforesaid Report being an
entry in the course of business is prima
facie evidence of the facts therein stated. Private respondent, apart from his
testimony, did not offer any controverting evidence. If indeed PAL omitted to give information about the options
available to its diverted passengers, it would have been deluged with
complaints. But, only private
respondent complained –

“Atty. Rivera (for PAL)

Q.   I understand from you Mr. Zapatos that at the
time you were waiting at Cotabato Airport for the decision of PAL, you were not
informed of that decision until after the airplane left is that correct?

A.    Yes.

COURT:

Q.   What do you mean by “yes”? You meant you were not informed?

A.    Yes, I was not informed of their decision,
that they will only accommodate few passengers.

Q.   Aside from you there were many other stranded
passengers?

A.    I believed, yes.

Q.   And you want us to believe that PAL did not explain
(to) any of these passengers about the decision regarding those who will board
the aircraft back to Cebu?

A.    No, Sir.

Q.   Despite these facts Mr. Zapatos did any of
the other passengers complained (sic) regarding that incident?

x x x x

A.    There were plenty of arguments and I was one
of those talking about my case.

Q.   Did you hear anybody complained (sic) that he
has not been informed of the decision before the plane left for Cebu?

A.    No.”^[25]

Admittedly, private respondent’s insistence on being given priority
in accommodation was unreasonable considering the fortuitous event and that
there was a sequence to be observed in
the booking, i.e., in the order the passengers checked-in at their port of
origin. His intransigence in fact was
the main cause for his having to stay at the airport longer than was necessary –

“Atty. Rivera:

Q.   And, you were saying that despite the fact
that according to your testimony there were at least 16 passengers who were
stranded there in Cotabato airport according to your testimony, and later you
said that there were no other people left there at that time, is that correct?

A.    Yes, I did not see anyone there around. I think I was the only civilian who was left
there.

Q.   Why is it that it took you long
time to leave that place?

A.    Because I was arguing with the PAL
personnel. “^[26]

Anent the plaint that PAL
employees were disrespectful and inattentive toward private respondent, the
records are bereft of evidence to support the same. Thus, the ruling of respondent Court of Appeals in this regard is
without basis.^[27] On
the contrary, private respondent was attended to not only by the personnel of
PAL but also by its Manager.^[28]

In the light of these
findings, we find the award of moral damages of Fifty Thousand Pesos
(P50,000.00) unreasonably excessive; hence, we reduce the same to Ten Thousand
Pesos (P10,000.00). Conformably
herewith, the award of exemplary damages is also reduced to Five Thousand Pesos
(P5,000.00). Moral damages are not
intended to enrich the private respondent. They are awarded only to enable the injured party to obtain means,
diversion or amusements that will serve to alleviate the moral suffering he has
undergone by reason of the defendant’s culpable action.^[29]

With regard to the award of actual damages in the amount of
P5,000.00 representing private respondent’s
alleged business losses occasioned by his stay at Cotabato City, we find the
same unwarranted. Private respondent’s
testimony that he had a scheduled business “transaction of shark liver oil
supposedly to have been consummated on August 3, 1975 in the morning” and
that “since (private respondent) was out for nearly two weeks I missed to
buy about 10 barrels of shark liver oil,”^[30] are
purely speculative. Actual or
compensatory damages cannot be presumed but must be duly proved with reasonable
degree of certainty. A court cannot rely on speculation,
conjecture or guesswork as to the fact and amount of damages, but must depend
upon competent proof that they have suffered and on evidence of the actual amount
thereof.^[31]

WHEREFORE the decision appealed from is AFFIRMED with
modification however that the award of moral damages of Fifty Thousand Pesos
(P50,000.00) is reduced to Ten Thousand Pesos (P10,000.00) while the exemplary
damages of Ten Thousand Pesos (P10,000.00) is also reduced to Five Thousand
Pesos (P5,000.00). The award of actual
damages in the amount Five Thousand Pesos (P5,000.00) representing business
losses occasioned by private respondent’s being stranded in Cotabato City is
deleted.

SO ORDERED.

Cruz, (Chairman), Griño-Aquino, Davide, Jr., and Quiason, JJ., concur.

^[1]
Penned by Justice Floreliana Castro-Bartolome,
concurred in by Justices Jorge R.
Coquia, Mariano A. Zosa and Bienvenido C. Ejercito, Third Civil Cases
Division.

^[2]
Rollo, p. 46.

^[3]
Record of Exhibits, p. 13.

^[4]
TSN, 15 March 1979, p. 29.

^[5]
Id., p. 33.

^[6]
Id., p. 11.

^[7]
Id., p. 27.

^[8]
Id., pp. 24-25.

^[9]
Rollo, pp. 54-56.

^[10]
Penned by Judge Melencio A. Genato, Court of First Instance of Misamis
Occidental, Branch II, Ozamiz City; Rollo,
pp. 37-44.

^[11]
Rollo, pp. 112-116.

^[12]
Id., p. 15.

^[13]
Id., pp. 157-158.

^[14]
Rollo, pp. 49-50.

^[15]
TSN, 15 March 1979, pp. 10-11.

^[16]
Arevalo v. Dimayuga, 49
Phil. 894, 897 (1927).

^[17]
See Beam v. Yatco, 82 Phil. 30, 37-38 (1948).

^[18]
TSN, 15 March 1979, p. 34.

^[19]
Sec. 5, Rule 10, Rules of Court.

^[20]
Art. 1755, New Civil Code of the Philippines.

^[21]
L-21438, 28 September 1966, 18 SCRA 155, 167-168.

^[22]
Aboitiz Shipping Corporation v. Court of Appeals, G.R. No. 84458, 6
November 1989, 179 SCRA 95, 102.

^[23]
Rollo, p. 114.

^[24]
Exh. “7”, Record of Exhibits, p. 13.

^[25]
TSN, 15 March 1979, pp. 21-22.

^[26]
Ibid. p. 23.

^[27]
Rollo, p. 114.

^[28]
TSN, 15 March 1979, pp. 7-10; See also Report dated 3 August 1979, supra.

^[29]
De Leon v. Court of Appeals, L-31931, 31 August 1988, 165 SCRA 166, 179.

^[30]
TSN, 15 March 1979, pp. 16-17.

^[31]
Diokno v. Court of
Appeals, G.R. No. 55613, 10 December 1990, 192 SCRA 169, 176.