[LOPEZ] G.R. No.
R. No. 73835 January 17, 1989 the receipt of the instructions from the Manila office to the SF office.
CHINA AIRLINES, LTD., petitioner, vs. INTERMEDIATE APPELLATE
COURT and CLAUDIO B. OSORIO, respondents.
Topic: Common Carrier; Damages
Doctrine: The breach of contract under consideration having been incurred
in good faith, CAL is liable for damages which are the natural and probable
consequences of said breach and which the parties have foreseen at the
time the obligation was constituted.
Facts:
1. After a four-hour delay due to an engine malfunction, respondent
Osorio boarded in Manila, Flight No. CI-812 of China Airlines, Ltd.
(CAL) for Taipei. The flight was to bring Osorio and 9 other
passengers to Taipei in time for their flight to LAX.
2. As this schedule had been rendered impossible, it was agreed that
Osorio, et.al. would spend the night in Taipei at CALs expense, and
would be brought the following day to San Francisco, where they
would be furnished an immediate flight connection to LAX.
3. Upon Osorio et.al.s arrival in San Francisco, CAL asked Osorio,
et.al. to wait as no instructions have been received regarding
respondents accommodation due to the delay in the transmission of
telex messages. CAL tried to contact the Manila office, but it could
not be done immediately because of the time difference.
4. Seeing that they would need to spend the night, respondent asked
that they be provided food and overnight accommodations as transit
passengers, but were refused by CALs passenger service agent,
Dennis Cheng.
5. Because of such, they angrily left CALs San Francisco office without
leaving a contact address. Thus, when word came in from Manila,
the respondent could not be informed of the issuance of the tickets.
6. The following day, after spending the night at YMCA, they learned
that their tickets and luggage are ready for pick-up. However, Osorio
preferred to pick up her luggage after another day, and preferred to
fly to LAX with a Western Airlines ticket which she purchased for
$56.
7. Osorio then filed a complaint for damages arising from breach of
contract against CAL. The trial court absolved CAL from any liability
except the actual sum spent by Osorio as reimbursement ofr any
expense and the Western Airlines ticket.
8. On appeal, IAC reversed the trial courts decision, finding a palpable
breach of contract of carriage. IAC considered CAL as wanting in
human care and foresight in not having taken other steps to ensure
They also found that rude and arrogant behavior of Dennis Cheng to
be a factor for the breach. CAL was ordered to pay Osorio actual
damages, as well as moral (P100,000) and exemplary damages
(P20,000) with attorneys fees (P5,000).
9. Hence, this petition by CAL.
Issue: W/N failure of CAL to arrange an immediate flight to LAX constitute a
palpable breach of contract
Held: No!
1. Verily, CAL committed a breach of contract in failing to secure an
immediate flight connection for private respondent. The reliance of
CAL on telex communications falls short of the utmost diligence of a
very cautious person expected of it, thereby rendering it liable for its
failure to abide by the promised immediate connection.
2. However, the breach of contract was not attended by gross
negligence, recklessness or wanton disregard of the rights of Osorio
as a passenger.
a. Telex was the established mode of communication between
petitioner's Manila and San Francisco offices. Contact by
telephone was not a practice due to the time difference
between the two places.
3. Thus, while petitioner's Manila office was aware of the possibility of
transmission delay, it had to avail itself of this mode of
communication. For this course of action, CAL did not act wantonly
or recklessly.
4. Considering the gap of more than 24 hours between the time the
telex messages were sent out and Osorio's expected arrival at San
Francisco, it was not unreasonable for CAL to expect that this time
gap would cover whatever delay might be encountered at the
Hongkong Link (from where the Telex will go through). Thus, while
petitioner may have been remiss in its total reliance upon the telex
communications and therefore considered negligent in view of the
degree of diligence required of it as a common carrier, such
negligence cannot under the obtaining circumstances be said to be
so gross as to amount to bad faith.
Damages to be awarded
5. The breach of contract under consideration having been incurred in
good faith, CAL is liable for damages which are the natural and
probable consequences of said breach and which the parties have
 foreseen at the time the obligation was constituted. These damages
consist of the actual damages awarded by the trial court to Osorio.
6. With respect to moral damages, the rule is that the same are
recoverable in a damage suit predicated upon a breach of contract of
carriage only where (1) the mishap results in the death of a
passenger and (2) it is proved that the carrier was guilty of fraud or
bad faith, even if death does not result. As the present case does not
fall under either of the cited instances, the award of moral damages
should be, as it is hereby disallowed.
7. The award of exemplary damages must likewise be deleted, as it has
not been shown that petitioner, in committing the breach of contract
of carriage, acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner.

Re: Rude and Arrogant Behavior of Dennis Cheng as CALs agent

1. He cannot be faulted for refusing to acceded to Osorios demand for
an immediate flight connection to LAX, nor for accommodations as
such refusal was because they lacked information upon which to act
upon. There was no deliberate intent to ignore or disregard Osorios
rights.
2. Contact thru telephone with Manila could not immediately be made
because of the time difference as the Manila office has not yet begun
its office hours. However, Osorio left the airport without leaving a
contact address. In this sense, it was private respondent herself who
rendered it impossible for petitioner airlines to perform its obligation
of bringing her to Los Angeles as contracted for.

WHEREFORE, the decision under review is hereby MODIFIED in that the

award of moral and exemplary damages to private respondent Claudia B.
Osorio is eliminated and the attorney's fees is increased to P10,000.00. No
pronouncement as to costs.