Consti

Tatad v. Garcia, Jr.

G.R. No. 114222, 6 April 1995, 243 SCRA 436

FACTS:

In 1989, DOTC planned to construct a light railway transit line along EDSA, a major thoroughfare in
Metropolitan Manila. The plan, referred to as EDSA Light Rail Transit III (EDSA LRT III), was intended to
provide a mass transit system along EDSA and alleviate the congestion and growing transportation
problem in the metropolis. RA 6957 was enacted allowing for the financing, construction and operation
of government projects through private initiative and investment. Accordingly, prequalification and
bidding was made and EDSA LRT Corporation (organized under HK laws) was recommended to be
awarded with the contract. The President approved the awarding of the contract. Petitioners are
senators praying for the prohibition of respondents from further implementing and enforcing the
contract.

ISSUE:

Whether the agreement granting EDSA LRT Corporation LTD, a foreign corporation, the ownership of
EDSA LRT III, a public utility, violates constitution.

RULING:

No. What private respondent owns are the rail tracks, rolling stocks like the coaches, rail stations,
terminals and the power plant, not a public utility. While a franchise is needed to operate these facilities
to serve the public, they do not by themselves constitute a public utility. What constitutes a public utility
is not their ownership but their use to serve the public (Iloilo Ice & Cold Storage Co. v. Public Service
Board, 44 Phil. 551, 557 558 [1923]).

The Constitution, in no uncertain terms, requires a franchise for the operation of a public utility.
However, it does not require a franchise before one can own the facilities needed to operate a public
utility so long as it does not operate them to serve the public.
The right to operate a public utility may exist independently and separately from the ownership of the
facilities thereof. One can own said facilities without operating them as a public utility, or conversely,
one may operate a public utility without owning the facilities used to serve the public. The devotion of
property to serve the public may be done by the owner or by the person in control thereof who may not
necessarily be the owner thereof.

In law, there is a clear distinction between the “operation” of a public utility and the ownership of the
facilities and equipment used to serve the public. Ownership is defined as a relation in law by virtue of
which a thing pertaining to one person is completely subjected to his will in everything not prohibited by
law or the concurrence with the rights of another. The exercise of the rights encompassed in ownership
is limited by law so that a property cannot be operated and used to serve the public as a public utility
unless the operator has a franchise. The operation of a rail system as a public utility includes the
transportation of passengers from one point to another point, their loading and unloading at designated
places and the movement of the trains at pre-scheduled times.

Even the mere formation of a public utility corporation does not ipso facto characterize the corporation
as one operating a public utility. The moment for determining the requisite Filipino nationality is when
the entity applies for a franchise, certificate or any other form of authorization for that purpose (People
v. Quasha, 93 Phil. 333 [1953]).

Shewaram v. Philippine Airlines, Inc.

G.R. No. L-20099, 7 July 1966, 17 SCRA 606

FACTS:

Shewaram, petitioner herein, is a Hindu from Davao. He boarded a PAL plane for a trip to Manila. He
checked in 3 pieces of baggage, a suitcase and 2 other pieces. One of the suitcases were mistagged by
the defendant and as a result the said suitcase did not arrive with him in Manila. Among his things in the
suitcase was a Rollflex camera and Transistor Radio 7. His baggage was later on returned but the camera
and radio were missing. He demanded indemnity for his loss from PAL. The latter offered to pay P100
for his loss but Shewaram. Defendant herein claimed that the PAL ticket, on the reverse side, stated in
fine print that if the value of baggage is not stated, and the baggage is lost, the maximum liability of PAL
is P100.00. If value in excess of P100.00 is stated, PAL will charge extra because PAL is being held liable
for an amount exceeding P100.00. Shewaram rejected the offer and demanded full payment of P800.00
for the amount of the things he lost. PAL refused to do so.

ISSUE:
Whether the stipulation limiting the liability of PAL shall apply in the case at bar.

HELD:

The Court held that PAL is liable for the loss of the petitioner herein. The stipulation in at the back of the
ticket shall not be binding against the petitioner. Article 1750 of the NCC provides that the pecuniary
liability of a common carrier may, by contract, be limited to a fixed amount. It is required, however, that
the contract must be “reasonable and just under the circumstances and has been fairly and freely
agreed upon.” In this case, the court believes that the requirements of said article have not been met. It
cannot be said that the petitioner had actually entered into a contract with the PAL, embodying the
conditions as printed at the back of the ticket stub that was to the petitioner. The fact that those
conditions are printed at the back of the ticket stub in letters so small that they are hard to read would
not warrant the presumption that the petitioner was aware of those conditions such that he had “fairly
and freely agreed” to those conditions.

Sabena Beljan air world v ca

Doctrine:

– Art. 1733 of the [Civil] Code provides that from the very nature of their business and by reasons of
public policy, common carriers are bound to observe extraordinary diligence in the vigilance over the
goods transported by them.

– Art. 1735 establishes the presumption that if the goods are lost, destroyed or deteriorated, common
carriers are presumed to have been at fault or to have acted negligently, unless they prove that they had
observed extraordinary diligence as required in Article 1733.

– The Warsaw Convention denies to the carrier availment ‘of the provisions which exclude or limit his
liability, if the damage is caused by his wilful misconduct or by such default on his part as, in accordance
with the law of the court seized of the case, is considered to be equivalent to wilful misconduct,’ or ‘if
the damage is (similarly) caused x x x by any agent of the carrier acting within the scope of his
employment.’
Facts:

Plaintiff Ma. Paula San Agustin, herein private respondent, was a passenger on board Flight SN 284 of
defendant airline originating from Casablanca to Brussels, Belgium on her way back to Manila. She
checked in her luggage which contained her valuables, namely: jewelries valued at $2,350.00; clothes
$1,500.00; shoes/bag $150; accessories $75; luggage itself $10.00; or a total of $4,265.00, for which she
was issued Tag No. 71423. She stayed overnight in Brussels and her luggage was left on board Flight SN
284.

She arrived at Manila International Airport and immediately submitted her Tag No. 71423 but her
luggage was missing. She was advised to accomplish and submit a property Irregularity Report which
she submitted and filed on the same day but when her luggage could not be found, she filed a formal
complaint with defendant’s Local Manager.

Subsequently, plaintiff was furnished copies of telexes of defendant’s Brussel’s Office that the latter
found her luggage and that they have broken the locks for identification. Plaintiff was assured by the
defendant that it has notified its Manila Office that the luggage will be shipped to Manila. But
unfortunately plaintiff was informed that the luggage was lost for the second time.

Plaintiff demanded from the defendant the money value of the luggage and its contents or its exchange
value, but defendant refused to settle the claim. Defendant asserts in its Answer and its evidence tend
to show that while it admits that the plaintiff was a passenger with a piece of checked in luggage, the
loss of the luggage was due to plaintiff’s sole if not contributory negligence.

Petitioner airline company, in contending that the alleged negligence of private respondent should be
considered the primary cause for the loss of her luggage, avers that, despite her awareness that the
flight ticket had been confirmed only for Casablanca and Brussels, and that her flight from Brussels to
Manila had yet to be confirmed, she did not retrieve the luggage upon arrival in Brussels. Petitioner
insists that private respondent, being a seasoned international traveler, must have likewise been
familiar with the standard provisions contained in her flight ticket that items of value are required to be
hand-carried by the passenger and that the liability of the airline or loss, delay or damage to baggage
would be limited, in any event, to only US$20.00 per kilo unless a higher value is declared in advance
and corresponding additional charges are paid thereon. At the Casablanca International Airport, private
respondent, in checking in her luggage, evidently did not declare its contents or value, pursuant to
Section 5(c), Article IX, of the General Conditions of Carriage, which states that: “Passengers shall not
include in his checked baggage, and the carrier may refuse to carry as checked baggage, fragile or
perishable articles, money, jewelry, precious metals, negotiable papers, securities or other valuables.”

The trial court rendered judgment ordering Sabena Belgian World Airlines to pay private respondent.
Sabena appealed but the CA affirmed in toto the trial court’s judgment, hence the present petition for
review.
Issue:

W/N the airline is liable for the lost luggage

Held:

Yes. Fault or negligence consists in the omission of that diligence which is demanded by the nature of an
obligation and corresponds with the circumstances of the person, of the time, and of the place. When
the source of an obligation is derived from a contract, the mere breach or non-fulfillment of the
prestation gives rise to the presumption of fault on the part of the obligor. This rule is not different in
the case of common carriers in the carriage of goods which, indeed, are bound to observe not just the
due diligence of a good father of a family but that of “extraordinary” care in the vigilance over the
goods.

The only exceptions to the foregoing extraordinary responsibility of the common carrier is when the
loss, destruction, or deterioration of the goods is due to any of the following causes:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;

(3) Act or omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the containers;

(5) Order or act of competent public authority.’

Not one of the above excepted causes obtains in this case.

The airline cannot invoke the tort doctrine of proximate cause because the private respondent’s luggage
was lost while it was in the custody of petitioner. The “loss of said baggage not only once by twice,” said
the appellate court, “underscores the wanton negligence and lack of care” on the part of the carrier. The
above findings foreclose whatever rights petitioner might have had to the possible limitation of liabilities
enjoyed by international air carriers under the Warsaw Convention.

In Alitalia vs. Intermediate Appellate Court, the Court held that “the Warsaw Convention however
denies to the carrier availment ‘of the provisions which exclude or limit his liability, if the damage is
caused by his wilful misconduct or by such default on his part as, in accordance with the law of the court
seized of the case, is considered to be equivalent to wilful misconduct,’ or ‘if the damage is (similarly)
caused x x x by any agent of the carrier acting within the scope of his employment.’

The Hague Protocol amended the Warsaw Convention by removing the provision that if the airline took
all necessary steps to avoid the damage, it could exculpate itself completely, and declaring the stated
limits of liability not applicable ‘if it is proved that the damage resulted from an act or omission of the
carrier, its servants or agents, done with intent to cause damage or recklessly and with knowledge that
damage would probably result.’ The same deletion was effected by the Montreal Agreement of 1966,
with the result that a passenger could recover unlimited damages upon proof of wilful misconduct.

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. 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. Decision
appealed from AFFIRMED.

Cangco v. Manila Railroad Co.

G.R. No. L-12191, 14 October 1918

FACTS:

Jose Cangco was in the employment of Manila Railroad Company. He lived in the pueblo of San Mateo,
in the province of Rizal, which is located upon the line of the defendant railroad company; and in coming
daily by train to the company’s office in the city of Manila where he worked, he used a pass, supplied by
the company, which entitled him to ride upon the company’s trains free of charge.
During his ride in the train he arose from his seat and makes his way to the exit while the train is still on
travel. When the train has proceeded a little farther Jose Cangco step down into the cement platform
but unfortunately step in to a sack of watermelon, fell down and rolled under the platform and was
drawn under the moving car which resulting to his arm to be crashed and lacerated. He was rushed to
the hospital and sued the company and the employee who put the sack of watermelon in the platform.

The accident occurred between 7 and 8 o’ clock on the dark night. It is that time of the year that may we
considered as season to harvest watermelon explaining why there are sacks of watermelon in the
platform. The plaintiff contends that it is the negligence of the Manila Railroad Co. on why they let their
employees put a hindrance in the platform that may cause serious accident. The defendant answered
that it is the lack of diligence on behalf of the plaintiff alone on why he did not wait for the train to stop
before alighting the train.

ISSUE:

Whether or not the company is liable or there is a contributory negligence on behalf of the plaintiff.

RULING:

There is no contributory negligence on behalf of the plaintiff. The Supreme Court provides some test
that may find the contributory negligence of a person. Was there anything in the circumstances
surrounding the plaintiff at the time he alighted from the train which would have admonished a person
of average prudence that to get off the train under the conditions then existing was dangerous? If so,
the plaintiff should have desisted from alighting; and his failure so to desist was contributory negligence.

Alighting from a moving train while it is slowing down is a common practice and a lot of people are
doing so every day without suffering injury. Cangco has the vigor and agility of young manhood, and it
was by no means so risky for him to get off while the train was yet moving as the same act would have
been in an aged or feeble person. He was also ignorant of the fact that sacks of watermelons were there
as there were no appropriate warnings and the place was dimly lit.

Article 1173, first paragraph: The fault or negligence of the obligor consists in the omission of that
diligence which is required by the nature of the obligation and corresponds with the circumstances of
that persons, of the time and of the place. When negligence shows bad faith, the provisions of Article
1171 and 2201, paragraph 2, shall apply.
In the case the proximate cause of the accident is the lack of diligence of the company to inform their
employees to not put any hindrance in the platform like sacks of watermelon. The contract of defendant
to transport plaintiff carried with it, by implication, the duty to carry him in safety and to provide safe
means of entering and leaving its trains (civil code, article 1258). That duty, being contractual, was direct
and immediate, and its non-performance could not be excused by proof that the fault was morally
imputable to defendant’s servants. Therefore, the company is liable for damages against Cangco.

PEOPLE OF THE PHILIPPINES vs. ANDRE MARTI (193 SCRA 57) Case Digest

Facts:

On August 14, 1987, the appellant and his common-law wife, Shirley Reyes went to Manila Packaging
and Export Forwarders to send packages to Zurich, Switzerland. It was received by Anita Reyes and ask if
she could inspect the packages. Shirley refused and eventually convinced Anita to seal the package
making it ready for shipment. Before being sent out for delivery, Job Reyes, husband of Anita and
proprietor of the courier company, conducted an inspection of the package as part of standard
operating procedures. Upon opening the package, he noticed a suspicious odor which made him took
sample of the substance he found inside. He reported this to the NBI and invited agents to his office to
inspect the package. In the presence of the NBI agents, Job Reyes opened the suspicious package and
found dried-marijuana leaves inside. A case was filed against Andre Marti in violation of R.A. 6425 and
was found guilty by the court a quo. Andre filed an appeal in the Supreme Court claiming that his
constitutional right of privacy was violated and that the evidence acquired from his package was
inadmissible as evidence against him.

Issue:

Can the Constitutional Right of Privacy be enforced against private individuals?

Ruling:

The Supreme Court held based on the speech of Commissioner Bernas that the Bill of Rights governs the
relationship between the individual and the state.
The constitutional proscription against unlawful searches and seizures therefore applies as a restraint
directed only against the government and its agencies tasked with the enforcement of the law. It is not
meant to be invoked against acts of private individuals. It will be recalled that Mr Job Reyes was the one
who opened the box in the presence of the NBI agents in his place of business. The mere presence of
the NBI agents did not convert the reasonable search effected by Mr. Reyes into a warrantless search
and siezure proscribed by the constitution. Merely to observe and look at that which is in plain sight is
not a search.

The judgement of conviction finding appeallant guilty beyond reasonable doubt of the crime charged
was AFFIRMED.

Transportation Law Case Digest: Ganzon V. CA (1988)

G.R. No. L-48757 May 30, 1988

Lessons Applicable: Actionable Document

Laws Cited: Art. 1736,Art. 1734

FACTS: Gelacio > Ganzon (via Capt. Niza) > Lighter “Batman” (common carrier) (loaded half)

November 28, 1956: Gelacio Tumambing (Gelacio) contracted the services of of Mauro B. Ganzon to
haul 305 tons of scrap iron from Mariveles, Bataan, to the port of Manila on board the light LCT
“Batman”

December 1, 1956: Gelacio delivered the scrap iron to Filomeno Niza, captain of the lighter, for loading
which was actually begun on the same date by the crew of the lighter under the captain’s supervisor.

When about half of the scrap iron was already loaded, Mayor Jose Advincula of Mariveles, Bataan
arrived and demanded P5000 from Gelacio

Upon resisting, the Mayor fired at Gelacio so he had to be taken to the hospital

Loading of the scrap iron was resumed

December 4, 1956: Acting Mayor Basilio Rub (Rub), accompanied by 3 policemen, ordered captain
Filomeno Niza and his crew to dump the scrap iron where the lighter was docked

Later on Rub had taken custody of the scrap iron

RTC: in favor of Gelacio and against Ganzon

ISSUE: W/N Ganzon should be held liable under the contract of carriage
HELD: YES. Petition is DENIED.

Ganzon thru his employees, actually received the scraps is freely admitted.

Pursuant to Art. 1736, such extraordinary responsibility would cease only upon the delivery, actual or
constructive, by the carrier to the consignee, or to the person who has a right to receive them.

The fact that part of the shipment had not been loaded on board the lighter did not impair the said
contract of transportation as the goods remained in the custody and control of the carrier, albeit still
unloaded.

failed to show that the loss of the scraps was due to any of the following causes enumerated in Article
1734 of the Civil Code, namely:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;

(3) Act or omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the containers;

(5) Order or act of competent public authority.

Hence, the petitioner is presumed to have been at fault or to have acted negligently.

By reason of this presumption, the court is not even required to make an express finding of fault or
negligence before it could hold the petitioner answerable for the breach of the contract of carriage.

exempted from any liability had he been able to prove that he observed extraordinary diligence in the
vigilance over the goods in his custody, according to all the circumstances of the case, or that the loss
was due to an unforeseen event or to force majeure. As it was, there was hardly any attempt on the part
of the petitioner to prove that he exercised such extraordinary diligence.

We cannot sustain the theory of caso fortuito - "order or act of competent public authority"(Art. 1174 of
the Civil Code)

no authority or power of the acting mayor to issue such an order was given in evidence. Neither has it
been shown that the cargo of scrap iron belonged to the Municipality of Mariveles.

Ganzon was not duty bound to obey the illegal order to dump into the sea the scrap iron.

Moreover, there is absence of sufficient proof that the issuance of the same order was attended with
such force or intimidation as to completely overpower the will of the petitioner's employees. The mere
difficulty in the fullfilment of the obligation is not considered force majeure.

Title: PHILIPPINE AIRLINES, INC., petitioner,
 vs. COURT OF APPEALS and GILDA C. MEJIA, respondents.
Court: Supreme Court of the Philippines

Case No.: G.R. No. 119706

Date: March 14, 1996

Ponente: REGALADO, J

<Facts>

This is definitely not a case of first impression. The incident, which eventuated in the present controversy, is a drama
of common contentious occurrence between passengers and carriers whenever loss is sustained by the former.
Withal, the exposition of the factual ambience and the legal precepts in this adjudication may hopefully channel the
assertiveness of passengers and the intransigence of carriers into the realization that at times a bad extrajudicial
compromise could be better than a good judicial victory.

Assailed in this petition for review is the decision of respondent Court of Appeals in CA-G.R. CV No. 42744 1 which
affirmed the decision of the lower court 2 finding petitioner Philippine Air Lines, Inc. (PAL) liable as follows:

ACCORDINGLY, judgment is hereby rendered ordering defendant Philippine Air Lines, Inc., to pay plaintiff Gilda C.
Mejia:

(1) P30, 000.00 by way of actual damages of the microwave oven;

(2) P10, 000.00 by way of moral damages;

(3) P20, 000.00 by way of exemplary damages;

(4) P10, 000.00 as attorney's fee;

All in addition to the costs of the suit.

Defendant's counterclaim is hereby dismissed for lack of merit.

Mejia shipped through PAL 1 microwave oven from San Francisco to Manila. Upon arrival, she discovered that the
front glass door was broken and the oven could not be used. Mejia filed action against PAL. PAL denied liability and
alleged that it acted in conformity with the Warsaw Convention
<Issues>

Whether or not the air waybill should be strictly construed against petitioner?

<Ruling>

Although the airway bill is binding between the parties, the liability of Pal is not limited on the provisions of the
airway bill. While the Warsaw Convention is law in the Philippines, the Philippines being a signatory thereto, it does
not operate as an exclusive enumeration of the instances when a carrier shall be liable for breach of contract or as
an absolute limit of the extent of liability nor does it preclude the operation of the Civil Code or other pertinent laws.

Also, the willful misconduct and insensitivity of the officers of PAL in not attempting to explain the damage despite
due demand and the unexplained delay in acting on her claim amounted to bad faith and renders unquestionable
its liability for damages

Adhesion contract is one that is not negotiated by the parties having been drafted by the dominant party and usually
embodied in a standardized form. It is called a contract of adhesion because the participation of 1 party is limited to
affixing her signature.

Alitalia v. IAC

Facts:

Dr. Felipa Pablo, an associate professor in the University of the Philippines and a research grantee of the
Philippine Atomic Energy Agency, was invited to take part at a meeting of the Department of Research
and Isotopes in Italy in view of her specialized knowledge in “foreign substances in food and the
agriculture environment”. She would be the second speaker on the first day of the meeting. Dr. Pablo
booked passage on petitioner Alitalia. She arrived in Milan on the day before the meeting, but was told
that her luggage was delayed and was in a succeeding flight from Rome to Milan. The luggage included
her materials for the presentation. The succeeding flights did not carry her luggage. Desperate, she went
to Rome to try to locate the luggage herself, but to no avail. She returned to Manila without attending
the meeting. She demanded reparation for the damages. She rejected Alitalia’s offer of free airline
tickets and commenced an action for damages. As it turned out, the luggage was actually forwarded to
Ispra, but only a day after the scheduled appearance. It was returned to her after 11 months. The trial
court ruled in favor of Dr. Pablo, and this was affirmed by the Court of Appeals.

Issues:

(1) Whether the Warsaw Convention should be applied to limit Alitalia’s liability
(2) Whether Dr. Pablo is entitled to nominal damages

Held:

(1) Under the Warsaw Convention, an air carrier is made liable for damages for:

a. The death, wounding or other bodily injury of a passenger if the accident causing it took place on
board the aircraft or I the course of its operations of embarking or disembarking;

b. The destruction or loss of, or damage to, any registered luggage or goods, if the occurrence causing it
took place during the carriage by air; and

c. Delay in the transportation by air of passengers, luggage or goods.

The convention however denies to the carrier availment of the provisions which exclude or limit his
liability, if the damage is caused by his wilful misconduct, or by such default on his part as is considered
to be equivalent to wilful misconduct. 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.
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.

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. 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.

(2) She is not, of course, entitled to be compensated for loss or damage to her luggage. 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 that for any loss suffered and this Court agrees that the
respondent Court of Appeals correctly set the amount thereof at PhP 40,000.00.

The Court also agrees that respondent Court of Appeals correctly awarded attorney’s fees to Dr. Pablo
and the amount of PhP 5,000.00 set by it is reasonable in the premises. The law authorizes recovery of
attorney’s fees inter alia where, as here, the defendant’s act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest or where the court deems it just
and equitable.

Torts And Damages Case Digest: Lopez V. Pan American (1966)

G.R. No. L-20434 July 30, 1966

Lessons Applicable: Factors in determining amount (Torts and Damages)

Laws Applicable:

FACTS:

August 1, 1960: Pan American Employees Association staged a strike so Pan Am forced them to take a
leave of absence without pay on February 22, 1961 to February 23, 1961

court a quo: affected them financially and economically, it ordered Pan America to pay them their two
days salaries

CA: affirmed.

ISSUE: W/N the employees should be awarded back wages.

HELD: NO. AFFIRMED in so far as it declares petitioner Pan American World Airways, Inc. not guilty of
unfair labor practice, but IS REVERSED in so far as it orders said petitioner to pay the members of the
respondent labor union, Pan American Employees Association, their wages or salaries for February 22
and 23, 1961 when they were made by the petitioner to go on furlough. The petitioner is absolved from
paying the said back wages. No pronouncement as to costs. It is so ordered.
The dismiss employee is not entirely without remedy if his charge of unfair labor practice fails and his
complaint dismissed, because the breach by the employer of the obligation to him may be redressed like
an ordinary contract or obligation

in placing its employees on furlough for two days, petitioner acted in good faith. The record shows that
before laying them off it asked permission from the industrial court and only effected the furlough after
said court authorized it to do so.

the step taken by respondent was necessary to protect its interest whose business is mainly dependent
on the flight of its planes," giving as additional reason that "lack of work as a cause of lay-off is justified.

Inasmuch as petitioner acted in good faith, it should not be ordered to pay back wages to its laid off
employees.

not paid their wages for only two days, We do not believe that the same would place them in such a
financial and economic distress as to warrant the award of their back wages

KLM Royal Dutch Airlines vs Court of Appeals

(65 SCRA 237)

Facts: Spouses Mendoza approached Mr. Reyes, the branch manager of Philippine Travel Bureau, for
consultation about a world tour which they were intending to make with their daughter and niece.
Three segments of the trip, the longest, was via KLM. Respondents decided that one of the routes they
will take was a Barcelona-Lourdes route with knowledge that only one airline, Aer Lingus, served it.
Reyes made the necessary reservations. To this, KLM secured seat reservations for the Mendoza’s and
their companions from the carriers which would ferry them throughout their trip, which the exception
of Aer Lingus. When the Mendoza’s left the Philippines, they were issued KLM tickets for the entire trip.
However, their coupon for Aer Lingus was marked “on request”.

When they were in Germany, they went to the KLM office and obtained a confirmation from Aer Lingus.
At the airport in Barcelona, the Mendozas and their companions checked in for their flight to Lourdes.
However, although their daughter and niece were allowed to take the flight, the spouses Mendozas
were off loaded on orders of the Aer Lingus manager, who brusquely shoved them aside and shouted at
them. So the spouses Mendozas took a train ride to Lourdes instead.

Thus, they filed a complaint for damages against KLM for breach of contract of carriage. The trial court
decided in favor of the Mendozas. On appeal, the CA affirmed the decision. Hence, KLM brings this
petition to the Supreme Court. KLM cites Art 30 of the Warsaw Convention, which states: the passenger
or his representatives can take action only against the carrier who performed the transportation during
which the accident or delay occurred. Also, KLM avers that the front cover of each ticket reads: that
liability of the carrier for damages shall be limited to occurrences on its own line.
Issue: Whether or not KLM is liable for breach of contract of carriage?

Held: The applicability of Art. 30 of the Warsaw Convention cannot be sustained. The article
presupposes the occurrence of delay or accident. What is manifest here is that the Aer Lingus refused to
transport the spouses Mendozas to their planned and contracted destination.

As the airline which issued the tickets, KLM was chargeable with the duty and responsibility of
specifically informing the spouses of the conditions prescribed in their tickets or to ascertain that the
spouses read them before they accepted their passage tickets.

The Supreme Court held that KLM cannot be merely assumed as a ticket-issuing agent for other airlines
and limit its liability to untoward occurrences on its own line.

The court found, that the passage tickets provide that the carriage to be performed therein by several
successive carriers is to be regarded as a “single operation”.