transpo - japan airlines vs. court of appeals

7/29/2019 TRANSPO - Japan Airlines vs. Court of Appeals

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FIRST DIVISION[G.R. No. 161730. January 28, 2005.]JAPAN AIRLINES, petitioner, vs. MICHAEL ASUNCION and JEANETTE ASUNCION,respondents.Quisumbing, Torres for petitioner.Ferry, Toledo, Gonzaga Tria & Associates for respondents.

SYLLABUS1. CIVIL LAW; LEASE; COMMON CARRIERS; SAFETY OF PASSENGERS; THEPASSENGER HAS EVERY RIGHT TO EXPECT THAT HE BE TRANSPORTED ON THATFLIGHT AND ON THAT DATE AND IT BECOMES THE CARRIER'S OBLIGATION TO CARRYHIM AND HIS LUGGAGE SAFELY TO THE AGREED DESTINATION. Under Article 1755 ofthe Civil Code, a common carrier such as JAL is bound to carry its passengers safely as far as humancare and foresight can provide, using the utmost diligence of very cautious persons, with due regard forall the circumstances. When an airline issues a ticket to a passenger, confirmed for a particular flight ona certain date, a contract of carriage arises. The passenger has every right to expect that he betransported on that flight and on that date and it becomes the carrier's obligation to carry him and hisluggage safely to the agreed destination. If the passenger is not so transported or if in the process oftransporting he dies or is injured, the carrier may be held liable for a breach of contract of carriage.CacISA2. ID.; ID.; ID.; THE POWER TO ADMIT OR NOT AN ALIEN INTO THE COUNTRY IS ASOVEREIGN ACT WHICH CANNOT BE INTERFERED WITH BY AIRLINE COMPANY. Wefind that JAL did not breach its contract of carriage with respondents. It may be true that JAL has theduty to inspect whether its passengers have the necessary travel documents, however, such duty doesnot extend to checking the veracity of every entry in these documents. JAL could not vouch for theauthenticity of a passport and the correctness of the entries therein. The power to admit or not an alieninto the country is a sovereign act which cannot be interfered with even by JAL. This is not within theambit of the contract of carriage entered into by JAL and herein respondents. As such, JAL should notbe faulted for the denial of respondents' shore pass applications.3. ID.; DAMAGES; CANNOT BE AWARDED WHEN THERE WAS NO BREACH OFCONTRACT NOR PROOF THAT A PARTY ACTED IN WANTON, FRAUDULENT ORMALEVOLENT MANNER. Moral damages may be recovered in cases where one willfully causesinjury to property, or in cases of breach of contract where the other party acts fraudulently or in badfaith. Exemplary damages are imposed by way of example or correction for the public good, when theparty to a contract acts in wanton, fraudulent, oppressive or malevolent manner. Attorney's fees areallowed when exemplary damages are awarded and when the party to a suit is compelled to incurexpenses to protect his interest. There being no breach of contract nor proof that JAL acted in wanton,fraudulent or malevolent manner, there is no basis for the award of any form of damages. CADHcI4. ID.; ID.; A PERSON'S RIGHT TO LITIGATE SHOULD NOT BE PENALIZED BYHOLDING HIM LIABLE THEREFOR. [W]e find that the Court of Appeals correctly dismissedJAL's counterclaim for litigation expenses, exemplary damages and attorney's fees. The action wasfiled by respondents in utmost good faith and not manifestly frivolous. Respondents honestly believedthat JAL breached its contract. A person's right to litigate should not be penalized by holding him liablefor damages. This is especially true when the filing of the case is to enforce what he believes to be hisrightful claim against another although found to be erroneous.D E C I S I O NYNARES-SANTIAGO, J p:This petition for review seeks to reverse and set aside the October 9, 2002 decision 1 of the Court ofAppeals and its January 12, 2004 resolution, 2 which affirmed in toto the June 10, 1997 decision of theRegional Trial Court of Makati City, Branch 61 in Civil Case No. 92-3635. 3


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On March 27, 1992, respondents Michael and Jeanette Asuncion left Manila on board Japan Airlines'(JAL) Flight 742 bound for Los Angeles. Their itinerary included a stop-over in Narita and anovernight stay at Hotel Nikko Narita. Upon arrival at Narita, Mrs. Noriko Etou-Higuchi of JALendorsed their applications for shore pass and directed them to the Japanese immigration official. 4 Ashore pass is required of a foreigner aboard a vessel or aircraft who desires to stay in the neighborhoodof the port of call for not more than 72 hours. THcaDA

During their interview, the Japanese immigration official noted that Michael appeared shorter than hisheight as indicated in his passport. Because of this inconsistency, respondents were denied shore passentries and were brought instead to the Narita Airport Rest House where they were billeted overnight.The immigration official also handed Mrs. Higuchi a Notice 5 where it was stated that respondentswere to be "watched so as not to escape".Mr. Atsushi Takemoto of the International Service Center (ISC), the agency tasked by Japan'sImmigration Department to handle passengers who were denied shore pass entries, brought respondentsto the Narita Airport Rest House where they stayed overnight until their departure the following day forLos Angeles. Respondents were charged US$400.00 each for their accommodation, security serviceand meals.On December 12, 1992, respondents filed a complaint for damages 6 claiming that JAL did not fullyapprise them of their travel requirements and that they were rudely and forcibly detained at NaritaAirport.JAL denied the allegations of respondents. It maintained that the refusal of the Japanese immigrationauthorities to issue shore passes to respondents is an act of state which JAL cannot interfere with orprevail upon. Consequently, it cannot impose upon the immigration authorities that respondents bebilleted at Hotel Nikko instead of the airport resthouse. 7On June 10, 1997, the trial court rendered its decision, the dispositive portion of which reads:WHEREFORE PREMISES CONSIDERED, judgment is hereby rendered in favor of plaintiffsordering defendant JAL to pay plaintiffs as follows:1. the sum of US$800.00 representing the expenses incurred at the Narita Airport with interest at12% per annum from March 27, 1992 until the sum is fully paid;2. the sum of P200,000.00 for each plaintiff as moral damages;3. the amount of P100,000.00 for each plaintiff as exemplary damages;4. the amount of P100,000.00 as attorney's fees; and5. costs of suit. SEHaTCSO ORDERED. 8The trial court dismissed JAL's counterclaim for litigation expenses, exemplary damages and attorney'sfees.On October 9, 2002, the Court of Appeals affirmed in toto the decision of the trial court. Its motion forreconsideration having been denied, 9 JAL now files the instant petition.The basic issue for resolution is whether JAL is guilty of breach of contract.Under Article 1755 of the Civil Code, a common carrier such as JAL is bound to carry its passengerssafely as far as human care and foresight can provide, using the utmost diligence of very cautiouspersons, with due regard for all the circumstances. When an airline issues a ticket to a passenger,confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger has everyright to expect that he be transported on that flight and on that date and it becomes the carrier'sobligation to carry him and his luggage safely to the agreed destination. 10 If the passenger is not sotransported or if in the process of transporting he dies or is injured, the carrier may be held liable for abreach of contract of carriage. 11We find that JAL did not breach its contract of carriage with respondents. It may be true that JAL hasthe duty to inspect whether its passengers have the necessary travel documents, however, such dutydoes not extend to checking the veracity of every entry in these documents. JAL could not vouch for


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the authenticity of a passport and the correctness of the entries therein. The power to admit or not analien into the country is a sovereign act which cannot be interfered with even by JAL. This is not withinthe ambit of the contract of carriage entered into by JAL and herein respondents. As such, JAL shouldnot be faulted for the denial of respondents' shore pass applications. EcAISCPrior to their departure, respondents were aware that upon arrival in Narita, they must secure shore passentries for their overnight stay. Respondents' mother, Mrs. Imelda Asuncion, insisted though that Ms.

Linda Villavicencio of JAL assured her that her children would be granted the passes. 12 This assertionwas satisfactorily refuted by Ms. Villavicencio's testimony during the cross examination, to wit:ATTY. GONZAGA:Q I will show to you Exh. 9 which is the TIM and on page 184 hereof, particularly number 10, andI quote, "Those holding tickets with confirmed seats and other documents for their onward journey andcontinuing their journey to a third country provided that they obtain an indorsement with an applicationof shore pass or transit pass from the airline ground personnel before clearing the immigrationformality?"WITNESS:A Yes, Sir.Q Did you tell this provision to Mrs. Asuncion?A Yes, Sir. I did.Q Are you sure?A Yes, Sir.Q Did you give a copy?A No, Sir, I did not give a copy but verbally I explained to her the procedure they have to undergowhen they get to narita airport.xxx xxx xxxQ And you read the contents of this [TIM]?A No, Sir, I did not read it to her but I explained to her the procedure that each passenger has to gothrough before when they get to narita airport before they line up in the immigration counter.ACaDTHQ In other words, you told Mrs. Asuncion the responsibility of securing shore passes bears solelyon the passengers only?A Yes, Sir.Q That the airline has no responsibility whatsoever with regards (sic) to the application for shorepasses?A Yes, Sir. 13Next, respondents claimed that petitioner breached its contract of carriage when it failed to explain tothe immigration authorities that they had overnight vouchers at the Hotel Nikko Narita. They imputedthat JAL did not exhaust all means to prevent the denial of their shore pass entry applications.To reiterate, JAL or any of its representatives have no authority to interfere with or influence theimmigration authorities. The most that could be expected of JAL is to endorse respondents'applications, which Mrs. Higuchi did immediately upon their arrival in Narita.As Mrs. Higuchi stated during her deposition:ATTY. QUIMBOQ: Madam Witness, what assistance did you give, if any, to the plaintiffs during this interview?A: No, I was not present during their interview. I cannot assist.Q: Why not?A: It is forbidden for a civilian personnel to interfere with the Immigration agent's duties. 14xxx xxx xxxQ: During the time that you were in that room and you were given this notice for you to sign, didyou tell the immigration agent that Michael and Jeanette Asuncion should be allowed to stay at the


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Hotel Nikko Narita because, as passengers of JAL, and according to the plaintiff, they had vouchers tostay in that hotel that night?A: No, I couldn't do so. CTaSEIQ: Why not?A: This notice is evidence which shows the decision of immigration authorities. It shows there thatthe immigration inspector also designated Room 304 of the Narita Airport Resthouse as the place

where the passengers were going to wait for their outbound flight. I cannot interfere with that decision.15Mrs. Higuchi did all she could to assist the respondents. Upon being notified of the denial ofrespondents' applications, Mrs. Higuchi immediately made reservations for respondents at the NaritaAirport Rest House which is really more a hotel than a detention house as claimed by respondents. 16More importantly, nowhere in respondent Michael's testimony did he state categorically that Mrs.Higuchi or any other employee of JAL treated them rudely or exhibited improper behavior throughouttheir stay. We therefore find JAL not remiss in its obligations as a common carrier.Moral damages may be recovered in cases where one willfully causes injury to property, or in cases ofbreach of contract where the other party acts fraudulently or in bad faith. Exemplary damages areimposed by way of example or correction for the public good, when the party to a contract acts inwanton, fraudulent, oppressive or malevolent manner. Attorney's fees are allowed when exemplarydamages are awarded and when the party to a suit is compelled to incur expenses to protect his interest.17 There being no breach of contract nor proof that JAL acted in wanton, fraudulent or malevolentmanner, there is no basis for the award of any form of damages.Neither should JAL be held liable to reimburse respondents the amount of US$800.00. It has beensufficiently proven that the amount pertained to ISC, an agency separate and distinct from JAL, inpayment for the accommodations provided to respondents. The payments did not in any manner accrueto the benefit of JAL. AIDTHCHowever, we find that the Court of Appeals correctly dismissed JAL's counterclaim for litigationexpenses, exemplary damages and attorney's fees. The action was filed by respondents in utmost goodfaith and not manifestly frivolous. Respondents honestly believed that JAL breached its contract. Aperson's right to litigate should not be penalized by holding him liable for damages. This is especiallytrue when the filing of the case is to enforce what he believes to be his rightful claim against anotheralthough found to be erroneous. 18WHEREFORE, in view of the foregoing, the instant petition is PARTLY GRANTED. The October 9,2002 decision of the Court of Appeals and its January 12, 2004 resolution in CA-G.R. CV No. 57440,are REVERSED and SET ASIDE insofar as the finding of breach on the part of petitioner and theaward of damages, attorney's fees and costs of the suit in favor of respondents is concerned.Accordingly, there being no breach of contract on the part of petitioner, the award of actual, moral andexemplary damages, as well as attorney's fees and costs of the suit in favor of respondents Michael andJeanette Asuncion, is DELETED for lack of basis. However, the dismissal for lack of merit ofpetitioner's counterclaim for litigation expenses, exemplary damages and attorney's fees, isSUSTAINED. No pronouncement as to costs.SO ORDERED.Davide, Jr., C.J., Carpio and Azcuna, JJ., concur.Quisumbing, J., took no part. Close relation to counsel of a party.Footnotes1. Penned by Associate Justice Elvi John S. Asuncion as concurred in by Associate Justices Portia

Alio-Hormachuelos and Juan Q. Enriquez, Jr., Rollo, pp. 67-74.2. Rollo, p. 76.3. Penned by Judge Fernando V. Gorospe, Jr., Rollo, pp. 87-92.4. Mrs. Higuchi's Deposition, 21 September 1994, Records, pp. 583-585.


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5. Exhibit 1-E-Deposition, Records, p. 627.6. Rollo, pp. 77-81.7. Id., p. 84.8. Id., p. 92.9. Id., p. 76.

10. Cathay Pacific Airways, Ltd. v. Court of Appeals, G.R. No. 60501, 5 March 1993, 219 SCRA

520, 524.11. Singapore Airlines Limited v. Fernandez, G.R. No. 142305, 10 December 2003, 417 SCRA474, 480, citing Alitalia Airways v. Court of Appeals, G.R. No. 77011, 24 July 1990, 187 SCRA 763,770.12. Records, p. 327.13. TSN, Linda Villavicencio, 21 July 1994, Records, pp. 403-406.14. Mrs. Higuchi's Deposition, Records, p. 586.15. Id., pp. 589-590.16. Exhibits 1-H-Deposition, 1-J-Deposition to 1-N-Deposition, Records, pp. 630, 632-634.17. Rivera, et al. v. Del Rosario, et al., G.R. No. 144934, 15 January 2004.18. J. Marketing Corp. v. Sia, Jr., 349 Phil. 513, 517 (1998).

transpo - japan airlines vs. court of appeals

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