Bernales vs. Northwest Airlines

Moral damages predicated upon a breach of a contract of carriage are recoverable only where the mishap results in the death of a passenger or where the carrier is guilty of fraud or bad faith. Bad faith requires ill intentions and a conscious design to do a wrongful act for a dishonest purpose, not simple negligence or bad judgment.

Bernales, a lawyer, university dean, and board member of the Sangguniang Panlalawigan of Camarines Sur, was among the delegates of a Bicol trade and tourism mission to Honolulu, Hawaii, traveling as an economy class passenger of NWA Flight No. 10 from Manila to Honolulu via Narita, Japan. The dispute arises from a contract of carriage governed by the Civil Code provisions on common carriers and damages, particularly Articles 1764, 2206, and 2220 on moral damages for breach of a contract of carriage.

The petitioner Marito T. Bernales was a lawyer, a university dean, and a board member of the Sangguniang Panlalawigan of Camarines Sur. On 1 October 2002, he and several other prominent personalities from Bicol were on their way to Honolulu, Hawaii, as delegates of a trade and tourism mission for the province, traveling as economy class passengers of Northwest Airlines Flight No. 10 from Manila to Honolulu via Narita, Japan. The delegation arrived at Narita International Airport at around 11:00 a.m., with their connecting flight scheduled for 8:40 p.m. that evening.

At around 6:00 p.m., a typhoon hit Japan, leading to the cancellation of most flights, including NWA Flight No. 10. NWA did not cancel Flight No. 22, also bound for Honolulu later that night, to minimize delays and accommodate stranded passengers in case the typhoon subsided. Under NWA policy, affected passengers are protected in their booking for the next available flight in case of cancellations, with priority given to first class and business class passengers; if only limited seats were available, delayed passengers were wait-listed according to their priority level and in the sequence of their check-in, and original passengers of the next flight were prioritized over delayed passengers.

At around 9:00 p.m., the storm subsided and the airport resumed operations. NRT ordinarily had an 11:00 p.m. cut-off for flights, but on this day the Narita Airport Authority extended the airplane curfew to 1:00 a.m. to accommodate the delayed flights and make up for lost time. The delegates opted to be wait-listed for Flight No. 22, and the petitioner was placed last in the wait-list as he was the last economy class passenger to check in for Flight No. 10. To ensure departure before the 1:00 a.m. curfew, NWA gave out "dummy" boarding passes to the wait-listed passengers even before the priority passengers boarded the plane.

The passengers of Flight 22 were called for boarding at around 11:00 p.m., and the delegates boarded the shuttle taking them to the airplane. Before the shuttle bus could leave, NWA Customer Service Agent Tsuruki Ohashi entered the shuttle and informed the petitioner that he could not take Flight 22 as no available seat was left for him. According to the petitioner's version, Ohashi barged into the bus and shouted "Marito, Marito Bernales, where are you?"; when the petitioner identified himself, Ohashi allegedly yelled "Bullshit, Marito Bernales, you are not included in the manifest. Get out! Get out!"; Ohashi allegedly took the petitioner's boarding pass and grabbed him by the arm before ejecting him from the shuttle. The shuttle bus carrying his hand-carried bag left the petitioner alone outside the terminal without his money, passport, and other travel documents. Because of the incident, the other delegates refused to board the airplane unless the petitioner was physically brought to them at the tarmac, and after a stalemate between the delegates and the airline's employees, the petitioner was transported by shuttle to the aircraft to rejoin his group.

NWA narrated that Ohashi politely approached the petitioner in the shuttle bus and informed him that they needed to accommodate two original priority passengers who arrived, politely asked the petitioner to alight, assured him that he would look for a volunteer passenger who would give up his seat, and asked him to wait inside the terminal; NWA alleged that the petitioner gracefully complied without objections. Ohashi found a volunteer passenger within ten minutes, and NWA immediately transported the petitioner to the airplane. NWA maintained that Ohashi had an impeccable service record in customer relations and had received multiple commendations.

In either case, the petitioner was given a dummy boarding pass for Seat No. 35 in the name of "Eddie Tanno," issued out of necessity due to the lack of time to issue a new one. The petitioner, however, thought it was a real boarding pass, proceeded to Seat No. 35-H, and found it occupied by Eddie Tanno. He showed the dummy boarding pass to Tanno, who, noticing his name, irately asked, "Can't you read?" An attendant noticed the commotion and immediately escorted the petitioner to Seat No. 15-H, his allotted vacant seat.

Unfortunately, Flight No. 22 failed to depart in time to beat the Narita curfew. The pilot instructed the passengers to disembark and wait for the next flight, and they were returned to the terminal where they had to wait with 1,500 other stranded passengers. All the nearby hotels were fully booked from the many flight cancellations, and because it was already late, NWA failed to find billeting for the stranded Flight No. 22 passengers, who had to spend the night at the airport; they were given blankets, pillows, snacks, water, and food coupons. The petitioner claimed that he was made to sleep on the terminal floor "akin to the beggars of Quiapo and Baclaran" and had to suffer the discomfort of using the public toilets.

In the morning of 2 October 2002, NWA gave the delegates two options: (1) take a direct flight to Honolulu scheduled for 3 October 2002; or (2) take a 3:35 p.m. flight later that day to Los Angeles, California, with an immediate connecting flight to Honolulu. The delegates chose the second option so they could leave immediately. They arrived at Honolulu on 2 October 2002 between 3:00 and 4:00 p.m., Honolulu time, but had already missed the courtesy calls they were to make on the governor and the mayor, which were scheduled for earlier that day.

On 12 February 2003, the petitioner filed a complaint for moral and exemplary damages against NWA for breach of their contract of carriage, alleging that Ohashi's rude treatment, his ejection from the shuttle bus, the resulting missed obligations due to the flight's delay, and the humiliation from the ordeal caused him immense mental anguish and moral shock. He prayed for P10,000,000.00 as moral damages, P2,000,000.00 as exemplary damages, and P500,000.00 as attorney's fees plus P5,000.00 per court appearance. The complaint was docketed as Civil Case No. 3355. On 30 April 2003, NWA filed its answer denying that Ohashi or any of its employees forcibly ejected the petitioner or treated him rudely, insisting that it acted in good faith and never in a wanton, fraudulent, oppressive, or malevolent manner. After proceedings, the RTC rendered its decision on 3 October 2005 in favor of the petitioner, believing the petitioner's version of events and blaming the respondent for the humiliation caused by Eddie Tanno, the failure to billet the passengers to a nearby hotel, and for causing the petitioner to miss his scheduled obligations in Honolulu, awarding him P10,000,000.00 as moral damages, P2,000,000.00 as exemplary damages, and P530,000.00 as attorney's fees.

• Good Faith / CA Error: Petitioner argued that the CA erred in finding that NWA acted in good faith and in dismissing his complaint.
• Exception to Conclusiveness of CA Factual Findings: Petitioner asserted that this case is an exception to the rule that the factual findings of the CA are conclusive on the SC.

• Questions of Fact: Respondent pointed out that the petition should be dismissed outright because it only raises questions of fact.
• Good Faith: Respondent maintained that the CA did not err in concluding that it acted in good faith and that the petitioner's version of the events was incredible and contrary to human experience.

• Questions of Fact: Whether the petition for review on certiorari, raising only questions of fact, is the proper remedy.
• Exception to Conclusiveness of CA Factual Findings: Whether the case falls under a recognized exception to the rule that the CA's factual findings are conclusive on the SC.
• Bad Faith and Moral Damages: Whether NWA acted in bad faith, warranting an award of moral and exemplary damages.
• Fortuitous Event: Whether the typhoon was a fortuitous event that excused NWA from liability for the delay.

• Questions of Fact: No. Under Section 1 of Rule 45, a petition for review on certiorari shall only raise questions of law, and the SC is not a trier of facts.
• Exception to Conclusiveness of CA Factual Findings: Yes. The RTC and the CA had conflicting factual findings, which is a recognized exception to the rule that the CA's factual findings are conclusive on the SC.
• Bad Faith and Moral Damages: No. Moral damages predicated on a breach of a contract of carriage are recoverable only where the mishap results in death or where the carrier is guilty of fraud or bad faith, and NWA was not shown to have acted in bad faith.
• Fortuitous Event: Yes. Typhoon Higos was an extraordinary and unavoidable event that was the real and proximate cause of the delay, excusing NWA from liability.

• Questions of Fact: Under Section 1 of Rule 45, a petition for review on certiorari shall only raise questions of law. The SC is not a trier of facts and it is not its function to analyze and weigh the evidence that the lower courts have passed upon. Ordinarily, the factual findings of the CA are conclusive upon the SC. The petitioner only raised questions of fact.

• Exception to Conclusiveness of CA Factual Findings: Jurisprudence has carved out recognized exceptions to the rule, to wit: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion. In this case, the RTC believed the petitioner's version of events while the CA believed the respondent; considering that the lower courts differ in their factual conclusions, this case qualifies as an exception to the general rule.

• Bad Faith and Moral Damages: Moral damages predicated upon a breach of a carriage contract is only recoverable in instances where the mishap results in the death of a passenger, or where the carrier is guilty of fraud or bad faith. Bad faith is not simple negligence or bad judgment; it involves ill intentions and a conscious design to do a wrongful act for a dishonest purpose. NWA had the obligation to transport the petitioner from NRT to Honolulu on 1 October 2002 at 8:40 p.m., but failed to perform this duty because a strong typhoon hit Japan that evening, forcing widespread flight cancellations. NWA nevertheless attempted to fly the petitioner on a later flight after the typhoon passed, but this attempt failed because NWA was prevented by the mandatory airport curfew; NWA was only able to fulfill its obligation at 3:35 p.m. the following day. The SC did not believe the petitioner's accusations that Ohashi barged into the shuttle bus, verbally abused him, and forced him off the bus, as it made no sense for Ohashi to suddenly yell out of nowhere without any prior exchanges, and it was hard to believe that neither the petitioner nor the other delegates protested on the spot against the alleged abusive treatment. Ohashi had a good track record in customer service and was the recipient of several commendation letters; while previous acts are not admissible to prove how Ohashi behaved during the incident, previous conduct may be received as evidence to prove specific intent, habit, and tendencies, and Ohashi's track record contradicted the petitioner's portrayal of him as an unreasonably rude person. The SC also found it hard to swallow the petitioner's theory that Ohashi only brought him to the plane because the other delegates stayed on the tarmac and refused to board unless the petitioner was with them, as these delegates did not object when the petitioner was allegedly maltreated and ejected, yet the petitioner would have the SC believe that they protested on the tarmac for thirty to forty minutes in his behalf — inconsistent reactions contrary to common experience. On the insulting remark from Eddie Tanno, the SC cannot hold NWA responsible for the actions of other passengers; moral damages cannot be awarded for simple mistakes in the absence of bad faith. On the failure to house passengers in nearby hotels, the SC cannot impute bad faith, as Flight No. 22 was cancelled at around 1 a.m. and hotel rooms had already been booked by other airlines also billeting their passengers. The petitioner failed to mention that the 1,500 other stranded passengers had to endure the same discomforts; NWA did not maliciously single him out and did the next best thing by providing blankets, snacks, and other comforts available under the circumstances.

• Fortuitous Event: The primary cause of NWA's delay in the fulfillment of its obligation was the unusually strong typhoon that struck Japan that evening — Typhoon Higos, one of the most powerful typhoons to hit Japan as of that date, which resulted in the cancellation of more than 200 flights. The SC cannot attribute bad faith or ill motives on NWA for cancelling Flight No. 10, as pushing through would have recklessly endangered the lives of the passengers and the crew. Evidently, the real and proximate cause of NWA's breach of contract was a fortuitous event. NWA demonstrated good faith when it exerted its best efforts to accommodate the delayed Flight No. 10 passengers on Flight No. 22; while Flight No. 22 also failed to leave, the failure was caused by the Narita curfew, and the SC cannot attribute malice on NWA for the cancellation of Flight No. 22. The arrival of Typhoon Higos was an extraordinary and unavoidable event; its occurrence made it impossible for NWA to bring the petitioner to Honolulu in time for his commitments. The SC cannot hold the respondent liable for a breach of contract resulting from a fortuitous event.

• Moral Damages in Breach of Contract of Carriage — Moral damages predicated upon a breach of a carriage contract are recoverable only in instances where the mishap results in the death of a passenger, or where the carrier is guilty of fraud or bad faith. The SC applied this by denying moral damages since neither death nor bad faith was present.
• Bad Faith — Bad faith is not simple negligence or bad judgment; it involves ill intentions and a conscious design to do a wrongful act for a dishonest purpose. The SC applied this by finding NWA's actions were not motivated by ill will.
• Fortuitous Event — An extraordinary and unavoidable event that makes it impossible for a party to fulfill its obligation. The SC applied this by finding Typhoon Higos was a fortuitous event that excused NWA from liability for the delay.
• Questions of Fact vs. Questions of Law — A petition for review on certiorari under Rule 45 shall only raise questions of law; the SC is not a trier of facts. The SC applied this by noting the petition raised only questions of fact, but reviewed the case under a recognized exception.
• Exception to Conclusiveness of CA Factual Findings — The SC enumerated eleven exceptions to the rule that CA factual findings are conclusive: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion. The SC applied the exception of conflicting findings between the RTC and the CA.

• "Moral damages predicated upon a breach of a carriage contract is only recoverable in instances where the mishap results in the death of a passenger, or where the carrier is guilty of fraud or bad faith." — This states the rule on moral damages in breach of a contract of carriage.
• "Bad faith is not simple negligence or bad judgment; it involves ill intentions and a conscious design to do a wrongful act for a dishonest purpose." — This defines bad faith.
• "The arrival of Typhoon Higos was an extraordinary and unavoidable event. Its occurrence made it impossible for NWA to bring the petitioner to Honolulu in time for his commitments. We cannot hold the respondent liable for a breach of contract resulting from a fortuitous event." — This applies the fortuitous event doctrine.
• "The Supreme Court is not a trier of facts and it is not our function to analyze and weigh the evidence that the lower courts have passed upon." — This states the rule on questions of fact.

• New City Builders, Inc. vs. NLRC, 499 Phil. 207, 212 (2005) — Cited for the recognized exceptions to the rule that CA factual findings are conclusive.
• Cathay Pacific Airways, Ltd. vs. Court of Appeals, G.R. No. 60501, 5 March 1993, 219 SCRA 520, 524 — Cited for the rule on moral damages in breach of a contract of carriage.
• Far East Bank and Trust Company vs. Court of Appeals, G.R. No. 108164, 23 February 1995, 241 SCRA 671, 675 — Cited for the definition of bad faith.
• Montinola vs. Philippine Airlines, G.R. No. 198656, 8 September 2014, 734 SCRA 439, 458 — Cited for the definition of bad faith.

• Section 1, Rule 45, Rules of Court — A petition for review on certiorari shall only raise questions of law. Applied to note that the petition raised only questions of fact.
• Articles 1764 and 2206, Civil Code — Moral damages in breach of a contract of carriage are recoverable only where the mishap results in death or where the carrier is guilty of fraud or bad faith. Applied to deny moral damages.
• Article 2220, Civil Code — Moral damages may be awarded in cases of fraud or bad faith. Applied to deny moral damages.
• Section 34, Rule 130, Rules of Court — Previous conduct may be received as evidence to prove specific intent, habit, and tendencies. Applied to Ohashi's track record.