Spouses Cesar and Suthira Zalamea, and
their daughter, Liana Zalamea, purchased three (3) airline tickets
from the Manila agent of respondent TransWorld Airlines, Inc. (TWA)
for a flight from New York to Los Angeles on June 6, 1984. The
tickets of the spouses were
purchased at a discount of 75% while that of their daughter was a full fare ticket. All three tickets represented confirmed reservations.
purchased at a discount of 75% while that of their daughter was a full fare ticket. All three tickets represented confirmed reservations.
While in New York, on June 4, 1984, the
spouses Zalamea and their daughter received a notice of
reconfirmation of their reservations for said flight. On the
appointed date, however, the spouses Zalamea and their daughter
checked in at 10:00 am, an hour earlier than the scheduled flight at
11:00 am but were placed on the wait-list because the number of
passengers who checked in before tem had already taken all the seats
available on the flight.
Out of the 42 names on the wait-list,
the first 22 names were eventually allowed to board the flight to Los
Angeles, including Cesar Zalamea. The two others, on the other hand,
being ranked lower than 22, were not able to fly. As it were, those
holding full-fare ticket were given first priority among the
wait-listed passengers. Mr. Zalamea, who was holding the full-fare
ticket of his daughter, was allowed to board the plane; while his
wife and daughter, who presented the discounted tickets were denied
boarding. Even in the next TWA flight to Los Angeles, Mrs. Zalamea
and her daughter, could not be accommodated because it was full
booked. Thus, they were constrained to book in another flight and
purchased two tickets from American Airlines.
Upon their arrival in the Philippines,
the spouses Zalamea filed an action for damages based on breach of
contract of air carriage before the RTC of Makati which rendered a
decision in their favor ordering the TWA to pay the price of the
tickets bought from American Airlines together with moral damages and
attorney’s fees. On appeal, the CA held that moral damages are
recoverable in a damage suit predicated upon a breach of contract of
carriage only where there is fraud or bad faith. It further stated
that since it is a matter of record that overbooking of flights is a
common and accepted practice of airlines in the United States and is
specifically allowed under the Code of Federal Regulations by the
Civil Aeronautics Board, neither fraud nor bad faith could be imputed
on TWA.
ISSUE:
Whether or not the CA erred in
accepting the finding that overbooking is specifically allowed by the
US Code of Federal Regulations and in holding that there was no fraud
or bad faith on the part of TWA ?
HELD:
The CA was in error. There was fraud or
bad faith on the part of TWA when it did not allow Mrs. Zalamea and
her daughter to board their flight for Los Angeles in spite of
confirmed tickets. The US law or regulation allegedly authorizing
overbooking has never been proved.
1.) Foreign laws do not prove
themselves nor can the court take judicial notice of them. Like any
other fact, they must be alleged and proved. Written law may be
evidenced by an official publication thereof or by a copy attested by
the officers having legal custody of the record, or by his deputy and
accompanied with a certificate that such officer has custody. The
certificate may be made by a secretary of an embassy or legation,
consul-general, consul, vice-consul, or consular agent or by any
officer in the foreign service of the Phil. stationed in the foreign
country in which the record is kept and authenticated by the seal of
his office. Here, TWA relied solely on the testimony of its customer
service agent in her deposition that the Code of Federal Regulations
of the Civil Aeronautic Board allows overbooking. Aside from said
statement, no official publication of said code was presented as
evidence. Thus, the CA’s finding that overbooking is specifically
allowed by the US Code of Federal Regulations has no basis in fact.
"That there was fraud or
bad faith on the part of respondent airline when it did not allow
petitioners to board their flight for Los Angeles in spite of
confirmed tickets cannot be disputed. The U.S. law or regulation
allegedly authorizing overbooking has never been proved. Foreign laws
do not prove themselves nor can the courts take judicial notice of
them. Like any other fact, they must be alleged and proved. Written law may be evidenced by an official
publication thereof or by a copy attested by the officer having the
legal custody of the record, or by his deputy, and accompanied with a
certificate that such officer has custody. The certificate may be
made by a secretary of an embassy or legation, consul general,
consul, vice-consul, or consular agent or by any officer in the
foreign service of the Philippines stationed in the foreign country
in which the record is kept, and authenticated by the seal of his
office.
Respondent TWA relied
solely on the statement of Ms. Gwendolyn Lather, its customer service
agent, in her deposition dated January 27, 1986 that the Code of
Federal Regulations of the Civil Aeronautics Board allows
overbooking. Aside from said statement, no official publication of
said code was presented as evidence. Thus, respondent court's finding
that overbooking is specifically allowed by the US Code of Federal
Regulations has no basis in fact."
"Even if the claimed U.S.
Code of Federal Regulations does exist, the same is not applicable to
the case at bar in accordance with the principle of lex loci
contractus which require that the law of the place where the
airline ticket was issued should be applied by the court where the
passengers are residents and nationals of the forum and the ticket is
issued in such State by the defendant airline. Since the tickets were sold and issued in
the Philippines, the applicable law in this case would be Philippine
law."
Other Issues:
2.) Even if the claimed US Code of
Federal Regulations does exist, the same is not applicable to the
case at bar in accordance with the principle of lex loci contractus
which requires that the law of the place where the airline ticket was
issued should be applied by the court where the passengers are
residents and nationals of the forum and the ticket is issued in such
State by the airline.
3.) Existing jurisprudence explicitly
states that overbooking amounts to bad faith, entitling the
passengers concerned to an award of moral damages. Where an airline
had deliberately overbooked, it took the risk of having to deprive
some passengers of their seats in case all of them would show up for
check in. for the indignity and inconvenience of being refused a
confirmed seat on the last minute, said passenger is entitled to an
award of moral damages. This is so, for a contract of carriage
generates a relation attended with public duty --- a duty to provide
public service and convenience to its passengers which must be
paramount to self-interest or enrichment. Even on the assumption that
overbooking is allowed, TWA is still guilty of bad faith in not
informing its passengers beforehand that it could breach the contract
of carriage even if they have confirmed tickets if there was
overbooking. Moreover, TWA was also guilty of not informing its
passengers of its alleged policy of giving less priority to
discounted tickets. Evidently, TWA placed self-interest over the
rights of the spouses Zalamea and their daughter under their contract
of carriage. Such conscious disregard make respondent TWA liable for
moral damages, and to deter breach of contracts by TWA in similar
fashion in the future, the SC adjudged TWA liable for exemplary
damages, as well.
By: Glenn Quintos Albano