GR 119706; (March, 1996) (Digest)
G.R. No. 119706 March 14, 1996
PHILIPPINE AIRLINES, INC., petitioner, vs. COURT OF APPEALS and GILDA C. MEJIA, respondents.
FACTS
On January 27, 1990, respondent Gilda C. Mejia shipped a microwave oven via petitioner Philippine Airlines (PAL) from San Francisco to Manila. Upon its arrival, the oven’s front glass door was found broken, rendering it unserviceable. Mejia, who was in the catering business, made oral and written demands for reimbursement of the oven’s value and transportation charges, but PAL refused. She filed an action for damages. PAL defended itself by asserting that Mejia’s formal claim was filed beyond the 14-day period prescribed in the air waybill for visible damage and that she failed to submit proof of the cargo’s value.
The trial court ruled in favor of Mejia, awarding actual, moral, and exemplary damages, attorney’s fees, and costs. The Court of Appeals affirmed this decision. PAL elevated the case to the Supreme Court, contesting the appellate court’s affirmance of the trial court’s findings that the air waybill’s provisions should be strictly construed against PAL as a contract of adhesion, that PAL’s liability was not limited by said provisions, and that the awards for moral and exemplary damages and attorney’s fees were proper.
ISSUE
The core issue is whether PAL is liable for damages for the loss, and if so, whether the liability limitations in the air waybill apply and whether the awards for moral and exemplary damages and attorney’s fees are justified.
RULING
The Supreme Court denied the petition and affirmed the assailed decision, holding PAL liable. On the contractual limitation, the Court ruled that the air waybill is a contract of adhesion. Its provisions, particularly the 14-day notice requirement, must be strictly construed against PAL, the party that prepared it. The Court found that Mejia immediately reported the damage and was given the runaround by PAL’s employees, which estopped PAL from invoking the period. Furthermore, PAL’s employee in San Francisco advised Mejia not to declare the value, contributing to the obscurity of the terms.
On the award of damages, the Court sustained the grant of actual damages for the proven loss. For moral and exemplary damages, the Court found ample basis in PAL’s gross negligence and bad faith. The evidence showed PAL failed to exercise the required extraordinary diligence of a common carrier. Its employees ignored Mejia’s immediate complaint and provided contradictory and evasive testimony regarding their investigation, demonstrating a wanton disregard for her rights. This contractual breach attended by bad faith justified the awards for moral and exemplary damages and attorney’s fees. The carrier’s intransigence and failure to settle a valid claim in good faith warranted such sanctions.