GR 119995; (November, 1997) (Digest)
G.R. No. 119995 November 18, 1997
CARLOS SINGSON, petitioner, vs. COURT OF APPEALS and CATHAY PACIFIC AIRWAY, INC., respondents.
FACTS
On May 24, 1988, Carlos Singson and his cousin bought two open-dated, round-trip plane tickets from Cathay Pacific Airways, Ltd. (CATHAY) for a vacation in the United States. Each ticket consisted of six flight coupons for specific legs of the journey. On June 30, 1988, in Los Angeles, they arranged their return flight for July 1, 1988. While his cousin easily got a booking, Singson could not because his ticket booklet was missing flight coupon no. 5 (San Francisco-Hongkong) and instead contained the already-used flight coupon no. 3 (San Francisco-Los Angeles). CATHAY could only arrange his return flight on July 6, 1988. Singson filed a damages suit against CATHAY, claiming it shrugged off his urgent pleas and arrogantly directed him to investigate the missing coupon himself or buy a new ticket. He and his cousin were forced to go to San Francisco to verify. CATHAY denied the allegations, arguing that as an open-dated ticket holder, Singson was not confirmed on a specific flight, so no contract of carriage was breached. It also stated it needed to verify the coupon’s status via telex to Hongkong, and the delay was due to the time difference and a holiday. The trial court found CATHAY guilty of gross negligence and awarded damages. The Court of Appeals reversed, deleting the awards for moral and exemplary damages and attorney’s fees, finding no fraud or bad faith.
ISSUE
1. Whether a breach of contract was committed by CATHAY when it failed to confirm Singson’s booking for its July 1, 1988 flight.
2. Whether CATHAY was liable not only for actual damages but also for moral and exemplary damages, and attorney’s fees.
RULING
1. Yes, CATHAY committed a breach of contract. The round-trip ticket was a complete written contract, and the contract was already partially executed. CATHAY’s agent testified that Singson had reservations booked for travel. The carrier’s negligence in detaching the wrong coupon and its subsequent refusal to honor the ticket constituted a breach.
2. Yes, CATHAY is liable for moral and exemplary damages and attorney’s fees. The breach was attended by fraud or bad faith, as CATHAY’s employees exhibited a cavalier attitude, showing a lack of care and a dismissive posture towards Singson, which amounted to wanton, reckless, and oppressive conduct. Moral damages are recoverable in breach of contract where the carrier acted fraudulently or in bad faith. Exemplary damages are also warranted to set an example. Attorney’s fees are awarded as Singson was compelled to litigate. The Supreme Court awarded P20,000.00 for actual damages, P200,000.00 for moral damages, P50,000.00 for exemplary damages, and P25,000.00 for attorney’s fees. The petition was granted, and the Court of Appeals decision was reversed.