G.R. No. 120334 & 120337 January 20, 1998
NORTHWEST AIRLINES, INC., petitioner, vs. COURT OF APPEALS and ROLANDO I. TORRES, respondents. / ROLANDO I. TORRES, petitioner, vs. COURT OF APPEALS and NORTHWEST AIRLINES, INC., respondents.

FACTS

Petitioner Rolando I. Torres, allegedly on a special mission to purchase firearms for the Philippine Senate, purchased a round-trip ticket from petitioner Northwest Airlines, Inc. (NORTHWEST) for travel to Chicago and back to Manila. On his return, he checked in two identical baggage, one containing firearms. NORTHWEST’s representative required the baggage to be opened, and after Torres presented his authorization and receipts, he sealed it, and the representative placed a red “CONTAINS FIREARMS” tag on it. Upon arrival in Manila on June 22, 1988, Torres could not claim the baggage containing firearms, as it was recalled to Chicago by NORTHWEST for US Customs verification. On June 28, 1988, upon claiming the returned baggage in Manila, Torres found the firearms missing, and a Personal Property Missing Damage Report was issued. After NORTHWEST refused to settle amicably, Torres filed a complaint for actual, moral, temperate, and exemplary damages and attorney’s fees. NORTHWEST, in its answer, claimed US Customs agents ordered the return of the weapons, and when opened in Chicago, the box contained no firearms, implying the baggage received in Manila must have contained them. After Torres presented his evidence, NORTHWEST filed a “Motion to Dismiss (By Way of Demurrer to the Evidence with Motion for Summary Judgment),” seeking dismissal of the claims for moral, exemplary, and temperate damages and attorney’s fees and moving for summary judgment awarding Torres $640 as actual damages, citing the Warsaw Convention’s liability limit. Torres offered no objection to submission for decision but insisted on his claimed damages. Instead of ruling solely on the motion, the trial court rendered a full decision awarding Torres $9,009.32 (value of lost goods), P100,000 attorney’s fees, P5,181.09 filing fees, P20,000 litigation expenses, and P50,000 moral damages, finding NORTHWEST’s personnel acted with willful misconduct by “guessing” which baggage contained firearms in Tokyo, taking the case beyond the Warsaw Convention’s liability limit. Both parties appealed. The Court of Appeals sustained Torres’s right to actual damages, agreeing the “guessing” amounted to willful misconduct under the Warsaw Convention, but set aside the rest of the decision, ruling the trial court erred in determining the amount of damages by summary judgment and in disposing of the entire case by summary judgment when NORTHWEST only moved for summary judgment on actual damages and demurrer to evidence on other damages. It held the trial court should have merely granted or denied the demurrer and, if denied, allowed NORTHWEST to present evidence, and remanded the case for further proceedings. Both parties filed separate petitions for review.

ISSUE

1. Whether the trial court erred in deciding the entire case on the merits via summary judgment and in its treatment of the demurrer to evidence.
2. Whether Torres is entitled to actual damages exceeding the Warsaw Convention’s liability limit.
3. Whether the case should be remanded for further proceedings.

RULING

1. Yes, the trial court erred. The Supreme Court agreed with the Court of Appeals that the trial court erred in deciding the entire case on its merits. Regarding the demurrer to evidence, the trial court should have only granted or denied it; denying it required allowing NORTHWEST to present its evidence, not immediately awarding damages. Regarding the motion for summary judgment, both lower courts erred. Summary judgment is improper when the amount of damages is in issue, as it was here, since NORTHWEST disputed the loss and value of the firearms. Summary judgment should only be rendered if, after the motion is heard, the pleadings, affidavits, and documents show no genuine issue as to any material fact. Here, there was a genuine issue as to the fact of loss and the actual value of the firearms, precluding summary judgment.
2. Yes, Torres is entitled to actual damages exceeding the Convention’s limit, but the amount must be proven. The Supreme Court agreed with the lower courts that NORTHWEST’s liability may not be limited to the Warsaw Convention’s prescribed limit because its personnel’s act of “guessing” which baggage contained firearms constituted willful misconduct, as held in Alitalia v. Intermediate Appellate Court, where the Convention’s limits do not apply if the cause of loss is attributable to willful misconduct or improper conduct by the carrier’s employees.
3. Yes, the case must be remanded. The Supreme Court partly granted NORTHWEST’s petition by setting aside the Court of Appeals’ affirmation of the summary judgment as to Torres’s right to actual damages, denied Torres’s petition for want of merit, and remanded the case to the trial court for reception of NORTHWEST’s evidence and rendition of judgment on the merits.