GR 121824; (January 1998) (Digest)
G.R. No. 121824 January 29, 1998
BRITISH AIRWAYS, petitioner, vs. COURT OF APPEALS, GOP MAHTANI, and PHILIPPINE AIRLINES, respondents.
FACTS
Private respondent GOP Mahtani purchased a ticket from petitioner British Airways (BA) for travel from Manila to Bombay, India, on April 16, 1989. Since BA had no direct flights from Manila to Bombay, the itinerary required Mahtani to fly from Manila to Hongkong via Philippine Airlines (PAL), and then take a connecting BA flight from Hongkong to Bombay. Mahtani checked in two pieces of luggage at the PAL counter in Manila, expecting them to be transferred to the BA flight in Hongkong. Upon arrival in Bombay, his luggage was missing. BA advised him to file a claim. Mahtani filed a complaint for damages and attorney’s fees against BA and his travel agent before the Regional Trial Court of Cebu. BA filed an answer and a third-party complaint against PAL, alleging that the luggage was not transferred due to PAL’s late arrival in Hongkong. PAL disclaimed liability. The trial court ruled in favor of Mahtani, ordering BA to pay him P7,000 for the suitcases, US$400 for the contents, P50,000 as moral and actual damages, and attorney’s fees, while dismissing the third-party complaint against PAL. The Court of Appeals affirmed the decision. BA appealed to the Supreme Court, assailing the award of damages and attorney’s fees and the dismissal of its third-party complaint against PAL.
ISSUE
1. Whether the award of compensatory damages to Mahtani was proper despite the limited liability provisions in the airline ticket.
2. Whether the dismissal of BA’s third-party complaint against PAL was correct.
RULING
1. Yes, the award of compensatory damages was proper. While the Warsaw Convention and airline tariffs typically limit a carrier’s liability for lost baggage unless a higher value is declared, BA waived this defense of limited liability. During trial, BA failed to timely object when Mahtani testified on the actual damages he incurred. BA’s counsel not only did not object but also cross-examined Mahtani on the matter. The right to object is a privilege that can be waived by failure to raise it at the earliest opportunity. Furthermore, factual findings of the trial court, as affirmed by the Court of Appeals, on the actual value of the luggage are entitled to great respect and are not reviewable by the Supreme Court.
2. No, the dismissal of the third-party complaint was incorrect. The contract of air transportation was exclusively between Mahtani and BA. PAL, in transporting Mahtani from Manila to Hongkong, was acting as BA’s agent, as shown by the ticket issued by BA which included the PAL flight segment. Under the Civil Code, an agent is responsible for negligence and is liable for damages which the principal may suffer due to the agent’s non-performance. Since the trial court found that the cause of the luggage not being transferred was PAL’s late arrival in Hongkong, PAL as an agent can be held liable to BA as principal. The Supreme Court modified the decision, reinstating the third-party complaint against PAL.