G.R. No. 155550 ; January 31, 2008
NORTHWEST AIRLINES, INC., petitioner, vs. STEVEN P. CHIONG, respondent.

FACTS

Respondent Steven Chiong, a seafarer hired for a vessel in San Diego, possessed a confirmed Northwest Airlines ticket for a flight on April 1, 1989. He arrived at the Manila airport three hours early, complied with all pre-departure government requirements, and proceeded to check in. Northwest personnel, however, informed him his name was not on the computer’s passenger list. He was directed to a “man in barong” outside the counter who demanded US$100 for a boarding pass. Chiong, lacking the money and despite repeated attempts, was denied check-in and boarding. His name on the manifest was crossed out and substituted with another passenger, “W. Costine.” Consequently, Chiong missed his flight and lost his employment contract.
Chiong filed a complaint for breach of contract of carriage. Northwest defended itself by claiming Chiong was a “no-show” passenger. The Regional Trial Court ruled in favor of Chiong, awarding damages. The Court of Appeals affirmed the decision in toto, prompting Northwest to elevate the case to the Supreme Court via a petition for review.

ISSUE

Whether Northwest Airlines is liable for breach of contract of carriage for bumping off respondent Steven Chiong from his confirmed flight.

RULING

Yes, Northwest Airlines is liable. The Supreme Court affirmed the lower courts’ findings. The core legal principle is that a contract of carriage obligates the common carrier to bring the passenger safely to their destination, and a confirmed ticket creates a binding obligation. The carrier bears the burden of proving it exercised extraordinary diligence. Here, Northwest failed to discharge this burden.
The Court found the evidence preponderated in favor of Chiong. His testimony, corroborated by his agency’s liaison officer, established that he was present and ready to board but was unjustly prevented from doing so by Northwest’s personnel who demanded a bribe. The substitution of his name on the manifest with “W. Costine” strongly indicated bad faith and a deliberate act of bumping him off to accommodate another passenger. Northwest’s defense of “no-show” was contradicted by this evidence. The act of its employee, the “man in barong,” in soliciting money is attributable to the airline. This constituted a willful and fraudulent breach of contract, warranting an award of actual damages for lost income, temperate damages for his family’s travel expenses, moral damages for the besmirched reputation and anguish suffered, exemplary damages to deter similar acts, and attorney’s fees.