G.R. No. 92288 . February 9, 1993.
BRITISH AIRWAYS, INC., petitioner, vs. THE HON. COURT OF APPEALS, Twelfth Division, and FIRST INTERNATIONAL TRADING AND GENERAL SERVICES, respondents.

FACTS

Private respondent First International Trading and General Services Co., a recruitment agency, received a telex from its principal in Jeddah, Saudi Arabia, to recruit Filipino contract workers. In March 1981, the principal prepaid airfare tickets for 93 workers with petitioner British Airways, Inc., with instructions to transport them on or before March 30, 1981. Petitioner received a prepaid ticket advice (PTA) and informed private respondent. Private respondent instructed its travel agent to book the 93 workers, but petitioner failed to fly them, compelling private respondent to borrow money to purchase tickets from other airlines. In June 1981, petitioner received another PTA for 27 workers. Private respondent’s agent booked them, but petitioner only confirmed 16 seats for a June 9 flight, of which only 9 boarded. Subsequent bookings for the remaining workers on June 30, July 4, and July 7, 1981, were repeatedly cancelled by petitioner without prior notice. The workers eventually left using tickets bought from other airlines. Due to the delays, private respondent’s principal cancelled the hiring of remaining workers. Private respondent demanded compensation for damages, which petitioner denied. Private respondent filed a complaint for damages. The trial court ordered petitioner to pay actual, moral, and exemplary damages, attorney’s fees, and costs. The Court of Appeals affirmed the decision. Petitioner contends no perfected contract of carriage existed as no tickets were issued and private respondent had no cause of action.

ISSUE

Whether a perfected contract of carriage existed between the parties, giving private respondent a cause of action for damages against petitioner for breach thereof.

RULING

Yes. The Supreme Court, affirming the Court of Appeals with modification, held that a consensual contract “to carry” was perfected. The essential elements of consent, object, and cause were present. Petitioner’s consent was manifested by its acceptance of the PTAs and the prepaid fares from private respondent’s principal. The object was the transport of the workers from Manila to Jeddah. The cause was the fare paid. Petitioner’s repeated failure to transport the workers despite confirmed bookings constituted breach of contract and bad faith. However, the award of actual damages was deleted for lack of competent proof. The awards for moral and exemplary damages were sustained due to petitioner’s patent bad faith, which caused injury to private respondent’s reputation and business. The counterclaims of petitioner were deemed mere afterthoughts.