GR L 68988; (June, 1990) (Digest)
G.R. No. L-68988 June 21, 1990
PAN AMERICAN WORLD AIRWAYS, INC., petitioner, vs. INTERMEDIATE APPELLATE COURT and EDMUNDO P. ONGSIAKO, respondents.
FACTS
Edmundo P. Ongsiako was a paying passenger on a PAN AM flight from Manila to Los Angeles via Honolulu on June 8, 1978. Upon arrival in Honolulu, he discovered his checked-in luggage had been left behind in Manila and was only found a week later. At the Honolulu airport, when Ongsiako sought assistance from PAN AM personnel, he was met with indifference; an employee, instead of helping, looked at his watch and told Ongsiako to proceed to his connecting flight to avoid being bumped off, refusing to even examine his baggage claim tag. Offers to forward the luggage to him in the United States were later made but refused as Ongsiako’s travel itinerary was uncertain by that time.
ISSUE
Whether the Court correctly affirmed the award of moral damages in favor of Ongsiako for PAN AM’s breach of contract of carriage.
RULING
Yes. The Supreme Court affirmed the award of moral damages. Under Article 2220 of the Civil Code, moral damages are recoverable for breach of contract where the defendant acted fraudulently or in bad faith. The Court found that PAN AM’s actions constituted gross and reckless negligence amounting to bad faith. Accepting Ongsiako as a passenger and his luggage when it knew or should have known that time constraints might prevent the loading of his baggage was a conscious disregard of its contractual obligations. Furthermore, the conduct of its employees in Honolulu—exhibiting callous indifference, refusing to assist, and effectively dismissing his legitimate concerns in a foreign country—directly caused Ongsiako mental anguish, anxiety, and humiliation. This distress was a natural consequence of the breach under the circumstances. The Court held that the factual findings of the lower courts, which were supported by evidence, adequately established the factual basis for bad faith justifying moral damages. The financial standing of Ongsiako and the gravity of the distress suffered were considered in quantifying the award, which the Court found not to be excessive.