China Airlines v CA (G.R. No. 129988)

Facts:
Respondents, Antonio Salvador and Rolando Lao planned to travel to Los Angeles, California to pursue a cable business deal involving the distribution of Filipino films. Initially, Morelia Travel Agency booked their flight with China Airlines (CAL).

Upon discovering that Morelia charged higher rates than American Express Travel (Amexco), they dropped the services of Morelia. Lao called Amexco claiming that he and Salvador had a confirmed booking with CAL. Lao then gave to Amexco the record locator number that CAL issued previously to Morelia. CAL confirmed the booking.

When the respondents were at the airport, CAL prevented them from boarding because their names were not in the passenger's manifest. CAL cancelled the reservations when Morelia revoked the booking. But the respondents were able to get a flight with Northwest Airlines.

Issue/s:
1. Whether or not there was a breach in the contract of carriage.
2. Whether or not there there was bad faith.
3. Whether or not there was sufficient claims for damages.

Held:
1. Yes. When an airline issues a ticket to a passenger confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger has every right to expect that he would fly on that flight and on that date.

When CAL did not allow respondents, who were in possession of the confirmed tickets, from boarding its airplane because their names were not in the manifest, it ocnsituted a breach of contract of carriage.

2. No. Bad faith should always be established by clear and convincing evidence since the law always presumes good faith.

In the case, there were three reasons why CAL cancelled the reservations. First was Amexco's unauthorized use of the record locator number. Second was CAL's negligence in confirming the reservations of Amexco. Third was the absence of the correct contact numbers of private respondents. There was no concerted effort on the part of CAL to cancel respondent's reservations in favor of other passengers.

3. Not entitled to moral damages because not every case of mental anguish, fright or anxiety calls for the award of moral damages.

Not entitled to exemplary damages because CAL was not in bad faith and its employees did not act in a wanton, fraudulent, reckless, oppressive or malevolent manner.

Not entitled to actual damages because respondents did not shell out any money for their CAL tickets. Respondents would have been entitled to the price difference between the tickets of CAL and Northwest had the latter cost more than the former but this was not the case. Evidence shows that Northwest tickets ($625) cost less than CAL tickets ($629). The court cannot order reimbursement of the Northwest tickets because this would have enabled respondents to fly for free. The cost of the tickets were a necessary expense that private respondents could not pass on to CAL.

Entitled to nominal damages of P5,000 when the plaintiff suffers some species of injury not enough to warrant an award of actual damages.