China Airlines vs.
Chiok (e) a three-piece set of gold (18 carats) cross pens valued atP3,500;
G.R. No. 152122 July 30, 2003
FACTS:
 Daniel Chiok purchased from China Airlines a passenger ticket for air
transportation covering Manila-Taipei-Hong Kong-Manila. The said
ticket was exclusively endorsable to PAL.
 Before Chiok his trip, the trips covered by the ticket were pre-
scheduled and confirmed by the former. When petitioner arrived in
Taipei, he went to CAL to confirm his Hong Kong- Manila trip on board
PAL. The CAL office attached a yellow sticker indicating the status was
OK.
 When Chiok reached Hong Kong, he then went to PAL office to
confirm his flight back to Manila. The PAL also confirmed the status
of his ticket and attached a ticket indicating a status OK. Chiok
proceeded to Hong Kong airport for his trip to Manila. However, upon
reaching the PAL counter, he was told that the flight to Manila was
cancelled due to typhoon. He was informed that all confirmed flight
ticket holders of PAL were automatically booked for the next flight
the following day.
 On November 25, 1981, Chiok was not able to board the plane
because his name did not appear in PAL’s computer list of passengers.
Chiok then sought to recover his luggage but found only two and
realized that his new Samsonite luggage was missing which contained
cosmetics worth HK$14,128.80
 He then proceeded to PAL and confronted the reservation officer
who previously confirmed his flight back to Manila. However, the
reservation officer showed him that his name was on the list.
 Chiok then decided to use his CAL ticket and asked PAL’s reservation
officer if he could use the ticket to book him for the said flight; The
latter, once again, booked and confirmed the former’s trip on a flight
scheduled to depart that evening
 Later, Chiok went to the PAL check-in counter and it was Carmen
Chan, PAL’s terminal supervisor who attended to him. As this
juncture, Chiok had already placed his travel documents, including his
clutch bag, on top of the PAL check-in counter.Thereafter, Carmen
directed PAL personnel to transfer counters. In the ensuing
commotion, Chiok lost his clutch bag containing the following, to wit:
(a) $2,000.00; (b) HK$2,000.00; (c) Taipei $8,000.00; (d) P2,000.00;
(f) a Cartier watch worth about P7,500.00; (g) a tie clip with a garnet
birthstone and diamond worth P1,800.00; and (h) a [pair of] Christian
Dior reading glasses. Subsequently, he was placed on stand-by and
at around 7:30 p.m., PAL personnel informed him that he could now
check-in.
ISSUE: Whether CAL is liable for damages? YES.
HELD: CAL is liable even if PAL was the one that would perform/had
performed the contract of carriage. The issuance of a confirmed CAL ticket
in favor of CHIOK guaranteed that the carrier (PAL) would honor his ticket,
assure him of space and transport him. It is significant to note that the
contract of air transportation was between petitioner and respondent, with
the former endorsing to PAL the Hong Kong-to-Manila segment of the
journey. Such contract of carriage has always been treated in this jurisdiction
as a single operation. In the instant case, PAL as the carrying agent of CAL,
the latter cannot evade liability to respondent, Chiok, even though it may
have been only a ticket issuer for Hong Kong- Manila sector.
This jurisprudential rule is supported by the Warsaw Convention, to which
the Philippines is a party, and by the existing practices of the International Air
Transport Association (IATA). Article 1, Section 3 of the Warsaw Convention
states: “Transportation to be performed by several successive air carriers shall be
deemed, for the purposes of this Convention, to be one undivided transportation, if it
has been regarded by the parties as a single operation, whether it has been agreed
upon under the form of a single contract or of a series of contracts, and it shall not
lose its international character merely because one contract or a series of contracts is
to be performed entirely within a territory subject to the sovereignty, suzerainty,
mandate, or authority of the same High Contracting Party.”
Article 15 of IATA-Recommended Practice similarly provides: “Carriage to be
performed by several successive carriers under one ticket, or under a ticket and any
conjunction ticket issued therewith, is regarded as a single operation.”
In American Airlines v. Court of Appeals, we have noted that under a general
pool partnership agreement, the ticket-issuing airline is the principal in a
contract of carriage, while the endorsee-airline is the agent. Likewise, as the
principal in the contract of carriage, the petitioner in British Airways v. Court
of Appeals was held liable, even when the breach of contract had occurred,
not on its own flight, but on that of another airline. The Decision followed
our ruling in Lufthansa German Airlines v. Court of Appeals, in which we had
held that the obligation of the ticket-issuing airline remained and did not
cease, regardless of the fact that another airline had undertaken to carry
the passengers to one of their destinations.

In the instant case, following the jurisprudence cited above, PAL acted as the
carrying agent of CAL. In the same way that we ruled against British Airways
and Lufthansa in the aforementioned cases, we also rule that CAL cannot
evade liability to respondent, even though it may have been only a ticket
issuer for the Hong Kong-Manila sector.

The employees of PAL were utterly insensitive to his need to be in Manila on

November 25, 1981, and to the likelihood that his business affairs in the city
would be jeopardized because of a mistake on their part.

It was that mistake that had caused the omission of his name from the
passenger list despite his confirmed flight ticket. By merely looking at his
ticket and validation sticker, it is evident that the glitch was the airline‘s fault.
However, no serious attempt was made by PAL to secure the all-important
transportation of respondent to Manila on the following day. To make
matters worse, PAL allowed a group of non-revenue passengers, who had no
confirmed tickets or reservations, to board the re-booked flight.

Since the status of CHIOK in the 1st flight was "OK," as a matter of right
testified to by PAL‘s witness, he should have been automatically transferred
to and allowed to board Flight 307 the following day. Clearly resulting from
negligence on the part of PAL was its claim that his name was not included in
its list of passengers for the first flight and, consequently, in the list of the
replacement flight P. Since he had secured confirmation of his flight -- not
only once, but twice -- by personally going to the carrier’s offices where he
was consistently assured of a seat thereon -- PAL’s negligence was so gross
and reckless that it amounted to bad faith.

Moral and exemplary damages should be awarded (note: only CAL held liable,
as PAL was not impleaded)