Have you lost a checked-in luggage during your international travel and the airline company was lackadaisical in locating it, and when it was found, it was not returned to you?
Are you entitled to damages for the airline’s negligence? How much?
Should the airline company pay you a maximum of only $400 (about P20,000) based on the Warsaw Convention that defines liability of carrier in case of loss, damage, injury... on international flights?
The answers to these questions were threshed out by the Supreme Court (SC) in the case of a prominent Filipino surgeon, Jose M. Tiongco.
Tiongco, one of the founders of the Medical Mission Group Hospital and Health Services in Davao City, was invited by the United Nations World Health Organization (UN-WHO) to be a keynote speaker during the 20th anniversary of the Alma-Ata Declaration to be held in Almaty, Kazakhstan from Nov. 27-28, 1998.
The 1978 Alma-Ata Declaration “recognizes primary health care as a means to achieving the objective of health for all people of all nations.”
Tiongco secured a visa for Kazakhstan. Since there was no direct flight from Manila to Kazakhstan, he had to fly to Singapore from where he would take two connecting flights to Almaty via KLM Royal Dutch Airlines.
On Nov. 25, 1998, Tiongco arrived in Singapore and at 9:30 p.m. he departed for Amsterdam via KLM. His flight from Amsterdam to Frankfurt was delayed by 45 minutes and thus he missed the fourth leg of his journey from Frankfurt to Almaty.
In Frankfurt, he was assured by KLM that his checked-in luggage would be transferred to his next flight. KLM gave him his new boarding pass and itinerary.
In Instanbul, passengers were asked to identify their luggage. Tiongco could not locate his checked-in luggage. So as not to miss his flight, he boarded the plane on assurance that his luggage would be loaded in the next available flight to Almaty.
When Tiongco arrived in Almaty, nobody from KLM, Lufthansa or Turkish Airlines assisted him. He boarded a taxicab and proceeded to the hotel where the UN-WHO convention would be held.
Instead of a formal suit which was in his checked-in luggage, Tiongco wore a pair of slacks and a sweatshirt and proceeded to the place where the convention was being held.
At first, Tiongco was not allowed entry because of his inappropriate attire. After some explanations, he was allowed entry and delivered his speech without the visual aids. He failed to furnish the participants the documents in support of his speech since they were in his lost luggage.
On Dec. 14, 1998, Tiongco returned to the Philippines. After three months, there was no news on his lost luggage.
On March 15, 1999, he wrote Singapore Airlines, KLM and Lufthansa demanding compensation for his lost luggage.
When nothing came out of his demand, Tiongco filed a complaint for damages and payment of attorney’s fees before the Davao City regional trial court (RTC)
KLM, Singapore Airlines, and Lufthansa filed their separate answers and denied liability. For KLM, it said it performed extraordinary diligence in transporting Tiongco to his last destination. It also said it was not the first or the last carrier.
KLM pointed out that if found liable, the amount of actual damage would only be $400 pursuant to the Warsaw Convention since Tiongco did not declare the actual value of the checked-in suitcase and its contents.
On Jan. 16, 2006, the RTC declared KLM solely liable for the loss of Tiongco’s luggage for its failure to exercise extraordinary care in handling the suitcase.
The trial court rejected KLM’s claim that Singapore Airlines and Turkish Airlines should be responsible being the first and last carrier, respectively.
It said that since KLM, which issued the tickets, was the principal in the contract of carriage and, thus, it was liable for the acts and omissions of the other carriers to which it endorsed the other legs of Tiongco’s flight to Almaty.
The RTC ordered KLM to pay Tiongco P3 million in nominal damages; P3 million, moral damages; P5 million, exemplary damages; and P1.6 million attorney’s fees.
KLM elevated the case to the Court of Appeals (CA) which agreed with the RTC on KLM’s liability for breach of contract of carriage. But the CA modified the monetary awards – P1 million for moral damages; P300,000 for exemplary damages; and P50,000 for nominal damages. The attorney’s fee was set at 20 per cent of the total monetary awards.
When KLM’s motion for reconsideration was denied by the CA, it filed a petition with the SC.
In a decision that was promulgated last Oct. 4, made public last Nov. 29 and written by Associate Justice Ramon Paul L. Hernando, the CA resolved the issue on whether KLM acted in gross negligence, bad faith and willful misconduct in the loss of Tiongco's luggage for him to be entitled to damages.
The SC said:
“Unfortunately, KLM failed to substantiate its claim that the CA misapprehended any facts or failed to reconsider relevant facts to warrant a reversal of its assailed decision.
“A contract of carriage is one whereby a certain person or association of persons obligate themselves to transport persons, things, or goods from one place to another for a fixed price.
“The nature of the business which involves the transportation of persons or goods makes a contract of carriage imbued with public interest. It is therefore bound to observe not just the due diligence of a good father of a family but that of ‘extraordinary’ care in the vigilance over the goods as required under Article 1733 of the Civil Code.
“Considering that a contract of carriage is vested with public interest, a common carrier is presumed to have been at fault or to have acted negligently in case of lost or damaged goods unless they prove that they observed extraordinary diligence.
“Hence, in an action based on a breach of contract of carriage, the aggrieved party does not need to prove that the common carrier was at fault or was negligent. He or she is only required to prove the existence of the contract and its non-performance by the carrier.
“There is no dispute that KLM and Dr. Tiongco entered into a contract of carriage. Dr. Tiongco purchased tickets from the airline for his trip to Almaty, Kazakhstan. KLM, however, breached its contract with Dr. Tiangco when it failed to deliver his checked-in suitcase at the designated place and time.
“Worse, Dr. Tiangco's suitcase was never returned to him even after he arrived in Manila from Almaty. Thus, KLM’s liability for the lost suitcase was sufficiently established as it failed to overcome the presumption of negligence.
“We agree with the RTC and the CA that KLM acted in bad faith. It is undisputed that Dr. Tiongco's luggage went missing during his flight. Even after his return to the Philippines, Dr. Tiongco's suitcase was still missing.
“Nobody from KLM's personnel updated him of what happened to the search. It was only when Dr. Tiongco wrote KLM a demand letter that the latter reached out to him asking for time to investigate the matter. Yet, it did not even notify him of the result of the purported investigation.
“To make matters even worse, the Customer Relations Officer of KLM, Arlene Almario, categorically testified that the suitcase was eventually found in Almaty as shown in the baggage report dated December 18, 1998 of Turkish Airlines. The said airline immediately notified KLM. However, KLM did not bother to inform Dr. Tiongco that his suitcase had been found or took the necessary steps to transport it back to Manila.
“The bad faith on the part of KLM as found by the RTC and the CA thus renders the same liable for moral and exemplary damages. However, the amounts thereof must be modified further to be fair, reasonable, and commensurate to the injury sustained by the passenger
“WHEREFORE, the Petition for Review on Certiorari is DENIED. The April 10, 2013 Decision of the Court of Appeals in CA-G.R. CV No. 00884-MIN is hereby AFFIRMED with MODIFICATION in that: (a) the awards of damages and exemplary damages are hereby reduced to P300,000 and P100,000, respectively; (b) temperate damages in the amount of P50,000 is awarded to Dr. Jose M. Tiongco in lieu of nominal damages; (c) the attorney's fees which is equivalent to 20% of the total monetary awards is maintained for being reasonable; and (d) the total monetary awards shall bear interest of twelve percent (12%) per annum from January 16, 2006, the date of the RTC Decision, to June 30, 2013; and six per cent (6%) per annum from July 1, 2013 until full payment.”