G.R. No.

104685 March 14, 1996

SABENA BELGIAN WORLD AIRLINES, petitioner,
vs.
COURT OF APPEALS and MA. PAULA SAN AGUSTIN, respondents.
VITUG, J.:
FACTS:
Sometime in 1987, Ma. Paula San Agustin was a passenger on board an aircraft of Sabena Belgian World
Airlines (Sabena Airlines) originating from Casablanca to Brussels, Belgium. Inside her luggage were jewelry,
clothes, and shoes valued at $4,265.00. She stayed overnight in Brussels and her luggage was left on board.
When San Agustin arrived at Manila International Airport, she was informed that her luggage was missing
and was advised to accomplish and submit a Property Irregularity Report, which she did. Upon follow-up of her
claim a few days later, she received information that her luggage had been found but that it was eventually lost
again.
This prompted San Agustin to demand from Sabena Airlines the monetary value of the luggage, but the
latter refused to settle.
The trial court rendered judgment in favor of San Agustin. CA affirmed. Hence, this appeal by certiorari.
SABENA AIRLINES’ ALLEGATIONS
Sabena Airlines countered that the luggage was lost due to the sole, if not contributory, negligence of San
Agustin. Additionally, Sabena Airlines insists that San Agustin, being a seasoned international traveler, must have
been familiar with the standard provisions contained in her flight ticket that items of value are required to be hand-
carried by the passenger and that the liability of the airlines for loss, delay or damage to baggage would be limited
to only US$20.00 per kilo unless a higher value is declared in advance and corresponding additional charge are
paid thereon.
ISSUE:
WoN the Warsaw Convention, particularly its provision on the limited liability of international carriers,
applies in this case.
RULING:
NO. San Agustin’s luggage was lost while it was in the custody of Sabena Airlines. When she discovered
that the luggage was missing, she promptly accomplished and filed a Property Irregularity Report. She followed up
her claim and filed, on the following day, a formal letter-complaint with Sabena Airlines. She felt relieved when
she was advised that her luggage had finally been found, with its contents intact, only to be told later that her
luggage had been lost for the second time. The loss of said baggage not only once, but twice, underscore the
wanton negligence and lack of care on the part of the carrier.
The Hague Protocol amended the Warsaw Convention by declaring that the stated limits of liability
are not applicable if it is proven that the damage resulted from an act or omission of the carrier, its servants
or agents, done with intent to cause damage or with knowledge that damage would probably result. The
same deletion was effected by the Montreal Agreement of 1966, with the result that a passenger could recover
unlimited damages upon proof of willful misconduct.
The decision appealed from is affirmed.

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G.R. No. 127768 November 19, 1999
UNITED AIRLINES, petitioner,
vs.
WILLIE J. UY, respondent.
BELLOSILLO, J.:
FACTS:
Willie Uy, a passenger on board a United Airlines flight for the San Francisco-Manila route, checked-in
together with his luggage which was found to be overweight at the airline counter. To his utter humiliation, an
employee of United Airlines rebuked him, saying that he should have known the maximum weight allowance and
that he should have packed his things accordingly. Ultimately, Uy was compelled to pay the overweight charges
and proceeded to board his flight.
Upon arrival in Manila, Uy discovered that one of his bags had been slashed and its contents stolen. He
particularized his losses to be around $5,310.00. Uy notified United Airlines of the loss and embarrassment he
suffered and requested reimbursement thereof. United Airlines did not refute any of Uy’s allegations and mailed
him a check based on the maximum liability of $9.70 per pound. Uy, thinking the amount to be grossly
inadequate, sent two more letters to United Airlines. Still, United Airlines refused to accede to his demands.
Uy then filed a complaint for damages against United Airlines. United Airlines moved to dismiss the
complaint on the ground that Uy’s cause of action had prescribed, invoking Art. 29 of the Warsaw Convention
which provides:
The right to damages shall be extinguished if an action is not brought within two (2)
years, reckoned from the date of arrival at the destination, or from the date on which
the aircraft ought to have arrived, or from the date on which the transportation
stopped.
The trial court ordered the dismissal of the action. The CA reversed the trial court decision, holding that the
Warsaw Convention did not preclude the operation of the Civil Code and other pertinent laws. Hence, this petition
for review on certiorari.
ISSUE:
WoN Willie Uy’s cause of action had already prescribed.
RULING:
NO. The SC has held previously that the Warsaw Convention does not preclude the operation of the Civil
Code and other pertinent laws. It does not regulate, much less exempt, the carrier from liability for damages for
violating the rights of its passengers under the contract of carriage, especially if willful misconduct on the part of
the carrier's employees is found or established.
Uy’s complaint reveals that he is suing on two causes of action: (a) the shabby and humiliating treatment
he received; and (b) the slashing of his luggage and the loss of his personal effects. While his second cause of
action is well within the bounds of the Warsaw Convention, his first cause of action clearly is not.
Consequently, insofar as the first cause of action is concerned, Uy’s failure to file his complaint within the
two-year limitation of the Warsaw Convention does not bar his action since United Airlines may still be held liable
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for breach of other provisions of the Civil Code which prescribe a different period or procedure for instituting the
action.
Nonetheless, while it cannot be denied that Uy filed his complaint beyond the period of limitation
prescribed by the Warsaw Convention, it is obvious that he was forestalled from immediately filing an
action because United Airlines gave him the runaround, answering his letters but not giving in to his
demands. True, Uy should have already filed an action at the first instance when his claims were denied, but
the same could only be due to his desire to make an out-of-court settlement for which he cannot be faulted.
Hence, despite the express mandate of Art. 29 of the Warsaw Convention that an action for damages should
be filed within two years from the arrival at the place of destination, such rule shall not be applied in the
instant case because of the delaying tactics employed by the airline itself. Thus, even Uy’s second cause of
action cannot be considered as time-barred under Art. 29 of the Warsaw Convention.
The petition is denied. The assailed decision is affirmed.
G.R. No. 104235 November 18, 1993
SPOUSES CESAR and SUTHIRA ZALAMEA and LIANA ZALAMEA, petitioners,
vs.
COURT OF APPEALS and TRANSWORLD AIRLINES, INC., respondents.
NOCON, J.:
FACTS:
Spouses Cesar Zalamea and Suthira Zalamea, with their daughter, Liana Zalamea, purchased three airline
tickets from the Manila agent of TransWorld Airlines, Inc. (TWA) for a flight from New York to Los Angeles.
The tickets of the spouses Zalamea were purchased at a discount of 75% while that of their daughter was a full fare
ticket (this is a material fact).
Unfortunately, despite arriving an hour before boarding, the Zalameas were placed on the wait-list (with
priority being given to purchasers of full-fare tickets) because the airline had apparently overbooked. Thus, they
were constrained to book in another flight at the cost of $918.00.
Upon their arrival in the Philippines, they filed an action for damages based on breach of contract of air
carriage before the RTC. The RTC decided in their favor. On appeal, the CA held that moral damages are
recoverable in a damage suit predicated upon a breach of contract of carriage only where there is fraud or bad
faith. Since it is a matter of record that overbooking of flights is a common and accepted practice of airlines, no
fraud nor bad faith could be imputed on TWA. Resultantly, the moral and exemplary damages awarded by the trial
court were deleted. Hence, this present petition for review on certiorari.
ISSUE:
WoN there was bad faith on the part of TWA which justifies the award of moral and exemplary damages to
spouses Zalamea.
RULING:
YES. The U.S. law or regulation allegedly authorizing overbooking was never proven. Foreign laws
do not prove themselves nor can the courts take judicial notice of them. Written law may be evidenced by an
official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his
deputy, and accompanied with a certificate that such officer has custody.

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 In this case, TWA relied solely on the statement of Gwendolyn Lather, its customer service agent, that the
Code of Federal Regulations of the Civil Aeronautics Board allows overbooking. Aside from said statement, no
official publication of said code was presented as evidence.
Even if the claimed U.S. Code of Federal Regulations does exist, the same is not applicable to the
case at bar in accordance with the principle of lex loci contractus which require that the law of the place
where the airline ticket was issued should be applied, if the passengers are residents and nationals of the
forum and the ticket is issued in such state by the defendant airline. Since the tickets were sold and issued in
the Philippines, the applicable law in this case would be Philippine law.
Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling the passengers
concerned to an award of moral damages. In Alitalia Airways vs. Court of Appeals, the SC pronounced that when
an airline issues a ticket to a passenger confirmed on a particular flight, on a certain date, a contract of
carriage arises, and the passenger has every right to expect that he would fly on that flight and on that date.
If he does not, then the carrier opens itself to a suit for breach of contract of carriage. For the indignity and
inconvenience of being refused a confirmed seat on the last minute, said passenger is entitled to an award of moral
damages.
Even on the assumption that overbooking is allowed, TWA is still guilty of bad faith for not informing its
passengers beforehand that it could breach the contract of carriage even if they have confirmed tickets if there was
overbooking. TWA should have incorporated stipulations on overbooking on the tickets issued.
The petition is granted and the CA decision is modified to the extent that moral and exemplary damages
are awarded.
G.R. No. 124110 April 20, 2001
UNITED AIRLINES, INC., petitioner
vs.
COURT OF APPEALS and ANICETO FONTANILLA, in his personal capacity and on behalf of his minor
son, MYCHAL ANDREW FONTANILLA, respondents.
KAPUNAN, J.:
FACTS:
Aniceto Fontanilla purchased from the Manila office of United Airlines three “Visit the U.S.A.” tickets for
himself, his wife, and his son. The Fontanillas proceeded to the United States as planned, where they used the first
coupon from San Francisco to Washington. Thereafter, Aniceto bought two additional coupons each for himself,
his wife and his son. After paying the penalty for rewriting their tickets, the Fontanillas were issued tickets with
corresponding boarding passes with the words "CHECK-IN REQUIRED".
The Fontanillas claim that upon their arrival at the Los Angeles Airport for their flight, they were attended
by an employee named Linda. Linda examined their tickets, punched something into her computer and then told
them that boarding would be in fifteen minutes. When the flight was called, the Fontanillas proceeded to the plane.
To their surprise, the stewardess at the gate did not allow them to board the plane, as they had no assigned seat
numbers. They were then directed to go back to the check-in counter where Linda subsequently informed them
that the flight had been overbooked and asked them to wait.
Allegedly, Linda went on utter discriminatory and racist remarks against the Fontanillas.

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 This incident prompted the Fontanillas to file an action for damages before the RTC. The trial court
dismissed the complaint. The CA reversed the lower court’s decision upon finding that there was an admission on
the part of United Airlines that the Fontanillas did, in fact, observe the check-in requirement. The appellate court
likewise gave credence to the claim of Aniceto that the employees of United Airlines were discourteous and
discriminatory.
Hence, this petition for review.
ISSUE:
WoN the failure of the Fontanillas to comply with the check-in requirement defeats their claim for
damages.
RULING:
YES. The appellate court erred in applying the laws of the United States since Philippine law is the
applicable law. Although the contract of carriage was to be performed in the United States, the tickets were
purchased through United Airlines’ agent in Manila.
Under the doctrine of lex loci contractus, the law of the place where a contract is made or entered into
governs with respect to its nature and validity, obligation and interpretation. This has been said to be the rule even
though the place where the contract was made is different from the place where it is to be performed, and
particularly so, if the place of the making and the place of performance are the same. Hence, the court should
apply the law of the place where the airline ticket was issued, when the passengers are residents and nationals of
the forum and the ticket is issued in such State by the defendant airline.
The law of the forum on the subject matter is Economic Regulations No. 7, which provides that the
check-in requirement must be complied with before a passenger may claim against a carrier for being
denied boarding.
As to the Aniceto’s claims that they were subjected to harsh and derogatory remarks, the SC held that he
was not able to prove such allegation by preponderance of evidence, therefore, the award of moral and exemplary
damages by the CA is improper.
The petition is granted and the decision under appeal is reversed.
G.R. No. L-23145 November 29, 1968
TESTATE ESTATE OF IDONAH SLADE PERKINS, deceased.
RENATO D. TAYAG, ancillary administrator-appellee,
vs.
BENGUET CONSOLIDATED, INC., oppositor-appellant.
FERNANDO, J.:
FACTS:
Idonah Slade Perkins, an American citizen who died in New York City, left, among others, two stock
certificates issued by Benguet Consolidated, Inc., a corporation domiciled in the Philippines. As ancillary
administrator of Perkins’ estate in the Philippines, Renato Tayag now wants to take possession of these stock
certificates but County Trust Company of New York, the domiciliary administrator, refused to part with them.

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 Thus, the probate court of the Philippines was forced to issue an order declaring the stock certificates as
lost and ordering Benguet Consolidated to issue new stock certificates representing Perkins’ shares. Benguet
Consolidated appealed the order, arguing that the stock certificates are not lost as they are in existence and
currently in the possession of County Trust Company of New York.
ISSUE:
WoN the order of the lower court is proper.
RULING:
YES. Tayag, as ancillary administrator, has the power to gain control and possession of all assets of the
decedent within the jurisdiction of the Philippines. It is to be noted that the scope of the power of the ancillary
administrator was already outlined in an earlier case. Thus:
It is often necessary to have more than one administration of an estate. When a
person dies intestate, owning property in the country of his domicile as well as in
a foreign country, administration is had in both countries. That which is granted
in the jurisdiction of decedent's last domicile is termed the principal
administration, while any other administration is termed the ancillary
administration. The reason for the latter is because a grant of administration
does not ex proprio vigore have any effect beyond the limits of the country in
which it is granted. Hence, an administrator appointed in a foreign state has no
authority in the [Philippines].
It would then follow that the authority of the probate court to require that ancillary administrator's right to
the stock certificates in the books of Benguet Consolidated be respected is equally beyond question. Benguet
Consolidated is a Philippine corporation owing full allegiance and subject to the unrestricted jurisdiction of
local courts. Its shares of stock cannot therefore be considered in any wise as immune from lawful court
orders.
The SC decision in Wells Fargo Bank and Union vs. Collector of Internal Revenue finds application. “In
the instant case, the actual situs of the shares of stock is in the Philippines, the corporation being domiciled [here]."
The order under appeal is affirmed.
G.R. No. 101949 December 1, 1994
THE HOLY SEE, petitioner,
vs.
ERIBERTO U. ROSARIO, JR. and STARBRIGHT SALES ENTERPRISES, INC., respondents.
QUIASON, J.:
FACTS:
This petition arose from a controversy over a parcel of land. Lot 5-A, registered under the Holy See, was
contiguous to Lot 5-B and 5-D under the name of Philippine Realty Corporation (PRC). The land was donated by
the Archdiocese of Manila to the Papal Nuncio for his residence.
Said lots were sold through an agent to Ramon Licup who assigned his rights to Starbright Sales
Enterprises, Inc.

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 When the squatters refuse to vacate the lots, a dispute arose between the two parties because both were
unsure whose responsibility it was to evict the squatters from said lots. Starbright insists that the Holy See should
clear the property while the Holy See says that Starbright should do it or the earnest money will be returned. With
this, Msgr. Cirilios, the agent, subsequently returned the ₱100,000 earnest money.
To complicate things further, the same lots were sold by the Holy See to Tropicana Properties and
Development Corporation.
Starbright filed a suit for annulment of the sale, specific performance and damages against Msgr. Cirilios,
PRC as well as Tropicana. The Holy See and Msgr. Cirilos moved to dismiss the petition for lack of jurisdiction
based on sovereign immunity from suit. RTC denied the motion on ground that the Holy See had already "shed
off" its sovereign immunity by entering into a commercial transaction. The MR was likewise denied. Hence, this
special civil action for certiorari under Rule 65.
ISSUE:
WoN the Holy See can invoke sovereign immunity from suit in this instance.
RULING:
YES. According to the newer or restrictive theory, the immunity of the sovereign is recognized only with
regard to public acts or acts jure imperii of a state, but not with regard to private acts or acts jure gestionis.
The question now arises: what are acts considered jure gestionis?
Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate
test. The logical question is whether the foreign state is engaged in the activity in the regular course of
business. If the foreign state is not engaged regularly in a business or trade, the particular act or transaction
must then be tested by its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then
it is an act jure imperii, especially when it is not undertaken for gain or profit.
In the case at bench, if the Holy See has bought and sold lands in the ordinary course of a real estate
business, surely the said transaction can be categorized as an act jure gestionis. However, Lot 5-A was acquired
by the Holy See as a donation from the Archdiocese of Manila. The donation was made not for commercial
purpose, but to construct thereon the official place of residence of the Papal Nuncio.
In Article 31(a) of the 1961 Vienna Convention on Diplomatic Relations, it is said that a diplomatic
envoy shall be granted immunity from civil and administrative jurisdiction of the receiving state over any
real action relating to private immovable property. The Department of Foreign Affairs (DFA) certified that the
Embassy of the Holy See is a duly accredited diplomatic missionary to the Republic of the Philippines and is thus
exempted from local jurisdiction and is entitled to the immunity rights of a diplomatic mission or embassy.
Furthermore, the decision to transfer the property and the subsequent disposal thereof are likewise clothed
with a governmental character. The Holy See did not sell Lot 5-A for profit or gain. It merely wanted to
dispose of the same because the squatters living thereon made it almost impossible for the Holy See to use it
for the purpose of the donation.
The petition is granted and the complaint is dismissed.