G.R. No. 120262 July 17, 1997
PHILIPPINE AIRLINES, INC., petitioner, vs. COURT OF APPEALS and LEOVIGILDO A. PANTEJO, respondents.

FACTS

On October 23, 1988, private respondent Leovigildo A. Pantejo, then City Fiscal of Surigao City, boarded a PAL flight in Manila and disembarked in Cebu City to take a connecting flight to Surigao City. The connecting flight was cancelled due to typhoon Osang. PAL initially gave cash assistance of P100.00 and, the next day, P200.00 to stranded passengers for an expected two-day stay. Pantejo requested hotel accommodations at PAL’s expense due to lack of cash, but PAL refused. Pantejo was forced to share a room with a co-passenger, Andoni Dumlao, at Sky View Hotel, promising to pay his share later. On October 25, 1988, when flights resumed, Pantejo learned that PAL had reimbursed the hotel expenses of co-passengers Superintendent Ernesto Gonzales and Mrs. Gloria Rocha. Pantejo informed PAL’s Manager for Departure Services, Oscar Jereza, of his intent to sue for discrimination. Jereza then offered P300.00, which Pantejo declined. The Regional Trial Court awarded Pantejo damages, which the Court of Appeals affirmed but excluded attorney’s fees and litigation expenses.

ISSUE

Whether petitioner Philippine Airlines acted in bad faith when it failed and refused to provide hotel accommodations for respondent Pantejo or to reimburse him for hotel expenses incurred due to the flight cancellation.

RULING

Yes, petitioner PAL acted in bad faith. The Court affirmed the factual findings of the lower courts, which are binding and conclusive. The evidence established that PAL had a standard company policy to extend cash assistance or provide hotel accommodations to stranded passengers during flight cancellations, as admitted by its manager and corroborated by witness testimonies. PAL discriminated against Pantejo by reimbursing other passengers’ hotel expenses while refusing his request and not informing him of the possibility of reimbursement. This discriminatory act, without compelling justification, constituted bad faith. The contract of air carriage generates a public duty, and PAL’s neglect made it liable for damages. The Court upheld the awards for actual, moral, and exemplary damages, finding them justified due to the humiliation and anguish suffered by Pantejo, a person of social prominence. However, the legal interest of 6% on the monetary awards was modified to run from the date of the trial court’s judgment, not from the filing of the complaint, as the damages were unliquidated until ascertained by the court.