G.R. No.

104685 March 14, 1996

SABENA BELGIAN WORLD AIRLINES, petitioner,
vs.
HON. COURT OF APPEALS and MA. PAULA SAN AGUSTIN, respondents.

VITUG, J.:p
The appeal before the Court involves the issue of an airline's liability for lost luggage.
The petition for review assails the decision of the Court of Appeals, 1 dated 27 February
1992, affirming an award of damages made by the trial court in a complaint filed by
private respondent against petitioner.
The factual background of the case, narrated by the trial court and reproduced at length
by the appellate court, is hereunder quoted:
On August 21, 1987, plaintiff was a passenger on board Flight SN 284 of
defendant airline originating from Casablanca to Brussels, Belgium on her
way back to Manila. Plaintiff checked in her luggage which contained her
valuables, namely: jewelries valued at $2,350.00; clothes $1,500.00
shoes/bag $150; accessories $75; luggage itself $10.00; or a total of
$4,265.00, for which she was issued Tag No. 71423. She stayed overnight
in Brussels and her luggage was left on board Flight SN 284.
Plaintiff arrived at Manila International Airport on September 2, 1987 and
immediately submitted her Tag No. 71423 to facilitate the release of her
luggage but the luggage was missing. She was advised to accomplish and
submit a property Irregularity Report which she submitted and filed on the
same day.
She followed up her claim on September 14, 1987 but the luggage
remained to be missing.
On September 15, 1987, she filed her formal complaint with the office of
Ferge Massed, defendant's Local Manager, demanding immediate
attention (Exh. "A").
On September 30, 1987, on the occasion of plaintiffs following up of her
luggage claim, she was furnished copies of defendant's telexes with an
information that the Burssel's Office of defendant found the luggage and
that they have broken the locks for identification (Exhibit "B"). Plaintiff was
assured by the defendant that it has notified its Manila Office that the

luggage will be shipped to Manila on October 27, 1987. But unfortunately

plaintiff was informed that the luggage was lost for the second time
(Exhibits "C" and "C-1").
At the time of the filing of the complaint, the luggage with its content has
not been found.
Plaintiff demanded from the defendant the money value of the luggage
and its contents amounting to $4,265.00 or its exchange value, but
defendant refused to settle the claim.
Defendant asserts in its Answer and its evidence tend to show that while it
admits that the plaintiff was a passenger on board Flight No. SN 284 with
a piece of checked in luggage bearing Tag No. 71423, the loss of the
luggage was due to plaintiff's sole if not contributory negligence; that she
did not declare the valuable items in her checked in luggage at the flight
counter when she checked in for her flight from Casablanca to Brussels so
that either the representative of the defendant at the counter would have
advised her to secure an insurance on the alleged valuable items and
required her to pay additional charges, or would have refused acceptance
of her baggage as required by the generally accepted practices of
international carriers; that Section 9(a), Article IX of General Conditions of
carriage requiring passengers to collect their checked baggage at the
place of stop over, plaintiff neglected to claim her baggage at the Brussels
Airport; that plaintiff should have retrieved her undeclared valuables from
her baggage at the Brussels Airport since her flight from Brussels to
Manila will still have to visit for confirmation inasmuch as only her flight
from Casablanca to Brussels was confirmed; that defendant incorporated
in all Sabena Plane Tickets, including Sabena Ticket No. 08242272502241 issued to plaintiff in Manila on August 21, 1987, a warning that
"Items of value should be carried on your person" and that some carriers
assume no liability for fragile, valuable or perishable articles and that
further information may be obtained from the carrier for guidance;' that
granting without conceding that defendant is liable, its liability is limited
only to US $20.00 per kilo due to plaintiffs failure to declare a higher value
on the contents of her checked in luggage and pay additional charges
thereon. 2
The trial court rendered judgment ordering petitioner Sabena Belgian World Airlines to
pay private respondent Ma. Paula San Agustin
(a) . . . US $4,265.00 or its legal exchange in Philippine pesos;

(b) . . . P30,000.00 as moral damages;

(c) . . . P10,000.00 as exemplary damages;
(d) . . . P10,000.00 as attorney's fees; and
(e) (t)he costs of the suit. 3
Sabena appealed the decision of the Regional Trial Court to the Court of Appeals. The
appellate court, in its decision of 27 February 1992, affirmed in toto the trial court's
judgment.
Petitioner airline company, in contending that the alleged negligence of private
respondent should be considered the primary cause for the loss of her luggage, avers
that, despite her awareness that the flight ticket had been confirmed only for
Casablanca and Brussels, and that her flight from Brussels to Manila had yet to be
confirmed, she did not retrieve the luggage upon arrival in Brussels. Petitioner insists
that private respondent, being a seasoned international traveler, must have likewise
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 airline
for loss, delay or damage to baggage would be limited, in any event, to only US $20.00
per kilo unless a higher value is declared in advance and corresponding additional
charges are paid thereon. At the Casablanca International Airport, private respondent, in
checking in her luggage, evidently did not declare its contents or value. Petitioner cites
Section 5(c), Article IX, of the General Conditions of Carriage, signed at Warsaw,
Poland, on 02 October 1929, as amended by the Hague Protocol of 1955, generally
observed by International carriers, stating, among other things, that:
Passengers shall not include in his checked baggage, and the carrier may
refuse to carry as checked baggage, fragile or perishable articles, money,
jewelry, precious metals, negotiable papers, securities or other valuable. 4
Fault or negligence consists in the omission of that diligence which is demanded by the
nature of an obligation and corresponds with the circumstances of the person, of the
time, and of the place. When the source of an obligation is derived from a contract, the
mere breach or non-fulfillment of the prestation gives rise to the presumption of fault on
the part of the obligor. This rule is no different in the case of common carriers in the
carriage of goods which, indeed, are 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.
The appellate court has aptly observed:
. . . Art. 1733 of the [Civil] Code provides that from the very nature of their
business and by reasons of public policy, common carriers are bound to
observe extraordinary diligence in the vigilance over the goods

transported by them. This extraordinary responsibility, according to Art.

1736, lasts from the time the goods are unconditionally placed in the
possession of and received by the carrier until they are delivered actually
or constructively to the consignee or person who has the right to receive
them. Art. 1737 states that the common carrier's duty to observe
extraordinary diligence in the vigilance over the goods transported by
them remains in full force and effect even when they are temporarily
unloaded or stored in transit. And Art. 1735 establishes the presumption
that if the goods are lost, destroyed or deteriorated, common carriers are
presumed to have been at fault or to have acted negligently, unless they
prove that they had observed extraordinary diligence as required in Article
1733.
The only exceptions to the foregoing extraordinary responsibility of the
common carrier is when the loss, destruction, or deterioration of the goods
is due to any of the following causes:
(1) Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the
containers;
(5) Order or act of competent public authority.
Not one of the above excepted causes obtains in this case. 5
The above rules remain basically unchanged even when the contract is breached by
tort 6 although noncontradictory principles on quasi-delict may then be assimilated as
also forming part of the governing law. Petitioner is not thus entirely off track when it has
likewise raised in its defense the tort doctrine of proximate cause. Unfortunately for
petitioner, however, the doctrine cannot, in this particular instance, support its case.
Proximate cause is that which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces injury and without which the result would not have
occurred. The exemplification by the Court in one case 7 is simple and explicit; viz:
(T)he proximate legal cause is that acting first and producing the injury,
either immediately or by setting other events in motion, all constituting a
natural and continuous chain of events, each having a close causal
connection with its immediate predecessor, the final event in the chain

immediately affecting the injury as a natural and probable result of the

cause which first acted, under such circumstances that the person
responsible for the first event should, as an ordinarily prudent and
intelligent person, have reasonable ground to expect at the moment of his
act or default that an injury to some person might probably result
therefrom.
It remained undisputed that private respondent's luggage was lost while it was in the
custody of petitioner. It was supposed to arrive on the same flight that private
respondent took in returning to Manila on 02 September 1987. When she discovered
that the luggage was missing, she promptly accomplished and filed a Property
Irregularity Report. She followed up her claim on 14 September 1987, and filed, on the
following day, a formal letter-complaint with petitioner. She felt relieved when, on 23
October 1987, she was advised that her luggage had finally been found, with its
contents intact when examined, and that she could expect it to arrive on 27 October
1987. She then waited anxiously only to be told later that her luggage had been lost for
the second time. Thus, the appellate court, given all the facts before it, sustained the
trial court in finding petitioner ultimately guilty of "gross negligence" in the handling of
private respondent's luggage. The "loss of said baggage not only once but twice, said
the appellate court, "underscores the wanton negligence and lack of care" on the part of
the carrier.
The above findings, which certainly cannot be said to be without basis, foreclose
whatever rights petitioner might have had to the possible limitation of liabilities enjoyed
by international air carriers under the Warsaw Convention (Convention for the
Unification of Certain Rules Relating to International Carriage by Air, as amended by the
Hague Protocol of 1955, the Montreal Agreement of 1966, the Guatemala Protocol of
1971 and the Montreal Protocols of 1975). In Alitalia vs. Intermediate Appellate
Court, 8 now Chief Justice Andres R. Narvasa, speaking for the Court, has explained it
well; he said:
The Warsaw Convention however denies to the carrier availment of the
provisions which exclude or limit his liability, if the damage is caused by
his wilful misconduct or by such default on his part as, in accordance with
the law of the court seized of the case, is considered to be equivalent to
wilful misconduct, or if the damage is (similarly) caused . . . by any agent
of the carrier acting within the scope of his employment. The Hague
Protocol amended the Warsaw Convention by removing the provision that
if the airline took all necessary steps to avoid the damage, it could
exculpate itself completely, and declaring the stated limits of liability not
applicable if it is proved that the damage resulted from an act or omission
of the carrier, its servants or agents, done with intent to cause damage or
recklessly and 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
wilful misconduct.
The Convention does not thus operate as an exclusive enumeration of the
instances of an airline's liability, or as an absolute limit of the extent of that
liability. Such a proposition is not borne out by the language of the
Convention, as this Court has now, and at an earlier time, pointed out.
Moreover, slight reflection readily leads to the conclusion that it should be
deemed a limit of liability only in those cases where the cause of the death
or injury to person, or destruction, loss or damage to property or delay in
its transport is not attributable to or attended by any wilful misconduct, bad
faith, recklessness, or otherwise improper conduct on the part of any
official or employee for which the carrier is responsible, and there is
otherwise no special or extraordinary form of resulting injury. The
Convention's provisions, in short, do not regulate or exclude liability for
other breaches of contract by the carrier or misconduct of its officers and
employees, or for some particular or exceptional type of damage.
Otherwise, an air carrier would be exempt from any liability for damages in
the event of its absolute refusal, in bad faith, to comply with a contract of
carriage, which is absurd. Nor may it for a moment be supposed that if a
member of the aircraft complement should inflict some physical injury on a
passenger, or maliciously destroy or damage the latter's property, the
Convention might successfully be pleaded as the sole gauge to determine
the carrier's liability to the passenger. Neither may the Convention be
invoked to justify the disregard of some extraordinary sort of damage
resulting to a passenger and preclude recovery therefor beyond the limits
set by said Convention. It is in this sense that the Convention has been
applied, or ignored, depending on the peculiar facts presented by each
case.
The Court thus sees no error in the preponderant application to the instant case by the
appellate court, as well as by the trial court, of the usual rules on the extent of
recoverable damages beyond the Warsaw limitations. Under domestic law and
jurisprudence (the Philippines being the country of destination), the attendance of gross
negligence (given the equivalent of fraud or bad faith) holds the common carrier liable
for all damages which can be reasonably attributed, although unforeseen, to the nonperformance of the obligation, 9 including moral and exemplary damages. 10
WHEREFORE, the decision appealed from is AFFIRMED. Costs against petitioner.
SO ORDERED.

Padilla, Bellosillo, Kapunan and Hermosisima, Jr., JJ., concur.