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    36 Zalamea v. CA

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    NN DDL
    The Zalamea spouses and daughter purchased airline tickets from TWA's Manila agent for a flight from Manila to New York to Los Angeles. However, their return flight from New York to Manila was overbooked, forcing the wife and daughter to wait for the next flight, which was also overbooked. They sued TWA for breach of contract. The Supreme Court held TWA liable, finding that overbooking amounts to bad faith under Philippine law as the tickets were purchased in the Philippines. The court also rejected the argument that US regulations allowed overbooking, as Philippine law applied based on the rule of lex loci contractus, or the law of the place where the contract was formed.

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    36 Zalamea v. CA

    Uploaded by

    NN DDL
    63 views2 pages
    The Zalamea spouses and daughter purchased airline tickets from TWA's Manila agent for a flight from Manila to New York to Los Angeles. However, their return flight from New York to Manila was overbooked, forcing the wife and daughter to wait for the next flight, which was also overbooked. They sued TWA for breach of contract. The Supreme Court held TWA liable, finding that overbooking amounts to bad faith under Philippine law as the tickets were purchased in the Philippines. The court also rejected the argument that US regulations allowed overbooking, as Philippine law applied based on the rule of lex loci contractus, or the law of the place where the contract was formed.

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    The Zalamea spouses and daughter purchased airline tickets from TWA's Manila agent for a flight from Manila to New York to Los Angeles. However, their return flight from New York to Manila was overbooked, forcing the wife and daughter to wait for the next flight, which was also overbooked. They sued TWA for breach of contract. The Supreme Court held TWA liable, finding that overbooking amounts to bad faith under Philippine law as the tickets were purchased in the Philippines. The court also rejected the argument that US regulations allowed overbooking, as Philippine law applied based on the rule of lex loci contractus, or the law of the place where the contract was formed.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    63 views2 pages

    36 Zalamea v. CA

    Uploaded by

    NN DDL
    The Zalamea spouses and daughter purchased airline tickets from TWA's Manila agent for a flight from Manila to New York to Los Angeles. However, their return flight from New York to Manila was overbooked, forcing the wife and daughter to wait for the next flight, which was also overbooked. They sued TWA for breach of contract. The Supreme Court held TWA liable, finding that overbooking amounts to bad faith under Philippine law as the tickets were purchased in the Philippines. The court also rejected the argument that US regulations allowed overbooking, as Philippine law applied based on the rule of lex loci contractus, or the law of the place where the contract was formed.

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    © All Rights Reserved
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    of 2

    Zalamea vs.

    CA

    G.R. No. 104235, Nov. 18, 1993

    OVERBOOKING OF FLIGHT IS BAD FAITH; LEX LOCI CONTRACTUS – LAW OF


    THE PLACE WHERE TICKET WAS ISSUED GOVERNS

    FACTS:

    The Zalamea spouses and their daughter purchased 3 airline tickets from the
    Manila agent of respondent TransWorld Airlines (TWA) for a flight to New York to Los
    Angeles. The tickets of the spouses were purchased at a discount of 75% while that of
    their daughter was a full-fare ticket. All three tickets represented confirmed reservations.
    Once in New York, however, they found that their flight back to Manila was overbooked,
    as a result of which they had to be wait-listed. Out of those waitlisted, the ones with full-
    fare tickets were preferred. Thus, only the Zalamea husband, who was holding his
    daughter’s ticket, was able to get on board while his wife and daughter had to wait for
    the next flight. However, it turned out this next flight was likewise overbooked, forcing
    the Zalameas to purchase tickets from another airlines. Later, they sued TWA for
    breach of contract in the Philippines.

    ISSUE:

    Whether or not TWA is liable for breach of contract

    HELD:

    SC held in the affirmative. Overbooking of flight amounts to fraud or bad faith,


    entitling plaintiff to an award of moral damages because of bad faith attending the
    breach of contract. The holding that overbooking was allowed under US Federal
    regulations was found erroneous because: (1) this regulation was not proved and our
    courts cannot judicial notice of it, and (2) even if such regulation was proven, the rule of
    lex loci contractus negated its application. According to this rule, the law of the place
    where the airline ticket was issued should be applied by the court where the passengers
    are residents and nationals of the forum and the ticket is issued in such State by the
    defendant airline. Since tickets were sold and issued in the Philippines, the applicable
    law in this case would be Philippine law. Under our jurisprudence, overbooking of flight
    is bad faith. Moreover, the hierarchy of tickets practiced by TWA was evidence of its
    self-interest over that of its passengers, which SC held to be improper considering the
    public interest involved in a contract of carriage.
    Zalamea vs. CA

    G.R. No. 104235, Nov. 18, 1993

    Conflict Process
    Jurisdiction of the Forum

    The rule that lex loci contractus (the law of the place where the contract is made)
    governs in this jurisdiction. According to this rule, the law of the place where the airline
    ticket was issued should be applied by the court where the passengers are residents
    and nationals of the forum and the ticket is issued in such State by the defendant airline.
    Since tickets were sold and issued in the Philippines, the applicable law in this case
    would be Philippine law.
    Determine Foreign Element

    Contract was performed outside the Philippine Territory.

    Existence of Conflict of Laws

    US Federal Law vs Philippine Law regarding the acceptability of overbooking

    Choice of Law

    The rule of lex loci contractus negates the application of the US Federal Law. The
    Philippine Laws shall govern as the contract of carriage was perfected in the
    Philippines. As a result, the law of the Philippines considering overbooking as
    amounting to fraud or bad faith and thus, entitling plaintiff to an award of moral damages
    because of bad faith attending the breach of contract, is applied.

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