G.R. No. L-40597 June 29, 1979 AGUSTINO B. ONG YIU, Petitioner, vs. Honorable Court of Appeals and Philippine AIR LINES, INC., Respondents

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G.R. No.

L-40597 June 29, 1979

AGUSTINO B. ONG YIU, petitioner,


vs.
HONORABLE COURT OF APPEALS and PHILIPPINE
AIR LINES, INC., respondents.

FACTS:
Petitioner is a lawyer. He was a passenger in PAL Cebu to Butuan for a hearing. He had
with him a suit case which contained documents he needed for the hearing. Upon
arrival, he claims that his luggage could not be found. It was then learned, that the
luggage had been over carried to Manila and it would be immediately sent to Butuan.

The next day, Yiu went to the airport but his luggage was still not there. Just after when
he left, the luggage came through. A driver of a colorum car volunteered to take the
luggage to Yiu as he was the one who drove Yiu. The maleta opened when it was
placed in the airport counter. Yiu found out that some of his documents were missing
and refused to accept the luggage.

Yiu then demanded PAL to look for the missing documents or else be filed a suit against
them. After due diligence, the documents were still not found, thus Yiu filing against PAL
for breach of contract of transportation.

With the CA, they only found PAL guilty of simple negligence and order PAL to pay Yiu
P100.00 for the baggage liability.

ISSUE: Whether there was breach of contract between Yiu and PAL when the
documents were list in PALs custody.

RULING: NO.

The SC agreed with the CA that PAL had not acted in bad faith. Bad faith means a
breach of a known duty through some motive of interest or ill will. It was the duty of PAL
to look for petitioner's luggage which had been miscarried. PAL exerted due diligence in
complying with such duty.

In the absence of a wrongful act or omission or of fraud or bad faith, petitioner is not
entitled to moral damages (Art. 2217).

Petitioner is neither entitled to exemplary damages. In contracts, as provided for in


Article 2232 of the Civil Code, exemplary damages can be granted if the defendant
acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner, which has
not been proven in this case.

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