September 2007 - Philippine Supreme Court Resolutions
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[G.R. No. 156654 : September 26, 2007] PHILIPPINE AIRLINES, INC., PETITIONER VERSUS VICENTE LOPEZ, JR., RESPONDENT. :
[G.R. No. 156654 : September 26, 2007]
PHILIPPINE AIRLINES, INC., PETITIONER VERSUS VICENTE LOPEZ, JR., RESPONDENT.
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated 26 September 2007:
G.R. No. 156654 - PHILIPPINE AIRLINES, INC., petitioner versus VICENTE LOPEZ, JR., respondent.
For review on certiorari are the Decision[1] dated June 20, 2002 of the Court of Appeals in CA-G.R. CV No. 53360, and its Resolution[2] dated December 10, 2002, denying the motion for reconsideration of petitioner Philippine Airlines, Inc. (PAL). The assailed Decision affirmed in toto the Decision[3] dated April 19, 1995 of the Regional Trial Court (RTC) of Manila, Branch 24, in Civil Case No. 92-60199.
The antecedent facts are as follows:
On February 12, 1992, respondent Vicente Lopez, Jr. filed with the RTC of Manila, Branch 24, a Complaint[4] for Damages against PAL for its alleged unjustified downgrading of his seat from business class to economy class in his return flight from Bangkok to Manila last November 30, 1991.
Lopez claimed that he purchased a Manila-Hongkong-Bangkok-Manila business class PAL ticket. On November 11, 1991, he took the PAL flight from Manila to Hongkong and from there, on November 14, 1991, he went to Bangkok via Thai Airlines. On November 26, 1991, he went to PAL's Bangkok booking office where his return flight to Manila on November 30, 1991, was confirmed by PAL's personnel. But, when he checked in for the said return flight, he was surprised to learn that his status as business class passenger was changed to economy class. Despite his vehement protests, PAL could not offer any valid explanation for the sudden change. Lopez added that he nevertheless took the said flight as an economy class passenger even if aggrieved, as he had always been traveling first class, and because he had important appointments in Manila. Lopez averred he suffered wounded feelings, besmirched reputation, great embarrassment, moral shock, fright, serious anxiety and mental anguish entitling him to moral damages of not less than P100,000. He also prayed for exemplary damages and attorney's fees.
For its part, PAL denied any liability and claimed that whatever damage Lopez had suffered was due to his own fault. PAL explained that the terms and conditions of the contract of carriage required Lopez to reconfirm his booking for the Bangkok-Manila leg of his trip, and that he did not protest the economy seat given to him when the change in his accommodations was read to him by the person who received his phoned-in reconfirmation. Moreover, according to PAL, during the check-in, Lopez allegedly did not complain of his economy seat but raised the issue only after the flight was over.
By way of counter-claim, PAL contended that although Lopez had no cause of action against it, he nevertheless filed his malicious suit causing damage to PAL's good name and business reputation. Lopez's baseless suit also constrained PAL to engage the services of counsel and incur litigation expenses. Thus, PAL prayed that the case be dismissed for lack of merit and that Lopez be ordered to pay PAL's attorney's fees and litigation expenses.
Trial ensued and thereafter, the trial court rendered its Decision dated April 19, 1995 holding PAL liable for damages.
The dispositive portion of the decision of the lower court reads:
Hence, the instant petition on the following grounds:
Moreover, in Philippine Airlines, Inc. v. Court of Appeals,[10] we maintained that all actions for claims against a corporation pending before any court, tribunal or boards shall ipso jure be suspended in whatever stage such actions may be found upon the appointment by the SEC of a management committee or a rehabilitation receiver.
We had likewise held that "the suspension of action for claims against a corporation under rehabilitation receiver or management committee embraces all phases of the suit, be it before the trial court or any tribunal or before this Court. Furthermore, we ruled that the actions which are suspended cover all claims against a distressed corporation whether for damages founded on breach of contact of carriage, labor cases, collection suits or any other claims of a pecuniary measure."[11]
It must be stressed that the reason behind the suspension of claims pending rehabilitation proceedings is to enable the management committee or rehabilitation receiver to effectively exercise its/his power free from any judicial or extra-judicial interference that might unduly hinder or prevent the "rescue" of the debtor company. To allow such other action to continue would only add to the burden of the management committee or rehabilitation receiver, whose time, effort and resources would be wasted in defending claims against the corporation instead of being directed toward its restructuring and rehabilitation.[12]
WHEREFORE, premises considered, the proceedings of this case are hereby SUSPENDED until further notice from this Court. Accordingly, PAL is hereby DIRECTED to initially furnish a status report on its ongoing rehabilitation to this Court within fifteen (15) days from receipt of this Resolution, and thereafter, submit quarterly status reports.
SO ORDERED.
G.R. No. 156654 - PHILIPPINE AIRLINES, INC., petitioner versus VICENTE LOPEZ, JR., respondent.
For review on certiorari are the Decision[1] dated June 20, 2002 of the Court of Appeals in CA-G.R. CV No. 53360, and its Resolution[2] dated December 10, 2002, denying the motion for reconsideration of petitioner Philippine Airlines, Inc. (PAL). The assailed Decision affirmed in toto the Decision[3] dated April 19, 1995 of the Regional Trial Court (RTC) of Manila, Branch 24, in Civil Case No. 92-60199.
The antecedent facts are as follows:
On February 12, 1992, respondent Vicente Lopez, Jr. filed with the RTC of Manila, Branch 24, a Complaint[4] for Damages against PAL for its alleged unjustified downgrading of his seat from business class to economy class in his return flight from Bangkok to Manila last November 30, 1991.
Lopez claimed that he purchased a Manila-Hongkong-Bangkok-Manila business class PAL ticket. On November 11, 1991, he took the PAL flight from Manila to Hongkong and from there, on November 14, 1991, he went to Bangkok via Thai Airlines. On November 26, 1991, he went to PAL's Bangkok booking office where his return flight to Manila on November 30, 1991, was confirmed by PAL's personnel. But, when he checked in for the said return flight, he was surprised to learn that his status as business class passenger was changed to economy class. Despite his vehement protests, PAL could not offer any valid explanation for the sudden change. Lopez added that he nevertheless took the said flight as an economy class passenger even if aggrieved, as he had always been traveling first class, and because he had important appointments in Manila. Lopez averred he suffered wounded feelings, besmirched reputation, great embarrassment, moral shock, fright, serious anxiety and mental anguish entitling him to moral damages of not less than P100,000. He also prayed for exemplary damages and attorney's fees.
For its part, PAL denied any liability and claimed that whatever damage Lopez had suffered was due to his own fault. PAL explained that the terms and conditions of the contract of carriage required Lopez to reconfirm his booking for the Bangkok-Manila leg of his trip, and that he did not protest the economy seat given to him when the change in his accommodations was read to him by the person who received his phoned-in reconfirmation. Moreover, according to PAL, during the check-in, Lopez allegedly did not complain of his economy seat but raised the issue only after the flight was over.
By way of counter-claim, PAL contended that although Lopez had no cause of action against it, he nevertheless filed his malicious suit causing damage to PAL's good name and business reputation. Lopez's baseless suit also constrained PAL to engage the services of counsel and incur litigation expenses. Thus, PAL prayed that the case be dismissed for lack of merit and that Lopez be ordered to pay PAL's attorney's fees and litigation expenses.
Trial ensued and thereafter, the trial court rendered its Decision dated April 19, 1995 holding PAL liable for damages.
The dispositive portion of the decision of the lower court reads:
Based on all the foregoing therefore, the court finds in favor of the plaintiff and against the defendant and orders defendant to pay plaintiff, as prayed for in the complaint, the following amounts: P100,000.00 for moral damages; P20,000.00 for exemplary damages and P30,000.00 for attorney's fees and also to pay for the cost of suit. All amounts awarded to bear legal interest from the date of this decision.Aggrieved, PAL elevated the matter to the Court of Appeals, which however affirmed in toto the decision of the RTC. The dispositive part of the appellate court's decision reads:
SO ORDERED.[5]
WHEREFORE, premises considered, the Decision dated April 19, 1995 of the Regional Trial Court of the City of Manila, Branch 24, in Civil Case No. 92-60199 is hereby AFFIRMED in toto. Costs against the appellant.A motion for reconsideration was filed by PAL, but the same was denied by the Court of Appeals in its Resolution dated December 10, 2002.
SO ORDERED.[6]
Hence, the instant petition on the following grounds:
At this juncture, despite this Court's eagerness to resolve the foregoing issues and PAL's failure to move for the suspension of the proceedings of this case, we are nevertheless constrained to suspend the proceedings of this case. Section 6(c) of Presidential Decree No. 902-A,[8] the pertinent portion of which reads:I.
THE COURT OF APPEALS ERRED IN NOT RULING THAT IN AN OPEN-DATED CONTRACT OF CARRIAGE, THE PARTIES ARE FREE TO AGREE ON THE TERMS THEREOF ON THE DATE LEFT OPEN.II.
THE COURT OF APPEALS ERRED IN NOT RULING THAT RESPONDENT'S CONTRIBUTORY NEGLIGENCE PREVENTS HIM FROM RECOVERING DAMAGES FROM PETITIONER.III.
THE COURT OF APPEALS ERRED IN NOT RULING THAT TN MORAL DAMAGES RECOVERABLE IN BREACHES OF CONTRACTS, THE TERMS "FRAUD" AND "BAD FAITH" HAVE REFERENCE TO WANTON, RECKLESS, OPPRESSIVE, OR MALEVOLENT CONDUCT.IV.
THE COURT OF APPEALS ERRED IN NOT RULING THAT EXEMPLARY DAMAGES ARE NOT RECOVERABLE IN THE ABSENCE OF FRAUD OR BAD FAITH.V.
THE COURT OF APPEALS ERRED IN NOT RULING THAT AWARD OF ATTORNEY'S FEES IS NOT PROPER IN THE ABSENCE OF GROSS AND EVIDENT BAD FAITH ON THE PART OF THE PETITIONER.[7]
c) ...that upon appointment of a management committee, rehabilitation receiver, board or body, pursuant to this Decree, all actions for claims against corporations, partnerships . or associations under management or receivership pending before any court, tribunal, board or body shall be suspended accordingly. (Emphasis supplied.)In the recent case of Philippine Airlines, Inc. v. Zamora,[9] this Court suspended the proceedings of PAL's petition after taking note of the Order dated May 17, 1999 of the Securities and Exchange Commission (SEC) approving PAL's Amended and Restated Rehabilitation Plan and appointing a permanent rehabilitation receiver for it. Upon inquiry with the Office of the General Counsel of SEC last June 26, 2007, it confirmed that PAL's rehabilitation is still ongoing.
Moreover, in Philippine Airlines, Inc. v. Court of Appeals,[10] we maintained that all actions for claims against a corporation pending before any court, tribunal or boards shall ipso jure be suspended in whatever stage such actions may be found upon the appointment by the SEC of a management committee or a rehabilitation receiver.
We had likewise held that "the suspension of action for claims against a corporation under rehabilitation receiver or management committee embraces all phases of the suit, be it before the trial court or any tribunal or before this Court. Furthermore, we ruled that the actions which are suspended cover all claims against a distressed corporation whether for damages founded on breach of contact of carriage, labor cases, collection suits or any other claims of a pecuniary measure."[11]
It must be stressed that the reason behind the suspension of claims pending rehabilitation proceedings is to enable the management committee or rehabilitation receiver to effectively exercise its/his power free from any judicial or extra-judicial interference that might unduly hinder or prevent the "rescue" of the debtor company. To allow such other action to continue would only add to the burden of the management committee or rehabilitation receiver, whose time, effort and resources would be wasted in defending claims against the corporation instead of being directed toward its restructuring and rehabilitation.[12]
WHEREFORE, premises considered, the proceedings of this case are hereby SUSPENDED until further notice from this Court. Accordingly, PAL is hereby DIRECTED to initially furnish a status report on its ongoing rehabilitation to this Court within fifteen (15) days from receipt of this Resolution, and thereafter, submit quarterly status reports.
SO ORDERED.
Very truly yours,
(Sgd.) LUDIHCHI YASAY-NUNAG
Clerk of Court
(Sgd.) LUDIHCHI YASAY-NUNAG
Clerk of Court
Endnotes:
[1] Rollo, pp. 31-40. Penned by Associate Justice Mercedes Gozo-Dadole, with Associate Justices Salvador J. Valdez, Jr. and Amelita G. Tolentino concurring.
[2] Id. at 28.
[3] Records, pp. 199-210. Penned by Judge Sergio D. Mabunay.
[4] Id. at 1-4.
[5] Records, p. 210.
[6] Rollo, p. 40.
[7] Id. at 13-14.
[8] REORGANIZATION OF THE SECURITIES AND EXCHANGE COMMISSION WITH ADDITIONAL POWERS AND PLACING THE SAID AGENCY UNDER THE ADMINISTRATIVE SUPERVISION OF THE OFFICE OF THE PRESIDENT.
[9] G.R. No. 166996, February 6, 2007
[10] G.R. No. 123238, July 11, 2005 (Resolution)
[11] Philippine Airlines, Inc. v. Zamora, supra at 20.
[12] Id. at 21.
