Republic of the Philippines SUPREME COURT Baguio City THIRD DIVISION G.R. No.

170141 JAPAN AIR INES, petitioner, vs. JESUS SIMANGAN, respondent. DECISION RE!ES R.T., J." WHEN an airline issues a ticket to a passenger confir ed on a particular flight on a certain date, a contract of carriage arises, and the passenger has every right to e!pect that he "ould fly on that flight and on that date. #f he does not, then the carrier opens itself to a suit for breach of contract of carriage. $ %he po"er to ad it or not an alien into the country is a sovereign act "hich cannot be interfered "ith even by &apan 'irlines (&')*. + #n this petition for revie" on certiorari,, petitioner &') appeals the- #1$ D%&i'io(4 )*+%) M*, -1, 200. o/ +0% Co1r+ o/ App%*l' #CA$ or)%ri(2 i+ +o p*, r%'po()%(+ J%'1' Si3*(2*( 3or*l *() %4%3pl*r, )*3*2%'5 *() #2$ R%'ol1+io( . o/ +0% '*3% &o1r+ )*+%) S%p+%36%r 28, 200. )%(,i(2 JA 7' 3o+io( /or r%&o('i)%r*+io(. T0% 8*&+' #n $..$, respondent &esus /i angan decided to donate a kidney to his ailing cousin, )oreto /i angan, in 0C)' /chool of 1edicine in )os 'ngeles, California, 0./.'. 0pon re2uest of 0C)', respondent undertook a series of laboratory tests at the National 3idney #nstitute in 4ue5on City to verify "hether his blood and tissue type are co patible "ith )oreto6s.7 8ortunately, said tests proved that respondent6s blood and tissue type "ere "ell9 atched "ith )oreto6s. : Respondent needed to go to the 0nited /tates to co plete his preli inary "ork9up and donation surgery. Hence, to facilitate respondent6s travel to the 0nited /tates, 0C)' "rote a letter to the ' erican Consulate in 1anila to arrange for his visa. #n due ti e, respondent "as issued an e ergency 0./. visa by the ' erican E bassy in 1anila. ; Having obtained an e ergency 0./. visa, respondent purchased a round trip plane ticket fro petitioner &') for 0/<$,=;>.?? and "as issued the corresponding boarding pass. . He "as scheduled to a particular flight bound for )os 'ngeles, California, 0./.'. via Narita, &apan.$? April 22, 2008

@n &uly +., $..+, the date of his flight, respondent "ent to Ninoy '2uino #nternational 'irport in the co pany of several relatives and friends. $$ He "as allo"ed to check9in at &')6s counter.$+ His plane ticket, boarding pass, travel authority and personal articles "ere subAected to rigid i igration and security routines. $, 'fter passing through said i igration and security procedures, respondent "as allo"ed by &') to enter its airplane.$= While inside the airplane, &')6s airline cre" suspected respondent of carrying a falsified travel docu ent and i puted that he "ould only use the trip to the 0nited /tates as a prete!t to stay and "ork in &apan. $> %he ste"ardess asked respondent to sho" his travel docu ents. /hortly after, the ste"ardess along "ith a &apanese and a 8ilipino haughtily ordered hi to stand up and leave the plane. $7 Respondent protested, e!plaining that he "as issued a 0./. visa. &ust to allo" hi to board the plane, he pleaded "ith &') to closely onitor his ove ents "hen the aircraft stops over in Narita. $: His pleas "ere ignored. He "as then constrained to go out of the plane. $; #n a nutshell, r%'po()%(+ 9*' 613p%) o// +0% /li20+. Respondent "ent to &')6s ground office and "aited there for three hours. 1ean"hile, the plane took off and he "as left behind. $. 'fter"ards, he "as infor ed that his travel docu ents "ere, indeed, in order.+? Respondent "as refunded the cost of his plane ticket less the su of 0/<>??.?? "hich "as deducted by &'). +$ /ubse2uently, respondent6s 0./. visa "as cancelled. ++ Bispleased by the turn of events, respondent filed an action for da ages against &') "ith the Regional %rial Court (R%C* in Calen5uela City, docketed as Civil Case No. =$.>9 C9.,. He clai ed he "as not able to donate his kidney to )oretoD and that he suffered terrible e barrass ent and ental anguish. +, He prayed that he be a"arded P, illion as oral da ages, P$.> += fees. illion as e!e plary da ages and P>??,???.?? as attorney6s

&') denied the aterial allegations of the co plaint. #t argued, a ong others, that its failure to allo" respondent to fly on his scheduled departure "as due to Ea need for his travel docu ents to be authenticated by the 0nited /tates E bassyE +> because no one fro &')6s airport staff had encountered a parole visa before. +7 #t posited that the authentication re2uired additional ti eD that respondent "as advised to take the flight the follo"ing day, &uly ,?, $..+. &') alleged that respondent agreed to be rebooked on &uly ,?, $..+.+: &') also lodged a counterclai anchored on respondent6s alleged "rongful institution of the co plaint. #t prayed for litigation e!penses, e!e plary da ages and attorney6s fees.+; @n /epte ber +$, +???, the R%C presided by &udge 8loro P. 'leAo rendered its decision in favor of respondent (plaintiff*, disposing as follo"s WHERE8@RE, Audg ent is hereby rendered ordering the defendant to pay the

plaintiff the a ount of P$,???,???.?? as oral da ages, the a ount of P>??,???.?? as e!e plary da ages and the a ount of P+>?,???.?? as attorney6s fees, plus the cost of suit.+. %he R%C e!plained #n su arily and insolently ordering the plaintiff to dise bark "hile the latter "as already settled in his assigned seat, the defendant violated the contract of carriageD that "hen the plaintiff "as ordered out of the plane under the prete!t that the genuineness of his travel docu ents "ould be verified it had caused hi e barrass ent and bes irched reputationD and that "hen the plaintiff "as finally not allo"ed to take the flight, he suffered ore "ounded feelings and social hu iliation for "hich the plaintiff "as asking to be a"arded oral and e!e plary da ages as "ell as attorney6s fees. %he reason given by the defendant that "hat pro pted the to investigate the genuineness of the travel docu ents of the plaintiff "as that the plaintiff "as not then carrying a regular visa but Aust a letter does not appear satisfactory. %he defendant is engaged in transporting passengers by plane fro country to country and is therefore conversant "ith the travel docu ents. %he defendant should not be allo"ed to pretend, to the preAudice of the plaintiff not to kno" that the travel docu ents of the plaintiff are valid docu ents to allo" hi entry in the 0nited /tates. %he foregoing act of the defendant in ordering the plaintiff to deplane "hile already settled in his assigned seat clearly de onstrated that the defendant breached its contract of carriage "ith the plaintiff as passenger in bad faith and as such the plaintiff is entitled to oral and e!e plary da ages as "ell as to an a"ard of attorney6s fees.,? Bisagreeing "ith the R%C Audg ent, &') appealed to the C' contending that it is not guilty of breach of contract of carriage, hence, not liable for da ages. ,$ #t posited that it is the one entitled to recover on its counterclai . ,+ CA R1li(2 #n a Becision,, dated 1ay ,$, +??>, the C' affir ed the decision of the R%C "ith odification in that it lo"ered the a ount of oral and e!e plary da ages and deleted the a"ard of attorney6s fees. %he fallo of the C' decision reads WHERE8@RE, the appealed Becision is '88#R1EB "ith 1@B#8#C'%#@N. 'ppellant &'P'N '#R )#NE/ is ordered to pay appellee &E/0/ /#1'NF'N the reduced su s, as follo"s- 8ive Hundred %housand Pesos (P>??,???.??* as oral da ages, and %"o Hundred 8ifty %housand Pesos (P+>?,???.??* as e!e plary da ages. %he a"ard of attorney6s fees is hereby BE)E%EB. ,= %he C' elucidated that since &') issued to respondent a round trip plane ticket for a la"ful consideration, Ethere arose a perfected contract bet"een the .E ,> #t found that respondent "as Ehaughtily eAectedE,7 by &') and that Ehe "as certainly e barrassed and hu iliatedE,: "hen, in the presence of other passengers, &')6s airline staff Eshouted

at hi

to produce his travel papers, "ithout the least courtesy every hu an being is entitled toED ,; and that Ehe "as co pelled to deplane on the grounds that his papers "ere fake.E ,. %he C' ratiocinatedWhile the protection of passengers ust take precedence over convenience, the i ple entation of security easures ust be attended by basic courtesies. #n fact, breach of the contract of carriage creates against the carrier a presu ption of liability, by a si ple proof of inAury, relieving the inAured passenger of the duty to establish the fault of the carrier or of his e ployeesD and placing on the carrier the burden to prove that it "as due to an unforeseen event or to force majeure.

to stand up and arrogantly asked hi

%hat appellee possessed bogus travel docu ents and that he

ight stay illegally in &apan are allegations "ithout substantiation. 'lso, appellant6s atte pt to rebook appellee the follo"ing day "as too late and did not relieve it fro liability. %he da age had been done. Besides, its belated theory of novation, i.e., that appellant6s original obligation to carry appellee to Narita and )os 'ngeles on &uly +., $..+ "as e!tinguished by novation "hen appellant and appellant agreed that appellee "ill instead take appellant6s flight to Narita on the follo"ing day, &uly ,?, $..+, deserves little attention. #t is inappropriate at bar. 4uestions not taken up during the trial cannot be raised for the first ti e on appeal. =? (0nderscoring ours and citations "ere o itted*

Citing Ortigas, Jr. v. Lufthansa German Airlines ,=$ the C' declared that E(i*n contracts of co on carriage, inattention and lack of care on the part of the carrier resulting in the failure of the passenger to be acco odated in the class contracted for a ounts to bad faith or fraud "hich entitles the passengers to the a"ard of oral da ages in accordance "ith 'rticle +++? of the Civil Code.E =+ Nevertheless, the C' odified the da ages a"arded by the R%C. #t e!plained-

8unda ental in the la" on da ages is that one inAured by a breach of a contract, or by a "rongful or negligent act or o ission shall have a fair and Aust co pensation co ensurate to the loss sustained as conse2uence of the defendant6s act. Being discretionary on the court, the a ount, ho"ever, should not be palpably and scandalously e!cessive. Here, the trial court6s a"ard of P$,???,???.?? as oral da ages appears to be overblo"n. No other proof of appellee6s social standing, profession, financial capabilities "as presented e!cept that he "as single and a business an. %o 0s, the su of >??,???.?? is Aust and fair. 8or, oral da ages are e phatically not intended to enrich a co plainant at the e!pense of the defendant. %hey are a"arded only to enable the inAured party to obtain eans, diversion or a use ents that "ill serve to alleviate the oral suffering he has undergone, by reason of the defendant6s culpable action. 1oreover, the grant of P>??,???.?? as e!e plary da ages needs to be reduced to a reasonable level. %he a"ard of e!e plary da ages is designed to per it the

courts to ould behavior that has socially deleterious conse2uences and its i position is re2uired by public policy to suppress the "anton acts of the offender. Hence, the su of P+>?,???.?? is ade2uate under the circu stances.

%he a"ard of P+>?,???.?? as attorney6s fees lacks factual basis. 'ppellee "as
definitely co pelled to litigate in protecting his rights and in seeking relief fro appellant6s isdeeds. Get, the record is devoid of evidence to sho" the cost of the services of his counsel andHor the actual e!penses incurred in prosecuting his action.=, (Citations "ere o itted* When &')6s otion for reconsideration "as denied, it resorted to the petition at bar. I''1%' &') poses the follo"ing issues 9 #. WHE%HER @R N@% %HE C@0R% @8 'PPE')/ ERREB #N R0)#NF %H'% RE/P@NBEN% W'/ EN%#%)EB %@ 1@R') B'1'FE/, C@N/#BER#NF %H'% '. &') W'/ N@% F0#)%G @8 BRE'CH @8 C@N%R'C%. B. 1@R') B'1'FE/ 1'G BE 'W'RBEB #N BRE'CH @8 C@N%R'C% C'/E/ @N)G WHEN %HE BRE'CH #/ '%%ENBEB BG 8R'0B @R B'B 8'#%H. '//01#NF ARGUENDO %H'% &') W'/ F0#)%G @8 BRE'CH, &') B#B N@% 'C% 8R'0B0)EN%)G @R #N B'B 8'#%H '/ %@ EN%#%)E RE/P@NBEN% %@ 1@R') B'1'FE/. C. %HE )'W B#/%#NF0#/HE/ ' C@N%R'C%0') BRE'CH E88EC%EB #N F@@B 8'#%H 8R@1 @NE '%%ENBEB BG B'B 8'#%H. ##. WHE%HER @R N@% %HE C@0R% @8 'PPE')/ ERREB #N R0)#NF %H'% RE/P@NBEN% W'/ EN%#%)EB %@ EIE1P)'RG B'1'FE/ C@N/#BER#NF %H'% '. EIE1P)'RG B'1'FE/ 'RE N@% REC@CER'B)E #N BRE'CH @8 C@N%R'C% @8 C'RR#'FE 0N)E// %HE C'RR#ER #/ F0#)%G @8 W'N%@N, 8R'0B0)EN%, REC3)E//, @PPRE//#CE @R 1')EC@)EN% C@NB0C%. B. '//01#NF ARGUENDO %H'% &') W'/ F0#)%G @8 BRE'CH, &') B#B N@% 'C% #N ' W'N%@N 8R'0B0)EN%, REC3)E//, @PPRE//#CE @R 1')EC@)EN% 1'NNER '/ %@ EN%#%)E RE/P@NBEN% %@ EIE1P)'RG B'1'FE/. ###.

 '//01#NF ARGUENDO %H'% RE/P@NBEN% W'/ EN%#%)EB %@ 'N 'W'RB @8 B'1'FE/, WHE%HER @R N@% %HE C@0R% @8 'PPE')/ 'W'RB @8 P:>?,??? #N B'1'FE/ W'/ EICE//#CE 'NB 0NPRECEBEN%EB. #C.

WHE%HER @R N@% %HE C@0R% @8 'PPE')/ ERREB #N N@% 8#NB#NF 8@R &')
@N #%/ C@0N%ERC)'#1.== (0nderscoring @urs* Basically, there are three (,* issues to resolve here- #1$ 90%+0%r or (o+ JA i' 21il+, o/ &o(+r*&+ o/ &*rri*2%5 #2$ 90%+0%r or (o+ r%'po()%(+ i' %(+i+l%) +o 3or*l *() %4%3pl*r, )*3*2%'5 *() #-$ 90%+0%r or (o+ JA i' %(+i+l%) +o i+' &o1(+%r&l*i3 /or )*3*2%'. O1r R1li(2 This Court is not a trier of facts. Chiefly, the issues are factual. %he R%C findings of facts "ere affir ed by the C'. %he C' also gave its nod to the reasoning of the R%C e!cept as to the a"ards of da ages, "hich "ere reduced, and that of attorney6s fees, "hich "as deleted. We are not a trier of facts. We generally rely upon, and are bound by, the conclusions on this atter of the lo"er courts, "hich are better e2uipped and have better opportunity to assess the evidence first9hand, including the testi ony of the "itnesses. => We have repeatedly held that +0% /i()i(2' o/ /*&+ o/ +0% CA *r% /i(*l *() &o(&l1'i:% *() &*((o+ 6% r%:i%9%) o( *pp%*l +o +0% S1pr%3% Co1r+ pro:i)%) +0%, *r% 6*'%) o( '16'+*(+i*l %:i)%(&%.=7 We have no Aurisdiction, as a rule, to reverse their findings.=: ' ong the e!ceptions to this rule are- (a* "hen the conclusion is a finding grounded entirely on speculations, sur ises or conAecturesD (b* "hen the inference ade is anifestly istaken, absurd or i possibleD (c* "here there is grave abuse of discretionD (d* "hen the Audg ent is based on a isapprehension of factsD (e* "hen the findings of facts are conflictingD (f* "hen the C', in aking its findings, "ent beyond the issues of the case and the sa e is contrary to the ad issions of both appellant and appellee. =; %he said e!ceptions, "hich are being invoked by &'), are not found here. %here is no indication that the findings of the C' are contrary to the evidence on record or that vital testi onies of &')6s "itnesses "ere disregarded. Neither did the C' co it isapprehension of facts nor did it fail to consider relevant facts. )ike"ise, there "as no grave abuse of discretion in the appreciation of facts or istaken and absurd inferences. We thus sustain the coherent facts as established by the courts belo", there being no sufficient sho"ing that the said courts co itted reversible error in reaching their conclusions. JAL is guilty of breach of contract of carriage.

%hat respondent purchased a round trip plane ticket fro &') and "as issued the corresponding boarding pass is uncontroverted. =. His plane ticket, boarding pass, travel authority and personal articles "ere subAected to rigid i igration and security >? procedure. 'fter passing through said i igration and security procedure, he "as allo"ed by &') to enter its airplane to fly to )os 'ngeles, California, 0./.'. via Narita, &apan.>$ Concisely, there "as a contract of carriage bet"een &') and respondent. Nevertheless, &') ade respondent get off the plane on his scheduled departure on &uly +., $..+. He "as not allo"ed by &') to fly. JA +01' /*il%) +o &o3pl, 9i+0 i+' o6li2*+io( 1()%r +0% &o(+r*&+ o/ &*rri*2%. &') Austifies its action by arguing that there "as Ea need to verify the authenticity of respondent6s travel docu ent.E>+ #t alleged that no one fro its airport staff had encountered a parole visa before. >, #t further contended that respondent agreed to fly the ne!t day so that it could first verify his travel docu ent, hence, there "as novation. >= #t aintained that it "as not guilty of breach of contract of carriage as respondent "as not able to travel to the 0nited /tates due to his o"n voluntary desistance. >> We cannot agree. &') did not allo" respondent to fly. #t infor ed respondent that there "as a need to first check the authenticity of his travel docu ents "ith the 0./. E bassy.>7 's ad itted by &'), Ethe flight could not "ait for 1r. /i angan because it "as ready to depart.E>: /ince &') definitely declared that the flight could not "ait for respondent, it gave respondent no choice but to be left behind. %he latter "as uncere oniously bu ped off despite his protestations and valid travel docu ents and not"ithstanding his contract of carriage "ith &'). Ba age had already been done "hen respondent "as offered to fly the ne!t day on &uly ,?, $..+. /aid offer did not cure &')6s default. Considering that respondent "as forced to get out of the plane and left behind against his "ill, he could not have freely consented to be rebooked the ne!t day. #n short, 0% )i) (o+ *2r%% +o +0% *ll%2%) (o:*+io(. /ince novation i plies a "aiver of the right the creditor had before the novation, such "aiver ust be e!press. >; #t cannot be supposed, "ithout clear proof, that respondent had "illingly done a"ay "ith his right to fly on &uly +., $..+. 1oreover, the reason behind the bu ping off incident, as found by the R%C and C', "as that &') personnel i puted that respondent "ould only use the trip to the 0nited /tates as a prete!t to stay and "ork in &apan. >. 'part fro the fact that respondent6s plane ticket, boarding pass, travel authority and personal articles already passed the rigid i igration and security routines, 7? &'), as a co on carrier, ought to kno" the kind of valid travel docu ents respondent carried. 's provided in 'rticle $:>> of the Ne" Civil Code- E' co on carrier is bound to carry the passengers safely as far as hu an care and foresight can provide, using the ut ost diligence of very cautious persons, "ith a due regard for all the circu stances .E7$ %hus, We find untenable &')6s defense of Everification of respondent6s docu entsE in its breach of contract of carriage.

#t bears repeating that the po"er to ad it or not an alien into the country is a sovereign act "hich cannot be interfered "ith even by &'). 7+ #n an action for breach of contract of carriage, all that is re2uired of plaintiff is to prove the e!istence of such contract and its non9perfor ance by the carrier through the latter6s failure to carry the passenger safely to his destination. 7, Respondent has co plied "ith these t"in re2uisites. Respondent is entitled to moral and exemplary damages and attorney's fees plus legal interest. With reference to oral da ages, &') alleged that they are not recoverable in actions e! contractu e!cept only "hen the breach is attended by fraud or bad faith. #t is contended that it did not act fraudulently or in bad faith to"ards respondent, hence, it ay not be held liable for oral da ages. 's a general rule, oral da ages are not recoverable in actions for da ages predicated on a breach of contract for it is not one of the ite s enu erated under 'rticle ++$. of the Civil Code.7= 's an e!ception, such da ages are recoverable- ($* in cases in "hich the ishap results in the death of a passenger, as provided in 'rticle $:7=, in relation to 'rticle ++?7(,* of the Civil CodeD and (+* in the cases in "hich the carrier is guilty of fraud or bad faith, as provided in 'rticle +++?. 7> T0% *&+' &o33i++%) 6, JA *2*i('+ r%'po()%(+ *3o1(+' +o 6*) /*i+0. 's found by the R%C, &') breached its contract of carriage "ith respondent in bad faith. &') personnel su arily and insolently ordered respondent to dise bark "hile the latter "as already settled in his assigned seat. He "as ordered out of the plane under the alleged reason that the genuineness of his travel docu ents should be verified. %hese findings of facts "ere upheld by the C', to "it-

! ! ! he "as haughtily eAected by appellant. He "as certainly e barrassed and

hu iliated "hen, in the presence of other passengers, the appellant6s airline staff shouted at hi to stand up and arrogantly asked hi to produce his travel papers, "ithout the least courtesy every hu an being is entitled to. %hen, he "as co pelled to deplane on the grounds that his papers "ere fake. His protestation of having been issued a 0./. visa coupled "ith his plea to appellant to closely onitor his ove ents "hen the aircraft stops over in Narita, "ere ignored. Worse, he "as ade to "ait for any hours at the office of appellant only to be told later that he has valid travel docu ents.77 (0nderscoring ours* Clearly, JA i' li*6l% /or 3or*l )*3*2%' . #t is fir ly settled that oral da ages are recoverable in suits predicated on breach of a contract of carriage "here it is proved that the carrier "as guilty of fraud or bad faith, as in this case. #nattention to and lack of care for the interests of its passengers "ho are entitled to its ut ost consideration, particularly as to their convenience, a ount to bad faith "hich entitles the passenger to an a"ard of oral da ages. What the la" considers as bad faith "hich ay furnish the ground for an a"ard of oral da ages "ould be bad faith in securing the contract and in the e!ecution thereof, as "ell as in the enforce ent of its ter s, or any other kind of deceit. 7:

JA i' *l'o li*6l% /or %4%3pl*r, )*3*2%' as its above9 entioned acts constitute "anton, oppressive and alevolent acts against respondent. E!e plary da ages, "hich are a"arded by "ay of e!a ple or correction for the public good, ay be recovered in contractual obligations, as in this case, if defendant acted in "anton, fraudulent, reckless, oppressive, or alevolent anner.7; E!e plary da ages are designed by our civil la" to per it the courts to reshape behaviour that is socially deleterious in its conse2uence by creating negative incentives or deterrents against such behaviour. #n re2uiring co pliance "ith the standard of e!traordinary diligence, a standard "hich is, in fact, that of the highest possible degree of diligence, fro co on carriers and in creating a presu ption of negligence against the , the la" seeks to co pel the to control their e ployees, to ta e their reckless instincts and to force the to take ade2uate care of hu an beings and their property. 7. Neglect or alfeasance of the carrier6s e ployees could give ground for an action for da ages. Passengers have a right to be treated by the carrier6s e ployees "ith kindness, respect, courtesy and due consideration and are entitled to be protected against personal isconduct, inAurious language, indignities and abuses fro such e ployees.:? %he assess ent of P>??,???.?? as oral da ages and P$??,???.?? as e!e plary da ages in respondent6s favor is, in @ur vie", reasonable and realistic. %his a"ard is reasonably sufficient to inde nify hi for the hu iliation and e barrass ent he suffered. %his also serves as an e!a ple to discourage the repetition of si ilar oppressive acts. With respect to attorney6s fees, they ay be a"arded "hen defendant6s act or o ission has co pelled plaintiff to litigate "ith third persons or to incur e!penses to protect his interest.:$ %he Court, in Construction Develo ment Cor oration of the !hili ines v. Estrella,:+ citing "ra#ers Ro$al %an& Em lo$ees Union'(n#e en#ent v. National La)or Relations Commission,:, elucidated thus %here are t"o co only accepted concepts of attorney6s fees, the so9called ordinary and e!traordinary. #n its ordinary concept, an attorney6s fee is the reasonable co pensation paid to a la"yer by his client for the legal services he has rendered to the latter. %he basis of this co pensation is the fact of his e ploy ent by and his agree ent "ith the client. I( i+' %4+r*or)i(*r, &o(&%p+, *( *++or(%,7' /%% i' *( i()%3(i+, /or )*3*2%' or)%r%) 6, +0% &o1r+ +o 6% p*i) 6, +0% lo'i(2 p*r+, i( * li+i2*+io(. %he basis of this is any of the cases provided by la" "here such a"ard can be ade, such as those authori5ed in 'rticle ++?;, Civil Code, and i' p*,*6l% (o+ +o +0% l*9,%r 61+ +o +0% &li%(+, 1(l%'' +0%, 0*:% *2r%%) +0*+ +0% *9*r) '0*ll p%r+*i( +o +0% l*9,%r *' *))i+io(*l &o3p%('*+io( or *' p*r+ +0%r%o/.:= #t "as therefore erroneous for the C' to delete the a"ard of attorney6s fees on the ground that the record is devoid of evidence to sho" the cost of the services of respondent6s counsel. %he a ount is actually discretionary upon the Court so long as it passes the test of reasonableness. %hey ay be recovered as actual or co pensatory da ages "hen e!e plary da ages are a"arded and "henever the court dee s it Aust and e2uitable, :>

as in this case. Considering the factual backdrop of this case, attorney6s fees in the a ount of P+??,???.?? is reasonably odest. %he above liabilities of &') in the total a ount of P;??,???.?? earn legal interest pursuant to the Court6s ruling in Construction Develo ment Cor oration of the !hili ines v. Estrella,:7 citing Eastern *hi ing Lines, (nc. v. Court of A eals ,:: to "it Regarding the i position of legal interest at the rate of 7J fro the ti e of the filing of the co plaint, "e held in Eastern *hi ing Lines, (nc. v. Court of A eals , that "hen an obligation, regardless of its source, i.e., la", contracts, 2uasi9contracts, delicts or 2uasi9delicts is breached, the contravenor can be held liable for pay ent of interest in the concept of actual and co pensatory da ages, subAect to the follo"ing rules, to "it 9 $. When the obligation is breached, and it consists in the pay ent of a su of oney, i.e., a loan or forbearance of oney, the interest due should be that "hich ay have been stipulated in "riting. 8urther ore, the interest due shall itself earn legal interest fro the ti e it is Audicially de anded. #n the absence of stipulation, the rate of interest shall be $+J per annu to be co puted fro default, i.e., fro Audicial or e!traAudicial de and under and subAect to the provisions of 'rticle $$7. of the Civil Code. +. When an obligation, not constituting a loan or forbearance of oney, is breached, an interest on the a ount of da ages a"arded ay be i posed at the discretion of the court at the rate of 7J er annum. No interest, ho"ever, shall be adAudged on unli2uidated clai s or da ages e!cept "hen or until the de and can be established "ith reasonable certainty. 'ccordingly, "here the de and is established "ith reasonable certainty, the interest shall begin to run fro the ti e the clai is ade Audicially or e!traAudicially ('rt. $$7., Civil Code* but "hen such certainty cannot be so reasonably established at the ti e the de and is ade, +0% i(+%r%'+ '0*ll 6%2i( +o r1( o(l, /ro3 +0% )*+% +0% ;1)23%(+ o/ +0% &o1r+ i' 3*)% #*+ 90i&0 +i3% +0% <1*(+i/i&*+io( o/ )*3*2%' 3*, 6% )%%3%) +o 0*:% 6%%( r%*'o(*6l, *'&%r+*i(%)$ . %he actual base for the co putation of legal interest shall, in any case, be on the a ount finally adAudged.

,. =0%( +0% ;1)23%(+ o/ +0% &o1r+ *9*r)i(2 * '13 o/ 3o(%, 6%&o3%'

/i(*l *() %4%&1+or,, +0% r*+% o/ l%2*l i(+%r%'+, 90%+0%r +0% &*'% /*ll' 1()%r p*r*2r*p0 1 or p*r*2r*p0 2, *6o:%, '0*ll 6% 12> p%r *((13 /ro3 '1&0 /i(*li+, 1(+il i+' '*+i'/*&+io(, +0i' i(+%ri3 p%rio) 6%i(2 )%%3%) +o 6% 6, +0%( *( %<1i:*l%(+ +o * /or6%*r*(&% o/ &r%)i+.:; (E phasis supplied and citations o itted* 'ccordingly, in addition to the said total a ount of P;??,???.??, &') is liable to pay respondent legal interest. Pursuant to the above ruling of the Court, the legal interest is 7J and it shall be reckoned fro /epte ber +$, +??? "hen the R%C rendered its Audg ent. 8ro the ti e this Becision beco es final and e!ecutory, the interest rate shall be $+J until its satisfaction.

JAL is not entitled to its counterclaim for damages. %he counterclai of &') in its 'ns"er:. is a co pulsory counterclai for da ages and attorney6s fees arising fro the filing of the co plaint. %here is no ention of any other counter clai s. %his co pulsory counterclai of &') arising fro the filing of the co plaint ay not be granted inas uch as the co plaint against it is obviously not alicious or unfounded. #t "as filed by respondent precisely to clai his right to da ages against &'). Well9settled is the rule that the co ence ent of an action does not er se ake the action "rongful and subAect the action to da ages, for the la" could not have eant to i pose a penalty on the right to litigate.;? We reiterate case la" that i/ )*3*2%' r%'1l+ /ro3 * p*r+,7' %4%r&i'% o/ * ri20+, i+ i' damnum absque injuria.81 *9/1l *&+' 2i:% ri'% +o (o i(;1r,. +alang erhu,is$ong maaring i#ulot ang aggamit sa sariling &ara atan. Buring the trial, ho"ever, &') presented a "itness "ho testified that &') suffered further da ages. 'llegedly, respondent caused the publications of his subAect co plaint against &') in the ne"spaper for "hich &') suffered da ages. ;+ 'lthough these additional da ages allegedly suffered by &') "ere not incorporated in its 'ns"er as they arose subse2uent to its filing, &')6s "itness "as able to testify on the sa e before the R%C. ;, Hence, although these issues "ere not raised by the pleadings, they shall be treated in all respects as if they had been raised in the pleadings. 's provided in /ection >, Rule $? of the Rules of Court, ?#9$0%( i''1%' (o+ r*i'%) 6, +0% pl%*)i(2' *r% +ri%) 9i+0 +0% %4pr%'' or i3pli%) &o('%(+ o/ +0% p*r+i%', +0%, '0*ll 6% +r%*+%) i( *ll r%'p%&+' *' i/ +0%, 0*) 6%%( r*i'%) i( +0% pl%*)i(2'.? Nevertheless, &')6s counterclai &') is a co cannot be granted.

ainly "ith the traveling public. #t invites people to avail the selves of the co forts and advantages it offers. ;= /ince &') deals "ith the public, its bu ping off of respondent "ithout a valid reason naturally dre" public attention and generated a public issue. %he publications involved atters about "hich the public has the right to be infor ed because they relate to a public issue. %his public issue or concern is a legiti ate topic of a public co ent that ay be validly published. 'ssu ing that respondent, indeed, caused the publication of his co plaint, he ay not be held liable for da ages for it. %he constitutional guarantee of /r%%)o3 o/ +0% 'p%%&0 and of the press includes fair co entaries on atters of public interest. %his is e!plained by the Court in %orjal v. Court of A eals,;> to "it-

on carrier. &')6s business is

%o reiterate, fair co

entaries on atters of public interest are privileged and constitute a valid defense in an action for libel or slander. %he doctrine of fair co ent eans that "hile in general every discreditable i putation publicly ade is

dee ed false, because every an is presu ed innocent until his guilt is Audicially proved, and every false i putation is dee ed alicious, nevertheless, 90%( +0% )i'&r%)i+*6l% i3p1+*+io( i' )ir%&+%) *2*i('+ * p16li& p%r'o( i( 0i' p16li& &*p*&i+,, i+ i' (o+ (%&%''*ril, *&+io(*6l%. I( or)%r +0*+ '1&0 )i'&r%)i+*6l% i3p1+*+io( +o * p16li& o//i&i*l 3*, 6% *&+io(*6l%, i+ 31'+ %i+0%r 6% * /*l'% *ll%2*+io( o/ /*&+ or * &o33%(+ 6*'%) o( * /*l'% '1ppo'i+io(. I/ +0% &o33%(+ i' *( %4pr%''io( o/ opi(io(, 6*'%) o( %'+*6li'0%) /*&+', +0%( i+ i' i33*+%ri*l +0*+ +0% opi(io( 0*pp%(' +o 6% 3i'+*@%(, *' lo(2 *' i+ 3i20+ r%*'o(*6l, 6% i(/%rr%) /ro3 +0% /*&+'.;7 (Citations o itted and underscoring ours* Even though &') is not a public official, the rule on privileged co entaries on atters of public interest applies to it. %he privilege applies not only to public officials but e!tends to a great variety of subAects, and includes atters of public concern, public en, and candidates for office.;: Hence, pursuant to the %orjal case, there ust be an *&+1*l 3*li&% in order that a discreditable i putation to a public person in his public capacity or to a public official ay be actionable. %o be considered alicious, the libelous state ents ust be sho"n to have been "ritten or published "ith the kno"ledge that they are /*l'% or i( r%&@l%'' )i'r%2*r) o/ 90%+0%r +0%, *r% /*l'% or (o+. ;; Considering that the published articles involve atters of public interest and that its e!pressed opinion is not alicious but based on established facts, the i putations against &') are not actionable. %herefore, &') ay not clai da ages for the . =HERE8ORE, the petition is DENIED. %he appealed Becision of the Court of 'ppeals is A88IRMED =ITH MODI8ICATION. 's odified, petitioner &apan 'irlines is ordered to pay respondent &esus /i angan the follo"ing- ($* P>??,???.?? as oral da agesD (+* P$??,???.?? as e!e plary da agesD and (,* P+??,???.?? as attorney6s fees. %he total a ount adAudged shall earn legal interest at the rate of 7J per annu fro the date of Audg ent of the Regional %rial Court on /epte ber +$, +??? until the finality of this Becision. 8ro the ti e this Becision beco es final and e!ecutory, the unpaid a ount, if any, shall earn legal interest at the rate of $+J per annu until its satisfaction. SO ORDERED. RUAEN T. RE!ES 'ssociate &ustice