Agustino B. Ong Yiu vs. Honorable Court of Appeals.

G.R. No. L-40597, July 29, 1979.


Yui, a paying passenger, boarded PAL bound for Butuan City. Upon arrival, one his luggages, a blue “maleta” could not be found. Yui demanded the delivery of his baggage because it contained vital documents needed for trial the next day.

When the maleta was returned, it was found that a folder containing certain documents needed for the trial were missing. Yui filed a complaint for damages for breach of contract of transportation. 

PAL provided that its liability is limited to P100.00 per baggage, not having declared a greater value,  as written on the back of the ticket. 


(1) Whether PAL’s carriage liability is limited to the amount of P100.00 as stipulated at the back of the ticket.

(2) Whether the petitioner shall be entitled to moral and exemplary damages?


(1) YES. While petitioner had not signed the plane ticket, he is nevertheless bound by the provisions thereof.  “Such provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter’s lack of knowledge or assent to the regulation”. It is what is known as a contract of “adhesion”, wherein one party imposes a ready made form of contract on the other, as the plane ticket in the case at bar, are contracts not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent.

In Randolph v. American Airlines, 103 Ohio App. 172, 144 N.E. 2d 878; Rosenchein vs. Trans World Airlines, Inc., 349 S.W. 2d 483, “a contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence.”

Petitioner had failed to declare a higher value for his baggage, he cannot be permitted a recovery in excess of P100.00. Besides, passengers are advised not to place valuable items inside their baggage but “to avail of our V-cargo service” (Exh. “1”). It is likewise to be noted that there is nothing in the evidence to show the actual value of the goods allegedly lost by petitioner.

(2) NO. In the absence of a wrongful act or omission or of fraud or bad faith, petitioner is not entitled to moral damages. 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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