Pan American World Airways, Inc. vs. Intermediate Appellate Court.

G.R. No. 70462, August 11, 1988.

FACTS:

Plaintiff Rene V. Pangan entered into 2 agreements for the exhibition of films and preparation of the required promotional materials in San Francisco and Guam. On the date of his flight, his luggages which contained the promotional materials did not arrive which allegedly caused the cancellation of his agreements. Pangan filed a complaint against Pan American World for actual damages consisting of alleged lost profits due to the loss of baggage.

Pan American contends that its liability for the lost baggage as provided in the Warsaw Convention is $20 per kilo, as Pangan did not declare a higher value for his baggage and pay the corresponding additional charges.

ISSUE:

Whether the liability of Pan America shall be limited as provided in the printed stipulation at the back of an airline ticket.

HELD:

YES, petitioner’s liability for the lost baggage is limited to $20.00 per kilo or $600.00, as stipulated at the back of the ticket. In Mendoza v. Philippine Air Lines, Inc., in order to impose on the defaulting party further liability than for damages naturally and directly, i.e., in the ordinary course of things, arising from a breach of contract, such unusual or extraordinary damages must have been brought within the contemplation of the parties as the probable result of breach at the time of or prior to contacting.

In the absence of a showing that petitioner’s attention was called to the special circumstances requiring prompt delivery of private respondent Pangan’s luggages, petitioner cannot be held liable for the cancellation of private respondents’ contracts as it could not have foreseen such an eventuality when it accepted the luggages for transit.

The evidence reveals that the proximate cause of the cancellation of the contracts was private respondent Pangan’s failure to deliver the promotional and advertising materials on the dates agreed upon. For this petitioner cannot be held liable. Private respondent Pangan had not declared the value of the two luggages he had checked in and paid additional charges. Neither was petitioner privy to respondents’ contracts nor was its attention called to the condition therein requiring delivery of the promotional and advertising materials on or before a certain date.

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