CATHAY PACIFIC VS. SPS.

FUENTEBELLA

Facts:

Congressmen Fuentebella and his wife was authorized to travel on an official business to
Sydney, Australia via Hong Kong from Manila. Respondents bought a business class ticket from
Cathay Pacific for Manila to Sydney via Hong Kong and back. They later changed their minds and
decided to upgrade to first class. Upon payment of the fare difference, the airline issued to the
respondent the first class tickets buy clarified they were open-dated or waitlisted.
When respondent queued in front of the first class counter in the airport, they were issued
business class boarding passes and only found out that they were not first class when denined
entry into the first class lounge. The respondents said the ground staff were discourteous,
arrogant and rude.
Petitioner admitted the first class tickets were issued but qualified as open-dated and in this
case they would not be accommodated to first class since the sections were full.
The spouses flew nonetheless but experienced discomfort, and when they returned to the
Philippines, respondet demanded a formal apology and payment for damages.
RTC identified the ticket as contract of adhesion as the contract was only entered because of the
assurance that they would be give first class seats and affording respondents testimonies, they
ordered petitioner to pay P5 million as moral damages, P1 million as exemplary damages, and
P500k as attorneys fees. And found the airline to be in bad faith.
The CA affirmed the RTCs decision that there was indeed bad faith on the airlines inferred from
the inattentiveness and lack of concern shown by petitioners personnel to the predicament of
the respondent and the fact that respondents were downgraded, from first to business class,
due to the overbooking.

ISSUE: W/N The CA erred in its decision in finding petitioners bad faith.

HELD: No.

RATIO:

Generally, moral and exemplary damages are not awarded in breach of contract cases, except
on two cases one, when the breach is wanton and deliberately injurious, or two, when the one
responsible had acted fraudulently or with malice or bad faith
Bad faith is a question of fact that must be proven by clear and convincing evidence
In this case, the SC agreed in both the RTCs and CAs decision that petitioner was indeed in bad
faith.
Petitioner argument that the testimonial evidence of the treatment accorded by its employees
to respondents is self-serving and, hence, should not have been the basis for the finding of bad
faith is wrong. The Rules of Court do not require that the testimony of the injured party be
corroborated by independent evidence. In fact, in criminal cases in which the standard of proof
is higher, the SC has ruled that the testimony of even one witness may suffice to support a
conviction. And in the present case, in which petitioner has had adequate opportunity to
controvert the testimonies of respondents.
Also, "the mere fact that respondent was a Congressman should not result in an automatic
increase in the moral and exemplary damages."
However, the award of P5 million as moral damages is excessive, considering the highest
amount ever awarded to moral damages cases involving airlines if P500k.
Wherefore, the SC affirmed the decision of the CA but reduced the amount of the moral
damages to P500k.