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NORTHWEST AIRLINES v. STEVEN P. CHIONG

FACTS:

Philimare Shipping, the authorized Philippine agent of TransOcean Lines, hired Steven Chiong as Third Engineer of TransOcean's vessel M/V Elbia. Chiong was guaranteed a monthly salary of US$440.00 and a monthly overtime pay of US$220.00, amounting to a total of US$7,920.00 for one year. Philimare purchased a plane ticket for Chiong's travel from Manila to San Diego and dispatched a letter of guarantee for his arrival. On the day of his departure, Chiong arrived at the Manila International Airport but was informed by Northwest personnel that his name was not in the list of confirmed passengers. He was asked to pay $100 for a boarding pass by a person claiming to be a Northwest employee. Despite Philimare's assurance that Chiong's ticket was confirmed, he was not allowed to board the flight and therefore could not work on the M/V Elbia. Chiong filed a complaint against Northwest for breach of contract of carriage.

The RTC ruled in favor of Chiong, holding Northwest liable for damages. The CA affirmed the RTC's decision, finding that Northwest breached the contract of carriage with Chiong. Northwest argued that Chiong was a "no-show" passenger and had already defaulted on his obligation, but the court disagreed. Chiong presented evidence, such as a Northwest ticket, his passport with PCG stamps, and testimonies from witnesses, to support his case. The court upheld the factual findings of the lower courts and concluded that Chiong is entitled to damages.

Chiong passed through the PCG counter at the airport and complied with the necessary requirements for departing seafarers. Philimare's liaison officer, Calvo, confirmed Chiong's presence at the airport and his check-in at the PCG counter. Calvo testified that she intentionally stayed at the PCG counter to ensure Chiong's successful boarding of the plane, as part of her duties as Philimare's liaison officer. Her task was to confirm with TransOcean that Chiong had left the country and commenced his travel to the designated port.

ISSUES:

  1. Whether the factual findings of the lower courts should be disturbed on appeal.

  2. Whether the evidence presented by Chiong proves his presence at the airport and his subsequent bumping-off by Northwest despite a confirmed ticket.

  3. Whether Northwest presented sufficient evidence to establish its claim that Chiong was a "no-show" passenger on April 1, 1989.

  4. Whether Northwest's claim that Chiong worked at M/V Elbia when he left the Philippines on April 17, 1989, is relevant to the case.

  5. Whether Northwest waived its defense of "no-show" by failing to raise it in its Motion to Dismiss or Answer.

  6. Whether the "falsus in uno, falsus in omnibus" doctrine is applicable to the case.

  7. Whether or not Chiong is entitled to actual and compensatory damages.

  8. Whether or not Northwest is liable for moral and exemplary damages and attorney's fees.

  9. Whether or not Exhibits "2" and "3" should be admitted as evidence.

RULING:

  1. The factual findings of the lower courts deserve the utmost respect and are not to be disturbed on appeal.

  2. The evidence presented by Chiong, including his Northwest ticket and PCG stamps on his passport, prove his presence at the airport on April 1, 1989, and his subsequent bumping-off by Northwest despite a confirmed ticket.

  3. Northwest failed to present sufficient evidence to establish its claim that Chiong was a "no-show" passenger on April 1, 1989.

  4. Northwest's claim that Chiong worked at M/V Elbia when he left the Philippines on April 17, 1989, is irrelevant to the case.

  5. The failure of Northwest to raise the defense of "no-show" in its Motion to Dismiss or Answer constituted a waiver thereof. Section 1, Rule 9 of the Rules of Court provides that defenses and objections not pleaded in a motion to dismiss or in the answer are deemed waived. Similarly, Section 8, Rule 15 of the Rules of Court states that a motion attacking a pleading, order, judgment, or proceeding shall include all objections then available, and all objections not included shall be deemed waived.

  6. The "falsus in uno, falsus in omnibus" doctrine is not strictly applied in the Philippines. Before this doctrine can be applied, the witness must be shown to have wilfully falsified the truth on one or more material points. Furthermore, the doctrine deals only with the weight of evidence and is not a positive rule of law. In this case, Chiong's testimony did not contain inconsistencies on what occurred on April 1, 1989, and Northwest failed to show that Chiong wilfully falsified the truth.

  7. Chiong is entitled to actual and compensatory damages.

  8. Northwest is liable for moral and exemplary damages and attorney's fees.

  9. Exhibits "2" and "3" should not be admitted as evidence.

PRINCIPLES:

  • Factual findings of the lower courts are not to be disturbed on appeal.

  • Evidence, such as tickets and stamps on a passport, can prove a person's presence at a specific location on a certain date.

  • The burden of proof shifts to the party against whom a prima facie case has been established.

  • The failure to present competent witnesses and relevant evidence can weaken a party's case.

  • Defenses and objections not pleaded in a motion to dismiss or in the answer are deemed waived. (Section 1, Rule 9, Rules of Court)

  • A motion attacking a pleading, order, judgment, or proceeding shall include all objections then available, and all objections not included shall be deemed waived. (Section 8, Rule 15, Rules of Court)

  • The "falsus in uno, falsus in omnibus" doctrine is not strictly applied in the Philippines. Before this doctrine can be applied, the witness must be shown to have wilfully falsified the truth on one or more material points. The doctrine deals only with the weight of evidence and is not a positive rule of law. (Leyson v. Lawa)

  • An award of moral damages in a breach of contract case is in order upon a showing that the defendant acted fraudulently or in bad faith. Bad faith means breach of a known duty through some motive, interest or ill will that partakes of the nature of fraud.

  • Exemplary damages may be awarded when the defendant acted in an oppressive manner towards the plaintiff.

  • Attorney's fees may be awarded when a party is compelled to litigate or incur expenses to protect his interest, or where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's valid claim.

  • Hearsay evidence, such as entries in the course of business, may be admitted if certain requirements are met, including the person who made the entries being dead or unable to testify, the entries being made at or near the time of the transactions, and the entries being made in the ordinary course of business or duty.