FACTS:

Jesus Simangan (respondent) purchased a round-trip ticket from Japan Airlines (JAL) to travel from Manila to the United States. However, upon boarding the flight, JAL's airline staff accused him of having fake travel documents and ordered him to deplane. Respondent was humiliated and forced to deplane. He filed a complaint against JAL for breach of contract of carriage, seeking damages. The Regional Trial Court (RTC) ruled in favor of respondent and awarded him damages. JAL appealed the decision to the Court of Appeals (CA), which affirmed the RTC's decision with modifications. JAL then filed a petition for review with the Supreme Court, raising various issues regarding the award of damages.

ISSUES:

1. Whether the Court can review the factual findings of the lower courts.

2. Whether JAL is guilty of breach of contract of carriage.

3. Whether JAL is liable for moral damages.

4. Whether JAL is liable for exemplary damages.

5. Whether JAL is liable for attorney's fees.

6. Whether JAL is liable to pay the total amount of P800,000.00 in damages and attorney's fees.

7. Whether JAL is liable to pay legal interest on the total amount of damages awarded.

8. Whether JAL is entitled to its counterclaim for damages.

9. Whether or not a discreditable imputation directed against a public person in his public capacity is actionable.

10. Whether or not the published articles involving matters of public interest and expressing an opinion based on established facts are actionable.

RULING:

1. The Court is not a trier of facts and generally relies on the factual findings of the lower courts, which are considered final and conclusive, unless certain exceptions are present. In this case, there is no indication that the findings of the Court of Appeals (CA) are contrary to the evidence on record or that vital testimonies were disregarded. Therefore, the Court upholds the factual findings of the lower courts.

2. JAL is guilty of breach of contract of carriage. JAL failed to comply with its obligation under the contract when it prevented the respondent from boarding the plane despite having valid travel documents. JAL's justification of needing to verify the authenticity of the respondent's travel documents is not acceptable. As a common carrier, JAL is bound to carry passengers safely as far as human care and foresight can provide, using utmost diligence. The reason behind the bumping off incident, as found by the lower courts, was based on JAL personnel's unfounded suspicion that the respondent would use the trip to the United States as a pretext to stay and work in Japan. This reasoning does not justify JAL's breach of contract.

3. Yes, JAL is liable for moral damages. The court found that JAL breached its contract of carriage with the respondent in bad faith. The respondent was embarrassed and humiliated when he was ordered to disembark from the plane and his protestation of having valid travel documents was ignored. Inattention to and lack of care for the interests of passengers constitute bad faith, which entitles the passenger to an award of moral damages.

4. Yes, JAL is liable for exemplary damages. The acts committed by JAL against respondent constitute wanton, oppressive, and malevolent acts. Exemplary damages are awarded to create negative incentives or deterrents against socially deleterious behavior. JAL's acts fall under this category.

5. Yes, JAL is liable for attorney's fees. Attorney's fees may be awarded when the defendant's act or omission has compelled the plaintiff to litigate to protect their interests. In this case, the respondent was compelled to litigate due to JAL's actions. The amount of attorney's fees awarded is discretionary upon the court as long as it passes the test of reasonableness.

6. JAL is liable to pay the total amount of P800,000.00 in damages and attorney's fees.

7. JAL is liable to pay legal interest on the total amount of damages awarded. The legal interest is 6% from the time the RTC rendered its judgment, and 12% from the time the decision becomes final and executory.

8. JAL is not entitled to its counterclaim for damages.

9. A discreditable imputation directed against a public person in his public capacity is not necessarily actionable. In order for it to be actionable, it must either be a false allegation of fact or a comment based on a false supposition. If the comment is an expression of opinion based on established facts, it is immaterial that the opinion happens to be mistaken, as long as it might reasonably be inferred from the facts.

10. The published articles involving matters of public interest and expressing an opinion based on established facts are not actionable. Since the imputations against the petitioner in this case are not shown to have been written or published with the knowledge that they are false or in reckless disregard of whether they are false or not, the petitioner may not claim damages for them.

PRINCIPLES:

• The Court is not a trier of facts and generally relies on the factual findings of the lower courts, which are considered final and conclusive, unless certain exceptions are present.

• In an action for breach of contract of carriage, the plaintiff must prove the existence of the contract and its non-performance by the carrier in failing to carry the passenger safely to the destination.

• A common carrier is bound to carry passengers safely as far as human care and foresight can provide, using utmost diligence.

• Moral damages are recoverable in a breach of contract of carriage if the carrier is guilty of fraud or bad faith.

• Exemplary damages may be awarded in contractual obligations if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.

• Passengers have the right to be treated with kindness, respect, courtesy, and due consideration by the carrier's employees.

• Attorney's fees can be awarded when the plaintiff is compelled to litigate with third persons or incur expenses to protect their interests.

• The amount of attorney's fees awarded is discretionary upon the court as long as it is reasonable and just.

• When an obligation is breached, and it consists of the payment of a sum of money, the interest due should be that which may have been stipulated in writing. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand. (Eastern Shipping Lines, Inc. v. Court of Appeals)

• When an obligation, not constituting a loan or forbearance of money, is breached, the interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. (Eastern Shipping Lines, Inc. v. Court of Appeals)

• The constitutional guarantee of freedom of speech and of the press includes fair commentaries on matters of public interest. Fair commentaries on matters of public interest are privileged and constitute a valid defense in an action for libel or slander. (Borjal v. Court of Appeals)

• Every discreditable imputation publicly made is deemed false and malicious, unless proven otherwise, as every man is presumed innocent until his guilt is judicially proved.

• A discreditable imputation directed against a public person in his public capacity is not necessarily actionable, unless it is a false allegation of fact or a comment based on a false supposition.

• Privileged commentaries on matters of public interest apply not only to public officials but also to a variety of subjects, including matters of public concern, public men, and candidates for office.

• To be considered malicious, libelous statements must be shown to have been written or published with the knowledge that they are false or in reckless disregard of whether they are false or not.

• If a comment is an expression of opinion based on established facts, it is not actionable, even if the opinion happens to be mistaken, as long as it might reasonably be inferred from the facts.