G.R. No. 123238 - PHILIPPINE AIRLINES, INCORPORATED, VS. COURT OF APPEALS AND SPOUSES MANUEL S. BUNCIO AND AURORA R. BUNCIO, MINORS DEANNA R. BUNCIO AND NIKOLAI R. BUNCIO, ASSISTED BY THEIR FATHER, MANUEL S. BUNCIO, AND JOSEFA REGALADO, REPRESENTED BY HER ATTORNEY-IN-FACT, MANUEL S. BUNCIO.D E C I S

Ruling

ACCORDINGLY, judgment is hereby rendered: Ordering defendant Philippines Airlines, Inc. to pay Deanna R. Buncio and Nikolai R. Buncio the amount of P50,000.00 each as moral damages; and the amount of P25,000.00 each as exemplary damages; Ordering said defendant to pay the amount of P75,000.00 to Aurora R. Buncio, mother of Deanna and Nikolai, as moral damages; and the amount of P30,000.00 to Josefa Regalado, grandmother of Deanna and Nikolai, as moral damages; and Ordering said defendant to pay P38,250.00 as attorney's fees and also the costs of the suit. [9] Petitioner appealed to the Court of Appeals. On 20 December 1995, the appellate court promulgated its Decision affirming in toto the RTC Decision, thus: WHEREFORE, the decision appealed is hereby AFFIRMED in toto and the instant appeal DISMISSED. [10] Petitioner filed the instant petition before us assigning the following errors [11] : I. THE COURT OF APPEALS ERRED IN SUSTAINING THE RTC AWARD OF MORAL DAMAGES. II. THE COURT OF APPEALS ERRED IN SUSTAINING THE RTC AWARD OF EXEMPLARY DAMAGES. III. THE COURT OF APPEALS ERRED IN SUSTAINING THE RTC AWARD OF ATTORNEY'S FEES AND ORDER FOR PAYMENT OF COSTS. Anent the first assigned error, petitioner maintains that moral damages may be awarded in a breach of contract of air carriage only if the mishap results in death of a passenger or if the carrier acted fraudulently or in bad faith, that is, by breach of a known duty through some motive of interest or ill will, some dishonest purpose or conscious doing of wrong; if there was no finding of fraud or bad faith on its part; if, although it lost the indemnity bond, there was no finding that such loss was attended by ill will, or some motive of interest, or any dishonest purpose; and if there was no finding that the loss was deliberate, intentional or consciously done. [12] Petitioner also claims that it cannot be entirely blamed for the loss of the indemnity bond; that during the stop-over of Flight 106 in Honolulu, Hawaii, USA, it gave the indemnity bond to the immigration office therein as a matter of procedure; that the indemnity bond was in the custody of the said immigration office when Flight 106 left Honolulu, Hawaii, USA; that the said immigration office failed to return the indemnity bond to petitioner's personnel before Flight 106 left Honolulu, Hawaii, USA; and that even though it was negligent in overlooking the indemnity bond, there was still no liability on its part because mere carelessness of the carrier does not per se constitute or justify an inference of malice or bad faith. [13] When an airline issues a ticket to a passenger, confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger has every right to expect that he be transported on that flight and on that date, and it becomes the airline's obligation to carry him and his luggage safely to the agreed destination without delay. If the passenger is not so transported or if in the process of tran