Have you lost checked baggage during your international trip and the airline could not locate it, and when it was found, it was not returned to you?

Are you entitled to damages for airline negligence? How much?

Should the airline pay you a maximum of just $ 400 (around P20,000) based on the Warsaw Convention which defines the carrier’s liability for loss, damage, injury… on international flights?

The answers to these questions were debated by the Supreme Court (SC) in the case of a prominent Filipino surgeon, Jose M. Tiongco.

Tiongco, one of the founders of the Medical Mission Group Hospital and Health Services in Davao City, was invited by the United Nations World Health Organization (UN-WHO) to be the keynote speaker at the 20th anniversary of the Alma-Ata Declaration to be held in Almaty, Kazakhstan, November 27-28, 1998.

The 1978 Alma-Ata Declaration “recognizes primary health care as a means of achieving the goal of health for all people of all nations.”

Tiongco obtained a visa for Kazakhstan. As there was no direct Manila-Kazakhstan flight, he had to go to Singapore from where he would take two connecting flights to Almaty via KLM Royal Dutch Airlines.

On November 25, 1998, Tiongco arrived in Singapore and at 9:30 p.m. left for Amsterdam via KLM. His flight from Amsterdam to Frankfurt was delayed by 45 minutes, so he missed the fourth leg of his trip from Frankfurt to Almaty.

In Frankfurt, it was assured by KLM that his checked baggage would be transferred on his next flight. KLM gave him his new boarding pass and his itinerary.

In Istanbul, passengers were asked to identify their luggage. Tiongco was unable to locate his checked baggage. In order not to miss his flight, he boarded the plane with the assurance that his luggage would be loaded on the next available flight to Almaty.

When Tiongco arrived in Almaty, no one from KLM, Lufthansa or Turkish Airlines assisted him. He boarded a taxi and went to the hotel where the UN-WHO convention would be held.

Instead of a formal costume that was in his checked baggage, Tiongco wore pants and a sweatshirt and made his way to where the convention was being held.

At first, Tiongco was not allowed in due to his inappropriate attire. After some explanation, he was allowed in and delivered his speech without the visual aids. He failed to provide the participants with documents to support his speech as they were in his lost baggage.

On December 14, 1998, Tiongco returned to the Philippines. After three months, there was no news of his lost luggage.

On March 15, 1999, he wrote to Singapore Airlines, KLM and Lufthansa to seek compensation for his lost baggage.

When nothing came out of his claim, Tiongco filed a lawsuit for damages and payment of attorney’s fees in the Davao City Regional Court of First Instance (RTC).

KLM, Singapore Airlines and Lufthansa filed their separate responses and denied responsibility. For KLM, he said he had shown extraordinary diligence in transporting Tiongco to its final destination. He also said he was neither the first nor the last carrier.

KLM pointed out that if its liability were recognized, the amount of the actual damages would only be $ 400 under the Warsaw Convention, as Tiongco did not declare the actual value of the checked baggage and its contents.

On January 16, 2006, the RTC declared KLM solely responsible for the loss of Tiongco’s luggage for not having shown extraordinary care in handling the suitcase.

The trial court rejected KLM’s claim that Singapore Airlines and Turkish Airlines should be responsible for being the first and last carrier, respectively.

She stated that since KLM, which issued the tickets, was the principal in the contract of carriage and, therefore, it was responsible for the acts and omissions of the other carriers to which it endorsed the other stages of the flight from Tiongco to Almaty.

The RTC ordered KLM to pay Tiongco 3 million pesos in nominal damages; P3 million, moral damages; 5 million pesos, exemplary damage; and P1.6 million attorney fees.

KLM took the case to the Court of Appeal (CA) which agreed with the RTC on KLM’s liability for breach of contract of carriage. But the AC changed the pecuniary compensation – £ 1 million for moral damages; 300,000 P for exemplary damages; and P 50,000 for nominal damage. Legal fees have been set at 20 percent of the total monetary awards.

When KLM’s reconsideration request was rejected by the Board, it filed a petition with the SC.

In a decision promulgated on October 4, made public on November 29 and drafted by Deputy Judge Ramon Paul L. Hernando, the CA resolved the question of whether KLM had acted by gross negligence, bad faith and willful misconduct in the loss of Tiongco’s baggage for him to be entitled to damages.

The SC said:

“Unfortunately, KLM has not substantiated its claim that the CA misunderstood facts or failed to re-examine the relevant facts to justify overturning its impugned decision.

“A contract of carriage is a contract by which a certain person or association of persons undertakes to transport people, things or goods from one place to another for a fixed price.

“The nature of the activity which involves the transport of people or goods makes a contract of transport marked by public interest. He is therefore required to observe not only the diligence of a good father but that of an “extraordinary” care in the vigilance of the goods as required by article 1733 of the civil code.

“Considering that a contract of carriage is in the public interest, a public carrier is presumed to have been at fault or to have acted negligently in the event of lost or damaged goods unless he proves that he has shown proof of extraordinary diligence.

“Therefore, in an action based on breach of contract of carriage, the injured party does not need to prove that the common carrier was at fault or negligent. He is only required to prove the existence of the contract and its non-performance by the carrier.

“There is no doubt that KLM and Dr Tiongco have entered into a contract of carriage. Dr Tiongco bought tickets from the airline for his trip to Almaty, Kazakhstan. KLM, however, broke its contract with Dr Tiangco by failing to deliver his checked-in suitcase at the designated location and time.

“Worse, Dr Tiangco’s suitcase was never returned to him, even after his arrival in Manila from Almaty. Thus, KLM’s liability for the lost suitcase was sufficiently established as it failed to overcome the presumption of negligence.

“We agree with the RTC and the CA that KLM acted in bad faith. It is not disputed that Dr Tiongco’s luggage disappeared during his flight. Even after returning to the Philippines, Dr Tiongco’s suitcase was still missing.

“No one from the KLM staff informed him of what had happened to the research. It was not until Dr Tiongco wrote a formal notice to KLM that the latter contacted him to ask for time to investigate the case. Yet he did not even inform him of the outcome of the alleged investigation.

To make matters worse, KLM Customer Relations Manager Arlene Almario categorically stated that the suitcase was eventually found in Almaty, as shown in Turkish Airlines’ December 18, 1998 baggage report. The said airline immediately notified KLM. However, KLM did not bother to inform Dr Tiongco that his suitcase had been found or took the necessary steps to return it to Manila.

“KLM’s bad faith observed by the RTC and the CA thus commits it to moral and exemplary damages. However, the amounts of these must be modified further to be fair, reasonable and proportionate to the damage suffered by the passenger.

“THEREFORE, the petition for review on Certiorari is DENIED. The decision of April 10, 2013 of the Court of Appeal in the case CA-GR CV n ° 00884-MIN is AFFIRMED with MODIFICATION in that:, respectively; (b) moderate damages in the amount of P50,000 are awarded to Dr. Jose M. Tiongco in lieu of nominal damages; (c) attorney’s fees equivalent to 20% of the total amount of monetary awards are maintained to be reasonable; and (d) the total monetary rewards will bear interest at twelve percent (12%) per annum from January 16, 2006, the date of the RTC’s decision, to June 30, 2013; and six percent (6%) per annum from July 1, 2013 until full payment.