CONFLICTS OF LAW DIGESTS + DOCTRINES

6. In the matter of the petition of Vicente Rosal Pardo to be admitted a citizen of the Philippines. VICENTE ROSAL PARDO,
petitioner-appellee, vs. THE REPUBLIC OF THE PHILIPPINES||| (Pardo v. Republic, G.R. No. L-2248, [January 23, 1950], 85 PHIL 323-
330)PARDO VS REPUBLIC

G.R. No. L-2248. January 23, 1950||| (Pardo v. Republic, G.R. No. L-2248, [January 23, 1950], 85 PHIL 323-330)

FACTS:

Vicente Rosal Pardo, a Spanish citizen born in Spain in 1895 and residing in the Philippines since 1905, married a Filipino woman and
employed in Manila has been adjudged by the Court of First Instance of Manila entitled to become a Filipino citizen. The Government
contests that the appellee Pardo is unable to speak and write any of the principal Filipino languages as part of its appeal.

Pardo claims that he knows enough Tagalog to be understood in that language. It was confirmed by Lino Gutierrez, a respectable
businessman and citizen who has known him for 27 years confirmed said testimony. The trial judge has also asked him to transcribe a
particular statement in Tagalog and it was satisfactory to the court. The applicant arrived in the Philippines when he was 10 years old and
has already lived here for 44 years continuously except for a few months’ visit in Spain and dealing with people who use Tagalog in their
daily intercourse, lends credence to his testimony that he has acquired a good working knowledge of that language.

The portion of the applicant's testimony which is copied in appellant's brief should not be taken isolatedly and at face value. This
testimony is obviously an extravagant understatement of the reality, typifying an extreme modesty which is thought by some to be a virtue.
We do not believe that this statement represents appellant's sincere conviction of its literal meaning.

The other issue was on whether the laws of Spain grant Filipinos the right to become naturalized citizens of that country. Pardo
stating that in accordance with articles 17 and 25 of the Spanish Civil Code, among other Spanish legislation, Filipinos are eligible to Spanish
citizenship in Spain introduced a certificate signed by the Consul General of Spain in the Philippines. Under that law, Article 17 provides that
foreigners who have obtained a certificate of naturalization and those who have not obtained such certificate but have acquired domicile in
any town of the Monarchy are Spaniards. No discrimination being made in these provisions, they apply to persons of any nationality.

ISSUE: Whether or not an offer of evidence of the law of a foreign country or reciprocity regarding the acquisition of citizenship, although not
meeting the prescribed rule of practice by section 41 of Rule 123, may be allowed and used as basis for a favorable action?

HELD:
YES. A copy of a foreign law certified only by the local consul of the applicant's country does not conform to the requirement concerning the
certification and authentication of such law (sec. 41, Rule 123). But the case at bar and the cases cited therein as precedents are not
governed by the Rules of the Court. Rule 1342, entitled "Applicability of the Rules," provides that "These rules shall not apply to land
registration, cadastral and election cases, naturalization and insolvency proceedings, and other cases not herein provided for, except by
analogy or in a suppletory character and whenever practicable and convenience. By reason of this provision, literal adherence to the Rules of
Court, which include rules of evidence, is not obligatory in a proceeding like that under the Philippine law is judicial in character, and strict
compliance with the process prescribed by statute, if there were one, would be essential, yet when, as here, no specific procedure is
indicated in the premises, it is only necessary that the merits of the petition be passed on and a decision reached on afar consideration of the
evidence on satisfactory proof.

The Court ruled that evidence of the law of a foreign country or reciprocity regarding the acquisition of citizenship, although not meeting the
prescribed rule of practice by section 41 of Rule 123, may be allowed and used as basis for a favorable action if, in the light of all
circumstances, the court is satisfied of the authenticity of the written proof offered.

PHILIPPINE COMMERCIAL AND INDUSTRIAL BANK, Administrator of

the Testate Estate of Charles Newton Hodges vs.THE HONORABLE
VENICIO ESCOLIN, Presiding Judge of the Court of First Instance of
Iloilo, Branch II, and AVELINA A. MAGNO
G.R. Nos. L-27860 and L-27896 March 29, 1974
TESTATE ESTATE OF THE LATE LINNIE JANE HODGES (Sp. Proc. No.
1307). TESTATE ESTATE OF THE LATE CHARLES NEWTON HODGES
(Sp. Proc. No. 1672). PHILIPPINE COMMERCIAL AND INDUSTRIAL
BANK, administrator-appellant,
vs.
LORENZO CARLES, JOSE PABLICO,
ALFREDO CATEDRAL, SALVADOR GUZMAN, BELCESAR CAUSING,
FLORENIA BARRIDO, PURIFICACION CORONADO, GRACIANO
LUCERO, ARITEO THOMAS JAMIR, MELQUIADES BATISANAN, PEPITO
IYULORES, ESPERIDION PARTISALA, WINIFREDO ESPADA, ROSARIO
ALINGASA, ADELFA PREMAYLON, SANTIAGO PACAONSIS, and
AVELINA A. MAGNO, the last as Administratrix in Sp. Proc. No. 1307,
appellees, WESTERN INSTITUTE OF TECHNOLOGY, INC., movantappellee.
G.R. Nos. L-27936 & L-27937 March 29, 1974
Barredo, J.:
FACTS:

The instant cases refer to the estate left by the late Charles Newton Hodges as well as that of his wife, Linnie Jane Hodges, who predeceased
him by about five years and a half. In their respective wills which were executed on different occasions, each one of them provided mutually
as follows: ―I give, devise and bequeath all of the rest, residue and remainder (after funeral and administration expenses, taxes and debts) of
my estate, both real and personal, wherever situated or located, to my beloved (spouse) to have and to hold unto (him/her) — during
(his/her) natural lifetime, subject to the condition that upon the death of whoever of them survived the other, the remainder of what he or
she would inherit from the other is ―give(n), devise(d) and bequeath(ed)‖ to the brothers and sisters of the latter. Mrs. Hodges died first, on
May 23, 1957. Four days later, on May 27, Hodges was appointed special administrator of her estate, and in a separate order of the same
date, he was ―allowed or authorized to continue the business in which he was engaged (buying and selling personal and real properties) and
to perform acts which he had been doing while the deceased was living.‖ Subsequently, on December 14, 1957, after Mrs. Hodges‘ will had
been probated and Hodges had been appointed and had qualified as Executor thereof, upon his motion in which he asserted that he was
―not only part owner of the properties left as conjugal, but also, the successor to all the properties left by the deceased Linnie Jane Hodges,
the trial court ordered that all the sales, conveyances, leases and mortgages of all properties left by the deceased Linnie Jane Hodges
executed by the Executor, Charles Newton Hodges are hereby APPROVED. The said Executor is further authorized to execute subsequent
sales, conveyances, leases and mortgages of the properties left by the said deceased Linnie Jane Hodges in consonance with the wishes
contained in the last will and testament of the latter. Hodges then submitted to the court the corresponding statements of his account of his
administration annually and stressed in all motions that no person interested in the Philippines of the time and place of examining the
herein accounts be given notice as herein executor is the only devisee or legatee of the deceased in accordance with the last will and
testament already probated by the Honorable Court. All said accounts were approved as prayed for. Nothing else appears to have been done
either by the court a quo or Hodges until December 25, 1962.

What was importatant in the will was the provision that her share in the conjugal partnership was to be inherited by her husband ―to
have and to hold unto him, my said husband, during his natural lifetime‖ and that ―at the death of my said husband, I give, devise and
bequeath all the rest, residue and remainder of my estate, both real and personal, wherever situated or located, to be equally divided among
my brothers and sisters, share and share alike, which provision naturally made it imperative that the conjugal partnership be promptly
liquidated, in order that the ―rest, residue and remainder‖ of his wife‘s share thereof, as of the time of Hodges‘ own death, may be readily
known and identified. However, no such liquidation was ever undertaken.

The record gives no indication of the reason for such omission, although relatedly, it appears therein:
1. That in his annual statement submitted to the court of the net worth of C. N. Hodges and the Estate of Linnie Jane Hodges, Hodges
repeatedly and consistently reported the combined income of the conjugal partnership and then merely divided the same equally between
himself and the estate of the deceased wife, and, more importantly, he also, as consistently, filed corresponding separate income tax returns
for each calendar year for each resulting half of such combined income, thus reporting that the estate of Mrs. Hodges had its own income
distinct from his own.
2. A correction was asked of the Court when the court a quo inadvertently omitted in its order probating the will of Mrs. Hodges the
name of one of her brothers, Roy Higdon then already deceased, Hodges lost no time in asking for the proper correction ―in order that the
heirs of deceased Roy Higdon may not think or believe they were omitted, and that they were really interested in the estate of the deceased
Linnie Jane Hodges
3. That in his aforementioned motion of December 11, 1957, he expressly stated that ―deceased Linnie Jane Hodges died leaving no
descendants or ascendants except brothers and sisters and herein petitioner as the surviving spouse, to inherit the properties of the
decedent‖, thereby indicating that he was not excluding his wife‘s brothers and sisters from the inheritance.
4. Hodges allegedly made statements to the US inheritance tax authorities that e had already renounced his inheritance form his wife
in favor of other heirs, and supposedly it was reiterated in an alleged affidavit in the Philippines as well.
 On said date, December 25, 1962, Hodges died. The very next day, upon motion of herein respondent and appellee, Avelina A. Magno,
she was appointed by the trial court as Administratrix of the Testate Estate of Linnie Jane Hodges in Special Proceedings No. 1307 and as
Special Administratrix of the estate of Charles Newton Hodges. In the the latter case, she is appointed as such because the last will of said
Charles Newton Hodges is still kept in his vault or iron safe and that the real and personal properties of both spouses may be lost, damaged
or go to waste, unless a Special Administratrix is appointed. Although soon enough, on December 29, 1962, a certain Harold K. Davies was
appointed as her Co-Special Administrator, and when Special Proceedings No. 1672, Testate Estate of Charles Newton Hodges, was opened,
Joe Hodges, as the nephew of Hodges, was in due time appointed as CoAdministrator of said estate together with Atty. Fernando P. Mirasol,
to replace Magno and Davies, only to be in turn replaced eventually by petitioner PCIB alone. At the outset, the two probate proceedings
appear to have been joined, with each administrator acting together with the other, under a sort of modus operandi. PCIB used to secure at
the beginning the conformity to and signature of Magno in transactions it wanted to enter into and submitted the same to the court for
approval as their joint acts. The same thing was done by Magno.

There are notable differences that have arisen however. PCIB conducted the business of the estate independently of Magno and acted
as if all of he properties appearing in the name of Charles Newton Hodges belonged only to his estate and to the exclusion of the brothers
and sisters of Mrs. Hodges, without consideration as to whether or not the said properties corresponded to the portion of the conjugal
partnership pertained to the estate of Mrs. Hodges. Magno, on the other had appeared in the name of Hodges, on the assumtion that they
actually correspond to the name of Mrs. Hodges. The trial court approved these separate actuations of the two administarators. It eventually
came to the point that it became difficult for PCIB to perform ormally its functions as administrator separate from her.

PCIB holds to the view that the estate of Mrs. Hodges had already been closedwith the adjudication of the mentioned orders of her
whole estate to Mr. Hodges and thus, Magno cannot administer anymore for Mrs. Hodges’ brothers and sisters as they do not have any
interests anymore on the estate. The trial court allowed respondent Magno to continue acting as administratix of the estate of Mrs. Hodges,
however this is the subject of the petition for certiorari and prohibition filed by PCIB. Additionally, PCIB maintains that the provision in Mrs.
Hodges‘ will instituting her brothers and sisters in the manner therein specified is in the nature of a testamentary substitution. However, it is
not, in its view, in accordance with the pertinent provisions of the Civil Code; therefore, it is ineffective and may not be enforced. It is further
contended that, in any event, inasmuch as the Hodges spouses were both residents of the Philippines, following the decision of this Court in
Aznar vs. Garcia, or the case of Christensen, 7 SCRA 95, the estate left by Mrs. Hodges could not be more than one-half of her share of the
conjugal partnership, notwithstanding the fact that she was citizen of Texas, U.S.A., in accordance with Article 16 in relation to Articles 900
and 872 of the Civil Code. Initially, the Supreme Court issued a preliminary injunction against Magno and allowed PCIB to act alone. PCIB has
also cntested several acts of appellee Magno in her capacity as administratix of the estate of Mrs. Hodges, claiming that all of the properties
now belong to the estate of Hodges exclusively, thus there is no more reason for her to administer and enter into various contracts to sell the
property. On the other hand, respondent-appellee Magno denies that the trial court‘s orders of May 27 and December 14, 1957 were meant
to be finally adjudicatory of the hereditary rights of Hodges. She contends that they were no more than the court‘s general sanction of past
and future acts of Hodges as executor of the will of his wife in due course of administration. As to the point regarding substitution, her
position is that what was given by Mrs. Hodges to her husband under the provision in question was a lifetime usufruct of her share of the
conjugal partnership, with the naked ownership passing directly to her brothers and sisters. Anent the application of Article 16 of the Civil
Code, she claims that the applicable law to the will of Mrs. Hodges is that of Texas under which, she alleges, there is no system of legitime,
hence, the estate of Mrs. Hodges cannot be less than her share or one-half of the conjugal partnership properties. She further maintains that,
in any event, Hodges had as a matter of fact and of law renounced his inheritance from his wife and, therefore, her whole estate passed
directly to her brothers and sisters effective at the latest upon the death of Hodges.

HELD:

YES. In this decision, for the reasons discussed above, and upon the issues just summarized, the Supreme Court overruled PCIB‘s contention
that the orders of May 27, 1957 and December 14, 1957 amount to an adjudication to Hodges of the estate of his wife. The Supreme Court
recognizes the present existence of the estate of Mrs. Hodges, as consisting of properties, which, while registered in that name of Hodges, do
actually correspond to the remainder of the share of Mrs. Hodges in the conjugal partnership, it appearing that pursuant to the pertinent
provisions of her will, any portion of said share still existing and undisposed of by her husband at the time of his death should go to her
brothers and sisters share and share alike. Factually, the Supreme Court finds that the proven circumstances relevant to the said orders do
not warrant the conclusion that the court intended to make thereby such alleged final adjudication. Legally, the Supreme Court holds that the
tenor of said orders furnish no basis for such a conclusion, and what is more, at the time said orders were issued, the proceedings had not
yet reached the point when a final distribution and adjudication could be made. Moreover, the interested parties were not duly notified that
such disposition of the estate would be done. At best, therefore, said orders merely allowed Hodges to dispose of portions of his inheritance
in advance of final adjudication, which is implicitly permitted under Section 2 of Rule 109, there being no possible prejudice to third parties,
inasmuch as Mrs. Hodges had no creditors and all pertinent taxes have been paid. More specifically, the Supreme Court, on the basis of
circumstances presently extant in the record, and on the assumption that Hodges‘ purported renunciation should not be upheld, the estate of
Mrs. Hodges inherited by her brothers and sisters consists of onefourth of the community estate of the spouses at the time of her death,
minus whatever Hodges had gratuitously disposed of therefrom during the period from, May 23, 1957, when she died, to December 25,
1962, when he died provided, that with regard to remunerative dispositions made by him during the same period, the proceeds thereof,
whether in cash or property, should be deemed as continuing to be part of his wife‘s estate, unless it can be shown that he had subsequently
disposed of them gratuitously. At this juncture, it may be reiterated that the question of what the pertinent laws of Texas are and what would
be the estate of Mrs. Hodges under them is basically one of fact, and considering the respective positions of the parties in regard to said
factual issue, it can already be deemed as settled for the purposes of these cases that, indeed, the free portion of said estate that could
possibly descend to her brothers and sisters by virtue of her will may not be less than one-fourth of the conjugal estate, it appearing that the
difference in the stands of the parties has reference solely to the legitime of Hodges, PCIB being of the view that under the laws of Texas,
there is such a legitime of one-fourth of said conjugal estate and Magno contending, on the other hand, that there is none. In other words,
hereafter, whatever might ultimately appear, at the subsequent proceedings, to be actually the laws of Texas on the matter would no longer
be of any consequence, since PCIB would anyway be in estoppel already to claim that the estate of Mrs. Hodges should be less than as
contended by it now, for admissions by a party related to the effects of foreign laws, which have to be proven in our courts like any other
controverted fact, create estoppel. In the process, the Supreme Court overrules PCIB‘s contention that the provision in Mrs. Hodges‘ will in
favor of her brothers and sisters constitutes ineffective hereditary substitutions. But neither is the Supreme Court sustaining, on the other
hand, Magno‘s position that it gave Hodges only a lifetime usufruct. The Supreme Court holds that by said provision, Mrs. Hodges
simultaneously instituted her brothers and sisters as co-heirs with her husband, with the condition, however, that the latter would have
complete rights of dominion over the whole estate during his lifetime and what would go to the former would be only the remainder thereof
at the time of Hodges‘ death. In other words, whereas they are not to inherit only in case of default of Hodges, on the other hand, Hodges was
not obliged to preserve anything for them. Clearly then, the essential elements of testamentary substitution are absent; the provision in
question is a simple case of conditional simultaneous institution of heirs, whereby the institution of Hodges is subject to a partial resolutory
condition the operative contingency of which is coincidental with that of the suspensive condition of the institution of his brothers and
sisters-in-law, which manner of institution is not prohibited by law. The Supreme Court also holds, however, that the estate of Mrs. Hodges
inherited by her brothers and sisters could be more than just stated, but this would depend on (1) whether upon the proper application of
the principle of renvoi in relation to Article 16 of the Civil Code and the pertinent laws of Texas, it will appear that Hodges had no legitime as
contended by Magno, and (2) whether or not it can be held that Hodges had legally and effectively renounced his inheritance from his wife.
Under the circumstances presently obtaining and in the state of the record of these cases, as of now, the Court is not in a position to make a
final ruling, whether of fact or of law, on any of these two issues, and the Supreme Court, therefore, reserves said issues for further
proceedings and resolution in the first instance by the court a quo, as hereinabove indicated. The Supreme Court reiterates, however, that
pending such further proceedings, as matters stand at this stage, its considered opinion is that it is beyond cavil that since, under the terms
of the will of Mrs. Hodges, her husband could not have anyway legally adjudicated or caused to be adjudicated to himself her whole share of
their conjugal partnership, albeit he could have disposed any part thereof during his lifetime, the resulting estate of Mrs. Hodges, of which
Magno is the uncontested administratrix, cannot be less than one-fourth of the conjugal partnership properties, as of the time of her death,
minus what, as explained earlier, have been gratuitously disposed of therefrom, by Hodges in favor of third persons since then, for even if it
were assumed that, as contended by PCIB, under Article 16 of the Civil Code and applying renvoi the laws of the Philippines are the ones
ultimately applicable, such one-fourth share would be her free disposable portion, taking into account already the legitime of her husband
under Article 900 of the Civil Code. The foregoing considerations leave the Court with no alternative than to conclude that in predicating its
orders on the assumption, albeit unexpressed therein, that there is an estate of Mrs. Hodges to be distributed among her brothers and sisters
and that respondent Magno is the legal administratrix thereof, the trial court acted correctly and within its jurisdiction. Accordingly, the
petition for certiorari and prohibition has to be denied. The Court feels however, that pending the liquidation of the conjugal partnership and
the determination of the specific properties constituting her estate, the two administrators should act conjointly as ordered in the Court‘s
resolution of September 8, 1972 and as further clarified in the dispositive portion of its decision. Anent the appeals from the orders of the
lower court sanctioning payment by appellee Magno, as administratrix, of expenses of administration and attorney‘s fees, it is obvious that,
with the Supreme Court‘s holding, there is such an estate of Mrs. Hodges, and for the reasons stated in the body of this opinion, the said
orders should be affirmed. It is justified by the evidence of record, and seemingly agreed to by appellant PCIB, that the size and value of the
properties that should correspond to the estate of Mrs. Hodges far exceed the total of the attorney‘s fees and administration expenses in
question. With respect to the appeals from the orders approving transactions made by appellee Magno, as administratrix, covering
properties registered in the name of Hodges, the details of which are related earlier above, a distinction must be made between those
predicated on contracts to sell executed by Hodges before the death of his wife, on the one hand, and those premised on contracts to sell
entered into by him after her death. As regards the latter, the Supreme Court held that inasmuch as the payments made by appellees
constitute proceeds of sales of properties belonging to the estate of Mrs. Hodges, as may be implied from the tenor of the motions of May 27
and December 14, 1957, said payments continue to pertain to said estate, pursuant to her intent obviously reflected in the relevant
provisions of her will, on the assumption that the size and value of the properties to correspond to the estate of Mrs. Hodges would exceed
the total value of all the properties covered by the impugned deeds of sale, for which reason, said properties may be deemed as pertaining to
the estate of Mrs. Hodges. And there being no showing that thus viewing the situation, there would be prejudice to anyone, including the
government, the Court also holds that, disregarding procedural technicalities in favor of a pragmatic and practical approach as discussed
above, the assailed orders should be affirmed. Being a stranger to the estate of Mrs. Hodges, PCIB has no personality to raise the procedural
and jurisdictional issues raised by it. And inasmuch as it does not appear that any of the other heirs of Mrs. Hodges or the government has
objected to any of the orders under appeal, even as to these parties, there exists no reason for said orders to be set aside.

It should be borne in mind that as above-indicated, the question of what are the laws of Texas governing the matters herein issue is, in the
first instance, one of fact, not of law. Elementary is the rule that foreign laws may not be taken judicial notice of and have to be proven like
any other fact in dispute between the parties in any proceeding, with the rare exception in instances when the said laws are already within
the actual knowledge of the court, such as when they are well and generally known or they have been actually ruled upon in other cases
before it and none of the parties concerned do not claim otherwise.||| (Philippine Commercial and Industrial Bank v. Escolin, G.R. Nos. L-27860
& L-27896, L-27937, [March 29, 1974], 155 PHIL 228-400)

the parties in a given case do not have any controversy or are more or less in agreement, the Court may take it for granted for the purposes
of the particular case before it that the said laws are as such virtual agreement indicates, without the need of requiring the presentation of
what otherwise would be the competent evidence on the point. Thus, in the instant cases wherein it results from the respective contentions
of both parties that even if the pertinent laws of Texas were known and to be applied, the amount of the inheritance pertaining to the heirs
of Mrs. Hodges is as We have fixed above, the absence of evidence to the effect that, actually and in fact, under said laws, it could be
otherwise is of no longer of any consequence, unless the purpose is to show that it could be more. In other words, since PCIB, the petitioner-
appellant, concedes that upon application of Article 16 of the Civil Code and the pertinent laws of Texas, the amount of the estate in
controversy is just as We have determined it to be, and respondent-appellee is only claiming, on her part, that it could be more, PCIB may not
now or later pretend differently.
||| (Philippine Commercial and Industrial Bank v. Escolin, G.R. Nos. L-27860 & L-27896, L-27937, [March 29, 1974], 155 PHIL 228-400)

ZALAMEA VS CA

G.R. No. 104235. November 18, 1993.]

SPOUSES CESAR & SUTHIRA ZALAMEA AND

LIANA ZALAMEA, petitioners, vs. HONORABLE COURT OF APPEALS AND TRANSWORLD AIRLINES, INC

||| (Spouses Zalamea v. Court of Appeals, G.R. No. 104235, [November 18, 1993], 298 PHIL 672-684)

FACTS: Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea, and their daughter, Liana Zalamea, purchased three (3) airline tickets
from the Manila agent ofrespondent TransWorld Airlines, Inc. for a flight from New York to Los Angeles on June 6, 1984. The
tickets of petitioners-spouses were purchased at a discount of75% while that of their daughter was a full fare ticket. All three tickets
represented confirmed reservations.
While in New York, on June 4, 1984, petitioners received notice of the reconfirmation of their reservations for said flight. On the date, they
checked in at 10:00 am, an hour earlier than the scheduled flight but were placed on the wait-list because the number of passengers who had
checked in before them had already taken all the seats available on the flight. Only Cesar Zalamea was allowed to board the flight, as it were,
those holding full-fare tickets were given first priority among the wait-listed passengers. His wife and daughter, who presented the
discounted tickets were denied boarding. Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, could not be
accommodated because it was also fully booked. Thus, they were constrained to book in another flight and purchased two tickets from
American Airlines at a cost of Nine Hundred Eighteen ($918.00) Dollars.

An action for damages was filed by the petitioners based on a breach of contract of carriage before the RTC of Makati. The lower court ruled
in their favor. However, the CA reversed the decision stating that moral damages are recoverable in a damage suit predicated upon a
breach of contract of carriage only where there is fraud or bad faith. Since it is a matter of record that overbooking of flights is a common and
accepted practice of airlines in the United States and is specifically allowed under the Code of Federal Regulations by the Civil Aeronautics
Board, no fraud nor bad faith could be imputed on respondent TransWorld Airlines.

ISSUE: Whether or not the CA erred in accepting the finding that overbooking is specifically allowed by the US Code of Federal Regulations and in holding that there was no
fraud or bad faith on the part of TWA ?

HELD:
That there was fraud or bad faith on the part of respondent airline when it did not allow petitioners to board their flight for Los Angeles in
spite of confirmed tickets cannot be disputed. The U.S. law or regulation allegedly authorizing overbooking has never been proved. Foreign
laws do not prove themselves nor can the courts take judicial notice of them. Like any other fact, they must be alleged and proved. 6 Written
law may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his
deputy, and accompanied with a certificate that such officer has custody. The certificate may be made by a secretary of an embassy or
legation, consul general, consul, vice-consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the
foreign country in which the record is kept, and authenticated by the seal of his office. 7
Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its customer service agent, in her deposition dated January 27,
1986 that the Code ofFederal Regulations of the Civil Aeronautics Board allows overbooking. Aside from said statement, no official
publication of said code was presented as evidence. Thus, respondent court's finding that overbooking is specifically allowed by the US
Code of Federal Regulations has no basis in fact. Cdpr
Even if the claimed U.S. Code of Federal Regulations does exist, the same is not applicable to the case at bar in accordance with the
principle of lex loci contractuswhich requires that the law of the place where the airline ticket was issued should be applied by
the court where the passengers are residents and nationals of the forum and the ticket is issued in such State by the defendant
airline. 8 Since the tickets were sold and issued in the Philippines, the applicable law in this case would be Philippine law.
Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling the passengers concerned to an
award of moral damages. In Alitalia Airways v.Court of Appeals, 9 where passengers with confirmed bookings were refused carriage on
the last minute, this Court held that when an airline issues a ticket to a passenger confirmed on a particular flight, on a certain date, a
contract of carriage arises, and the passenger has every right to expect that he would fly on that flight and on that date. If he does not,
then the carrier opens itself to a suit for breach of contract of carriage. Where an airline had deliberately overbooked, it took the
riskof having to deprive some passengers of their seats in case all of them would show up for check in. For the indignity and
inconvenience of being refused a confirmed seat on the last minute, said passenger is entitled to an award of moral damages.
Similarly, in Korean Airlines Co., Ltd. v. Court of Appeals, 10 where private respondent was not allowed to board the plane because her
seat had already been given to another passenger even before the allowable period for passengers to check in had lapsed despite the
fact that she had a confirmed ticket and she had arrived on time, this Court held that petitioner airline acted in bad faith in violating
private respondent's rights under their contract of carriage and is therefore liable for the injuries she has sustained as a result.
cdll

In fact, existing jurisprudence abounds with rulings where the breach of contract of carriage amounts to bad faith. In Pan American
World Airways, Inc. v. Intermediate Appellate Court, 11 where a would-be passenger had the necessary ticket, baggage claim and
clearance from immigration all clearly and unmistakably showing that she was indeed a confirmed passenger and that she was, in fact,
included in the passenger manifest of said flight, and yet was denied accommodation in said flight, this Court did not hesitate to affirm
the lower court's finding awarding her damages.
A contract to transport passengers is quite different in kind and degree from any other contractual relation. So ruled
this Court in Zulueta v. Pan American World Airways, Inc. 12 This is so, for a contract of carriage generates a relation attended with
public duty — a duty to provide public service and convenience to its passengers which must be paramount to self-interest or
enrichment. Thus, it was also held that the switch of planes from Lockheed 1011 to a smaller Boeing 707 because there were only 138
confirmed economy class passengers who could very well be accommodated in the smaller plane, thereby sacrificing the comfort of its
first class passengers for the sake of economy, amounts to bad faith. Such inattention and lack of care for the interest of its passengers
who are entitled to its utmost consideration entitles the passenger to an award of moral damages. 13
Even on the assumption that overbooking is allowed, respondent TWA is still guilty of bad faith in not informing its passengers
beforehand that it could breach the contract of carriage even if they have confirmed tickets if there was overbooking. Respondent
TWA should have incorporated stipulations on overbooking on the tickets issued or to properly inform its passengers about these
policies so that the latter would be prepared for such eventuality or would have the choice to ride with another airline. LibLex

Respondent TWA contends that Exhibit I, the detached flight coupon upon which were written the name of the passenger and the
points of origin and destination, contained such a notice. An examination of Exhibit I does not bear this out. At any rate, said exhibit
was not offered for the purpose of showing the existence of a notice of overbooking but to show that Exhibit I was used for Flight 007
in first class of June 11, 1984 from New York to Los Angeles.
Moreover, respondent TWA was also guilty of not informing its passengers of its alleged policy of giving less priority to discounted
tickets. While the petitioners had checked in at the same time, and held confirmed tickets, yet, only one of them was allowed to board
the plane ten minutes before departure time because the full-fare ticket he was holding was given priority over discounted tickets. The
other two petitioners were left behind.

It is respondent TWA's position that the practice of overbooking and the airline system of boarding priorities are reasonable policies,
which when implemented do not amount to bad faith. But the issue raised in this case is not the reasonableness of said policies but
whether or not said policies were incorporated or deemed written on petitioners' contracts of carriage. Respondent TWA failed to
show that there are provisions to that effect. Neither did it present any argument of substance to show that petitioners were duly
apprised of the overbooked condition of the flight or that there is a hierarchy of boarding priorities in booking passengers. It is evident
that petitioners had the right to rely upon the assurance of respondent TWA, thru its agent in Manila, then in New York, that their
tickets represented confirmed seats without any qualification. The failure of respondent TWA to so inform them when it could easily
have done so thereby enabling respondent to hold on to them as passengers up to the last minute amounts to bad faith. Evidently,
respondent TWA placed its self-interest over the rights of petitioners under their contracts of carriage. Such conscious
disregard of petitioners' rights makes respondent TWA liable for moral damages. To deter breach of contracts by respondent TWA in
similar fashion in the future, we adjudge respondent TWA liable for exemplary damages, as well. LexLib

Petitioners also assail the respondent court's decision not to require the refund of Liana Zalamea's ticket because the ticket was used
by her father. On this score, we uphold the respondent court. Petitioners had not shown with certainty that the act of respondent TWA
in allowing Mr. Zalamea to use the ticket of her daughter was due to inadvertence or deliberate act. Petitioners had also failed to
establish that they did not accede to said arrangement. The logical conclusion, therefore, is that both petitioners and respondent TWA
agreed, albeit impliedly, to the course of action taken.
The respondent court erred, however, in not ordering the refund of the cost of the American Airlines tickets purchased and used by
petitioners Suthira and Liana. The evidence shows that petitioners Suthira and Liana were constrained to take the American Airlines
flight to Los Angeles not because they "opted not to use their TWA tickets on another TWA flight" but because respondent TWA could
not accommodate them either on the next TWA flight which was also fully booked. 14 The purchaseof the American Airlines tickets by
petitioners Suthira and Liana was the consequence of respondent TWA's unjustifiable breach of its contracts of carriage with
petitioners. In accordance with Article 2201, New Civil Code, respondent TWA should, therefore, be responsible for all damages which
may be reasonably attributed to the non-performance of its obligation. In the previously cited case of Alitalia
Airways v. Court of Appeals, 15 this Court explicitly held that a passenger is entitled to be reimbursed for the cost of the tickets he had to
buy for a flight on another airline. Thus, instead of simply being refunded for the cost of the unused TWA tickets, petitioners should be
awarded the actual cost of their flight from New York to Los Angeles. On this score, we differ from the trial court's ruling which ordered
not only the reimbursement of the American Airlines tickets but also the refund of the unused TWA tickets. To require both prestations
would have enabled petitioners to fly from New York to Los Angeles without any fare being paid. LLjur

The award to petitioners of attorney's fees is also justified under Article 2208(2) of the Civil Code which allows recovery when the
defendant's act or omission has compelled plaintiff to litigate or to incur expenses to protect his interest. However, the award for moral
and exemplary damages by the trial court is excessive in the light of the fact that only Suthira and Liana Zalamea were actually
"bumped off." An award of P50,000.00 moral damages and another P50,000.00 exemplary damages would suffice under the
circumstances obtaining in the instant case.
||| (Spouses Zalamea v. Court of Appeals, G.R. No. 104235, [November 18, 1993], 298 PHIL 672-684)