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Cathay Pacific v. Sps. Vasquez

FACTS

Private respondents were passengers of petitioner booked on its Flight CX-905 with the route of Manila
to Hongkong and back. They, along with their maid and two friends, went to HK for pleasure and
business. While the maid’s boarding pass was for the Economy Class, the spouses’ and their
two friends’ indicated that they were on the Business Class. However, while in Kai Tak Airport,
after checking in their luggage and presenting their boarding passes to the ground stewardess, they
were informed by Ms. Chiu, a ground attendant, that there was a seat change from Business to First
Class for the spouses. It is to be noted that the Vasquezes are frequent flyers of the airline and are Gold
Card members of its Marco Polo Club. The Marco Polo Club is part of the marketing strategy of
Cathay through which it accords its frequent flyers several privileges, including priority for upgrading
of booking without any extra charge whenever an opportunity arises. Upon being informed of this
change, Dr. Vasquez refused the same, saying that it would not look nice for them as hosts to travel in
First Class and their guests, in Business Class, not to mention that they also had to discuss business
matters during the flight. He asked Ms. Chiu to have other passengers transferred instead. Shocked by
this unusual reaction to a seat upgrade, Ms. Chiu, after consulting with her supervisor, informed them
that if they would not avail of the privilege, they would not be allowed to take the flight. Eventually,
after talking with his friends, Dr. Vasquez agreed. He and his wife took the First Class Cabin. Back in
Manila, after apparent inaction on the part of Cathay, the Vasquezes filed a damage suit, asking for
temperate, moral and exemplary damages, as well as attorney’s fees. They attributed discourteous
and humiliating behavior to Ms. Chiu. Cathay answered that seat upgrading is a common practice
among airlines.

The TC ruled for the spouses, awarding them nominal (P100,000 each), moral (P2M each), exemplary
(P5M each) and attorney’s fees (P1M each). The CA affirmed, but deleted the award of exemplary
damages and reduced the awards of moral and nominal damages and attorney’s fees.

ISSUE/s

1. WON Cathay breached its contract of carriage with the Vs when it upgraded their seat
accommodation.

2. WON the upgrading was made in bad faith or with fraud.

3. WON the Vasquezes are entitled to damages.

RULING

1. YES. The Vazquezes never denied that they were members of Cathay’s Marco Polo Club.
They knew that as members of the Club, they had priority for upgrading of their seat accommodation at
no extra cost when an opportunity arises. But, just like other privileges, such priority could be waived.
The Vazquezes should have been consulted first whether they wanted to avail themselves of the
privilege or would consent to a change of seat accommodation before their seat assignments were given
to other passengers. Normally, one would appreciate and accept an upgrading, for it would mean a
better accommodation. But, whatever their reason was and however odd it might be, the Vazquezes had
every right to decline the upgrade and insist on the Business Class accommodation they had booked for
and which was designated in their boarding passes. They clearly waived their priority or preference

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