Spouses Fernando and Lourdes Viloria v Continental Airlines,

Inc.
G.R. No. 188288, 16 January 2012
Nature: Petition for review on certiorari of a decision of the Court of
Appeals
Ponente: REYES, J.
Facts:
On 21 July 1997, while in the US, Sps. Viloria bought two (2)
round trip tickets from San Diego, California to Newark, New Jersey on
board Continental Airlines for US$ 400.00 from a Holiday Travel travel
agency and attended to by Margaret Mager. Fernando agreed to buy
the said tickets after being informed that there were no available seats
at Amtrak. The spouses were scheduled to leave for Newark on 13
August 1997 and return to San Diego on 21 August 1997, subsequently
Fernando requested Mager to reschedule their flight to Newark to 6
August 1997 wherein he was informed that flights via Continental
Airlines were already booked and offered an alternative round trip via
Frontier Air.
Fernando had second thoughts of travelling via Frontier Air thus
he went to the Greyhound Station where he saw an Amtrak station and
later was able to buy 2 tickets for Washington, D.C. Fernando then
went to Holiday Travel and confronted Mager into misleading him to
buying the Continental Airlines tickets by misrepresenting that Amtrak
was already fully booked. Fernando reiterated his demand for a refund
but Mager was firm in her position that the tickets are non-refundable.
Hence, upon his return to the Philippines, Fernando demanded a refund
but was denied it but was advised that he may take the subject tickets
to any Continental ticketing location for the re-issuance of new tickers
within 2 years from date of issuance but was later denied of the use of
the tickets since it would entail a higher fee. Thus, Fernando filed a
complaint against CAI for the refund of the tickets plus moral and
exemplary damages. The RTC granted the petition and upon appeal
was denied by the CA, hence this appeal.
Issue: Whether or not a principal-agent relationship exists between CAI
and Holiday Travel
Held: YES.
Ruling:
All the elements of an agency exist in this case such as:

(a) There is consent, express or implied of the parties to establish

the relationship;
(b)The object is the execution of a juridical act in relation to a third
person;
(c) The agent acts as a representative and not for himself; and
(d)The agent acts within the scope of his authority.
Such that the 1st and 2nd elements are present and CAI does not
deny that it concluded an agreement with Holiday Travel, whereby
Holiday Travel would enter into contracts of carriage with third persons
on CAIs behalf. The 3rd element is also present as it is undisputed that
Holiday Travel merely acted in a representative capacity and it is CAI
and not Holiday Travel who is bound by the contracts of carriage
entered into by Holiday Travel on its behalf. The 4 th element is also
present considering that Holiday Travel exceeded the authority that
was granted to it. In fact, CAI consistently maintains the validity of the
contracts of carriage that Holiday Travel executed with Sps. Viloria and
that Mager was not guilty of any fraudulent misrepresentation
As categorically provided under Art 1869 of the NCC agency may
be express or implied from the acts of the principal, from his silence or
lack of action, or his failure to repudiate the agency, knowing that
another person is acting on his behalf without his authority.
Considering that all the elements are present, the Court finds that
there is a principal-agent relationship between CAI and Mager, hence
the petition is denied in view of the contractual relationship between
Mager and CAI.