G.R. No. 121824, 29 January 1998

FACTS:

Mahtani decided to visit his relatives in Bombay, India. In anticipation of his visit, he obtained the services of a certain Mr. Gumar to prepare his travel plans. The latter, in turn, purchased a ticket from BA. Since BA had no direct flights from Manila to Bombay, Mahtani had to take a flight to Hongkong via PAL, and upon arrival in Hongkong he had to take a connecting flight to Bombay on board BA.

Prior to his departure, Mahtani checked in at the PAL counter in Manila his two pieces of luggage containing his clothings and personal effects, confident that upon reaching Hongkong, the same would be transferred to the BA flight bound for Bombay. Unfortunately, when Mahtani arrived in Bombay he discovered that his luggage was missing and that upon inquiry from the BA representatives, he was told that the same might have been diverted to London. After patiently waiting for his luggage for one week, BA finally advised him to file a claim by accomplishing the “Property Irregularity Report.

Back in the Philippines, Mahtani filed his complaint for damages and attorney’s fees 5 against BA and Mr. Gumar before the trial court. BA filed its answer and conteded that Mahtani did not have a cause of action against it. Likewise, BA filed a third-party complaint 7 against PAL alleging that the reason for the non-transfer of the luggage was due to the latter’s late arrival in Hongkong, thus leaving hardly any time for the proper transfer of Mahtani’s luggage to the BA aircraft bound for Bombay. PAL then disclaimed any liability and argued that there was, in fact, adequate time to transfer the luggage to BA facilities in Hongkong. Furthermore, the transfer of the luggage to Hongkong authorities should be considered as transfer to BA.

The trial court rendered its decision in favor of Mahtani which is affirmed by the CA. hence the petition.

ISSUE:

Whether PAL is considered an agent of BA and can be held liable for any negligence in the performance of its function.

RULING:

Yes, is considered an agent of BA and can be held liable.

In resolving this issue, it is worth observing that the contract of air transportation was exclusively between Mahtani and BA, the latter merely endorsing the Manila to Hongkong leg of the former’s journey to PAL, as its subcontractor or agent. In fact, the fourth paragraph of the “Conditions of Contracts” of the ticket32 issued by BA to Mahtani confirms that the contract was one of continuous air transportation from Manila to Bombay.

4. . . . carriage to be performed hereunder by several successive carriers is regarded as a single operation.
Prescinding from the above discussion, it is undisputed that PAL, in transporting Mahtani from Manila to Hongkong acted as the agent of BA.

Parenthetically, the Court of Appeals should have been cognizant of the well-settled rule that an agent is also responsible for any negligence in the performance of its function (Art. 1909) and is liable for damages which the principal may suffer by reason of its negligent act (Art. 1884). Hence, the Court of Appeals erred when it opined that BA, being the principal, had no cause of action against PAL, its agent or sub-contractor.

Also, it is worth mentioning that both BA and PAL are members of the International Air Transport Association (IATA), wherein member airlines are regarded as agents of each other in the issuance of the tickets and other matters pertaining to their relationship. Therefore, in the instant case, the contractual relationship between BA and PAL is one of agency, the former being the principal, since it was the one which issued the confirmed ticket, and the latter the agent.

*Case digest by Rezeile S. Morandarte, JD – 4, Andres Bonifacio College, SY 2019 – 2020