G.R. No. 125138, 2 March 1999

FACTS:

Private respondent PAL issued to the herein petitioner, Nicholas Cervantes, a round trip plane ticket for Manila-Honolulu-Los Angeles-Honolulu-Manila, which ticket expressly provided an expiry of date of one year from issuance, that is, until March 27, 1990. On March 23, 1990, four days before the expiry date of subject ticket, the petitioner used it. Upon his arrival in Los Angeles on the same day, he immediately booked his Los Angeles-Manila return ticket with the PAL office, and it was confirmed for the April 2, 1990 flight. Upon learning that the same PAL plane would make a stop-over in San Francisco, and considering that he would be there on April 2, 1990, petitioner made arrangements with PAL for him to board the flight in San Francisco instead of boarding in Los Angeles. On April 2, 1990, when the petitioner checked in at the PAL counter in San Francisco, he was not allowed to board. The PAL personnel did not accept the ticket due to the expiration of its validity.

Petitioner Cervantes filed a Complaint for Damages for breach of contract of carriage, but the said complaint was dismissed. Petitioner appealed to the Court of Appeals, which upheld the dismissal of the case. Petitioner contends that the confirmation by the PALs agents in Los Angeles and San Francisco changed the compromise agreement between the parties.

ISSUE:

Whether the act of the PAL agents in confirming subject ticket extended the period of validity of petitioner’s ticket.

RULING:

No, the employees of PAL had no authority to extend the validity or lifetime of the ticket in question.

The plane ticket itself provides that it is not valid after March 27, 1990. It is also stipulated therein that the ticket is good for carriage for one year from date of issue. The ticket constitutes the contract between the parties. It is axiomatic that when the terms are clear and leave no doubt as to the intention of the contracting parties, contracts are to be interpreted according to their literal meaning. Petitioner had firsthand knowledge that the ticket in question would expire on March 27,1990 and that to secure an extension, he would have to file a written request for extension at the PALs office in the Philippines. Petitioner was fully aware that there was a need to send a letter to the legal counsel of PAL for the extension of the period of validity of his ticket.

Since the PAL agents are not privy to the said Agreement and petitioner knew that a written request to the legal counsel of PAL was necessary, he cannot use what the PAL agents did to his advantage. The said agents, therefore, acted without authority when they confirmed the flights of the petitioner.

Under Article 1898 of the New Civil Code, the acts of an agent beyond the scope of his authority do not bind the principal, unless the latter ratifies the same expressly or impliedly. Furthermore, when the third person (herein petitioner) knows that the agent was acting beyond his power or authority, the principal cannot be held liable for the acts of the agent. If the said third person is aware of such limits of authority, he is to blame, and is not entitled to recover damages from the agent, unless the latter undertook to secure the principals ratification.

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