Spouses Yu v. Pan American World Airways, Inc.

G.R. No. 123560, 27 March 2000

FACTS:

Plaintiff Yu Eng Cho is a businessman who travels from time to time to Malaysia, Taipei and Hongkong. On July 10, 1976, plaintiffs bought plane tickets from defendant Claudia Tagunicar who represented herself to be an agent of defendant Tourist World Services, Inc. (TWSI). The destination[s] are Hongkong, Tokyo, San Francisco, U.S.A. On said date, only the passage from Manila to Hongkong, then to Tokyo, were confirmed. [PAA] Flight 002 from Tokyo to San Francisco was on “RQ” status, meaning “on request”. Per instruction of defendant Claudia Tagunicar, plaintiffs returned after a few days for the confirmation of the Tokyo-San Francisco segment of the trip. After calling up Canilao of TWSI, defendant Tagunicar told plaintiffs that their flight is now confirmed all the way.

On July 23, 1978, plaintiffs left for Hongkong and thereafter left for Tokyo. Upon their arrival in Tokyo, they called up Pan-Am office for reconfirmation of their flight to San Francisco. Said office, however, informed them that their names are not in the manifest. Since plaintiffs were supposed to leave on the 29th of July, 1978, and could not remain in Japan for more than 72 hours, they were constrained to agree to accept airline tickets for Taipei instead, per advise of JAL officials. Upon reaching Taipei, there were no flight[s] available for plaintiffs, thus, they were forced to return back to Manila on instead of proceeding to the United States. A complaint for damages was filed by petitioners against private respondents the Regional Trial Court held the defendants jointly and severally liable, except defendant Julieta Canilao. Only respondents Pan Am and Tagunicar appealed to the Court of Appeals. the appellate court rendered judgment modifying the amount of damages awarded, holding private respondent Tagunicar solely liable therefor, and absolving respondents Pan Am and TWSI from any and all liability.

ISSUES:

WON there is an agency relationship between PAN-AM, TWSI and Tagunicar.

RULING:

No. By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. The elements of agency are:

(1) consent, express or implied, of the parties to establish the relationship;
(2) the object is the execution of a juridical act in relation to a third person;
(3) the agent acts as a representative and not for himself;
(4) the agent acts within the scope of his authority. It is a settled rule that persons dealing with an assumed agent are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it.

In the case at bar, petitioners rely on the affidavit of respondent Tagunicar where she stated that she is an authorized agent of TWSI. This affidavit, however, has weak probative value in light of respondent Tagunicar’s testimony in court to the contrary. Affidavits, being taken ex parte, are almost always incomplete and often inaccurate, sometimes from partial suggestion, or for want of suggestion and inquiries. The declarations of the agent alone are generally insufficient to establish the fact or extent of his authority.

In addition, as between the negative allegation of respondents Canilao and Tagunicar that neither is an agent nor principal of the other, and the affirmative allegation of petitioners that an agency relationship exists, it is the latter who have the burden of evidence to prove their allegation, failing in which, their claim must necessarily fail.

*Case digest by Stephanie C. Castillo, JD-IV, Andres Bonifacio College, SY: 2019-2020

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