Facts:
The respondents were
Jose G. Gana (deceased), Clara A. Gana, Ramon Gana, Manuel Gana, Maria Teresa Gana, Roberto Gana, Jaime Javier Gana, Clotilde Vda. de Arevalo, and Emily San Juan and the petitioner was
AIR FRANCE; the operative events occurred in Manila, Osaka, and Tokyo between February 1970 and May 1971. In February 1970 the GANAS purchased through Imperial Travels, Incorporated, nine open-dated round-trip tickets for the Manila/Osaka/Tokyo/Manila route, paying US$2,528.85 plus travel taxes, and AIR FRANCE exchanged those tickets on 24 April 1970. The issued coupons showed a printed limitation, “Non valable apres de,” fixing the tickets’ validity until 8 May 1971. The GANAS did not begin travel in May 1970 and in January 1971 sought extension of the tickets; the travel agent, Lee Ella of the Philippine Travel Bureau, forwarded the tickets to Cesar Rillo, Office Manager of
AIR FRANCE, and was informed that extension was not possible without payment of fare differentials caused by an increase in fares authorized by the
Civil Aeronautics Board (CAB) and increased travel taxes. The GANAS scheduled departure for 7 May 1971; on the morning of that day Ella again advised that extension without payment was impossible, but, without AIR FRANCE’s authorization and allegedly because of urgency, affixed validating stickers (a JAL sticker and an SAS sticker) to the coupons indicating seating reservations for the onward flights. The GANAS departed Manila on 7 May 1971 on AIR FRANCE Flight 184 and arrived in Osaka, but Japan Airlines refused on 17 May 1971 to honor the Osaka/Tokyo coupons because the tickets had expired on 8 May 1971, forcing the GANAS to purchase new tickets; AIR FRANCE likewise refused to honor the Tokyo/Manila coupons unless readjusted fares and taxes were paid, and the GANAS returned only after prepayment of the adjusted rates and on separate AIR FRANCE flights (Jose on 19 May 1971; the other family members on 26 May 1971). On 25 August 1971 the GANAS commenced Civil Case No. 84111 in the Court of First Instance of Manila, Branch III, for damages for breach of contract of carriage;
AIR FRANCE pleaded that the GANAS assumed the risk, that Ella acted beyond his authority, and that AIR FRANCE acted in good faith. On 29 May 1975 the Trial Court dismissed the Complaint based on the parties’ Partial and Additional Stipulations of Fact and the evidence. The GANAS appealed to the Court of Appeals, which on 15 December 1980 reversed and awarded moral damages of P90,000.00; upon denial of reconsideration,
AIR FRANCE petitioned this Court for certiorari, and this Court rendered judgment on December 29, 1983.
Issues:
Did the respondents prove that
AIR FRANCE breached the contract of carriage by refusing to honor the expired tickets and by requiring payment of fare differentials and adjusted travel taxes? Did the unauthorized affixing of validating stickers by the travel agent bind
AIR FRANCE or constitute ratification that extended the tickets’ validity? Did notice to the travel agent who handled the GANAS’ arrangements suffice as notice to the GANAS?
Ruling:
Ratio:
Doctrine: