G.R. No. L-57339 - Air France vs. Court of Appeals

Petitioner Air France issued nine open-dated air passage tickets to respondents Jose G. Gana and family (the GANAS) through an authorized travel agent, Imperial Travels, for the Manila/Osaka/Tokyo/Manila route in February 1970.
The GANAS paid US$2,528.85 for economy and first-class fares and P100.00 travel tax per passenger at an exchange rate of P3.90 per US$1.00.
On April 24, 1970, Air France exchanged these tickets for others on the same route, valid until May 8, 1971.

The GANAS did not depart on the originally booked date (May 8, 1970) but scheduled to depart on May 7, 1971, one day before ticket expiry.
In January 1971, Jose Gana sought assistance from Teresita Manucdoc (secretary of Sta. Clara Lumber Company) for the extension of ticket validity.
Teresita consulted Lee Ella, manager of Philippine Travel Bureau, who sent the tickets to Cesar Rillo, Air France Office Manager.
Rillo informed that ticket extension was impossible without payment of fare differentials and additional taxes due to exchange rate and fare increases.
Ella advised Teresita of this negative response.

On May 7, 1971, the GANAS planned to depart; Teresita again requested Ella to arrange ticket revalidation.
Ella refused but affixed validating stickers (JAL and SAS) on the tickets for the Osaka/Tokyo flight without Air France’s knowledge or consent, relying on Teresita’s assurance that the GANAS would make necessary arrangements for onward flights.
Despite warnings, the GANAS departed Manila on May 7, 1971, via Air France Flight 184 to Osaka, which proceeded without issue.

Japan Airlines refused to honor the Osaka/Tokyo segment tickets on May 17, 1971, due to expiration; the GANAS had to buy new tickets.
Air France refused to honor the Tokyo/Manila segment; the family returned on separate Air France flights after relatives prepaid the adjusted fares and taxes.

On August 25, 1971, the GANAS filed a complaint for damages due to breach of contract of carriage before the Court of First Instance of Manila.
Air France denied liability, contending the GANAS assumed the risk by insisting on using expired tickets and unauthorized travel agent acts.
On May 29, 1975, the Trial Court dismissed the complaint based on stipulated facts and evidence.
The GANAS appealed; principal plaintiff Jose G. Gana died during the appeal.
On December 15, 1980, the Court of Appeals reversed the Trial Court, awarding P90,000 as moral damages to the GANAS.
Air France’s motion for reconsideration was denied, leading to the present petition for review on certiorari before the Supreme Court.

Whether Air France breached the contract of carriage by refusing to honor the respondents’ tickets after the expiry date.
Whether the respondents were entitled to damages for breach of contract of carriage.
Whether the process of requiring additional fare payments due to exchange rate and fare adjustments was lawful and proper under IATA and CAB regulations.
Whether travel agent Ella’s unilateral revalidation of tickets without Air France’s consent was authorized and could bind Air France.
Whether the GANAS’ lack of knowledge of fare and ticket validity rules excused their non-compliance with those rules.