Case Digest (G.R. No. 188288) Core Legal Reasoning Model
Facts:
The case of Spouses Fernando and Lourdes Viloria versus Continental Airlines, Inc. arose from a transaction involving the purchase of airline tickets in the United States on July 21, 1997. Fernando Viloria bought two round-trip tickets for himself and his wife, Lourdes, from San Diego, California to Newark, New Jersey through a travel agency named Holiday Travel, where a certain Margaret Mager attended to them. Mager informed the Vilorias that Amtrak, an intercity passenger train service, had no available seats, leading them to buy the tickets from Continental Airlines at a price of US$400 each. Requests to reschedule the flight or seek refunds were denied on the ground that the tickets were non-refundable. Subsequent discovery by Fernando of seat availability at Amtrak prompted demands for refunds, which Continental Airlines refused, citing contractual terms.
Following these events, the Vilorias filed a complaint with the Regional Trial Court (RTC) of Antipolo City, Branch 74,
Case Digest (G.R. No. 188288) Expanded Legal Reasoning Model
Facts:
- On or about July 21, 1997, Fernando Viloria purchased two round-trip airline tickets from San Diego to Newark through Holiday Travel, attended by agent Margaret Mager, for himself and his wife, Lourdes. The tickets were bought at $400 each, with an initial itinerary departing August 13, 1997, returning August 21, 1997.
- Fernando requested to reschedule the departure to August 6, 1997.
- Mager claimed Continental Airlines flights were fully booked and offered a higher-priced alternative via Frontier Air.
- Fernando opted for a refund, which was denied by Mager citing a non-refundable policy, but was offered ticket re-issuance within one year.
- Fernando found seats available on Amtrak after purchasing tickets and confronted Mager regarding her misrepresentation about seat availability.
- Upon return to the Philippines, Fernando sent a refund demand letter dated February 11, 1998 to Continental Airlines, alleging deception.
- Continental Airlines, through Continental Micronesia, referred the complaint to its Customer Refund Services and later denied the refund request but allowed tickets to be used as partial payment for new tickets, subject to a re-issuance fee.
- On June 17, 1999, Fernando visited Continental’s office to replace the tickets with a single round-trip ticket to Los Angeles but was informed Lourdes’ ticket was non-transferable. Fernando was required to pay the difference since the new ticket price ($1,867.40) exceeded the original ticket value.
- Fernando demanded a refund again, alleging bad faith for charging higher amounts and refusal to use Lourdes’ ticket.
- On September 8, 2000, the Spouses Viloria filed a complaint for refund and damages including moral and exemplary damages and attorney’s fees.
- Continental Airlines denied liability, arguing non-refundable tickets, the absence of principal-agent relationship with Mager or Holiday Travel, and that prices were within their business discretion.
- The Regional Trial Court (RTC), on April 3, 2006, ruled in favor of Spouses Viloria, finding Mager an agent of Continental Airlines who acted in bad faith through misrepresentation, and awarded refund and damages.
- The Court of Appeals (CA), on January 30, 2009, reversed the RTC decision, holding there was no evidence of agency relationship between Continental Airlines and Holiday Travel or Mager, refusing refund due to non-refundable clause, and upholding the airline’s pricing discretion.
- Spouses Viloria filed a petition for review with the Supreme Court, claiming bad faith of Continental Airlines and arguing agency relationship and unfair contractual terms.
Issues:
- Whether a principal-agent relationship exists between Continental Airlines Inc. and Holiday Travel.
- If agency exists, whether Continental is liable for acts of its agent’s employees such as Mager.
- Whether Mager’s representation on Amtrak seat availability constitutes fraudulent misrepresentation vitiating consent.
- Whether Continental Airlines is justified in insisting on the tickets’ non-transferability and non-refundable nature.
- Whether Continental acted in bad faith by charging a higher price for the new ticket and refusing to allow Lourdes’ ticket to be used for purchase.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)