[G.R. No. 123560.

March 27, 2000]

SPOUSES YU ENG CHO and FRANCISCO TAO

YU, petitioners, vs. PAN AMERICAN WORLD AIRWAYS, INC.,
TOURIST WORLD SERVICES, INC., JULIETA CANILAO and
CLAUDIA TAGUNICAR, respondents.

DECISION

PUNO, J.:

This petition for review seeks a reversal of the 31 August 1995 Decision  and
[1]

11 January 1998 Resolution  of the Court of Appeals holding private

[2]

respondent Claudia Tagunicar solely liable for moral and exemplary damages
and attorneys fees, and deleting the trial courts award for actual damages.

The facts as found by the trial court are as follows: Kycalr

"Plaintiff Yu Eng Cho is the owner of Young Hardware Co. and

Achilles Marketing. In connection with [this] business, he travels
from time to time to Malaysia, Taipei and Hongkong. On July 10,
1976, plaintiffs bought plane tickets (Exhs. A & B) 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., for
the amount of P25,000.00 per computation of said defendant
Claudia Tagunicar (Exhs. C & C-1). The purpose of this trip is to
go to Fairfield, New Jersey, U.S.A. to buy two (2) lines of
infrared heating system processing textured plastic article (Exh.
K).

"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. Thereafter, she attached the confirmation stickers on the
plane tickets (Exhs. A & B).

"A few days before the scheduled flight of plaintiffs, their son,
Adrian Yu, called the Pan Am office to verify the status of the
flight. According to said Adrian Yu, a personnel of defendant
Pan Am told him over the phone that plaintiffs booking[s] are
confirmed.

"On July 23, 1978, plaintiffs left for Hongkong and stayed there
for five (5) days. They left Hongkong for Tokyo on July 28, 1978.
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 29 th 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. This is the only
option left to them because Northwest Airlines was then on
strike, hence, there was no chance for the plaintiffs to obtain
airline seats to the United States within 72 hours. Plaintiffs paid
for these tickets.

"Upon reaching Taipei, there were no flight[s] available for

plaintiffs, thus, they were forced to return back to Manila on
August 3, 1978, instead of proceeding to the United States.
[Japan] Air Lines (JAL) refunded the plaintiffs the difference of
the price for Tokyo-Taipei [and] Tokyo-San Francisco (Exhs. I &
J) in the total amount of P2,602.00.

"In view of their failure to reach Fairfield, New Jersey, Radiant

Heat Enterprises, Inc. cancelled Yu Eng Chos option to buy the
two lines of infra-red heating system (Exh. K). The agreement
was for him to inspect the equipment and make final
arrangement[s] with the said company not later than August 7,
1978. From this business transaction, plaintiff Yu Eng Cho
expected to realize a profit of P300,000.00 to P400,000.00."

"[A] scrutiny of defendants respective evidence reveals the

following:

"Plaintiffs, who were intending to go to the United States, were

referred to defendant Claudia Tagunicar, an independent travel
solicitor, for the purchase of their plane tickets. As such travel
solicitor, she helps in the processing of travel papers like
passport, plane tickets, booking of passengers and some
assistance at the airport. She is known to defendants Pan-Am,
TWSI/Julieta Canilao, because she has been dealing with them
in the past years. Defendant Tagunicar advised plaintiffs to take
Pan-Am because Northwest Airlines was then on strike and
plaintiffs are passing Hongkong, Tokyo, then San Francisco and
Pan-Am has a flight from Tokyo to San Francisco. After verifying
from defendant TWSI, thru Julieta Canilao, she informed
plaintiffs that the fare would be P25,093.93 giving them a
discount of P738.95 (Exhs. C, C-1). Plaintiffs, however, gave her
a check in the amount of P25,000.00 only for the two round trip
tickets. Out of this transaction, Tagunicar received a 7%
commission and 1% commission for defendant TWSI.
Defendant Claudia Tagunicar purchased the two round-trip Pan-
Am tickets from defendant Julieta Canilao with the following
schedules:

Origin Destination Airline Date Time/Travel

Manila Hongkong CX900 7-23-78 1135/1325hrs

Hongkong Tokyo CS500 7-28-78 1615/2115hrs

Tokyo San Francisco PA002 7-29-78 1930/1640hrs

The use of another airline, like in this case it is Cathay Pacific

out of Manila, is allowed, although the tickets issued are Pan-
Am tickets, as long as it is in connection with a Pan-Am flight.
When the two (2) tickets (Exhs. A & B) were issued to plaintiffs,
the letter "RQ" appears below the printed word "status" for the
flights from Tokyo to San Francisco which means "under
request," (Exh. 3-A, 4-A Pan-Am). Before the date of the
scheduled departure, defendant Tagunicar received several
calls from the plaintiffs inquiring about the status of their
bookings. Tagunicar in turn called up TWSI/Canilao to verify;
and if Canilao would answer that the bookings are not yet
confirmed, she would relate that to the plaintiffs.  Calrky

"Defendant Tagunicar claims that on July 13, 1978, a few days

before the scheduled flight, plaintiff Yu Eng Cho personally went
to her office, pressing her about their flight. She called up
defendant Julieta Canilao, and the latter told her "o sige Claudia,
confirm na." She even noted this in her index card (Exh. L), that
it was Julieta who confirmed the booking (Exh. L-1). It was then
that she allegedly attached the confirmation stickers (Exhs. 2, 2-
B TWSI) to the tickets. These stickers came from TWSI.

Defendant Tagunicar alleges that it was only in the first week of

August, 1978 that she learned from Adrian Yu, son of plaintiffs,
that the latter were not able to take the flight from Tokyo to San
Francisco, U.S.A. After a few days, said Adrian Yu came over
with a gentleman and a lady, who turned out to be a lawyer and
his secretary. Defendant Tagunicar claims that plaintiffs were
asking for her help so that they could file an action against Pan-
Am. Because of plaintiffs promise she will not be involved, she
agreed to sign the affidavit (Exh. M) prepared by the
lawyer. Mesm

Defendants TWSI/Canilao denied having confirmed the Tokyo-

San Francisco segment of plaintiffs flight because flights then
were really tight because of the on-going strike at Northwest
Airlines. Defendant Claudia Tagunicar is very much aware that
[said] particular segment was not confirmed, because on the
 very day of plaintiffs departure, Tagunicar called up TWSI from
the airport; defendant Canilao asked her why she attached
stickers on the tickets when in fact that portion of the flight was
not yet confirmed. Neither TWSI nor Pan-Am confirmed the flight
and never authorized defendant Tagunicar to attach the
confirmation stickers. In fact, the confirmation stickers used by
defendant Tagunicar are stickers exclusively for use of Pan-Am
only. Furthermore, if it is the travel agency that confirms the
booking, the IATA number of said agency should appear on the
validation or confirmation stickers. The IATA number that
appears on the stickers attached to plaintiffs tickets (Exhs. A &
B) is 2-82-0770 (Exhs. 1, 1-A TWSI), when in fact TWSIs IATA
number is 2-83-0770 (Exhs. 5, 5-A TWSI)." [3]

A complaint for damages was filed by petitioners against private respondents

Pan American World Airways, Inc.(Pan Am), Tourist World Services, Inc.
(TWSI), Julieta Canilao (Canilao), and Claudia Tagunicar (Tagunicar) for
expenses allegedly incurred such as costs of tickets and hotel
accommodations when petitioners were compelled to stay in Hongkong and
then in Tokyo by reason of the non-confirmation of their booking with Pan-Am.
In a Decision dated November 14, 1991, the Regional Trial Court of Manila,
Branch 3, held the defendants jointly and severally liable, except defendant
Julieta Canilao, thus: Scslx

"WHEREFORE, judgment is hereby rendered for the plaintiffs

and ordering defendants Pan American World Airways, Inc.,
Tourist World Services, Inc. and Claudia Tagunicar, jointly and
severally, to pay plaintiffs the sum of P200,000.00 as actual
damages, minus P2,602.00 already refunded to the plaintiffs;
P200,000.00 as moral damages; P100,000.00 as exemplary
damages; an amount equivalent to 20% of the award for and as
attorneys fees, plus the sum of P30,000.00 as litigation
expenses.

Defendants counterclaims are hereby dismissed for lack of

merit.

SO ORDERED."

Only respondents Pan Am and Tagunicar appealed to the Court of Appeals.

On 11 August 1995, 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, thus: Slxs c

"PREMISES CONSIDERED, the decision of the Regional Trial

Court is hereby SET ASIDE and a new one entered declaring
appellant Tagunicar solely liable for:

1) Moral damages in the amount of P50,000.00;

 2) Exemplary damages in the amount of P25,000.00; and

3) Attorneys fees in the amount of P10,000.00 plus costs of suit.

The award of actual damages is hereby DELETED.

SO ORDERED."

In so ruling, respondent court found that Tagunicar is an independent travel

solicitor and is not a duly authorized agent or representative of either Pan Am
or TWSI. It held that their business transactions are not sufficient to consider
Pan Am as the principal, and Tagunicar and TWSI as its agent and sub-agent,
respectively. It further held that Tagunicar was not authorized to confirm the
bookings of, nor issue validation stickers to, herein petitioners and hence, Pan
Am and TWSI cannot be held responsible for her actions. Finally, it deleted
the award for actual damages for lack of proof.

Hence this petition based on the following assignment of errors:  slx mis

1. the Court of Appeals, in reversing the decision of the trial

court, misapplied the ruling in Nicos Industrial Corporation vs.
Court of Appeals, et. al. [206 SCRA 127]; and

2. the findings of the Court of Appeals that petitioners ticket

reservations in question were not confirmed and that there is no
agency relationship among PAN-AM, TWSI and Tagunicar are
contrary to the judicial admissions of PAN-AM, TWSI and
Tagunicar and likewise contrary to the findings of fact of the trial
court.

We affirm.

I. The first issue deserves scant consideration. Petitioners contend that

contrary to the ruling of the Court of Appeals, the decision of the trial court
conforms to the standards of an ideal decision set in Nicos Industrial
Corporation, et. al. vs. Court of Appeals, et. al.,  as "that which, with welcome
[4]

economy of words, arrives at the factual findings, reaches the legal

conclusions, renders its ruling and, having done so, ends." It is averred that
the trial courts decision contains a detailed statement of the relevant facts and
evidence adduced by the parties which thereafter became the bases for the
courts conclusions.

A careful scrutiny of the decision rendered by the trial court will show that after
narrating the evidence of the parties, it proceeded to dispose of the case with
a one-paragraph generalization, to wit:  Missdaa

"On the basis of the foregoing facts, the Court is constrained to

conclude that defendant Pan-Am is the principal, and
defendants TWSI and Tagunicar, its authorized agent and sub-
agent, respectively. Consequently, defendants Pan-Am, TWSI
 and Claudia Tagunicar should be held jointly and severally liable
to plaintiffs for damages. Defendant Julieta Canilao, who acted
in her official capacity as Office Manager of defendant TWSI
should not be held personally liable." [5]

The trial courts finding of facts is but a summary of the testimonies of the
witnesses and the documentary evidence presented by the parties. It did not
distinctly and clearly set forth, nor substantiate, the factual and legal bases for
holding respondents TWSI, Pan Am and Tagunicar jointly and severally liable.
In Del Mundo vs. CA, et al.   where the trial court, after summarizing the
[6]

conflicting asseverations of the parties, disposed of the kernel issue in just

two (2) paragraphs, we held: Sda adsc

"It is understandable that courts, with their heavy dockets and

time constraints, often find themselves with little to spare in the
preparation of decisions to the extent most desirable. We have
thus pointed out that judges might learn to synthesize and to
simplify their pronouncements. Nevertheless, concisely written
such as they may be, decisions must still distinctly and clearly
express, at least in minimum essence, its factual and legal
bases."

For failing to explain clearly and well the factual and legal bases of its award
of moral damages, we set it aside in said case. Once more, we stress that
nothing less than Section 14 of Article VIII of the Constitution requires that "no
decision shall be rendered by any court without expressing therein clearly and
distinctly the facts and the law on which it is based." This is demanded by the
due process clause of the Constitution. In the case at bar, the decision of the
trial court leaves much to be desired both in form and substance. Even while
said decision infringes the Constitution, we will not belabor this infirmity and
rather examine the sufficiency of the evidence submitted by the
petitioners. Rtc spped

II. Petitioners assert that Tagunicar is a sub-agent of TWSI while TWSI is a

duly authorized ticketing agent of Pan Am. Proceeding from this premise, they
contend that TWSI and Pan Am should be held liable as principals for the acts
of Tagunicar. Petitioners stubbornly insist that the existence of the agency
relationship has been established by the judicial admissions allegedly made
by respondents herein, to wit: (1) the admission made by Pan Am in its
Answer that TWSI is its authorized ticket agent; (2) the affidavit executed by
Tagunicar where she admitted that she is a duly authorized agent of TWSI;
and (3) the admission made by Canilao that TWSI received commissions from
ticket sales made by Tagunicar. Korte

We do not agree. 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)
[7]

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
[8]

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.
[9]

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 Tagunicars
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. Their infirmity as a species of
evidence is a matter of judicial experience and are thus considered inferior to
the testimony given in court.  Further, affidavits are not complete
[10]

reproductions of what the declarant has in mind because they are generally
prepared by the administering officer and the affiant simply signs them after
the same have been read to her.  Respondent Tagunicar testified that her
[11]

affidavit was prepared and typewritten by the secretary of petitioners lawyer,

Atty. Acebedo, who both came with Adrian Yu, son of petitioners, when the
latter went to see her at her office. This was confirmed by Adrian Yu who
testified that Atty. Acebedo brought his notarial seal and notarized the affidavit
of the same day.  The circumstances under which said affidavit was prepared
[12]

put in doubt petitioners claim that it was executed voluntarily by respondent

Tagunicar. It appears that the affidavit was prepared and was based on the
answers which respondent Tagunicar gave to the questions propounded to
her by Atty. Acebedo.  They never told her that the affidavit would be used in
[13]

a case to be filed against her.  They even assured her that she would not be
[14]

included as defendant if she agreed to execute the affidavit.  Respondent [15]

Tagunicar was prevailed upon by petitioners son and their lawyer to sign the
affidavit despite her objection to the statement therein that she was an agent
of TWSI. They assured her that "it is immaterial"  and that "if we file a suit
[16]

against you we cannot get anything from you."  This purported admission of
[17]

respondent Tagunicar cannot be used by petitioners to prove their agency

relationship. At any rate, even if such affidavit is to be given any probative
value, the existence of the agency relationship cannot be established on its
sole basis. The declarations of the agent alone are generally insufficient to
establish the fact or extent of his authority.  In addition, as between the
[18]

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
[19]

necessarily fail. Sclaw

We stress that respondent Tagunicar categorically denied in open court that

she is a duly authorized agent of TWSI, and declared that she is an
independent travel agent.  We have consistently ruled that in case of conflict
[20]

between statements in the affidavit and testimonial declarations, the latter

command greater weight. [21]
As further proofs of agency, petitioners call our attention to TWSIs Exhibits
"7", "7-A", and "8" which show that Tagunicar and TWSI received sales
commissions from Pan Am. Exhibit "7"  is the Ticket Sales Report submitted
[22]

by TWSI to Pan Am reflecting the commissions received by TWSI as an agent

of Pan Am. Exhibit "7-A"  is a listing of the routes taken by passengers who
[23]

were audited to TWSIs sales report. Exhibit "8"  is a receipt issued by TWSI
[24]

covering the payment made by Tagunicar for the tickets she bought from
TWSI. These documents cannot justify the deduction that Tagunicar was paid
a commission either by TWSI or Pan Am. On the contrary, Tagunicar testified
that when she pays TWSI, she already deducts in advance her commission
and merely gives the net amount to TWSI.  From all sides of the legal prism,
[25]

the transaction is simply a contract of sale wherein Tagunicar buys airline

tickets from TWSI and then sells it at a premium to her clients.  Sc lex

III. Petitioners included respondent Pan Am in the complaint on the

supposition that since TWSI is its duly authorized agent, and respondent
Tagunicar is an agent of TWSI, then Pan Am should also be held responsible
for the acts of respondent Tagunicar. Our disquisitions above show that this
contention lacks factual and legal bases. Indeed, there is nothing in the
records to show that respondent Tagunicar has been employed by Pan Am as
its agent, except the bare allegation of petitioners. The real motive of
petitioners in suing Pan Am appears in its Amended Complaint that
"[d]efendants TWSI, Canilao and Tagunicar may not be financially capable of
paying plaintiffs the amounts herein sought to be recovered, and in such
event, defendant Pan Am, being their ultimate principal, is primarily and/or
subsidiarily liable to pay said amounts to plaintiffs."  This lends credence to
[26]

respondent Tagunicars testimony that she was persuaded to execute an

affidavit implicating respondents because petitioners knew they would not be
able to get anything of value from her. In the past, we have warned that this
Court will not tolerate an abuse of the judicial process by passengers in order
to pry on international airlines for damage awards, like "trophies in a safari."
[27]

This meritless suit against Pan Am becomes more glaring with petitioners
inaction after they were bumped off in Tokyo. If petitioners were of the honest
belief that Pan Am was responsible for the misfortune which beset them, there
is no evidence to show that they lodged a protest with Pan Ams Tokyo office
immediately after they were refused passage for the flight to San Francisco,
or even upon their arrival in Manila. The testimony of petitioner Yu Eng Cho in
this regard is of little value, viz.:

"Atty. Jalandoni: x x x

q Upon arrival at the Tokyo airport, what did you do if any in

connection with your schedule[d] trip?

a I went to the Hotel, Holiday Inn and from there I immediately

called up Pan Am office in Tokyo to reconfirm my flight, but they
told me that our names were not listed in the manifest, so next
morning, very early in the morning I went to the airport, Pan Am
 office in the airport to verify and they told me the same and we
were not allowed to leave.

q You were scheduled to be in Tokyo for how long Mr. Yu?

a We have to leave the next day 29th.

q In other words, what was your status as a passenger?

a Transient passengers. We cannot stay there for more than 72

hours.

xxxxxxxxx

q As a consequence of the fact that you claimed that the Pan

Am office in Tokyo told you that your names were not in the
manifest, what did you do, if any?

a I ask[ed] them if I can go anywhere in the States? They told

me I can go to LA via Japan Airlines and I accepted it.

q Do you have the tickets with you that they issued for Los
Angeles?

a It was taken by the Japanese Airlines instead they issue[d] me

a ticket to Taipei.

xxxxxxxxx

q Were you able to take the trip to Los Angeles via Pan Am
tickets that was issued to you in lieu of the tickets to San
Francisco?

a No, sir.

q Why not?

a The Japanese Airlines said that there were no more available

seats.

q And as a consequence of that, what did you do, if any?

a I am so much scared and worried, so the Japanese

Airlines advised us to go to Taipei and I accepted it.

xxxxxxxxx

q Why did you accept the Japan Airlines offer for you to go to
Taipei?
 a Because there is no chance for us to go to the United States
within 72 hours because during that time Northwest Airlines
[was] on strike so the seats are very scarce. So they advised me
better left (sic) before the 72 hours otherwise you will have
trouble with the Japanese immigration.

q As a consequence of that you were force[d] to take the trip to

Taipei?

a Yes, sir."  (emphasis supplied)

[28]

It grinds against the grain of human experience that petitioners did not insist
that they be allowed to board, considering that it was then doubly difficult to
get seats because of the ongoing Northwest Airlines strike. It is also
perplexing that petitioners readily accepted whatever the Tokyo office had to
offer as an alternative. Inexplicably too, no demand letter was sent to
respondents TWSI and Canilao.  Nor was a demand letter sent to respondent
[29]

Pan Am. To say the least, the motive of petitioners in suing Pan Am is
suspect. x law

We hasten to add that it is not sufficient to prove that Pan Am did not allow
petitioners to board to justify petitioners claim for damages. Mere refusal to
accede to the passengers wishes does not necessarily translate into damages
in the absence of bad faith.  The settled rule is that the law presumes good
[30]

faith such that any person who seeks to be awarded damages due to acts of
another has the burden of proving that the latter acted in bad faith or with ill
motive.  In the case at bar, we find the evidence presented by petitioners
[31]

insufficient to overcome the presumption of good faith. They have failed to

show any wanton, malevolent or reckless misconduct imputable to respondent
Pan Am in its refusal to accommodate petitioners in its Tokyo-San Francisco
flight. Pan Am could not have acted in bad faith because petitioners did not
have confirmed tickets and more importantly, they were not in the passenger
manifest. Sc

In not a few cases, this Court did not hesitable to hold an airline liable for
damages for having acted in bad faith in refusing to accommodate a
passenger who had a confirmed ticket and whose name appeared in the
passenger manifest. In Ortigas Jr. v. Lufthansa German Airlines Inc.   we [32]

ruled that there was a valid and binding contract between the airline and its
passenger after finding that validating sticker on the passengers ticket had the
letters "O.K." appearing in the Res. Status box which means "space
confirmed" and that the ticket is confirmed or validated. In Pan American
World Airways Inc. v. IAC, et al.  where a would-be-passenger had the
[33]

necessary ticket, baggage claim and clearance from immigration all clearly
showing that she was a confirmed passenger and included in the passenger
manifest and yet was denied accommodation in said flight, we awarded
damages. In Armovit, et al. v. CA, et al.,  we upheld the award of damages
[34]

made against an airline for gross negligence committed in the issuance of

tickets with erroneous entries as to the time of flight. In Alitalia Airways v. CA,
et al.,  we held that when airline issues a ticket to a passenger confirmed on
[35]
a particular flight, on a certain date, a contract of carriage arises, and the
passenger has every right to expect that he would fly on that flight and on that
date. If he does not, then the carrier opens itself to a suit for breach of
contract of carriage. And finally, an award of damages was held proper in the
case of Zalamea, et al. v. CA, et al.,  where a confirmed passenger included
[36]

in the manifest was denied accommodation in such flight.  Scmis

On the other hand, the respondent airline in Sarreal, Sr. v. Japan Airlines Co.,
Ltd.,   was held not liable for damages where the passenger was not allowed
[37]

to board the plane because his ticket had not been confirmed. We ruled that
"[t]he stub that the lady employee put on the petitioners ticket showed among
other coded items, under the column "status" the letters "RQ" which was
understood to mean "Request." Clearly, this does not mean a confirmation but
only a request. JAL Traffic Supervisor explained that it would have been
different if what was written on the stub were the letter "ok" in which case the
petitioner would have been assured of a seat on said flight. But in this case,
the petitioner was more of a wait-listed passenger than a regularly booked
passenger." Mis sc

In the case at bar, petitioners ticket were on "RQ" status. They were not
confirmed passengers and their names were not listed in the passenger
manifest. In other words, this is not a case where Pan Am bound itself to
transport petitioners and thereafter reneged on its obligation. Hence,
respondent airline cannot be held liable for damages.  Mis spped

IV. We hold that respondent Court of Appeals correctly ruled that the tickets
were never confirmed for good reasons: (1) The persistent calls made by
respondent Tagunicar to Canilao, and those made by petitioners at the
Manila, Hongkong and Tokyo offices of Pan Am, are eloquent indications that
petitioners knew that their tickets have not been confirmed. For, as correctly
observed by Pan Am, why would one continually try to have ones ticket
confirmed if it had already been confirmed? (2) The validation stickers which
respondent Tagunicar attached to petitioners tickets were those intended for
the exclusive use of airline companies. She had no authority to use them.
Hence, said validation stickers, wherein the word "OK" appears in the status
box, are not valid and binding. (3) The names of petitioners do not appear in
the passenger manifest. (4) Respondent Tagunicars "Exhibit 1"  shows that
[38]

the status of the San Francisco-New York segment was "Ok", meaning it was
confirmed, but that the status of the Tokyo-San Francisco segment was still
"on request". (5) Respondent Canilao testified that on the day that petitioners
were to depart for Hongkong, respondent Tagunicar called her from the
airport asking for confirmation of the Tokyo-San Francisco flight, and that
when she told respondent Tagunicar that she should not have allowed
petitioners to leave because their tickets have not been confirmed,
respondent Tagunicar merely said "Bahala na."  This was never controverted
[39]

nor refuted by respondent Tagunicar. (6) To prove that it really did not confirm
the bookings of petitioners, respondent Canilao pointed out that the validation
stickers which respondent Tagunicar attached to the tickets of petitioners had
IATA No. 2-82-0770 stamped on it, whereas the IATA number of TWSI is 28-
30770. [40]
Undoubtedly, respondent Tagunicar should be liable for having acted in bad
faith in misrepresenting to petitioners that their tickets have been confirmed.
Her culpability, however, was properly mitigated. Petitioner Yu Eng Cho
testified that he repeatedly tried to follow up on the confirmation of their tickets
with Pan Am because he doubted the confirmation made by respondent
Tagunicar.  This is clear proof that petitioners knew that they might be
[41]

bumped off at Tokyo when they decided to proceed with the trip. Aware of this
risk, petitioners exerted efforts to confirm their tickets in Manila, then in
Hongkong, and finally in Tokyo. Resultantly, we find the modification as to the
amount of damages awarded just and equitable under the
circumstances. Spped

WHEREFORE, the decision appealed from is hereby AFFIRMED. Cost

against petitioners. Jo spped

SO ORDERED.

Davide, Jr., C.J., (Chairman), Kapunan, and Pardo, JJ., concur.

Ynares-Santiago, J., no part.

[1]
 Penned by Associate Justice Antonio M. Martinez, with Consuelo Ynares-Santiago and Ruben T.
Reyes, JJ., concurring; Rollo, 35-49.
[2]
 Ibid., 51.
[3]
 Original Records, 647-650.
[4]
 206 SCRA 127 (1992).
[5]
 Original Record, 650.
[6]
 240 SCRA 348 (1995).
[7]
 New Civil Code, Article 1868.
[8]
 Tolentino, Civil Code of the Phils., Vol. V, 1992 ed., p. 396.
[9]
 BA Finance v. CA, et al., 211 SCRA 112 (1992).
[10]
 People v. Diaz, 262 SCRA 723 (1996).
[11]
 People v. Gondora, 265 SCRA 408 (1996).
[12]
 TSN, December 16, 1982, pp. 17-19.
[13]
 TSN, September 29, 1983, pp. 12-13.
[14]
 TSN, December 16, 1982, p. 17.
[15]
 TSN, September 29, 1983, pp. 16-17.
[16]
 TSN, July 22, 1983, p. 43.
[17]
 Ibid., p. 38.
[18]
 Reuschlein & Gregory, The Law of Agency and Partnership, 1990, Second ed., p. 28; BA
Finance v. CA, et al., 211 SCRA 112 (1992).
[19]
 Martinez v. NLRC, et al., 272 SCRA 793 (1997).
[20]
 TSN, July 22, 1983, p. 44; August 12, 1983, pp. 6-7.
[21]
 People v. Aliposa, 263 SCRA 471 (1996).
[22]
 Original Records, p. 448.
[23]
 Ibid., 449.
[24]
 Ibid., 450.
[25]
 TSN, July 22, 1983, p. 50.
[26]
 Original Records, p. 46.
[27]
 Alitalia Airways vs. CA, et al., 187 SCRA 763 (1990).
[28]
 TSN, August 20, 1981, pp. 18-28.
[29]
 TSN, November 23, 1983, p. 35.
[30]
 Air France v. CA, et al., 171 SCRA 399 (1989).
[31]
 Ford Phils., Inc. v. CA, et al., 267 SCRA 320 (1997).
[32]
 64 SCRA 610 (1975).
[33]
 153 SCRA 521 (1987).
[34]
 184 SCRA 476 (1990).
[35]
 187 SCRA 763 (1990).
[36]
 228 SCRA 23 (1993).
[37]
 207 SCRA 359 (1992).
[38]
 Original Records, p. 292.
[39]
 TSN, November 23, 1983, pp. 29-31.
[40]
 Ibid., p. 14.
[41]
 TSN, August 27, 1981, p. 42.