G.R. No. 125138 March 2, 1999
NICHOLAS Y. CERVANTES, petitioner, vs. COURT OF APPEALS AND THE PHILIPPINE AIR LINES, INC., respondent.

FACTS

Petitioner Nicholas Cervantes was issued a round-trip plane ticket by Philippine Airlines (PAL) with a one-year validity, expiring on March 27, 1990. The ticket was issued pursuant to a Compromise Agreement resolving prior litigation. On March 23, 1990, four days before expiry, Cervantes used the ticket for his outbound flight. In Los Angeles, he booked a confirmed return flight for April 2, 1990. He later arranged with PAL to board the same flight in San Francisco instead. However, upon check-in in San Francisco on April 2, 1990, PAL personnel refused him boarding, noting on his ticket that it was not accepted due to expiration of validity.
Cervantes filed a complaint for damages for breach of contract of carriage. Both the Regional Trial Court and the Court of Appeals dismissed his complaint. The appellate court affirmed the dismissal, prompting this petition for review.

ISSUE

The primary issue is whether the act of PAL agents in confirming the petitioner’s flights extended the validity period of his expired ticket.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The ticket constituted the contract of carriage, and its terms, particularly the clear one-year validity period ending March 27, 1990, were binding. The confirmation of flights by PAL agents in Los Angeles and San Francisco did not amend this contract or extend the ticket’s validity.
Crucially, the agents who confirmed the flights acted beyond the scope of their authority. Under Article 1898 of the Civil Code, acts of an agent beyond his authority do not bind the principal unless ratified. The Court found that Cervantes was aware from the outset that the ticket would expire and that a formal written request to PAL’s legal department in the Philippines was necessary for any extension. Since he knew the agents lacked the authority to grant an extension, he could not hold PAL liable based on their unauthorized confirmations. The defense of lack of authority was properly considered, as it pertained to PAL’s capacity to act through its agents, which is a substantive matter not waived under procedural rules.
Furthermore, the denial of damages was proper. No bad faith or willful injury on PAL’s part was established. The breach was not wanton or fraudulent but stemmed from the petitioner’s use of an expired ticket despite his knowledge of the expiry and the proper procedure for extension. Consequently, claims for moral, exemplary, and actual damages, as well as attorney’s fees, could not be awarded.