G.R. No. 185891; June 26, 2013
CATHAY PACIFIC AIRWAYS, Petitioner, vs. JUANITA REYES, WILFREDO REYES, MICHAEL ROY REYES, SIXTA LAPUZ, and SAMPAGUITA TRAVEL CORP., Respondents.

FACTS

Respondents, the Reyes family and Sixta Lapuz, booked a round-trip flight to Australia through Sampaguita Travel Corp., using Cathay Pacific Airways. Their outbound flight was uneventful. One week before their scheduled return, Wilfredo Reyes reconfirmed their bookings with Cathay Pacific in Adelaide and was advised they were “still okay as scheduled.” However, upon checking in for their return flight, they were informed only Lapuz had a confirmed reservation. They were allowed to board the flight to Hong Kong but were denied boarding on the connecting flight to Manila, as it was fully booked. Only Lapuz could proceed. The family was stranded overnight and flew home the next day.
Cathay Pacific, in its defense, claimed the confusion stemmed from multiple and conflicting bookings made through two travel agencies. It asserted that for some passengers, the return bookings were either not properly ticketed within the prescribed period or were made using a system function (MK status) that did not create a confirmed reservation. Cathay Pacific argued it had the right to cancel bookings not properly ticketed and filed a cross-claim against Sampaguita Travel.

ISSUE

Whether Cathay Pacific Airways is liable for damages arising from the breach of contract of carriage when it denied the respondents boarding on their confirmed return flight.

RULING

Yes, Cathay Pacific is liable. The Supreme Court affirmed the lower courts’ findings that a contract of carriage existed for the entire round-trip journey upon the issuance of the tickets. The petitioner failed to overcome the presumption of negligence imposed upon a common carrier. Cathay Pacific’s own evidence showed that a confirmed booking for the return flight existed under Passenger Name Record (PNR) J76TH for Wilfredo Reyes. Its cancellation due to alleged non-ticketing was an internal matter between the carrier and its agent, Sampaguita Travel. The passenger, having paid for the ticket and received a reconfirmation directly from Cathay Pacific, had the right to rely on the validity of his booking.
The Court emphasized that the relationship of agency between Cathay Pacific and Sampaguita Travel does not absolve the carrier of liability to the passengers. As the principal, Cathay Pacific is responsible for the acts of its agent within the scope of its authority. The negligence of Sampaguita Travel in handling the bookings is imputable to Cathay Pacific. The breach of contract caused the respondents mental anguish, serious anxiety, and physical inconvenience, warranting an award of moral and exemplary damages, as well as attorney’s fees. The actual damages awarded were also sustained, covering the family’s necessary expenses during the unexpected delay.