Spouses Fernando Viloria and Lourdes Viloria vs Continental Airlines, Inc.

In 1997, while the spouses Viloria were in the United States, they approached Holiday Travel, a travel agency working for Continental Airlines, to purchase tickets from Newark to San Diego. The travel agent, Margaret Mager, advised the couple that they cannot travel by train because it is fully booked; that they must purchase plane tickets for Continental Airlines; that if they wont purchase plane tickets; theyll never reach their destination in time. The couple believed Magers representations and so they purchased two plane tickets worth $800.00. Later however, the spouses found out that the train trip isnt fully booked and so they purchased train tickets and went to their destination by train instead. Then they called up Mager to request for a refund for the plane tickets. Mager referred the couple to Continental Airlines. As the couple are now in the Philippines, they filed their request with Continental Airlines office in Ayala. The spouses Viloria alleged that Mager misled them into believing that the only way to travel was by plane and so they were fooled into buying expensive tickets. Continental Airlines refused to refund the amount of the ticket and so the spouses sued the airline company. In its defense, Continental Airlines claimed that the ticket sold to them by Mager is non-refundable; that, if any, they are not bound by the misrepresentations of Mager because theres no agency existing between Continental Airlines and Mager. The trial court ruled in favor of spouses Viloria but the Court of Appeals reversed the ruling of the RTC. ISSUE: Whether or not a contract of agency exists between Continental Airlines and Mager. HELD: Yes. All the elements of agency are present, to wit:

there is consent, express or implied of the parties to establish the relationship; the object is the execution of a juridical act in relation to a third person; the agent acts as a representative and not for himself, and the agent acts within the scope of his authority. The first and second elements are present as Continental Airlines does not deny that it concluded an agreement with Holiday Travel to which Mager is part of, whereby Holiday Travel would enter into contracts of carriage with third persons on the airlines behalf. The third element is also present as it is undisputed that Holiday Travel merely acted in a representative capacity and it is Continental Airlines and not Holiday Travel who is bound by the contracts of carriage entered into by Holiday Travel on its behalf. The fourth element is also present considering that Continental Airlines has not made any allegation that Holiday Travel exceeded the authority that was granted to it. Continental Airlines also never questioned the validity of the transaction between Mager and the spouses. Continental Airlines is therefore in estoppels. Continental Airlines cannot be allowed to take an altogether different position and deny that Holiday Travel is its agent without condoning or giving imprimatur to whatever damage or prejudice that may result from such denial or retraction to Spouses Viloria, who relied on good faith on Continental Airlines acts in recognition of Holiday Travels authority. Estoppel is primarily based on the doctrine of good faith and the avoidance of harm that will befall an innocent party due to its injurious reliance, the failure to apply it in this case would result in gross travesty of justice.

FELIMON MANGUIOB, Petitioner, - versus - JUDGE PAUL T. ARCANGEL, RTC, BRANCH 12, DAVAO CITY and ALEJANDRA VELASCO, Respondents. The Facts 1. That, the plaintiff and defendant established a Partnership on May 3, 1994 to engage in the Buy and Sell of Agricultural products and operation of a General Merchandise Store at Baculin, Baganga, Davao Oriental, and for which purpose the parties executed an Articles of Partnership, a copy of which is attached to the complaint as Annex A thereof; 2. That, the partnership has ceased to operate and [for] all intents and purposes considered dissolved as of September 14, 1994; 3. That, as per records submitted by the defendant, from May 8, 1994 to September 9, 1994 the amount of copra purchased is1,261,418.45 as shown in the statement, a copy of which is hereto attached or Annex A hereof; 4. That, from May 31, 1994 up to September 10, 1994, the total copra sales amounted to 1,430,904.40, net of hauling expenses, as shown in the statement attached hereto and marked as Annex B hereof; 5. That, from May 1994 to September 14, 1994 the total sales of General Merchandise as per records of defendant is 930,640.50 as shown in the statement hereto attached as Annex C hereof; The RTC found that the capital contributed by Velasco to the partnership was 400,000.00, as established by clear, convincing, and competent evidence.[17] Anent the second issue, the RTC averred that while Velasco may have received the proceeds of the sales of copra from May 31, 1994 to August 24, 1994, such proceeds were returned to Manguiob to be used in the purchase of more copra and other merchandise for their business, as evidenced by receipts[18] signed by Manguiob or his wife. Thus, the RTC said that except for the proceeds of the sales of copra on September 10, 1994, in the amount of 116,954.40, all the proceeds of the sales of copra were either retained by, or returned to, [Manguiob].[19] As for the net profit

earned by the partnership, the RTC proclaimed that it was 191,999.98, as declared by Manguiobs own accountant. Thus, the RTC ruled that Velasco was entitled to the amount of 498,245.52 representing her capital contribution less the proceeds from the copra sales made on September 10, 1994, which she retained, plus her 60% share in the net profit.[20] On August 31, 2001, the Court of Appeals modified the RTCs decision with respect to the amount due Velasco, the rate of interest imposable, and the award of attorneys fees. The Appellant is obliged to pay to Appellee the amount of 401,640.97 with interest thereon at the rate of 6% per annum computed from the time the Court a quos Decision and, an interest at the rate of 12 per annum from the time of the finality of this Decision up to the time that the obligation of the Appellant to pay Appellee is paid in full. The award of attorneys fees is deleted.

LOADMASTERS CUSTOMS SERVICES, INC., vs. GLODEL BROKERAGE CORPORATION and R&B INSURANCE CORPORATION, / G.R. No. 179446 / January 10, 2011
FACTS: The case is a petition for review on certiorari under Rule 45 of the Revised Rules of Court assailing the August 24, 2007 Decision of the Court of Appeals (CA) in CA-G.R. CV No. 82822. On August 28, 2001, R&B Insurance issued Marine Policy No. MN-00105/2001 in favor of Columbia to insure the shipment of 132 bundles of electric copper cathodes against All Risks. On August 28, 2001, the cargoes were shipped on board the vessel "Richard Rey" from Isabela, Leyte, to Pier 10, North Harbor, Manila. They arrived on the same date. Columbia engaged the services of Glodel for the release and withdrawal of the cargoes from the pier and the subsequent delivery

to its warehouses/plants. Glodel, in turn, engaged the services of Loadmasters for the use of its delivery trucks to transport the cargoes to Columbias warehouses/plants in Bulacan and Valenzuela City. The goods were loaded on board twelve (12) trucks owned by Loadmasters, driven by its employed drivers and accompanied by its employed truck helpers. Of the six (6) trucks route to Balagtas, Bulacan, only five (5) reached the destination. One (1) truck, loaded with 11 bundles or 232 pieces of copper cathodes, failed to deliver its cargo. Later on, the said truck, was recovered but without the copper cathodes. Because of this incident, Columbia filed with R&B Insurance a claim for insurance indemnity in the amount ofP1,903,335.39. After the investigation, R&B Insurance paid Columbia the amount ofP1,896,789.62 as insurance indemnity. R&B Insurance, thereafter, filed a complaint for damages against both Loadmasters and Glodel before the Regional Trial Court, Branch 14, Manila (RTC), It sought reimbursement of the amount it had paid to Columbia for the loss of the subject cargo. It claimed that it had been subrogated "to the right of the consignee to recover from the party/parties who may be held legally liable for the loss." On November 19, 2003, the RTC rendered a decision holding Glodel liable for damages for the loss of the subject cargo and dismissing Loadmasters counterclaim for damages and attorneys fees against R&B Insurance. Both R&B Insurance and Glodel appealed the RTC decision to the CA. On August 24, 2007, the CA rendered that the appellee is an agent of appellant Glodel, whatever liability the latter owes to appellant R&B Insurance Corporation as insurance indemnity must likewise be the amount it shall be paid by appellee Loadmasters. Hence, Loadmasters filed the present petition for review on certiorari. ISSUE: Whether or not Loadmasters and Glodel are common carriers to determine their liability for the loss of the subject cargo.

RULING: The petition is PARTIALLY GRANTED. Judgment is rendered declaring petitioner Loadmasters Customs Services, Inc. and respondent Glodel Brokerage Corporation jointly and severally liable to respondent Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or associations engaged in the business of carrying or transporting passenger or goods, or both by land, water or air for compensation, offering their services to the public. Loadmasters is a common carrier because it is engaged in the business of transporting goods by land, through its trucking service. It is a common carrier as distinguished from a private carrier wherein the carriage is generally undertaken by special agreement and it does not hold itself out to carry goods for the general public. Glodel is also considered a common carrier within the context of Article 1732. For as stated and well provided in the case of Schmitz Transport & Brokerage Corporation v. Transport Venture, Inc., a customs broker is also regarded as a common carrier, the transportation of goods being an integral part of its business. Loadmasters and Glodel, being both common carriers, are mandated from the nature of their business and for reasons of public policy, to observe the extraordinary diligence in the vigilance over the goods transported by them according to all the circumstances of such case, as required by Article 1733 of the Civil Code. When the Court speaks of extraordinary diligence, it is that extreme measure of care and caution which persons of unusual prudence and circumspection observe for securing and preserving their own property or rights. With

respect to the time frame of this extraordinary responsibility, the Civil Code provides that the exercise of extraordinary diligence lasts from the time the goods are unconditionally placed in the possession of, and received by, the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them. The Court is of the view that both Loadmasters and Glodel are jointly and severally liable to R & B Insurance for the loss of the subject cargo. Loadmasters claim that it was never privy to the contract entered into by Glodel with the consignee Columbia or R&B Insurance as subrogee, is not a valid defense. For under ART. 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or omissions, but also for those of persons for whom one is responsible. xxxx Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry. It is not disputed that the subject cargo was lost while in the custody of Loadmasters whose employees (truck driver and helper) were instrumental in the hijacking or robbery of the shipment. As employer, Loadmasters should be made answerable for the damages caused by its employees who acted within the scope of their assigned task of delivering the goods safely to the warehouse. Glodel is also liable because of its failure to exercise extraordinary diligence. It failed to ensure that Loadmasters would fully comply with the undertaking to safely transport the subject cargo to the designated

destination. Glodel should, therefore, be held liable with Loadmasters. Its defense of force majeure is unavailing. For the consequence, Glodel has no one to blame but itself. The Court cannot come to its aid on equitable grounds. "Equity, which has been aptly described as a justice outside legality, is applied only in the absence of, and never against, statutory law or judicial rules of procedure." The Court cannot be a lawyer and take the cudgels for a party who has been at fault or negligent.