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Infante vs.

Cunanan Spouses Fernando Viloria and Lourdes Viloria vs

G.R L- 5180 August 31, 1953 Continental Airlines, Inc.
Bautista Angelo, J:
In 1997, while the spouses Viloria were in the United
Infante was the owner of the land with a house built States, they approached Holiday Travel, a travel
on it. Cunanan and Mijares were contracted to sell agency working for Continental Airlines, to purchase
the property from which they would receive tickets from Newark to San Diego. The travel agent,
commission. Noche agreed to purchase the lot but Margaret Mager, advised the couple that they cannot
Infante informed C & M about her change of mind to travel by train because it was already fully booked;
sell the lot and had them sign a document stating
that they must purchase plane tickets for Continental
that their authority to sell was already cancelled.
Airlines; that if they won’t purchase plane tickets;
Subsequently, Infante sold the lot & house to Noche.
Defendants herein demanded for their commission. they’ll never reach their destination in time. The
RTC ordered Infante to pay commission. CA couple believed Mager’s representations and so they
affirmed. purchased two plane tickets worth $800.00.

Issue: Later however, the spouses found out that the train
trip wasn’t really fully booked and so they purchased
Whether or not petitioner was duty bound to pay train tickets and went to their destination by train
commission notwithstanding that authority to sell instead. Then they called up Mager to request for a
has been cancelled. refund for the plane tickets. Mager referred the
couple to Continental Airlines. As the couple were
Ruling: now in the Philippines, they filed their request with
Continental Airline’s office in Ayala. The spouses
Viloria alleged that Mager misled them into believing
A principal may withdraw the authority given to an
that the only way to travel was by plane and so they
agent at will. But respondents agreed to cancel the
were fooled into buying expensive plane tickets.
authority given to them upon assurance by
petitioner that should property be sold to Noche,
Continental Airlines refused to refund the amount of
they would be given commission.
the tickets and so the spouses sued the airline
company. In its defense, Continental Airlines claimed
That petitioner had changed her mind even if that the tickets sold to them by Mager were non-
respondents had found a buyer who was willing to refundable; that, if any, they were not bound by the
close the deal, is a matter that would give rise to a misrepresentations of Mager because there’s no
legal consequence if respondents agree to call off to contract of agency existing between Continental
transaction in deference to the request of the Airlines and Mager.
petitioner. Petitioner took advantage of the services
of respondents, but believing that she could evade The trial court ruled in favor of spouses Viloria but
payment of their commission, she made use of a the Court of Appeals reversed the ruling of the RTC.
ruse by inducing them to sign the deed of
cancellation. This act of subversion cannot be ISSUE: Whether or not a contract of agency exists
sanctioned and cannot serve as basis for petitioner between Continental Airlines and Mager.
to escape payment of the commissions agreed upon.
HELD: Yes. All the elements of agency are present,
to wit:

1. there is consent, express or implied

of the parties to establish the
2. the object is the execution of a
juridical act in relation to a third
3. the agent acts as a representative
and not for himself, and
4. 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 estoppel.
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 Travel’s
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.