CERVANTES VS CA FACTS: PAL issued to Cervantes a round trip ticket for Manila-Honolulu-Los Angeles-Honolulu-Manila.

This ticket expressly provide an expiry date of 1 year from issuance or until March 27, 1990. The ticket was issued in compliance w/ a Compromise Agreement entered between PAL & Cervantes in 2 previous suits between them. On March 3, 1990, $ days before the expiry date, Cervantes used it. Upon his arrival to LA, on the same day, he immediately booked his LA-Manila return ticket w/ PAL office which was confirmed for April 2, 1990 flight. Cervantes learned that the same PAL plane would make a stop-over in San Francisco and because he would be in San Francisco on April 2, 1990, he made arrangements w/ PAL for him to board the flight in San Francisco instead of boarding it in LA. When Cervantes checked in at PAL counter in San Francisco he was not allowed to board. PAL personnel made a notation on his ticket TICKET NOT ACCEPTED DUE TO EXPIRATION OF VALIDITY . Aggrieved, Cervantes filed a complaint for damages for Breach of Contract of Carriage. The RTC dismissed the complaint w/c was upheld by the CA. ISSUE: 1. WON the act of the PAL agents in confirming the ticket of Cervantes extended the period of validity. RULING: The SC ruled in the negative. The plane ticket itself provides that it is not valid after March 27, 1990. It is also stipulated in paragraph 8 of the Conditions of Contract that 8. This ticket is good for carriage for one year from date of issue, except as otherwise provided in this ticket, in carrier's tariffs, conditions of carriage, or related regulations. The fare for carriage hereunder is subject to change prior to commencement of carriage. Carrier may refuse transportation if the applicable fare has not been paid. 6 In the case of Lufthansa vs. Court of Appeals, the SC held that the "ticket constitute the contract between the parties. It is axiomatic that when the terms are clear and leave no doubt as to the intention of the contracting parties, contracts are to be interpreted according to their literal meaning." In his effort to evade this inevitable conclusion, petitioner theorized that the confirmation by the PAL's agents in Los Angeles and San Francisco changed the compromise agreement between the parties. As aptly by the appellate court: . . . on March 23, 1990, he was aware of the risk that his ticket could expire, as it did, before he returned to the Philippines.' The 2 personnel from PAL did not have an authority to extend the validity of the ticket. Cervantes knew this from the start when he called up the Legal Department of appellee in the Philippines before he left for the United States of America. He had first hand knowledge that the ticket in question would expire on March 27, 1990 and that to secure an extension, he would have to file a written request for extension at the PAL's office in the Philippines. ). Despite this knowledge, he persisted to use the ticket in question." Since the PAL agents are not privy to the said Agreement and Cervantes knew that a written request to the legal counsel of PAL was necessary, he cannot use what the PAL agents did to his advantage. The said agents, according to the Court of Appeals, 10 acted without authority when they confirmed the flights of the petitioner. Under Article 1989 11 of the New Civil Code, the acts an agent beyond the scope of his authority do not bind the principal, unless the latter ratifies the same expressly or impliedly. Furthermore, when the third person (herein petitioner) knows that the agent was acting beyond his power or authority, the principal cannot be held liable for the acts of the agent. If the said third person is aware of such limits of authority, he is to blame, and is not entitled to recover damages from the agent, unless the latter undertook to secure the principal's ratification. 12