Shasha purchased an airline ticket from Sea Airlines (SAL) covering Manila-Bangkok- Hanoi-Manila. The ticket was exclusively endorsable to Siam Airlines (SMA). The contract of air transportation was between Shasha and SAL, with the latter endorsing to SMA the Hanoi-Manila segment of the journey. All her flights were confirmed by SAL before she left Manila. Shasha took the flight from Manila to Bangkok on board SAL using the ticket. When she arrived in Bangkok, she went to the SAL ticket counter and confirmed her return trip from Hanoi to Manila on board SMA Flight No. SA 888. On the date of her return trip, she checked in for SMA Flight No. SA 888, boarded the plane, and before she could even settle in on her assigned seat, she was off-loaded and treated rudely by the crew. She lost her luggage and missed an important business meeting. She thereafter filed a complaint solely against SAL and argued that it was solidarily liable with SMA for the damages she suffered since the latter was only an agent of the former.
(a) Should either, or both, SAL and SMA be held liable for damages that Shasha suffered? (2.5%)
(b) Assuming that one is an agent of the other, is the agency coupled with interest? (2.5%)
Suggested Answer:
(a) Only SAL may be held liable. Answer
Under jurisprudence, the obligation of the ticket-issuing airline remained and did not cease, regardless of the fact that another airline had undertaken to carry the passengers to one of their destinations. Further, the endorsee-airline is considered as the agent of the ticket-issuing airline which is the principal. Accordingly, the ticket-issuing airline as the principal assumes liability for the acts of its agent, the endorsee-airline. Rule
In the case at bar, SAL is a principal and SMA is its agent. When SAL endorsed Sasha to SMA, SAL as the principal assumes liability for acts of its agent, SMA. Apply
Thus, only SAL may be held liable for damages that Shasha suffered. Conclusion
(b) Yes. Answer
Under the Civil Code and jurisprudence, when an agency is established for both the principal and the agent, an agency coupled with an interest is created and the principal cannot revoke the agency at will. Rule
In the case at bar, if one is an agent of the other, then the agency is coupled with interest as it is established for both the principal and agent. That is to say, both principal and agent may benefit or experience loss resulting from the contract, such as fees or payments due to either of them. Apply
Thus, the agency is coupled with interest if one is an agent of the other. Conclusion
