Facts:

Yu Eng Cho is the owner of Young Hardware Co. and Achilles Marketing. In connection to his
business, he travels to Malaysia, Taipei, and Hong Kong. On 1976 July 10, Cho bought tickets
from Tagunicar who represented herself as an agent of Tourist World Services, Inc – however,
Tagunicar was only a travel solicitor who assisted passengers with their documents. TWSI
destinations are Hong Kong, Tokyo, San Francisco, for PhP 25,000. The purpose of the purchase
of tickets to New Jersey was to buy two lines of infrared heating system processing textured
plastic article.

On the said date, only the flight from Manila to Hong Kong to Tokyo were confirmed. The flight
from Tokyo to San Francisco was on request. Per instruction of Tagunicar, Cho returned after a
few dats fro the confirmation of the Tokyo-San Francisco segment. Tagunicar informed the CHos
that their flight were confirmed and attached the confirmation stickers on their tickets.

1978 July 23, the Chos left for Hong Kong and stayed their for five days. Upon their arrival at
Tokyo, they called the Pan-Am office for confirmation of their flight to San Francisco. However,
they were informed that their names were not included in the manifest. Since the Chos could not
stay for more than 72 hours in Tokyo, they were then forced to fly to Taipei.

Upon reaching Taipei, there were not flights available, the Chos were then forced to fly back to
Manila. Because of the Chos’s failure to aarive at the Radiant Heat Enterprise’s premises, the
company cancelled Chos’s option to purchase the two lines of infrared heating systems. This lead
to Cho being unable to realizes a profit of PhP 300,000 to PhP 400,000.

The Chos’s then filed a case holding Pan-Am liable as principals for the actions of Tagunicar.

Issues:
Whether TWSI is a duly authorized ticketing agent of Pan-Am
Whether Tagunicar is a sub-agent of TWSI

Held:
No. In a contract of agency, a person binds himself to render some service or to do something in
representation or on behalf of another, with the consent or authority of the latter.

Elements of agency are:

1. Consent of the parties to establish the relationship
2. Object is the execution of the juridical act in relation to a third person
3. Agent acts as a representative and not for himself
4. Agent acts within the scope of his authority.

The Court upon taking scrutiny of the facts found that Tagunicar was only engaged in a contract of sale.
Tagunicar when she pays TWSI, she deducts her commissions in advance and gives the net amount. There
was nothing in the records to show that Tagunicar was employed by Pan Am as its agent except the bare
allegations of the petitioner.