On  March 3, 1949,  the National  Airports  Corporation (hereinafter referred to as the lessor) and Leopoldo Prieto entered  into a concession contract  (Exhibit A), whereby the latter  was granted the  exclusive rights to establish, operate,  conduct  and  maintain  a Snack Bar  within  the International Airport, in the municipality  of  Parañaque, province of Rizal, for a period of two  (2)  years from March IS,  1949,  in  consideration of a monthly rental of P300,  plus a royalty of three per centum (3%) of the gross sales  and  the  telephone, electrical  and water charges. Alleging that Prieto wag delinquent in the payment of said rentals,  royalties  and  charges,  on  October 27, 1949,  the lessor instituted this action for  the recovery of P2,777.61, with interest and costs.  In his answer to  the complaint, Prieto alleged a breach of contract on the part of the lessor, upon the ground that it had allowed the establishment, in a building of the Philippine Air Lines,  Inc. (hereinafter referred to as the PAL) to which the International Airport was leased, for the operation of its airline business of a store engaged in the same business which was the exclusive right of Prieto to do, under his aforementioned concession, and that he, accordingly, had suffered damages, which he prayed, by way of counterclaim, that the lessor be sentenced to indemnify.  Thereafter, the lessor filed against the PAL a third-party complaint, stating that said store in the PAL premises had been opened and maintained by the PAL without  the knowledge and consent of the lessor and in violation of the rules and regulations, governing commercial activity within  the area of said. airport, which  are binding to the  PAL, and that, consequently,  Prieto had sued the lessor  for damages resulting from breach of his concession, and  praying that the PAL be sentenced to pay to the lessor such amount as the latter may be required to indemnify Prieto, should he obtain a favorable judgment on his counterclaim.  Answering the third-party complaint, the PAL asserted that it had authority to permit, and did permit, the operation of the store in question within its premises in the International Airport; that the lessor had consented thereto; and  that, at any  rate, said store had been opened  and run by the PAL Cooperative Association, a corporation distinct and different from the PAL, which is not responsible for the acts  of said association.  In due course, the Court of First Instance of Manila rendered a decision the dispositive part of which reads as follows:

"En vista de todo lo expuesto, el Juzgado dicta sentoncia:

"(a) gobreseyendo Ja  demanda contra el demandado;
"(b) condenando a Ja demandante National Airports Corporation
a pagar al demandado Leopoldo Prieto la cantidad de P7,823.16, en concepto de danos y perjuicios, y  las costas; y
"(c) condenando a la tercera parte demaadada Philippine Airlines, Inc. a pagar  a la  demandante  National Airports Corporation la referida. eantidad  de P7,823.16, eon las costas."

On appeal taken by the PAL, this decision was affirmed by the Court of Appeals. The PAL  now seeks a review, by certiorari, of the decision of the latter court.

It is not disputed that the  lessor is guilty of breach of its contract with Prieto; that Prieto had, by reason of the operation of the cooperative store, sustained damages which, after deducting  the balance of the rentals and the telephone, electric and water charges due from him, amount to the sum stated in the decisions of the court of first instance  and the Court of Appeals;  and that the lessor should indemnify said amount.  The  only issue for determination  in  this  appeal is whether the lessor is entitled to, reimbursement from the PAL.. The latter maintains the negative, upon two  (2) grounds, namely:  (1)  that the. lessor had consented to the establishment  and operation of said  cooperative store; and  (2)  that  the same  was organized  and maintained  by, and  belongs to, the  PAL Cooperative  Association,  not  the PAL, which  is separate and independent from said association.  We find no merit in this pretense.

To begin with, the Court of Appeals said in its decision:

"The allogations that the store of the  PAL Cooperative was opened only after proper authority  therefor  had been  obtained is untenable.  On this point Zosa testified:

'A. I went to see Col. Villamor, who was then the general manager of the National Airports Corporation, and talked to him and told him  about  the intention of  these boys in  having  or  forming  a cooperative  association, and he said it was a very good idea and to go ahead with it, and that they arc supposed to follow the paper work, and I wrote him a letter  also about requesting permission to construct in our compound a building for' the use of these boys, which was promised by the management and that they were going to avail themselves of the space for their use.'   (t. s.  n. p. 137) The letter which he sent to the  National Airports for the purpose was never answered."

In other words, said appellate court held that the lessor's alleged consent to the creation and operation of the  cooperative store had not been proved.   Apart from being conclusive upon us, this finding appears to be fully supported by the record.   Indeed, it is admitted that, as early, as  February 28, 1949, the lessor had written to the PAL a letter stating that  the  cooperative store should be closed because it violated existing rules and regulations. Instead of being surprised at  the attitude of the lessor as the PAL would have logically reacted, had it secured the lessor's consent to the opening of the cooperative store and of reminding the lessor  of its aforementioned consent, had it really been given, and of the  inconsistency thereof with its  aforesaid attitude, the PAL mildly replied with the statement that said store was catering solely to PAL personnel.  Again, on May 10,  1949,  Prieto wrote to the  lessor protesting against the operation of said  cooperative store as a violation  of his  concession 'contract.   On May  23, 1949, the lessor answered with the following letter:

                 "May 23, 1049

Atty. Alfredo Casimiro
No.  119-W, Bulacan  Street
Tondo, Manila

Dear Sir:

This is in reply to  yours of May 30.  We are fully aware and in full  sympathy with your petition.  We have therefore written  a communication of the Philippine Air Lines, Inc., giving them fifteen (15)  days  after the receipt of our  letter to close the PAL Cooperative Store. Failure  on  their part to comply,  shall cause  us to take the proper legal action against them.

Rest assured  that  we are doing all we can  for  the  satisfaction of our concessionaires.

                                                                                             Respectfully yours,

                                                                                                          Mariano C.  Reyes

                                                                                                          General Manager

On the same date,  the lessor sent to  the PAL a communication, the pertinent part of which we quote:

*           *           *           *           *           *           *           *

"While it may be true that the PAL Cooperative Store caters only to PAL  personnel,  yet it is equally true that it is engaged in the selling of goods and commodities which have been exclusively granted to the Airline Snack  Bar in the PAL area: The Airline Snack Bar is paying  3 per cent royalties on  its gross  sales,  monthly rentals and water, charges to the National Airports Corporation, which the PAL Cooperative Store is not.   The Airline Snack Bar has a contract with the National Airports Corporation, while the PAL  Cooperative Store  has  none.  The  operation of your  cooperative store causes us to  be placed  in some embarrassment, as  you  may gather from the  enclosed copy of the letter addressed to us  by the lawyer of Mr. Leopoldo Prieto,  concessionaire for the  operation  of the Airline Snack Bar.  It  may  be true that the operation' of your cooperative store is for. the benefit and welfare of your  employees, but, unfortunately, you failed  to secure the necessary 'permission from this Corporation so that you could legally commence and continue  operating the same. Having failed to  secure such necessary permission constitutes an infringement of our  regulations,

* * * Failure on  your part to close the PAL Cooperative Store within fifteen  (15) days after receipt  of this letter shall cause us to take the proper legal action against you regarding this matter." (Italics supplied.)

It should be noted  that the PAL is specifically charged, in this letter, with failure to secure, from the lessor,  the necessary permission for the operation of the cooperative store.  Had such permission been actually given, said letter would have provoked the indignation and a sharp protest of the PAL.  Yet, it did not do  so.  Instead,  the PAL replied  on June  14,  1949,  advising  the  lessor  that said letter had been referred to the PAL  Cooperative Store, and expressing the hope that the lessor would refrain from taking any further action until after it had heard from a representative of said store.  In short, the behaviour of the lessor and the PAL shows beyond doubt that the former had not authorized the establishment and  operation of said cooperative store.

With respect to the personality of the PAL  Cooperative Association, which is  said to be independent of that of  the PAL, suffice it to say that the PAL  is not  sued, and  has not been sentenced, for the acts of said association.  Plaintiff's action and the decisions against the PAL are based upon its  own acts, for  which the PAL cannot disclaim responsibility, namely: for having expressly authorized and  even abetted, by giving the  space and the  facilities necessary therefor the organization and  operation, within its premises in the International Airport, of said cooperative store, in violation of the rules and regulations governing the business activities within the area of said airport,, which rules and  regulations are binding on the PAL.

Wherefore, the decision appealed from, is hereby affirmed, with  costs  against the  Philippine  Air Lines,  Inc.  So ordered.

Bengzon, Padilla, Montemayor, Reyes, A., Jugo, Bautista Angela, Labrador and Reyes, J. B. L., JJ., concur.