atp cases week 6

7/23/2019 Atp Cases Week 6

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Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 137686 February 8, 2000

RURAL AN! OF M"LAOR #CAMAR"NES SUR$,petitioner,

vs.FRANC"SCA OCFEM"A, RO%ENA ARROGO, MAR"FE O. N"&O, FEL"C"S"MO OCFEM"A, RENATO OCFEM"A 'R, a() %"NSTONOCFEM"A,respondents.

PANGAN"AN, J.:

hen a ban!, b" its acts and failure to act, has clearl" clothed its #ana$er %ith apparent authorit" to sell an ac&uired asset in thenor#al course of business, it is le$all" obli$ed to confir# the transaction b" issuin$ a board resolution to enable the bu"ers to re$isterthe propert" in their na#es. It has a dut" to perfor# necessar" and la%ful acts to enable the other parties to en'o" all benefits of thecontract %hich it had authori(ed.

The Case

)efore this *ourt is a Petition for Revie% on Certiorarichallen$in$ the Dece#ber +, +-- Decision of the *ourt of ppeals +/*0 in*12R SP No. 34534, %hich affir#ed the Ma" 56, +--7 Decision 5of the Re$ional Trial *ourt /RT*0 of Na$a *it" /)ranch 50. The *disposed as follo%s8

herefore, pre#ises considered, the 9ud$#ent appealed fro# is hereb" ::IRM;D. *osts a$ainst the respondent1appellant. #otion to set aside the order of default. On 9ul" +6, +--4, thedefendant filed a #otion for reconsideration of the order of 9une +7, +--4 %ith ob'ection thereto b" =respondents>. On 9ul" +5,+--4, an order %as issued den"in$ =petitionerCs> #otion for reconsideration. On 9ul" filed a #otion toset case for hearin$. cop" thereof %as dul" furnished the =petitioner> but the latter did not file an" opposition and so=respondents> %ere allo%ed to present their evidence ex-parte. certioraricase %as filed b" the =petitioner> %ith the *ourt ofppeals doc!eted as * 2R No. 3+3-71SP but the petition %as denied in a decision rendered on March in this case,sho%=s> that she is the dau$hter of :rancisca Ocfe#ia, a co1=respondent> in this case, and the late Renato Ocfe#ia %ho diedon 9ul" 5


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other co1=respondents> Ro%ena O. )arro$o, :elicisi#o Ocfe#ia, Renato Ocfe#ia, 9r. and inston Ocfe#ia are her brothersand sisters.1wphi1.nt

Marife O. NiEo !no%s the five /B0 parcels of land described in para$raph 4 of the petition %hich are located in )o#bon,*a#arines Sur and that the" are the ones possessin$ the# %hich =%ere> ori$inall" o%ned b" her $randparents, 9uanitarellano Ocfe#ia and :elicisi#o Ocfe#ia. Durin$ the lifeti#e of her $randparents, =respondents> #ort$a$ed the said five /B0parcels of land and t%o /50 others to the =petitioner> Rural )an! of Milaor as sho%n b" the Deed of Real ;state Mort$a$e/;?hs. and 1+0 and the Pro#issor" Note /;?h. )0.

The spouses :elicisi#o Ocfe#ia and 9uanita rellano Ocfe#ia %ere not able to redee# the #ort$a$ed properties consistin$of seven /70 parcels of land and so the #ort$a$e %as foreclosed and thereafter o%nership thereof %as transferred to the=petitioner> ban!. Out of the seven /70 parcels that %ere foreclosed, five /B0 of the# are in the possession of the =respondents>because these five /B0 parcels of land described in para$raph 4 of the petition %ere sold b" the =petitioner> ban! to the parentsof Marife O. NiEo as evidenced b" a Deed of Sale e?ecuted in 9anuar" +- /;?hs. *, *1+ and *150.

The afore#entioned five /B0 parcels of land sub'ect of the deed of sale /;?h. *0, have not been, ho%ever transferred in thena#e of the parents of Merife O. NiEo after the" %ere sold to her parents b" the =petitioner> ban! because accordin$ to thessessorCs Office the five /B0 parcels of land, sub'ect of the sale, cannot be transferred in the na#e of the bu"ers as there is aneed to have the docu#ent of sale re$istered %ith the Re$ister of Deeds of *a#arines Sur.

In vie% of the fore$oin$, Marife O. NiEo %ent to the Re$ister of Deeds of *a#arines Sur %ith the Deed of Sale /;?h. *0 inorder to have the sa#e re$istered. The Re$ister of Deeds, ho%ever, infor#ed her that the docu#ent of sale cannot bere$istered %ithout a board resolution of the =petitioner> )an!. Marife NiEo then %ent to the ban!, sho%ed to if the Deed of Sale

/;?h. *0, the ta? declaration and receipt of ta? pa"#ents and re&uested the =petitioner> for a board resolution so that thepropert" can be transferred to the na#e of Renato Ocfe#ia the husband of petitioner :rancisca Ocfe#ia and the father of theother =respondents> havin$ died alread".

The =petitioner> ban! refused her re&uest for a board resolution and #ade #an" alibi=s>. She %as told that the =petitioner> ban!ha=d> a ne% #ana$er and it had no record of the sale. She %as as!ed and she co#plied %ith the re&uest of the =petitioner> fora cop" of the deed of sale and receipt of pa"#ent. The president of the =petitioner> ban! told her to $et an authorit" fro# herparents and other =respondents> and receipts evidencin$ pa"#ent of the consideration appearin$ in the deed of sale. Sheco#plied %ith said re&uire#ents and after she $ave all these docu#ents, Marife O. NiEo %as a$ain told to %ait for t%o /50%ee!s because the =petitioner> ban! %ould still stud" the #atter.

fter t%o /50 %ee!s, Marife O. NiEo returned to the =petitioner> ban! and she %as told that the resolution of the board %ould notbe released because the =petitioner> ban! ha=d> no records fro# the old #ana$er. )ecause of this, Marife O. NiEo brou$ht the

#atter to her la%"er and the latter %rote a letter on Dece#ber 55, +--B to the =petitioner> ban! in&uirin$ %h" no action %asta!en b" the board of the re&uest for the issuance of the resolution considerin$ that the ban! %as alread" full" paid =for> theconsideration of the sale since 9anuar" +- as sho%n b" the deed of sale itself /;?h. D and D1+ 0.

On 9anuar" +B, +--4 the =petitioner> ban! ans%ered =respondentsC> la%"erCs letter /;?h. D and D1+0 infor#in$ the latter that there&uest for board resolution ha=d> alread" been referred to the board of directors of the =petitioner> ban! %ith another re&uestthat the latter should be furnished %ith a certified #achine cop" of the receipt of pa"#ent coverin$ the sale bet%een the=respondents> and the =petitioner> /;?h. ;0. This re&uest of the =petitioner> ban! %as alread" co#plied =%ith> b" Marife O. NiEoeven before she brou$ht the #atter to her la%"er.

On 9anuar" 5 la%"er %rote bac! the branch #ana$er of the =petitioner> ban! infor#in$ the latter thatthe" %ere alread" furnished the receipts the ban! %as as!in$ =for> and that the =respondents> %ant=ed> alread" to !no% thestand of the ban! %hether the board =%ould> issue the re&uired board resolution as the deed of sale itself alread" sho%=ed> that

the =respondents %ere> clearl" entitled to the land sub'ect of the sale /;?h. :0. The #ana$er of the =petitioner> ban! receivedthe letter %hich %as served personall" to hi# and the latter told Marife O. NiEo that since he %as the one hi#self %ho receivedthe letter he %ould not si$n an"#ore a cop" sho%in$ hi# as havin$ alread" received said letter /;?h. :0.

fter several da"s fro# receipt of the letter /;?h. :0 %hen Marife O. NiEo %ent to the =petitioner> a$ain and reiterated herre&uest, the #ana$er of the =petitioner> ban! told her that the" could not issue the re&uired board resolution as the =petitioner>ban! ha=d> no records of the sale. )ecause of this Merife O. NiEo alread" %ent to their la%"er and ha=d> this petition filed.

The =respondents> are interested in havin$ the propert" described in para$raph 4 of the petition transferred to their na#esbecause their #other and co1petitioner, :rancisca Ocfe#ia, is ver" sic!l" and the" %ant to #ort$a$e the propert" for the#edical e?penses of :rancisca Ocfe#ia. The illness of :rancisca Ocfe#ia be$=a>n after her husband died and her sufferin$fro# arthritis and pul#onar" disease alread" beca#e serious before Dece#ber +--B.


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Marife O. NiEo declared that her #other is no% in serious condition and the" could not have her hospitali(ed for treat#ent asthe" do not have an" #one" and this is causin$ the fa#il" sleepless ni$hts and #ental an$uish, thin!in$ that their #other #a"die because the" could not sub#it her for #edication as the" do not have #one". 4

The trial court $ranted the Petition. s noted earlier, the * affir#ed the RT* Decision.

Hence, this recourse. 7In a Resolution dated 9une 5


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Respondents initiated the present proceedin$s, so that the" could transfer to their na#es the sub'ect five parcels of land@ andsubse&uentl", to #ort$a$e said lots and to use the loan proceeds for the #edical e?penses of their ailin$ #other. :or the propert" to betransferred in their na#es, ho%ever, the re$ister of deeds re&uired the sub#ission of a board resolution fro# the ban! confir#in$ boththe Deed of Sale and the authorit" of the ban! #ana$er, :e S. Tena, to enter into such transaction. Petitioner refused. fter bein$ $iventhe runaround b" the ban!, respondents sued in e?asperation.

Allegations in the etition for andamus /eemed Admitted

Respondents based their action before the trial court on the Deed of Sale, the substance of %hich %as alle$ed in and a cop" thereof%as attached to the Petition for andamus. The Deed na#ed :e S. Tena as the representative of the ban!. Petitioner, ho%ever, failedto specificall" den" under oath the alle$ations in that contract. In fact, it filed no ans%er at all, for %hich reason it %as declared indefault. Pertinent provisions of the Rules of *ourt read8

Sec. 7.Action or defense (ased on document. G henever an action or defense is based upon a %ritten instru#ent ordocu#ent, the substance of such instru#ent or docu#ent shall be set forth in the pleadin$, and the ori$inal or a cop" thereofshall be attached to the pleadin$ as an e?hibit, %hich shall be dee#ed to be a part of the pleadin$, or said cop" #a" %ith li!eeffect be set forth in the pleadin$.

Sec. . 0ow to contest genuineness of such documents.G hen an action or defense is founded upon a %ritten instru#ent,copied in or attached to the correspondin$ pleadin$ as provided in the precedin$ section, the $enuineness and due e?ecutionof the instru#ent shall be dee#ed ad#itted unless the adverse part", under oath, specificall" denies the#, and sets forth %hathe clai#s to be the facts@ but this provision does not appl" %hen the adverse part" does not appear to be a part" to theinstru#ent or %hen co#pliance %ith an order for an inspection of the ori$inal instru#ent is refused. +5

In failin$ to file its ans%er specificall" den"in$ under oath the Deed of Sale, the ban! ad#itted the due e?ecution of the said contract.Such ad#ission #eans that it ac!no%led$ed that Tena %as authori(ed to si$n the Deed of Sale on its behalf. +


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. . . *orporate transactions %ould speedil" co#e to a standstill %ere ever" person dealin$ %ith a corporation held dut"1boundto disbelieve ever" act of its responsible officers, no #atter ho% re$ular the" should appear on their face. This *ourt hasobserved in Ramire3 s. %rientalist Co.,


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Manila

:IRST DIVISION

G.R. No. 108*+7 'u(e 1, 1**3

PRU-ENT"AL AN!, petitioner,

vs.TE COURT OF APPEALS, AURORA CRU/, respondents.

oni'ue . Ignacio for petitioner.

4duardo C. Tutaan for priate respondent.

CRU/, J.:

e deal here %ith another controvers" involvin$ the inte$rit" of a ban!.

The co#plaint in this case arose %hen private respondent urora :.*ru(, %ith her sister as co1depositor, invested P566,666.66 in *entral )an! bills %ith the Prudential )an! at its branch in Jue(onvenue, Jue(on *it", on 9une 5


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;ver" da" thereafter, *ru( %ent to the ban! to in&uire about her re&uest to %ithdra% her invest#ent. She received no definite ans%er,not even to the letter she %rote the ban! %hich %as received b" Santos hi#self. 10:inall", *ru( sent the ban! a de#and letter datedNove#ber +5, +-4 for the a#ount of P566,666.66 plus interest. 11In a repl" dated Nove#ber 56, +-4, the ban!Cs Vice Presidentauro 9. 9ocson said that there appeared to be an ano#al"and re&uested *ru( to defer court action as the" hoped to settle the #atter a#icabl". 12Increasin$l" %orried, *ru( sent another letterreiteratin$ her de#and. 13This ti#e the repl" of the ban! %as une&uivocal and ne$ative. She %as told that her re&uest had to be deniedbecause she had alread" %ithdra%n the a#ount she %as clai#in$. 1

*ru(Cs reaction %as to f ile a co#plaint for breach of contract a$ainst Prudential )an! in the Re$ional Trial *ourt of Jue(on *it". Shede#anded the return of her #one" %ith interest, plus da#a$es and attorne"Cs fees. In its ans%er, the ban! denied liabilit", insistin$ that

*ru( had %ithdra%n her invest#ent. The ban! also instituted a third1part" co#plaint a$ainst Jui#bo, %ho did not file an ans%er and%as declared in default. 1+The ban!, ho%ever, did not present an" evidence a$ainst her.

fter trial, 9ud$e Rodolfo . Orti( rendered 'ud$#ent in favor of the plaintiffs and disposed as follo%s8

**ORDIN2, 'ud$#ent is hereb" rendered orderin$ the defendantLthird1part" plaintiff to pa" to the plaintiffs thefollo%in$ a#ounts8

+. P566,666.66, plus interest thereon at the rate of +


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Indeed, the ban! has not e?plained the re#ar!able coincidence that the a#ount indicated in the %ithdra%al slip isexactl*the sa#ea#ount *ru( %as re1investin$ after deductin$ therefro# the pre1paid interest.

The ban! has also not, succeeded in i#pu$nin$ the authenticit" of the *onfir#ation of Sale and the Debit Me#o %hich %ere #ade onits official, for#s. These are ad#ittedl" not available to the $eneral public or even its depositors and are handled onl" b" its personnel.;ven assu#in$ that the" %ere not si$ned b" its authori(ed officials, as it clai#s, there %as no obli$ation on the part of *ru( to verif"their authorit" because she had the ri$ht to presu#e it. The docu#ents had been issued in the office of the ban! itself and b" its o%ne#plo"ees %ith %ho# she had previousl" dealt. Such dealin$s had not been &uestioned before, #uch leas invalidated. There %asabsolutel" no reason %h" she should not have accepted their authorit" to act on behalf of their e#plo"er.

It is also %orth" of note G and %onder G that althou$h the ban! i#pleaded Jui#bo in a third1part" co#plaint, it did not pursue its suiteven %hen she failed to ans%er and %as declared in default. The ban! did not introduce evidence a$ainst her althou$h it could havedone so under the rules. No less re#ar!abl", it did not call on her to testif" on its behalf, considerin$ that under the circu#stancesclai#ed b" it, she %ould have been the best %itness to sho% that *ru( had actuall" %ithdra%n her P566,666.66 place#ent. Instead, theban! chose to rel" on its other e#plo"ees %hose testi#on" %as less direct and cate$orical than the testi#on" Jui#bo could have$iven.

e do not find that the *ourt of ppeals held the ban! liable on a 'uasi-delict. The ar$u#ent of the petitioner on this issue is pallid, tosa" the least, consistin$ as it does onl" of the observation that the article cited b" the respondent court on the a$entCs liabilit" falls underthe headin$ in the *ivil *ode on 'uasi-delicts. On the other hand, the respondent court clearl" declared that8

The defendantLthird1part" plaintiff bein$ liable for the return of the P566,666.66 place#ent of the plaintiffs, the e?tentof the liabilit" of the defendantLthird1part" plaintiff for da#a$es resultant thereof,which is contractual, is for all

da#a$es %hich #a" be reasonabl" attributed to the non1perfor#ance of the obli$ation, . . .

??? ??? ???

)ecause of the bad faith of the defendantLthird1part" plaintiff in its (reach of its contract %ith the plaintiffs, the latterare, therefore, entitled to an a%ard of #oral da#a$es . . . /;#phasis supplied0

There is no &uestion that the petitioner %as #ade liable for its failure or refusal to deliver to *ru( the a#ount she had deposited %ith itand %hich she had a ri$ht to %ithdra% upon its #aturit". That invest#ent %as ac!no%led$ed b" its o%n e#plo"ees, %ho had theapparent authorit" to do so and so could le$all" bind it b" its acts is-a-is *ru(. hatever #i$ht have happened to the invest#ent G%hether it %as lost or stolen b" %hoever G %as not the concern of the depositor. It %as the concern of the ban!.

s far as *ru( %as concerned, she had the ri$ht to %ithdra% her P566,666.66 place#ent %hen it #atured pursuant to the ter#s of herinvest#ent as ac!no%led$ed and reflected in the *onfir#ation of Sale. The failure of the ban! to deliver the a#ount to her pursuant tothe *onfir#ation of Sale constituted its breach of their contract, for %hich it should be held liable.

The liabilit" of the principal for the acts of the a$ent is not even debatable. a% and 'urisprudence are clearl" and absolutel" a$ainst thepetitioner.

Such liabilit" dates bac! to the Ro#an a% #a?i#, ui per alium facit per seipsum facere idetur. FHe %ho does a thin$ b" an a$ent isconsidered as doin$ it hi#self.F This rule is affir#ed b" the *ivil *ode thus8

rt. +-+6. The principal #ust co#pl" %ith all the obli$ations %hich the a$ent #a" have contracted %ithin the scope ofhis authorit".

rt. +-++. ;ven %hen the a$ent has e?ceeded his authorit", the principal is solidaril" liable %ith the a$ent if the for#erallo%ed the latter to act as thou$h he had full po%ers.

*onfor#abl", %e have declared in countless decisions that the principal is liable for obli$ations contracted b" thea$ent. The a$entCs apparent representation "ields to the principalCs true representation and the contract is consideredas entered into bet%een the principal and the third person. 18

ban! is liable for %ron$ful acts of its officers done in the interests of the ban! or in the course of dealin$s of theofficers in their representative capacit" but not for acts outside the scope of their authorit". /- c.&.s. p. 3+70 ban!holdin$ out its officers and a$ent as %orth" of confidence %ill not be per#itted to profit b" the frauds the" #a" thus beenabled to perpetrate in the apparent scope of their e#plo"#ent@ nor %ill it be per#itted to shir! its responsibilit" forsuch frauds, even thou$h no benefit #a" accrue to the ban! therefro# /+6 # 9ur 5d, p. ++30. ccordin$l", a ban!in$corporation is liable to innocent third persons %here the representation is #ade in the course of its business b" an


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a$ent actin$ %ithin the $eneral scope of his authorit" even thou$h, in the particular case, the a$ent is secretl"abusin$ his authorit" and atte#ptin$ to perpetrate a fraud upon his principal or so#e other person, for his o%nulti#ate benefit /McIntosh v. Da!ota Trust *o., B5 ND 7B5, 563 N +, 36 R +65+.0

pplication of these principles in especiall" necessar" because ban!s have a fiduciar" relationship %ith the public and their stabilit"depends on the confidence of the people in their honest" and efficienc". Such faith %ill be eroded %here ban!s do not e?ercise strictcare in the selection and supervision of its e#plo"ees, resultin$ in pre'udice to their depositors.

It %ould appear fro# the facts established in the case before us that the petitioner %as less than ea$er to present Jui#bo at the trial oreven to establish her liabilit" althou$h it #ade the initial effort G %hich it did not pursue G to hold her ans%erable in the third1part"co#plaint. hat ever happened to her does not appear in the record. Her absence fro# the proceedin$s feeds the suspicion of herpossible #isdeed, %hich the ban! see#s to have studiousl" i$nored b" its insistence that the #issin$ #one" had been actuall"%ithdra%n b" *ru(. )" such insistence, the ban! is absolvin$ not onl" itself but also, in effect and b" e?tension, the disappearedJui#bo %ho apparentl" has #uch to e?plain.

e a$ree %ith the lo%er courts that the petitioner acted in bad faith in den"in$ *ru( the obli$ation she %as clai#in$ a$ainst it. It %asobvious that an irre$ularit" had been co##itted b" the ban!Cs personnel, but instead of repairin$ the in'ur" to *ru( b" i##ediatel"restorin$ her #one" to her, it sou$ht to $loss over the ano#al" in its o%n operations.

*ru( naturall" suffered an?ious #o#ents and #ental an$uish over the loss of the invest#ent. The a#ount of P566,666.66 is not s#alleven b" present standards. )" un'ustl" %ithholdin$ it fro# her on the unproved defense that she had alread" %ithdra%n it, the ban!violated the trust she had reposed in it and thus sub'ected itself to further liabilit" for #oral and e?e#plar" da#a$es.

If a person dealin$ %ith a ban! does not read the fine print in the contract, it is because he truststhe ban! and relies on its inte$rit". Theordinar" custo#er appl"in$ for a loan or even #a!in$ a deposit /and so hi#self e?tendin$ the loan to the ban!0 does not bother %ith thered tape re&uire#ents and the finic!" conditions in the docu#ents he si$ns. His feelin$ is that he does not have to be %ar" of the ban!because it %ill deal %ith hi# fairl" and there is no reason to suspect its #otives. This is an attitude the ban! #ust 'ustif".

hile this is not to sa" that ban! re$ulations are #eanin$less or have no bindin$ effect, the" should, ho%ever, not be used for coverin$up the fault of ban! e#plo"ees %hen the" blunder or, %orse, intentionall" cheat hi#. The #isdeeds of such e#plo"ees #ust be readil"ac!no%led$ed and rectified %ithout dela". The ban! #ust al%a"s act in $ood faith. The ordinar" custo#er does not feel the need for ala%"er b" his side ever" ti#e he deals %ith a ban! because he is certain that it is not a predator or a potential adversar". The ban!should sho% that there is reall" no reason for an" apprehension because it trul" deserves his faith in it.

H;R;:OR;, the petition is D;NI;D and the appealed decision is ::IRM;D, %ith costs a$ainst the petitioner. It is so ordered.

5ri6o-A'uino7 +ellosillo and uiason7 !!.7 concur.


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Republic of the Philippines

SUPREME COURTManila

THIRD DIVISION

G.R. No. *+61 Seeber 22, 1**

SANTOS . AREOLA a() L4-"A -. AREOLA, petitioners1appellants,vs.COURT OF APPEALS a() PRU-ENT"AL GUARANTEE AN- ASSURANCE, "NC., respondents1appellees.

5utierre37 Cortes 8 5on3ales for petitioners.

+eng3on7 +eng3on7 +araan 8 Fernande3 "aw %ffices for priate respondent.

ROMERO, J.:

On 9une 5-, +-B, seven #onths after the issuance of petitioner Santos reolaCs Personal ccident Insurance Polic" No. P1566+B,respondent insurance co#pan" unilaterall" cancelled the sa#e since co#pan" records revealed that petitioner1insured failed to pa" hispre#iu#s.

On u$ust


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:ro# the factual findin$s of the trial court, it appears that petitioner1insured, Santos reola, a la%"er fro# Da$upan *it", bou$ht,throu$hthe )a$uio *it" branch of Prudential 2uarantee and ssurance, Inc. /hereinafter referred to as Prudential0, a personal accidentinsurance polic" coverin$ the one1"ear period bet%een noon of Nove#ber 5, +-3 and noon of Nove#ber 5, +-B. 1Ander the ter#sof the state#ent of account issued b" respondent insurance co#pan", petitioner1insured %as supposed to pa" the total a#ount ofP+,46-.4B %hich included the pre#iu# of P+,376.66, docu#entar" sta#p of P++6.5B and 5K pre#iu# ta? of P5-.36. 2t the lo%er lefthand corner of the state#ent of account, the follo%in$ is le$ibl" printed8

This State#ent of ccount #ust not be considered a receipt. Official Receipt %ill be issued to "ou upon pa"#ent ofthis account.

If pa"#ent is #ade to our representative, de#and for a Provisional Receipt and if our Official Receipts is /sic0 notreceived b" "ou %ithin 7 da"s please notif" us.

If pa"#ent is #ade to our office, de#and for an O::I*I R;*;IPT.

On Dece#ber +7, +-3, respondent insurance co#pan" issued collectorCs provisional receipt No. -


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polic" prior to the filin$ of the co#plaint, respondent insurance co#pan" had co#plied %ith its obli$ation under the contract. Hence, itconcluded that petitioner1insured no lon$er has a cause of action a$ainst it. It insists that it cannot be held liable for da#a$es arisin$fro# breach of contract, havin$ de#onstrated full" %ell its fulfill#ent of its obli$ation.

The trial court, on 9une


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%asMr. Malapit G the person %ho co##itted the fraud G %ho sent and si$ned the notice of cancellation.

IV

Respondent *ourt of ppeals has decided a &uestion of substance contrar" to la% and applicable decision of theSupre#e *ourt %hen it refused to a%ard da#a$es in favor of herein Petitioner1ppellants.

It is petitioner1insuredCs sub#ission that the fraudulent act of Malapit, #ana$er of respondent insurance co#pan"Cs branch office in

)a$uio, in #isappropriatin$ his pre#iu# pa"#ents is the pro?i#ate cause of the cancellation of the insurance polic". Petitioner1insuredtheori(ed that MalapitCs act of si$nin$ and even sendin$ the notice of cancellation hi#self, not%ithstandin$ his personal !no%led$e ofpetitioner1insuredCs full pa"#ent of pre#iu#s, further reinforces the alle$ation of bad faith. Such fraudulent act co##itted b" Malapit,ar$ued petitioner1insured, is attributable to respondent insurance co#pan", an artificial corporate bein$ %hich can act onl" throu$h itsofficers or e#plo"ees. MalapitCs actuation, concludes petitioner1insured, is therefore not separate and distinct fro# that of respondent1insurance co#pan", contrar" to the vie% held b" the *ourt of ppeals. It #ust, therefore, bear the conse&uences of the erroneouscancellation of sub'ect insurance polic" caused b" the non1re#ittance b" its o%n e#plo"ee of the pre#iu#s paid. Subse&uentreinstate#ent, accordin$ to petitioner1insured, could not possibl" absolve respondent insurance co#pan" fro# liabilit", there bein$ anobvious breach of contract. fter all, reasoned out petitioner1insured, da#a$e had alread" been inflicted on hi# and no a#ount ofrectification could re#ed" the sa#e.

Respondent insurance co#pan", on the other hand, ar$ues that %here reinstate#ent, the e&uitable relief sou$ht b" petitioner1insured%as $ranted at an opportune #o#ent, i.e. prior to the filin$ of the co#plaint, petitioner1insured is left %ithout a cause of action on %hichto predicate his clai# for da#a$es. Reinstate#ent, it further e?plained, effectivel" restored petitioner1insured to all his ri$hts under the

polic". Hence, %hatever cause of action there #i$ht have been a$ainst it, no lon$er e?ists and the conse&uent a%ard of da#a$esordered b" the lo%er court in unsustainable.

e uphold petitioner1insuredCs sub#ission. MalapitCs fraudulent act of #isappropriatin$ the pre#iu#s paid b" petitioner1insured isbe"ond doubt directl" i#putable to respondent insurance co#pan". corporation, such as respondent insurance co#pan", acts solel"thru its e#plo"ees. The lattersC acts are considered as its o%n for %hich it can be held to account. 11The facts are clear as to therelationship bet%een private respondent insurance co#pan" and Malapit. s ad#itted b" private respondent insurance co#pan" in itsans%er, 12Malapit %as the #ana$er of its )a$uio branch. It is be"ond doubt that he represented its interest and acted in its behalf. Hisact of receivin$ the pre#iu#s collected is %ell %ithin the province of his authorit". Thus, his receipt of said pre#iu#s is receipt b"private respondent insurance co#pan" %ho, b" provision of la%, particularl" under rticle +-+6 of the *ivil *ode, is bound b" the acts oits a$ent.

rticle +-+6 thus reads8

rt. +-+6. The principal #ust co#pl" %ith all the obli$ations %hich the a$ent #a" have contracted %ithin the scope ofhis authorit".

s for an" obli$ation %herein the a$ent has e?ceeded his po%er, the principal is not bound e?cept %hen he ratifies ite?pressl" or tacitl".

MalapitCs failure to re#it the pre#iu#s he received cannot constitute a defense for private respondent insurance co#pan"@ noe?oneration fro# liabilit" could result therefro#. The fact that private respondent insurance co#pan" %as itself defrauded due to theano#alies that too! place in its )a$uio branch office, such as the non1accrual of said pre#iu#s to its account, does not free the sa#efro# its obli$ation to petitioner reola. s held in rudential +an, . Court of Appeals 13citin$ the rulin$ in cIntosh . /a,ota TrustCo.$ 1

ban! is liable for %ron$ful acts of its officers done in the interests of the ban! or in the course of dealin$s of theofficers in their representative capacit" but not for acts outside the scope of their authorit". ban! holdin$ out itsofficers and a$ent as %orth" of confidence %ill not be per#itted to profit b" the frauds the" #a" thus be enabled toperpetrate in the apparent scope of their e#plo"#ent@ nor %ill it be per#itted to shir! its responsibilit" for such frauds,even thou$h no benefit #a" accrue to the ban! therefro#. ccordin$l", a ban!in$ corporation is liable to innocentthird persons %here the representation is #ade in the course of its business b" an a$ent actin$ %ithin the $eneralscope of his authorit" even thou$h, in the particular case, the a$ent is secretl" abusin$ his authorit" and atte#ptin$ toperpetrate a fraud upon his principal or so#e other person, for his o%n ulti#ate benefit.

*onse&uentl", respondent insurance co#pan" is liable b" %a" of da#a$es for the fraudulent acts co##itted b" Malapit that $aveoccasion to the erroneous cancellation of sub'ect insurance polic". Its earlier act of reinstatin$ the insurance polic" can not obliteratethe in'ur" inflicted on petitioner1insured. Respondent co#pan" should be re#inded that a contract of insurance creates reciprocal


14/77

obli$ations for both insurer and insured. Reciprocal obli$ations are those %hich arise fro# the sa#e cause and in %hich each part" isboth a debtor and a creditor of the other, such that the obli$ation of one is dependent upon the obli$ation of the other. 1+

Ander the circu#stances of instant case, the relationship as creditor and debtor bet%een the parties arose fro# a co##on cause8 i.e.,b" reason of their a$ree#ent to enter into a contract of insurance under %hose ter#s, respondent insurance co#pan" pro#ised toe?tend protection to petitioner1insured a$ainst the ris! insured for a consideration in the for# of pre#iu#s to be paid b" the latter.Ander the la% $overnin$ reciprocal obli$ations, particularl" the second para$raph of rticle ++-+, 16the in'ured part", petitioner1insuredin this case, is $iven a choice bet%een fulfill#ent or rescission of the obli$ation in case one of the obli$ors, such as respondentinsurance co#pan", fails to co#pl" %ith %hat is incu#bent upon hi#. Ho%ever, said article entitles the in'ured part" to pa"#ent ofda#a$es, re$ardless of %hether he de#ands fulfill#ent or rescission of the obli$ation. Antenable then is reinstate#ent insurance

co#pan"Cs ar$u#ent, na#el", that reinstate#ent bein$ e&uivalent to fulfill#ent of its obli$ation, divests petitioner1insured of a ri$htfulclai# for pa"#ent of da#a$es. Such a clai# finds no support in our la%s on obli$ations and contracts.

The nature of da#a$es to be a%arded, ho%ever, %ould be in the for# of no#inal da#a$es 17contrar" to that $ranted b" the courtbelo%. lthou$h the erroneous cancellation of the insurance polic" constituted a breach of contract, private respondent insuranceco#pan", %ithin a reasonable ti#e too! steps to rectif" the %ron$ co##itted b" reinstatin$ the insurance polic" of petitioner. Moreover,no actual or substantial da#a$e or in'ur" %as inflicted on petitioner reola at the ti#e the insurance polic" %as cancelled. No#inalda#a$es are Frecoverable %here a le$al ri$ht is technicall" violated and #ust be vindicated a$ainst an invasion that has produced noactual present loss of an" !ind, or %here there has been a breach of contract and no substantial in'ur" or actual da#a$es %hatsoeverhave been or can be sho%n. 18

H;R;:OR;, the petition for revie% oncertiorari is hereb" 2RNT;D and the decision of the *ourt of ppeals in *12.R. No. +4-65on Ma"


15/77

FIN VI; O: TH; :OR;2OIN2, =there bein$> no reversible error in the challen$ed decision, the sa#e is hereb" AFF"RME-, intoto, and the instant appeal ordered -"SM"SSE-. *osts a$ainst the =petitioner>.F3

On the other hand, the affir#ed DecisionBof the Re$ional Trial *ourt /RT*0, )ranch 575 of Mari!ina, disposed as follo%s8

FH;R;:OR;, pre#ises considered, the co#plaint sub'ect of this decision is hereb" DISMISS;D.F4

The :acts

The facts are narrated b" the * as follo%s8

FThe historical bac!drop sho%s that =petitioner> and her husband, Valentino Do#in$o, %ere the re$istered o%ners of ot +-, )loc! +,subdivision plan /R*0 Psd1+B764 located at *ristina Subdivision, *oncepcion, Mari!ina and covered b" Transfer *ertificate of Title NoB Nor#a ). Do#in$o discontinued the construction of her house alle$edl" for failure of her husband tosend the necessar" financial support. So, she decided to dispose of the propert".

F friend, :lor )acani, volunteered to act as =petitioners> a$ent in sellin$ the lot. Trustin$ )acani, =petitioner> delivered their o%nerscop" of Transfer *ertificate of Title No. B $ave )acani all her receipts of pa"#ent for real estate ta?es. t the sa#e ti#e, )acani as!ed =petitioner> tosi$n %hat she recalled %as a record of e?hibits. Thereafter, =petitioner> %aited patientl" but )acani did not sho% up an" #ore.

FOn Nove#ber +, +--3, =Petitioner> Nor#a Do#in$o visited the lot and %as surprised to see the =respondents> / Robe:, for short0

startin$ to build a house on the sub'ect lot. verification %ith the Re$ister of Deeds revealed that the reconstituted Transfer *ertificateof Title No. B. Hence, the case for the nullit" thereof and its reconve"ance.

F=Respondents> Robles responded alle$in$ to be bu"ers in $ood faith and for value. The" narrate that the sub'ect lot %as offered tothe# b" :lor )acani, as the a$ent of the o%ners@ that after so#e ti#e %hen the" %ere alread" prepared to bu" the lot, )acaniintroduced to the# the supposed o%ners and a$reed on the sale@ then, on Ma" -, +--+, )acani and the introduced seller presented a

Deed of bsolute Sale alread" si$ned b" Valentino and Nor#a Do#in$o needin$ onl" her /Robles0 si$nature. Presented li!e%ise atthat #eetin$, %here she paid full purchase price, %as the ori$inal of the o%ners duplicate of Transfer *ertificate of Title No. B Robles contracted to sell the lot in issue in favor of spouses Danilo and Her#ini$ilda De(afor P5B6,666.66. =Respondent> olanda Robles even had to secure a $uardianship authorit" over the persons and properties of her#inor children fro# the Re$ional Trial *ourt of Pasi$ in 9DR* No. 54+3. hen onl" P56,666.66 re#ained unpaid of the total purchaseprice under the contract to sell, pa"#ent %as stopped because of the letter received b" olanda Robles that =petitioner> intends to sueher.

Ffter due proceedin$s, the =Re$ional Trial *ourt> rendered its Decision dated Ma" +


16/77


17/77

Renato ). Corpu3 for priate respondents.

CRU/, J.:p

The basic issue before us is the capacit" in %hich petitioner S"lvia H. )edia entered into the sub'ect contract %ith private respondent;#il" . hite. )oth the trial court and the respondent court held she %as actin$ in her o%n personal behalf. She faults this findin$ asreversible error and insists that she %as #erel" actin$ as an a$ent.

The case arose %hen )edia and hite entered into a Participation *ontract 1readin$ in full as follo%s8

TH; STT; :IR O: T;S C6PRTI*IPTION *ONTR*T

PRTI*IPNT /*OMPN NM;0 ;MI HIT;;NT;RPRIS;S

ILe, the above#entioned co#pan" hereb" a$rees to participate in the +-6 Dallas State :air to be held in Dallas,Te?as on October


18/77

one #a" contract in the na#e of another %ithout bein$ authori(ed b" the latter, or unless she has b" la% a ri$ht torepresent her. /rt. +

per s'uare meter for displa* (ooth of said fair. I have paid an advance of ASB66.66 as partial pa"#ent for the totalspace of +B s&uare #eter of %hich is 5,5B6.66 /T%o Thousand T%o Hundred :ift" Dollars0.6

s the Participation *ontract %as si$ned b" )edia, the above state#ent %as an ac!no%led$#ent b" hite that )edia %as onl" actin$for Hontiveros %hen it recruited her as a participant in the Te?as State :air and char$ed her a partial pa"#ent of B66.66. This a#ount%as to be fortified to Hontiveros in case of cancellation b" her of the a$ree#ent. The fact that the contract %as t"pe%ritten on the

letterhead stationer" of Hontiveros bolsters this conclusion in the absence of an" sho%in$ that said stationer" had been ille$all" usedb" )edia.

Si$nificantl", Hontiveros itself has not repudiated )ediaCs a$enc" as it %ould have if she had reall" not si$ned in its na#e. In the ans%erit filed %ith )edia, it did not den" the latterCs alle$ation in Para$raph 3 thereof that she %as onl" actin$ as its a$ent %hen she solicitedhiteCs participation. In fact, b" filin$ the ans%er 'ointl" %ith )edia throu$h their co##on counsel, Hontiveros affirmedthis alle$ation.

If the plaintiffs had an" doubt about the capacit" in %hich )edia %as actin$, %hat the" should have done %as verif" the #atter %ithHontiveros. The" did not. Instead, the" si#pl" accepted )ediaCs representation that she %as an a$ent of Hontiveros and dealt %ith heras such. Ander rticle +-+6 of the *ivil *ode, Fthe principal #ust co#pl" %ith all the obli$ations %hich the a$ent #a" have contracted%ithin the scope of his authorit".F Hence, the private respondents cannot no% hold )edia liable for the acts perfor#ed b" her for, andi#putable to, Hontiveros as her principal.

The plaintiffsC position beca#e all the #ore untenable %hen the" #oved on 9une B, +-3, for the dis#issal of the co#plaint a$ainstHontiveros, 7leavin$ )edia as the sole defendant. Hontiveros had ad#itted as earl" as %hen it filed its ans%er that )edia %as actin$ asits a$ent. The effect of the #otion %as to leave the plaintiffs %ithout a cause of action a$ainst )edia for the obli$ation, if an", ofHontiveros.

Our conclusion is that since it has not been found that )edia %as actin$ be"ond the scope of her authorit" %hen she entered into theParticipation *ontract on behalf of Hontiveros, it is the latter that should be held ans%erable for an" obli$ation arisin$ fro# thata$ree#ent. )" #ovin$ to dis#iss the co#plaint a$ainst Hontiveros, the plaintiffs virtuall" disar#ed the#selves and forfeited %hateverclai#s the" #i$ht have proved a$ainst the latter under the contract si$ned for it b" )edia. It should be obvious that havin$ %aived theseclai#s a$ainst the principal, the" cannot no% assert the# a$ainst the a$ent.

H;R;:OR;, the appealed decision dated March 816* 'a(uary 2*, 1*+7


19/77

TE SELL COMPAN4 OF TE P"L"PP"NES, LT-.,petitioner,vs.F"REMEN?S "NSURANCE COMPAN4 OF NE%AR!, NE% 'ERSE4 COMMERC"AL CASUALT4 "NSURANCE CO., SAL


20/77

. More or less five feet, sir.

J. fter liftin$ that car that hei$ht, %hat did "ou do %ith the car

. I also %ashed it, sir.

J. nd after %ashin$

. I $reased it.

J. On that occasion, have "ou been able to finish $reasin$ and %ashin$ the car

. There is one point %hich I could not reach.

J. nd %hat did "ou do then

. I lo%ered the lifter in order to reach that point.

J. fter lo%erin$ it a little, %hat did "ou do then

. I pushed and pressed the valve in its $radual pressure.

J. ere "ou able to reach the portion %hich "ou %ere not able to reach %hile it %as lo%er

. No #ore, sir.

J. h"

. )ecause %hen I %as lo%erin$ the lifter I sa% that the car %as s%in$in$ and it fell.

TH; *OART. h" did the car s%in$ and fall

ITN;SS8 CThat is %hat I do not !no%, sirC. /t.s.n., p.47.0

The position of Defendant Porfirio de la :uente is stated in his counter1state#ent of facts %hich is hereunder also reproduced8

In the afternoon of Septe#ber


21/77

The o%ner of the car forth%ith notified the insurers %ho ordered their ad'ustor, the Manila d'ustor *o#pan", to investi$ate the incidentand after such investi$ation the da#a$ed car, upon order of the insures and %ith the consent of the o%ner, %as brou$ht to the shop ofthe Philippine Motors, Inc. The car %as restored to runnin$ condition after thereon %hich a#ounted to P+,4B+.


22/77

. . . the fall of ppellant SisonCs car fro# the h"draulic lift and the da#a$e caused therefor, %ere the result of the 'er!in$ ands%a"in$ of the lift %hen the valve %as released, and that the 'er!in$ %as due to so#e accident and unforeseen shortco#in$ ofthe #echanis# itself, %hich caused its fault" or defective operation or functionin$,

. . . the servicin$ 'ob on ppellant SisonCs auto#obile %as accepted b" De la :uente in the nor#al and ordinar" conduct of hisbusiness as operator of his co1appelleeCs service station, and that the 'er!in$ and s%a"in$ of the h"draulic lift %hich causedthe fall of the sub'ect car %ere due to its defective condition, resultin$ in its fault" operation. . . .

s the act of the a$ent or his e#plo"ees actin$ %ithin the scope of his authorit" is the act of the principal, the breach of the underta!in$b" the a$ent is one for %hich the principal is ans%erable. Moreover, the co#pan" undertoo! to Fans%er and see to it that thee&uip#ents are in $ood runnin$ order and usable condition@F and the *ourt of ppeals found that the *o#pan"Cs #echanic failed to#a!e a thorou$h chec! up of the h"draulic lifter and the chec! up #ade b" its #echanic %as F#erel" routineF b" raisin$ Fthe lifter onceor t%ice and after observin$ that the operator %as satisfactor", he /the #echanic0 left the place.F The latter %as ne$li$ent and theco#pan" #ust ans%er for the ne$li$ent act of its #echanic %hich %as the cause of the fall of the car fro# the h"draulic lifter.

The 'ud$#ent under revie% is affir#ed, %ith costs a$ainst the petitioner.

aras7 C.!.7 +eng3on7 ontema*or7 Re*es7 A.7 +autista Angelo7 "a(rador7 Concepcion7 Re*es7 !.+.".7 4ndencia and Felix7 !!.7concur.


Manila

THIRD DIVISION

G.R. No. 88+3* O5ober 26, 1**3

!UE CU"SON, )o9( bu:9(e:: u()er e B9r (ae a() :ye!UE CU"SON PAPER SUPPL4, petitioner,vs.

TE COURT OF APPEALS,


23/77

respondent and ilian Tan. Petitioner denied an" involve#ent in the transaction entered into b" Tiu Hu" Tiac and refused to pa" privaterespondent the a#ount correspondin$ to the sellin$ price of the sub'ect #erchandise.

eft %ith no recourse, private respondent filed an action a$ainst petitioner for the collection of P5-7,37.


24/77

Villanueva %as not onl" bluffin$ %hen he pretended that he can produce the invoice, but that Villanueva %as li!e%ise prevaricatin$%hen he insisted that such prior transactions actuall" too! place. Petitioner is #ista!en. In fact, it %as petitionerCs counsel hi#self %ho%ithdre% the reservation to have Villanueva produce the docu#ent in court. s aptl" observed b" the *ourt of ppeals in its decision8

. . . Ho%ever, durin$ the hearin$ on March


25/77

ll of these point to the fact that at the ti#e of the transaction Tiu Hu" Tiac %as ad#ittedl" the #ana$er of petitionerCs store in Sto.*risto, )inondo. *onse&uentl", the transaction in &uestion as %ell as the conco#itant obli$ation is valid and bindin$ upon petitioner.

)" his representations, petitioner is no% estopped fro# disclai#in$ liabilit" for the transaction entered b" Tiu Hu" Tiac on his behalf. It#atters not %hether the representations are intentional or #erel" ne$li$ent so lon$ as innocent, third persons relied upon suchrepresentations in $ood faith and for value s held in the case of anila Remnant Co.Inc..Court of Appeals, /+-+ S*R 455 =+--6>08

More in point, %e find that b" the principle of estoppel, Manila Re#nant is dee#ed to have allo%ed its a$ent to act asthou$h it had plenar" po%ers. rticle +-++ of the *ivil *ode provides8

F;ven %hen the a$ent has e?ceeded his authorit", the principal issolidaril" liable %ith the a$ent ifthe for#er allo%ed the latter to act as thou$h he had full po%ers.F /;#phasis supplied0.

The above1&uoted article is ne%. It is intended to protect the ri$hts of innocent persons. In such a situation, both theprincipal and the a$ent #a" be considered as 'oint tortfeasors %hose liabilit" is 'oint and solidar".

uthorit" b" estoppel has arisen in the instant case because b" its ne$li$ence, the principal, Manila Re#nant, hasper#itted its a$ent, .A. Valencia and *o., to e?ercise po%ers not $ranted to it. That the principal #i$ht not have hadactual !no%led$e of thea$entCs #isdeed is of no #o#ent.

Tiu Hu" Tiac, therefore, b" petitionerCs o%n representations and #anifestations, beca#e an a$ent of petitioner b" estoppel, anad#ission or representation is rendered conclusive upon the person #a!in$ it, and cannot be denied or disproved as a$ainst the

person rel"in$ thereon /rticle +30.

Ta!en in this li$ht,. petitioner is liable for the transaction entered into b" Tiu Hu" Tiac on his behalf. Thus, even %hen the a$ent hase?ceeded his authorit", the principal is solidaril" liable %ith the a$ent if the for#er allo%ed the latter to fact as thou$h he had full po%ers/rticle +-++ *ivil *ode0, as in the case at bar.

:inall", althou$h it #a" appear that Tiu Hu" Tiac defrauded his principal /petitioner0 in not turnin$ over the proceeds of the transactionto the latter, such fact cannot in an" %a" relieve nor e?onerate petitioner of his liabilit" to private respondent. :or it is an e&uitable#a?i# that as bet%een t%o innocent parties, the one %ho #ade it possible for the %ron$ to be done should be the one to bear theresultin$ loss /:rancisco vs. 2overn#ent Service Insurance S"ste#, 7 S*R B77 =+-40.

Inas#uch as the funda#ental issue of the capacit" or incapacit" of the purported a$ent Tiu Hu" Tiac, has alread" been resolved, the*ourt dee#s it unnecessar" to resolve the other peripheral issues raised b" petitioner.

H;R;:OR;, the instant petition in hereb" D;NI;D for lac! of #erit. *osts a$ainst petitioner.

SO ORD;R;D.


Manila

S;*OND DIVISION

G.R. No. 10667 Auu: 12, 200

%OO-C"L- OL-"NGS, "NC., petitioner,vs.RODAS ELECTR"C AN- CONSTRUCT"ON COMPAN4, "NC.,respondent.

D ; * I S I O N

CALLE'O, SR., J.@

This is a petition for revie% on certiorari of the Decision+of the *ourt of ppeals in *12.R. *V No. B4+5B reversin$ the Decision5ofthe Re$ional Trial *ourt of Ma!ati, )ranch B7, %hich ruled in favor of the petitioner.
http://www.lawphil.net/judjuris/juri2004/aug2004/gr_140667_2004.html#fnt1http://www.lawphil.net/judjuris/juri2004/aug2004/gr_140667_2004.html#fnt1http://www.lawphil.net/judjuris/juri2004/aug2004/gr_140667_2004.html#fnt2http://www.lawphil.net/judjuris/juri2004/aug2004/gr_140667_2004.html#fnt2http://www.lawphil.net/judjuris/juri2004/aug2004/gr_140667_2004.html#fnt1http://www.lawphil.net/judjuris/juri2004/aug2004/gr_140667_2004.html#fnt2


26/77

Te A(e5e)e(:

The respondent Ro?as ;lectric and *onstruction *o#pan", Inc. /R;**I0, for#erl" the Ro?as ;lectric and *onstruction *o#pan", %asthe

o%ner of t%o parcels of land, identified as ot No. 3-+11


27/77

On March


28/77

a0 to deliver to oodchild Holdin$s the beneficial use of the stipulated 5B s&uare #eters and BB s&uare #eters@

b0 to sell to oodchild Holdin$s additional 5B and +66 s&uare #eters to allo% it full access and use of the purchased propert"pursuant to para. B of the Deed of bsolute Sale@

c0 to cause annotation on Transfer *ertificate of Title No. N176B the beneficial use and ri$ht of %a" $ranted to oodchildHoldin$s under the Deed of bsolute Sale@

d0 to pa" oodchild Holdin$s the a#ount of PB,446,666.66, representin$ actual da#a$es and unreali(ed inco#e@

e0 to pa" attorne"Cs fees in the a#ount of P+66,666.66@ and

f0 to pa" the costs of suit.

Other reliefs 'ust and e&uitable are pra"ed for.+4

In its ans%er to the co#plaint, the R;**I alle$ed that it never authori(ed its for#er president, Roberto Ro?as, to $rant the beneficialuse of an" portion of ot No. 3-+11


29/77

The Present Petition

The petitioner no% co#es to this *ourt assertin$ that8

I.

TH; *OART O: PP;S ;RR;D IN HODIN2 THT TH; D;;D O: )SOAT; S; /;H. F*F0 IS ATR VIR;S.

II.

TH; *OART O: PP;S 2RV; ;RR;D IN R;V;RSIN2 TH; RAIN2 O: TH; *OART JAO OIN2 TH;PINTI::1PP;;; TH; );N;:I*I AS; O: TH; ;ISTIN2 RI2HT O: PAS TH; STIPAT;D 5B SJAR;M;T;RS ND BB SJAR; M;T;RS );*AS; TH;S; R; VID STIPATIONS 2R;;D ) )OTH PRTI;S TO TH;D;;D O: )SOAT; S; /;H. F*F0.

III.

TH;R; IS NO :*TA PROO: OR ;VID;N*; :OR TH; *OART O: PP;S TO RA; THT TH; STIPATIONS O:TH; D;;D O: )SOAT; S; /;H. F*F0 ;R; DISDVNT2;OAS TO TH; PP;;;, NOR S PP;;;D;PRIV;D O: ITS PROP;RT ITHOAT DA; PRO*;SS.

IV.

IN :*T, IT S OOD*HID HO S D;PRIV;D O: PROP;RT ITHOAT DA; PRO*;SS ) TH; SSI;DD;*ISION.

V.

TH; D; IN TH; *ONSTRA*TION S DA; TO TH; :IAR; O: TH; PP;NT TO ;VI*T TH; SJATT;RS ONTH; ND S 2R;;D IN TH; D;;D O: )SOAT; S; /;H. F*F0.

VI.

TH; *OART O: PP;S 2RV; ;RR;D IN R;V;RSIN2 TH; RAIN2 O: TH; *OART JAO DIR;*TIN2 TH;D;:;NDNT TO P TH; PINTI:: TH; MOANT O: PB,B4,666.66 R;PR;S;NTIN2 *TA DM2;S NDPINTI::CS ANR;IQ;D IN*OM; S ; S TTORN;CS :;;S.56

The threshold issues for resolution are the follo%in$8 /a0 %hether the respondent is bound b" the provisions in the deed of absolute sale$rantin$ to the petitioner beneficial use and a ri$ht of %a" over a portion of ot

No. 3-+11


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contends, the petitioner cannot enforce its ri$ht to bu" a portion of the said propert" since there %as no a$ree#ent in the deed ofabsolute sale on the price thereof as %ell as the specific portion and area to be purchased b" the petitioner.

e a$ree %ith the respondent.

In )an !uan )tructural and )teel Fa(ricators7 Inc. . Court of Appeals,5+%e held that8

corporation is a 'uridical person separate and distinct fro# its stoc!holders or #e#bers. ccordin$l", the propert" of thecorporation is not the propert" of its stoc!holders or #e#bers and #a" not be sold b" the stoc!holders or #e#bers %ithoute?press authori(ation fro# the corporationCs board of directors. Section 5< of )P 4, other%ise !no%n as the *orporation

*ode of the Philippines, provides8

FS;*. 5


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Po%ers of attorne" are $enerall" construed strictl" and courts %ill not infer or presu#e broad po%ers fro# deeds %hich do notsufficientl" include propert" or sub'ect under %hich the a$ent is to deal.5-The $eneral rule is that the po%er of attorne" #ust be pursued%ithin le$al strictures, and the a$ent can neither $o be"ond it@ nor beside it. The act done #ust be le$all" identical %ith that authori(edto be done.


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rt. 5566. Inde#nification for da#a$es shall co#prehend not onl" the value of the loss suffered, but also that of the profits%hich the obli$ee failed to obtain.

rt. 556+. In contracts and &uasi1contracts, the da#a$es for %hich the obli$or %ho acted in $ood faith is liable shall be thosethat are the natural and probable conse&uences of the breach of the obli$ation, and %hich the parties have foreseen or couldhave reasonabl" foreseen at the ti#e the obli$ation %as constituted.

In case of fraud, bad faith, #alice or %anton attitude, the obli$or shall be responsible for all da#a$es %hich #a" bereasonabl" attributed to the non1perfor#ance of the obli$ation.

In su#, %e affir# the trial courtCs a%ard of da#a$es and attorne"Cs fees to the petitioner.

"N L"GT OF ALL TE FOREGO"NG,'ud$#ent is hereb" rendered AFF"RM"NGthe assailed Decision of the *ourt of ppeals %"TMO-"F"CAT"ON. The respondent is ordered to pa" to the petitioner the a#ount of PB,4+5,-6 b" %a" of actual da#a$es and P+66,666b" %a" of attorne"Cs fees. No costs.

SO OR-ERE-.

uno7 !.7 Chairman7 Austria-artine37 Tinga7 and Chico-?a3ario7 !!.7concur.


Manila

S;*OND DIVISION

G.R. No. 1+131* No;eber 22, 200

MAN"LA MEMOR"AL PAR! CEMETER4, "NC., petitioner,vs.PE-RO L. L"NSANGAN,respondent.

D ; * I S I O N

T"NGA, J.@

:or resolution in this case is a classic and interestin$ te?boo! &uestion in the la% on a$enc".

This is a petition for revie% assailin$ the Decision+of the *ourt of ppeals dated 55 9une 566+, and its Resolution5dated +5 Dece#ber566+ in * 2.R. *V No. 3-65 entitled FPedro . insan$an v. Manila Me#orial *e#eter", Inc. et al.,F f indin$ Manila Me#orial Par!*e#eter", Inc. /MMP*I0 'ointl" and severall" liable %ith :lorencia *. )alu"ot to respondent tt". Pedro . insan$an.

The facts of the case are as follo%s8
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So#eti#e in +-3, :lorencia )alu"ot offered tt". Pedro . insan$an a lot called 2arden State at the Hol" *ross Me#orial Par!o%ned b" petitioner /MMP*I0. ccordin$ to )alu"ot, a for#er o%ner of a #e#orial lot under *ontract No. 5B6+5 %as no lon$erinterested in ac&uirin$ the lot and had opted to sell his ri$hts sub'ect to rei#burse#ent of the a#ounts he alread" paid. The contract%as for P-B,666.66. )alu"ot reassured tt". insan$an that once rei#burse#ent is #ade to the for#er bu"er, the contract %ould betransferred to hi#. tt". insan$an a$reed and $ave )alu"ot P


34/77

over to )alu"ot %ho# tt". insan$an had fro# the be$innin$ allo%ed to receive the sa#e in his behalf. :urther#ore, %hatever#isi#pression that tt". insan$an #a" have had #ust have been rectified b" the ccount Apdatin$ rran$e#ent si$ned b" tt".insan$an %hich states that he Fe?pressl" ad#its that *ontract No. 5446 Con account of serious delin&uenc"is no% due forcancellation under its ter#s and conditions.CCC+5

The trial court held MMP*I and )alu"ot 'ointl" and severall" liable.+


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In the instant Petition for Revie%, MMP*I clai#s that the *ourt of ppeals seriousl" erred in disre$ardin$ the plain ter#s of the %rittencontract and tt". insan$anCs failure to abide b" the ter#s thereof, %hich 'ustified its cancellation. In addition, even assu#in$ that)alu"ot %as an a$ent of MMP*I, she clearl" e?ceeded her authorit" and tt". insan$an !ne% or should have !no%n about thisconsiderin$ his status as a lon$1practicin$ la%"er. MMP*I li!e%ise clai#s that the *ourt of ppeals erred in failin$ to consider that thefacts and the applicable la% do not support a 'ud$#ent a$ainst )alu"ot onl" Fup to the e?tent of costs.F 54

tt". insan$an ar$ues that he did not violate the ter#s and conditions of the contract, and in fact faithfull" perfor#ed his contractualobli$ations and co#plied %ith the# in $ood faith for at least t%o "ears.57He clai#s that contrar" to MMP*ICs position, his profession asa la%"er is i##aterial to the validit" of the sub'ect contract and the case at bar.5ccordin$ to hi#, MMP*I had practicall" ad#itted inits Petition that )alu"ot %as its a$ent, and thus, the onl" issue left to be resolved is %hether MMP*I allo%ed )alu"ot to act as thou$h

she had full po%ers to be held solidaril" liable %ith the latter.

5-

e find for the petitioner MMP*I.

The 'urisdiction of the Supre#e *ourt in a petition for revie% under Rule 3B of the Rules of *ourt is li#ited to revie%in$ onl" errors ofla%, not fact, unless the factual findin$s co#plained of are devoid of support b" the evidence on record or the assailed 'ud$#ent isbased on #isapprehension of facts.


36/77

peril the authorit" of the a$ent.


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she %as re#iss in her duties %hen she consented to tt". insan$anCs proposal that he %ill pa" the old price %hile the difference %ill beshouldered b" her. She li!e%ise ad#itted that the contract suffered arreara$es because %hile tt". insan$an issued the a$reedchec!s, she %as unable to $ive her share of P+,3BB.66 due to her o%n financial difficulties. )alu"ot even as!ed for co#passion fro#MMP*I for the error she co##itted.

tt". insan$an failed to sho% that MMP*I had !no%led$e of the arran$e#ent. s far as MMP*I is concerned, the contract price %asP+


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Ho%ever, this does not preclude tt". insan$an fro# institutin$ a separate action to recover da#a$es fro# )alu"ot, not as an a$ent ofMMP*I, but in vie% of the latterCs breach of their separate a$ree#ent. To revie%, )alu"ot obli$ated herself to pa" P+,3BB.66 in additionto tt". insan$anCs P+,66.66 to co#plete the #onthl" install#ent pa"#ent under the contract, %hich, b" her o%n ad#ission, she %asunable to do due to personal financial difficulties. It is undisputed that tt". insan$an issued the P+,66.66 as a$reed upon, and %ere itnot for )alu"otCs failure to provide the balance, *ontract No. 5446 %ould not have been cancelled. Thus, tt". insan$an has a causeof action a$ainst )alu"ot, %hich he can pursue in another case.

H;R;:OR;, the instant petition is 2RNT;D. The Decision of the *ourt of ppeals dated 55 9une 566+ and its Resolution dated +5Dece#ber 566+ in *1 2.R. *V No. 3-65, as %ell as the Decision in *ivil *ase No. 1+5B< of the Re$ional Trial *ourt, Ma!ati *it")ranch B7, are hereb" R;V;RS;D and S;T SID;. The *o#plaint in *ivil *ase No. 1+5B< is DISMISS;D for lac! of cause of

action. No pronounce#ent as to costs.

SO ORD;R;D.

uno7 ChairmanB7 Austria-artine37 Calle&o7 )r.7 and Chico-?a3ario7 !!.7concur.


Manila

:IRST DIVISION

G.R. No. 180+ 'u(e 8, 2006

E-UAR-O RESOURCES CORPORAT"ON$, ETEROUTREMER, S.A. a() FAR EAST AN!= TRUST COMPAN4, Respondents.

D ; * I S I O N

CALLE'O, SR., J.:

On appeal via a Petition for Revie% on *ertiorari is the Decision+of the *ourt of ppeals /*0 in *12.R. *V No. B+655, %hich affir#edthe Decision of the Re$ional Trial *ourt /RT*0, Pasi$ *it", )ranch +4B, in *ivil *ase No. B37, as %ell as the Resolution5of the *den"in$ the #otion for reconsideration thereof.
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The ;ternit *orporation /;*0 is a corporation dul" or$ani(ed and re$istered under Philippine la%s. Since +-B6, it had been en$a$ed inthe #anufacture of roofin$ #aterials and pipe products. Its #anufacturin$ operations %ere conducted on ei$ht parcels of land %ith atotal area of 37,5


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The *o##ittee for sia of our 2roup #et recentl" /#eetin$ ever" si? #onths0 and e?a#ined the position as far as the Philippines are/sic0 concerned. *onsiderin$ =the> ne% political situation since the departure of MR. MR*OS and a certain stabili(ation in thePhilippines, the *o##ittee has decided not to stop our operations in Manila. In fact, production has started a$ain last %ee!, and /sic0 toreco$ni(e the participation in the *orporation.

e re$ret that %e could not #a!e a deal %ith "ou this ti#e, but in case the polic" %ould chan$e at a later state, %e %ould consult "oua$ain.

? ? ?

ours sincerel",

/S$d.0*.:. D;SA

cc. To8 9. 2NVI; /;ternit *orp.0++

hen apprised of this develop#ent, the iton'uas, throu$h counsel, %rote ;*, de#andin$ pa"#ent for da#a$es the" had suffered onaccount of the aborted sale. ;*, ho%ever, re'ected their de#and.

The iton'uas then filed a co#plaint for specific perfor#ance and da#a$es a$ainst ;* /no% the ;terton Multi1Resources *orporation0and the :ar ;ast )an! Trust *o#pan", and ;S* in the RT* of Pasi$ *it". n a#ended co#plaint %as filed, in %hich defendant ;*

%as substituted b" ;terton Multi1Resources *orporation@ )enito *. Tan, Ruperto V. Tan, Stoc! Ha T. Tan and Deo$racias 2. ;ufe#io%ere i#pleaded as additional defendants on account of their purchase of ;S* shares of stoc!s and %ere the controllin$ stoc!holdersof ;*.

In their ans%er to the co#plaint, ;* and ;S* alle$ed that since ;teroutre#er %as not doin$ business in the Philippines, it cannot besub'ect to the 'urisdiction of Philippine courts@ the )oard and stoc!holders of ;* never approved an" resolution to sell sub'ect propertiesnor authori(ed Mar&ue( to sell the sa#e@ and the tele? dated October 5, +-4 of 9ac! 2lanville %as his o%n personal #a!in$ %hichdid not bind ;*.

On 9ul"


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On 9une +4, 5666, the * rendered 'ud$#ent affir#in$ the decision of the RT*. +4The iton'uas filed a #otion for reconsideration,%hich %as also denied b" the appellate court.

The * ruled that Mar&ue(, %ho %as a real estate bro!er, %as a special a$ent %ithin the purvie% of rticle +73 of the Ne% *ivil *ode.Ander Section 5< of the *orporation *ode, he needed a special authorit" fro# ;*s board of directors to bind such corporation to thesale of its properties. Delsau?, %ho %as #erel" the representative of ;S* /the #a'orit" stoc!holder of ;*0 had no authorit" to bind thelatter. The * pointed out that Delsau? %as not even a #e#ber of the board of directors of ;*. Moreover, the iton'uas failed to provethat an a$enc" b" estoppel had been created bet%een the parties.

In the instant petition for revie%, petitioners aver that

I

TH; *OART O: PP;S ;RR;D IN HODIN2 THT TH;R; S NO P;R:;*T;D *ONTR*T O: S;.

II

TH; PP;T; *OART *OMMITT;D 2RV; ;RROR O: IN HODIN2 THT MRJA;Q N;;D;D RITT;N ATHORIT:ROM R;SPOND;NT ;T;RNIT );:OR; TH; S; *N ); P;R:;*T;D.

III

TH; *OART O: PP;S ;RR;D IN NOT HODIN2 THT 2NVI; ND D;SA HV; TH; N;*;SSR ATHORIT TOS; TH; SA)9;*T PROP;RTI;S, OR T TH; V;R ;ST, ;R; NOIN2 P;RMITT;D ) R;SPOND;NT ;T;RNIT TODO *TS ITHIN TH; S*OP; O: N PPR;NT ATHORIT, ND THAS H;D TH;M OAT TO TH; PA)I* S POSS;SSIN2PO;R TO S; TH; SID PROP;RTI;S.+7

Petitioners #aintain that, based on the facts of the case, there %as a perfected contract of sale of the parcels of land and thei#prove#ents thereon for FAS+,666,666.66 plus P5,B66,666.66 to cover obli$ations prior to final li&uidation.F Petitioners insist thatthe" had accepted the counter1offer of respondent ;* and that before the counter1offer %as %ithdra%n b" respondents, the acceptance%as #ade !no%n to the# throu$h real estate bro!er Mar&ue(.

Petitioners assert that there %as no need for a %ritten authorit" fro# the )oard of Directors of ;* for Mar&ue( to validl" act asbro!erL#iddle#anLinter#ediar". s bro!er, Mar&ue( %as not an ordinar" a$ent because his authorit" %as of a special and li#itedcharacter in #ost respects. His onl" 'ob as a bro!er %as to loo! for a bu"er and to brin$ to$ether the parties to the transaction. He %as

not authori(ed to sell the properties or to #a!e a bindin$ contract to respondent ;*@ hence, petitioners ar$ue, rticle +73 of the Ne%*ivil *ode does not appl".

In an" event, petitioners aver, %hat is i#portant and decisive %as that Mar&ue( %as able to co##unicate both the offer and counter1offer and their acceptance of respondent ;*s counter1offer, resultin$ in a perfected contract of sale.

Petitioners posit that the testi#onial and docu#entar" evidence on record a#pl" sho%s that 2lanville, %ho %as the President and2eneral Mana$er of respondent ;*, and Delsau?, %ho %as the Mana$in$ Director for ;S* sia, had the necessar" authorit" to sellthe sub'ect propert" or, at least, had been allo%ed b" respondent ;* to hold the#selves out in the public as havin$ the po%er to sellthe sub'ect properties. Petitioners identified such evidence, thus8

+. The testi#on" of Mar&ue( that he %as chosen b" 2lanville as the then President and 2eneral Mana$er of ;ternit, to sell theproperties of said corporation to an" interested part", %hich authorit", as hereinabove discussed, need not be in %ritin$.

5. The fact that the N;2OTITIONS for the sale of the sub'ect properties spanned S;V;R MONTHS, fro# +-4 to +-7@

+,666,666.66 %ith the Securit" )an! and that an ;S*ROa$ree#ent %as drafted over the sub'ect properties@

4. 2lanvilles tele? to Delsau? in&uirin$ FH;N ; /Respondents0 I IMP;M;NT *TION TO )A ND S;F@
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7. More i#portantl", ;?hibits F2F and FHF of the Respondents, %hich evidenced the fact that Petitioners offer %asalle$edl" R;9;*T;D b" both 2lanville and Delsau?.+

Petitioners insist that it is incon$ruous for 2lanville and Delsau? to #a!e a counter1offer to petitioners offer and thereafter re'ect suchoffer unless the" %ere authori(ed to do so b" respondent ;*. Petitioners insist that Delsau? confir#ed his authorit" to sell theproperties in his letter to Mar&ue(, to %it8

Dear Sir,

Re8 and of ;ternit *orporation

I %ould li!e to confir# officiall" that our 2roup has decided not to proceed %ith the sale of the land %hich %as proposed to "ou.

The *o##ittee for sia of our 2roup #et recentl" /#eetin$ ever" si? #onths0 and e?a#ined the position as far as the Philippines are/sic0 concerned. *onsiderin$ the ne% political situation since the departure of MR. MR*OS and a certain stabili(ation in thePhilippines, the *o##ittee has decided not to stop our operations in Manila=.> =I>n fact production started a$ain last %ee!, and /sic0 toreor$ani(e the participation in the *orporation.

e re$ret that %e could not #a!e a deal %ith "ou this ti#e, but in case the polic" %ould chan$e at a later sta$e %e %ould consult "oua$ain.

In the #eanti#e, I re#ain

ours sincerel",

*.:. D;SA+-

Petitioners further e#phasi(e that the" acted in $ood faith %hen 2lanville and Delsau? %ere !no%in$l" per#itted b" respondent ;* tosell the properties %ithin the scope of an apparent authorit". Petitioners insist that respondents held the#selves to the public aspossessin$ po%er to sell the sub'ect properties.

)" %a" of co##ent, respondents aver that the issues raised b" the petitioners are factual, hence, are proscribed b" Rule 3B of theRules of *ourt. On the #erits of the petition, respondents ;* /no% ;M*0 and ;S* reiterate their sub#issions in the *. The"#aintain that 2lanville, Delsau? and Mar&ue( had no authorit" fro# the stoc!holders of respondent ;* and its )oard of Directors tooffer the properties for sale to the petitioners, or to an" other person or entit" for that #atter. The" assert that the decision and

resolution of the * are in accord %ith la% and the evidence on record, and should be affir#ed in toto.

Petitioners aver in their subse&uent pleadin$s that respondent ;*, throu$h 2lanville and Delsau?, confor#ed to the %ritten authorit" ofMar&ue( to sell the properties. The authorit" of 2lanville and Delsau? to bind respondent ;* is evidenced b" the fact that 2lanville andDelsau? ne$otiated for the sale of -6K of stoc!s of respondent ;* to Ruperto Tan on 9une +, +--7. 2iven the si$nificance of theirpositions and their duties in respondent ;* at the ti#e of the transaction, and the fact that respondent ;S* o%ns -6K of the sharesof stoc! of respondent ;*, a for#al resolution of the )oard of Directors %ould be a #ere cere#onial for#alit". hat is i#portant,petitioners #aintain, is that Mar&ue( %as able to co##unicate the offer of respondent ;* and the petitioners acceptance thereof.There %as no ti#e that the" acted %ithout the !no%led$e of respondents. In fact, respondent ;* never repudiated the acts of 2lanville,Mar&ue( and Delsau?.

The petition has no #erit.

nent the first issue, %e a$ree %ith the contention of respondents that the issues raised b" petitioner in this case are factual. hetheror not Mar&ue(, 2lanville, and Delsau? %ere authori(ed b" respondent ;* to act as its a$ents relative to the sale of the properties ofrespondent ;*, and if so, the boundaries of their authorit" as a$ents, is a &uestion of fact. In the absence of e?press %ritten ter#screatin$ the relationship of an a$enc", the e?istence of an a$enc" is a fact &uestion.56hether an a$enc" b" estoppel %as created or%hether a person acted %ithin the bounds of his apparent authorit", and %hether the principal is estopped to den" the apparentauthorit" of its a$ent are, li!e%ise, &uestions of fact to be resolved on the basis of the evidence on record .5+The findin$s of the trialcourt on such issues, as affir#ed b" the *, are conclusive on the *ourt, absent evidence that the trial and appellate courts i$nored,#isconstrued, or #isapplied facts and circu#stances of substance %hich, if considered, %ould %arrant a #odification or reversal of theoutco#e of the case.55

It #ust be stressed that issues of facts #a" not be raised in the *ourt under Rule 3B of the Rules of *ourt because the *ourt is not atrier of facts. It is not to re1e?a#ine and assess the evidence on record, %hether testi#onial and docu#entar". There are, ho%ever,reco$ni(ed e?ceptions %here the *ourt #a" delve into and resolve factual issues, na#el"8
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/+0 hen the conclusion is a findin$ $rounded entirel" on speculations, sur#ises, or con'ectures@ /50 %hen the inference #ade is#anifestl" #ista!en, absurd, or i#possible@ /


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n a$enc" #a" be e?pressed or i#plied fro# the act of the principal, fro# his silence or lac! of action, or his failure to repudiate thea$enc" !no%in$ that another person is actin$ on his behalf %ithout authorit". cceptance b" the a$ent #a" be e?pressed, or i#pliedfro# his acts %hich carr" out the a$enc", or fro# his silence or inaction accordin$ to the circu#stances.


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Neither #a" respondent ;* be dee#ed to have ratified the transactions bet%een the petitioners and respondent ;S*, throu$h2lanville, Delsau? and Mar&ue(. The transactions and the various co##unications inter se %ere never sub#itted to the )oard ofDirectors of respondent ;* for ratification.

IN I2HT O: TH; :OR;2OIN2, the petition is D;NI;D for lac! of #erit. *osts a$ainst the petitioners.

SO ORD;R;D.


Manila

:IRST DIVISION

G.R. No. 1660 'u(e 18, 2012


46/77

COUNTR4 AN!ERS "NSURANCE CORPORAT"ON,Petitioner,vs.!EPPEL CEU S"P4AR-, UN"MAR"NE S"PP"NG L"NES, "NC., PAUL RO-R"GUE/, PETER RO-R"GUE/, ALERTONTANOSAS, a() ETO-E CASTRO, J.:

This is a petition for revie% on certiorari+to reverse and set aside the 9anuar" 5-, 5663 Decision5and October 5, 5663 Resolution


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ines, Inc.7

In co#pliance %ith the a$ree#ent, Ani#arine, throu$h Paul Rodri$ue(, secured fro# *ountr" )an!ers Insurance *orp. /*)I*0, throu$hthe latters a$ent, )ethoven Juinain /Juinain0, *)I* Suret" )ond No. 2 /+40 5-3+-/the suret" bond0 on 9anuar" +B, +--5 in thea#ount of P


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Ho%ever, even the sureties failed to dischar$e their obli$ations, and so *ebu Ship"ard filed a *o#plaint dated 9anuar" , +--


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H;R;:OR;, 'ud$#ent is hereb" rendered in favor of the plaintiff *ebu Ship"ard ;n$ineerin$ or!s, Incorporated and a$ainst thedefendants8

+. Orderin$ the defendants Ani#arine Shippin$ ines, Incorporated, *ountr" )an!ers Insurance *orporation and PlaridelSuret" and Insurance *orporation to pa" plaintiff 'ointl" and severall" the a#ount ofP3,456,666.66 e&uivalent to the value ofthe suret" bonds@

5. Orderin$ further defendant Ani#arine to pa" plaintiff the a#ount of P5B-,3B.66 to co#plete its entire obli$ationof P3,B-,3B.66@

F because Falthou$h the contract of suret" is in essence secondar" onl" to a valid principal obli$ation,his liabilit" to =the> creditor is said to be direct, pri#ar"=,> and absolute, in other %ords, he is bound b" the principal.F , therefore, is entitled to collect and enforce said obli$ation a$ainst an" and or both of the#, and if and %hen*)I* pa"s, it can co#pel its co1defendant Ani#arine to rei#burse to it the a#ount it has paid .s far as third persons are concerned, an act is dee#ed to have been perfor#ed %ithin the scope of the a$ents authorit", if such actis %ithin the ter#s of the po%ers of attorne" as %ritten, even if the a$ent has in fact e?ceeded the li#its of his authorit" accordin$ to anunderstandin$ bet%een the principal and the a$ent.


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IV. hether or not *ross Defendant1ppellant ANIMRIN; and Third1Part" Defendants1ppellants Paul Rodri$ue(, PeterRodri$ue(, lbert Hontanosas and Third1Part" Defendant )ethoven Juinain are liable b" virtue of the Inde#nit" $ree#ente?ecuted bet%een the# and *ross and Third Part" Plaintiff *)I*@

V. hether or not Plaintiff1ppellee =*ebu Ship"ard> is entitled to the a%ard of P+66,666.66 in attorne"s fees and liti$atione?penses.35

The *ourt of ppeals held that it %as dul" proven that Ani#arine %as liable to *ebu Ship"ard for the ship repair %or!s it did on thefor#ers MLV Pacific :ortune. The *ourt of ppeals dis#issed *)I*s contention of novation for lac! of #erit.3


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The authorit" to bind a principal as a $uarantor or suret" is one of those po%ers %hich re&uires a Special Po%er of ttorne" pursuant torticle +7 of the *ivil *ode. Such po%er could not be si#pl" assu#ed or inferred fro# the #ere e?istence of an a$enc". person%ho enters into a contract of suret"ship %ith an a$ent %ithout confir#in$ the e?tent of the latters authorit" does so at his peril. ? ? ? .B5

*)I* clai#s that the fore$oin$ is true even if Juinain %as $ranted the authorit" to transact in the business of insurance in $eneral, asFthe authorit" to bind the principal in a contract of suret"ship could nonetheless never be presu#ed.FBhird persons see!in$ to hold the principal liable for transactions entered into b" an a$ent should establish the follo%in$, in case thesa#e is controverted8

4.4.+. The fact or e?istence of the a$enc".

4.4.5. The nature and e?tent of authorit".B3

To $o a little further, *)I* said that the correct *ivil *ode provision to appl" in this case is rticle +-. *)I* asserts that F*ebuShip"ard %as char$ed %ith !no%led$e of the e?tent of the authorit" conferred on Mr. Juinain b" its failure to perfor# due dili$enceinvesti$ations.FBB

*ebu Ship"ard, in its *o##entB4first assailed the propriet" of the petition for raisin$ factual issues. In support, *ebu Ship"ard clai#edthat the *ourt of ppeals application of rticle +-++ of the *ivil *ode %as founded on findin$s of facts that *)I* no% disputes. Thus,the &uestion is not purel" of la%.

Discussion

The fact that Juinain %as an a$ent of *)I* %as never put in issue. hat has al%a"s been debated b" the parties is the e?tent ofauthorit" or, at the ver" least, apparent authorit", e?tended to Juinain b" *)I* to transact insurance business for and in its behalf.

In a contract of a$enc", a person, the a$ent, binds hi#self to represent another, the principal, %ith the latters consent orauthorit".B7Thus, a$enc" is based on representation, %here the a$ent acts for and in behalf of the principal on #atters %ithin the scopeof the authorit" conferred upon hi#.BSuch Facts have the sa#e le$al effect as if the" %ere personall" done b" the principal. )" thisle$al fiction of representation, the actual or le$al absence of the principal is converted into his le$al or 'uridical presence.FB-

The RT* applied rticles +-66 and +-++ of the *ivil *ode in holdin$ *)I* liable for the suret" bond. It held that *)I* could not beallo%ed to disclai# liabilit" because Juinains actions %ere %ithin the ter#s of the special po%er of attorne" $iven to hi#.46The *ourt oppeals a$reed that *)I* could not be per#itted to abandon its obli$ation especiall" since third persons had relied on Juinainsrepresentations. It based its decision on rticle +-++ of the *ivil *ode and found *)I* to have been ne$li$ent and less than prudent inconductin$ its insurance business for its failure to supervise and #onitor the acts of its a$ents, to re$ulate the distribution of its

insurance for#s, and to devise sche#es to prevent fraudulent #isrepresentations of its a$ents .4+

This *ourt does not a$ree. Pertinent to this case are the follo%in$ provisions of the *ivil *ode8

rt. +-. If the a$ent contracts in the na#e of the principal, e?ceedin$ the scope of his authorit", and the principal does not ratif" thecontract, it shall be void if the part" %ith %ho# the a$ent contracted is a%are of the li#its of the po%ers $ranted b" the principal. In thiscase, ho%ever, the a$ent is liable if he undertoo! to secure the principals ratification.

rt. +-66. So far as third persons are concerned, an act is dee#ed to have been perfor#ed %ithin the scope of the a$ents authorit", ifsuch act is %ithin the ter#s of the po%er of attorne", as %ritten, even if the a$ent has in fact e?ceeded the li#its of his authorit"accordin$ to an understandin$ bet%een the principal and the a$ent.

rt. +-65. third person %ith %ho# the a$ent %ishes to contract on behalf of the principal #a" re&uire the presentation of the po%er of

attorne", or the instructions as re$ards the a$enc". Private or secret orders and instructions of the principal do not pre'udice thirdpersons %ho have relied upon the po%er of attorne" or instructions sho%n to the#.

rt. +-+6. The principal #ust co#pl" %ith all the obli$ations %hich the a$ent #a" have contracted %ithin the scope of his authorit".

s for an" obli$ation %herein the a$ent has e?ceeded his po%er, the principal is not bound e?cept %hen he ratifies it e?pressl" or tacitl"

rt. +-++. ;ven %hen the a$ent has e?ceeded his authorit", the principal is solidaril" liable %ith the a$ent if the for#er allo%ed the latterto act as thou$h he had full po%ers.

Our la% #andates an a$ent to act %ithin the scope of his authorit".45The scope of an a$ents authorit" is %hat appears in the %rittenter#s of the po%er of attorne" $ranted upon hi#.4


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In the case at bar, *)I* could be held liable even if Juinain e?ceeded the scope of his authorit" onl" if Juinains act of issuin$ Suret")ond No. 2 /+40 5-3+- is dee#ed to have been perfor#ed %ithin the %ritten ter#s of the po%er of attorne" he %as $ranted .43

Ho%ever, contrar" to %hat the RT* held, the Special Po%er of ttorne" accorded to Juinain clearl" states the li#its of his authorit" andparticularl" provides that in case of suret" bonds, it can onl" be issued in favor of the Depart#ent of Public or!s and Hi$h%a"s, theNational Po%er *orporation, and other $overn#ent a$encies@ further#ore, the a#ount of the suret" bond is li#ited to PB66,666.66, to%it8

SP;*I PO;R O: TTORN;

NO M;N ) TH;S; PR;S;NTS8

That, *OANTR )N;RS INSARN*; *ORPORTION, a corporation dul" or$ani(ed and e?istin$ under and b" virtue of the la%sof the Philippines, %ith head offices at th :loor, 2.:. ntonino )uildin$, T.M. ala% Street, ;r#ita, Manila, no% and hereinafter referredto as Fthe *o#pan"F hereb" appoints );THOV;N ). JAININ %ith address at ? ? ? to be its 2eneral $ent and ttorne"1in1:act, forand in its place, na#e and stead, and for its o%n use and benefit, to do and perfor# the follo%in$ acts and thin$s8

+. To conduct, #ana$e, carr" on and transact insurance business as usuall" pertains to a 2eneral $enc" of :ire,Personal ccident, )ond, Marine, Motor *ar /;?cept ancer0.

5. To accept, under%rite and subscribe policies of insurance for and in behalf of the *o#pan" under the ter#s andconditions specified in the 2eneral $enc" *ontract e?ecuted and entered into b" and bet%een it and its saidttorne"1in1:act sub'ect to the follo%in$ Schedule of i#its8

1 S*H;DA; O: IMITS 1

a. :IR;8

? ? ? ?

b. P;RSON **ID;NT8

? ? ? ?

c. MOTOR *R8

? ? ? ?

d. MRIN;8

? ? ? ?

e. )ONDS8

? ? ? ?

Suret" )ond /in favor of Dept. of Pub. or!s andHi$h%a"s, Natl. Po%er *orp. other. B66,666.662overn#ent a$encies04B

*)I* does not anchor its defense on a secret a$ree#ent, #utual understandin$, or an" verbal instruction to Juinain. *)I*s stance is$rounded on its contract %ith Juinain, and the clear, %ritten ter#s therein. This *ourt finds that the ter#s of the fore$oin$ contractspecificall" provided for the e?tent and scope of Juinains authorit", and Juinain has indeed e?ceeded the#.

Ander rticles +- and +-+6, an a$ents act, even if done be"ond the scope of his authorit", #a" bind the principal if he ratifies the#,%hether e?pressl" or tacitl". It #ust be stressed thou$h that onl" the principal, and not the a$ent, can ratif" the unauthori(ed acts, %hichthe principal #ust have !no%led$e of.44;?poundin$ on the concept and doctrine of ratification in a$enc", this *ourt said8

Ratification in a$enc" is the adoption or confir#ation b" one person of an act perfor#ed on his behalf b" another %ithout authorit". Thesubstance of the doctrine is confir#ation after conduct, a#ountin$ to a substitute for a prior authorit". Ordinaril", the principal #ust havefull !no%led$e at the ti#e of ratification of all the #aterial facts and circu#stances relatin$ to the unauthori(ed act of the person %hoassu#ed to act as a$ent. Thus, if #aterial facts %ere suppressed or un!no%n, there can be no valid ratification and this re$ardless of
http://www.lawphil.net/judjuris/juri2012/jun2012/gr_166044_2012.html#fnt64http://www.lawphil.net/judjuris/juri2012/jun2012/gr_166044_2012.html#fnt64http://www.lawphil.net/judjuris/juri2012/jun2012/gr_166044_2012.html#fnt65http://www.lawphil.net/judjuris/juri2012/jun2012/gr_166044_2012.html#fnt66http://www.lawphil.net/judjuris/juri2012/jun2012/gr_166044_2012.html#fnt66http://www.lawphil.net/judjuris/juri2012/jun2012/gr_166044_2012.html#fnt64http://www.lawphil.net/judjuris/juri2012/jun2012/gr_166044_2012.html#fnt65http://www.lawphil.net/judjuris/juri2012/jun2012/gr_166044_2012.html#fnt66


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the purpose or lac! thereof in concealin$ such facts and re$ardless of the parties bet%een %ho# the &uestion of ratification #a" arise.Nevertheless, this principle does not appl" if the principals i$norance of the #aterial facts and circu#stances %as %illful, or that theprincipal chooses to act in i$norance of the facts. Ho%ever, in the absence of circu#stances puttin$ a reasonabl" prudent #an onin&uir", ratification cannot be i#plied as a$ainst the principal %ho is i$norant of the facts.47/;#phases supplied.0

Neither Ani#arine nor *ebu Ship"ard %as able to repudiate *)I*s testi#on" that it %as una%are of the e?istence of Suret" )ond No.2 /+40 5-3+- and ;ndorse#ent No.


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person dealin$ %ith a !no%n a$ent is not authori(ed, under an" circu#stances, blindl" to trust the a$ents@ state#ents as to the e?tentof his po%ers@ such person #ust not act ne$li$entl" but #ust use reasonable dili$ence and prudence to ascertain %hether the a$entacts %ithin the scope of his authorit". The settled rule is that, persons dealin$ %ith an assu#ed a$ent are bound at their peril, and ifthe" %ould hold the principal liable, to ascertain not onl" the fact of a$enc" but also the nature and e?tent of authorit", and in caseeither is controverted, the burden of proof is upon the# to prove it. In this case, the petitioners failed to dischar$e their burden@ hence,petitioners are not entitled to da#a$es fro# respondent ;*.7B

In li$ht of the fore$oin$, this *ourt is constrained to release *)I* fro# its liabilit" on Suret" )ond No. 2 /+40 5-3+- and ;ndorse#entNo.


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G.R. No. L>27832 May 28, 1*70

TESTATE ESTATE OF AMA-EO MATUTE OLA


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)ut if it be entirel" indispensable for the court to $ain possession of the docu#ents that have co#e to the attorne" and are held b" hi#in the course of his e#plo"#ent as counsel, it can re&uire surrender thereof b" re&uirin$ the client or clai#ant to first file proper andade&uate securit" for the la%"ersC co#pensation /Rustia vs. beto 75 Phil. +


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Manila

;N )N*

G.R. No. L>273* 'uy 31, 1*70

ARMAN-O AGRA


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In 1+-7++ /ntonio M. Pere(, et al. vs. n$ela Tuason de Pere(0, the appearance of . Pison 9r. as counsel forrespondent1appellee in substitution of tt"s. *. S. Tan'uatco ssociates and tt". r#ando V. #pil, is NOT;D@ andconsiderin$ the #otion filed b" respondent n$ela Tuason de Pere( b" and throu$h her dau$hter and attorne"1in1factn$ela Pere( " Tuason de Stale" and assisted b" ne% counsel for said respondent, #anifestin$ /+0 that saiddau$hter is her dul" authori(ed attorne"1in1fact@ /50 that said respondent no% confir#s the co#pro#ise a$ree#ententered into b" her husband and her son on Ma" 5, +-B, cop" of %hich is attached to the #otion as nne? C)C@ and/


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Subse&uentl", %hen the sa#e co#pro#ise a$ree#ent %as sou$ht to be sub#itted b" respondents in the proceedin$s belo% for theli#ited ob'ective of see!in$ respondent courtCs approval thereof, said court dis#issed the proc

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