It appears indisputable that respondents Pedroso and Palacio had invested P47,000 and P49,550, respectively. These were received by Valle and remitted to Filipinas Life, using Filipinas Life’s official receipts, whose authenticity were not disputed. Valle’s authority to solicit and receive investments was also established by the parties. When respondents sought confirmation, Alcantara, holding a supervisory position, and Apetrior, the branch manager, confirmed that Valle had authority. While it is true that a person deal ing with an agent is put upon inquiry and must discover at his own peril the agent’s authority, in
this case, respondents did exercise due diligence in removing all doubts and in confirming the validity of the representations made by Valle.
Filipinas Life, as the principal, is liable for obligations contracted by its agent Valle. By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter.The general rule is that the principal is responsible for the acts of its agent done within the scope of its authority, and should bear the damage caused to third persons.
When the agent exceeds his authority, the agent becomes personally liable for the damage.But even when the agent exceeds his authority, the principal is still solidarily liable together with the agent if the principal allowed the agent to act as though the agent had full powers.In other words, the acts of an agent beyond the scope of his authority do not bind the principal, unless the principal ratifies them, expressly or impliedly.
Ratification in agency is the adoption or confirmation by one person of an act performed on his behalf by another without authority.
Filipinas Life cannot profess ignorance of Valle’s acts. Even if Valle’s representations were beyond his authority as a debit/insurance agent, Filipinas Life thru Alcantara and Apetrior expressly and knowingly ratified Valle’s acts. It cannot even be denied that Filipinas Life benefited from the investments deposited by Valle in the account of Filipinas Life. In our considered view, Filipinas Life had clothed Valle with apparent authority; hence, it is now estopped to deny said authority. Innocent third persons should not be prejudiced if the principal failed to adopt the needed measures to prevent misrepresentation, much more so if the principal ratified his agent’s acts beyond the latter’s authority. The act of the agent is considered that of the principal itself. Qui per alium facit per seipsum facere videtur. “He who does a thing by an agent is considered as doing it himself.”
MANILA MEMORIAL VS. LINSANGAN G.R. 151319
Facts: Florencia Baluyot wass authorized by the Manila Memorial Park Inc. (MMPI) to sell burial lots to those interested in purchasing. Herein respondent Atty. Linsangan was approached by Florencia with an offer to sell to the former a lot that she alleges to have already been previously sold but the owner thereof has cancelled and thus, Atty.
Linsangan shall only continue the payment thereof amounting to P95,000, Atty.
Linsangan agreed and payed an initial P35,000.
Thereafter, Florencia advised Atty. Linsangan that there were changes in the contract and that she needed him to sign a new contract stipulating the total price of P132,000 but Florencia assured Atty. Linsangan that he would only pay the agreed P95,000.
In the new contract, Atty. Linsangan acceded that he has read and understood all the stipulations therein. The payment was made in installments for two years which Atty.
Linsangan completed, however, after two years, Florencia informed Linsangan that their
contract was cancelled and offered a different lot, Atty. Linsangan refused the offer and filed a suit for breach of contract against MMPI and Florencia. MMPI avers that Florencia acted beyond the scope of her authority as MMPI’s agent since the latter did not allow her to renegotiate existing contracts but only to sell new contracts. Atty. Linsangan on the other hand argues that MMPI should be liable for the acts of its agents.
Held: The acts of an agent beyond the scope of his authority do not bind the principal, unless he ratifies them, expressly or impliedly. Only the principal can ratify; the agent cannot ratify his own unauthorized acts. Moreover, the principal must have knowledge of the acts he is to ratify.
Ratification in agency is the adoption or confirmation by one person of an act performed on his behalf by another without authority. The substance of the doctrine is confirmation after conduct, amounting to a substitute for a prior authority. Ordinarily, the principal must have full knowledge at the time of ratification of all the material facts and circumstances relating to the unauthorized act of the person who assumed to act as agent.
No ratification can be implied in the instant case. A perusal of Baluyot’s Answerreveals that the real arrangement between her and Atty. Linsangan was for the latter to pay a monthly installment of P1,800.00 whereas Baluyot was to shoulder the counterpart amount of P1,455.00 to meet the P3,255.00 monthly installments as indicated in the contract. However, it appears that while Atty. Linsangan issued the post-dated checks, Baluyot failed to come up with her part of the bargain. As far as MMPCI is concerned, the contract price was P132,250.00, as stated in the Offer to Purchase signed by Atty.
Linsangan and MMPCI’s authorized officer. MMPCI received only P1,800.00 checks, which were clearly insufficient payment. If MMPCI was aware of the arrangement, it would have refused the latter’s check payments for being insufficient.
BOARD OF LIQUIDATORS vs. HEIRS OF MAXIMO KALAW 20 SCRA 987
A corporate officer, entrusted with the general management and control of its business, has implied authority to make any contract or do any other act which is necessary or appropriate to the conduct of the ordinary business of the corporation. As such officer, he may, without any special authority from the Board of Directors, perform all acts of an ordinary nature, which by usage or necessity are incident to his office, and may bind the corporation by contracts in matters arising in the usual course of business.
Where similar acts have been approved by the directors as a matter of general practice, custom, and policy, the general manager may bind the company without formal authorization of the board of directors. In varying language, existence of such authority is established by proof of the course of business, the usages and practices of the company and by theknowledge which the board of directors has, or must be presumedto have, of acts and doings of its subordinates in and about the affairs of the corporation. Where the practice of the corporation has been to allow its general manager to negotiate and execute contracts in its copra trading activities for and in Nacoco's behalfwithout prior board approval, and the board itself, by its acts and through acquiescence, practically
laid aside the by-law requirement of prior approval, the contracts of the general manager, under the given circumstances, are valid corporate acts.
Ratification by a corporation of an unauthorized act or contract by its officers or others relates back to the time of the act or contract ratified and is equivalent to original authority. The corporation and the other party to the transaction are in precisely the same position as if the act or contract had been authorized at the time. The adoption or ratif ication of a contract by a corporation is nothing more nor less than the making of an original contract. The theory of corporate ratification is predicated on the right of a corporation to contract, and any ratification or adoption is equivalent to a grant of prior authority.
FRANCISCO VS. GSIS