[ G.R. No.

102784, February 28, 1996 ]

ROSA LIM, PETITIONER, VS. COURT OF APPEALS AND PEOPLE OFTHE
PHILIPPINES, RESPONDENTS.

FACTS:
An Information for Estafa was filed against petitioner Rosa Lim before Branch 92 of the
Regional Trial Court of Quezon City.

Said accused got and received in trust from VICTORIA SUAREZ one (1) ring 3.35 solo
worth P169,000.00, Philippine Currency, with the obligation to sell the same on
commission basis and to turn over the proceeds of the sale to said complainant or to
return said jewelry if unsold, but the said accused once in possession thereof and far
from complying with her obligation despite repeated demands therefor, misapplied,
misappropriated and converted the same to her own personal use and benefit, to the
damage and prejudice of the said offended party in the amount aforementioned and in
such other amount as may be awarded under the provisions of the Civil Code.

Petitioner said that the contract was not of agency to sell but sale on credit and returned
the artifacts to one Aurelia Nadera.

RTC convicted the accused. CA affirmed.

ISSUE:
What was the real transaction between Rosa Lim and Vicky Suarez - a contract of
agency to sell on commission basis as set out in the receipt or a sale on credit?

RULING:
Rosa Lim’s signature indeed appears on the upper portion of the receipt immediately
below the description of the items taken. We find that this fact does not have the effect
of altering the terms of the transaction from a contract of agency to sell on commission
basis to a contract of sale. Neither does it indicate absence or vitiation of consent thereto
on the part of Rosa Lim which would make the contract void or voidable. The moment
she affixed her signature thereon, petitioner became bound by all the terms stipulated
in the receipt. She, thus, opened herself to all the legal obligations that may arise from
their breach.

A contract of agency to sell on commission basis does not belong to any of these three
categories, hence it is valid and enforceable in whatever form it may be entered into.

The elements of estafa with abuse of confidence under this subdivision are as follows:
(1) That money, goods, or other personal property be received by the offender in trust,
or on commission, or for administration, or under any other obligation involving the
duty to make delivery of, or to return, the same; (2) That there be misappropriation or
conversion of such money or property by the offender or denial on his part of such
receipt; (3) That such misappropriation or conversion or denial is to the prejudice of
another; and (4) That there is a demand made by the offended party to the offender
(Note: The 4th element is not necessary when there is evidence of misappropriation of
the goods by the defendant).
 [ G.R. No. 130148, December 15, 1997 ]
JOSE BORDADOR AND LYDIA BORDADOR, PETITIONERS, VS. BRIGIDA D.
LUZ, ERNESTO M. LUZ AND NARCISO DEGANOS, RESPONDENTS.

FACTS:
Petitioners were engaged in the business of purchase and sale of jewelry and
respondent Brigida D. Luz, also known as Aida D. Luz, was their regular customer. On
several occasions during the period from April 27, 1987 to September 4, 1987,
respondent Narciso Deganos, the brother of Brigida D. Luz, received several pieces of
gold and jewelry from petitioners amounting toP382,816.00. These items and their
prices were indicated in seventeen receipts covering the same. Eleven of the receipts
stated that they were received for a certain Evelyn Aquino, a niece of Deganos, and the
remaining six indicated that they were received for Brigida D. Luz.

He neither paid the balance of the sales proceeds, nor did he return any unsold item to
petitioners.

After trial, the court below found that only Deganos was liable to petitioners for the
amount and damages claimed. It held that while Brigida D. Luz did have transactions
with petitioners in the past, the items involved were already paid for and all that
Brigida owed petitioners was the sum of P21,483.00 representing interest on the
principal account which she had previously paid for.

CA affirmed.

ISSUE:
Whether Deganos was an agent of Brigida Luz.

RULING:
NO. The evidence does not support the theory of petitioners that Deganos was an agent
of Brigida D. Luz and that the latter should consequently be held solidarily liable with
Deganos in his obligation to petitioners. While the quoted statement in the findings of
fact of the assailed appellate decision mentioned that Deganos ostensibly acted as an
agent of Brigida, the actual conclusion and ruling of the Court of Appeals categorically
stated that, “(Brigida Luz) never authorized her brother (Deganos) to act for and in her
behalf in any transaction with Petitioners x x x.” It is clear, therefore, that even
assuming arguendo that Deganos acted as an agent of Brigida, the latter never
authorized him to act on her behalf with regard to the transactions subject of this case.

The Civil Code provides: Art. 1868. 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 basis for agency is representation. Here, there is no showing that Brigida consented
to the acts of Deganos or authorized him to act on her behalf, much less with respect to
the particular transactions involved. Petitioners’ attempt to foist liability on respondent
spouses through the supposed agency relation with Deganos is groundless and ill-
advised. Besides, it was grossly and inexcusably negligent of petitioners to entrust to
Deganos, not once or twice but on at least six occasions as evidenced by six receipts,
several pieces of jewelry of substantial value without requiring a written authorization
from his alleged principal. A person dealing with an agent is put upon inquiry and
must discover upon his peril the authority of the agent.

The records show that neither an express nor an implied agency was proven to have
existed between Deganos and Brigida D. Luz. Evidently, petitioners, who were
negligent in their transactions with Deganos, cannot seek relief from the effects of their
negligence by conjuring a supposed agency relation between the two respondents
where no evidence supports such claim
 G.R. No. 145817, October 19, 2011 ]
URBAN BANK, INC, PETITIONER, VS. MAGDALENO M. PEÑA, RESPONDENT.
 [ G.R. No. 163928, January 21, 2015 ]
MANUEL JUSAYAN, ALFREDO JUSAYAN, AND MICHAEL JUSAYAN,
PETITIONERS, VS. JORGE SOMBILLA, RESPONDENT.

FACTS:
Wilson Jesena (Wilson) owned four parcels of land situated in New Lucena, Iloilo. On
June 20,1970, Wilson entered into an agreement with respondent Jorge Sombilla (Jorge),
wherein Wilson designated Jorge as his agent to supervise the tilling and farming of his
rice land in crop year 1970-1971. On August 20, 1971, before the expiration of the
agreement, Wilson sold the four parcels of land to Timoteo Jusayan (Timoteo). Jorge
and Timoteo verbally agreed that Jorge would retain possession of the parcels of land
and would deliver 110 cavans of palay annually to Timoteo without need for
accounting of the cultivation expenses provided that Jorge would pay the irrigation
fees. From 1971 to 1983, Timoteo and Jorge followed the arrangement. In 1975, the
parcels of land were transferred in the names of Timoteo’s sons, namely, Manuel,
Alfredo and Michael (petitioners). In 1984, Timoteo sent several letters to Jorge
terminating his administration and demanding the return of the possession of the
parcels of land.

Due to the failure of Jorge to render accounting and to return the possession of the
parcels of land despite demands, Timoteo filed on June 30, 1986, a complaint for
recovery of possession and accounting against Jorge in the RTC. Jorge asserted that he
enjoyed security of tenure as the agricultural lessee of Timoteo; and that he could not be
dispossessed of his landholding without valid cause.

RTC upheld the contractual relationship of agency between Timoteo and Jorge; and
ordered Jorge to deliver the possession of the parcels of land to the petitioners.

CA reversed the RTC and dismissed the case, declaring that the contractual relationship
between the parties was one of agricultural tenancy; and that the demand of Timoteo
for the delivery of his share in the harvest and the payment of irrigation fees constituted
an agrarian dispute that was outside the jurisdiction of the RTC, and well within the
exclusive jurisdiction of the Department of Agriculture.

ISSUE:
Whether the relationship between the parties is one of agency.

RULING:
No. The relationship is one of agricultural leasehold.

In agency, the agent binds himself to render some service or to do something in

representation or on behalf of the principal, with the consent or authority of the latter.
The basis of the civil law relationship of agency is representation, the elements of which
are, namely: (a) the relationship is established by the parties’ consent, express or
implied; (b) the object is the execution of a juridical act in relation to a third person; (c)
the agent acts as representative and not for himself; and (d) the agent acts within the
scope of his authority. Whether or not an agency has been created is determined by the
fact that one is representing and acting for another. The law does not presume agency;
hence, proving its existence, nature and extent is incumbent upon the person alleging it.

The claim of Timoteo that Jorge was his agent contradicted the verbal agreement he had
fashioned with Jorge. By assenting to Jorge’s possession of the land sans accounting of
the cultivation expenses and actual produce of the land provided that Jorge annually
delivered to him 110 cavans of palay and paid the irrigation fees belied the very nature
of agency, which was representation. The verbal agreement between Timoteo and Jorge
left all matters of agricultural production to the sole discretion of Jorge and practically
divested Timoteo of the right to exercise his authority over the acts to be performed by
Jorge. While in possession of the land, therefore, Jorge was acting for himself instead of
for Timoteo. Unlike Jorge, Timoteo did not benefit whenever the production increased,
and did not suffer whenever the production decreased. Timoteo’s interest was limited
to the delivery of the 110 cavans of palay annually without any concern about how the
cultivation could be improved in order to yield more produce.
 [ G.R. No. 199990, February 04, 2015 ]
SPOUSES ROLANDO AND HERMINIA SALVADOR, PETITIONERS, VS.
SPOUSES ROGELIO AND ELIZABETH RABAJA AND ROSARIO GONZALES,
RESPONDENTS.

FACTS:
This case stemmed from a dispute involving the sellers, petitioner spouses Rolando
and Herminia Salvador (Spouses Salvador); the sellers’ agent, Rosario Gonzales
(Gonzales); and the buyers, respondent Spouses Rogelio and Elizabeth Rabaja
(Spouses Rabaja), over a parcel of land situated at No. 25, Merryland Village, 375 Jose
Rizal Street, Mandaluyong City (subject property), covered by Transfer Certificate of Title
(TCT) No. 13426 and registered in the names of Spouses Salvador. From 1994 until 2002,
Spouses Rabaja were leasing an apartment in the subject lot.

Sometime in July 1998, Spouses Rabaja learned that Spouses Salvador were looking for
a buyer of the subject property. Petitioner Herminia Salvador (Herminia) personally
introduced Gonzales to them as the administrator of the said property. Spouses
Salvador even handed to Gonzales the owner’s duplicate certificate of title over the
subject property. On July 3, 1998, Spouses Rabaja made an initial payment of P48,000.00
to Gonzales in the presence of Herminia. Gonzales then presented the Special Power of
Attorney (SPA), executed by Rolando Salvador (Rolando) and dated July 24, 1998. On
the same day, the parties executed the Contract to Sell which stipulated that for a
consideration of P5,000,000.00, Spouses Salvador sold, transferred and conveyed in
favor of Spouses Rabaja the subject property. Spouses Rabaja made several payments
totaling P950,000.00, which were received by Gonzales pursuant to the SPA provided
earlier as evidenced by the check vouchers signed by Gonzales and the improvised
receipts signed by Herminia.

Sometime in June 1999, however, Spouses Salvador complained to Spouses Rabaja

that they did not receive any payment from Gonzales. This prompted Spouses Rabaja
to suspend further payment of the purchase price; and as a consequence, they
received a notice to vacate the subject property from Spouses Salvador for non-
payment of rentals. Thereafter, Spouses Salvador instituted an action for ejectment
against Spouses Rabaja. In turn, Spouses Rabaja filed an action for rescission of
contract against Spouses Salvador and Gonzales, the subject matter of the present
petition.

The petitioners were declared in default by the RTC and let the respondents present
evidence ex parte.

RTC ruled that the SPA is valid and that the contract to sell was actually a contract of
sale.

CA affirmed.
ISSUE:
Whether the SPA and the contract to sell were valid.

RULING:
YES. The Court agrees with the courts below in finding that the contract entered into by
the parties was essentially a contract of sale which could be validly rescinded. Spouses
Salvador insist that they did not receive the payments made by Spouses Rabaja from
Gonzales which totaled P950,000.00 and that Gonzales was not their duly authorized
agent. These contentions, however, must fail in light of the applicable provisions of the
New Civil Code which state:
Art. 1900. So far as third persons are concerned, an act is deemed to have been
performed within the scope of the agent's authority, if such act is within the
terms of the power of attorney, as written, even if the agent has in fact exceeded
the limits of his authority according to an understanding between the principal
and the agent. x x x x
Art. 1902. A third person with whom the agent wishes to contract on behalf of
the principal may require the presentation of the power of attorney, or the
instructions as regards the agency. Private or secret orders and instructions of the
principal do not prejudice third persons who have relied upon the power of
attorney or instructions shown them.
xxxx
Art. 1910. The principal must comply with all the obligations which the agent
may have contracted within the scope of his authority.

Persons dealing with an agent must ascertain not only the fact of agency, but also the
nature and extent of the agent’s authority. A third person with whom the agent wishes
to contract on behalf of the principal may require the presentation of the power of
attorney, or the instructions as regards the agency. The basis for agency is
representation and a person dealing with an agent is put upon inquiry and must
discover on his own peril the authority of the agent.

According to Article 1990 of the New Civil Code, insofar as third persons are
concerned, an act is deemed to have been performed within the scope of the agent's
authority, if such act is within the terms of the power of attorney, as written. In this
case, Spouses Rabaja did not recklessly enter into a contract to sell with Gonzales. They
required her presentation of the power of attorney before they transacted with her
principal. And when Gonzales presented the SPA to Spouses Rabaja, the latter had no
reason not to rely on it.

As correctly held by the CA and the RTC, considering that there was a valid SPA, then
Spouses Rabaja properly made payments to Gonzales, as agent of Spouses Salvador;
and it was as if they paid to Spouses Salvador. It is of no moment, insofar as Spouses
Rabaja are concerned, whether or not the payments were actually remitted to Spouses
Salvador. Any internal matter, arrangement, grievance or strife between the principal
and the agent is theirs alone and should not affect third persons. If Spouses Salvador
did not receive the payments or they wish to specifically revoke the SPA, then their
recourse is to institute a separate action against Gonzales. Such action, however, is not
any more covered by the present proceeding.
 [ G.R. No. 166044, June 18, 2012 ]
COUNTRY BANKERS INSURANCE CORPORATION, PETITIONER, VS. KEPPEL
CEBU SHIPYARD, UNIMARINE SHIPPING LINES, INC., PAUL RODRIGUEZ,
PETER RODRIGUEZ, ALBERT HONTANOSAS, AND BETHOVEN QUINAIN,
RESPONDENTS.

FACTS:
On January 27, 1992, Unimarine Shipping Lines, Inc. (Unimarine), a corporation
engaged in the shipping industry, contracted the services of Keppel Cebu Shipyard,
formerly known as Cebu Shipyard and Engineering Works, Inc. (Cebu Shipyard), for
dry docking and ship repair works on its vessel, the M/V Pacific Fortune.

On February 14, 1992, Cebu Shipyard issued Bill No. 26035 to Unimarine in
consideration for its services, which amounted to P4,486,052.00. Negotiations
between Cebu Shipyard and Unimarine led to the reduction of this amount to
P3,850,000.00. The terms of this agreement were embodied in Cebu Shipyard’s February
18, 1992 letter to the President/General Manager of Unimarine, Paul Rodriguez, who
signed his conformity to said letter.

In compliance with the agreement, Unimarine, through Paul Rodriguez, secured from
Country Bankers Insurance Corp. (CBIC), through the latter’s agent, Bethoven
Quinain (Quinain), CBIC Surety Bond No. G (16) 29419[8] (the surety bond) on January
15, 1992 in the amount ofP3,000,000.00. The expiration of this surety bond was extended
to January 15, 1993, through Endorsement No. 33152.

Due to Unimarine’s failure to heed Cebu Shipyard’s repeated demands, Cebu

Shipyard, through counsel, wrote the sureties CBIC on November 18, 1992, and
Plaridel, on November 19,1992, to inform them of Unimarine’s nonpayment, and to
ask them to fulfill their obligations as sureties, and to respond within seven days
from receipt of the demand. However, even the sureties failed to discharge their
obligations, and so Cebu Shipyard filed a Complaint dated January 8, 1993, before the
RTC, Branch 18 of Cebu City, against Unimarine, CBIC, and Plaridel.

CBIC, in its Answer, said that Cebu Shipyard’s complaint states no cause of action.
CBIC alleged that the surety bond was issued by its agent, Quinain, in excess of his
authority. CBIC claimed that Cebu Shipyard should have doubted the authority of
Quinain to issue the surety bond based on the following:
1. The nature of the bond undertaking (guarantee payment), and the amount
involved.
2. The surety bond could only be issued in favor of the Department of Public Works
and Highways, as stamped on the upper right portion of the face of the bond. This
stamp was covered by documentary stamps.
3. The issuance of the surety bond was not reported, and the corresponding
premiums were not remitted to CBI.
The RTC held that CBIC, “in its capacity as surety is bound with its principal jointly
and severally to the extent of the surety bond it issued in favor of [Cebu Shipyard]”
because“ although the contract of surety is in essence secondary only to a valid
principal obligation, his liability to [the] creditor is said to be direct, primary[,] and
absolute, in other words, he is bound by the principal.”

CA affirmed.

ISSUE:
Whether CBIC is solidary liable with Unimarine in favor of Cebu Shipyard.

RULING:
NO. In a contract of agency, a person, the agent, binds himself to represent another, the
principal, with the latter’s consent or authority. Thus, agency is based on
representation, where the agent acts for and on behalf of the principal on matters within
the scope of the authority conferred upon him. Such “acts have the same legal effect as
if they were personally done by the principal. By this legal fiction of representation, the
actual or legal absence of the principal is converted into his legal or juridical presence.”

Our law mandates an agent to act within the scope of his authority. The scope of an
agent’s authority is what appears in the written terms of the power of attorney granted
upon him. Under Article 1878(11) of the Civil Code, a special power of attorney is
necessary to obligate the principal as a guarantor or surety.

In the case at bar, CBIC could be held liable even if Quinain exceeded the scope of his
authority only if Quinain’s act of issuing Surety Bond No. G (16) 29419 is deemed to
have been performed within the written terms of the power of attorney he was granted.

However, contrary to what the RTC held, the Special Power of Attorney accorded to
Quinain clearly states the limits of his authority and particularly provides that in case of
surety bonds, it can only be issued in favor of the Department of Public Works and
Highways, the National Power Corporation, and other government agencies;
furthermore, the amount of the surety bond is limited to P500,000.00.

CBIC does not anchor its defense on a secret agreement, mutual understanding, or any
verbal instruction to Quinain. CBIC’s stance is grounded on its contract with Quinain,
and the clear, written terms therein. This Court finds that the terms of the foregoing
contract specifically provided for the extent and scope of Quinain’s authority, and
Quinain has indeed exceeded them.
Neither Unimarine nor Cebu Shipyard was able to repudiate CBIC’s testimony that it
was unaware of the existence of Surety Bond No. G (16) 29419 and Endorsement No.
33152. There were no allegations either that CBIC should have been put on alert with
regard to Quinain’s business transactions done on its behalf. It is clear, and undisputed
therefore, that there can beno ratification in this case, whether express or implied.

A person dealing with a known agent is not authorized, under any circumstances,
blindly to trust the agents; statements as to the extent of his powers; such person must
not act negligently but must use reasonable diligence and prudence to ascertain whether
the agent acts within the scope of his authority. The settled rule is that, persons
dealing with an assumed agent are bound at their peril, and if they would hold
the principal liable, to ascertain not only the fact of agency but also the nature
and extent of authority, and in case either is controverted, the burden of proof is
upon them to prove it. In this case, the petitioners failed to discharge their
burden; hence, petitioners are not entitled to damages from respondent EC.
 [ G.R. No. 169442, October 14, 2015 ]
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE PRIVATIZATION
AND MANAGEMENT OFFICE (PMO), PETITIONER, VS. ANTONIO V. BAÑEZ,
LUISITA BAÑEZ VALERA, NENA BAÑEZHOJILLA, AND EDGARDO B.
HOJILLA, JR., RESPONDENTS.

FACTS:
In 1976, Antonio V. Bañez, Luisita Bañez Valera, and Nena Bañez Hojilla (collectively,
respondents) offered for sale a parcel of land (subject property), with an area of 20,000
sq m in Barangay Calaba, Bangued, Abra to Cellophil Resources Corporation (CRC).
Pursuant to the offer to sell on 7 December 1981, respondents executed a Letter
Agreement irrevocably giving CRC the option to purchase the subject property,
which CRC accepted.

Respondents asked for several cash advances which reached the total amount of, more
or less, Two Hundred Seventeen Thousand Pesos (P217,000.00), to be deducted from the
purchase price of Four Hundred Thousand Pesos (P400,000.00). After paying cash
advances to respondents, CRC constructed staff houses and introduced
improvements on the subject property. As respondents would be staying abroad for a
time, they executed a Special Power of Attorney (SPA) in favor of Edgardo B. Hojilla
(Hojilla).

However, CRC stopped its operation. The Development Bank of the Philippines and
National Development Company took over CRC's operation and turned over CRC's
equity to Asset Privatization Trust (APT), which is a government agency created by
virtue of Proclamation No.50, as amended. The APT's function is to take title to and
possession of, provisionally manage and dispose of nonperforming assets of
government financial institutions. Upon the expiration of APT's term on 31 December
2000, the government issued Executive Order (E.O.) No. 323, which created the
Privatization and Management Office (PMO). By virtue of E.O. No. 323, the powers,
functions, and duties of APT were transferred to the PMO. Thus, the original party,
CRC, is now represented by the Republic of the Philippines through the PMO (herein
after referred to as petitioner), the successor of the defunct APT.

As alleged by petitioner, respondents declared afterwards the subject property as

Urbano Bañez property, rented out to third parties the staff houses petitioner
constructed, and ordered its guards to prohibit the petitioner from entering the
compound, which impelled petitioner to file a complaint for specific performance,
recovery of possession, and damages against respondents, including Hojilla, on 10
April 2000.
Hojilla filed a Motion to Dismiss on the grounds that he was not a real party-in-interest
and that the action was barred by the Statute of Limitations, which Motion the RTC
granted.

The RTC resolved that because the written contract was executed on 7 December 1981,
then the complaint that was filed more than eighteen (18) years since the contract was
executed was beyond the 10-year prescriptive period. Within that 18-year period, there
was no act on the part of petitioner, whether judicial or extrajudicial, to interrupt
prescription.

The Court of Appeals affirmed the ruling of the RTC in a Decision dated 23 August
2005 on the ground that the complaint was barred by the Statute of Limitations.

While petitioner sent demand letters dated 29 May 1991 and 24 October 1991, these
demand letters were not considered as demand letters because the letters simply
called the attention of Hojilla to return the properties and unlock the gates. Court of
Appeals ruled that because the letter was addressed to Hojilla, who was only an
attorney-in-fact authorized to register the property, it was not binding upon the
respondents.

ISSUE:
1. Whether the action is barred by Statute of Limitations
2. Whether Hojilla was an agent authorized to cause the transfer

RULING:
1. No. Hojilla's letter dated 15 August 1984 served as a written acknowledgement of
the respondents' debt or obligation, it interrupted the running of the prescriptive
period and set the same running anew with a new expiry period of 15 August
1994.

We do not agree with the lower courts. Clearly, the 29 May 1991 and 24 October
1991 letters demanded respondents to return the properties, discontinue the
construction, repair, demolition and occupancy of several staff houses, and
unlock the gates, which is to enforce respondents' obligations pursuant to
paragraph 7 of the Contract.

The letters dated 29 May 1991 and 24 October 1991 are deemed demand letters as
contemplated under Article 1155. They are demand letters to enforce
respondents' obligation under the Contract, which is to cede possession to
petitioner. The letters interrupted the running of the prescriptive period which
commenced to run anew.

2. YES. In the case at bar, the reliefs prayed for by petitioner include the execution
of the Contract such as delivery of the subject title, recovery of possession of the
subject property, execution of the deed of sale or transfer of absolute ownership
upon full payment of the balance, and damages for alleged violation of
respondents of the Contract for non-delivery of the title and refusal to vacate the
subject property. Indeed, following the reading of the lower courts of the scope
of Hojilla's authority, Hojilla is neither the proper party to execute the Contract
nor the proper party to receive the demand letters on behalf of respondents.

Contrary to the findings of the lower court, the present case is a case of an
express agency, where, Hojilla, the agent, binds himself to represent another,
the principal, who are herein respondents, with the latter's express consent or
authority. In a contract of agency, the agent acts for and in behalf of the principal
on matters within the scope of the authority conferred upon him, such that, the
acts of the agent have the same legal effect as if they were personally done by the
principal. Because there is an express authority granted upon Hojilla to
represent the respondents as evidenced by the SPA, Hojilla's actions bind the
respondents.

As agent, the representations and guarantees of Hojilla are considered

representations and guarantees of the principal. This is the principle of agency by
promissory estoppel. We refer to the evidence on record. It was Hojilla who
administered and/or managed the subject property. Based on Hojilla's letter
dated 15 August 1984 to petitioner, Hojilla made the representation that
besides being the attorney-in-fact of the respondents with limited authority to
register the property, he was also their agent with regard to respondents' other
obligations related to the Contract.

Also, one glaring fact that cannot escape us is Hojilla's representation and
guarantee that petitioner's obligation will only arise upon presentation of a clean
title and execution of a Deed of Sale signed by the respondents' heirs, which
reads, "[t]he Bañez heirs will only claim for the full payment of the property
upon presentation of a clean title and execution of a Deed of Sale signed by
the heirs."

Assuming further that Hojilla exceeded his authority, the respondents are still
solidarity liable because they allowed Hojilla to act as though he had full
powers by impliedly ratifying Hojilia's actions—through action by omission.
This is the import of the principle of agency by estoppel or the doctrine of
apparent authority.

In an agency by estoppel or apparent authority, "[t]he principal is bound by

the acts of his agent with the apparent authority which he knowingly permits
the agent to assume, or which he holds the agent out to the public as
possessing."
The respondents' acquiescence of Hojilla's acts was made when they failed to
repudiate the latter's acts. They knowingly permitted Hojilla to represent them
and petitioners were clearly misled into believing Hojilla's authority. Thus, the
respondents are now estopped from repudiating Hojilla's authority, and Hojilla's
actions are binding upon the respondents.