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 Jose and Lydia Bordador were engaged in the jewelry business. Respondent Brigida D. Luz was their regular customer. From April 27, 1987 to September 4, 1987, respondent Narciso Deganos, brother of Brigida, received jewelry items from petitioners worth P382,816.00, as evidenced by seventeen receipts. Eleven receipts stated the items were received for Evelyn Aquino (Deganos’s niece), and six indicated they were received for Brigida D. Luz. Deganos was to sell the items, remit the proceeds, and return unsold items. He only remitted P53,207.00, leaving a substantial balance. By January 1990, his unpaid account, including interest, reached P725,463.98. Petitioners filed a barangay case against Deganos. In the barangay proceedings, Brigida Luz appeared as a witness for Deganos, and she, along with her husband Ernesto Luz and Deganos, signed a compromise agreement where Deganos promised to pay his debt on installments. He failed to comply. Petitioners then filed a civil case for recovery of money and damages against Deganos and the Luz spouses. Petitioners claimed Deganos acted as Brigida’s agent. Deganos admitted an obligation but only for P382,816.00, and denied acting as Brigida’s agent or delivering any items to her. Brigida denied authorizing Deganos or receiving any items. The trial court found only Deganos liable, ordering him to pay P725,463.98 plus interest and attorney’s fees. It found Brigida liable only for P21,483.00 interest on a separate, paid-off loan. The court, while “persuaded that Brigida D. Luz was behind Deganos,” held any such agreement was unenforceable under the Statute of Frauds due to the lack of a written memorandum. The Court of Appeals affirmed the trial court’s decision.

ISSUE

Whether or not respondent spouses Brigida D. Luz and Ernesto M. Luz are solidarily liable with Narciso Deganos for the sum of P725,463.98 based on an alleged agency relationship.

RULING

No. The Supreme Court affirmed the decisions of the lower courts, absolving the Luz spouses from solidary liability. The Court held that no agency relationship was proven between Deganos and Brigida Luz. Article 1868 of the Civil Code requires that agency be based on representation with the consent or authority of the principal. There was no evidence that Brigida consented to or authorized Deganos to act on her behalf regarding the specific transactions in question. The fact that some receipts indicated the items were “for Brigida D. Luz” was insufficient to establish agency, especially since it was petitioner Lydia Bordador who wrote those notations. The letters presented by petitioners, wherein Brigida acknowledged obligations, were found to pertain to her previous, separate transactions and not to the items subject of this case. The Court also noted petitioners’ negligence in repeatedly entrusting valuable jewelry to Deganos without requiring written authorization from his alleged principal. A person dealing with an agent must ascertain the agent’s authority. Furthermore, the pendency of a separate estafa case against Deganos and Brigida Luz does not affect the civil case, as civil liability from criminal acts can be pursued independently. The concurrent factual findings of the trial and appellate courts, that no agency existed and the Luz spouses were not liable for Deganos’s debt, are binding and conclusive.