GR 151319; (November, 2004) (Digest)
G.R. No. 151319 November 22, 2004
MANILA MEMORIAL PARK CEMETERY, INC., petitioner, vs. PEDRO L. LINSANGAN, respondent.
FACTS
Respondent Atty. Pedro Linsangan agreed to purchase a memorial lot from Florencia Baluyot, who represented herself as an agent of petitioner Manila Memorial Park Cemetery, Inc. (MMPCI). The agreed price was P95,000.00. Linsangan made payments to Baluyot, who issued receipts. Baluyot later presented a new contract (No. 28660) from MMPCI listing a higher price of P132,250.00. To assure Linsangan, Baluyot executed a handwritten letter confirming he would pay only the original P95,000.00, signing it as “Agency Manager, Holy Cross Memorial Park.” Relying on this, Linsangan signed the MMPCI contract and issued postdated checks to MMPCI, which the company encashed.
MMPCI later cancelled Contract No. 28660 due to alleged arrears. Linsangan filed a complaint for breach of contract. MMPCI defended itself by claiming Baluyot was an independent contractor, not its agent, and that it was unaware of her side agreement with Linsangan regarding the reduced price. It argued Linsangan was bound solely by the written contract’s terms.
ISSUE
Whether MMPCI is bound by the acts of Florencia Baluyot and thus liable to honor the purchase agreement at the price of P95,000.00 as confirmed by Baluyot.
RULING
Yes. The Supreme Court affirmed the lower courts’ finding that MMPCI is bound by Baluyot’s acts and is estopped from denying the agency relationship. The legal logic rests on the principles of agency by estoppel and ratification. While the “Agency Manager Agreement” between MMPCI and Baluyot may have limited her authority, MMPCI’s subsequent actions clothed her with apparent authority. By accepting and encashing the series of postdated checks issued by Linsangan—which were delivered by Baluyot and represented installment payments—MMPCI effectively ratified Baluyot’s representations and led Linsangan to justifiably believe she was acting within her scope of authority. A principal who accepts the benefits of an agent’s act is estopped from denying the agent’s authority. Furthermore, Linsangan, as the injured party, had the right to rely on Baluyot’s representations as MMPCI’s manager, and MMPCI’s failure to oversee its agent or disavow her acts promptly resulted in its liability. Consequently, MMPCI is jointly and severally liable with Baluyot to perform its undertaking under the contract at the price of P95,000.00.