G.R. No. 158907; February 12, 2007
EDUARDO B. OLAGUER, Petitioner, vs. EMILIO PURUGGANAN, JR. AND RAUL LOCSIN, Respondents.
FACTS
Petitioner Eduardo Olaguer, an executive and stockholder of Businessday Corporation, was an active political oppositionist during the Marcos regime. Anticipating possible arrest, he executed a Special Power of Attorney (SPA) on May 26, 1979, appointing respondent Raul Locsin and others as attorneys-in-fact to sell his shares “for such price… and under such terms and conditions, as my said attorneys-in-fact may deem proper.” Olaguer was arrested and detained in December 1979. During his detention, Locsin, purportedly unable to find an external buyer, used corporate funds to purchase Olaguer’s shares himself at par value, paying Olaguer’s in-laws in installments totaling ₱600,000 from 1980 to 1982. Upon his release in 1986, Olaguer discovered the shares had been transferred to Locsin and filed a complaint to annul the sale.
ISSUE
Whether the sale of Olaguer’s shares of stock to respondent Locsin, effected by Locsin as both attorney-in-fact and buyer, is valid.
RULING
The Supreme Court affirmed the lower courts’ dismissal of the complaint, upholding the validity of the sale. The legal logic rests on the clear terms of the SPA and Olaguer’s subsequent conduct. The SPA expressly authorized the attorneys-in-fact to sell the shares “for such price… and under such terms and conditions, as my said attorneys-in-fact may deem proper.” This broad language encompassed the authority for an attorney-in-fact to become the purchaser, absent any explicit prohibition in the instrument itself. The Court found no such prohibition. Furthermore, Olaguer’s acceptance of the ₱600,000 in installment payments over two years, which he acknowledged were for the shares, constituted a ratification of the transaction. His failure to immediately repudiate the sale upon receiving the payments estopped him from challenging its validity later. The Court concluded that the confluence of the unambiguous SPA and Olaguer’s knowing receipt of the purchase price established a perfected contract of sale.