GR 32501; (October, 1930) (Digest)

G.R. No. 32501, October 16, 1930
TAN LUA, plaintiff-appellant, vs. S. W. O’BRIEN, ET AL., defendants-appellees.

FACTS

Tan Lua, widow of Eugenio Velasco Chua Eng Chay and resident of Amoy, China, filed an action to annul an order of the Sixth Branch of the Court of First Instance of Manila dated March 17, 1927. The order declared her a general partner of the insolvent firms Mariano Velasco & Co. and Mariano Velasco Sons & Co., and consequently adjudged her insolvent. The insolvency proceeding was initiated on June 12, 1926, by S.W. O’Brien and others against the partnerships, their successor corporation, and the general partners, including Tan Lua and her family. At the time, Tan Lua was in Amoy, China. Initially, publication of summons was considered for her, but attorney Gregorio Perfecto filed a general appearance on June 23, 1926, representing Tan Lua, her children, grandchildren, and daughter-in-law. He also filed an answer to the insolvency petition on July 2, 1926, accompanied by an affidavit from Tan Lua’s eldest son, Chua Chitco, denying insolvency and partnership. After extensive litigation, the court declared all respondents insolvent. Notice of the decision was served on Atty. Perfecto. Tan Lua later contested the order, claiming she was not properly served process and that Perfecto lacked authority to represent her.

ISSUE

Whether Tan Lua was validly declared insolvent, considering the alleged lack of proper service of process and authority of the attorney who represented her in the insolvency proceedings.

RULING

Yes. The Supreme Court affirmed the trial court’s dismissal of Tan Lua’s action. The Court held that Gregorio Perfecto’s appearance and representation of Tan Lua in the insolvency case were authorized. Chua Chitco, as the eldest son managing family affairs pursuant to Chinese custom, had implied authority to employ an attorney for his mother. Moreover, Tan Lua had knowledge of the insolvency proceedings and acquiesced to the representation. The Court emphasized that authority to employ an attorney need not be in writing and may be inferred from circumstances. The presumption that an attorney appears with sufficient authority stands unless rebutted in a timely direct attack, which Tan Lua failed to do. Thus, the adjudication of insolvency was valid and binding on her.