G.R. No. L-6530, October 6, 1911
LA COMPAÑIA GENERAL DE TABACOS DE FILIPINAS, plaintiff-appellant, vs. DIABA, defendant-appellee.

FACTS

On July 19, 1909, La Compañia General de Tabacos de Filipinas (plaintiff) filed an action in the Court of First Instance of Leyte to recover P442 from Diaba (defendant) for goods sold and delivered by its agent, Gutierrez, between January 11 and April 1, 1909. In his answer, Diaba admitted purchasing goods from Gutierrez amounting to P692 but claimed he had sold abaca and other products to Gutierrez, acting as the plaintiff’s agent, amounting to P1,308.80, leaving a balance of P616.80 in his favor. After trial, the lower court ruled in favor of Diaba, ordering the plaintiff to pay him P616.80. The plaintiff appealed, arguing that Gutierrez had been suspended as its agent and lacked authority to purchase abaca on its behalf.

ISSUE

Whether Gutierrez, as the plaintiff’s agent, had apparent authority to purchase abaca from Diaba on behalf of the plaintiff, thereby binding the plaintiff to the transactions.

RULING

Yes. The Supreme Court affirmed the lower court’s decision. The Court found that Gutierrez had been acting as the plaintiff’s agent in dealing with Diaba for over eight years, including both selling goods and purchasing abaca. The plaintiff failed to prove that it had communicated Gutierrez’s suspension or lack of authority to Diaba. Consequently, Diaba had a right to rely on Gutierrez’s apparent authority as an agent. The plaintiff could not ratify only the beneficial acts (sales) while disowning the burdensome ones (purchases). Thus, the plaintiff was liable for the balance due to Diaba. Costs were awarded against the plaintiff.