ChanRobles Virtual law Library

chanrobles.com - PHILIPPINE SUPREME COURT RESOLUTIONS - ON-LINE

cralaw_scresolutions_separator.NHAD

[G.R. No. 149881. July 26, 2006]

M.V. CASACLANG CONSTRUCTION AND SUPPLY, REPRESENTED BY ITS OWNER, MARITESS V. CASACLANG versus FERNANDO HORA

Third Division

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated JULY 26, 2006 .

G.R. No. 149881 (M.V. Casaclang Construction and Supply, Represented by its Owner, Maritess V. Casaclang versus Fernando Hora)

x ------------------------------------------------------------------------------------------------------------------------- x

RESOLUTION

This petition assails the August 31, 2001 Court of Appeals Decision in CA-G.R. CV No. 65726 entitled "Fernando Hora v. M.V. Casaclang Construction and Suppl[y], represented by its owner, Marites[s] V. Casaclang." [1] cralaw The Court of Appeals affirmed the October 12, 1999 Decision [2] cralaw rendered by the Regional Trial Court, Branch 49 of Urdaneta City, Pangasinan, and upheld its judgment in the complaint for specific performance and damages filed by plaintiff (now respondent) Fernando Hora against herein petitioner M.V. Casaclang Construction and Supply (MVCCS).

Based on the findings of both the Regional Trial Court and the Court of Appeals which are in accord, the facts of the case are as follows:

On November 21, 1996, a certain Teddy, accompanied by Amado Orines, a former employee of MVCCS, arrived at Tabin Iron Works where Fernando Hora was a welder. Teddy and Amado asked Hora to work on a spent bullet that Teddy brought. Hora agreed, but only after Teddy had assured Hora that the ammunition no longer posed any danger. Lamentably, the bullet exploded while Hora was welding some iron on it, causing serious and multiple injuries on him. Hora was hospitalized for one year and became unfit for work.

While in the hospital, Hora learned that Brillante Hidalgo, a supervisor of MVCCS, had visited Hora's father, Juanito, and offered the latter P5,000 as financial assistance for Hora's injuries. Although hesitant at first, his father eventually relented because the family needed the money. Both Hora's father and Hidalgo signed a document attesting to the former's receipt of the settlement money. [3] cralaw The document was notarized before a Notary Public, Atty. Monte Ignacio.

When Hora realized the money was insufficient for his hospitalization expenses as well as lost income, he made a demand against MVCCS for more compensation. When MVCCS refused the demand, Hora filed an action against MVCCS for specific performance and damages before the Regional Trial Court.

The Regional Trial Court found in favor of Hora, as follows:

WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff Fernando Hora and against defendant M.V. Casaclang Construction & Supply as follows:

1.��� For defendant to pay plaintiff the amount of P22,288.28 with receipts marked as Exhibits "A" and series;

2.��� For his inability to work for two (2) years with an income of P6,000.00 a month, the defendant has to pay the lost earnings of P144,000.00;

3.��� For defendant to pay plaintiff moral damages in the amount of P30,000.00;

4.��� For defendant to pay attorney's fees in the amount of P10,000.00 and with costs.

SO ORDERED. [4] cralaw

On appeal, the Court of Appeals ruled that the bare denial of defense witness Maritess Casaclang, who is the proprietor of MVCCS, cannot prevail over the affirmative testimonies of Hora's witnesses - Amado Orines, who accompanied Teddy and testified that Teddy was an employee of MVCCS; and Joseph Colorado, who was at the site when the explosion occurred and also testified that Teddy introduced himself as an employee of the petitioner company. [5] cralaw

The Court of Appeals held that Teddy was an employee of MVCCS; that Hidalgo offered Juanito and his wife P5,000 as compensation for the injuries sustained by Hora; that receipt of the P5,000 was evidenced by a notarized "SETTLEMENT" agreement which states that MVCCS is the employer of Teddy; that Teddy hired Hora to do some welding works on a 105 MM Howitzer ammunition which exploded; and that MVCCS agreed to give Hora P5,000 as assistance. [6] cralaw

In the present petition before us, MVCCS assigns to the Court of Appeals the following errors:

(First and Main Issue)

I.�� WHETHER OR NOT THE SETTLEMENT DOCUMENT EXECUTED AND ENTERED INTO BY AN EMPLOYEE WITHOUT THE AUTHORITY OF THE EMPLOYER IS BINDING UPON THE LATTER;

(Incidental Issues)

II.� WHETHER OR NOT HEARSAY EVIDENCE MAY BE CONSIDERED BY THE COURT IN FINDING LIABILITY AGAINST THE PETITIONER;

III.� WHETHER OR NOT THE INJURIES SUSTAINED BY THE RESPONDENT WAS CAUSED BY A FORTUITOUS EVENT. [7] cralaw

MVCCS essentially argues that the Court of Appeals erred in declaring the settlement agreement entered into by Hidalgo binding on MVCCS. MVCCS insists that Hidalgo did not have a special power of attorney to enter into a settlement agreement concerning the injuries of Hora and it never ratified the agreement, thus, it is unenforceable against MVCCS.

Pertinent in this regard is Article 1869 of the New Civil Code which provides:

Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. (Emphasis supplied.)

By the contract of agency, a person binds himself to render some service or to do something in representation or in behalf of another, with the consent or authority of the latter. [8] cralaw The basis of agency is representation [9] cralaw and the same may be constituted expressly or impliedly. In an implied agency, the principal can be bound by the acts of the implied agent.

Notwithstanding the absence of a special power of attorney, we find that MVCCS had impliedly constituted Hidalgo as its agent when the latter was made to deal with Juanito for purposes of offering the settlement of P5,000. The provisions of the settlement agreement is clear in providing that Teddy was MVCCS's employee and the money offered was given to compensate for the injuries sustained by Hora as a result of the explosion. [10] cralaw The implied agency was confirmed when MVCCS did not repudiate the settlement agreement entered into by Hidalgo. Further, we note that Hidalgo was MVCCS's supervisor in charge of the daily supervision and control of the company's laborers working at the construction sites. [11] cralaw Thus, when Hidalgo approached Juanito and offered financial assistance, Hora's father had every reason to believe that Hidalgo was acting in behalf of MVCCS. Likewise, when Hidalgo appeared before Atty. Ignacio, he informed the notary public that he was an authorized representative of MVCCS. [12] cralaw

The records also reveal that Hidalgo's authority was repudiated by MVCCS only after Hora filed the civil case against MVCCS, more than a year after the incident. MVCCS's repudiation, it would appear, was an afterthought.

Petitioner Maritess Casaclang even testified to the effect that she was satisfied that Hidalgo had settled with Hora. Her testimony is as follows:

A.� During that time, I do not know of any news about that. I have only known after the agreement between Hidalgo and the victim, sir.

Q. In other words, you only came to know about an injury involving this alleged employee of yours and the complainant after there was an agreement that was brought to your attention by your foreman at Asingan?

A.� Yes, sir.

Q. And did you verify this matter with your foreman in Asingan in the person of Brillante Hidalgo?

A.� I verified this matter from Brillante Hidalgo and this Brillante Hidalgo told me that there is no problem anymore because there is already an agreement made between them, sir. [13] cralaw

Her testimony reveals that she had ratified Hidalgo's agency conformably with Article 1317, [14] cralaw 1403, [15] cralaw and 1396 [16] cralaw of the New Civil Code. Even if initially, Hidalgo was not MVCCS's agent, the company had ratified the implied agency. Ratification in agency is the adoption or confirmation by one person of an act performed on his behalf by another without authority. Ratification means that one under no disability voluntarily adopts and gives sanction to some unauthorized act or defective proceeding, which without his sanction would not be binding on him. It is this voluntary choice, knowingly made, which amounts to a ratification of what has theretofore been unauthorized, and becomes the authorized act of the party so making the ratification. [17] cralaw

Ratification may be effected expressly or impliedly. [18] cralaw Implied ratification may take various forms - such as silence, or acquiescence; by acts showing approval or adoption of the contract; or by acceptance and retention of benefits flowing therefrom. [19] cralaw MVCCS's silence and inaction for a considerable length of time, to our mind, constitutes implied ratification of the settlement agreement.

WHEREFORE, the present petition is DENIED. The August 31, 2001 Decision of the Court of Appeals sustaining the October 12, 1999 Decision of the Regional Trial Court is AFFIRMED.

Costs against petitioner.

SO ORDERED.

Very truly yours,

(Sgd.) LUCITA ABJELINA-SORIANO
Clerk of Court



Endnotes:

[1] cralaw Rollo, pp. 18-26. Penned by Associate Justice Portia Ali�o-Hormachuelos, with Associate Justices Ma. Alicia Austria-Martinez (now a member of this Court), and Mercedes Gozo-Dadole concurring.

[2] cralaw Records, pp. 190-210.

[3] cralaw Rollo, pp. 22-23.

[4] cralaw Records, pp. 209-210.

[5] cralaw Rollo, p. 22.

[6] cralaw Id. at 22-23.

[7] cralaw Id. at 8.

[8] cralaw NEW CIVIL CODE, Art. 1868.

[9] cralaw Dominion Insurance Corporation v. Court of Appeals, G.R. No. 129919, February 6, 2002, 376 SCRA 239, 243.

[10] cralaw Rollo, p. 23.

[11] cralaw Id. at 5.

[12] cralaw Id. at 23.

[13] cralaw TSN, March 10, 1999, pp. 7-8.

[14] cralaw ART. 1317. No one may contract in the name of another without being authorized by the latter, or unless he has by law a right to represent him.

A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party. (Emphasis supplied.)

[15] cralaw ART. 1403. The following contracts are unenforceable, unless they are ratified:

(1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers; x x x x. (Emphasis supplied.)

[16] cralaw ART. 1396. Ratification cleanses the contract from all its defects from the moment it was constituted. (Emphasis supplied.)

[17] cralaw Coronel v. Constantino, G.R. No. 121069, February 7, 2003, 397 SCRA 128, 134.

[18] cralaw NEW CIVIL CODE, Art. 1393.

[19] cralaw Metropolitan Waterworks and Sewerage System (MWSS) v. Court of Appeals, G.R. Nos. 126000 & 128520, October 7, 1998, 297 SCRA 287, 307.


Back to Home | Back to Main

 

CLICK HERE FOR THE LATEST SUPREME COURT JURISPRUDENCE

PHILIPPINE SUPREME COURT DECISIONS

QUICK SEARCH

cralaw

 







chanrobles.com





ChanRobles Legal Resources:

ChanRobles On-Line Bar Review

ChanRobles Internet Bar Review : www.chanroblesbar.com

ChanRobles MCLE On-line

ChanRobles Lawnet Inc. - ChanRobles MCLE On-line : www.chanroblesmcleonline.com