Compañia General de Tabacos v. Diaba
REITERATIONFacts
The Antecedents: Plaintiff-appellant, La Compañia General de Tabacos de Filipinas, initiated an action against defendant-appellee, Diaba, to recover P442 for goods sold and delivered between January 11, 1909, and April 1, 1909. The defendant admitted purchasing goods amounting to P692 from the plaintiff's agent, Gutierrez, between January 12, 1909, and March 15, 1909. The defendant also claimed to have sold abaca and other effects to the same agent, Gutierrez, between January 25, 1909, and February 6, 1909, amounting to P1,308.80, resulting in a balance of P616.80 due to the defendant. Procedural History: The Court of First Instance of Leyte, after hearing the evidence, rendered a judgment in favor of the defendant, finding that the plaintiff was indebted to the defendant in the sum of P616.80. The Petition: The plaintiff appealed the judgment to the Supreme Court, assigning several errors.
Issue(s)
Whether the plaintiff-appellant is indebted to the defendant-appellee. Whether the acts of the agent, Gutierrez, in purchasing abaca from the defendant were binding upon the plaintiff.
Ruling
The Supreme Court affirmed the judgment of the lower court, finding that the plaintiff was indebted to the defendant in the sum of P616.80.
Ratio Decidendi
On whether the plaintiff-appellant is indebted to the defendant-appellee: The Court examined the evidence and found that the agent, Gutierrez, had been engaged in transactions with the defendant for over eight years. The specific transactions in question occurred between January 11, 1909, and April 1, 1909. The defendant admitted purchasing goods worth P692 from Gutierrez, while also selling abaca and other effects worth P1,308.80 to Gutierrez. This resulted in a net balance of P616.80 in favor of the defendant. The lower court's finding of this balance was supported by a preponderance of evidence. On whether the acts of the agent, Gutierrez, in purchasing abaca from the defendant were binding upon the plaintiff: The Court held that the plaintiff failed to provide convincing proof that the defendant was informed of the suspension of Gutierrez's authority as an agent. The defendant had a right to believe that Gutierrez was still representing the plaintiff in his dealings, particularly in the purchase of abaca and other effects, until explicitly notified otherwise. The plaintiff's attempt to disavow the agent's purchasing acts while implicitly accepting his selling acts was deemed inconsistent. Furthermore, Gutierrez himself testified that the abaca purchased from the defendant was bought as an agent of the plaintiff and was delivered to the plaintiff. This testimony, coupled with the lack of notice to the defendant, supported the conclusion that the plaintiff was bound by the agent's actions in purchasing the abaca.
Main Doctrine
A principal is bound by the acts of its agent if the principal fails to inform the third party that the agent's authority has been suspended or revoked, especially when the principal is willing to ratify the agent's acts in some transactions but not others.