Case Summary (G.R. No. 126891)
Petitioner
Laureano T. Angeles pursued specific performance (delivery of 46 metric tons of scrap rails) and damages, asserting rights derived through his deceased wife, Lizette, who had acted in relation to a rail award originally made to Romualdez. He was substituted as plaintiff after Lizette’s death.
Respondents
PNR maintained that Romualdez was the awardee and that Lizette acted only as his representative in withdrawing the rails. PNR relied on a signed delivery receipt showing Lizette’s withdrawal of 54.658 metric tons (valued at P114,781.80 at P2,100.00/MT) and refused the spouses’ demand for refund of P96,000.00.
Transaction and Documentary Instruments
On May 5, 1980, PNR accepted Romualdez’s offer to buy certain scrap rails at stated prices (P1,300.00 and P2,100.00 per metric ton) for a total of P96,600.00. Romualdez paid. On May 26, 1980 he wrote to PNR’s Acting Purchasing Agent, Atty. Cipriano Dizon, stating he had “authorized the bearer, LIZETTE R. WIJANCO … to be my lawful representative in the withdrawal of the scrap/unserviceable rails awarded to me,” and that he had given her copies of the award and official receipt which “will indicate my waiver of rights, interests and participation in favor of LIZETTE R. WIJANCO.” That same day Lizette requested a transfer of the withdrawal location; PNR granted the transfer but later suspended withdrawals because of alleged documentary discrepancies and reported pilferages.
Procedural History
Spouses Angeles filed suit against PNR and Rodolfo Flores on August 10, 1988, for specific performance and damages. After pleadings and trial, Lizette died and her heirs (including petitioner Laureano) were substituted. On April 16, 1996 the Regional Trial Court (Quezon City, Branch 79) dismissed the complaint for lack of cause of action, concluding the plaintiffs were not real parties-in-interest because Lizette had been Romualdez’s representative, not an assignee. The Court of Appeals affirmed (Decision, June 4, 2001) and denied reconsideration (Resolution, September 17, 2001). The Supreme Court denied the petition for review.
Issue Presented
Whether the May 26, 1980 letter from Romualdez to PNR designated Lizette as an assignee of his rights (giving her standing to sue in her own name) or whether it merely appointed her as his agent/representative limited to withdrawal of the rails (in which case the principal, Romualdez, is the real party-in-interest).
Applicable Law and Standards
Governing constitutional framework: 1987 Philippine Constitution (applicable because the decision date is after 1990). Relevant Civil Code provisions and doctrines invoked by the courts: real party-in-interest rule; Article 1374 (stipulations of a contract must be interpreted together) and Article 1371 (intention of contracting parties judged by contemporaneous and subsequent acts); agency and assignment principles; rules on powers of attorney (form and strict construction); estoppel. Precedents and authorities cited in the decision include Uy v. Court of Appeals, Lubos v. Galupo, Reyes v. Santiago, and American jurisprudence on agency as cited in the decision.
Court of Appeals and Trial Court Findings Affirmed
Both trial court and CA found, on the basis of the letter’s text and subsequent conduct, that Romualdez simply authorized Lizette to act as his lawful representative in the withdrawal of the awarded rails. The courts treated Lizette as an agent (or holder of a power of attorney evidencing agency) rather than an assignee of Romualdez’s contractual rights with PNR. Because an agent does not generally acquire rights against the third party by virtue of agency, the plaintiffs lacked the status of real parties-in-interest to sue on the contract.
Contractual Interpretation and Letter Content
The courts relied on close textual interpretation of Romualdez’s letter. Key points considered: (1) the letter uses the verb “authorized” and the noun “representative,” terms consistent with agency rather than assignment; (2) the phrase “For this reason, I have given her the original copy of the award … which will indicate my waiver of rights, interests and participation in favor of LIZETTE R. WIJANCO” was read in context as facilitating withdrawal pursuant to agency, not as effecting an absolute cession of ownership or contractual right; and (3) Article 1374 directs that contract stipulations be read together to discern intent.
Contemporaneous and Subsequent Acts as Evidence of Agency
The courts gave weight to contemporaneous and subsequent acts under Article 1371: the spouses’ own letters referred to Lizette as “authorized representative” of San Juanico Enterprises, and the withdrawal receipt Lizette signed indicated she was acting in a representative capacity. Such conduct corroborated the agency characterization and supported the conclusion that Lizette lacked independent title or assignable contractual rights against PNR.
Power of Attorney and Formality
The courts noted that a power of attorney need not follow any prescribed form absent statutory requirement; the May 26 letter was sufficient to evidence authority to act as agent. Nevertheless, powers conferred by such instruments must be strictly construed: the instrument grants only the powers expressly specified and the agent cannot exceed those powers. Here, the letter’s scope—withdrawal of the rails—did not expressly confer authority to hold or sue upon an independent proprietary claim against PNR.
Real Party-in-Interest Principle and Agency Consequences
The decision reiterated that liability on a contract is to the principal, not the agent, and that actions to enforce contractual rights ordinarily must be brought by a contracting party or an assignee. An agent may sue only if properly constituted and recognized as an assignee. Because the courts found no assignment, the plaintiffs (Lizette a
Case Syllabus (G.R. No. 126891)
Citation and Case Information
- Reported at 532 Phil. 147, Second Division; Supreme Court G.R. No. 150128; Decision dated August 31, 2006.
- Petition for review under Rule 45 of the Rules of Court.
- Petition assails and seeks to set aside: (a) Court of Appeals Decision dated June 4, 2001 (CA-G.R. CV No. 54062) which affirmed the Regional Trial Court decision dismissing the complaint for specific performance and damages; and (b) Court of Appeals Resolution dated September 17, 2001 denying petitioner’s motion for reconsideration.
- Decision penned by Justice Garcia; concurrence by Puno (Chairperson), Sandoval-Gutierrez and Azcuna, JJ.; Corona, J., on leave.
- Court of Appeals decision authored by Associate Justice Martin S. Villarama, Jr., with Associate Justices Conrado M. Vasquez, Jr. and Alicia L. Santos concurring.
Parties and Roles
- Petitioner: Laureano T. Angeles (also referenced in the record as Laureno T. Angeles), husband and later substituted heir of Lizette R. Wijanco (also referred to as Lizette W. Angeles), deceased.
- Respondents: Philippine National Railways (PNR) and Rodolfo Flores (PNR corporate secretary).
- Third party originally involved by award: Gaudencio Romualdez, who was awarded purchase of PNR scrap/unserviceable rails and paid the purchase price.
- Original award to Romualdez was to San Juanico Enterprises (Romualdez identified as President of San Juanico Enterprises).
Factual Background
- On May 5, 1980, PNR accepted Gaudencio Romualdez’s offer to buy PNR scrap/unserviceable rails located in Del Carmen and Lubao, Pampanga at P1,300.00 and P2,100.00 per metric ton respectively, for a total amount of P96,600.00.
- Romualdez paid the stated purchase price; Official Receipt No. 8706855 dated May 20, 1980 was issued.
- On May 26, 1980, Romualdez wrote a letter to Atty. Cipriano Dizon, PNR Acting Purchasing Agent, authorizing Lizette R. Wijanco as his “lawful representative in the withdrawal of the scrap/unserviceable rails awarded to me,” and stating he had given her the original award and O.R. which “will indicate my waiver of rights, interests and participation in favor of LIZETTE R. WIJANCO.”
- That same day (May 26, 1980) Lizette requested PNR to transfer the location of withdrawal because the rails in Del Carmen and Lubao were not ready for hauling; PNR permitted withdrawal in Murcia, Capas and San Miguel, Tarlac.
- PNR later suspended the withdrawal due to alleged documentary discrepancies and reported pilferages of over P500,000.00 worth of PNR scrap properties in Tarlac.
- The spouses Angeles demanded refund of P96,000.00 (note: earlier recited total P96,600.00) but PNR refused, asserting that a delivery/withdrawal receipt signed by Lizette showed withdrawal of 54.658 metric tons, which at P2,100.00 per metric ton amounted to P114,781.80—an amount greater than the refund claim.
- On August 10, 1988, the spouses Angeles filed suit against PNR and Rodolfo Flores, among others, before the Regional Trial Court (RTC) of Quezon City for specific performance and damages, praying that PNR be directed to deliver 46 metric tons of scrap/unserviceable rails and to pay damages and attorney’s fees.
- During the proceedings Lizette W. Angeles died and was substituted by her heirs, including her husband (the petitioner herein).
Procedural History
- Trial ensued after issues were joined. On April 16, 1996, the RTC (Branch 79, Quezon City) rendered judgment dismissing the complaint for lack of cause of action, holding that the spouses Angeles were not the real parties-in-interest because Lizette was merely a representative of Romualdez and not an assignee of his rights.
- Petitioner appealed to the Court of Appeals. In its Decision dated June 4, 2001, the CA dismissed the appeal and affirmed the RTC judgment. A Motion for Reconsideration was denied by CA Resolution dated September 17, 2001.
- Petitioner filed the present Rule 45 petition to the Supreme Court seeking to set aside both CA issuances.
Central Issue Presented
- Whether the May 26, 1980 letter of Gaudencio Romualdez to Atty. Cipriano Dizon constituted an assignment of Romualdez’s rights in the awarded scrap/unserviceable rails to Lizette R. Wijanco (making Lizette and, by substitution, her heirs the real parties-in-interest), or whether it merely constituted an authorization of Lizette to act as Romualdez’s representative/agent to withdraw the rails (in which case the agent lacks personality to sue and the real party-in-interest remains Romualdez).
Parties’ Contentions (as presented)
- Petitioner’s contention: The Romualdez letter, by stating that Lizette was given the original copy of the award and that Romualdez waived rights, interests and participation in favor of Lizette, d