Case Summary (G.R. No. 243366)
Transaction Background
On July 10, 1917, Anacleto Cainto, acting as an agent for Damian Madriguera, purchased 1,257 kilos of abaca from Isidro Nantes for the sum of P1,357.56. Cainto paid only P70 at the time of purchase, leaving an outstanding balance of P1,287.56. The transaction was documented, stating conditions regarding payment and the delivery of the abaca, which was to be sent to Santa Cruz, Laguna.
Legal Action Initiated
On August 7, 1917, Nantes initiated legal action against Madriguera and Cainto to recover the unpaid balance. Cainto acknowledged the facts of the transaction but contended that he acted solely as an agent of Madriguera, thereby placing financial liability exclusively upon Madriguera, in his response to the complaint.
Trial Proceedings
During the trial, Cainto testified regarding his role as an agent and asserted that he had acted on behalf of Madriguera, who provided funds for purchasing abaca. However, Madriguera denied any principal-agent relationship, asserting that Cainto had acted independently, which led to a motion by Madriguera's counsel to strike Cainto's testimony regarding their relationship.
Lower Court's Decision
The lower court held that Nantes lacked a cause of action against Madriguera due to Cainto’s denial of agency. The court ruled that Nantes could not present evidence of the agency since Madriguera had denied it, relying on Article 247 of the Code of Commerce, which requires that an established agency is essential for a party to hold the principal liable.
Legal Considerations and Interpretation
The central question emerged: when an agent contracts in the name of the principal and the principal denies the agency, can the third party (the vendor) prove the agency to hold the principal liable? Article 247 delineates the responsibilities and rights of both the agent and the third party, establishing that if the agent conducts business in the name of the principal, the third party can sue the principal, pending proof of the agency.
Court's Analysis of Agency Liability
The court analyzed whether the mere denial of agency by the principal is sufficient to exonerate him from liability to the third party. It argued that this would contradict the intent of the law and potentially foster fraudulent practices whereby sound principals could deny their agents’ authority and esc
...continue readingCase Syllabus (G.R. No. 243366)
Case Overview
- The case involves Isidro Nantes (plaintiff/appellant) suing Damian Madriguera and Anacleto Cainto (defendants/appellees) for the unpaid balance of a sale of abaca.
- The transaction took place on July 10, 1917, with Cainto acting as an agent for Madriguera.
- A written agreement documented the sale of 1,257 kilos of abaca for P1,357.56, with only P70 paid at the time, leaving a balance of P1,287.56.
Transaction Details
- Cainto purchased abaca from Nantes on behalf of Madriguera.
- Cainto acknowledged the debt and promised to pay the remaining balance on July 20, 1917.
- The abaca was duly delivered to Madriguera as per the agreement.
Legal Proceedings
- Nantes filed a lawsuit on August 7, 1917, against both defendants to recover the balance owed.
- Madriguera denied having an agency relationship with Cainto and disclaimed liability.
- Cainto admitted the allegations but claimed that Madriguera, as the principal, was solely liable.
Trial Testimonies
- Cainto testified that he had been acting as a buyer for Madriguera since March 1917 and that he had instructions to purchase on credit when necessary.
- The trial court initially disallowed evidence intended to establish the a