Regina Dizon et al v. CA and Overland Express Lines, Inc.
G.R. No. 122544 January 28, 1999Martinez, J.
FACTS:
Overland Express Lines, Inc. entered into a Contract of Lease with
Option to Buy with petitionersinvolving a 1,755.80 square meter
parcel of land situated at corner MacArthur Highway and SouthH
Street, Diliman, Quezon City. The term of the lease was for 1 year
commencing from May 16,1974 up to May 15, 1975. During this
period, Overland Express Lines was granted an option
topurchase for the amount of P3,000.00 per
square meter. Thereafter, the lease shall be on a permonth basis
with a monthly rental of P3,000.00.
For failure of Overland Express Lines to pay the increased rental of
P8,000.00 per month effective June 1976, petitioners filed an action
for ejectment against it. The lower court rendered judgmentordering
Overland Express Lines to vacate the leased premises and to pay
the sum of P624,000.00representing rentals in arrears and/or as
damages in the form of reasonable compensation for theuse and
occupation of the premises during the period of illegal detainer from
June 1976 to November1982 at the monthly rental of P8,000.00, less
payments made, plus 12% interest per annum fromNovember 18,
1976, the date of filing of the complaint, until fully paid, the
sum of P8,000.00 amonth starting December 1982, until Overland
Express Lines fully vacates the premises, and to payP20,000.00 as
and by way of attorneys fees.
ISSUE:
WON Overland Express Lines actually paid the alleged P300,000.00
to Fidela Dizon, asrepresentative (agent) of petitioners
in consideration of the option
HELD:
No.
CA opined that the payment by Overland Express Lines of
P300,000.00 as partial payment for theleased property, which
petitioners accepted (through Alice A. Dizon) and for which an official
receiptwas issued, was the operative act that gave rise to a
perfected contract of sale, and that for failureof petitioners to deny
receipt thereof, Overland Express Lines can therefore assume that
Alice A.Dizon, acting as agent of petitioners, was authorized by them
to receive the money in their behalf.CA went further by stating that in
fact, what was entered into was a conditional contract of
salewherein ownership over the leased property shall not pass
to the Overland Express Lines until it hasfully paid the purchase
price. Since Overland Express Lines did not consign to the court the
balanceof the purchase price and continued to occupy the subject
premises, it had the obligation to pay theamount of P1,700.00 in
monthly rentals until full payment of the purchase price.
In an attempt to resurrect the lapsed option, Overland Express Lines
gave P300,000.00 to petitioners(thru Alice A. Dizon) on the
erroneous presumption that the said amount tendered would
constitute aperfected contract of sale pursuant to the contract of
lease with option to buy. There was no validconsent by the
petitioners (as co-owners of the leased premises) on the supposed
sale entered intoby Alice A. Dizon, as petitioners alleged agent, and
Overland Express Lines. The basis for agency isrepresentation and
a person dealing with an agent is put upon inquiry and must discover
upon hisperil the authority of the agent. As provided in Article 1868 of
the New Civil Code, there was noshowing that petitioners consented
to the act of Alice A. Dizon nor authorized her to act on
theirbehalf with regard to her transaction
with private respondent. The most prudent thing privaterespondent
should have done was to ascertain the extent of the authority of Alice
A. Dizon. Beingnegligent in this regard, private respondent cannot
seek relief on the basis of a supposed agency.
Every person dealing with an agent is put upon inquiry
and must discover upon his peril theauthority of the agent. If he does
not make such inquiry, he is chargeable with knowledge of
theagents authority, and his ignorance of that authority will not be
any excuse. Persons dealing with anassumed agency, whether the
assumed agency be a general or special one, are bound at their
peril,if they would hold the principal, to ascertain not only the fact of
the agency but also the nature andextent of the authority, and in
case either is controverted, the burden of proof is upon them
toestablish it.