Angeles v. Phil. National Railways - 500 SCRA 444

LAUREANO T. ANGELES, G.R. No.
150128
Petitioner,

Present:

PUNO, J., Chairperson,

SANDOVAL-GUTIERREZ,
- versus - CORONA,
AZCUNA, and
GARCIA, JJ.

Promulgated:

PHILIPPINE NATIONAL
RAILWAYS (PNR) AND August 31, 2006
RODOLFO FLORES,[1]
Respondents.
x--------------------------------------------------
-x

DECISION

GARCIA, J.:

Under consideration is this petition for review under Rule 45 of the Rules
of Court assailing and seeking to set aside the following issuances of the
Court of Appeals (CA) in CA-G.R. CV No. 54062, to wit:

1. Decision[2] dated June 4, 2001, affirming an earlier decision of
the Regional Trial Court (RTC) ofQuezon City, Branch
79, which dismissed the complaint for specific performance
and damages thereat commenced by the petitioner against the
herein respondents; and
2. Resolution[3] dated September 17,
2001, denying the petitioner's motion for reconsideration.

The facts:

On May 5, 1980, the respondent Philippine National Railways (PNR)
informed a certain Gaudencio Romualdez (Romualdez, hereinafter) that it
has accepted the latters offer to buy, on an AS IS, WHERE IS
basis, the PNRs scrap/unserviceable rails located in Del Carmen and
Lubao, Pampanga at P1,300.00 and P2,100.00 per metric ton,
respectively, for the total amount of P96,600.00. After paying the stated
purchase price, Romualdez addressed a letter to Atty. Cipriano
Dizon, PNRs Acting Purchasing Agent. Bearing date May 26, 1980, the
letter reads:

Dear Atty. Dizon:

This is to inform you as President of San Juanico Enterprises, that I
have authorized the bearer, LIZETTE R. WIJANCO of No. 1606
Aragon St., Sta. Cruz, Manila, to be my lawful representative in the
withdrawal of the scrap/unserviceable rails awarded to me.

For this reason, I have given her the ORIGINAL COPY of
the AWARD, dated May 5, 1980 and O.R. No. 8706855 dated May 20,
1980 which will indicate my waiver of rights, interests and participation
in favor of LIZETTE R. WIJANCO.

Thank you for your cooperation.

Very truly yours,
(Sgd.) Gaudencio Romualdez

The Lizette R. Wijanco mentioned in the letter
was Lizette Wijanco- Angeles, petitioner's now deceased wife. That very
same day May 26, 1980 Lizette requested the PNR to transfer the location
of withdrawal for the reason that the scrap/unserviceable rails
located in Del Carmen and Lubao, Pampanga were not ready for
hauling. The PNR granted said request and allowed Lizette to withdraw
scrap/unserviceable rails in Murcia, Capas and San Miguel, Tarlac
instead. However, the PNR subsequently suspended the withdrawal in
view of what it considered as documentary discrepancies coupled
by reported pilferages of over P500,000.00 worth of PNR scrap properties
in Tarlac.

Consequently, the spouses Angeles demanded the refund of the amount
of P96,000.00. The PNR, however, refused to pay, alleging that as per
delivery receipt duly signed by Lizette, 54.658 metric tons of
unserviceable rails had already been withdrawn which, at P2,100.00 per
metric ton, were worth P114,781.80, an amount that exceeds the claim for
refund.

On August 10, 1988, the spouses Angeles filed suit against the PNR and
its corporate secretary, Rodolfo Flores, among others, for specific
performance and damages before the
Regional Trial Court of Quezon City. In it, they prayed that PNR be direc
ted to deliver 46 metric tons of scrap/unserviceable rails and to pay them
damages and attorney's fees.

Issues having been joined following the filing by PNR, et al., of their
answer, trial ensued. Meanwhile, Lizette W. Angeles passed away and
was substituted by her heirs, among whom is her husband, herein
petitioner Laureno T. Angeles.

On April 16, 1996, the trial court, on the postulate that the spouses

Angeles are not the real parties-in-interest, rendered judgment dismissing
their complaint for lack of cause of action. As held by
the court, Lizette was merely a representative of Romualdez in the
withdrawal of scrap or unserviceable rails awarded to him and not an
assignee to the latter's rights with respect to the award.

Aggrieved, the petitioner interposed an appeal with the CA, which, as
stated at the threshold hereof, in its decision of June 4, 2001, dismissed
the appeal and affirmed that of the trial court. The affirmatory decision
was reiterated by the CA in its resolution of September 17,
2001, denying the petitioners motion for reconsideration.

Hence, the petitioners present recourse on the submission that the CA
erred in affirming the trial court's holding that petitioner and his spouse,
as plaintiffs a quo, had no cause of action as they were not the real
parties-in-interest in this case.

We DENY the petition.

At the crux of the issue is the matter of how the aforequoted May 26,
1980 letter of Romualdez to Atty. Dizonof the PNR should be taken: was
it meant to designate, or has it the effect of designating, Lizette
W. Angeles as a mere agent or as an assignee of his (Romualdez's)
interest in the scrap rails awarded to San Juanico Enterprises? The CAs
conclusion, affirmatory of that of the trial court, is that Lizette was not an
assignee, but merely an agent whose authority was limited to the
withdrawal of the scrap rails, hence, without personality to sue.

Where agency exists, the third party's (in this case, PNR's) liability on a
contract is to the principal and not to the agent and the relationship of the
third party to the principal is the same as that in a contract in which there
is no agent. Normally, the agent has neither rights nor liabilities as
against the third party. He cannot thus sue or be sued on the
contract. Since a contract may be violated only by the parties thereto as
against each other, the real party-in-interest, either as plaintiff or
defendant in an action upon that contract must, generally, be
a contracting party.

The legal situation is, however, different where an agent is constituted as
an assignee. In such a case, the agent may, in his own behalf, sue on a
contract made for his principal, as an assignee of such contract. The rule
requiring every action to be prosecuted in the name of the real party-in-

interest recognizes the assignment of rights of action and also recognizes
that when one has a right assigned to him, he is then the real party-in-
interest and may maintain an action upon such claim or right.[4]

Upon scrutiny of the subject Romualdez's letter

to Atty. Cipriano Dizon dated May 26, 1980, it is at once apparent that
Lizette was to act just as a representative of Romualdez in the withdrawal
of rails, and not an assignee. For perspective, we reproduce the contents
of said letter:

This is to inform you as President of San Juanico Enterprises, that I
have authorized the bearer, LIZETTE R. WIJANCO x x x to be my
lawful representative in the withdrawal of the scrap/unserviceable
rails awarded to me.

For this reason, I have given her the ORIGINAL COPY of
the AWARD, dated May 5, 1980 and O.R. No. 8706855 dated May 20,
1980 which will indicate my waiver of rights, interests and
participation in favor of LIZETTE R. WIJANCO. (Emphasis added)

If Lizette was without legal standing to sue and appear in this case, there
is more reason to hold that her petitioner husband, either as her conjugal
partner or her heir, is also without such standing.

Petitioner makes much of the fact that the terms agent or attorney-in-fact
were not used in the Romualdez letter aforestated. It bears to stress,
however, that the words principal and agent, are not the only terms used
to designate the parties in an agency relation. The agent may also be
called an attorney, proxy, delegate or, as here, representative.

It cannot be over emphasized that Romualdez's use of the active verb

authorized, instead of assigned,indicated an intent on his part to keep and
retain his interest in the subject matter. Stated a bit differently, he
intended to limit Lizettes role in the scrap transaction to being
the representative of his interest therein.

Petitioner submits that the second paragraph of the Romualdez letter,

stating - I have given [Lizette] the original copy of the award x x x which
will indicate my waiver of rights, interests and participation in favor of
Lizette R. Wijanco - clarifies that Lizette was intended to be an assignee,
and not a mere agent.

We are not persuaded. As it
were, the petitioner conveniently omitted an important phrase preceding
theparagraph which would have put the whole matter in context. The
phrase is For this reason, and the antecedent thereof is his (Romualdez)
having appointed Lizette as his representative in the matter of the
withdrawal of the scrap items. In fine, the key phrase clearly conveys
the idea that Lizette was given the original copy of the contract award to
enable her to withdraw the rails as Romualdezs authorized representative.

Article 1374 of the Civil Code provides that the various stipulations of a
contract shall be read and interpreted together, attributing to the doubtful
ones that sense which may result from all of them taken jointly. In
fine,the real intention of the parties is primarily to be determined from the
language used and gathered from the whole instrument. When put into the
context of the letter as a whole, it is abundantly clear that the rights which
Romualdez waived or ceded in favor of Lizette were those in furtherance
of the agency relation that he had established for the withdrawal of the
rails.

At any rate, any doubt as to the intent of Romualdez generated by the
way his letter was couched could be clarified by the acts of the main
players themselves. Article 1371 of the Civil Code provides that to judge
the intention of the contracting parties, their contemporaneous and
subsequent acts shall be principally considered. In other words, in case of
doubt, resort may be made to the situation, surroundings, and relations of
the parties.

The fact of agency was, as the trial court aptly observed,[5] confirmed in
subsequent letters from the Angelesspouses in which they themselves
refer to Lizette as authorized representative of San Juanico Enterprises.
Mention may also be made that the withdrawal receipt which Lizette had
signed indicated that she was doing so in a representative capacity. One
professing to act as agent for another is estopped to deny his agency both
as against his asserted principal and third persons interested in the
transaction which he engaged in.

Whether or not an agency has been created is a question to be determined

by the fact that one represents and is acting for another. The appellate
court, and before it, the trial court, had peremptorily determined
that Lizette, with respect to the withdrawal of the scrap in question, was
acting for Romualdez. And with the view we take of this case, there were
substantial pieces of evidence adduced to support this determination. The
desired reversal urged by the petitioner cannot, accordingly, be granted.
For, factual findings of the trial court, adopted and confirmed by the CA,
are, as a rule, final and conclusive and may not be disturbed on appeal.
[6]
So it must be here.

Petitioner maintains that the Romualdez letter in question was not in the

form of a special power of attorney, implying that the latter had not
intended to merely authorize his wife, Lizette, to perform an act for
him(Romualdez). The contention is specious. In the absence of statute, no
form or method of execution is required for a valid power of attorney; it
may be in any form clearly showing on its face the agents authority.[7]

A power of attorney is only but an instrument in writing by
which a person, as principal, appoints another as his agent and confers
upon him the authority to perform certain specified acts on behalf of the
principal. The written authorization itself is the power of attorney, and
this is clearly indicated by the fact that it has also been called a letter of
attorney. Its primary purpose is not to define the authority of the agent as
between himself and his principal but to evidence the authority of the
agent to third parties with whom the agent deals.[8] The letter
under consideration is sufficient to constitute a power of attorney. Except
as may be required by statute, a power of attorney is valid although no
notary public intervened in its execution.[9]

A power of attorney must be strictly construed and pursued. The
instrument will be held to grant only those powers which are specified
therein, and the agent may neither go beyond nor deviate from the power
of attorney.[10] Contextually, all that Lizette was authorized to do was
to withdraw the unserviceable/scrap railings. Allowing her authority to
sue therefor, especially in her own name, would be to read something not
intended, let alone written in the Romualdez letter.

Finally, the petitioner's claim that Lizette paid the amount of P96,000.00
to the PNR appears to be a mere afterthought; it ought to be dismissed
outright under the estoppel principle. In earlier proceedings, petitioner
himself admitted in his complaint that it was Romualdez who paid
this amount.

WHEREFORE, the petition is DENIED and the assailed decision of the
CA is AFFIRMED.

Costs against the petitioner.

SO ORDERED.

CANCIO C. GARCIA
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Associate Justice
Chairperson

(ON LEAVE)
ANGELINA SANDOVAL- RENATO C. CORONA
GUTIERREZ Associate Justice
Associate Justice

ADOLFO S. AZCUNA
Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above decision were reached in
consultation before the case was assigned to the writer of the opinion of
the Courts Division.

REYNATO S . PUNO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, and the Division
Chairperson's Attestation, it is hereby certified that the conclusions in the
above decision were reached in consultation before the case was assigned
to the writer of the opinion of the Court.

ARTEMIO V. PANGANIBAN
Chief Justice
[1]
As filed, the petition impleads the Court of Appeals as among the respondents. Pursuant to Sec.
4, Rule 45, the CA need not be impleaded.
[2] Penned by Associate Justice Martin S. Villarama, Jr., with Associate Justices Conrado M. Vasquez,
Jr. and Alicia L. Santos, concurring; Rollo, pp. 46-53.
[3] Id. at 75.
[4]
Uy v. Court of Appeals, G.R. No. 120465, September 9, 1999, 314 SCRA 69.
[5]
RTC Decision, pp. 17-18; Rollo, pp. 71-72.
[6]
Lubos v. Galupo, G.R. No. 139136, January 16, 2002, 373 SCRA 618.
[7]
3 Am Jur. 2d, Agency, Sec. 25.
[8]
Ibid. Sec. 23.
[9]
Reyes v. Santiago, CA-G.R. No. 47996-7-R, Nov. 27, 1975.
[10]
3 Am. Jur. 2d, Agency, Sec. 31.

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LAUREANO T. ANGELES, G.R. No.

On April 16, 1996, the trial court, on the postulate that the spouses

requiring every action to be prosecuted in the name of the real party-in-

Upon scrutiny of the subject Romualdez's letter

It cannot be over emphasized that Romualdez's use of the active verb

Petitioner submits that the second paragraph of the Romualdez letter,

Whether or not an agency has been created is a question to be determined

Petitioner maintains that the Romualdez letter in question was not in the

Costs against the petitioner.

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