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Manila Memorial Park Cemetery v. Linsangan Manila Memorial Park Cemetery v. Linsangan

I. RECIT-READY SUMMARY II. FACTS OF THE CASE

Baluyot offered Atty. Linsangan a lot in Holy Cross Memorial Park. Because the
former of the lot is no longer interested in acquiring it, he agreed to sell his rights Baluyot - agent of MMPCI
subject to the reimbursements of the amounts he already paid. This contract is for Atty. Linsangan-buyer
P95k. Atty. Linsangan agreed and gave Baluyot the reimbursement. MMPCI-principal
However, Baluyot informed Linsangan that he would be issued another contract and
that this contract the subject lot is priced at P132, 250. To convince Linsangan, In 1984, Florencia Baluyot offered Atty. Pedro Linsangan a lot called Garden State
Baluyot executed a letter stating that she would shoulder the difference between the at the Holy Cross Memorial Park owned by petitioner (MMPCI.) However, Baluyot
old contract price of P95k and the P132k. Linsangan agreed and issued 12 postdated said that a former owner of a memorial lot under a contract is no longer interested in
checks for two years which MMPCI validated and accepted. But Baluyot said that acquiring the lot and had opted to sell his rights subject to reimbursement of the
MMPCI cancelled the contract and instead proposed another lot that is equivalent to amounts he already paid. The contract is for P95,000.00 (old contract no.25012).
that of Garden State. Linsangan refused and wants Baluyot and MMPCI to honor Baluyot reassured Atty. Linsangan that once reimbursement is made to the former
their previous undertaking. buyer, the contract would be transferred to him. Atty. Linsangan agreed and gave
Baluyot P35,295.00 representing the amount to be reimbursed to the original buyer
Held: As the Court sees it, there are two obligations in the instant case. and to complete the down payment to Manila Memorial Cemetery (MMPCI).
Baluyot issued handwritten and typewritten receipts for these payments
One is the new contract between MMPCI and by Atty. Linsangan for the purchase of
an interment space in the former's cemetery. The other is the agreement between Baluyot informed Atty. Linsangan that he would be issued another contract (contract
Baluyot and Atty. Linsangan for the former to shoulder the amount P1,455.00, or the no. 28660) covering the same lot instead of the old contract. Understandably, Atty.
difference between P95,000.00, the original price, and P132,250.00, the actual Linsangan protested but Baluyot assured him that he would still be paying the
contract price. original amount of P95,000 with P19,838 credited as full down payment with a
balance of P75k.
This Court finds the new contract was validly entered into both by MMPCI and Atty.
Linsangan. By affixing his signature in the contract, Atty. Linsangan agreed to the However in the new contract, the listed price of the lot is P132,250. Atty. Linsangan
terms and conditions. When Atty. Linsangan incurred delinquencies in payment, yet again objected to the new contract price since it was not the amount previously
MMCPI merely enforced its rights under the said contract by canceling the same. agreed upon. To convince Atty. Linsangan, Baluyot executed a document
confirming that while the contract price is P132,250.00, Atty. Linsangan would
Being aware of the limits of Baluyot's authority, Atty. Linsangan cannot insist on pay only the original price of P95,000.00 (see notes for letter)
what he claims to be the terms of the new contract. The agreement, insofar as the
P95,000.00 contract price is concerned, is void and cannot be enforced as Because of this letter, Atty. Linsangan signed the new conract and accepted the
against MMPCI. At best, the "agreement" between Baluyot and Atty. official receipt. Linsangan issued 12 postdated checks of P,1800 each in favor of
Linsangan bound only the two of them. As far as MMPCI is concerned, it MMPCI. The following year or on April 29,1986, Linsangan again issued 12
bound itself to sell its interment space to Atty. Linsangan for P132,250.00. postdated checks in favor of MMPCI.
In 1987, Baluyot verbally advised Linsangan that the new contract was cancelled
DOCTRINE: The acts of the agent beyond the scope of his authority do not bind and presented to him another proposal for the purchase of an equivalent property. He
the principal unless the latter ratifies the same. It also bears emphasis that when the refused and said that Baluyot and MMPCI should honor their previous contract.
third person knows that the agent was acting beyond his power or authority, the Thus, Atty. Linsangan filed a complaint for Breach of Contract and Damages against
principal cannot be held liable for the acts of the agent. If the said third person was MMPCI and Baluyot.
aware of such limits of authority, he is to blame and is not entitled to recover MMPCI contends that:
damages from the agent, unless the latter undertook to secure the principal's 1. Baluyot is not an agent but an independent contractor and was not authorized to
ratification. represent MMPCI.
2. It was not aware of the arrangements entered into by Linsangan and Baluyot

G.R. NO: 15139; Nov. 22, 2004 PONENTE: J. Tinga

ARTICLE; TOPIC OF CASE: Art.1900; Agent’s Written Power of Attorney in so far as it concerns 3rd persons DIGEST MAKER:Chan
 B2022 ANNOTATED B2022 ANNOTATED
Manila Memorial Park Cemetery v. Linsangan Manila Memorial Park Cemetery v. Linsangan

RULING OF THE LOWER COURT considered an independent contractor and not an agent. In that same contract,
Baluyot was authorized to solely in behalf of MMPCI.
Trial court: ruled in favor of Atty. Linsangan. The court held that MMPCI and
Baluyot should be jointly and severally liable. It found that Baluyot was an agent of 2. The Offer to Purchase duly signed by Atty. Linsangan, and accepted and validated
MMPCI and that the latter was estopped from denying this agency, having received by MMPCI showed a total list price of P132,250.00. Likewise, it was clearly
and encashed the checks issued by Atty. Linsangan and given to it by Baluyot. stated therein that "Purchaser agrees that he has read or has had read to him this
agreement, that he understands its terms and conditions, and that there are no
On Appeal to the CA covenants, conditions, warranties or representations other than those contained
herein." By signing the Offer to Purchase, Atty. Linsangan signified that he
MMPCI contends further: understood its contents. That he and Baluyot had an agreement different from
1. That Atty. Linsangan, a practicing lawyer for over 13 years at the time he entered that contained in the Offer to Purchase is of no moment, and should not
into the contract, is presumed to know his contractual obligations and is fully affect MMPCI, as it was obviously made outside Baluyot's authority. To
aware that he cannot belatedly and unilaterally change the terms of the repeat, Baluyot's authority was limited only to soliciting purchasers. She had no
contract without the consent, much less the knowledge of the other authority to alter the terms of the written contract provided by MMPCI. The
contracting party, which was MMPCI. And in this case, MMPCI did not agree document/letter "confirming" the agreement that Atty. Linsangan would
to a change in the contract and in fact implemented the same pursuant to its clear have to pay the old price was executed by Baluyot alone. Nowhere is there
terms. Thus, because of Atty. Linsangan's delinquency, MMPCI validly cancelled any indication that the same came from MMPCI or any of its officers.
the contract.
2. That it cannot be held jointly and solidarily liable with Baluyot as the latter As the Court sees it, there are two obligations in the instant case.
exceeded the terms of her agency, neither did MMPCI ratify Baluyot's acts. It
added that it cannot be charged with making any misrepresentation, nor of having One is the new contract between MMPCI and by Atty. Linsangan for the purchase of
allowed Baluyot to act as though she had full powers as the written contract an interment space in the former's cemetery. The other is the agreement between
expressly stated the terms and conditions which Atty. Linsangan accepted and Baluyot and Atty. Linsangan for the former to shoulder the amount P1,455.00, or the
understood. difference between P95,000.00, the original price, and P132,250.00, the actual
contract price.
CA affirms the decision of the trial court:
To repeat, the acts of the agent beyond the scope of his authority do not bind
MMPCI is considered estopped when it allowed Baluyot to act and represent the principal unless the latter rati es the same. It also bears emphasis that when
MMPCI even beyond her authority. The appellate court likewise found that the acts the third person knows that the agent was acting beyond his power or
of Baluyot bound MMPCI when the latter allowed the former to act for and in its authority, the principal cannot be held liable for the acts of the agent. If the
behalf and stead. While Baluyot's authority "may not have been expressly conferred said third person was aware of such limits of authority, he is to blame and is not
upon her, the same may have been derived impliedly by habit or custom, which entitled to recover damages from the agent, unless the latter undertook to
may have been an accepted practice in the company for a long period of time." secure the principal's ratification.

This Court finds the new contract was validly entered into both by MMPCI and Atty.
Linsangan. By affixing his signature in the contract, Atty. Linsangan agreed to the
III. ISSUE/S
terms and conditions. When Atty. Linsangan incurred delinquencies in payment,
1. Whether or not Baluyot is an agent of MMPCI- Yes
MMCPI merely enforced its rights under the said contract by canceling the same.
2. Whether or not MMPCI allowed Baluyot to act as though she had full
powers to be held solidarily liable with the latter- NO
Being aware of the limits of Baluyot's authority, Atty. Linsangan cannot insist on
what he claims to be the terms of the new contract. The agreement, insofar as the
P95,000.00 contract price is concerned, is void and cannot be enforced as
IV. RATIO/LEGAL BASIS
against MMPCI. Neither can he hold Baluyot liable for damages under the same
1. Baluyot was an agent of MMPCI, having represented the interest of the latter,
contract, since there is no evidence showing that Baluyot undertook to secure
and having been allowed by MMPCI to represent it in her dealings with its
MMPCI's ratification.
clients/prospective buyers. Even if in its Agency Manager Agreement, Baluyot is

G.R. NO: 15139; Nov. 22, 2004 PONENTE: J. Tinga

ARTICLE; TOPIC OF CASE: Art.1900; Agent’s Written Power of Attorney in so far as it concerns 3rd persons DIGEST MAKER:Chan
 B2022 ANNOTATED B2022 ANNOTATED
Manila Memorial Park Cemetery v. Linsangan Manila Memorial Park Cemetery v. Linsangan

At best, the "agreement" between Baluyot and Atty. Linsangan bound only the two This will con rm our agreement that while the offer to purchase under Contract No.
of them. As far as MMPCI is concerned, it bound itself to sell its interment space to 28660 states that the total price of P132,250.00 your undertaking is to pay only the
Atty. Linsangan for P132,250.00. total sum of P95,000.00 under the old price. Further the total sum of P19,838.00
already paid by you under O.R. # 118912 dated April 6, 1985 has been credited in
If the contract was cancelled due to default in payment, Atty. Linsangan's recourse the total purchase price thereby leaving a balance of P75,162.00 on a monthly
should only be against Baluyot who personally undertook to pay the difference installment of P1,800.00 including interests (sic) charges for a period of five (5)
between the true contract price of P132,250.00 and the original proposed price years.
of P95,000.00. (Signed) FLORENCIA C. BALUYOT

However, this does not preclude Atty. Linsangan from instituting a separate action to
recover damages from Baluyot, not as an agent of MMPCI, but in view of the latter's
breach of their separate agreement.

Baluyot obligated herself to pay P1,455.00 in addition to Atty. Linsangan's

P1,800.00 to complete the monthly installment payment under the contract, which,
by her own admission, she was unable to do due to personal financial difficulties. It
is undisputed that Atty. Linsangan issued the P1,800.00 as agreed upon, and were it
not for Baluyot's failure to provide the balance, the new contract would not
have been cancelled. Thus, Atty. Linsangan has a cause of action against Baluyot,
which he can pursue in another case.

V. DISPOSITION
WHEREFORE, the instant petition is GRANTED. The Decision of the Court of
Appeals dated 22 June 2001 and its Resolution dated 12 December 2001 in CA-G.R.
CV No. 49802, as well as the Decision in Civil Case No. 88-1253 of the Regional
Trial Court, Makati City Branch 57, are hereby REVERSED and SET ASIDE. The
Complaintin Civil Case No. 88-1253 is DISMISSED for lack of cause of action. No
pronouncement as to costs.
dll
VI. Notes
The document reads in part:
The monthly installment will start April 6, 1985; the amount of P1,800.00
and the difference will be issued as discounted to conform to the previous price as
previously agreed upon. — P95,000.00

Prepared by:

(Signed)

(MRS.) FLORENCIA C. BALUYOT

Agency Manager
Holy Cross Memorial Park
4/18/85

Dear Atty. Linsangan:

G.R. NO: 15139; Nov. 22, 2004 PONENTE: J. Tinga

ARTICLE; TOPIC OF CASE: Art.1900; Agent’s Written Power of Attorney in so far as it concerns 3rd persons DIGEST MAKER:Chan