Bordador V Luz

G.R. No.
130148 December 15, 1997
JOSE BORDADOR and LYDIA BORDADOR, petitioners,

vs.
BRIGIDA D. LUZ, ERNESTO M. LUZ and NARCISO DEGANOS, respondents.
REGALADO, J.:
FACTS
Petitioners Jose Bordador and Lydia Bordador (Bordador) were engaged in the
business of purchase and sale of jewelry and respondent Brigida D. Luz (Luz) was their
regular customer. On several occasions respondent Narciso Deganos (Deganos0 the
brother to Brigida D. Luz, received several pieces of gold and jewelry from petitioner
amounting to P382,816.00. These items and their prices were indicated in seventeen
receipts covering the same. Eleven of the receipts stated that they were received for a
certain Evelyn Aquino, a niece of Deganos, and the remaining six indicated that they
were received for Brigida D. Luz.
Deganos was supposed to sell the items at a profit and thereafter remit the proceeds
and return the unsold items to petitioners but this was not realized, in fact Deganos
remitted only the sum of P53,207.00 and neither paid the balance of the sales
proceeds, nor did he return any unsold item to petitioners.
This prompted Bordador to file a complaint in the barangay court against Deganos to

recover said amount. The parties entered into compromise agreement where in
Deganos obligated himself to pay petitioners, on installment basis, the balance of his
account plus interest thereon. However, he failed to comply with his aforestated
undertakings, hence petitioner left no recourse but to institute a civil case both against
Deganos and Luz.
Bordador claimed that Deganos acted as the agent oLuz when he received the subject
items of jewelry and, because he failed to pay for the same, Luz, as principal, and her
spouse are solidarily liable with him therefor of which Luz denied that she had anything
to do with the said transactions.
ISSUE
Whether or not Luz spouses are liable to Bordador spouses despite the fact that the
evidence does not show that they signed any of the subject receipts or authorized
Deganos to receive the items of jewelry on their behalf.
RULING
No. There was no evidence to support the theory of petitioners that Deganos was an
agent of Brigida D. Luz and that the latter should consequently be held solidarily liable
with Deganos in his obligation to petitioners. While the quoted statement in the findings
of fact of the assailed appellate decision mentioned that Deganos ostensibly acted as
an agent of Brigida, the actual conclusion and ruling of the Court of Appeals
categorically stated that, “(Brigida Luz) never authorized her brother (Deganos) to act
for and in her behalf in any transaction with Petitioners. It is clear, therefore, that even
assuming arguendo that Deganos acted as an agent of Brigida, the latter never
authorized him to act on her behalf with regard to the transactions subject of this case.
The Civil Code provides:
Art. 1868. By the contract of agency a person binds himself to render some service or to
do something in representation or on behalf of another, with the consent or authority of
the latter.
The basis for agency is representation. Here, there is no showing that Brigida

consented to the acts of Deganos or authorized him to act on her behalf, much less with
respect to the particular transactions involved. Petitioners’ attempt to foist liability on
respondent spouses through the supposed agency relation with Deganos is groundless
and ill-advised.
Besides, it was grossly and inexcusably negligent of petitioners to entrust to
Deganos, not once or twice but on at least six occasions as evidenced by six receipts,
several pieces of jewelry of substantial value without requiring a written authorization
from his alleged principal. A person dealing with an agent is put upon inquiry and must
discover upon his peril the authority of the agent.
The records show that neither an express nor an implied agency was proven to
have existed between Deganos and Brigida D. Luz. Evidently, petitioners, who were
negligent in their transactions with Deganos, cannot seek relief from the effects of their
negligence by conjuring a supposed agency relation between the two respondents
where no evidence supports such claim.
What was finally proven as a matter of fact is that there was no such contract
between Brigida D. Luz and Narciso Deganos, executed or partially executed, and no
delivery of any of the items subject of this case was ever made to the former.
PRINCIPLES ENUNCIATED BY THE SUPREME COURT
1. A person dealing with an agent is put upon inquiry and must discover upon his
peril the authority of the agent.
2. The basis of agency is representation.

Art. 1868. By the contract of agency a person binds himself to render some
service or to do something in representation or on behalf of another, with the
consent or authority of the latter.
In this case, there is no showing that Brigida consented to the acts of Deganos or
authorized him to act on her behalf, much less with respect to the particular transactions
involved. Petitioners' attempt to foist liability on respondent spouses through the
supposed agency relation with Deganos is groundless and ill-advised.
COMMENTS/OBSERVATIONS/REALIZATIONS
When there is doubt as to the representation of the agent to the principal, the third
person before contracting to the agent, if he has the opportunity to ask the principal
should verify first to the latter whether agency relationship exists or not. It is also
necessary on the part of the third person to require the agent certain documents that
would establish the authority of the latter acting on behalf of the principal. Mere
speculations of the previous transactions of the alleged principal would warrant the
agent-principal relationship especially that the agent is a brother or sister of the
principal.

Bordador V Luz

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Bordador V Luz

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G.R. No.

130148 December 15, 1997

JOSE BORDADOR and LYDIA BORDADOR, petitioners,

This prompted Bordador to file a complaint in the barangay court against Deganos to

The basis for agency is representation. Here, there is no showing that Brigida

PRINCIPLES ENUNCIATED BY THE SUPREME COURT

2. The basis of agency is representation.

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