BORDADOR v.

LUZ
FACTS:
Petitioners were engaged in the business of purchase and sale of jewelry and the
respondent Brigida Luz was their regular customer. On several occasions, Narciso
Deganos, brother of Brigida Luz, received several pieces of gold and jewelry from
petitioners amounting to 382,816 pesos. Eleven of the receipts indicated that they
were received for a certain Evelyn Aquino, a niece of Deganos, and the remaining six
were received for by Brigida D. Luz.
Deganos was supposed to sell the items and remit the proceeds and return the
unsold items to petitioners. Deganos, however, remitted only the sum of 53,207 PHP.
He neither paid the balance of sales proceeds nor did he return unsold items to
petitioners. By January 1990, the total of Deganos unpaid account to petitioners
reached more than 700,000 PHP. Petitioners then filed a complaint in Barangay Court
to recover said amount.
In the Barangay proceedings, Brigida Luz appeared as witness for Deganos.
Spouses Luz and Deganos signed a compromise agreement with petitioners. In that
compromise agreement, Deganos obliged himself to pay petitioners the balance of his
account inclusive of the interest on an installment basis. Deganos however failed to
comply with his undertaking. The Petitioner instituted a civil case on the RTC of
Malolos against Deganos and Brigida Luz for the recovery of sum of money; while
Ernesto Luz was impleaded therein as the spouse of Brigida.
During the trial of the civil case, petitioners claimed that Deganos acted as the
agent of Brigida Luz, as when he received the subject items of jewelry and that
because Deganos failed to pay for it, Brigida, as principal, as well as her spouse, are
solidarily liable with him. Meanwhile, Deganos asserted that it was he alone who was
involved in the transactions with the Petitioners. He neither acted as agent nor was he
authorized to act as an agent by Brigida Luz. As to Brigida, the latter denied that she
had anything to do with the transactions between petitioners and Deganos. She
claimed that she never authorized Deganos to receive any item of jewelry in her
behalf. Neither did she receive any of the subject articles.
CA affirmed the judgment of the RTC. Hence, the petitioners brought the case
before the SC.
ISSUE: W/N the herein respondent spouses are liable to petitioners for the
latters claim for money and damages (NO)
Alternative issue: W/N Deganos is an agent of Brigida Luz (NO)
Petitioners submit that the CA erred in finding that respondent spouses are
liable to them as said conclusion of the trial court is contradicted by the finding of fact
of the CA that Deganos acted as agent of his sister (Luz). To support the contention,
petitioners quoted several letters sent to them by Brigida Luz where the later
acknowledged her obligation to petitioners. Both CA and RTC however found that the
said letters had nothing to do with the money sought to be recovered in the present
case.
While there was an admission as regards the testimony of Brigida on the
delivery of the gold to her, there is no showing whatsoever that her statement
referred to the items which are the subject matter of the case. Thus, it cannot be
said that she admitted her liability on the same.
Petitioners insist that Deganos was the agent of Brigida Luz. This was
supported by the representation that the CA recognized in its decision that Deganos
was an agent of Brigida. While it may be true that the appellate decision somehow
recognized that Deganos ostensibly acted as an agent of Brigida, the actual conclusion
of the CA however stated that Luz never authorized her brother to act for and in her
behalf in any transaction with petitioners. In other words, such premise is merely
linked on the assumption that should there be a contract of agency between Brigida
and Deganos, the same would be unenforceable under the Statute of Frauds which
requires a presentation of a note or memorandum thereof as a condition precedent for
its enforceability (Art. 1403, par 2, subpar B).
The basis for agency is representation. As such Art. 1868 of the NCC is clear
as it states that 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. There is no showing that Brigida consented to the acts of
Deganos or authorized him to act on her behalf. The SC thus found the petitioners
argument groundless. As a matter of fact, the SC pointed out the negligence of the
petitioners to entrust Deganos on six occasions of several pieces of jewelry without
requiring 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.
Records also show that neither an express nor implied agency was proven to
have existed between Deganos and Luz. Petitioners, who were negligent, thus cannot
seek relief from the effects of their negligence by conjuring a supposed agency
relation between the two respondents where no evidence supports it. 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.