TRINIDAD FRANCISCO v GSIS

J. JBL Reyes | March 30, 1963 | GR No. L-18287

Putative Principal:
Putative Agent:
Third Party:

GSIS
Rodolfo Andal
Trinidad Francisco

FACTS: GSIS extrajudicially foreclosed Trinidads

mortgage over property in Baesa, Q.C, since she was in
arrears for P52,000 of her P400,000 loan of which she
had only paid P130,000. GSIS bought the property in the
foreclosure sale.
Trinidads father Atty. Francisco sent a letter to
Andal, the General Manager of GSIS, offering (a) to
pay P30,000 to set aside the foreclosure; and (b) to
arrange the payment of the balance 1.On the same day,
Atty. Francisco received a telegram saying GSIS
BOARD
APPROVE,
YOUR
REQUEST
RE
REDEMPTION OF FORECLOSED PROPERTY OF
YOUR DAUGHTER, ANDAL.
Atty. Francisco remitted to GSIS a check for 30,000php,
with a letter saying he is sending the check in accordance
with his offer and GSIS favourable reply. GSIS accepted
payments and the corresponding official receipts were
issued with respect to (1) the payment of the P30,000
made through the check and (2) the payment of the
balance pursuant to the agreement. The payment of the
remaining balance was P68,726 in total.
GSIS sent three letters, one signed by the assistant
general manager and two signed by Andal, asking
Trinidad for a proposal to pay her indebtedness since
GSIS says the period for redemption has already
expired. Andal claims the letter was sent by the board
secretary in his name but without his knowledge.
In reply, Atty. Francisco sent a letter to GSIS saying they
already had an agreement with respect to paying the loan.
GSIS, by letter, claimed an additional condition was
given in their board resolution, which was mistakenly
not included in the letter sent to the Franciscos. It was
subject to the condition that Mr. Vicente J. Francisco
shall pay all expenses incurred by the GSIS in the
foreclosure of, the' mortgage.

Trinidad filed a complaint for specific performance and

damages. She says the board resolution of the Board was
binding and the subsequent telegram should be
disregarded.
ISSUE: WON THE TELEGRAM WAS BINDING ON
THE PARTIES
RULING: YES, it was binding because there was a valid
acceptance of their offer.
RATIO: The terms of the offer were clear, and over
the signature of Andal, Trinidad was informed
telegraphically her proposal had been accepted. There
was nothing in the telegram hinting of an anomaly or
gave ground to suspect its veracity and the plaintiff
cannot be blamed for it. There is no denying the
telegram was within Andals apparent authority.
Assuming his claim that the board secretary sent it but
without his consent; the Court cited the case of Ramirez v
Orientalist: The integrity of commercial transactions can
only be maintained by holding the corporation strictly to
the liability fixed upon it by its agents in accordance with
lawit is familiar doctrine that if a corporation
knowingly permits one of its officers, or any other agent,
to do acts within the scope of an apparent authority, and
thus holds him out to the public as possessing power to do
those acts, the corporation will, as against anyone who
has in good faith dealt with the corporation through such
agent, be estopped from denying his authority; and where
it is said "if the corporation permits" his, means the same
as "if the thing is permitted by the directing power of the
corporation.
Hence, even if it were the board secretary who sent the
telegram, the corporation could not evade the binding
effect produced by the telegram. Andal does not dispute
the fact this letter was sent from his office but alleges
merely a mistake in couching the correct wording.
The Court considered the payment of P30,000 advanced
by Atty. Francisco and enclosed therewith he quoted
verbatim the GSIS telegram acceptance was in itself
notice to the corporation of the terms of the unauthorized
telegram. The Court also held that by accepting
remittances GSIS has ratified the original agreement.

Contract provides: I propose this arrangement: for the GSIS to take over the administration of
the mortgaged property and to collect the monthly instalments, amounting to about P5, 000, due
on the unpaid purchase price of more than / 31 lots' and houses therein and the monthly
instalments collected phail, be applied to the payment of arrearage until the sums is fully covered.
It is requested, however, that from the amount of the monthly installments, collected, the sum of
P350.00 be deducted for necessary expenses, such as to pay the' security guard, the street
caretaker, the "Meralco" Bill for the street lights and sundry items.

CA decision AFFIRMED