vi) Independent Contractor Shell Co. of the Phil. vs. Firemens Ins. Co. of Nevada, et al.

53
OG 6084
G.R. No. L-8169

January 29, 1957

THE
SHELL
COMPANY
OF
THE
PHILIPPINES,
LTD., petitioner,
vs.
FIREMEN'S INSURANCE COMPANY OF NEWARK, NEW JERSEY COMMERCIAL CASUALTY
INSURANCE CO., SALVADOR SISON, PORFIRIO DE LA FUENTE and THE COURT OF
APPEALS (First Division),respondents.

FACTS: It is a fact that a Plymounth car owned by Salvador R. Sison was brought, on September 3,
1947 to the Shell Gasoline and Service Station, located at the corner of Marques de Comillas and
Isaac Peral Streets, Manila, for washing, greasing and spraying. The operator of the station, having
agreed to do service upon payment of P8.00, the car was placed on a hydraulic lifter under the
direction of the personnel of the station.
Said car was insured against loss or damage by Firemen's Insurance Company of
Newark, New Jersey, and Commercial Casualty Insurance Company jointly for the
sum of P10,000
The job of washing and greasing was undertaken by DE LA FUENTE through his two
employees a greaseman and a helper/washer. To perform the job, the car was
carefully and centrally placed on the platform of a hydraulic lifter before raising up
said platform to a height of about 5 feet and then the servicing job was started
After more than one hour of washing and greasing, the job was about to be
completed except for an ungreased portion underneath the vehicle which could not
be reached by the greaseman. So, the lifter was lowered a little by the greaseman
and while doing so, the car for unknown reason accidentally fell and suffered
substantial damage
SISON forthwith brought the matter to his insurers attention. The insurance
companies after due inspection paid the sum of P1,651.38 for the damaged cars
repair. SISON, for his part made assignments of his rights to recover damages in
favor of the Firemen's Insurance Company and the Commercial Casualty Insurance
Company hence, the instant case for the recovery of the total amount of the
damage from SHELL and DE LA FUENTE on the ground of negligence
CFI dismissed the complaint. Insurance Companies appealed. The Court of Appeals
reversed the CFIs judgment and sentenced SHELL and DE LA FUENTE to pay the
amount sought to be recovered, plus legal interest and costs
The CA ruled that DE LA FUENTE is SHELLs agent; hence, as principal, it is liable for
his agents breach of undertaking

SHELL now comes to the SC on appeal questioning the aforesaid CA decision,

raising the following
ISSUE: WON DE LA FUENTE is really SHELLs agent? Isnt he more of an
independent contractor?
HELD: DE LA FUENTE is SHELLs agent. The operator of a gasoline station is an
agent of the oil company. He cannot be considered as an independent contractor by
reason of SHELLs extensive control and supervision over his tasks. The assailed CA
decision is affirmed.
DE LA FUENTE owed his position to SHELL which could remove him or terminate his
services at any time. He merely undertook to exclusively sell SHELLs products at
the station he operates. For this purpose, he was placed in possession of all the
equipments needed to operate it, including the hydraulic lifter from which SISONs
automobile fell
But it must be noted that these equipments were delivered to DE LA FUENTE merely
on loan basis. SHELL still took charge of its care and maintenance. It supervised DE
LA FUENTE and conducted periodic inspection of the gasoline and service station
Moreover, SHELL did not leave the fixing of price for gasoline to DE LA FUENTE; on
the other hand, SHELL had complete control thereof; and it had supervision over DE
LA FUENTE in the operation of the station and in the sale of its products therein
In fine, the gasoline and service station really belonged to SHELL. It bore its
tradename and the operator DE LA FUENTE merely sold the products of SHELL there
Considering the abovelisted, in no wise can it be said that DE LA FUENTE is an
independent contractor of SHELL. The extensive control and supervision that SHELL
exercises over DE LA FUENTE militate heavily against this contention. On the
contrary, such circumstances show the existence of agency between them
The existence of agency between SHELL and DE LA FUENTE is also evidenced by a
receipt issued by SHELL and signed by DE LA FUENTE, acknowledging the delivery
of equipments for the gas station in question and an official from of the inventory of
said equipment containing DE LA FUENTEs signature above the words: "Agent's
signature"
RE: Liability of Principal for Agents breach of undertaking
As the CA correctly ruled, the fall of SISONs car from the hydraulic lift was the result
of some unforeseen shortcoming of the mechanism itself. As the servicing job on
SISONs car was accepted by DE LA FUENTE in the normal and ordinary conduct of
his business as operator of SHELLs service station, and that the defective hydraulic
lift caused the fall of the car, he is liable therefor. SHELL, his principal, is also liable
as DE LA FUENTE acted withn the representative authority granted him as SHELLs

agent. As the act of the agent acting within the scope of his authority is
the act of the principal, the breach of the undertaking by the agent is one
for which the principal is answerable
Moreover, SHELL undertook to "answer and see to it that the equipments are in
good running order and usable condition." Obviously, SHELL failed to make a
thorough check up of the hydraulic lifter. Hence, it was also negligent in that aspect
to which it must answer, as the faulty lifter was the cause of the fall of the SISONs
car.
G.
i.

Kinds
Manner

of
of

Agency
Constitution

a. express Art. 1869

Art. 1869. Agency may be express, or implied from the acts of the
principal, from his silence or lack of action, or his failure to repudiate the
agency, knowing that another person is acting on his behalf without
authority.
Agency may be oral, unless the law requires a specific form. (1710a)
Kinds of agency.
Agency may be classified as follows:
(1) As to manner of its creation:
(a) express. one where the agent has been actually authorized by the principal,
either orally or in writing (Art.1869.); or
(b) implied. one which is implied from the acts of the principal, from his silence or
lack of action, or his failure to repudiate the agency knowing that another person is
acting on his behalf without authority (Ibid.), or from the acts of the agent which
carry out the agency, or from his silence or inaction according to the circumstances.
(Art. 1870.) An implied agency is an actual agency as much as an express agency.
The enumeration of cases of implied agency in Articles
1869 and 1870 is not exclusive. Ratification may produce the effect of an express or
implied agency.25 It results in agency by ratification. (see Arts. 1901, 1910, par. 2.)
The principal cannot deny the existence of the agency after third parties, relying on
his conduct, have had dealings with the supposed agent. This method of creating an
agency is known as agency by estoppel or implication. (see Art. 1911.)
An agency may exist by operation of law. (see Arts. 1884, par. 2; 1885, 1929, 1931,
and 1932.)
(2) As to its character:
(a) gratuitous. one where the agent receives no compensation for his services
(Art. 1875.); or
(b) compensated or onerous. one where the agent receives compensation for his
services. (Ibid.)
(3) As to extent of business covered:
(a) general. one which comprises all the business of the principal (Art. 1876.); or
(b) special. one which comprises one or more specific transactions. (Ibid.)

(4) As to authority conferred:

(a) couched in general terms. one which is created in general terms and is
deemed to comprise only acts of administration (Art. 1877.); or
(b) couched in specific terms. one authorizing only the performance of a specific
act or acts. (see Art. 1878.)
(5) As to its nature and effects:
(a) ostensible or representative. one where the agent acts in the name and
representation of the principal (Art. 1868.); or
(b) simple or commission. one where the agent acts in his own name but for the
account of the principal.
b. implied Art. 1870; 1871; 1872; 1910, par. 2, 1911;

Art. 1870. Acceptance by the agent may also be express, or implied from his acts
which carry out the agency, or from his silence or inaction according to the
circumstances. (n)
Form of agency.
The usual method an agency is created is by contract which may be oral, written, or
implied. There are some provisions of law which require certain formalities for
particular contracts. The first is when the form is required for the validity of the
contract; the second, when it is required to make the contract effective against third
persons such as those mentioned in Articles 1357 and 1358 of the Civil Code; and
the third, when it is required for the purpose of proving the existence of a contract
such as those provided in the Statute of Frauds in Article 1403. (Lim vs. Court of
Appeals, 254 SCRA 170 [1996].)
(1) In general, there are no formal requirements governing the appointment of an
agent. The agents authority may be oral or written. It may be in public or private
writing. An instance when the law requires a specific form for the agency is Article
1874.
(2) Agency may even be implied from words and conduct of the parties and the
circumstances of the particular case. (Arts.1869-1872.) But agency cannot be
inferred from mere relationship or family ties. (Sidle vs. Kaufman, 345 Pa. 549.)
Thus, it has been held that a father who was unable to drive an automobile but who
purchased one for pleasure and convenience of family was not liable for injuries
inflicted by the automobile while driven by an adult son with the fathers permission
on trip to make arrangements for sons approaching marriage, as no agency of
son for father was created. (Hildock vs. Grosso, 566 Pa. 222.)
Appointment of agent.
It is not essential that an agent should be appointed directly by the principal, but
the appointment may be made through another as by referring an applicant to
another and representing that he has authority to act, or the relation may arise out
of an agreement to employ the agent of another, such person then becoming the
agent of the first party.
An agent appointed by the directors of a corporation to act for the corporation is an
agent of the corporation and not of the directors. (2 C.J.S. 1044-1045.)
Presumption of agency.

(1) General rule. Agency is generally not presumed. The relation between
principal and agent must exist as a fact. Thus, it is held that where the relation of
agency is dependent upon the acts of the parties, the law makes no presumption of
agency, and it is always a fact to be proved, with the burden of proof resting upon
the person alleging the agency to show, not only the fact of its existence, but also
its nature and extent. (Antonio vs. Enriquez, [C.A.] 51 O.G. 3536; Lopez vs. Tan
Tioco, 8 Phil. 693 [1907]; Harry E. Keller Elec. Co. vs. Rodriguez, 44 Phil. 19 [1922].)
It is a rule that whatever statements or communications made by the parties
(supposed principal and agent) between them, if anything thereto appears contrary
to their intention, the latter will always prevail. (3 C.J.S. 252.)
(2) Exceptions. A presumption of agency may arise, however, in those few cases
where an agency may arise by operation of law 27 (3 Am. Jur. 706.) or to prevent
unjust enrichment. Thus, it has been held that a shipper may be held liable for
freightage on bills of ladings signed by another person where the shipper appears
as shipper or consignee, on bills of lading where other persons appear as shippers,
and on unsigned bills of lading, where the evidence shows that the goods shipped
actually belong to such shipper. (Comp
Art. 1871. Between persons who are present, the acceptance of the
agency may also be implied if the principal delivers his power of attorney
to the agent and the latter receives it without any objection. (n)
Acceptance between persons present.
As regards implied acceptance by the agent, the law distinguishes between cases
(1) where persons are present (Art. 1871.) and (2) where persons are absent. (Art.
1872.) The agency is impliedly accepted if the agent receives a power of attorney
from the principal himself personally without any objection, both being present.
The presumption of acceptance may be rebutted by contrary proof.
Definition and purpose of a power of attorney.
(1) A power of attorney is an instrument in writing by which one person, as
principal, appoints another as his agent and confers upon him the authority to
perform certain specified acts or kinds of 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.
(2) 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
within whom the agent deals; and the person holding a power of attorney is shown
and designated as an attorney-in-fact, thus distinguishing such person from an
attorney-at-law (3 Am. Jur. 2d 433.), a lawyer.
Except as may be required by statute, a power of attorney is valid although no
notary public intervened in its execution. 28 (see Reyes vs. Santiago, C.A.-G.R. Nos.
47996-7-R, Nov. 27, 1975; see Angeles vs. Phil. National Railways, 500 SCRA 744
[2006].)
Construction of powers of attorney.
(1) Rule of strict construction. It is the general rule that a power of attorney must
be strictly construed and strictly pursued. Under this rule, the instrument will be
held to grant only those powers which are specified and defined, and the agent may
neither go beyond nor deviate from the power of attorney. In other words, the act

done must be legally identical with that authorized to be done. Moreover, where the
mode of exercising a power is prescribed in the instrument in which it is created,
there must be a strict compliance therewith in every substantial particular. 29 This is
but in accord with the disinclination of courts to enlarge the authority granted.
(2) Qualification of the rule. The rule is not absolute and should not be applied to
the extent of destroying the very purpose of the power. If the language will permit,
a construction should be adopted which will carry out, instead of defeat, the
purpose of the appointment. Even if there are repugnant clauses in a power of
attorney, they should be reconciled, if possible, so as to give effect to the
instrument in keeping with its general intent or predominant purpose. Furthermore,
the instrument should always be deemed to give such powers as are essential or
usual and reasonably necessary and proper in effectuating the express powers. (3
Am. Jur. 2d., 437-438; Angeles vs. Philippine National Railways, 520 SCRA 444
[2006]; Mercado vs. Allied Banking Corporation, 528 SCRA 444 [2007].)
Art. 1872. Between persons who are absent, the acceptance of the agency
cannot be implied from the silence of the agent, except:
(1) When the principal transmits his power of attorney to the agent, who
receives it without any objection;
(2) When the principal entrusts to him by letter or telegram a power of
attorney with respect to the business in which he is habitually engaged as
an agent, and he did not reply to the letter or telegram. (n)
Acceptance between persons absent.
If both the principal and the agent are absent, acceptance of the agency by the
agent is not implied from his silence or inaction.
Since the agent is not bound to accept the agency, he can simply ignore the offer.
However, in the two cases mentioned in Article 1872, agency is implied. Thus, there
is implied acceptance if the agent writes a letter acknowledging receipt of the
power of attorney but offers no objection to the creation of the agency. (No. 1.) But
his mere failure to give a reply does not mean that the agency has been accepted
unless the power of attorney is with respect to the business in which he is
habitually engaged as an agent (No. 2.), 31 or the acceptance could be inferred from
his acts which carry out the agency (Art. 1870.) as when he begins to act under the
authority conferred upon him. It should be noted that under Article 1872, the
principal transmits the power of attorney to the agent. In Article 1871, he personally
delivers the power of attorney to the agent.
Art. 1910. The principal must comply with all the obligations which the
agent may have contracted within the scope of his authority.
As for any obligation wherein the agent has exceeded his power, the
principal is not bound except when he ratifies it expressly or tacitly.
(1727)

Representation, essence of agency.

(1) Agent acts in a representative capacity. Representation being the essence of
agency, it is evident that the obligations contracted by the agent are for and in
behalf of the principal to bind him as if he personally contracted. (11 Manresa 647.)
It is not enough, however, that the agent should act within the scope of his
authority under Article 1910. (par. 1.) The agent must also act in a representative
capacity (Art. 1868.), in the principals name; otherwise, the principal assumes no
liability. (Art. 1883.)
(2) Agent acts within limits of his authority. Under the second paragraph of Article
1910, the agent who exceeds his authority is not deemed a representative of the
principal. In effect, he acts without authority and becomes personally liable for any
damage caused. Hence, the principal is not bound unless he ratifies the act
expressly or impliedly. Without such ratification, the agent is the one personally
liable.2 (Art. 1897.) Of course, the principal must have capacity to ratify the
unauthorized act. (Infra.)
Meaning of ratification.
As applied to the law of agency, ratification is the adoption or affirmance by a
person of a prior act which did not bind him, but which was done or professed to be
done on his account thus giving effect to the acts as if originally authorized. 3 The
doctrine applies to the ratification of the act of an agent in excess of his authority or
the act of one who purports to be an agent but is really not. (3 Am. Jur. 2d 548.) It
may be implied from the principals conduct, e.g., acceptance of benefits by the
principal under a contract entered in his name.
Acts that may be ratified.
(1) Valid/void acts. Usually, those acts that may be authorized (i.e., they are
valid) may be ratified. Acts which are absolutely void cannot be authorized nor
ratified.
(2) Voidable acts. Acts which are merely voidable may be
ratified.5 The reason is that a voidable act is not inoperative but imperfectly
inoperative. Ratification, indeed, is a method by which a voidable act may be
ratified.6 (Teller, op. cit., p. 83.)
(3) Unrevoked acts. The act or transaction must remain capable of ratification.
The general rule is that a principal must ratify his agents unauthorized contract
before it is revoked by the other contracting party. 7 In other words, the third partys
contract with the unauthorized agent may be said to constitute an offer to the
principal which can be revoked by the offeror before acceptance by the offeree. This
aspect of the doctrine of ratification would appear to contradict a fundamental
concept of the doctrine, that of relation back to the time when the contract was
originally entered into. (Teller, op. cit., p. 93.)
The third partys offer to a principal arising out of a contract with his unauthorized
agent, may be revoked in one of two ways: first, as indicated above, by express
revocation, and second, by a change in the nature of the contract as originally
entered into.
(4) Criminal acts. The general rule is subject to qualification in one important
particular. A substantial number of cases hold that one whose name has been
forged can ratify the act. A slight majority of the cases, however, hold that since
forgery involves a crime and a public wrong and is also opposed to public policy, it
cannot be ratified. This is another instance where ratification should not be

confused with estoppel. All would probably agree that a person who expressly or
impliedly represents that his forged signature is genuine, would be estopped from
denying its genuineness against one who has changed his position from the worse.
(Wyatt & Wyatt, op. cit., p. 240.)
(5) Tortious acts. An agency to commit a tort would generally be inoperative and,
therefore, the ratification without more of a tort is inconceivable, and is, in fact, a
rare phenomenon.
The usual case, however, presents the ratification of a transaction in general, which
includes, by circumstance, a tort. (Teller, op. cit., p. 83.)
Acts must be done in behalf of principal.
An act, to be capable of ratification, must be done by one party as agent for
someone else. Stated in another way, a principal cannot ratify the unauthorized act
of another person unless that person purported to act as agent for, and in the name
of, the principal, and not in his own behalf.
The rule operates to prevent one person from acquiring the right of another. One
person may enter into a fruitful contract with another person; a stranger cannot
acquire rights in the contract by attempting to ratify it. (Wyatt & Wyatt, op. cit., p.
240.)
Art. 1911. Even when the agent has exceeded his authority, the principal
is solidarily liable with the agent if the former allowed the latter to act as
though he had full powers. (n)
Meaning of estoppel.
Estoppel is a bar which precludes a person from denying or asserting anything
contrary to that which has been established as the truth by his own deed or
representation either express or implied. (19 Am. Jur. 601.)
Through estoppel, an admission or representation is thus rendered conclusive upon
the person making it and cannot be denied or disproved as against the person
relying thereon. (Art. 1431.)
Ratification and estoppel distinguished.
(1) Ratification differs from estoppel mainly in that the former rests on intention,
express or implied, regardless of prejudice to another, whereas estoppel rests on
prejudice rather than intention. (3 Am. Jur. 2d 549.) In other words, in the former,
the party is bound because he intended to be, while in the latter, he is bound
notwithstanding the absence of such intention because the other party will be
prejudiced and defrauded by his conduct, unless the law treats him as legally
bound. (Forsythe vs. Day, 46 Me. 175, cited in Teller, pp. 81-82.)
(2) While ratification is retroactive and makes the agents unauthorized act good
from the beginning, estoppel operates upon something which has been done but
after the misleading act and in reliance on it and may only extend to so much of
such act as can be shown to be affected by the estopping conduct. (Woodworth vs.
School Dist. No. 2, Stevens Country, 159 P. 757, 92 Washington 456; 2 C.J.S. 1070.)
Stated otherwise, ratification affects the entire transaction and from the beginning,
while estoppel affects only the relevant parts of the transaction and from that time
only when estoppel may be said to be spelled out. (Federal Garage, Inc. vs. Prenner,
106 Vt. 222, cited in Teller, p. 82.)

(3) Ratification by a principal of an unauthorized act of his agent has occasionally

been grounded upon the doctrine of an equitable estoppel. A clear distinction,
however, exists between an estoppel in pais9 (or by conduct) and ratification. The
substance of ratification is confirmation of the unauthorized act or contract after it
has been done or made, whereas, the substance of estoppel is the principals
inducement to another to act to his prejudice. Acts and conduct amounting to an
estoppel in pais may in some instances amount to a ratification; but on the other
hand, ratification may be complete without any elements of estoppel. (2 C.J. 469.)
So far as the rights of third persons are concerned, however, the distinctions are of
little importance because the principal is bound by the acts of the agent whether
the conduct of the principal constitutes ratification or whether it constitutes
estoppel.
When principal solidarily liable with the agent.
Under Article 1911, the agent must have acted in the name of a disclosed principal
and the third person was not aware of the limits of the power granted by the
principal. (See Art. 1898.)
Article 1911 is based on the principle of estoppel and it is necessary for the
protection of innocent third persons. It is an instance when solidarity is imposed by
law. (Arts. 1207, 1208.)
Both the principal and the agent may be considered as joint tortfeasors whose
liability is solidary. (Verzosa vs. Lim, 45 Phil. 416 [1923]; see Cuison vs. Court of
Appeals, 227 SCRA 391 [1993]; Lustan vs. Court of Appeals, 266 SCRA 663 [1997].)
The third person with whom the agent dealt may sue either the agent or the
principal alone, or both. The agent should be exempt from liability if he acted in
good faith.
- Equitable PCIBank vs. Ku, 355 SCRA 309 (2001)

[G.R. No. 142950. March 26, 2001]

EQUITABLE
PCI
BANK,
formerly
EQUITABLE
CORPORATION, petitioner, vs. ROSITA KU, respondent.

BANKING

On February 4, 1982, respondent Rosita Ku, as treasurer of Noddy Dairy Products, Inc., and
Ku Giok Heng, as Vice-President/General Manager of the same corporation, mortgaged the
subject property to the Equitable Banking Corporation, now known as Equitable PCI Bank to
secure Noddy Inc.s loan to Equitable. The property, a residential house and lot located in La
Vista, Quezon City, was registered in respondents name.
Noddy, Inc. subsequently failed to pay the loan secured by the mortgage, prompting
petitioner to foreclose the property extrajudicially. As the winning bidder in the foreclosure sale,
petitioner was issued a certificate of sale. Respondent failed to redeem the property. Thus, on
December 10, 1984, the Register of Deeds canceled the Transfer Certificate of Title in the name
of respondent and a new one was issued in petitioners name.

On May 10, 1989, petitioner instituted an action for ejectment before the Quezon City
Metropolitan Trial Court (MeTC) against respondents father Ku Giok Heng. Petitioner alleged
that it allowed Ku Giok Heng to remain in the property on the condition that the latter pay
rent. Ku Giok Hengs failure to pay rent prompted the MeTC to seek his ejectment. Ku Giok
Heng denied that there was any lease agreement over the property.
On December 8, 1994, the MeTC rendered a decision in favor of petitioner and ordered Ku
Giok Heng to, among other things, vacate the premises
Ku Giok Heng did not appeal the decision of the MeTC. Instead, he and his daughter,
respondent Rosita Ku, filed on December 20, 1994, an action before the Regional Trial Court
(RTC) of Quezon City to nullify the decision of the MeTC. Finding no merit in the complaint,
the RTC on September 13, 1999 dismissed the same and ordered the execution of the MeTC
decision.
Respondent filed in the Court of Appeals (CA) a special civil action for certiorari assailing
the decision of the RTC. She contended that she was not made a party to the ejectment suit and
was, therefore, deprived of due process. The CA agreed and, on March 31, 2000, rendered a
decision enjoining the eviction of respondent from the premises.
Issue: Can a person be evicted by virtue of a decision rendered in an ejectment case
where she was not joined as a party? This was the issue that confronted the Court of
Appeals, which resolved the issue in the negative. To hold the contrary, it said,
would violate due process.
Held:

The petition is meritorious.

Generally, no man shall be affected by any proceeding to which he is a stranger, and
strangers to a case are not bound by judgment rendered by the court. [5] Nevertheless, a judgment
in an ejectment suit is binding not only upon the defendants in the suit but also against those not
made parties thereto, if they are:
a) trespassers, squatters or agents of the defendant fraudulently occupying the property to
frustrate the judgment;
b) guests or other occupants of the premises with the permission of the defendant;
c) transferees pendente lite;
d) sub-lessees;

e) co-lessees; or
f) members of the family, relatives and other privies of the defendant.[6]
Thus, even if respondent were a resident of the property, a point disputed by the parties, she
is nevertheless bound by the judgment of the MeTC in the action for ejectment despite her being
a non-party thereto.Respondent is the daughter of Ku Giok Heng, the defendant in the action for
ejectment.
Respondent nevertheless claims that the petition is defective. The bank alleged in its petition
that it received a copy of the CA decision on April 25, 2000. A Certification dated June 6, 2000
issued by the Manila Central Post Office reveals, however, that the copy was duly delivered to
and received by Joel Rosales (Authorized Representative) on April 24, 2000.[7] Petitioners
motion for extension to file this petition was filed onMay 10, 2000, sixteen (16) days from the
petitioners receipt of the CA decision (April 24, 2000) and one (1) day beyond the reglementary
period for filing the petition for review (May 9, 2000).
Petitioner argues that receipt on April 25, 2000 by Joel Rosales, who was not an agent of its
counsels law office, did not constitute notice to its counsel, as required by Sections 2 [10] and 10,
[11]
Rule 13 of the Rules of Court. To support this contention, petitioner cites Philippine Long
Distance Telephone Co. vs. NLRC.[12] In said case, the bailiff served the decision of the National
Labor Relations Commission at the ground floor of the building of the petitioner therein, the
Philippine Long Distance Telephone Co., rather than on the office of its counsel, whose address,
as indicated in the notice of the decision, was on the ninth floor of the building. We held that:

x x x practical considerations and the realities of the situation dictate that the service
made by the bailiff on March 23, 1981 at the ground floor of the petitioners building
and not at the address of record of petitioners counsel on record at the 9 floor of the
PLDT building cannot be considered a valid service. It was only when the Legal
Services Division actually received a copy of the decision on March 26, 1981 that a
proper and valid service may be deemed to have been made. x x x.
th

Applying the foregoing provisions and jurisprudence, petitioner submits that actual receipt
by its counsel was on April 27, 2000, not April 25, 2000. Following the argument to its logical
conclusion, the motion for extension to file the petition for review was even filed two (2) days
before the lapse of the 15-day reglementary period. That counsel treated April 25, 2000 and not
April 27, 2000 as the date of receipt was purportedly intended to obviate respondents possible
argument that the 15-day period had to be counted from April 25, 2000.
The Court is not wholly convinced by petitioners argument. The Affidavit of Joel Rosales
states that he is not the constituted agent of Curato Divina Mabilog Nedo Magturo Pagaduan

Law Office. An agency may be express but it may also be implied from the acts of the principal,
from his silence, or lack of action, or his failure to repudiate the agency, knowing that another
person is acting on his behalf without authority.[13] Likewise, acceptance by the agent may also be
express, although it may also be implied from his acts which carry out the agency, or from his
silence or inaction according to the circumstances.[14] In this case, Joel Rosales averred that [o]n
occasions when I receive mail matters for said law office, it is only to help them receive their
letters promptly, implying that counsel had allowed the practice of Rosales receiving mail in
behalf of the former. There is no showing that counsel had objected to this practice or took steps
to put a stop to it. The facts are, therefore, inadequate for the Court to make a ruling in
petitioners favor.
Assuming the motion for extension was indeed one day late, petitioner urges the Court, in
any event, to suspend its rules and admit the petition in the interest of justice. Petitioner
invokes Philippine National Bank vs. Court of Appeals,[15] where the petition was filed three (3)
days late. The Court held:

It has been said time and again that the perfection of an appeal within the period fixed
by the rules is mandatory and jurisdictional. But, it is always in the power of this
Court to suspend its own rules, or to except a particular case from its operation,
whenever the purposes of justice require it. Strong compelling reasons such as serving
the ends of justice and preventing a grave miscarriage thereof warrant the suspension
of the rules.
The Court finds these arguments to be persuasive, especially in light of the merits of the
petition.
WHEREFORE, the petition is GIVEN DUE COURSE and GRANTED. The decision of the
Court of Appeals is REVERSED. SO ORDERED.