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TRINIDAD J. FRANCISCO, vs. GOVERNMENT SERVICEINSURANCE
SYSTEM,
(Reyes J./ 1963)
Facts:
(from a previous digest)On Oct. 10, 1956, Trinidad Francisco, in
consideration of aloan extended to it, mortgaged to GSIS a parcel
of landknown as VIC-MARI compound. On Jan. 6, 1959 themortgage was
extrajudicially foreclosed. GSIS acquiredownership of the land
Vicente Francisco, Trinidads father, sent a letter dated Feb.20,
1959 to GSIS proposing a redemption of the property.
He later received a telegram from the GeneralManager Andal
saying that GSIS approvedredemption. After the redemption had
already concludedand all of the arrearages have been paid.
On Jan. 1960, Trinidad, thinking that she had alreadyredeemed
the property suddenly received letters from theGSIS the General
Manager Andal asking for the proposal forthe payment of her
indebtedness. Franciscos fatherprotested claiming that he had
already redeemed theproperty as per the letter he sent GSIS.
Nevertheless, GSIS continued to demand foreclosure. Theyclaimed
that the telegram assenting to the proposal letter ofFranciscos
father should be disregarded as it failed toexpress the contents of
the board resolution due to the errorof its minor employees in
couching the correct wording ofthe telegram. The board resolution
approving the lettercontained the condition that Franciscos father
should alsopay the expenses in the foreclosure of the mortgage.
Theremittances already made by him were not sufficient tocover
this.
Trindad thus instituted the present suit.
The trial court ruled in favor of Trinidad. It found that
theletter dated Feb. 20, 1959 had been unqualifiedly accepted
and was binding and the plaintiff need not pay the extracharges
being demanded.
ISSUE: WON the offer by Vicente Francisco was accepted bythe
corporation?
RULING:
YES, a person who knows that the officer or agent of
thecorporation habitually transacts certain kinds of business
forsuch corporation under circumstances which necessarilyshow
knowledge on the part of those charged with the
conduct of the corporate business assumes, as he has theright to
assume, that such agent or officer is acting withinthe scope of his
authority. If a private corporationintentionally or negligently
clothes its officers or agents withapparent power to perform acts
for it, the corporation will beestopped to deny that such apparent
authority is real, as toinnocent third persons dealing in good
faith with suchofficers or agents.
In this case, the telegram was within Andals apparentauthority.
Assuming that it was sent by the Board Secretaryin his name but
without his knowledge, third persons are not
duty bound to disbelieve the acts of a corporations
officers,especially when it appears regular on its face.
Furthermore, the Civil Code provides for ratification, whereina
party with knowledge of the reason which renders thecontract
voidable and such reason having ceased, theperson who has a right
to invoke it executes an act whichnecessarily implies an intention
to waive his right.In this case, GSIS ratified its acceptance of
VicenteFranciscos offer when it failed to refute it in the letter
sent
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by Trinidad Francisco to Mr. Andal which quoted verbatimthe
telegram of acceptance. This was in itself notice to thecorporation
of the terms of the allegedly unauthorizedtelegram.
Since a corporation cannot see, or know, anything exceptthrough
its officers, knowledge of facts acquired orpossessed by an officer
or agent of a corporation in thecourse of his employment, and in
relation to matters withinthe scope of his authority, is notice to
the corporation,whether he communicates such knowledge or not.
GSIS pocketed the amount and kept silent about thetelegram. This
silence, taken together with theunconditional acceptance of three
other subsequentremittances from plaintiff, constitutes in itself a
bindingratification of the original agreement
FOR THE FOREGOING REASONS, the appealed decision is
hereby affirmed.
