G.R. No. 75640, 5 April 1990

FACTS:

Gil Medalla, entered into a contract for hire of ship known as “MV Sea Runner” with defendant National Grains Authority. Under the said contract Medalla obligated to transport on the “MV Sea Runner” sacks of rice belonging to defendant National Grains Authority from the port of San Jose, Occidental Mindoro, to Malabon, Metro Manila.

Upon completion of the delivery of rice at its destination, plaintiff wrote a letter requesting defendant NGA that it be allowed to collect the amount stated in its statement of account. The statement of account included not only a claim for freightage but also claims for demurrage and stevedoring charges. Plaintiff wrote, this time specifically requesting that the payment for freightage and other charges be made to it and not to defendant Medalla because plaintiff was the owner of the vessel “MV Sea Runner. Plaintiff wrote defendant Medalla demanding that he turn over to plaintiff the money. Defendant Medalla, however, “ignored the demand.

ISSUE:

Whether petitioner NFA is not liable under the exception to the rule (Art. 1883) since it had no knowledge of the fact of agency.

RULING:

Petitioner NFA’s contention holds no water. It is an undisputed fact that Gil Medalla was a commission agent of respondent Superior Shipping Corporation which owned the vessel “MV Sea Runner” that transported the sacks of rice belonging to petitioner NFA. The context of the law is clear. Art. 1883, which is the applicable law in the case at bar provides:

Art. 1883. If an agent acts in his own name, the principal has no right of action against the persons with whom the agent has contracted; neither have such persons against the principal.

In such case the agent is the one directly bound in favor of the person with whom he has contracted, as if the transaction were his own, except when the contract involves things belonging to the principal.

The provision of this article shall be understood to be without prejudice to the actions between the principal and agent.

Consequently, when things belonging to the principal (in this case, Superior Shipping Corporation) are dealt with, the agent is bound to the principal although he does not assume the character of such agent and appears acting in his own name. In other words, the agent’s apparent representation yields to the principal’s true representation and that, in reality and in effect, the contract must be considered as entered into between the principal and the third person. Corollarily, if the principal can be obliged to perform his duties under the contract, then it can also demand the enforcement of its rights arising from the contract.

*Case digest by Lowel Dave D. Manuel, JD-4, Andres Bonifacio Law School, S.Y. 2019-2020