GOZUN v. MERCADO G.R. No. 167812.
December 19, 2006
JESUS M. GOZUN, petitioner, vs. JOSE TEOFILO T. MERCADO a.k.a. ‘DON PEPITO
MERCADO,’ respondent.
- PETITION for review on certiorari of the decision and resolution of the Court of
Appeals
PETITIONER: Jesus M. Gozun
RESPONDENT: Jose Teofilo T. Mercado a.k.a. Don Pepito Mercado
Context: local elections of 1995, respondent Mercado vied for the gubernatorial post in
Pampanga and petitioner Gozun, owner of JMG Publishing House, a printing shop
located in San Fernando, Pampanga
PETITIONER: Jesus M. Gozun
- submitted to respondent draft samples and price quotation of campaign materials
- respondent’s wife told him that respondent already approved his price quotation
and that he could start printing the campaign materials
- then printed campaign materials posters bearing respondent’s photograph
leaflets containing the slate of party candidates, sample ballots, poll watcher IDs, and
stickers
- urgency and limited time to do the job order petitioner availed of the services
and facilities of Metro Angeles Printing (owned by his daughter Jennifer Gozun) and of
St. Joseph Printing Press (owned by his mother Epifania Macalino Gozun)
- delivered the campaign materials to respondent’s HQs along Gapan-Olongapo Road
in San Fernando, Pampanga
- 31 Marc 1995 respondent’s sister-in-law, Lilian Soriano (Lilian) obtained from
petitioner “cash advance” of P253,000 allegedly for the allowances of poll
watchers who were attending a seminar and for other related expenses not able
to go to the bank to get money for the allowances of Poll Watchers who were having a
seminar at the headquarters plus other election related expenses during that day
- Lilian acknowledged on petitioner’s 1995 diary receipt of the amount
- later sent respondent a Statement of Account in the total amount of P2,177,906
itemized as follows:
- P640,310 for JMG Publishing House
- P837,696 for Metro Angeles Printing
- P446,900 for St. Joseph Printing Press; and
- P253,000, the “cash advance” obtained by Lilian
- 11 Aug 1995 respondent’s wife partially paid 1M to petitioner who issued a
receipt therefor
- repeated demands and respondent’s promise to pay, respondent failed to settle the
balance of his account
- being compadres (principal sponsors at the weddings of their respective daughters) ,
waited 3 years before seeking his counsel’s advice demand letter but to no avail
- RTC Angeles complaint to collect remaining balance of P1,177,906 plus
“inflationary adjustment” and attorney’s fees
RESPONDENT: Jose Teofilo T. Mercado a.k.a. Don Pepito Mercado
- petitioner his over-all coordinator in charge of the conduct of seminars for
volunteers and the monitoring of other matters bearing on his candidacy
actively volunteered to help in his campaign
- his campaign manager, Juanito “Johnny” Cabalu (Cabalu), who was authorized to
approve details with regard to printing materials, presented him some campaign
materials, those were partly donated
- denied having transacted with petitioner or entering into any contract for the printing
of campaign materials
- denied giving Lilian an authority to obtain the cash advance of 253,000
- to ensure compliance with pertinent election laws all contracts involving his
personal expenses were coursed through and signed by him and various campaign
materials delivered to him were represented as donations from his family, friends and
political supporters
- no knowledge of the receipt issued to his wife by petitioner and 1M given by
wife “compensation [to petitioner] who helped a lot in the campaign as a gesture of
goodwill”
- came to know about petitioner’s claim against him only after receiving a copy of the
complaint, which surprised him because he knew fully well that the campaign
materials were donations
- disclaimed knowledge of the Comelec rule that if a campaign material is donated, it
must be so stated on its face he acknowledged that nothing of that sort was written
on all the materials made by petitioner
RTC Angeles: favored petitioner Gozun
CA reversed: dismissed the complaint for lack of cause of action
- applying Article 1317 of the Civil Code, it held that petitioner’s claim for P253,000 is
unenforceable
(Art. 1317: a person cannot be bound by contracts he did not authorize to be
entered into his behalf)
- petitioner could not collect amounts due to Metro Angeles and St. Joseph Printing
not impleaded as parties to the case
- respondent’s wife had paid P1,000,000 to petitioner claim of P640,310 by petitioner
(after excluding the P253,000) had already been settled
PETITION: Invoked Article 1873 of the Civil Code petitioner submits that
respondent informed him that he had authorized Lilian to obtain the loan
ART. 1873. If a person specially informs another or states by public
advertisement that he has given a power of attorney to a third person, the latter
thereby becomes a duly authorized agent, in the former case with respect to the
person who received the special information, and in the latter case with regard to
any person.
The power shall continue to be in full force until the notice is rescinded in the
same manner in which it was given.
ISSUE: w/n Lilian authorized by respondent Gozun to borrow money or make CA
of 253,000 - NO
HELD: A special power of attorney (SPA) is necessary for an agent to borrow
money, unless it be urgent and indispensable for the preservation of the things
which are under administration
1. Petitioner failed to establish that the loan was made on behalf of respondent
- Exhibit “A” states that the amount was received by Lilian “in behalf of Mrs. Annie
Mercado”
- Exhibit “B” [the receipt issued by petitioner] only indicates that P253,0000.00
received by Lilian, BUT WITHOUT SPECIFYING FOR WHAT REASON THE SAID
AMOUNT WAS DELIVERED AND IN WHAT CAPACITY DID LILIAN RECEIVE THE
MONEY
- Thus, Lilian bound herself in her personal capacity and not as an agent of
respondent or anyone for that matter
- Special Powers of Attorney; Contracts entered into in the name of another person
by one who has been given no authority or legal representation or who has acted
beyond his powers are classified as unauthorized contracts and are unenforceable,
unless they are ratified; A special power of attorney is necessary for an agent to borrow
money, unless it be urgent and indispensable for the preservation of the things which
are under administration
- Contracts entered into in the name of another person by one who has been given no
authority or legal representation or who has acted beyond his powers are classified as
unauthorized contracts and are declared unenforceable, unless they are ratified.
- Generally, the agency may be oral, unless the law requires a specific form.
However, a special power of attorney is necessary for an agent to, as in this case,
borrow money, unless it be urgent and indispensable for the preservation of the
things which are under administration. Since nothing in this case involves the
preservation of things under administration, a determination of whether Soriano had the
special authority to borrow money on behalf of respondent is in order
- The requirement of a special power of attorney refers to the nature of the
authorization and not to its form—if the special authority is not written, then it
must be duly established by evidence.
- Lim Pin v. Liao Tian, et al., (1982), held that the requirement of a special power of
attorney refers to the nature of the authorization and not to its form. . . . The
requirements are met if there is a clear mandate from the principal specifically
authorizing the performance of the act.
- Strong v. Guttierez-Repide (1906) if the special authority is not written, then it must
be duly established by evidence
2. On the amount due him and the other two printing presses
- respondent has the obligation to pay the total cost of printing his campaign materials
delivered by petitioner in the total of P1,924,906, less the partial payment of
P1,000,000, or P924,906
- petitioner is the real party-in-interest as he subcontracted the two printing
establishments in order to deliver on time the campaign materials ordered by
respondent
PETITION GRANTED. RTC Angeles decision reinstated but modified in that the
amount payable by respondent to petitioner is reduced to P924,906
