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Decree: Art. 1892.

The agent may appoint a substitute if the principal has not prohibited him
from doing so; but he shall be responsible for the acts of the substitute:
(1) hen he !as not gi"en the po!er to appoint one.
Escueta vs Lim
Facts: The facts
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appear as follo!s:
#espondent #ufina $im filed an action to remo"e cloud on% or &uiet title to% real property% !ith
preliminary in'unction and issuance of (a hold)departure order* from the +hilippines against
,gnacio -. #ubio. #espondent amended her complaint to include specific performance and
damages.
,n her amended complaint% respondent a"erred inter alia that she bought the hereditary shares
(consisting of 1. lots) of ,gnacio #ubio (and* the heirs of $u/ 0aloloy% that ,gnacio #ubio
refused to recei"e the other half of the do!n payment !hich is +(1..%...*; that ,gnacio #ubio
refused and still refuses to deli"er to (respondent* the certificates of title co"ering his share on
the t!o lots
As to petitioner Corazon Escueta, in spite of her knowledge that the disputed lots
have already been sold by Ignacio Rubio to respondent, it is alleged that a
simulated deed of sale involving said lots was efected by Ignacio Rubio in her favor
and that the simulated deed of sale by Rubio to Escueta has raised doubts and
clouds over respondent!s title"
,1 2,- 34 T5- 43#-63,16% 'udgment is hereby rendered in fa"or of (respondent*%
The 0aloloys filed a petition for relief from 'udgment
Trial on the merits ensued bet!een respondent and #ubio and -scueta. After trial% the trial court
rendered its assailed 7ecision% as follo!s:
,1 2,- 34 T5- 43#-63,16% the complaint (and* amended complaint are dismissed against
(petitioners*
#he CA a$rmed the trial court!s order and partial decision, but reversed the later
decision"
%etitioner argues the sale by &irginia to respondent is not binding" %etitioner Rubio
did not authorize &irginia to transact business in his behalf pertaining to the
property" #he 'pecial %ower of Attorney was constituted in favor of (lamas, and the
latter was not empowered to designate a substitute attorney)in)fact"
Issue: WoN the contract of sale entered into by the sub agent is binding upon the
agent and conse*uently the principal
Held: Article 1892 of the 8i"il 8ode pro"ides:
Art. 1892. The agent may appoint a substitute if the principal has not prohibited him from doing
so; but he shall be responsible for the acts of the substitute:
(1) hen he !as not gi"en the po!er to appoint one 9 9 9.
Applying the abo"e)&uoted pro"ision to the special po!er of attorney e9ecuted by ,gnacio #ubio
in fa"or of his daughter +atricia $lamas% it is clear that she is not prohibited from appointing a
substitute. 0y authori/ing 2irginia $im to sell the sub'ect properties% +atricia merely acted !ithin
the limits of the authority gi"en by her father% but she !ill ha"e to be :responsible for the acts of
the sub)agent%:
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among !hich is precisely the sale of the sub'ect properties in fa"or of
respondent.
-"en assuming that 2irginia $im has no authority to sell the sub'ect properties% the contract she
e9ecuted in fa"or of respondent is not "oid% but simply unenforceable% under the second
paragraph of Article 1;1< of the 8i"il 8ode !hich reads:
Art. 1;1<. 9 9 9
A contract entered into in the name of another by one !ho has no authority or legal
representation% or !ho has acted beyond his po!ers% shall be unenforceable% unless it is ratified%
e9pressly or impliedly% by the person on !hose behalf it has been e9ecuted% before it is re"o=ed
by the other contracting party.
,gnacio #ubio merely denies the contract of sale. 5e claims% !ithout substantiation% that !hat he
recei"ed !as a loan% not the do!n payment for the sale of the sub'ect properties. 5is acceptance
and encashment of the chec=% ho!e"er% constitute ratification of the contract of sale and :produce
the effects of an e9press po!er of agency.:
2.
:(5*is action necessarily implies that he !ai"ed his
right of action to a"oid the contract% and% conse&uently% it also implies the tacit% if not e9press%
confirmation of the said sale effected: by 2irginia $im in fa"or of respondent.
>imilarly% the 0aloloys ha"e ratified the contract of sale !hen they accepted and en'oyed its
benefits. :The doctrine of estoppel applicable to petitioners here is not only that !hich prohibits
a party from assuming inconsistent positions% based on the principle of election% but that !hich
precludes him from repudiating an obligation "oluntarily assumed after ha"ing accepted benefits
therefrom.