OLAGUER VS PURUGGANAN JR

Facts:

A petition for review on the decision of CA affirming the decision of RTC dismissing the Olaguers
suit.

P was the owner of shares of stocks of businessday Corp. He was active in the political
opposition against Marcos dictatorship. Antiicpating the possibility of his arrest and detention by
tem arcos military, he executed a SPS appointing his attorneys-in-fact Locsin, Joaquin and
hofilena for the purpose of selling or transferring his shares of stocks with Busonessday. During
his trial under the SPA, in order to cancel his shares of stocks even before they are sold for the
purpose of concealing that he was a stockholder. The parties acknowledge the SPA before Emilio
Purugganan, the corporate Sec and the notary public.

He was arrested for arson and locsin ordered purugganan to cancel the shares in thr books of the
corp and to transfer them to Locsins name.

When he was released from detention, he discovered that he was no longer registered as
stickholder. He demanded that respondents restore to him full ownership , but they refused to do
so. He filed a complaint before RTC against purugganana and locsin to declare as illegal the sale
of the shares of stock.

He alleged that respondent exceeded his authority under the SPA. SPA only applied in absence
and incapacity.

RTC dismissed and found the sale of shares b/w him and respondent locsin was valid.

Issue: WON the CA erred in ruling that there was perfected sale.

Ruling:

Petitioner sought to impose a strict construction of the SPA by limiting th deifiniton of the word
ABSENCE to a condition wherein a person disappears from his domicile, his whereabouts being
unknown without leaving an agent to administer his proeprty.

Incapacity for olaguer would be limited to mean minority, insanity, imbecility, the state of being
deaf-mute, prodigality and civil interdiction.

He claims that his arrest and subsequent detention are not among the instances covered by the
terms absence and incapacity as provided in the SPA in favor of locsin.

It is a general rule the SPA must be strictly construed, however, the rule is not absolute and
should not be applied to the extent of destroying the very purpose of the power.

He already authorized agents to do specific acts of admniistraiton and no longer necessitated the
appointment of one by the court.

Absence and incapacity by their everyday usage means the state of not being present and the
inability to act given to context that the SPA authorizes the agents to attend stockholders
meeitgns and vote in behalf of petitioner, to sell the shares of stocks and other related acts. This
construction covers the situation wherein petritoner was arrested and detained. Which he
admitted in his testimony.
Doctrines:

CivilLaw;PowersofAttorney;Agency;Itisageneralrulethatapowerofattorneymustbe
strictlyconstrued;theinstrumentwillbeheldtograntonlythosepowersthatarespecified,
andtheagentmayneithergobeyondnordeviatefromthepowerofattorney.Petitioners
argumentsareunpersuasive.Itisageneralrulethatapowerofattorneymustbestrictly
construed;theinstrumentwillbeheldtograntonlythosepowersthatarespecified,andthe
agentmayneithergobeyondnordeviatefromthepowerofattorney.However,theruleisnot
absoluteandshouldnotbeappliedtotheextentofdestroyingtheverypurposeofthepower.
Ifthelanguagewillpermit,theconstructionthatshouldbeadoptedisthatwhichwillcarry
outinsteadofdefeatthepurposeoftheappointment.Clausesinapowerofattorneythatare
repugnant to each other should be reconciled so as to give effect to the instrument in
accordance with its general intent or predominant purpose. Furthermore, the instrument
should always be deemed to give such powers as essential or usual in effectuating the
expresspowers.
Same;Same;Same;Inthepresentcase,limitingthedefinitionsofabsencetothatprovided
underArticle381oftheCivilCodeandofincapacityunderArticle38ofthesameCode
negates the effect of the power of attorney by creating absurd, if not impossible, legal
situations.Inthepresentcase,limitingthedefinitionsofabsencetothatprovidedunder
Article381oftheCivilCodeandofincapacityunderArticle38ofthesameCodenegates
the effectof thepowerof attorney bycreatingabsurd, if notimpossible,legalsituations.
Article381providesthenecessarilystringentstandardsthatwouldjustifytheappointment
ofarepresentativebyajudge.Amongthestandardsthesaidarticleenumeratesisthatno
agenthasbeenappointedtoadministertheproperty.Inthepresentcase,petitionerhimself
had already authorized agents to do specific acts of administration and thus, no longer
necessitated the appointment of one by the court. Likewise, limiting the construction of
incapacitytominority,insanity,imbecility,thestateofbeingadeafmute,prodigalityand
civilinterdiction,asprovidedunderArticle38,wouldrendertheSPAineffective.Article
1919(3)oftheCivilCodeprovidesthatthedeath,civilinterdiction,insanityorinsolvencyof
theprincipaloroftheagentextinguishestheagency.Itwouldbeequallyincongruous,ifnot
outrightimpossible,forthepetitionertorequirehimselftoqualifyasaminor,animbecile,a
deafmute,oraprodigalbeforetheSPAbecomesoperative.Insuchcases,notonlywouldhe
be prevented from appointing an agent, he himself would be unable to administer his
property.
Same;Same;Same;Defining theterms absence andincapacity bytheir everyday usage
makesforareasonableconstruction,thatis,thestateofnotbeingpresentandtheinabilityto
act, given the context that the Special Power of Attorney (SPA) authorizes the agents to
attendstockholdersmeetingandvoteinbehalfofpetitioner,tosellthesharesofstock,and
otherrelatedacts.Defining thetermsabsenceandincapacitybytheireverydayusage
makesforareasonableconstruction,thatis,thestateofnotbeingpresentandtheinability
toact,giventhecontextthattheSPAauthorizestheagentstoattendstockholdersmeetings
and vote in behalf of petitioner, to sell the shares of stock, and other related acts. This
constructioncoversthesituationwhereinpetitionerwasarrestedanddetained.Thismuchis
admittedbypetitionerinhistestimony.
Same;Same;Same;Article 1882 of the Civil Code provides that the limits of an agents
authority shall not be considered exceeded should it have been performed in a manner
advantageous totheprincipal than thatspecifiedbyhim.Article1882 ofthe CivilCode
providesthatthelimitsofanagentsauthorityshallnotbeconsideredexceededshouldit
havebeenperformedinamannermoreadvantageoustotheprincipalthanthatspecifiedby
him.
Same;Same;Same;Theprohibitionagainst agentspurchasing property intheirhandsfor
sale or management is, however, clearly, not absolute.It is, indeed, a familiar and
universallyrecognizeddoctrinethatapersonwhoundertakestoactasagentforanother
cannotbepermittedtodealintheagencymatteronhisownaccountandforhisownbenefit
withouttheconsentofhisprincipal,freelygiven,withfullknowledgeofeverydetailknown
totheagentwhichmightaffectthetransaction.Theprohibitionagainstagentspurchasing
propertyintheirhandsforsaleormanagementis,however,clearly,notabsolute.Itdoesnot
applywheretheprincipalconsentstothesaleofthepropertyinthehandsoftheagentor
administrator.