Name: SARACHO, Nicole R.

Topic: Rule of Attribution

Law or Provision Cited: Article 1393, NCC; Doctrine of Apparent
Authority
Title: Trinidad J. Francisco v GSIS
Source, Date: No. L-18287, 30 March 1963
Facts:
Trinidad Francisco obtained a loan for P400,000. In consideration
of said loan, she mortgaged a land in favor of Government Service
Insurance System (GSIS). Consequently, GSIS extrajudicially foreclosed
the mortgage because Francisco was in arrears on her monthly
installments.
Subsequently, the father of Trinidad, Atty. Vicente Francisco,
made an arrangement through a letter with the GSIS (1) That he will
pay P30,000 to the GSIS to set aside the foreclosure of the mortgage;
(2) and for GSIS to take over the administration of the mortgaged
property to pay for the balance and unpaid installments. GSIS General
Manager Rodolfo Andal expressed that the GSIS Board approved the
request of re-redemption of the foreclosed property.
GSIS through letters requested for the payment of Trinidads
indebtness and the expiration of the redemption period, to which Atty.
Francisco protested. GSIS countered Atty. Franciscos protest saying
that the exchange between them should be disregarded in view of its
failure to express the contents of the board resolution due to the error
of its minor employees in couching the word of the telegram.
CFI ruled in favor of the plaintiff holding that the offer of
Francisco had been unqualifiedly accepted and thus, was binding.
Issue: Whether the telegram generated a contract that is valid and
binding upon the parties.
Held: YES. The appealed decision is affirmed.
Ruling: There was nothing in the telegram that hinted at any anomaly,
or gave ground to suspect its veracity, and the plaintiff, therefore, can
not be blamed for relying upon it. There is no denying that the
telegram was within Andals apparent authority, that his defense that
he has no knowledge of the telegram and that he did not sign it is
untenable.
It is a well settled rule that If a private corporation intentionally
or negligently clothes its officers or agents with apparent power to
perform acts for it, the corporation will be estopped to deny that such
apparent authority is real, as to innocent third persons dealing in good
faith with such officers or agents.

Knowledge of facts acquired or possessed by an officer or agent

of a corporation in the course of his employment, and in relation to
matters within the scope of his authority, is notice to the corporation,
whether he communicates such knowledge or not.
Thus,
The silence of the corporation, taken together with
the unconditional acceptance of three subsequent remittances from
plaintiff, constitutes a binding ratification of the original agreement
between them.