Agency, Trusts, Partnerships, and Joint Ventures Digest

Sumaway, Christine Joyce L (2B)

Nevada v Casuga
668 SCRA 441 (2012)
A.C 7591

Relevant Issue/s:

W/N the lawyer was an authorized agent of the hotel owner and can thus validly
enter into transactions on the latter’s behalf? NO, the lawyer was not authorized nor
was he able to present any evidence to prove the existence of an agency
relationship between him and the hotel owner. One who alleges the existence of
an agency relationship must prove such fact.

Salient Facts:

Nevada, a hotel owner, and Casuga, a lawyer, are members of one and the
same religious group. The hotel owner (Nevada) allowed the use of one of the Hotel's
functions rooms for church services. And in time, the lawyer (Casuga) was able to gain
her trust and confidence.

The lawyer, unbeknownst to the hotel owner, started to represent himself as the
administrator of the Hotel. The lawyer entered into a contract of lease with a certain
client covering an office space in the Hotel. The lawyer signed the lease contract and
notarized the document himself. Moreover, the lawyer was also able to acquire from her
several pieces of jewelry from the hotel owner which he was tasked to sell. However,
despite repeated demands by the hotel owner to the lawyer to return the valuables or
otherwise remit the proceeds of the sale, no jewelry or money was ever returned.

The lawyer claims that the hotel owner informally instituted him as the
administrator of the Hotel in a limited capacity. With regard to the pieces of jewelry, the
lawyer claimed that the hotel owner actually pawned them in a pawnshop and it was the
wife of the lawyer who redeemed it for her.

Thus, the hotel owner filed a case against the lawyer for misrepresenting himself.

Ruling of the Supreme Court (Held):

The lawyer represented himself as a duly-authorized representative of the hotel

owner when in fact he was not. The lawyer admitted signing the subject contract of
lease, but claimed that he was duly authorized to do so by the hotel owner. However,
the lawyer failed to adduce an iota of evidence to prove that he was indeed so
authorized. One who alleges the existence of an agency relationship must prove such
fact. The Court ruled in Yun Kwan Byung v. Philippine Amusement and Gaming
Corporation, "The law makes no presumption of agency and proving its existence,
nature and extent is incumbent upon the person alleging it." Plainly enough, the lawyer
was guilty of misrepresentation, when he made it appear that he was authorized to
enter into a contract of lease in behalf of Nevada when, in fact, he was not.

My critique and analysis:

The Supreme Court correct in ruling that the lawyer had no authority to represent
the hotel owner. Jurisprudence provides that although the perfection of a contract of
agency may be in implied form since it is generally consensual in nature and requires
no specific form for it to be perfected and binding, the agency relationship cannot be
presumed. It cannot be presumed or implied because of the mere relationship that
exists between the parties. The existence of agency must be proven by the person who
claims its existence. In this case, even if the parties were acquainted through a religious
group, it cannot be presumed that there was an agency relationship that existed
between the parties. The lawyer in this case, did not provide any evidence showing that
he was authorized by the hotel owner to enter into juridical acts on her behalf.