Distinguished from other forms of relations/contracts

Case Citation: Jose De La Pena Y De Ramon vs Federico Hidalgo

Date: August 17, 1910

Petitioners: Jose De La Pena Y De Ramon

Respondents: Federico Hidalgo

Subject matter of Negotiorum Gestio (Implied Agency vs Management on another’s business)

controversy:

Antecedent  Jose De La Pena y de Ramon (de Ramon) and Vicenta De Ramon in her own
Facts: behalf and as the legal guardian of her son Roberto De La Pena filed a written
complaint against Federico Hidalgo, Antonio Hidalgo, and Francisco Hidalgo, the 3
persons who administered Jose de la Pena Gomiz’s (Gomiz) property for 3 periods.

1st agent - Federico Hidalgo = Nov. 18. 1887 – Dec. 31, 1893
2nd agent - Antonio Hidalgo = Jan. 1, 1894 – Sept. 1902
3rd agent - Francisco Hidalgo = Oct. 1902 – Jan. 7, 1904

 De Ramon was the judicial administrator of the estate of the deceased Gomiz

Petitioner’s  That Federico, who has possession of and administered Gomiz’s properties, was
Contention: mandated to deposit P50,244 which was collected by him in partial amounts and on
different dates in accordance with the verbal agreement between the deceased and
Federico in the general treasure of the Spanish Gov’t, but failed to remit/pay to
Gomiz during his lifetime nor to any representative of the deceased nor has
deposited the unpaid balance of the said sum in the treasury.
 That Federico, having received the sum of P6,360 from Gonzalo Tuason, withdrew
the said amount and disposed of the same for his own use and benefit, without
having paid all or any part of the said sum to Gomiz or to de Ramon
 That Gomiz on his voyage to Spain, remitted from Singapore to Fr. Ramon
Caviedas the sum of P6,000 with the request to deliver the same to Federico who,
on receiving the money, appropriated it to himself and converted it to his own use
and benefit

Respondent’s  He took charge of the administration of Gomiz’s property and administered the
Contention: same by virtue of the power conferred upon him by the deceased
 He ceased to discharge the duties of his position as an agent of Gomiz, the
principal, for the reasons of health
 He requested Gomiz to appoint a person to substitute him in the administration of
Gomiz’s property since Federico, for reasons of health, was unable to continue in
his trust because of serious illness
 He had renounced his powers and turned over the administration of Gomiz’s
property to Antonio Hidalgo, to whom he should transmit a power of attorney for the
fulfillment of the trust that Federico had been discharging
 He rendered the accounts in question to his principals (Gomiz & de Ramon) when
he embarked for Spain
 He never intervened nor taken any part in the administration of the property of
Gomiz when he turned over the administration of the deceased’s property to
Antonio who later on delegated his powers to Francisco Hidalgo, the 3 rd agent of
Gomiz’s property

MTC/RTC Ruling: Favored de Ramon

Issue: W/N there is an implied agency existed between Antonio and the deceased Gomiz
when Federico turned over the administration of the latter’s property to Antonio? YES

SC Ruling: Renunciation of Agency

After Federico had occupied the position of agent and administrator of Gomiz’s property
for several years, Federico wrote to Gomiz to designate a person who might substitute
him in his position as an agent in the event of his being obliged to absent himself for
reasons of health. Federico further stated in his letter of having provisionally turned
over the administration of Gomiz’s property to his cousin, Antonio, upon whom Federico
had conferred a general power of attorney. However, Gomiz did not even answer
Federico’s letters to approve/object it and did not appoint/designate another person
who might substitute Federico in his administration of Gomiz’s property. With this,
Federico was obliged to embark for Spain and rendered the accounts of Gomiz’s
administration and forwarded them to his constituent.

SC ruled that the notification made by Federico to Gomiz is essential in determining

whether/not an implied agency exists. Here, Federico renounced his agency and that
the agency was duly terminated. Accordingly, Federico (the agent) expressly and
definitely renounced his agency in the ff. manner:
1. When Federico (the agent) informed Gomiz (the principal) that for reasons of
health and by medical advice he is about to depart from the place where the
property subject to his administration is situated
2. When Federico abandoned the property
3. When Federico turned it over to a 3rd party without stating when he may return
to take charge of the administration
4. When Federico rendered the accounts of the administration
5. When Federico transmitted to his principal a general statement summarizing all
the balances of his accounts from the time he exercised his agency up to the
date he ceased to exercised it
6. When Federico asked a power of attorney to take effect the (provisional)
substitution in administering Gomiz’s property

Since Gomiz (the principal) did not disapprove the designation of Antonio as his new
agent nor did not appoint another, nor send a new power of attorney to the same,
Antonio acted in the matter of the administration of the principal’s property by virtue
of implied agency derived from the latter. The existence of implied agency on
Gomiz’s part was proven by the latter’s tacit consent and silence for 9 years which
impliedly allows Antonio from continuing in the exercise of his position as
administrator/agent of Gomiz’s property. With this, it can be said that Gomiz consented
to have Antonio administer his property and created in his favor an implied agency, as
the true legitimate administrator.

Implied agency vs Negotiorum Gestio (management of another’s business)

Antonio administered Gomiz’s property not in the character of business manager, but
as an agent by virtue of implied agency vested in him by its owner who was not
unaware of the fact, who knew perfectly well that Antonio took charge of the
administration of the property on account of the absence of his previous agent. Here,
SC differentiated implied agency from negotiorum gestio:

Negotiorum Gestio (management of another’s business):

- where the owner of the property is ignorant of the officious management of the 3 rd
party
- there is no simultaneous consent, either express/implied, but a fiction/presumption of
consent because of the benefit received
- derived from a quasi-contract

Implied Agency (administration and management):

- where the owner had perfect knowledge (consented) of the management and
administration by the 3rd person of the former’s property
- founded on the lack of contradiction/opposition which constitutes simultaneous
agreement on the part of the presumed principal to the execution of the contract
- originated from a contract

In applying these principles in the instant case, it is clear that Antonio is the legitimate
agent of Gomiz as a result of the tact agreement on the latter’s part, and the previous
agent (Federico) abandoned and ceased to hold his position for reasons of health
thereby renouncing his agency.

As to Federico’s liability, he is only liable for the results and consequences of his
administrator during the period when Gomiz’s property was in his charge and his
liability cannot extend beyond the period of his management, as his agency terminated
by the tacit/implied approval of his principal from his silence in neither objecting nor
prohibiting Antonio’s continuance to administer his property.