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444

SUPREME COURT REPORTS ANNOTATED

Angeles vs. Philippine National Railways (PNR)
*

G.R. No. 150128. August 31, 2006.

LAUREANO T. ANGELES, petitioner, vs. PHILIPPINE

NATIONAL
RAILWAYS (PNR) AND RODOLFO
1
FLORES, respondents.
Civil Law; Contracts; Agency; Normally, the agent has neither
rights nor liabilities as against the third party; he cannot thus sue
or be sued on the contract.Where agency exists, the third partys
(in this case, PNRs) liability on a contract is to the principal and not
to the agent and the relationship of the third party to the principal
is the same as that in a contract in which there is no agent.
Normally,
_______________
*
1

SECOND DIV ISION.

As filed, the petition impleads the Court of Appeals as among the

respondents. Pursuant to Sec. 4, Rule 45, the CA need not be impleaded.

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the agent has neither rights nor liabilities as against the third
party. He cannot thus sue or be sued on the contract. Since a
contract may be violated only by the parties thereto as against each
other, the real party-in-interest, either as plaintiff or defendant in
an action upon that contract must, generally, be a contracting
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party.
Agency; Assignee; The legal situation is different where an
agent is constituted as an assignee.The legal situation is,
however, different where an agent is constituted as an assignee. In
such a case, the agent may, in his own behalf, sue on a contract
made for his principal, as an assignee of such contract. The rule
requiring every action to be prosecuted in the name of the real
party-in-interest recognizes the assignment of rights of action and
also recognizes that when one has a right assigned to him, he is
then the real party-in-interest and may maintain an action upon
such claim or right.
Civil Law; Contracts; Article 1374 of the Civil Code provides
that the various stipulations of a contract shall be read and
interpreted together, attributing to the doubtful ones that sense
which may result from all of them taken jointly.Article 1374 of
the Civil Code provides that the various stipulations of a contract
shall be read and interpreted together, attributing to the doubtful
ones that sense which may result from all of them taken jointly. In
fine, the real intention of the parties is primarily to be determined
from the language used and gathered from the whole instrument.
When put into the context of the letter as a whole, it is abundantly
clear that the rights which Romualdez waived or ceded in favor of
Lizette were those in furtherance of the agency relation that he had
established for the withdrawal of the rails. At any rate, any doubt
as to the intent of Romualdez generated by the way his letter was
couched could be clarified by the acts of the main players
themselves. Article 1371 of the Civil Code provides that to judge the
intention of the contracting parties, their contemporaneous and
subsequent acts shall be principally considered. In other words, in
case of doubt, resort may be made to the situation, surroundings,
and relations of the parties.
Powers of Attorney; A power of attorney is only but an
instrument in writing by which a person, as principal, appoints
another as his agent and confers upon him the authority to perform
certain
446

446

SUPREME COURT REPORTS ANNOTATED

Angeles vs. Philippine National Railways (PNR)

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specified acts on behalf of the principal.A power of attorney is

only but an instrument in writing by which a person, as principal,
appoints another as his agent and confers upon him the authority
to perform certain specified acts on behalf of the principal. The
written authorization itself is the power of attorney, and this is
clearly indicated by the fact that it has also been called a letter of
attorney. Its primary purpose is not to define the authority of the
agent as between himself and his principal but to evidence the
authority of the agent to third parties with whom the agent
deals.The letter under consideration is sufficient to constitute a
power of attorney. Except as may be required by statute, a power of
attorney is valid although no notary public intervened in its
execution. A power of attorney must be strictly construed and
pursued. The instrument will be held to grant only those powers
which are specified therein, and the agent may neither go beyond
nor deviate from the power of attorney.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Vicente D. Millora for petitioner.
Dionisio D. Ramos and Frolin H. Remoquillo for
respondent PNR.
GARCIA, J.:
Under consideration is this petition for review under Rule
45 of the Rules of Court assailing and seeking to set aside
the following issuances of the Court of Appeals (CA) in CAG.R. CV No. 54062,to wit:
2

1. Decision dated June 4, 2001, affirming an earlier decision of the

Regional Trial Court (RTC) of Quezon City, Branch 79, which
dismissed the complaint for specific performance and damages
_______________
2

Penned by Associate Justice Martin S. Villarama, Jr., with Associate

Justices Conrado M. Vasquez, Jr. and Alicia L. Santos, concurring; Rollo,

pp. 46-53.
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thereat commenced by the petitioner against the herein

respondents; and
3
2. Resolution dated September 17, 2001, denying the petitioners
motion for reconsideration.

The facts:
On May 5, 1980, the respondent Philippine National
Railways (PNR) informed a certain Gaudencio Romualdez
(Romualdez, hereinafter) that it has accepted the latters
offer to buy, on an AS IS, WHERE IS basis, the PNRs
scrap/unserviceable rails located in Del Carmen and Lubao,
Pampanga at P1,300.00 and P2,100.00 per metric ton,
respectively, for the total amount of P96,600.00. After
paying the stated purchase price, Romualdez addressed a
letter to Atty. Cipriano Dizon, PNRs Acting Purchasing
Agent. Bearing date May 26, 1980, the letter reads:
Dear Atty. Dizon:
This is to inform you as President of San Juanico Enterprises, that I
have authorized the bearer, LIZETTE R. WIJANCO of No. 1606
Aragon St., Sta. Cruz, Manila, to be my lawful representative in the
withdrawal of the scrap/unserviceable rails awarded to me.
For this reason, I have given her the ORIGINAL COPY of the
AWARD, dated May 5, 1980 and O.R. No. 8706855 dated May 20,
1980 which will indicate my waiver of rights, interests and
participation in favor of LIZETTE R. WIJANCO.
Thank you for your cooperation.
Very truly yours,
(Sgd.) Gaudencio Romualdez

The Lizette R. Wijanco mentioned in the letter was Lizette

Wijanco-Angeles, petitioners now deceased wife. That very
same dayMay 26, 1980Lizette requested the PNR to
transfer the location of withdrawal for the reason that the
_______________
3

Id., at p. 75.
448

448

SUPREME COURT REPORTS ANNOTATED

Angeles vs. Philippine National Railways (PNR)

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scrap/unserviceable rails located in Del Carmen and Lubao,

Pampanga were not ready for hauling. The PNR granted
said request and allowed Lizette
to withdraw
scrap/unserviceable rails in Murcia, Capas and San Miguel,
Tarlac instead. However, the PNR subsequently suspended
the withdrawal in view of what it considered as documentary
discrepancies coupled by reported pilferages of over
P500,000.00 worth of PNR scrap properties in Tarlac.
Consequently, the spouses Angeles demanded the refund
of the amount of P96,000.00. The PNR, however, refused to
pay, alleging that as per delivery receipt duly signed by
Lizette, 54.658 metric tons of unserviceable rails had
already been withdrawn which, at P2,100.00 per metric ton,
were worth P114,781.80, an amount that exceeds the claim
for refund.
On August 10, 1988, the spouses Angeles filed suit
against the PNR and its corporate secretary, Rodolfo Flores,
among others, for specific performance and damages before
the Regional Trial Court of Quezon City. In it, they prayed
that PNR be directed to deliver 46 metric tons of
scrap/unserviceable rails and to pay them damages and
attorneys fees.
Issues having been joined following the filing by PNR, et
al., of their answer, trial ensued. Meanwhile, Lizette W.
Angeles passed away and was substituted by her heirs,
among whom is her husband, herein petitioner Laureno T.
Angeles.
On April 16, 1996, the trial court, on the postulate that
the spouses Angeles are not the real parties-in-interest,
rendered judgment dismissing their complaint for lack of
cause of action. As held by the court, Lizette was merely a
representative of Romualdez in the withdrawal of scrap or
unserviceable rails awarded to him and not an assignee to
the latters rights with respect to the award.
Aggrieved, the petitioner interposed an appeal with the
CA, which, as stated at the threshold hereof, in its decision
of June 4, 2001, dismissed the appeal and affirmed that of
the trial court. The affirmatory decision was reiterated by
the CA
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in its resolution of September 17, 2001, denying the

petitioners motion for reconsideration.
Hence, the petitioners present recourse on the
submission that the CA erred in affirming the trial courts
holding that petitioner and his spouse, as plaintiffs a quo,
had no cause of action as they were not the real parties-ininterest in this case.
We DENY the petition.
At the crux of the issue is the matter of how the
aforequoted May 26, 1980 letter of Romualdez to Atty.
Dizon of the PNR should be taken: was it meant to
designate, or has it the effect of designating, Lizette W.
Angeles as a mere agent or as an assignee of his
(Romualdezs) interest in the scrap rails awarded to San
Juanico Enterprises? The CAs conclusion, affirmatory of
that of the trial court, is that Lizette was not an assignee,
but merely an agent whose authority was limited to the
withdrawal of the scrap rails, hence, without personality to
sue.
Where agency exists, the third partys (in this case,
PNRs) liability on a contract is to the principal and not to
the agent and the relationship of the third party to the
principal is the same as that in a contract in which there is
no agent. Normally, the agent has neither rights nor
liabilities as against the third party. He cannot thus sue or
be sued on the contract. Since a contract may be violated
only by the parties thereto as against each other, the real
party-in-interest, either as plaintiff or defendant in an
action upon that contract must, generally, be a contracting
party.
The legal situation is, however, different where an agent
is constituted as an assignee. In such a case, the agent may,
in his own behalf, sue on a contract made for his principal,
as an assignee of such contract. The rule requiring every
action to be prosecuted in the name of the real party-ininterest recognizes the assignment of rights of action and
also recognizes that when one has a right assigned to him,
he is then the real
450

450

SUPREME COURT REPORTS ANNOTATED

Angeles vs. Philippine National Railways (PNR)

party-in-interest and may maintain an action upon such

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4

claim or right.
Upon scrutiny of the subject Romualdezs letter to Atty.
Cipriano Dizon dated May 26, 1980, it is at once apparent
that Lizette was to act just as a representative of
Romualdez in the withdrawal of rails, and not an assignee.
For perspective, we reproduce the contents of said letter:
This is to inform you as President of San Juanico Enterprises, that
I have authorized the bearer, LIZETTE R. WIJANCO x x x to be
my lawful representative in the withdrawal of the
scrap/unserviceable rails awarded to me.
For this reason, I have given her the ORIGINAL COPY of the
AWARD, dated May 5, 1980 and O.R. No. 8706855 dated May 20,
1980 which will indicate my waiver of rights, interests and
participation in favor of LIZETTE R. WIJANCO. (Emphasis added)

If Lizette was without legal standing to sue and appear in

this case, there is more reason to hold that her petitioner
husband, either as her conjugal partner or her heir, is also
without such standing.
Petitioner makes much of the fact that the terms agent
or attorney-in-fact were not used in the Romualdez letter
aforestated. It bears to stress, however, that the words
principal and agent, are not the only terms used to
designate the parties in an agency relation. The agent may
also be called an attorney, proxy, delegate or, as here,
representative.
It cannot be over emphasized that Romualdezs use of the
active verb authorized, instead of assigned, indicated an
intent on his part to keep and retain his interest in the
subject matter. Stated a bit differently, he intended to limit
Lizettes role in the scrap transaction to being the
representative of his interest therein.
_______________
4

Uy v. Court of Appeals, G.R. No. 120465, September 9, 1999, 314

SCRA 69.
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451

Angeles vs. Philippine National Railways (PNR)

Petitioner submits that the second paragraph of the
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Romualdez letter, statingI have given [Lizette] the

original copy of the award x x x which will indicate my
waiver of rights, interests and participation in favor of
Lizette R. Wijancoclarifies that Lizette was intended to
be an assignee, and not a mere agent.
We are not persuaded. As it were, the petitioner
conveniently omitted an important phrase preceding the
paragraph which would have put the whole matter in
context. The phrase is For this reason, and the
antecedent thereof is his (Romualdez) having appointed
Lizette as his representative in the matter of the withdrawal
of the scrap items. In fine, the key phrase clearly conveys
the idea that Lizette was given the original copy of the
contract award to enable her to withdraw the rails as
Romualdezs authorized representative.
Article 1374 of the Civil Code provides that the various
stipulations of a contract shall be read and interpreted
together, attributing to the doubtful ones that sense which
may result from all of them taken jointly. In fine, the real
intention of the parties is primarily to be determined from
the language used and gathered from the whole instrument.
When put into the context of the letter as a whole, it is
abundantly clear that the rights which Romualdez waived
or ceded in favor of Lizette were those in furtherance of the
agency relation that he had established for the withdrawal
of the rails.
At any rate, any doubt as to the intent of Romualdez
generated by the way his letter was couched could be
clarified by the acts of the main players themselves. Article
1371 of the Civil Code provides that to judge the intention
of the contracting parties, their contemporaneous and
subsequent acts shall be principally considered. In other
words, in case of doubt, resort may be made to the situation,
surroundings, and relations of the parties.
452

452

SUPREME COURT REPORTS ANNOTATED

Angeles vs. Philippine National Railways (PNR)
5

The fact of agency was, as the trial court aptly observed,

confirmed in subsequent letters from the Angeles spouses in
which they themselves refer to Lizette as authorized
representative of San Juanico Enterprises. Mention may
also be made that the withdrawal receipt which Lizette had
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signed indicated that she was doing so in a representative

capacity. One professing to act as agent for another is
estopped to deny his agency both as against his asserted
principal and third persons interested in the transaction
which he engaged in.
Whether or not an agency has been created is a question
to be determined by the fact that one represents and is
acting for another. The appellate court, and before it, the
trial court, had peremptorily determined that Lizette, with
respect to the withdrawal of the scrap in question, was
acting for Romualdez. And with the view we take of this
case, there were substantial pieces of evidence adduced to
support this determination. The desired reversal urged by
the petitioner cannot, accordingly, be granted. For, factual
findings of the trial court, adopted and confirmed by the CA,
are, as a rule,
final and conclusive and may not be disturbed
6
on appeal. So it must be here.
Petitioner maintains that the Romualdez letter in
question was not in the form of a special power of attorney,
implying that the latter had not intended to merely
authorize his wife, Lizette, to perform an act for him
(Romualdez). The contention is specious. In the absence of
statute, no form or method of execution is required for a
valid power of attorney; it may be in7 any form clearly
showing on its face the agents authority.
A power of attorney is only but an instrument in writing
by which a person, as principal, appoints another as his
agent
_______________
5

RTC Decision, pp. 17-18; Rollo, pp. 71-72.

Lubos v. Galupo, G.R. No. 139136, January 16, 2002, 373 SCRA 618.

3 Am Jur. 2d, Agency, Sec. 25.

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Angeles vs. Philippine National Railways (PNR)

and confers upon him the authority to perform certain
specified acts on behalf of the principal. The written
authorization itself is the power of attorney, and this is
clearly indicated by the fact that it has also been called a
letter of attorney. Its primary purpose is not to define the
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authority of the agent as between himself and his principal

but to evidence the authority
of the agent to third parties
8
with whom the agent deals. The letter under consideration
is sufficient to constitute a power of attorney. Except as may
be required by statute, a power of attorney is9 valid although
no notary public intervened in its execution.
A power of attorney must be strictly construed and
pursued. The instrument will be held to grant only those
powers which are specified therein, and the agent may10
neither go beyond nor deviate from the power of attorney.
Contextually, all that Lizette was authorized to do was to
withdraw the unserviceable/scrap railings. Allowing her
authority to sue therefor, especially in her own name, would
be to read something not intended, let alone written in the
Romualdez letter.
Finally, the petitioners claim that Lizette paid the
amount of P96,000.00 to the PNR appears to be a mere
afterthought; it ought to be dismissed outright under the
estoppel principle. In earlier proceedings, petitioner himself
admitted in his complaint that it was Romualdez who paid
this amount.
WHEREFORE, the petition is DENIED and the assailed
decision of the CA is AFFIRMED.
Costs against the petitioner.
SO ORDERED.
Puno (Chairperson), Sandoval-Gutierrez and Azcuna,
JJ., concur.
_______________
8

Ibid. Sec. 23.

Reyes v. Santiago, CA-G.R. No. 47996-7-R, Nov. 27, 1975.

10

3 Am. Jur. 2d, Agency, Sec. 31.

454

454

SUPREME COURT REPORTS ANNOTATED

Quesada vs. Department of Justice
Corona, J., On Leave.

Petition denied, assailed decision affirmed.

Note.Parties may freely stipulate their duties and
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obligations which perforce would be binding on them.

(National Sugar Trading vs. Philippine National Bank, 396
SCRA 528 [2003])
o0o

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