Rosa Villa Monna vs. Guillermo Garcia Bosque, F. H. GOULETTE, and R. G.

FRANCE (Street, 1926)

FACTS:
Rosa, widow of E. Bota, was the owner of a printing establishment in Escolta, known
as La Flor de Cataluna, Viuda de E. Bota. Rosa, acting through her attorney-in-fact,
Manuel Pirretas, sold the store to Guillermo Bosque and Jose Ruiz for P55,000.00,
payable in four installments of P15,000.00 upon execution of the contract,
P10,000.00 one year after the date of execution, P10,000.00 for the 2 nd year and
P15,000.00 on the 3rd year. Interest rate is set to be 7% per annum. France and
Goulette obligated themselves as solidary sureties for Bosque. First installment was
paid in order.
Manuel, the attorney-in-fact, went to a prolonged visit to Spain, and in consideration
of that trip, he made a document purporting to be a partial substitution of agency, to
Figueras Hermanos, a mercantile entity (probably a corporation?) so that "they may
be able to effect the collection ofmoney as may be due to the plaintiff by reason of
the sale of the bookstore"
When the time to collect the 2 nd year installment became due, Bosque was unable to
to comply. After several negotiations with Alfredo Rocha, representative of Figueras
Hermanos, an agreement was reached Figueras will accept P5,800.00 plus three
promissory notes payable each month from December 1920 to April 1921. The notes
were not paid promptly by Bosque but the balance due to them was paid in full on
December 24, 1921.
About this time the owners of La Flor de Catalua appear to have converted it into a
limited partnership under the style of Guillermo Garcia Bosque, S. en C.;" and
presently a corporation was formed to take over the business under the name "Bota
Printing Company, Inc.". The partnership appears to have conveyed all its assets to
this corporation for the purported consideration of P15,000.00. Meanwhile the seven
notes representing the unpaid balance of the second installment and interest were
failing due without being paid.
A certain M. T. Figueras later enters into an agreement with Bosque, stating as
follows:
o Guillermo was indebted to Rosa in the amount of P32,000 for which R. G. France
and F. H. Goulette are bound as joint and several sureties, and that the
partnership mentioned had transferred all its assets to the Bota Printing
Company, Inc., of which George Andrews was a principal stockholder.
o France and Goulette shall be relieved from all liability on their contract as
sureties and that in lieu of Guillermo, France and Goulette, the Bota Printing
Company, Inc., as debtor to the extent of P20,000, which indebtedness was
expressly assumed by it, and George Andrews as debtor to the extent of
P12,000, will undertake to pay Rosa.
Rosa is now alleging that Figueras had no authority to execute the contract
containing the release of Guillermo et al from their liability, and that she had not
ratified the same. Guillermo et al argue otherwise, using the agreement as a
novation releasing him from personal liability.
ISSUE(S):
WON Rosa is bound to the agreement made by Figueras, therefore removing her cause
of action against Guillermo et al.

RATIO:
The court first looks at the partial substitution of agency made by Manuel Pirretas,
conferring on Figueras Hermanos or the person or persons exercising legal
representation of FH all of the powers that had been conferred on Pirretas by the
plaintiff in the original power of attorney.
It was argued that the original power of attorney included a wide range of powers
(including the general power of Pirretas to sell the business upon conditions fixed by
Pirretas, as well as the power of substitution to collect balance due to Rosa). However,
the Court has also said that the substitution agreement between Pirretas and FH were
explicit the sole purpose of the substitution was only to collect the balance of the
selling price of the Printing Establishment and Bookstore above-mentioned, which has
been sold to Messrs. Bosque and Pomar. Nothing can be construed to authorize
Figueras to discharge debtors or novate the contract. On the other hand, the
substitution agreement is very much explicit in limiting the powers of Figueras.
Furthermore, it was the mercantile entity Figueras Hermanos (or its legal
representatives) who were given the capacity to exercise the substituted power. M. T.
Figueras intervenes as purpoted attorney in fact without anything whatever to show that
he is in fact the legal representative of Figueras Hermanos or that he is there acting in
such capacity. The act of substitution conferred no authority whatever on M. T. Figueras
as an individual.
The argument of Bosque that Rosa had ratified the novation of the contract through
acceptance of the amount was also disregarded by the Court, stating that the Bota
Printing Company became a primary debtor for Guillermo et al. Rosa could therefore
accept the payment of the debt despite Rosas refusal to be bound by the supposed
novation of the contract of debt of Guillermo.
DISPOSITIVE: Appealed judgment affirmed.
JM Vida
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