G.R. No. 159489             February 4, 2008 some P17,000 worth of it.

some P17,000 worth of it. Palacio also tried to withdraw hers, but Filipinas Life, despite
demands, refused to return her money. With the assistance of their lawyer, they went to Filipinas
Life Escolta Office to collect their respective investments, and to inquire why they had not seen
FILIPINAS LIFE ASSURANCE COMPANY (now AYALA LIFE ASSURANCE, INC.), petitioner,
Valle for quite some time. But their attempts were futile. Hence, respondents filed an action for
vs.
the recovery of a sum of money.
CLEMENTE N. PEDROSO, TERESITA O. PEDROSO and JENNIFER N. PALACIO thru her
Attorney-in-Fact PONCIANO C. MARQUEZ, respondents.
After trial, the RTC, Branch 3, Manila, held Filipinas Life and its co-defendants Valle,
Apetrior and Alcantara jointly and solidarily liable to the respondents.
DECISION

WON FILIPINAS AND VALLER (AGENTS) ARE SOLIDARILY LIABLE?

On appeal, the Court of Appeals affirmed the trial court’s ruling and subsequently denied the
This petition for review on certiorari seeks the reversal of the Decision1 and Resolution,2 dated
motion for reconsideration.
November 29, 2002 and August 5, 2003, respectively, of the Court of Appeals in CA-G.R. CV
No. 33568. The appellate court had affirmed the Decision3 dated October 10, 1989 of the
Regional Trial Court (RTC) of Manila, Branch 3, finding petitioner as defendant and the co- Petitioner now comes before us raising a single issue:
defendants below jointly and severally liable to the plaintiffs, now herein respondents.
WHETHER OR NOT THE COURT OF APPEALS COMMITTED A REVERSIBLE
The antecedent facts are as follows: ERROR AND GRAVELY ABUSED ITS DISCRETION IN AFFIRMING THE DECISION
OF THE LOWER COURT HOLDING FLAC [FILIPINAS LIFE] TO BE
Respondent Teresita O. Pedroso is a policyholder of a 20-year endowment life insurance issued JOINTLY AND SEVERALLY LIABLE WITH ITS CO-DEFENDANTS
by petitioner Filipinas Life Assurance Company (Filipinas Life). Pedroso claims Renato Valle (SOLIDARY) ON THE CLAIM OF RESPONDENTS INSTEAD OF HOLDING ITS
was her insurance agent since 1972 and Valle collected her monthly premiums. AGENT, RENATO VALLE, SOLELY LIABLE TO THE RESPONDENTS. 10

In the first week of January 1977, Valle told her that the Filipinas Life Escolta Office was holding Simply put, did the Court of Appeals err in holding petitioner and its co-defendants jointly and
a promotional investment program for policyholders. It was offering 8% prepaid interest a month severally liable to the herein respondents?
for certain amounts deposited on a monthly basis. Enticed, she initially invested and issued a
post-dated check dated January 7, 1977 for P10,000.4 
Filipinas Life does not dispute that Valle was its agent, but claims that it was only a life
insurance company and was not engaged in the business of collecting investment money. It
In return, Valle issued Pedroso his personal check for P800 for the 8%5 prepaid interest and a contends that the investment scheme offered to respondents by Valle, Apetrior and Alcantara
Filipinas Life "Agent’s Receipt" No. 807838. 6 was outside the scope of their authority as agents of Filipinas Life such that, it cannot be
held liable to the respondents. 11
Subsequently, she called the Escolta office and talked to Francisco Alcantara, the administrative
assistant, who referred her to the branch manager, Angel Apetrior. Pedroso inquired about the On the other hand, respondents contend that Filipinas Life authorized Valle to solicit
promotional investment and Apetrior confirmed that there was such a promotion. She was even investments from them. In fact, Filipinas Life’s official documents and facilities were used in
told she could "push through with the check" she issued. From the records, the check, with the consummating the transactions. These transactions, according to respondents, were confirmed
endorsement of Alcantara at the back, was deposited in the account of Filipinas Life with the by its officers Apetrior and Alcantara. Respondents assert they exercised all the diligence
Commercial Bank and Trust Company (CBTC), Escolta Branch. required of them in ascertaining the authority of petitioner’s agents; and it is Filipinas Life that
failed in its duty to ensure that its agents act within the scope of their authority.
Relying on the representations made by the petitioner’s duly authorized representatives Apetrior
and Alcantara, as well as having known agent Valle for quite some time, Pedroso waited for the Considering the issue raised in the light of the submissions of the parties, we find that the
maturity of her initial investment. A month after, her investment of P10,000 was returned to her petition lacks merit. The Court of Appeals committed no reversible error nor abused gravely its
after she made a written request for its refund. The formal written request, dated February 3, discretion in rendering the assailed decision and resolution.
1977, was written on an inter-office memorandum form of Filipinas Life prepared by
Alcantara.7 To collect the amount, Pedroso personally went to the Escolta branch where
Alcantara gave her the P10,000 in cash. After a second investment, she made 7 to 8 more It appears indisputable that respondents Pedroso and Palacio had invested P47,000
investments in varying amounts, totaling P37,000 but at a lower rate of 5%8 prepaid interest a and P49,550, respectively. These were received by Valle and remitted to Filipinas Life, using
month. Upon maturity of Pedroso’s subsequent investments, Valle would take back from Filipinas Life’s official receipts, whose authenticity were not disputed. Valle’s authority to solicit
Pedroso the corresponding yellow-colored agent’s receipt he issued to the latter. and receive investments was also established by the parties. When respondents sought
confirmation, Alcantara, holding a supervisory position, and Apetrior, the branch manager,
confirmed that Valle had authority. While it is true that a person dealing with an agent is put upon
Pedroso told respondent Jennifer N. Palacio, also a Filipinas Life insurance policyholder, about inquiry and must discover at his own peril the agent’s authority, in this case, respondents
the investment plan. Palacio made a total investment of P49,5509 but at only 5% prepaid did exercise due diligence in removing all doubts and in confirming the validity of the
interest. However, when Pedroso tried to withdraw her investment, Valle did not want to return representations made by Valle. (THERE Was AN EXERCISE OF DUE DILIGENCE)
Filipinas Life, as the principal, is liable for obligations contracted by its agent Valle. By
the contract of agency, a person binds himself to render some service or to
do something in representation or on behalf of another, with the consent or
authority of the latter.12 

The general rule is that the principal is responsible for the acts of its agent done within
the scope of its authority, and should bear the damage caused to third persons.13 When
the agent exceeds his authority, the agent becomes personally liable for the damage.14 

But even when the agent exceeds his authority, the principal is still solidarily liable
together with the agent if the principal allowed the agent to act as though the agent had
full powers.15 

In other words, the acts of an agent beyond the scope of his authority do not bind the
principal, unless the principal ratifies them, expressly or impliedly.16 Ratification in agency
is the adoption or confirmation by one person of an act performed on his behalf by another
without authority.17

Filipinas Life cannot profess ignorance of Valle’s acts. Even if Valle’s representations were
beyond his authority as a debit/insurance agent, Filipinas Life thru Alcantara and Apetrior
expressly and knowingly ratified Valle’s acts. It cannot even be denied that Filipinas Life
benefited from the investments deposited by Valle in the account of Filipinas Life. In our
considered view, Filipinas Life had clothed Valle with apparent authority; hence, it is
now estopped to deny said authority. Innocent third persons should not be prejudiced if the
principal failed to adopt the needed measures to prevent misrepresentation, much more so if the
principal ratified his agent’s acts beyond the latter’s authority. The act of the agent is considered
that of the principal itself. Qui per alium facit per seipsum facere videtur.
"He who does a thing by an agent is considered as doing it
himself."18

WHEREFORE, the petition is DENIED for lack of merit. The Decision and Resolution, dated
November 29, 2002 and August 5, 2003, respectively, of the Court of Appeals in CA-G.R. CV
No. 33568 are AFFIRMED.

Costs against the petitioner.

SO ORDERED.