Siredy Enterprises v. Hon. Court of Appeals

Summary

Siredy Enterprises, a subdivision developer, was sued by contractor Conrado De Guzman for unpaid construction work worth P412,154.93. De Guzman had contracted with Hermogenes Santos, who possessed a Letter of Authority from Siredy's president to enter construction contracts. The RTC dismissed the case against Siredy, ruling it was not bound by the contract since it was not a signatory. The Court of Appeals reversed, finding Santos was Siredy's duly authorized agent. The Supreme Court affirmed, holding that a valid agency existed and Santos acted within his written authority to build housing units. Under Article 1900 of the Civil Code, third parties are protected when agents act within written terms of their authority, regardless of private understandings between principal and agent. The case establishes important precedent on agency law and protection of third parties dealing with authorized agents.