National Food Authority v. Intermediate Appellate Court

Summary

This case involves a contractual dispute over payment for shipping services where Gil Medalla, acting as commission agent for Superior Shipping Corporation, contracted with National Food Authority to transport rice using Superior Shipping's vessel 'MV Sea Runner.' When Superior Shipping demanded direct payment from NFA, NFA refused, claiming it only contracted with Medalla who did not disclose his agency relationship. The Supreme Court applied Article 1883 of the Civil Code, ruling that when a contract involves things belonging to the principal (the vessel), the undisclosed principal can claim rights under the contract. The Court held that NFA was jointly and severally liable with Medalla for the freight charges, as the contract was effectively between Superior Shipping and NFA despite the undisclosed agency. This decision clarifies the exception to the general rule on undisclosed principals in agency relationships under Philippine civil law.