The Manila Remnant Co. v. The Honorable Court of Appeals

Summary

This case involved a fraudulent real estate scheme where Artemio Valencia, serving as president of both subdivision owner Manila Remnant Co., Inc. and sales agent A.U. Valencia & Co., executed valid contracts to sell two lots to the Ventanilla spouses, then fraudulently sold the same lots to Carlos Crisostomo ten days later. Valencia kept the Ventanillas' payments while transmitting Crisostomo's fictitious contracts to Manila Remnant. When the fraud was discovered in 1978, Manila Remnant refused the Ventanillas' payment offer. The Supreme Court held Manila Remnant solidarily liable with its agent under Civil Code Article 1911, ruling that the company was estopped from denying liability due to its negligent supervision and allowing its agent to act with apparent plenary authority. The decision emphasized protecting innocent third parties who relied on the agent's apparent authority and established important precedents for principal liability in agency relationships involving real estate transactions.