Locsin v. Puerto Galera Resort Hotel, Inc.

 

Locsin v. Puerto Galera Resort Hotel, Inc.

G.R. No. 233678

July 27, 2022

 

FACTS:

Robustiano Quinto is the registered owner of a hotel in Oriental Mindoro. Luisito Padilla, a resort manager and developer, entered into a lease with Quinto for 10 years, where he was given the right to introduce improvements therein. The contract was further, authorizing Padilla to construct structures and renovate. They entered into a MOA to look for prospective tenants and lessees for the hotel complex, where they leased the complex to Cecilia Yulo Locsin. She took possession of the hotel and complex. However, Quinto, in his visit, was shocked to see the complex in ruins. Padilla sent a demand letter to Cecilia for her to pay P12.5M for the damages and losses. In response, Cecilia claimed that their lease contract was not yet perfected thus she could not be held liable. Padilla, in his personal capacity on behalf of Quinto and Puerto Galera Resort Hotel (PGRHI), instituted the instant complaint for damages pursuant to the Special Power of Attorney (SPA) executed by Quinto. However, Quinto manifested later on the dismissal of the case against Cecilia alleging that he did not fully understand the SPA contents he accomplished in favor of Padilla. On this basis, the RTC granted the Motion to Dismiss. Aggrieved, Padilla and PGRHI appealed before the CA while Cecilia passed away and was substituted by Leandro Locsin. The CA reversed the decision and held that the agency between Quinto and Padilla is one coupled with interest and, hence, irrevocable. Petitioner filed for a Motion for Reconsideration but was denied hence this case.

ISSUE:

Whether the SPA between Padilla and Quinto had been effectively revoked by Quinto

HELD:

No. A contract of agency is generally revocable because it is a personal contract of representation based on trust and confidence reposed by the principal on his agent. As the power of the agent to act depends on the will and license of the principal he or she represents, the power of the agent ceases when the will or permission is withdrawn by the principal. Thus, generally, the agency may be revoked by the principal at will. The reason for its irrevocability is because the agency becomes part of another obligation or agreement. It is not solely the rights of the principal, but also that of the agent and third persons, which are affected. Hence, the law provides that in such cases, the agency cannot be revoked at the sole will of the principal. In this case, the Court agrees with the finding of the CA that the agency granted by Quinto to Padilla is coupled with interest because it is the means of fulfilling an obligation already contracted, which is the MOA where Padilla introduced “very substantial improvements” to the hotel complex. Quinto in this case cannot revoke at his whim and pleasure the SPA which he had executed in favor of Padilla and duly acknowledged before a notary public. The mutual interest of Quinto and Padilla being the owner and developer, respectively, of the hotel complex is exactly the reason why they entered into a MOA.