By Atty. Eduardo T. Reyes III
‘Silence’ has been one favorite word in poems and even movie titles as it evokes some mystery when there is quietude. A reserved and keeps-to-himself/herself type of person also radiates an interesting aura in that one would wonder what occupies his/her thoughts.
There is also an aphorism that says “silence means yes.”
Yet this adage could pose some danger in our daily transactions and so we have to be mindful of the principle known in law as “agency by estoppel.”
In the recent case of Chevron Philippines, Inc. v. Alberto T. Looyuko, G.R. No. 236525, which was handed down on March 29, 2023, the Supreme Court explained “agency by estoppel” in this fashion:
“The rule on agency by estoppel, otherwise known as the doctrine of apparent authority, was introduced into the Civil Code with the intention of protecting the rights of innocent persons dealing with agents carrying their principals’ apparent authority-even if for the agents’ purpose of misrepresentation. This prevents said principals from disclaiming liability from any transactions their supposed agents, and makes their supposed agents’ representation conclusive. Said the Court in Cuison v. Court of Appeals, “[i]t matters not whether the representations are intentional or merely negligent so long as innocent third persons relied upon such representations in good faith and for value.” The rule is also in line with Section 2(a), Rule 131 of the Revised Rules on Evidence, which enumerate as a conclusive presumption instances “[w]henever a party has, by his or her own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing to be true, and to act upon such belief, he or she cannot, in any litigation arising out of such declaration, act or omission, be permitted to falsify it.”
When you’re running a business, big or small, or planning to sell land, many supposed “agents” would volunteer to “advertise the business” or “look for buyers” for the land.
This is the time to practice extreme caution as any misrepresentations by the would-be agent could be binding on you despite the absence of any written agreement that you signed.
The “agency by estoppel” principle binds a person for the acts of another. This is true even if there is no written authority for so long as the person concerned does not categorically disown, or tell the public that, those representations are without his/her permission.
To remain silent therefore in the face of an unauthorized representation could spell trouble for a person as the permission or authority – or the “yes”- could be inferred from his/her silence.
(The author is the senior partner of ET Reyes III & Associates– a law firm based in Iloilo City. He is a litigation attorney, a law professor, MCLE lecturer, bar reviewer and a book author. His website is etriiilaw.com).