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Unformatted text preview: aforesaid consideration, SMC issued a check payable to 74 "Rene Savellon in trust for bacaltos coal mines" for which Savellon issued a receipt under the heading of
Bacaltos Coal Mines.
The vessel was able to make only one trip. As such, SMC filed against the petitioners and Rene Savellon for
specific performance and damages. The petitioners alleged that Savellon was not their Chief Operating
Officer and that the powers granted to him are only those clearly expressed in the Authorization which do
not include the power to enter into any contract with SMC. They further claimed that if it is true that SMC
entered into a contract with them, it should have issued the check in their favor. They setup counterclaims
for moral and exemplary damages and attorney's fees. Savellon did not file his Answer and was declared in
RTC: renders judgment in favor of SMC.
It ruled that the Authorization given by German Bacaltos to Savellon necessarily included the power to enter
into the Trip Charter Party. It did not give credence to the petitioners' claim that the authorization refers only
to coal or coal mining and not to shipping because, according to it, "the business of coal mining may also
involve the shipping of products" and "a company such as a coal mining company is not prohibited to
engage in entering into a Trip Charter Party contract." It further reasoned out that even assuming that the
petitioners did not intend to authorize Savellon to enter into the Trip Charter Party, they are still liable
because: (a) SMC appears to be an innocent party which has no knowledge of the real intent of the parties
to the Authorization and has reason to rely on the written Authorization submitted by Savellon pursuant to
Articles 1900 and 1902 of the Civil Code; (b) Savellon issued an official receipt of Bacaltos Coal Mines for
the consideration of the Trip Charter Party, and the petitioners denial that they caused the printing of such
official receipt is "lame" bec...
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- Fall '14