Olaguer v.

Parungganan and Locsin 2007

Facts:
Olaguer was executive Vice President of
Businessday Corporation. He was the owner of
60,000 shares of stock worth 600,000 pesos.
Olaguer, along with accused Locsin and
Joaquin were active in opposing the Marcos
dictatorship.
Anticipating the possibility that Olaguer would
be arrested and detained by the military,
Locsin, Joaquin, and Hector Hofilena had an
unwritten agreement that in the event that
Olaguer was arrested, they would support
Olaguers family by continued payment of his
salary.
May 26, 1979 - Olaguer executed a Special
Power of Attorney appointing as his attorneysin-fact Locsin, Joaquin and Hofilena for the
purpose of transferring petitioners shares of
stock with Businessday.
The SPA read:
EDUARDO B. OLAGUER, of legal age . . .
appoint RAUL L. LOCSIN, ENRIQUE M.
JOAQUIN, and HECTOR HOFILEA . . . to
be my true and lawful attorneys-in-fact, for me
and in my name, place and stead, in the event
of my absence or incapacity . . . to wit:
1. For me and in my stead to attend and vote
my stock at any stockholders meeting of the
Businessday Group of Companies . . .
2. To sell, assign, transfer, endorse and deliver,
for such price . . . any and all shares of stock
now held.
Dec. 24, 1979 Olaguer was arrested by
military for alleged arson. Upon knowing the
detention, Locsin tried to sell Olaguers shares
of stock. Since he couldnt find any buyers, he
bought the shares for himself.
Locsin paid Olaguer installments of 10,000
pesos every 15th and 30th of the month to pay
for the total sum of 600,000 pesos.
After receiving a total of 600,000, the payments
stopped.

Jan 16, 1986 Olaguer was released from

detention.
He discovered that he was no longer a
stockholder of Businessday Corporation. He
learned that Parungganan, the Corporate
Secretary of Businessday had already recorded
the transfer of his shares to Locsin.

Olaguer contends that the words of the Special

Power of Attorney should be strictly
constructed.
Absence
Art. 381. When a person disappears from his
domicile, his whereabouts being unknown,
and without leaving an agent to administer his
property, the judge, at the instance of an
interested party, a relative, or a friend, may
appoint a person to represent him in all that
may be necessary.
Incapacity
Art. 38. Minority, insanity or imbecility, the
state of being a deaf-mute, prodigality and
civil interdiction are mere restrictions on
capacity to act, and do not exempt the
incapacitated person from certain obligations,
as when the latter arise from his acts or from
property relations, such as easements. (32a)
RTC Sale was valid. Petitioner intended to
sell the stocks to anyone according to the
Special Power of Attorney.
During trial, Eduardo testified that he agreed to
execute theSPA in order to cancel his shares of
stock, even before they are sold, for the purpose
of concealing that he was a stockholder of
Businessday
Court of Appeals Sale was valid. He
received the price and didnt raise protest over
the sale

ISSUE:
WON there was a perfected contract of sale between petitioner and Locsin over the shares.

Held:

YES. Contract of Sale is valid. Petitioners claims regarding the meanings of the words absence
and incapacity in his Special Power of Attorney would result to absurd and impossible legal
situations.
Olaguer has to be a minor or insane for that SPA to have function. Since the said SPA executed by
Olaguer gave powers to the respondents to actually dispose of his share, he cannot therefore assail
such now. And even if the said contract is assailable, it was already ratified by the reception of the
amount 600,000 by Olaguers wife and in-laws from 1980-198