Article 1375

Article 1375
By: Gretzen M. Colona

Words which may have different significations shall be understood in that which is most inkeeping with the nature and object of the contract. (1286)

Ang mga salitang maaaring magkaroon ng iba’t ibang mga kahulugan ay dapat unawain kung saan sinasabi ang mga kalikasan at object ng kontrata. (1286)

Case: Germann & Co. vs. Donaldson, Sim & Co. (1 Phil. 63)

FACTS:

PETITIONER: Germann & Co. RESPONDENT: Donaldoson, SIm & Co.

PONENTE: Ladd, J.

1. CONTRACT; CONFLICT OF LAWS. — The validity of a power of attorney executed in Germany between German subjects should considered according to the laws of that country.

2. AGENCY; POWER OF ATTORNEY. — The right to commence action for collection of debts owing to principal is not an incident of strict ownership, which must be conferred in express terms.

3. POWER OF ATTORNEY; RIGHT TO SUE. — The power to “legally compel” the payment of debts owing to the principal is an express grant of the right to bring suit for the collection of such debts.

This case arises from a question on the personality of the plaintiff’s attorney to recover a sum claimed to be due for freight under a charter party. Fernando Kamerzell, German & Co.’s lawyer, by virtue of a general power for suits, executed such action. The power of attorney was executed as an instrument in Berlin by Max Leonard Tornow, sole owner of Germann and Co., which is operating in Manila and Berlin, and Kamerzell.

By this instrument Tornow constitutes Kammerzell his “true and lawful attorney with full power to enter the firm name of Germann & Co. in the Commercial Registry of the city of Manila as a branch of the house of Germann & Co. in Berlin, it being the purpose of this power to invest said attorney with full legal powers and authorization to direct and administer in the city of Manila for us and in our name a branch of our general commercial business of importation and exportation, for which purpose he may make contracts of lease and employ suitable assistants, as well as sign every kind of documents, accounts, and obligations connected with the business which may be necessary, take charge in general of the receipt and delivery of merchandise connected with the business, sign all receipts for sums of money and collect them and exact their payment by legal means, and in general execute all the acts and things necessary for the perfect carrying on of the business committed to his charge in the same manner as we could do ourselves if we were present in the same place.”

The defendants claimed that the original power is invalid under Article 1280, No. 5 of the Civil Code, which provides that the power for suits must be contained in a public instrument, Further, they claimed that the original power cannot be construed as conferring upon Kamerzall’s authority to institute or defend suits, based on Article 1713 which states “in order to compromise, alienate, mortgage, or to execute any other act of strict ownership an express commission is required.”.

ISSUE/S
Whether Kamerzell, through the instrument executed in Berlin by himself and Tornow, has the authority to institute suits for the recovery of sums of money.

LAWS
Article 1375. Words which may have different significations shall be understood in that which is most in keeping with the nature and object of the contract. (1286)

HELD
Yes. Kamerzell, through the instrument executed in Berlin by himself and Tornow, has the authority to institute suits for the recovery of sums of money. The clause referring to the “exact the payment” of sums of money “by legal means” also means the power to exact the payment of debts through the institution of suits for their recovery. If there could be any doubt as to the meaning of this language taken by itself, it would be removed by a consideration of the general scope and purpose of the instrument in which it occurs. (See Civil Code, art. 1286.) The main object of the instrument is clearly to make Kammerzell the manager of the Manila branch of the plaintiff’s business, with the same general authority with reference to its conduct which his principal would himself possess if he were personally directing it. It can not be reasonably supposed, in the absence of very clear language to that effect, that it was the intention of the principal to withhold from his agent a power so essential to the efficient management of the business entrusted to his control as that to sue for the collection of debts.

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