Professional Documents
Culture Documents
Partnership Digests
Partnership Digests
3.
Basis
A.
ARTICLE 1868
Art. 1868. By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter.
Rallos v. Felix Go Chan (MAI) January 31, 1978 Muoz Palma, J. FACTS: Concepcion and Gerundia Rallos were sisters and registered co-owners of a parcel of land known as Lot No. 5983. In 1954, they executed a special power of attorney in favor of their brother, Simeon Rallos, authorizing him to sell for and in their behalf the aforementioned parcel of land. On March 1955, Concepcion Rallos died. On September 1955, Simeon Rallos sold the undivided shares of his sisters in lot 5983 to Felix Go Chan and Sons Realty Corporation. The deed of sale was registered and the previous TCT was cancelled. On May 1956, Ramos Rallos, as administrator of the Intestate Estate of Concepcion Rallos, filed a complaint with the CFI of Cebu, praying (1) that the sale of the undivided share of the deceased Concepcion Rallos be declared unenforceable, and said share be reconveyed to her estate; (2) that the TCT issued in the name of Felix Go Chan and Sons Realty Corporation be cancelled; and (3) that the plaintiff be indemnified by way of attorneys fees and payment of costs of suit. The trial court rendered judgment declaring the deed of sale null and void, insofar as the one-half pro-indiviso share of Concepcion Rallos in the property in question, and sentencing Juan Borromeo, the administrator of the estate of Simeon Rallos, to pay Felix Go Chan and Sons Realty Corporation the sum representing the price of one-half of the lot. The appellate court reversed the decision and sustained the sale. ISSUE: Whether or not the sale of the agent of the principals property after the latters death is valid HELD: NO. The general rule in Article 1919 of the NCC is that death is one of the causes for the extinguishment of agency. There being an integration of the personality of the principal into that of the agent, it is not possible for the representation to continue once the death of either is established. There are certain exceptions, however, Article 1931 being one of them. Under this provision, an act done by the agent after the death of the principal is valid and effective if two conditions concur: (1) the agent acted without knowledge of the death of the principal; and (2) that the third person who contracted with the agent acted in good faith. But because it was established that Simeon Rallos had knowledge of the death of his principal when he made the sale, Article 1931 will not apply. The general rule shall apply then that any act of an agent after the death of his principal is void ab initio. Simeon Rallos act
1. 2.
Definition Nature
Orient Air Services & Hotel Rep. v CA (GEN) May 29, 1991 Padilla, J. FACTS: American Airlines Inc. (AAI) and Orient Air Services and Hotel Representatives (Orient Air) entered into a General Sales Agency Agreement authorizing the latter to act as its exclusive general sales agent within the Philippines for the sale of air passenger transportation. Due to the alleged failure of Orient Air to promptly remit the net proceeds of sales for 6 months, AAI undertook the collection of the proceeds of tickets sold originally by Orient Air and terminated the agency agreement. AAI then instituted suit against Orient Air with CFI of Manila for Accounting with Preliminary Attachment or Garnishment, Mandatory Injunction and Restraining Order. The CFI of Manila ruled in favor of Orient Air and dismissed the complaint. It then ordered AAI to reinstated Orient Air as its general sales agent for passenger transportation in the Philippines. The IAC affirmed with modifications the findings of CFI of Manila. ISSUE: WON the lower court may compel AAI to extend its personality to Orient Air? HELD: NO. It would be violative of the principles and essence of agency, defined by law as a contract whereby a person binds himself to another to render some service or to do something in representation or on behalf of another WITH THE CONSENT OR AUTHORITY OF THE LATTER. In an agent-principal relationship, the personality of the principal is extended through the facility of the agent. In so doing, the agent, by legal fiction, becomes the principal, authorized to perform all acts which the latter would have him do. Such a relationship can only be effected with the consent of the principal, which must not, in any way, be compelled by law or by any court.
Effect: as if no there was no registration at all Air France v CA, Jose Gana (ABBY) Dec. 29, 1983 Melencio Herrera FACTS: The Ganas purchased from Air France through Imperial Travels, a duly authorized agent, 9 open dated tickets for a Manila/Osaka/Tokyo/Manila. The expiry date was May 8, 1970. Jose Gana sought the assistance of Teresita Manucdoc, a secretary of the company where Jose Gana worked, to procure the extension of the validity of their tickets. Manucdoc talked with Lee Ella, Manager of the Philippine Travel Bureau. She was told that they would have to pay fare differentials and that the extension is impossible. The GANAS scheduled their departure for May 7 and on May 6, Teresita again asked for Lee Ellas help in the revalidation. She was told that it would only be valid until May 8 and no longer valid for the rest of the trip after that. However, Ella attached revalidation stickers on the
5.
6.
Smith vs. Lopez (EARLA) September 30, 1905 Torres, J. FACTS: Nicasio Lopez, as administrator of the house owned by his two daughters, contracted the services of Philippine Gas Light Company for the installation of a water system, urinals, closets, shower baths, and drain pipes in the house at 142 Calle Dulumbayan, Santa Cruz Manila. This was done pursuant to the order of the Board of Health. The Company, with Smith and Reyes as proprietors, incurred a total of P4020 Mexican currency; P750 of which was already paid, leaving a balance of P3270. Failing to pay, Smith and Reyes instituted an action to recover the P3270 plus interest, from the sisters, Jacinta and Ignacia Lopez de Pineda. As a defense, the sisters claimed, among others, that they are not liable for the sum demanded since the works done by Smith were done without the authority or consent of the sisters. The CFI ruled in favor of Smith and ordered the Lopez sisters to pay P2717.40 local currency. ISSUE: WON Nicasio Lopez is the agent of his two daughters? Yes. HELD: Nicasio is the administrator of the property of the defendant. Pursuant to the order of the Board of Health, he contracted the services of the Phil. Gas Light Company for the installation of certain fixtures. Accordingly, he did all these voluntarily. Thus, although there was no express consent given by the sisters, through a valid power of attorney, there was an IMPLIED power, because the sisters did not object to the work being done on the house, which benefited them in the end. There was a quasi-contract which created certain reciprocal obligations between them and the plaintiffs. Moreover, it is presumed from their failure to object to the work being done that they were approving it, thereby ratifying the act of their father, as though he acted under an express power from them. It cannot also be denied that they have benefited from the work done by Smith, et al: The house was not improved by said work. Likewise, If it were not undertaken by the plaintiffs, the Board of Health would have undertaken the same work at the
4.
Purpose
7.
Parties/Capacity
Mendoza v. De Guzman*
8.
Distinguished relations
from
other
juridical
Sevilla v. CA (REG) 1998 FACTS: Tourist World Service, Inc. (TWS) leased the premises belonging to Noguera for the formers use as a branch office. Petitioner Sevilla held herself solidarily liable with the party of the part for the prompt payment of the monthly rental. When the branch office was opened, it was run by Sevilla payable to TWS by any airline. For any fare brought in on the efforts of Sevilla, 4% was to go to Lina Sevilla and 3% was to be withheld by the TWS. Sevilla was paid no salaries. She even shared in the expenses of maintaining the office, paid for the salary of an office secretary and other sundry expenses. Later Tourist World considered closing down its office because of business losses and news that Sevilla was then connected with a rival firm. Thus, an employee of TWS went to the branch and padlocked its premises. Sevilla filed a complaint claiming damages brought about by TWSs revocation of their relationship.
2.
Fressel v Mariano Uy Chaco Sons & Co. (ABBY) March 3, 1916 Trent, J.
9.
Art. 1821. Notice to any partner of any matter relating to partnership affairs, and the knowledge of the partner acting in the particular matter, acquired while a partner or then present to his mind, and the knowledge of any other partner who reasonably could and should have communicated it to the acting partner, operate as notice to or knowledge of the partnership, except in the case of fraud on the partnership, committed by or with the consent of that partner.
B.
Article 1869
Art. 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. 1. Oral, express 2. Implied a. acts or conduct of principal Gutierrez Hermanos vs. Orense (EARLA) December 4, 1914 Torres, J. FACTS: Engracio Orense is the original owner of a parcel of land in Guinobatan, Albay. On February 14, 1907, Jose Duran, the nephew of Orense, sold the land for P1500 to Gutierrez Hermanos, with Orenses knowledge and consent. The sale was embodied in a public instrument, and contained a provision giving Duran a right to repurchase within a period of 4 years. Thereafter, by a contract of lease executed between Gutierrez and Duran, Orense continued occupying the land. After the lapse of 4 years stipulated for the redemption of the property, Gutierrez asked that Orense deliver the property to the company and pay rentals for the use of the property. Orense however, refused to do so. Orense claimed that the sale was void for having been done without his authority, either written or verbal. He further alleged that he did not intentionally and deliberately performed acts as would lead Gutierrez Hermanos that he authorized his nephew to enter into the contract of sale.
Art. 1877. An agency couched in general terms comprises only acts of administration, even if the principal should state that he withholds no power or that the agent may execute such acts as he may consider appropriate, or even though the agency should authorize a general and unlimited management. Specific terms attorney are
Art. 1875. Agency is presumed to be for a compensation, unless there is proof to the contrary. c. Onerous
(1) To make such payments as are not usually considered as acts of administration; (2) To effect novations which put an end to obligations already in existence at the time the agency was constituted; (3) To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action or to abandon a prescription already acquired; (4) To waive any obligation gratuitously; (5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration; (6) To make gifts, except customary ones for charity or those made to employees in the business managed by the agent; (7) To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration; (8) To lease any real property to another person for more than one year; (9) To bind the principal to render some service without compensation; (10) To bind the principal in a contract of partnership; (11) To obligate the principal as a guarantor or surety; (12) To create or convey real rights over immovable property; (13) To accept or repudiate an inheritance; (14) To ratify or recognize obligations contracted before the agency; (15) Any other act of strict dominion. e. As to manner of appointment Direct Indirect, appointment through another f. As to nature and effects Ostensible or representative Simple or commission
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Art. 1358. The following must appear in a public document: (1) Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest therein a governed by Articles 1403, No. 2, and 1405; (2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains; (3) The power to administer property, or any other power which has for its object an act appearing or which should appear in a public document, or should prejudice a third person; (4) The cession of actions or rights proceeding from an act appearing in a public document. All other contracts where the amount involved exceeds five hundred pesos must appear in writing, even a private one. But sales of goods, chattels or things in action are governed by Articles, 1403, No. 2 and 1405 Art. 1403. The following contracts unenforceable, unless they are ratified: are
FACTS: Harry Keeler is engaged in the electrical business and is selling the Matthews plant in the Philippine Islands. One day, A.C Montelibano went to the office of Harry Keeler and told him that he could find purchasers of the Matthews plant. Keeler agreed with the understanding that for every customer that he could find or any plant that he could sell, he would be given a 10% commission if the sale was consummated. Pursuant to this agreement, Montelibano was able to negotiate the sale of the the Matthews plant between Keeler and Rodriguez. After the machine had been installed,
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6. Authority presumed
of
attorney
to
appear
is
Sec. 21. Authority of attorney to appear. - An attorney is presumed to be properly authorized to represent any cause in which he appears, and no written power of attorney is required to authorize him to appear in court for his client, but the presiding judge may, on motion of either party and on reasonable grounds therefor being shown, require any attorney who assumes the right to appear in a case to produce or prove the authority under which he appears, and to disclose, whenever pertinent to any issue, the name of the person who employed him, and may thereupon make such order as justice requires. An attorney wilfully appearing in court for a person without being employed, unless by leave of the court, may be punished for contempt as an officer of the court who has misbehaved in his official transactions.chan robles virtual law library Sec. 22. Attorney who appears in lower court presumed to represent client on appeal. - An attorney who appears de parte in a case before a lower court shall be presumed to continue representing his client on appeal, unless he files a formal petition withdrawing his appearance in the appellate court.
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Sec. 23. Authority of attorneys to bind clients. Attorneys have authority to bind their clients in any case by any agreement in relation thereto made in writing, and in taking appeals, and in all matters of ordinary judicial procedure. But they cannot, without special authority, compromise their client's litigation, or receive anything in discharge of a client's claim but the full amount in cash. Air Phil Corp. (ALAIN) Panganiban J. Facts: v. International Business
APC was in need of the services of a business establishment to ferry its B-737 airplane. It engaged the services of IBAPSI as its agent to look for and engage, for APC, a business enterprise to ferry the airplane. IBASPI did engage the services of Universal Weather & Aviation, Inc. (UWAI). UWAI sent its Billings to APC, through IBASPI, in the total amount of US$65,131.55 for its services for the ferry of the airplane. But APC repeatedly failed to pay its account. Exasperated, UWAI blamed IBASPI. IBASPI was impelled to pay UWAI. IBASPI demanded refund of the amount advanced to UWAI. But still, no payment was effected by API. IBASPI demanded the payment of said amount plus 10% commission. APC finally made its first partial payment of P200,000.00 to IBASPI with a simultaneous Receipt/Agreement executed by IBASPI and APC, the latter, through Attorney. Manolito A. Manalo, Officer-in-Charge of the Legal Department of APC. After this partial payment, no other payments were executed by APC. APC refused to pay its balance with IBASPI. IBASPI sued APC in court. However, the counsel of APC filed at least three motions to extend filing of petitioners Answer; did not appear during the scheduled pretrials; and failed to file petitioners pretrial Brief. Court ordered IBASPI to pay the balance, the 10% commission and attorneys fees. APC submits that CA erred in upholding the ruling of the RTC despite the fact that the gross negligence, incompetence and dishonesty of APCs former counsel, Attorney. Manolito A. Manolo, have effectively denied APC of its day in court. APC further contended that Attorney. Manalo was not authorized to execute the Receipt/Agreement in behalf of petitioner APC. Thus APC asked for Motion for New Trial.
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Etymology: French, literally, horse from Friesland 1 : a defense consisting typically of a timber or an iron barrel covered with projecting spikes and often strung with barbed wire 2 : a protecting line (as of spikes) on top of a wall usually used in plural
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Art. 1871. Between persons who are present, the acceptance of the agency may also be implied if the principal delivers his power of attorney to the agent and the latter receives it without any objection. where absent the persons are
Art. 1872. Between persons who are absent, the acceptance of the agency cannot be implied from the silence of the agent, except: (1) When the principal transmits his power of attorney to the agent, who receives it without any objection; (2) When the principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is habitually engaged as an agent, and he did not reply to the letter or telegram. 2. Power of attorney; definition, purpose Notarization needed
Strong v. Gutierrez Repide (MAI) February 21, 1912 Moreland, J. FACTS: Prior to October 10, 1903, the plaintiff, Eleanor Erica Strong, was the owner of 800 shares of the capital stock of the Philippine Sugar Estates Development Company, Limited, of the par value of P100 each. On October 10, 1903, the defendant, Francisco Gutierrez Repide, by means subsequently found and adjudged to have been fraudulent, obtained possession of said shares and thereafter alleged to be the owner thereof. The CFI of Manila subsequently held that the sale of these shares was made without the authority of Mrs. Strong, that she never ratified the sale but repudiated it as soon as she learned of it, that this sale was induced by fraud on the part of the defendant, and therefore was a fraudulent sale. This judgment was, on appeal to the Supreme Court of the Philippine Islands, reversed, and plaintiff's complaint dismissed on the merits. Thereupon, plaintiff prosecuted an appeal to the Supreme Court of the United States, which court, on the 3rd of May, 1909, rendered its judgment, reversing the decision of the Supreme Court of the Philippine Islands and affirming the judgment of the trial court. From the 10th day of October, 1903, the date of the said fraudulent purchase by the defendant, until the 27th day of July, 1909, the defendant
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Issue: Whether the respondent Judge committed grave abuse of discretion in allowing the October 19, 1977 compromise agreement in the absence of the petitioner. NO. HELD:
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D. Article 1873 Art. 1873. If a person specially informs another or states by public advertisement that he has given a power of attorney to a third person, the latter thereby becomes a duly authorized agent, in the former case with respect to the person who received the special information, and in the latter case with regard to any person. The power shall continue to be in full force until the notice is rescinded in the same manner in which it was given. 1. Effects of special information
Macke v. Camps (ABBY) Feb 12, 1907 Carson, J. FACTS: B.H. Macke and W.H. Chandler are partners and sold to Jose Camps of the Washington Caf various bills of goods amounting to P351.50 but he only received P174. Macke made a demand but Camps failed to pay. Macke said that Ricardo Flores the business manager of the hotel bar restaurant signed the receipt and that Flores was also the one who made the previous payments. A witness, one Galmes, the lessor of the building said that Flores also signed as a witness on the sublease contract as managing agent, which Jose Camps also signed. Camps now says that the
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Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. 1. Applicability; relate to Art. 1403 (2e) Art. 1403. The following contracts unenforceable, unless they are ratified: are
2(e): An agreement of the leasing for a longer period than one year, or for the sale of real property or of an interest therein; 2. Repurchase 3. Cases: Lim v. CA (ALAIN) Cosmic Lumber v. CA (GEN) Nov. 29, 1996 Bellosillo, J. FACTS: Cosmic, through its General Manager, executed a Special Power of Attorney appointing Paz G. Villamil-Estrada as attorney-in-fact:
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HELD: YES. The fact that Atanacio Valenzuela, et al. were agents of Nieves Cruz under the agency agreement of December 31, 1958 is not material, for if it is true that Nieves Cruz did agree to sell to her agents the real estate subject of the agency, her consent to the agreement took the transaction out of the prohibition contained in article 1491(2) of the Civil Code. Neither are articles 1874 and 1878(5) and (12) of the Civil Code relevant, for they refer to sales made by an agent for a principal and not to sales made by the owner personally to another, whether that other be acting personally or through a representative. Thus, the agreement is valid. The parties to the agency agreement subsequently entered into a new and different contract by which the landowner, Nieves Cruz, verbally agreed to sell her interest in the litigated real estate to Atanacio Valenzuela, et al. and this was established by certain facts, such as: [1] Salud de Leon testified that it was she who had the oral agreement with Nieves Cruz for the purchase by Atanacio Valenzuela, et al. of the litigated property and, as found by the respondent Court, Salud de Leon was the representative of Atanacio Valenzuela, et al., not of Nieves Cruz; [2] Cruzs acceptance of the sums of money given by the private respondents and her subsequent issuance of receipts for these sums; [3] the sale was established and recognized in the land registration proceedings where the certificates of title bear the annotation of the aforesaid right of Atanacio Valenzuela, et al. Pertinent provisions: Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another: xxx (2) Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given; Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. Katigbak v. Tai Hing (ROG) 1928 FACTS: Ejap was owner of land with Torrens Title that was subject to a mortgage lien in favor of Phil National Bank. Po Tecsi executed a general power of attorney in favor of brother Ejap empowering latter to perform on his behalf as his lawful agent, the following: "to buy, sell, or barter, assign, or
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ISSUE: W/N Pascuals allegation takes his case out of the operation of the statute of frauds. (If yes then Realty is compelled to execute the deed of sale)
HELD: No, this is not one of the exceptions. While it is alleged that plaintiff has occupied the land since 1912, there is nothing alleged therein to the effect that he has taken possession thereof in view of a supposed verbal contract he had with the defendant to purchase it, nor is there any allegation that he has made improvements thereon because and as a consequence of said supposed contract to sell. This case having been dismissed on a mere motion to dismiss, the merits of the order of the court can only be gauged upon a consideration of the allegations appearing in the complaint, and upon no other.
FACTS: Ramon Pascual filed an action to compel Realty Investment to sell to him the land that he is occupying. He alleges that he has been occupying the 450 sq.m. of land since 1912 while it was still under Angela Tuasons administration. When it was sold to Realty in 1941, he said that he offered to buy it at P15/sqm. He failed to perfect the sale because Realty increased the price to P25 hence this action. Realty filed a motion to dismiss and was granted.
CFI basis: An agreement to sell real property should be made in writing, or at least it should appear in a note or a memorandum, in order that a suit based thereon may be enforceable, the present action cannot be maintained and should be dismissed. For our purposes apply 1403 also. The point is W/N the sale to be enforceable, must be in writingYES!
Where a parol contract of sale is adduced not for the purpose of enforcing it, but as a basis of the possession of the person claiming to be the owner of the land, the statute of frauds is not applicable (Almirol et al., vs. Monserrat, 48 Phil., 67), in the same way that it does not apply to contracts which are either totally or partially performed upon the theory that there is a wide field for the commission of frauds in executory contracts which only prevented by requiring them to be in writing, a fact which is reduced to a minimum in executed contracts because the intention of the parties become apparent by their execution). Pascuals situation does not here obtain for the reason that the complaint does not contain the requisite allegations. On the contrary, it alleges that plaintiff occupied the land as a tenant since 1912. Raet vs. CA (EARLA) September 17, 1998 Mendoza, J. FACTS: In 1984, the Sps. Raet and Sps. Mitra paid Amparo Gatus P40k and P35k, respectively, after negotiations regarding the sale of Gatus rights in certain units in Las Villas de Sto Nino in Meyacauayan, Bulacan. This subdivision was
The purpose of this action is to enforce an alleged verbal agreement to sell to the plaintiff a parcel of land which is claimed to have been occupied by the plaintiff as at tenant since 1912, it appearing that under the statute of frauds said verbal
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Macondray v. Sellner (ROG) Feb. 2, 1916 J. Carson Facts: Sellner, a real estate broker, sold land to Macondray. Formal deed of sale not executed until delivery of a Torrens title. In the meantime, land was flooded by high tides and Macondray became highly dissatisfied with its purchase. When final transfer was made company informed Sellner that land as wholly unsuited for use as a coal-yard, for which it had been bought and requested him to find another purchaser. Both parties had an understanding that Sellner was to have as commission for getting a purchaser anything over amount which he could get. Sellner found another buyer Barretto. A formal deed of sale was executed together with Torrens which was delivered to Sellner by Company. Barretto agreed to accept land if upon examination, title and deed be satisfactory. Sellner retained the Torrents title but left deed of sale with Barretto with understanding that if both were satisfactory, latter would just issued check to former. A few days later Barretto was detained by typhoon on his way to Tayabas so his return was delayed. During his absence, company advised Sellner that latter must consummate sale and collect money without delay upon Barretto's return. All the while company kept asking Sellner to speed up in closing the deal but Barretto could not immediately do so coz he was indisposed from his trip. Barretto arrived Saturday and promised he'd get to checking the docs in a day or two. By Monday, Company gave an ultimatum. -Young, Company's general manager then formally notified Sellner that unless purchase price was paid
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Inland Realty Investment v. CA (ALAIN) June 9, 1997 Hermosisisima, Jr., J.: FACTS: On September 16, 1975, defendant corporation (Araneta, Inc.) thru its co-defendant Asst. Gen. Mgr. Eduque, granted to Inland Realty Investment Service, Inc. (Inland) represented by one Roman de los Reyes (entitled to of the claim asserted which is 5% brokers commission) a 30day authority to sell its shares stock in another corporation. Inland was able to find a prospective buyer, the Stanford Microsystems, Inc., but the offer of said buyer was rejected by Araneta, Inc. Thus, Inland looked for other buyers and found two more prospective ones. The authority was extended several times: first on Oct. 2, 1975, for 30 days from the said date, the second on Oct. 28, 1975 for 30 days from said date, and on Dec. 2, 1975 for 30 days from the said date. On July 8, 1977 or 1 year and 5 months after the last extension granted to Inland, the shares of stock were finally sold to Standford Microsystems, Inc. Thus, Inland and de los Reyes formally demanded their 5% brokers commission, which was denied by Araneta, Inc. on the ground that the claim has no factual or legal basis.
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ISSUES WON Danon is entitled to the commission agreed upon. NO. RATIONALE Plaintiff is not entitled to the commission.The most that can be said as to what the plaintiff had accomplished is, that he had found a person who might have bought the defendant's factory if the defendant had not sold it to someone else. The evidence does not show that the Santa Ana Oil Mill had definitely decided to buy the property in question at the fixed price of P1,200,000. The board of directors of said corporation had not resolved to purchase said property; and even if its president could legally make the purchase without previous formal authorization of the board of directors, yet said president does not pretend that he had definitely and formally agreed to buy the factory in question on behalf of his corporation at the price stated. It is undisputed that plaintiffs services did not any way contribute towards bringing about the sale of the factory in question. He was not "the efficient agent or the procuring cause of the sale."
Sibbald vs Betlehem Iron Co o The duty assumed by the broker is to bring the minds of the buyer and seller to an agreement for a sale, and the price and terms on which it is to be made, and until that is done his right to commissions does not accrue. o It follows, as a necessary deduction from the established rule, that a broker is never entitled to commissions for unsuccessful efforts. The risk of a failure is wholly his. The reward comes only with his success. The broker may devote his time and labor, and expend his money with ever so much of devotion to the interest of his employer, and yet if he fails, if without effecting an agreement or accomplishing a bargain, he abandons the effort, or his authority is fairly and in good faith terminated, he gains no right to commissions. He loses the labor and effort which was staked upon success. And in such event it matters not that after his failure, and the termination of his agency, what he has done proves of use and benefit to the principal. o The rule however must be taken with one important and necessary
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Pratts v. CA (ROG) 1978 Facts: This complaint for sum of money filed by Prats, doing business under name of Philippine Real Estate Exchange, against Doronila and PNB. Doronila was registered owner of 300hectares of land. He wrote to SSS Chair offering his property to SSS at P4 per square meter (per sqm). There were several counter offers made as to the price. Doronilla requested certification from Board of Realtor regarding the actual prices of his real estate raw-land properties. The Board replied that the fair market value of raw land is P3-P3.50 per sqm. Current prices before reaching Doronilla's property range from 6-7 per sqm. Doronilla granted an exclusive option and authority to Prats to sell former's property. Commission will be 10% based on P2.10 per sqm or at any price finally agreed upon. Doronilla asked SSS to return all papers related to his property in view of the exclusive option granted to Prats. SSS asked for a meeting with Doronilla but latter asked that SSS meet with Philippine Real Estate Exchange instead because Doronilla had given exclusive option to it. Prats gave notice to Doronilla that SSS had agreed to purchase the land. The latter replied that he had not received any written offer from SSS during the 60day period of the exclusive authority nor during its extension.
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Distinguished from Danon vs Brimo: The case of Danon is not in point. In that case, claimantagent fully comprehended the possibility that he may not realize the agents commission as he was informed that another agent was also negotiating the sale and thus, compensation will pertain to the one who finds a purchaser and eventually effects the sale.
LG Marquez v. Valera (REG) J. Labrador 1952 FACTS: Lora was authorized by defendants Varela to negotiate the sale of their share or interest in a
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Issue: WoN Infante was liable to pay Cunanan and Mijares commission despite the written cancellation of authority signed by the respondents. Held: Yes. Petition denied There is enough justification for the conclusion reached by the lower court as well as by the Court of Appeals to the effect that respondents are entitled to the commission originally agreed upon. It is a fact found by the Court of Appeals that after petitioner had given the written authority to respondents to sell her land for the sum of P30,000, respondents found a buyer in the person of one Pio S. Noche who was willing to buy the property under the terms agreed upon, and this matter was immediately brought to the knowledge of petitioner. But the latter, perhaps by way of strategem, advised respondents that she was no longer interested in the deal and was able to prevail upon them to sign a document agreeing to the cancellation of the written authority. That petitioner had changed her mind even if respondents had found a buyer who was willing to close the deal, is a matter that would not give rise to a legal consequence if respondents agree to call off the transaction in deference to the request of the petitioner. But the situation varies if one of the parties takes advantage of the benevolence of the other and acts in a manner that would promote his own selfish interest. This act is unfair as would amount to bad faith. This act cannot be sanctioned without ac-cording to the party prejudiced the reward which is due him. This is the situation in which respondents were placed by petitioner.
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Art. 1876. An agency is either general or special. The former comprises all the business of the principal. The latter, one or more specific transactions. Art. 1877. An agency couched in general terms comprises only acts of administration, even if the principal should state that he withholds no power or that the agent may execute such acts as he may consider appropriate, or even though the agency should authorize a general and unlimited management. 1. Classes of Agency: General, Special, Universal Siasat v. IAC (MARK) Oct. 10, 1985 J. Gutierrez, Jr. FACTS Sometime in 1974, respondent Teresita Nacianceno succeeded in convincing officials of the then Department of Education and Culture to purchase without public bidding, one million pesos worth of national flags for the use of public schools throughout the country. The respondent was able to expedite the approval of the purchase by hand-carrying the different indorsements from one office to another, so that by the first week of September, 1974, all the legal requirements had been complied
35
One does not have to undertake a close scrutiny of the document embodying the agreement between the petitioners and the respondent to deduce that the 'latter was instituted as a general agent. Indeed, it can easily be seen by the way general words were employed in the agreement that no restrictions were intended as to the manner the agency was to be carried out or in the place where it was to be executed. The power granted to the respondent was so broad that it practically covers the negotiations leading to, and the execution of, a contract of sale of petitioners' merchandise with any entity or organization. 2. Couched in general terms; acts of administration
ISSUES WON Nacianceno is entitled to the commission despite the absence of specific authorization for the sale of 15,666 Philippine flags to DECS. HELD Yes. Nacianceno is a general agent.
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(1) To make such payments as are not usually considered as acts of administration; (2) To effect novations which put an end to obligations already in existence at the time the agency was constituted; (3) To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an
40
ISSUE WON Villamil-Estrada has the authority to sell the property of Cosmic. NO. RATIONALE The authority granted Villamil-Estrada under the special power of attorney was explicit and exclusionary: for her to institute any action in court to eject all persons found on Lots Nos. 9127 and 443 so that petitioner could take material possession thereof, and for this purpose, to appear at the pre-trial and enter into any stipulation of facts and/or compromise agreement but only insofar as this was protective of the rights and interests of petitioner in the property . Nowhere in this authorization was Villamil-Estrada granted expressly or impliedly any power to sell the subject property nor a portion thereof.
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Vicente v Geraldez (GEN) July 31, 1973 Antonio, J. FACTS: Hi Cement Corporation acquired a Placer Lease Contract from Banahaw Shale Mining Association. The lease contract covered two mining claims over 51 ha of land. Included in the mining claims were the three parcels of land owned by the petitioners. On several occasions, the Corporation informed the petitioners, thru its representatives, of the its acquisition of the placer mining claims. The Corporation requested the petitioners to allow its workers to enter their lands to explore and develop the claims, with the promise to pay the petitioners
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Art. 1879. A special power to sell excludes the power to mortgage; and a special power to mortgage does not include the power to sell. Art. 1880. A special power to compromise does not authorize submission to arbitration. 1. cases National Bank v Tan Ong Sze (GEN) Sept. 2, 1929 Johns, J. FACTS: Tan Ong Sze vested Tan Buco, attorney-in-fact, the power for me and in name to sign, seal and execute, and as my act deed, deliver any lease, any other deed conveying (of) any real or personal property. her my and for
Tan Buco loaned P300,000 from the National Bank. He then executed a promissory note and a real estate mortgage over a property in Iloilo owned by the defendant to secure the loan. When no part of the defendant has been paid, the Bank filed a complaint and prayed that the property be foreclosed and that the proceeds be applied to the satisfaction of the debt.
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PNB v. Paz Agudelo y Gonzaga, et al. (MAI) Villareal, J. Facts: On November 9, 1920, Paz Agudelo y Gonzaga executed in favor of her nephew, Mauro A. Garrucho, a document conferring upon him a special power of attorney sufficiently broad in scope to enable him to sell, alienate and mortgage
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Art. 1881. The agent must act within the scope of his authority. He may do such acts as may be conducive to the accomplishment of the purpose of the agency. Art. 1882. The limits of the agent's authority shall not be considered exceeded should it have been performed in a manner more advantageous to the principal than that specified by him. 1. distinguish between power 2. kinds of authority 3. cases Tan Tiong Teck v. SEC (REG) Avancea 1939 FACTS: Tan Tiong Gong purchased and sold shares of stock through respondent Cua Oh & Co. as his broker. It was alleged that the respondent purchased shares of stock for P3,649.86 and sold others for P2,385, without the consent or authority of the petitioner ISSUE: WON transactions effected by the respondent are null and void with respect to the petitioner because they were not consented or authorized by the latter. RULING: NO. The Securities and Exchange Commission, after going into evidence, reached the conclusion that the petitioner failed to establish his contention. The appeal from the resolution of the Commission is based upon a pure question of fact, and the factual findings of the commission is final under section 35 of Commonwealth Act No. 83. Bay View Hotel v. Ker & Co., and Phoneix Assurance Co. Ltd. (ABBY) Facts: Bay View Hotel secured a fidelity guarantee bond from Ker & Co., Ltd., for its accountable employees against acts of fraud and dishonesty whose principal is Phoenix Assurance. authority and
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Esperanza vs. Catinding (EARLA) March 30, 1914 Carson, J. Facts: The land subject of this litigation was originally the owner and possessor of the land. When he died, this land was given to his daughter, Venancia Catmon, who together with her husband, Ramon Catinding and 4 children (Andrea, et al) lived in the property for many years. When Venancia died, Ramon married Sabina Butron and came to live in the property for several years. In 1898, they sold the land to Baltazar Bullo who was buying the land in favor of his grandson, Florentino Esperanza. To rectify the mistakes made in the original deed, they went before the Justice of the Peace in 1904 and executed another deed of sale. Because they could not take possession of the said property, Luis Esperanza and Baltazar Bullo as apoderados (attorneys-in-fact) of Florentino Esperanza filed an action to recover a certain piece of land in Surigao. They alleged that Andrea Catinding was unlawfully depriving them of Florentinos property. They further assert that the land was entered upon by Ramon Catinding and Sabina Butron while it was yet unclaimed and uncultivated land; that it was first cultivated by them and that their title in the land was by reason of this original occupancy. The trial court dismissed their complaint on the ground that the evidence presented failed to prove the claim of the plaintiffs. Even the witnesses they presented contradicted their claim that Catinding and Butron were the original occupant of the property. As a matter of fact, their witnesses categorically stated that the land in question formerly belonged to Julian Catmon. ISSUE: WON they can recover the land. HELD: No. The SC agreed with the conclusions of fact reached by the trial court, saying that the plaintiffs were not even able to prove by a preponderance of evidence the claims ventilated in the action. The record strongly revealed that Ramon only came into possession of the land by reason of his wifes ownership, and not through original occupancy.
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Commercial Bank v. Republic Armored Car Services Corp. al (MARK) FACTS Defendants were given credit accommodation by Commercial Bank in the form of an overdraft line to which they drew regularly certain amounts. Demands were made for the payment of the drawings but defendants have failed to pay the amounts demanded. Commercial Bank thus filed complaints against them. Defendants in their answer admit the opening of the credit line in their favor and that demands for the indebtedness were made upon them, but allege as special defenses that the directors and officers of the defendant corporation deliberately defrauded and mismanaged the said corporation breach of trust in order to deprive Damaso Perez of his control and majority interest in the defendant corporation, as a result of which fraud, mismanagement and breach of trust the defendants suffered tremendous losses; that the amounts drawn by defendant corporation upon the credit line were received and used by the former directors and officers and same constitute part of the funds of the defendant corporation misapplied and mismanaged by said former officers and directors of said corporation.
ISSUES WON the obligation of the defendants-appellants to pay for the amount due under the overdraft line ceases due to the misappropriations on mismanagement of the funds of the corporation by the directors and employees thereof. NO. RATIONALE The obligation of the defendants-appellants to pay for the amount due under the overdraft line is not in any way qualified; there is no statement that the responsibility of the defendants-appellants for the amount taken on overdraft would cease or be defeated or reduced upon misappropriations on
Art. 1883. If an agent acts in his own name, the principal has no right of action against the persons with whom the agent has contracted; neither have such persons against the principal.
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Under general rules and principles of law the mismanagement of the business of a party by his agents does not relieve said party from the responsibility that he had contracted to third persons, especially in the case at bar where the written agreement contains no limitation to defendants-appellants' liability.
Ortega v Bauang Farmers Cooperative (GEN) Dec. 29, 1959 Montemayor, J. FACTS: Ortega sold and delivered to defendant 2,643 kilos of flue-cured Virginia leaf tobacco at P7,136.10. The defendant paid Ortega 2 installments leaving a balance of P3,136.10. In spite of repeated demands made, the defendant has failed and refused to pay. Ortega filed an action against the defendant to collect payment. The defendant admitted the allegations of the complaint but set up the affirmative defense: That the tobacco leaf it bought was shipped and delivered to and received by the ACCFA (Agricultural Credit and Cooperative Financing Administration), in accordance with an agency contract entered into between ACCFA as principal, and the defendant Bauang FACOMA, as agent, for the purchase of local Virginia leaf tobacco; and That final liquidation had not been made between principal and agent. Shortly after filing its answer, defendant filed a "Motion to Bring in Third Party Defendant," attaching thereto its "Third Party Complaint" against the ACCFA praying that judgment be rendered against it for all sums that may be adjudged against defendant in favor of the plaintiff. The trial court, finding the ACCFA to be a necessary party in the case, granted the motion to bring it as a third-party defendant. However, it later ordered that the third-party complaint be stricken out because it was filed without leave of court. The CFI of La Union ordered the defendant to pay Ortega the sum of P3,136.10, with legal interest from the date of the filing of the complaint, plus costs. ISSUE: WON the defendant acted in behalf of ACCFA? HELD: YES. Although at the time of the purchase of the tobacco in question, the attention of the
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Facts: William Uy and Rodel Roxas are agents authorized to sell eight parcels of land by the owners thereof. By virtue of such authority, petitioners offered to sell the lands, located in Tuba, Tadiangan, Benguet to respondent National Housing Authority (NHA) to be utilized and developed as a housing project. The NHA paid for the 5 parcels but after a test was done, the remaining 3 parcels were found to be unsuitable for housing or any civil structures. The NHA cancelled the contract and offered P1.225M to the landowners. Uy and Roxas found a complaint for damages and the RTC said the cancellation of the contract was justified but still awarded the P1.225M damages. The CA reversed the RTC since there was "sufficient justifiable basis" in cancelling the sale, "it saw no reason" for the award of damages. The CA also noted that petitioners were mere attorneys-in-fact and, therefore, not the real parties-in-interest in the action before the trial court. The damages prayed for were intended not for the benefit of their principals but to indemnify petitioners for the losses they themselves allegedly incurred as a result of such termination. These damages consist mainly of "unearned income" and advances. They brought the action in their own name and in their own behalf.
Issue: WoN the agents have a cause of action against the NHA suing in their own name.
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Now, on the merits of the case NHA: The cancellation was based on the negation of the cause arising from the realization that the lands, which were the object of the sale, were not suitable for housing. The NHA was justified in canceling the contract. The realization of the mistake as regards the quality of the land resulted in the negation of the motive/cause thus rendering the contract inexistent. Assuming that petitioners are parties, assignees or beneficiaries to the contract of sale, they would not be entitled to any award of damages.
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RATIONALE Article 246 of the Code of Commerce reads as follows: When the agent transacts business in his own name, it shall not be necessary for him to state who is the principal and he shall be directly liable, as if the business were for his own account, to the persons with whom he transacts the same, said persons not having any right of action against the principal, nor the latter against the former, the liabilities of the principal and of the agent to each other always being reserved. Smith Bell & Co. v Sotelo Matti (JANCES) Facts: In August 1918, Smith, Bell & Co and Sotelo Matti entered into contracts whereby the former obligated itself to sell and deliver 2 steel tanks, 2 expellers and 2 electric motors. The tanks were to be delivered within 3-4 months, the expellers Sept 18 or as soon as possible, and the motors within 90 days (but not guaranteed). In all the contracts, it was stated that the seller was not responsible for delays caused by fires, riots on land or on sea, strikes or other causes known as force majeure. Note also that the contracts were executed at the time of the world war. The tanks arrived at Manila on April 27, 1919, the expellers on Oct 18, 1918, and motors on February 27, 1919. The plaintiff corporation notified Mr. Sotelo of the arrival of the goods but Mr. Sotelo refused to receive them. Smith, Bell and Co. brought suit against Mr. Sotelo. The latters defense was that he made the contracts in question as manager of the Manila Oil Refining and By-Products Co. Manila Oil Co. intervened and alleged that it was notified by Smith Bell of the arrival only in May 1919. Ruling:
In their answer, the defendant, Mr. Sotelo, and the intervenor, the Manila Oil Refining and By-Products Co., Inc., denied the plaintiff's allegations as to the shipment of
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ISSUES WON the intervenor has a cause of action against plaintiff due to the alleged delay in the delivery of the machineries. NO. RATIONALE When an agent acts in his own name, the principal has no right of action against the persons with whom the agent has contracted, or such persons against the principal . In such case, the agent is directly liable to the person with whom he has contracted, as if the transaction were his own (Art. 1717, Civil Code).
Maritime Agencies & Services v. CA (ALAIN) July 12, 1990 J. Cruz FACTS: Transaction: shipment of bagged urea from USSR to the Philippines, so need to charter a motor vessel Motor vessel: named Hongkong Island Owner of vessel: Hongkong Island Shipping Co. Charterer: Transcontinental Fertilizer Company of London Consignee in the Philippines: Atlas Fertilizer Company (Manila and Cebu) Insurer of goods: Union Insurance Society of Canton, Ltd (against all risks) Charterers agent: Maritime Agencies & Services, Inc. Owners agent: Macondray Company, Inc.
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Art. 1884. The agent is bound by his acceptance to carry out the agency, and is liable for the damages which, through his non-performance, the principal may suffer. He must also finish the business already begun on the death of the principal, should delay entail any danger. 1. Effects of acceptance of agency PNB v. Manila Surety (ROG) 1965 Facts: PNB had opened a letter of credit and advanced thereon $120k to Edgington Oil for 8k tons of hot asphalt. Of this amount, 2k tons worth $279k were released and delivered to Adams & Taguba Corp (ATACO) under a trust receipt guaranteed by Manila Surety up to amount of P75k. To pay for the asphalt, ATACO constituted the Bank its assignee and attorney-in-fact to receive and collect from the Bureau of Public Works the amount out of funds payable to the assignor under Purchase Order No. 71947. Ataco delivered to the Bureau of Public Works and the latter accepted asphalt worth P431k. Of this amount the Bank regularly collected but the bank subsequently ceased to collect for unexplained
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Also, it is worth mentioning that both British Airways and PAL are members of the International Air Transport Association (IATA), wherein member airlines are regarded as agents of each other in the issuance of the tickets and other matters pertaining to their relationship. Therefore, in the instant case, the contractual relationship between British Airways and PAL is one of agency, the former being the principal, since it was the one which issued the confirmed ticket, and the latter the agent. A carrier like PAL, acting as an agent of another carrier, is also liable for its own negligent acts or omission in the performance of its duties. Accordingly, to deny British Airways the procedural remedy of filing a third-party complaint against PAL for the purpose of ultimately determining who was primarily at fault as between them, is without legal basis. B. Article 1885: Effect when person declines agency (ABBY) Art. 1885. In case a person declines an agency, he is bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner until the latter should appoint an agent or take charge of the goods. Obligation: Bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner.
Unfortunately, when Mahtani arrived in Bombay he discovered that his luggage was missing and that upon inquiry from the British Airways representatives, he was told that the same might have been diverted to London. After patiently waiting for his luggage for one week, British Airways finally advised him to file a claim by accomplishing the Property Irregularity Report.
Mahtani subsequently filed a complaint for damages and attorneys fees against British Airways and Mr. Gumar. British Airways, in turn, filed a third-party complaint against PAL. The trial court ruled in favor of Mahtani and dismissed the third-party complaint against PAL. The Court of Appeals affirmed the decision, stating that British Airways had no cause of action against PAL.
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D. Article 1887 (JANCES) Art. 1887. In the execution of the agency, the agent shall act in accordance with the instructions of the principal. In default thereof, he shall do all that a good father of a family would do, as required by the nature of the business. 1. Effect of violation of principals instructions 2. Instructions v. authority 3. Rule in absence of instructions 4. When departure is justified 5. Cases Gutierrez Hermanos v. Oria Hermanos (ALAIN) March 30, 1915 Torres, J.: FACTS: ALLEGATIONS by defendant ORIA HERMANOS & CO.: By reason of mercantile relations and the opening of a mutual current account from May 1, 1900, the plaintiff (Gutierrez Hermanos) had obligated itself periodically to send to the defendant firm a memorandum or statement of the current account, and further obligated itself, in case the said mercantile relations should be finally terminated, to present a general and complete account, duly supported by vouchers and other proofs; that plaintiff, Gutierrez Hermanos, had contended itself by sending to Oria Hermanos and Co. some memoranda or abstracts of account, accepted by defendant as such "abstract of account," without the latter's having waived its right to demand the presentation, as agreed upon, of the vouchers and other proofs upon the closing of the current account, a stipulation which Gutierrez Hermanos had failed to comply with. Defendant therefore prayed that the plaintiff, Gutierrez Hermanos, be sentenced to render and
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H. Article 1891 (BAMBI) Art. 1891. Every agent is bound to render an account of his transactions and to deliver to the principal whatever he may have received by virtue of the agency, even though it may not be owing to the principal. Every stipulation exempting the agent from the obligation to render an account shall be void. (1720a) RULE: It is the duty of the agent to ACCOUNT FOR and to DELIVER to the principal ALL money and
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Exemptions to obligation to account: If agent acted only as a middleman with the task of merely bringing together the vendor and vendee, who themselves thereafter will negotiate the terms and conditions of the transaction. If agent informed principal of gift/bonus/profit he received from vendee and principal did not object thereto. When right of lien exists in favor of agent (i.e. Article 19142; Sec. 37, Rule 138, ROC3)
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Domingo v. Domingo (REX) FACTS On June 2, 1956 Vicente Domingo granted Gregorio Domingo, a real estate broker, the exclusive agency to sell a lot with an area of about 88k square meters at the rate of 2 pesos per sqm, with a 5% commission of the total price if sold by Vicente or anyone else during the 30 day duration
Art. 1914. The agent may retain in pledge the things which are the object of the agency until the principal effects the reimbursement and pays the indemnity set forth in the two preceding articles. (1730)
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Sec. 37. Attorneys' liens. An attorney shall have a lien upon the funds, documents and papers of his client which have lawfully come into his possession and may retain the same until his lawful fees and disbursements have been paid, and may apply such funds to the satisfaction thereof. He shall also have a lien to the same extent upon all judgments for the payment of money, and executions issued in pursuance of such judgments, which he has secured in a litigation of his client, from and after the time 64
when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his just fees and disbursements.
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Guzman v Court of Appeals (GEN) July 31, 1956 Reyes, J.B.L., J FACTS: Jonathan Guzman was a traveling sales agent of New Life Commercial, selling various La Tondena wine in a truck together with a driver and a helper. He made cash sales amounting to P4,873.62 in Aparri, Cagayan. He informed the driver that P2,840.50 was stolen and reported the matter to the police. Meanwhile, on their way home, they were stopped by authorities requesting Guzman to execute an affidavit regarding the alleged theft. Guzman instructed the driver to deliver P1,630 in cash and P403.12 in check to the manager, Enrique Go. Go reported the matter to the police and Guzman was subsequently questioned. The latter requested that Go defer the filing of the complaint and that he promised to refund the amount lost. However, Guzman was still prosecuted for theft for the unreturned amount of P804.70. ISSUE: WON Guzman was liable for theft HELD: NO. An agent, unlike a servant or messenger, has both the physical and juridical possession of the goods received in agency, or the proceeds thereof, which takes the place of the goods after their sale by the agent. His duty to turn over the proceeds of the agency depends upon his discharge, as well as the result of the accounting
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I.
Art. 1892. The agent may appoint a substitute if the principal has not prohibited him from doing so; but he shall be responsible for the acts of the substitute: (1) When he was not given the power to appoint one; (2) When he was given such power, but without designating the person, and the person appointed was notoriously incompetent or insolvent. All acts of the substitute appointed against the prohibition of the principal shall be void. (1721)
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Art. 1893. In the cases mentioned in Nos. 1 and 2 of the preceding article, the principal may furthermore bring an action against the substitute with respect to the obligations which the latter has contracted under the substitution. 1. Relation among principal, agent, and sub-agent 2. General rule: Agent may appoint substitute 3. Consequence of lack of prohibition 4. Effects of substitution Sub-agent defined: a person to whom agent delegates as his agent, the performance of an act for the principal which the agent has been empowered to perform through his representative. Power of agent to appoint sub-agent or substitute allowed. Agent here is a principal with respect to the substitute. Law allows such substitution for reasons of convenience and practical utility. Principal need not fear prejudice as he has right of action not only against agent but also against substitute with respect to obligation which latter has contracted under the substitution. This right of action against substitute is an exception to general rule that contracts are binding only between the contracting parties. Relation among principal, agent and sub-agent: 1. Sub-agent appointed by agent on latter's sole account- sub agent a stranger to principal who originally gave life to agency. 2. Sub-agent appointed by agent with authority from principal- where agent authorized to appoint sub-agent, relation of principal and agent, exists between principal and sub-agent. 3. Effect of death of principal/agent if authority of sub-agent proceeds from principal, death of agent who appointed him does not affect his authority. Effects of substitution Substitution prohibited - when substitution is appointed by agent against the express prohibition of principal agent exceeds limits of his authority thus acts of substitute will be void. Substitution authorized - if agent given power to appoint, substitution has effect of releasing agent from responsibility unless person appointed is notoriously incompetent or insolvent because this would be abuse of principal's confidence. Substitution not authorized, but not prohibited substitution valid if it is beneficial to principal because agency has been executed.
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Art. 1894. The responsibility of two or more agents, even though they have been appointed simultaneously, is not solidary, if solidarity has not been expressly stipulated. (1723) Art. 1895. If solidarity has been agreed upon, each of the agents is responsible for the non-fulfillment of agency, and for the fault or negligence of his fellows agents, except in the latter case when the fellow agents acted beyond the scope of their authority. 1. Rule when 2 agents appointed independently
Municipal Council of Iloilo vs. Evangelista (ANJ S.) Facts: Tan Ong Sze Vda. De Tan Toco was awarded by the CFI of Iloilo 42,966.40php for the strip of land belonging to her that was taken by the Municipal Council to widen a public street. After the case was remanded to the court of origin, and the judgment rendered therein had become final and executory, Attorney. Jose Evangelista (Tan Ong Szes counsel in the expropriation case), in his own behalf and as counsel for the administratrix of Attorney. Jose Ma. Arroyos intestate estate (who was the previous counsel of Tan Ong Sze in this case), filed a claim in the same case for professional services rendered by them, which the court, acting with the consent of Tan Ong Sze, fixed at 15% of the amount of the judgment. At the hearing of the said claim, Philippine National Bank (PNB) and a representative of the late Antero Soriano appeared. PNB prayed that the amount of the judgment be turned over to it because the land taken over had been mortgaged to the bank. The representative of the late Antero (previous counsel of Tan Ong in other cases concerning her other properties), on the other hand, claimed the amount of the judgment as it had been assigned to Antero by the attorney-in-fact of Tan Ong Sze, Tan Boon Tiong. Antero, in turn, assigned the said credit to Maurico Cruz & Co., Inc. After hearing all the adverse claims on the amount of the judgment, the court ordered that the attorneys lien in the amount of 15% of the judgment, be recorded in favor of Attorney Jose
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Art. 1896. The agent owes interest on the sums he has applied to his own use from the day on which he did so, and on those which he still owes after the extinguishment of the agency. Two distinct cases contemplated here: 1) sums belonging to the principal which the agent applied to his own use agent is liable for interest by way of compensation or indemnity (not to be confused with interest for delay) interest shall be computed from the day on which the agent did so (applied to own use) agents liability is without prejudice to a criminal action that may be brought against him because of conversion 2) sums which the agent still owes the principal after the expiration of the agency general rule: there is no liability for interest on sums which have not been converted for agents use exception: the agent who is found to owe the principal sums after the extinguishment of the agency is liable for interest interest shall be computed from the date the agency is distinguished Mendezona v. C. Viuda de Goitia (BAMBI)
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other actions shall be filed. Considering the distance that separated the plaintiffs from their attorney-in-fact and that the latter failed to supply them with data from 1915 to 1926, it is natural that they had to resort to calculating the amounts due them from their stocks in "Tren de Aguadas." To deny them the right to amend their complaint in accordance with section 776, when they had secured more definite information as to the amounts due them, would be an injustice, especially since this action arises from trust relations between the plaintiffs and the deceased Goitia.
Excludes Evidence-related issues. Plaintiffs only asked for annual dividends before the committee whereas the amended complaint in the trial court asked for ordinary and extraordinary dividends.
FACTS: In February 1926, A.L. Ammen Transportation Company applied for a certificate of public convenience with the Public Service Commission (PSC) to operate an autotruck service between all principal points of Albay, Camarines, and Sorsogon. At the time of the decision, Ammen was already plying a route between Legaspi and Banquerohan.
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Art. 1897. The agent who acts as such is not personally liable to the party with whom he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers. 1. General rule; exception Duties and liabilities of agent to third persons The rule is that the principal is responsible for the acts of the agent done within the scope of his authority and should bear any damage caused to third persons (Art 1910) 1. In general The duties of an agent to third persons and his corresponding liabilities must be considered with reference to the character of his act as to whether it is authorized or unauthorized, and also with reference to the nature of liability which it sought to assert as being in contract or tort. 2. Unauthorized assumption of agency One who unauthorizedly assume to act for another is guilty of a wrong, and is liable for the damage to those dealing with him in reliance on his assumed authority in that they are deprived of the benefit of the principal. Of course, if no damages have been sustained, no liability for the agents false assumption of authority exists. Nature of liability A purported agent will be held personally liable as principal on a contract executed without authority if the contract contains apt words to bind him personally, or if such was the intention of the parties. HOWEVER, in the absence of an apt expression or intention, the nature of his liability is the subject of some divergence in judicial opinion: a. In some jurisdictions, in the absence of statute, the purported agent is held liable as principal on the contract itself, based, it has been said on the theory that since the contact was intended to bind someone, it must necessarily bind the purported agent even if the principal is unaffected.
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4.
5.
Third partys liabilities toward agent. Four main instances in which a third party subjects himself to liability at the hands of an agent: o Where the agent contracts in his own name for an undisclosed principal, in which case, the agent may sue the third party to enforce the contract; o Where the agent possesses a beneficial interest in the subject matter of the agency. o Where the agent pays money of his principal to third party by mistake or under the contract which proves subsequently to be illegal, the agent being ignorant with respect to its illegal nature; and o Where the third party commits a tort against the agent. 2. Cases DBP v. CA (EVA) 1994 Quaison, J. Facts: Juan B. Dans, together with his wife Candida, his son and daughter-in-law, applied for a loan of P500K with DBP Basilan. As the principal mortgagor, Dans, then 76 years of age, was advised by DBP to obtain a mortgage redemption insurance (MRI) with the DBP Mortgage Redemption Insurance Pool (DBP MRI Pool). The MRI premium was deducted by DBP from the approved loan of P300K and credited this [less 10% service fee] to the MRI Pool Account on Aug. 20, 1987. Dans was also made to accomplish and submit the "MRI Application for Insurance" and the "Health Statement for DBP MRI Pool." On Sept. 3, 1987 Dans died of cardiac arrest. On Sept. 23, 1987 the DBP MRI Pool notified DBP that Dans was not eligible for MRI coverage, being over the acceptance age limit of 60 years at the time of application.
DBP apprised Candida Dans of the disapproval of her late husband's MRI application. The DBP offered to refund the premium of P1,476.00 which the deceased had paid, but Candida Dans refused to accept the same, demanding payment of the face value of the MRI or an amount equivalent to the loan. She, likewise,
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ISSUE: WON DBP should be held liable? HELD. YES, but for a reduced amount. In dealing with Dans, DBP was wearing two legal hats: the first as a lender, and the second as an insurance agent. As an insurance agent, DBP is not authorized to accept applications for MRI when its clients are more than 60 years of age. Knowing all the while that Dans was ineligible for MRI coverage because of his advanced age, DBP exceeded the scope of its authority when it accepted Dan's application for MRI by collecting the insurance premium, and deducting its agent's commission and service fee. Art. 1897 applies. The liability of an agent who exceeds the scope of his authority depends upon whether the third person is aware of the limits of the agent's powers. There is no showing that Dans knew of the limitation on DBP's authority to solicit applications for MRI. If the third person dealing with an agent is unaware of the limits of the authority conferred by the principal on the agent and he (third person) has been deceived by the nondisclosure thereof by the agent, then the latter is liable for damages to him. Philippine Products v Primateria Anonyme Pour Le Commerce (GEN) Nov. 29, 1965 Bengzon, C.J. Societe
Facts: Benguet Consolidated, Inc., is a domestic corporation engaged in the mining industry with respondents Stanley Willimont, Eugene Kneebone, C.W. Herold, G.N. Wright, O.M. Westerfield, A.P. Davidson and William Johnson as its officers. Respondent BCI Employees and Workers Union (PAFLU) is a legitimate labor union while respondent Donaciano Andrada is a member thereof. On August 28, 1954, Andrada and several others petitioned the respondent company that they be given the rates of pay as prescribed in the collective bargaining contrac, and petitioner company, in compliance thereto made the necessary salary adjustment with the exception of complainant Andrada who, although he was reclassified from clerk second class to clerk first class, did not receive any corresponding increase in his pay. Andrada also declared that on or about August 26, 1967, on the occasion of a grievance meeting concerning the adjustment of his wages, Eugene Kneebone, one of the respondent herein, said to him, "am spending much of my time for your complaint. My time is precious. I tell you that as long as I am still connected with Benguet
FACTS: Primateria Zurich (respondent), through Alexander Baylin, entered into an agreement with Philippine Products Company (PPC) whereby the latter undertook to buy Copra in the Philippines for the account of Primateria Zurich. PPC shipped copra to foreign countries pursuant to the instructions of Primateria Zurich, through Primateria Phils, with Baylin and Jose Crame as
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(Latin) as a favor
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Dy Peh v. CIR (EARLA) PNB v. Ritratto Group (JANCES) July 31, 2001 J. Kapunan Facts: PNB-IFL, subsidiary of PNB extended a letter of credit in favor of Ritratto Inc. to secured real estate mortgages constituted over 4 parcels of land in Makati. Ritratto was not able to pay, thus PNB-IFL moved to foreclose the mortgages. Ritratto filed complaint for injunction with prayer for issuance of writ of preliminary injunction. Petitioner filed a motion to dismiss complaint for injunction on grounds of failure to state a cause of action and absence of any privity between the petitioner and respondents. Ruling: RTC issued writ of preliminary injunction; denied motion to dismiss. PNB-IFL is a wholly owned subsidiary of defendant Philippine National Bank, the suit against the defendant PNB is a suit against PNB-IFL. CA affirmed Issue: WON PNB is the real party-in-interest [NO] HELD: PNB was sued because it acted as an attorney-in-fact of PNB-IFL in initiating the foreclosure proceedings. A suit against an agent cannot without compelling reasons be considered a suit against the principal. Respondents committed the mistake of filing the case against the wrong party. They do not have a cause of action against the petitioner as the latter is not privy to the contract the provisions of which respondents seek to declare void. Disposition: petition granted.
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Article 1898. If the agent contracts in the name of the principal, exceeding the scope f his authority, and the principal does not ratify the contract, it shall be void if the party with whom the agent contracted is aware of the limits of the powers granted by the principal. In this case, however, the agent is liable if he undertook to secure the principals ratification. 1. Reason why agent is liable Article 1910, par.2 states that if the agent acts in excess of his authority, even if he contracts in the name of the principal, the agent is the one personally liable unless there is subsequent ratification by the principal. 2. Status of contracts entered into by an agent in excess of his authority
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The liability of an agent who exceeds the scope of his authority depends upon WON the third person is aware of the limits of the agents power. The agent is not bound or liable for damages in case he gave notice of his powers to the third person, nor in a case where the third person is aware of the limits of the powers granted by the principal. If the agent promised or undertook to secure the principals ratification and failed, he is personally liable. If ratification is becomes liable. obtained, then the principal
5. Cases Lorca v. Dineros, supra Salonga v. Warner (JESSA) January 31, 1951 Bautista Angelo, J. Facts: On August 28, 1946, Westchester Fire Insurance Company of New York entered into a contract with Gamboa whereby said company insured one case of rayon yardage which said Gamboa shipped from San Francisco, California, on steamer Clovis Victory, to Manila and consigned to Salonga. According to the contract of insurance, the insurance company undertook to pay to the sender or her consignee the damages that may be caused to the goods shipped subject to the condition that the liability of the company will be limited to the actual loss which the insured may suffer not to the exceed the sum of P2,000
Issue: Main issue: WON the trial court erred in holding that Warner, as agent of Westchester Fire Insurance Company of New York, United States of America, is responsible upon the insurance claim subject to the suit Sub-issues: (1) WON Warner has no contractual relation with either the plaintiff or his consignor (2) WON Warner is not the real party in interest against whom the suit should be brought (3) WON a judgment for or against an agent in no way binds the real party in interest. Held: YES (the main issue answering the sub-issues) is answered by
1.YES. It is a well known rule that a contractual obligation or liability, or an action ex-contractu, must be founded upon a contract, oral or written, either express or implied. If there is no contract, there is no corresponding liability, and no cause of action may arise therefrom. This is what is provided for in article 1257 of the Civil Code. This article provides that contracts are binding upon the parties who make them and their heirs, excepting, with respect to the latter, where the rights and
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Issues and Held: 1. WON defendants violated banks instructions in extending new special crop loans after receiving PNBs telegram of November 26, 1946. YES. It may be that there was no such express instruction directly ordering the defendants to stop granting new special crop loans. However, defendants should have gathered that idea from the central offices letters. That defendant understood this clearly was evidenced by the fact that Bagamaspad, in one of his letters to the central office, asked still entertain new applicants on Special Crop Loans. 2. WON defendants acted with extreme laxity, negligence, and carelessness in granting said new special crop loans.
Article 1899. If a duly authorized agent acts in accordance with the orders of the principal, the latter cannot set up the ignorance of the agent as to circumstances whereof he himself was, or ought to have been, aware. Nepomuceno v. Heredia (TOFF) O. Article 1900 (TOPE)
Art. 1900. So far as third persons are concerned, an act is deemed to have been performed within
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Methods of broadening and restricting agents authority A principal may assume rights and incur liabilities in respect of his agents acts or transactions other than those for which express authorization has been given and an agents authority may be enlarged or restricted in a number of ways: o By implication Authority extends to acts and transactions incidental to what have been expressly authorized. o By usage and custom (may enlarge as well as restrict) Agents authorization may not, however, be enlarged through usage and custom in the following four classes of cases: Where it is sought to vary the terms of an express authorization, as where the agent
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Eugenio v CA and Pepsi Cola Bottling Co. (EVA) 1994 Regalado, J. FACTS
Responsibility of principal where agent acted with improper motives. General rule The motive of the agent in entering into a contract with a third person is immaterial. Where a written authority given to an agent covers the thing done by him on behalf of the principal, it is not competent to the court to look into the mind of the agent, and if he had applied his authority for his own ends, to hold that the principal is not bound. Exceptions Where the third person knew that the agent was acting for his private benefit (that the principal is not liable) Where the owner is seeking recovery of personal property which he has been unlawfully deprived. Principals responsibility for agents misrepresentation. Within the scope of agents authority.o A principal is subject to liability for loss caused to another by the others reliance upon a deceitful
Nora Eugenio was a dealer of the softdrinks product of respondent company while her husband Alfredo used to be a route manager of Pepsi7. Pepsi filed a complaint for a collection of sum of money against the Eugenio spouses alleging an outstanding account of P94,651 representing balances both from the Quezon City and Muntinlupa plants where Nora maintains a regular charge account with them. During trial, the Eugenio spouses presented four Trade Provisional Receipts (TPRs) allegedly issued and received by them from Pepsis current route manager Jovencio Estrada of its Malate Warehouse showing payments in the total amount of P80,500. The Eugenios contend that had the amounts in the TPRs been credited on their favor, they would not be indebted to Pepsi but it is the latter who would be indebted to them in the sum of P3,546 representing overpayment. TC ruled for Pepsi. CA affirmed.
ISSUE: WON the TPRs are sufficient evidence to prove Sps Eugenios payment of their accountabilities to Pepsi? HELD: YES. CA judgment annulled and set aside; Pepsi ordered to pay back petitioners overpayment. RATIO The TPRs presented in evidence are disputably presumed as evidence of payments made on the accounts of the Eugenios. There are
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Prior to the instant case, Alfredo filed an illegal dismissal case against Pepsi which was decided in his favor.
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Ch. Veloso and Rosales v La Urbana and Del Mar (GEN) Nov. 3, 1933 Imperial, J. FACTS: Petitioner Corazon Ch. Veloso owned undivided portions of 5 parcels of land in Manila. Defendant Del Mar forged 2 powers of attorney purporting to have been executed by the petitioner spouses conferring upon him authority to mortgage the petitioners participation in the properties. These powers of attorney were duly registered in the office of the Register of Deeds. Del Mar proceeded in mortgaging the petitioners participations to La Previsora Filipina. Subsequently, he cancelled the mortgage and transferred it to La Urbana which granted him a loan of P13,475. He delivered the owners duplicates of the certificates of title to La Urbana. However, Del Mar violated the conditions of the mortgage which prompted La Urbana to foreclose the mortgages. Petitioners filed a criminal action against Del Mar for the fraudulent transactions which resulted into his eventual conviction. The trial court also held
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Art. 1901. A third person cannot set up the fact that the agent has exceeded his powers, if the principal has ratified, or has signified his willingness to ratify the agent's acts. 1. Effects of ratification and expression of willingness to ratify If the principal does not ratify the acts of the agent it is unenforceable and he is not bound by it. If the principal ratifies the acts of the agent, i.e. authorizes, receives benefits, the THIRD PERSON cannot set up the fact that the agent has exceeded his authority. The THRID PERSON may be compelled to abide by his contract. The ratification shall have a retroactive effect. It is only the PRINCIPAL NOT THE AGENT who may stamp the imprimatur of ratification. Before ratification by the principal or expression of willingness on his part to ratify, the third person may repudiate the acts of the agent. 2. Implied ratification Where a person acts for another who accepts or retains the benefits or proceeds of his effort with knowledge of the material facts surrounding the transaction, the latter mus be DEEMED to have ratified the methods employed. Principle of Principal may not accept the benefits of the transaction and repudiate the burdens. 3. Cases Commission on Public Highways v San Diego (EARLA) Rafferty v. Province of Cebu (JANCES) December 29, 1928 Johns Facts: An instrument was executed by plaintiff, by and through his agent and attorney-in-fact, in which the said agent undertook to convey title of the plaintiff to 6700 sq. meters of a lot for a consideration of P226. The part of the lot was to be expropriated within the provincial park. Plaintiff received and accepted the P226 consideration. Plaintiff, however, contends that the agent had no authority to execute the instrument in question.
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Art. 1902. A third person with whom the agent wishes to contract on behalf of the principal may require the presentation of the power of attorney, or the instructions as regards the agency. Private or secret orders and instructions of the principal do not prejudice third persons who have relied upon the power of attorney or instructions shown them. 1. Effects of private or secret instructions upon third persons Dizon v CA (JESSA) January 28, 2003 Ynares-Santiago, J. Facts: These involve two consolidated petitions seeking to set aside and annul the decisions and resolutions of respondent Court of Appeals essentially, the facts are: Overland Express Lines, Inc. (lessee) entered into a Contract of Lease with Option to Buy with petitioners (lessors) involving a 1,755.80 square meter parcel of land term of the lease was for one (1) year commencing from May 16, 1974 up to May 15, 1975. During this period, private respondent was granted an option to purchase for the amount of P3,000.00 per square meter. the lease shall be on a per month basis with a monthly rental of P3,000.00 For failure of private respondent to pay the increased rental of P8,000.00 per month effective, petitioners filed an action for ejectment
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Issue and Held: 1. WON there was a perfected contract of sale. NO. Article 1475 of the Civil Code specifically provides that the contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. The Agreement is not a contract of sale because it imposed no obligation on the part of Toyota to transfer ownership and no correlative obligation on the part of Sosa to pay therefor a
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Art. 1903. The commission agent shall be responsible for the goods received by him in the terms and conditions and as described in the consignment, unless upon receiving them he should make a written statement of the damage and deterioration suffered by the same. Definition Factor or commission agent One whose business is to receive and sell goods for a commission Entrusted by the principal with the possession of goods to be sold, and usually selling in his own name. May act on his own name or in that of the principal
Ordinary agent Need not have the possession of the goods of his principal, while the commission agent must be in possession
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Art. 1904. The commission agent who handles goods of the same kind and mark, which belong to different owners, shall distinguish them by countermarks, and designate the merchandise respectively belonging to each principal. Santos v. Bernabe (MAI) November 6, 1929 Villareal, J. Facts: Urbano Santos deposited in Jose Bernabes warehouse 778 cavans and 38 kilos of palay while Pablo Tiongson deposited in the same warehouse 1,026 cavans and 9 kilos of the same grain. On March 20, 1928, Pablo Tiongson filed with the Court of First Instance of Bulacan a complaint against Jose C. Bernabe, to recover from the latter the 1,026 cavans and 9 kilos of palay deposited in the defendant's warehouse. At the same time, the application of Pablo Tiongson for a writ of attachment was granted, and the attachable property of Jose C. Bernabe, including 924 cavans and 31 1/2 kilos of palay found by the sheriff in his warehouse, were attached, sold at public auction, and the proceeds thereof delivered to said defendant Pablo Tiongson, who obtained judgment in said case. It does not appear that the sacks of palay of Urbano Santos and those of Pablo Tiongson, deposited in Jose C. Bernabe's warehouse, bore any marks or signs, nor were they separated one from the other. Urbano Santos contends that Pablo Tiongson cannot claim the 924 cavans and 31 kilos of palay attached by the defendant sheriff as part of those deposited by him in Jose C. Bernabe's warehouse, because, in asking for the attachment thereof, he impliedly acknowledged that the same belonged to Jose C. Bernabe and not to him.
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Art. 1905. The commission agent cannot, without the express or implied consent of the principal, sell on credit. Should he do so, the principal may demand from him payment in cash, but the commission agent shall be entitled to any interest or benefit, which may result from such sale. If sale is made without authority, the principal is given two alternatives: 1. require payment in cash; but the interest or benefit from the sale on credit shall belong to the agent since
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2.
Green Valley Poultry v. IAC & Squibb (ABBY) 1984 J. Abad Santos Facts: Green Valley was appointed as the noexclusive distributor of verinary products of Squibb in northern Luzon. Squibb filed a suit to collect on goods delivered but unpaid. Green Valley claimed that the contract with Squibb was a mere agency to sell; that it never purchased goods from Squibb; that the goods received were on consignment only with the obligation to turn over the proceeds, less its commission, or to return the goods ff not sold, and since it had sold the goods but had not been able to collect from the purchasers thereof, the action was premature. Upon the other hand, Squibb claimed that the contract was one of sale so that Green Valley was obligated to pay for the goods received upon the expiration of the 60-day credit period. Green Valley was ordered by the CA to pay the sum of P48,374.74 plus P96.00 with interest at 6% per annum from the filing of this action; plus attorney's fees in the amount of P5,000.00 and to pay the costs to Squibb. Issue: 1.WoN it is a contract of sale or a contract to sell. 2. WoN Green Valley is liable to pay the unsold products Held: According to the SC: We do not have to categorize the contract. Whether viewed as an agency to sell or as a contract of sale, the liability of Green Valley is indubitable. Adopting Green Valley's theory that the contract is an agency to sell, it is liable because it sold on credit without authority from its principal. The Civil Code has a provision exactly in point. It reads: Art. 1905. The commission agent cannot, without the express or implied consent of the principal, sell on credit. Should he do so, the principal may demand from him payment in cash, but the commission agent shall be entitled to any interest or benefit, which may result from such sale. U. Article 1906-1908 (EARLA)
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Art. 1909. The agent is responsible not only for fraud, but also for negligence, which shall be judged with more or less rigor by the courts, according to whether the agency was or was not for a compensation. MBTC vs. CA (ALAIN) Feb 18, 1991 Cruz, J. FACTS: In January 1979, a certain Eduardo Gomez opened an account with Golden Savings and deposited over a period of two months 38 treasury warrants with a total value of P1,755,228.37. They were all drawn by the Philippine Fish Marketing Authority and purportedly signed by its General Manager and countersigned by its Auditor. Six of these were directly payable to Gomez while the others appeared to have been indorsed by their respective payees, followed by Gomez as second indorser. On various dates between June 25 and July 16, 1979, all these warrants were subsequently indorsed by Gloria Castillo as Cashier of Golden Savings and deposited to its Savings Account No. 2498 in the Metrobank branch in Calapan, Mindoro. They were then sent for clearing by the branch office to the principal office of Metrobank, which forwarded them to the Bureau of Treasury for special clearing. More than two weeks after the deposits, Gloria Castillo went to the Calapan branch several times to ask whether the warrants had been cleared. She was told to wait. Accordingly, Gomez was meanwhile not allowed to withdraw from his account. Later, however, "exasperated" over Gloria's repeated inquiries and also as an accommodation for a "valued client," the petitioner
Art. 1906. Should the commission agent, with authority of the principal, sell on credit, he shall so
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must be noted that in Article 11748, the emphasis of the provision is on the event, not on the factors responsible for them. To avail of the exemption granted in law, it is not necessary that the persons responsible for the occurrence should be found or punished; it would only be sufficient to establish that the unforeseeable event, the robbery in this case, did take place without any concurrent fault on the debtors part, and this can be done by preponderant evidence. To require in the present action for the prior conviction of the culprits in the criminal case in order to establish the robbery as a fact, would be to demand proof beyond reasonable doubt.
Article 1910. The principal may revoke the agency at will, and compel the agent to return the document evidencing the agency. Such revocation may be express or implied. GENERAL OBLIGATIONS: 1. Contractual obligations duties and liabilities of the principal are primarily based upon the
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Art. 1174. Except in cases expressly specified by law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable. 9 Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages.
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SPECIFIC OBLIGATIONS: 1. To comply with the obligations which the agent may have contracted within the scope of his authority and in the name of the principal; 2. To advance to the agent, should the latter so request, the sums necessary for the execution of the agency; 3. To reimburse the agent of all the advances made by him, provided the agent is free from fault; 4. To indemnify the agent for all the damages which the execution of the agency may have caused the latter without the fault or negligence on his part; and 5. To pay the agent the compensation agreed upon, or if no compensation was specified, the reasonable value of the agents services. Note: Even if the agent has exceeded his authority, the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers [Estoppel]. LIABILITY OF THE PRINCIPAL TO THIRD PERSONS General Rule: Where the relation of agency legally exists, the principal will be liable to third persons for ALL the acts committed by the agent in his behalf in the course and within the actual or apparent scope of his authority, and this is not altered by the fact that the agent also may be liable, nor by the fact that some of the acts are to the principals advantage while the others to his disadvantage. Reason for the Rule o For express and implied agency the act of agent is the act of principal o For apparent authority and agency by estoppel to prevent fraud upon innocent third parties LIABILITY OF THIRD PERSONS TO PRINCIPAL An agent is the instrumentality of the principal whose primary design is to obtain rights against third parties. The principals rights are the third parties liabilities. 1. In contract. A third person is liable to the principal upon contracts entered into by his agent, in the same manners as though the contract were entered into by the principal himself. This proposition results from the representative nature of agency. In tort. The third persons tort liability to the principal, insofar as the agent is involved in tort, arises in three factual situations: (a) Where the third person damages or injures property or interest of the
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LIABILITY OF PRINCIPAL FOR TORT OF AGENT General Rule: The principal is civilly liable to third persons for torts of an committed at the principals direction or in the course of within the scope of the agents employment. Reason for liability: based on the principle that he who acts through another does it himself. Note: Agent is also liable he is SOLIDARILY liable with the principla to third persons and so such third persons may sue both. TEST of liability (Motivation-deviation test) The bounds of the agents authority are not the limits of the principals tort liability, but rather the scope of employment which may or may not be within the bound of authority; hence, wider in scope. But an act is not necessarily done within the scope of employment by reason merely of the fact that it is done during the employment. Two factors must concur for liability to be imposed: 1. satisfactory evidence that the employee in doing the act, in doing of which the tort was committed, was motivated in part, at least, by desire to serve his employer; AND 2. satisfactory evidence that the act, in doing of which the tort is committed, was not an extreme deviation from the normal conduct of the employee. Article 1910, par. 1: When agent acts in a representative capacity, the principal is evidently liable Article 1910, par. 2: When agent exceeded his authority, the principal is not bound unless he RATIFIES that act of the agent expressly or impliedly. RATIFICATION is the adoption or the affirmance by a person of a prior act which did not bind him,
2.
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Issues and Held: 1. WON the sale in favor of the Robleses was valid. YES. A notarized instrument enjoys a prima facie presumption of authenticity and due execution. To overcome that presumption, clear and convincing evidence must be presented. Forgery cannot be presumed. Hence, it was incumbent upon petitioner to prove it. This petitioner failed to do. Petitioner also failed to convince the trial court that the person with whom Robles transacted was in fact not her husband. She only alleged that her husband was out of the country at the
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Limketkai & Sons Milling v. CA (REX) Rural Bank of Milaor v. Ocfemia, 325 SCRA 99 (JESSA) Facts: On April 10, 1996, Rural Bank was declared in default on motion of the respondents for failure to file an answer within the reglementaryperiod after it was duly served with summons On April 26, 1996, bank filed a motion to set aside the order of default with objection thereto filed by respondents On June 17, 1996, an order was issued denying bank's motion to set aside the order of default On July 31, 1996, respondents filed a motion to set case for hearing. The bank did not file any opposition and so respondents were allowed to present their evidence ex-parte. A certiorari case was filed by the bank with the Court of Appeals but the petition was denied in a decision and the same is now final. The evidence presented by the respondents through the testimony of Nio, one of the respondents in this case, shows that: she is the daughter of Francisca Ocfemia, a co-respondent in this case, and the late Renato Ocfemia (deceased) the parents of her father, Renato Ocfemia, were Juanita Arellano Ocfemia and Felicisimo Ocfemia her other co-respondents Rowena O. Barrogo, Felicisimo Ocfemia, Renato
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Issue: WON the bank manager was authorized by the bank to sign on its behalf Held: YES. In failing to file its answer specifically denying under oath the Deed of Sale, the bank admitted the due execution of the said contract. Such admission means that it acknowledged that the manager was authorized to sign the Deed of Sale on its behalf. The bank acknowledged, by its own acts or failure to act, the authority of the manager to enter into binding contracts. After the execution of the Deed of Sale, respondents occupied the properties in dispute and paid the real estate taxes due thereon. If the bank management believed that it had title to the property, it should have taken some measures to prevent the infringement or invasion of its title thereto and possession thereof. Likewise, the manager had previously transacted business on behalf of the bank, and the latter had acknowledged her authority. A bank is liable to innocent third persons where representation is made in the course of its normal business by an agent like the manager, even though such agent is abusing her authority. Clearly, persons dealing with her could not be blamed for believing that she was authorized to transact business for and on behalf of the bank. Board of Liquidators v. Kalaw: Settled jurisprudence has it that where similar acts have been approved by the directors as a matter of general practice, custom, and policy, the general manager may bind the company without formal authorization of the board of directors. In varying language, existence of such authority is established, by proof of the course of business, the usages and practices of the company and by the knowledge which the board of directors has, or must be presumed to have, of acts and doings of its subordinates in and about the affairs of the corporation. So also, authority to act for and bind a corporation may be presumed from acts of recognition in other instances where the power was in fact exercised. Thus, when, in the usual course of business of a corporation, an officer has been allowed in his official capacity to manage its affairs, his authority to represent the corporation may be implied from the manner in which he has been
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ISSUE: WON CAL is liable. Held: Yes. It is significant to note that the contract of air transportation was between petitioner and respondent, with the former endorsing to PAL the Hong Kong-to-Manila segment of the journey. Such contract of carriage has always been treated in this jurisdiction as a single operation. This jurisprudential rule is supported by the Warsaw Convention, to which the Philippines is a party, and by the existing practices of the International Air Transport Association. In American Airlines v. Court of Appeals, the court have noted that under a general pool partnership agreement, the ticket-issuing airline is the principal in a contract of carriage, while the endorsee-airline is the agent. In the instant case, following the jurisprudence cited above, PAL acted as the carrying agent of CAL. In the same way that we ruled against British Airways and Lufthansa in the aforementioned cases, we also rule that CAL cannot evade liability to respondent, even though it may have been only a ticket issuer for the Hong Kong-Manila sector. Cuison v. CA, 227 SCRA 391 (TOPE) Facts: Petitioner Kue Cuison is a sole proprietorship engaged in the purchase and sale of newsprint, bond paper and scrap while Private
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Issue: Whether or not Tiu Huy Tiac possessed the required authority from petitioner sufficient to hold the latter liable for the disputed transaction. Held: YES. It is a well-established rule that one who clothes another with apparent authority as his agent and holds him out to the public as such cannot be permitted to deny the authority of such person to act as his agent, to the prejudice of innocent third parties dealing with such person in good faith and in the honest belief that he is what he appears to be. It is evident from the records that by his own acts and admission, petitioner held out Tiu Huy Tiac to the public as the manager of his store. More particularly, petitioner explicitly introduced Tiu Huy Tiac to Bernardino Villanueva, respondent's manager, as his (petitioner's) branch manager as testified to by Bernardino Villanueva. Secondly, Lilian Tan, who has been doing business with petitioner for quite a while, also testified that she knew Tiu Huy Tiac to be the
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Woodchild Holdings v. Roxas Electric (MARK) Facts: The respondent Roxas Electric and Construction Company, Inc. (RECCI), formerly the Roxas Electric and Construction Company, was the owner of two parcels of land. On May 17, 1991, the respondents Board of Directors approved a resolution authorizing the corporation, through its president, Roberto B. Roxas, to sell the lots at a price, and under such terms and conditions, which he deemed most reasonable and advantageous to the corporation. He was likewise authorized to execute, sign, and deliver the pertinent sales documents and receive the proceeds of the sale for and on behalf of the company. Petitioner WHI bought one of the lots and a portion of the other. It was stipulated in the Deed of Sale that the vendor agrees, in the event that the right of way is insufficient for the vendees use (ex entry of a 45-foot container), to sell additional square meters from its current adjacent property. WHI constructed a warehouse. Said warehouse was leased by Ponderosa Leather Goods Company subject to a monthly rental of 300,000 php. In the meantime, WHI complained to Roberto Roxas that the vehicles of RECCI were parked on a portion of the property over which WHI had been granted a right of way. Roxas promised to look into the matter. Dy and Roxas discussed the need of WHI to buy a 500-square-meter portion of the other but Roxas died soon thereafter. The WHI demanded that the RECCI sell a portion of the other lot for its beneficial use otherwise the appropriate action would be filed against it. RECCI rejected the demand of WHI. On June 17, 1992, the WHI filed a complaint against the RECCI with the Regional Trial Court of Makati, for specific performance and damages.
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Art. 1910. The principal must comply with all the obligations which the agent may have contracted within the scope of his authority. As for any obligation wherein the agent has exceeded his power, the principal is not bound except when he ratifies it expressly or tacitly.
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ISSUE: WON the Compromise Agreement is valid HELD: NO First, the lawyers who entered the Compromise Agreement have no SPA in violation of Art. 1878 CC and Rule 138, Sec. 23 ROC. Contrary to the petitioners contention, Atty. Cardenas, as administrative manager of the Corporation, did not tacitly ratify the agreement entered into by the parties as he has no authority to do so. To ratify the unauthorized acts of an agent and make it binding on the corporation, it must be shown that the governing body or officer authorized to ratify had full and complete knowledge of all the material facts connected to the transaction. The petitioner failed to do this. Ratification by a corporation cannot be made by the same person who wrongfully assumed the power to make the contract. Manila Park Cemetery v. Linsangan (JESSA) Facts: Sometime in 1984, Florencia Baluyot offered Atty. Pedro L. Linsangan a lot called Garden State at the Holy Cross Memorial Park owned by MMPCI According to Baluyot, a former owner of a memorial lot was no longer interested in acquiring the lot and had opted to sell his rights subject to reimbursement of the amounts he already paid. The contract was for P95,000.00.
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Issue: 1. WON MMCI is liable 2. WON there is ratification 3. WON the contract was validly entered into by MMCI and Atty Linsangan Held: 1. NO. By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. Thus, the elements of agency are (i) consent, express or implied, of the parties to establish the relationship; (ii) the object is the execution of a juridical act in relation to a third person; (iii) the agent acts as a representative and not for himself; and (iv) the agent acts within the scope of his authority. As properly found both by the trial court and the Court of Appeals, Baluyot was an agent of MMPCI, having represented the interest of the latter, and having been allowed by MMPCI to represent it in her dealings with its clients/prospective buyers. Nevertheless, contrary to the findings of the Court of Appeals, MMPCI cannot be bound by the contract procured by Atty. Linsangan and solicited by Baluyot. Baluyot was authorized to solicit and remit to MMPCI offers to purchase interment spaces obtained on forms provided by MMPCI. The terms of the offer to purchase, therefore, are contained in such forms and, when signed by the buyer and an authorized officer of MMPCI, becomes binding on both parties. The Offer to Purchase duly signed by Atty. Linsangan, and accepted and validated by MMPCI showed a total list price of P132,250.00. Likewise, it was clearly stated therein that "Purchaser agrees that he has read or has had read to him this agreement, that he understands its terms and conditions, and that there are no covenants, conditions, warranties or representations other than those contained herein." By signing the Offer to Purchase, Atty. Linsangan signified that he understood its contents. That he and Baluyot had an agreement different from that contained in the Offer to Purchase is of no
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Article 1911. Even when the agent has exceeded his authority, the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers. Lustan v. CA, 266 SCRA 663 (JESSA) Facts: Lustan is the registered owner of a parcel of land petitioner leased the property to Parangan for a term of 10 years and an annual rent of P1,000.00 During the period of lease, Parangan was regularly extending loans in small amounts to petitioner to defray her daily expenses and to finance her daughter's education petitioner executed an SPA in favor of Parangan to secure an agricultural loan from PNB with the aforesaid lot as collateral a second SPA was executed by petitioner, by virtue of which, Parangan was able to secure 4 additional loans the last three loans were without the knowledge of herein petitioner and all the proceeds therefrom were used by Parangan for his own benefit (but these encumbrances were duly annotated on the certificate of title) petitioner signed a Deed of Pacto de Retro Sale in favor of Parangan which was superseded by the Deed of Definite Sale which petitioner signed upon Parangan's representation that the same merely evidences the loans extended by him unto the former For fear that her property might be prejudiced by the continued borrowing of Parangan, petitioner demanded the return of her certificate of title. Instead of complying with the request, Parangan asserted his rights over the property which allegedly had become his by virtue of the aforementioned Deed of Definite Sale.
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Issues: A. WON the Deed of Definite Sale is in reality an equitable mortgage B. WON petitioner's property is liable to PNB for the loans contracted by Parangan by virtue of the special power of attorney Held: 1. YES. A contract is perfected by mere consent. More particularly, a contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. This meeting of the minds speaks of the intent of the parties in entering into the contract respecting the subject matter and the consideration thereof. If the words of the contract appear to be contrary to the evident intention of the parties, the latter shall prevail over the former. In the case at bench, the evidence is sufficient to warrant a finding that petitioner and Parangan merely intended to consolidate the former's indebtedness to the latter in a single instrument and to secure the same with the subject property. Even when a document appears on its face to be a sale, the owner of the property may prove that the contract is really a loan with mortgage by raising as an issue the fact that the document does not express the true intent of the parties. In this case, parol evidence then becomes competent and admissible to prove that the instrument was in truth and in fact given merely as a security for the repayment of a loan. Art. 1602, (6), in relation to Art 1604 provides that a contract of sale is presumed to be an equitable mortgage in any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation. That the case clearly falls under this category can be inferred from the circumstances surrounding the transaction as herein set forth: Petitioner had no knowledge that the contract she signed is a deed of sale.
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C. Where damages is caused by wrongful acts of third persons principal not liable if he is not responsible for such third persons. D. Where agent acted upon his own account no obligation to indemnify since no agency exists in the legal sense. Art. 1914. The agent may retain in pledge the things which are the object of the agency until the principal effects the reimbursement and pays the indemnity set forth in the two preceding articles. Right of agent to retain in pledge object of agency an example of a legal pledge (i.e. imposed by law, as opposed to contractual pledges). NATURE of agents right of lien: (1) Right limited to the subject matter of the agency it is a specific, not a general lien. (2) Right requires the possession, custody, control or disposing power of the agent of the subject matter. (3) Right generally only in favor of agent (not to be extended to a sub-agent in the absence of
Art. 1912. The principal must advance to the agent, should the latter so request, the sums necessary for the execution of the agency. Should the agent have advanced them, the principal must reimburse him therefor, even if the business or undertaking was not successful, provided the agent is free from all fault. The reimbursement shall include interest on the sums advanced, from the day on which the advance was made. Obligations of principal to the agent under this Article: 1. Obligation to advance funds. The agent is bound by his acceptance to carry out the agency; on the other hand, the principal is under obligation to provide the means with which it execute the agency.
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Art. 1919. Agency is extinguished: (1) By its revocation; (2) By the withdrawal of the agent; (3) By the death, civil interdiction, insanity or insolvency of the principal or of the agent; (4) By the dissolution of the firm or corporation which entrusted or accepted the agency; (5) By the accomplishment of the object or purpose of the agency; (6) By the expiration of the period for which the agency was constituted. (1732a) Art. 1920. The principal may revoke the agency at will, and compel the agent to return the document evidencing the agency. Such revocation may be express or implied. Perez v. PNB, 17 SCRA 833 (IVY) Bicol Savings and Loan Assoc. v CA (GEN) March 31, 1989 Melencio-Herrera, J. FACTS: Juan de Jesus was the owner of a parcel of land in Naga City. He executed a Special Power of Attorney in favor of his son, Jose de Jesus: "To negotiate, mortgage my real property in any bank either private or public entity preferably in the Bicol Savings Bank, Naga City, in any amount that may be agreed upon between the bank and my attorney-in-fact." Jose de Jesus obtained a loan of P20,000 from petitioner bank. To secure payment, he executed a deed of mortgage on the real property referred to in the Special Power of Attorney. Then, Juan de Jesus died. Jose failed to pay the loan. Hence the bank extrajudicially foreclosed the mortgage. In the subsequent public auction, the mortgaged property was sold to the bank as the highest bidder to whom a Provisional Certificate of Sale was issued. Private respondents failed to redeem the property within one year from the date of the registration of the Provisional Certificate of Sale. Hence, a Definite Certificate of Sale was issued in favor of the bank.
D. Articles (MARK)
Art. 1915. If two or more persons have appointed an agent for a common transaction or undertaking, they shall be solidarily liable to the agent for all the consequences of the agency. (1731) Art. 1916. When two persons contract with regard to the same thing, one of them with the agent and the other with the principal, and the two contracts are incompatible with each other, that of prior date shall be preferred, without prejudice to the provisions of Article 1544. (n) Art. 1917. In the case referred to in the preceding article, if the agent has acted in good faith, the principal shall be liable in damages to the third person whose contract must be rejected. If the agent acted in bad faith, he alone shall be responsible. (n) Art. 1918. The principal is not liable for the expenses incurred by the agent in the following cases: (1) If the agent acted in contravention of the principal's instructions, unless the latter should wish to avail himself of the benefits derived from the contract; (2) When the expenses were due to the fault of the agent; (3) When the agent incurred them with knowledge that an unfavorable result would ensue, if the principal was not aware thereof;
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Lustan v. CA, 266 SCRA 683, supra Rammani v. CA, 196 SCRA 731 ALAIN Central Surety vs Hodges (JESSA) Facts: Prior to January 15, 1954, lots had been sold by C. N. Hodges to Vicente M. Layson, for the sum of P43,000.90, payable on installments. As of January 15, 1954, the outstanding balance of Layson's debt, after deducting the installments paid by him prior thereto, amounted to P15,516.00. In order that he could use said lots as security for a loan he intended to apply from a bank, Layson persuaded Hodges to execute in his favor a deed of absolute sale over the properties, with the understanding that he would put up a surety bond to guarantee the payment of said balance. Accordingly, Layson executed, in favor of Hodges, a promissory note for P15,516.00, with interest thereon at the rate of 1% per month, and the sum of P1,551.60, for attorney's fees and costs, in case of default in the payment of the principal or interest of said note. To guarantee the same, on January 23, 1954, the petitioner through the manager of its
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Under Article 1921, the notice of revocation must be personal; under Article 1922, it may be personal. Revocation by appointment of new agent:
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Issues: 1. WON the surety bond issued by Mesa is valid 2. WON Article 1922 is applicable Held: 1. YES Said surety bond is valid. In the first place, there appears to be no showing that the revocation of authority was made known to the public in general by publication, nor was Hodges notified of such revocation despite the fact that he was a regular client of the firm . Secondly, some surety bonds issued by Mrs. Mesa in favor of Hodges after her authority had allegedly been curtailed, were honored by the Central Surety despite the fact that these were not reported to the main office at the time of their issuance. These accounts were paid and by these acts, Central Surety ratified Mrs. Mesa's unauthorized acts and as such it is now estopped from setting forth Mrs. Mesa's lack of authority to issue surety bonds. It has been held that although the agent may have acted beyond the scope of his authority, or may have acted without authority at all, the principal may yet subsequently see fit to recognize and adopt the act as his own. Ratification being a matter of assent to and approval of the act as done on account of the person ratifying any words or acts which show such assent and approval are ordinarily sufficient. Moreover, the relocation of agency does not prejudice third persons who acted in good faith without knowledge of the revocation. 2. YES Indeed, Article 1922 of our Civil Code provides: If the agent had general powers, revocation of the agency does not prejudice third persons who acted in good faith and without knowledge of the revocation. Notice of the revocation in a newspaper of general circulation is a sufficient warning to third persons. It is not disputed that petitioner has not caused to be published any notice of the revocation of Mrs. Mesa's authority to issue surety bonds on its behalf, notwithstanding the fact that the powers of Mrs. Mesa, as its branch manager in Iloilo, were of a general nature, for she had exclusive authority,
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Garcia v. de Manzano, 39 Phil 577 ANGELA 1919 Moir, J. FACTS Narciso gave a general power of attorney to his son, Angel L. Manzano on the 9th of February, 1910, and on the 25th of March a second general power-of-attorney to his wife, Josefa Samson. Angel, acting under his GPA sold Narcisos half interest to the steamer San Nicolas, and mortgaged 3 parcels of land in Antimonan to Juan Garcia. Upon Narcisos death, Josefa was named administratrix to Narcisos properties. Garcia brought action against Narcisos Estate to foreclose the mortgage. ISSUES [as raised in Josefas counterclaim] 1. WON the power of attorney of Josefa revoked that of Angel? 2. WON Angels GPA authorize her to sell the boat ? HELD/RATIO: 1. NO Art. 1735 [now 1923a] provides: The appointment of a new agent for the same business produces a revocation of the previous agency from the day on which notice was given to the former agent, excepting the provisions of the next preceding article. There is no proof in the record that the first agent, the son, knew of the power-of-attorney to his mother. It was necessary for the defendants to prove that the son had notice of the second power-ofattorney. As they have not done so, and it must be considered that Angel L. Manzano was acting under a valid power-of-attorney from his father which had not been legally revoked on the date of the sale of the half interest in the steamer to the Garcia. 2. YES. The power-of-attorney does not expressly state that the agent may sell the boat, but a power so full and complete authoring the sale of real property, must necessarily carry with it the right to sell a half interest in a small boat. The record further shows the sale was necessary in
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Issues: 1. WON Atty Mora may be substituted by Atty. Julian S. Yap merely from the filing of a formal appearance by the latter 2. WON CA erred in granting the motion for reconsideration of Atty Mora Held: 1. The private respondents filed with the CA 2 separate motions for reconsideration through 2 counsels, namely, Atty. Raul A. Mora and Atty. Julian S. Yap. The motion for reconsideration filed by Atty. Yap stated, among others, that due to acts inimical to their interests, the private respondents had revoked the authority of Attorney-in-Fact Patrocinia Juanson-Cuizon to represent them and through their newly designated Attorneys-in-Fact decided to take over from her the conduct of the instant case and to retain Atty. Julian S. Yap as their counsel considering that Atty. Raul A. Mora was the personal counsel of Patrocinia JuansonCuizon.CA stated that "there is no showing that all the private respondents have revoked the authority granted to Patrocinia Juanson-Cuizon." Be that as it may, a revocation of authority of Patrocinia Juanson-Cuizon as Attorney-in-Fact of private respondents heirs of Valeriana Marilao, who are recognized as the real parties in interest in this case, should not affect Atty. Raul A. Mora, who remains counsel of record of private respondents absent a valid substitution of counsel. Atty. Raul A. Mora may not be presumed substituted by Atty. Julian S. Yap merely from the filing of a formal appearance by the latter. No substitution of counsel of record is allowed unless the following essential requisites of a valid substitution of counsel concur: (1) there must be a written request for substitution; (2) it must be filed with the written consent of the client; (3) it must be with the written consent of the attorney to be substituted; and (4) in case the consent of the attorney to be substituted cannot be obtained, there must be at least a proof of notice that the motion for substitution was served on him in the manner prescribed by the Rules of Court. In the Supplemental Motion for Reconsideration filed by Atty. Raul A. Mora with the Court of Appeals, he stated that the heirs of Valeriana Marilao never dismissed him nor replaced him as their counsel, thus, the appearance of Atty. Julian S. Yap was improper. In petitioner's Opposition, she stated that she received 2 motions for reconsideration from private respondents filed by different counsels, and was bound to treat Atty.
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Issue: 1. WoN Shinko received the commissions 2. WoN DRACOR is entitled to the commissions on the Direct Sales of CMS to Japanese buyers Held: 1. Petition unmeritorious, no evidence. The finding of fact was only based on a summary from CMS itself. Moreover, even if it was shown that Shinko did in fact receive the commissions in question, CMS is not entitled thereto since these were apparently paid by the buyers to Shinko for arranging the sale. This is therefore not part of the gross sales of CMS's logs. 2. No. We find merit in CMS's contention that the appellate court erred in holding that DRACOR was entitled to its commission from the sales made by CMS to Japanese firms.
Art. 1924. The agency is revoked if the principal directly manages the business entrusted to the agent, dealing directly with third persons. (n) Art. 1925. When two or more principals have granted a power of attorney for a common transaction, any one of them may revoke the same without the consent of the others CMS Logging v. CA (TOPE) 1992 J. Nocon Facts: Petitioner CMS is a forest concessionaire engaged in the logging business, while private respondent DRACOR is engaged in the business of exporting and selling logs and lumber. On August 28, 1957, CMS and DRACOR entered into a contract of agency whereby the former appointed the latter as its exclusive export and sales agent for all logs that the former may produce, for a period of five (5) years. One of the provisions indicated that DRACOR was to handle all negotiations. 6 months before the CoAgency was about to expire CMS president went to Tokyo and found out that DRACOR sold CMS logs through Shinko
The principal may revoke a contract of agency at will, and such revocation may be express, or implied, and may be availed of even if the period fixed in the contract of agency as not yet expired. As the principal has this absolute right to revoke the agency, the agent can not object thereto; neither may he claim damages arising from such revocation, unless it is shown that such was done in order to evade the payment of agent's commission. In the case at bar, CMS appointed DRACOR as its agent for the sale of its logs to Japanese firms. Yet, during the existence of the contract of agency, DRACOR admitted that CMS sold its logs directly to several Japanese firms. This act constituted an implied revocation of the contract of agency under Article 1924 of the Civil Code, which provides: Art. 1924 The agency is revoked if the principal directly manages the business
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Art. 1927. An agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation already contracted, or if a partner is appointed manager of a partnership in the contract of partnership and his removal from the management is unjustifiable. New Manila Lumber Co. v. Republic - TOFF Bacaling v. Muya, 380 SCRA 714 - REG National Sugar Trading v. PNB, 396 SCRA 528 - EARLA Sevilla, supra Del Rosario v. Abad, 104 Phil 648 - ABBY 1958; Padilla Facts: Plaintiffs are the children and heirs of Tiburcio del Rosario. Del Rosario was a grantee of a homestead patent in Nueva Ecija. The Certificate was issue Feb 11, 1937. He obtained a loan from Primitivo Abad Feb 24, 1937 (remember the 5 yr prohibition from encumbrance rule) for P2000 at 12% pa payable Dec 1941. The security for the payment was the improvement on the parcel of land. An irrevocable special power of attorney was also executed authorizing Abad to sell and convey the parcel of land. December 1945 Tiburcio died leaving the mortgage debt unpaid. Later, Primitivo sold the land to his son Teodorico Abad for P1. Title now registered in Teodoricos name. Del Rosario heirs filed suit for recovery and possession of the land. Issue: 1. WoN Power of Attorney created an agency coupled with an interest 2. WoN the land was sold validly Held: No. The power of attorney executed by the homesteader in favor of Abad did not create an agency nor did it clothe the agency with irrevocable character. A mere statement in the power of attorney that it is coupled with an interest is not enough. In what does such interest consist must be stated in the power of attorney. The mortgage has nothing to do with the power of attorney and may be foreclosed by the mortgagee upon the failure of the mortgagor to comply with
Art. 1926. A general power of attorney is revoked by a special one granted to another agent, as regards the special matter involved in the latter. Dy Buncio & Co., Inc. v Ong Guan Can (GEN) Oct. 2, 1934 Hull, J. FACTS: Ong Guan Can, Jr. executed on behalf of the Ong Guan Can, the deed covering the sale of a rice-mill and camarin, in favor of buyers who relied upon a 1928 power of attorney attached to the deed, but which turned out was not a general power of attorney but a limited one and [did] not give the express power to alienate the properties in question. The creditors of Ong Guan Can sought to have the sale declared void. But the buyers, defendants Juan Tong and Pua Giok Eng claimed that they were the owners and lessees of the property. Defendants claimed that the defect in the sons authority to sell on behalf of the father was cured by an earlier 1920 general power of attorney given to the same agent [son] by the father. The CFI of Capiz held that the deed was invalid and that the property was subject to the execution which has been levied on the properties by the judgment creditor of the owner. ISSUE: WON the deed of sale was invalid HELD: YES. The sale is void. The making and accepting of a new power of attorney, whether it enlarges or decreases the power of the agent under a prior power of attorney, must be held to supplant and revoke the latter when the two are inconsistent. If the new appointment with limited powers does not revoke the general power of attorney, the execution of the second power of attorney would be a mere futile gesture.
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Dela Pena v. Hidalgo (ANGELA) (This case is supra and rather complicated so Ill just include the relevant details) The CASE was instituted by the heirs of Jose Gomiz y Dela Pea to recover sums of money from Federico Hidalgo which he allegedly owes the estate of Jose representing unremitted accounts during the administration of Federico of the properties of Jose Gomiz y Dela Pea. FACTS In 1887, Federico Hidalgo took charge of administration of Jose Gomiz y Dela Peas properties by virtue of a power of attorney executed by the latter in favor of 4 agents (Federico included) before he embarked for Spain. After several years of agency, Federico Hidalgo wrote to Jose Gomiz requesting him to designate a person to substitute him in the position because one of those appointed in the power of attorney had died and the others did not wish to take charge of the administration of Gomiz properties. Gomiz did not answer Federicos letters nor did he approve or object to Federicos accounts nor did he appoint or designate another person to substitute Federico. In 1894, Federico was obliged to embark for Spain for health reasons. On preparing for his departure, he rendered the accounts of the administration. Federico also informed Gomiz of his intended departure from the Philippines and of his turning over the administration to his cousin Antonio Hidalgo, upon whom he conferred a GPA. But because he deemed such GPA to be insufficient, he also asked Gomiz to send a new SPA in favor or Antonio. When Antonio died, Francisco Hidalgo took Antonios place. Gomiz died without having said anything regarding the substitution of agents ISSUE: WON there was valid renunciation of the agency. HELD: YES. Under the circumstances of the case, it is reasonable to conclude that the agency was duly terminated. Although Federico did not use the words renouncing the agency, such words were undoubtedly understood and accepted by the principal because if the lapse of nearly 9 years up to time of principals death, he never
Art. 1928. The agent may withdraw from the agency by giving due notice to the principal. If the latter should suffer any damage by reason of the withdrawal, the agent must indemnify him therefor, unless the agent should base his withdrawal upon the impossibility of continuing the performance of the agency without grave detriment to himself. (1736a) Art. 1929. The agent, even if he should withdraw from the agency for a valid reason, must continue to act until the principal has had reasonable opportunity to take the necessary steps to meet the situation. Right of the agent to withdraw: Just as the principal may revoke generally the agency at will, the agent may likewise renounce or withdraw from the agency at any time, without the consent of the principal, even in violation of the latters contractual rights; subject to liability for breach of contract or for tort. 1. Without just cause The reason for the indemnity imposed by law is that the agent fails in his obligation and as such, he answers for losses and damages occasioned by the nonfulfillment. With just cause If the agent withdraws from the agency for a valid reason, as when the withdrawal is based on the impossibility of continuing with the agency without grave detriment to himself, or is due to a fortuitous event, the agent cannot be held liable.
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Obligation of agent to continue to act after withdrawal: The purpose of the law is to prevent damage or prejudice to the principal. The law reconciles the interests of the agent with those of the principal, and if permits the withdrawal of the agent, it is on the condition that no damage results to the principal, and if the agent desires to be relieved of the obligation of making reparation when he withdraws for a just cause, he must continue to act so that no injury may be caused to the principal.
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Rallos v. Felix Go Chan, supra Blondeau v. Nano (BAMBI) Facts: An action was brought in the Court of First Instance of Manila to foreclose a mortgage alleged to have been made by the defendants Agustin Nano and Jose Vallejo to the plaintiff Angela Blondeau, bearing date November 5, 1931, to secure the payment of the sum of P12,000, and covering property situated on Calle Georgia, Manila. Nano, purporting to represent both defendants, after filing an answer, was found in contempt of court. The other defendant Vallejos defense was that his signature to the mortgage was a forgery. Following the trial, judgment was rendered against Nano but not against Vallejo. Hence, this appeal. Issue: WoN there was a valid mortgage contract executed in favor of Blondeau. YES. The purported signature of the defendant Vallejo to the mortgage was not a forgery. It needs to be recalled that the mortgage was executed in the home of the plaintiffs, and that of those present, the principal plaintiff Angela Blondeau and her husband Fernando de la Cantera, together with the instrumental witness Pedro Jimenez Zoboli, identified Vallejo as the person who signed the document. Upon its face, the mortgage appears to be regular and to have been duly executed and accepted by Vallejo on November 5, 1931. Moreover, Agustin Nano had possession of Jose Vallejo's title papers. Without those title papers handed over to Nano with the acquiescence of Vallejo, a fraud could not have been perpetrated. When Fernando de la Cantera, a lawyer and the husband of Blondeau, the principal plaintiff, searched the registration records, he found them in due form, including the power of attorney of Vallejo, in favor of Nano. If this had not been so and if thereafter the proper notation of the encumbrance could not
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Manotok Bros. v. CA Manotok Bros. (Petitioner) owned a parcel of land and building which were formerly leased by City of Manila and used by Claro M. Recto High School. By means of a letter, Manotok authorized Salvador Saligumba (respondent) to negotiate with the City of Manila for the sale of the property for not less than 425K with 5% commission in the event that the sale is consummated. This authority was extended for 120 days and another 120 days. Another letter signed by the President of the Corp. authorized respondent to finalize and consummate the sale for not less than 410K and extended the authority for another 180 days. The City of Manila passed an ordinance appropriating for the payment of the 410K before the expiration of the authority of the respondent. However, the City Mayor signed it after 3 days of expiration of the authority. The sale was consummated but respondent never received any commission. This was because the petitioner refused to pay him as they did not recognize the respondents role as agent in the transaction. Respondent filed a case against the petitioner for the negotiation. On answer, petitioner insisted that the respondent is not entitled because: (1) the sale was not consummated within the period of his
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