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Philpotts vs. Philippine Manufacturing Co. and Berry W.G. Philpotts (Petitioner) , a stockholder in Philippine Manufacturing Company sought to compel respondents to permit plaintiff, a person or by some authorized agent or attorney to inspect and examine the records of the business transacted by said company since January 1, 1918. Respondent corporation or any of its officials has refused to allow the petitioner himself to examine anything relating to the affairs of the company, and the petitioner prays for an order commanding respondents to place records of all business transactions of the company, during a specific period, at the disposal of the plaintiff or his duly authorized agent or attorney. Petitioner desires to exercise said right through agent or attorney. Petition is filed originally in the Supreme Court under authority of Section 515 of Code of Civil Procedure, which gives SC concurrent jurisdiction with then Court of First Instance in cases where any corporation or person unlawfully excludes the plaintiff from use and enjoyment and some right he is entitled. ISSUE: Whether the right which the law concedes to a stockholder to inspect the records can be exercised by a proper agent or attorney of the stockholder as well as by stockholder in person HELD: Yes. Right of inspection of records can be exercised by proper agent or attorney of the stockholder as well as by stockholder in person. The right of inspection / examination into corporate affairs given to a stockholder in section 51 of the Corporation Law which states: “The records of all business transactions of the corporation and the minutes of any meeting shall HELD: NO, Parsons was not an agent. In order to classify a contract, due regard must be given to the essential clauses. In this case, there was an obligation on Quiroga’s part to supply beds while an obligations on Parson’s part to pay the price. These are essential features of a contract of purchase and sale. None of the clauses conveys the idea of an agency where an agent received the thing to sell it and be open to the inspection of any director, member, or stockholder of the corporation at reasonable hour” can be exercised either by himself or by any duly authorized representative or attorney in fact, and either with or without the attendance of the stockholder. This is in conformity with the general rule that what a man may do in person he may do through another. Quiroga v. Parsons FACTS: Quiroga and Parsons entered into a contract for the exclusive sale of Quiroga beds in the Visayan Islands. They agreed on the following terms: a) Quiroga shall furnish the beds and shall give a 25% discount on the invoiced prices as commission sales and Parsons shall order by the dozen; b) Payment shall be made within 60 days from date of shipment; c) Transportation and shipment expenses shall be borne by Quiroga while freight, insurance, and cost of unloading by Parsons; d) If before an invoice falls due, Quiroga should request payment, payment made shall be prompt payment and a deduction of 2% shall be given; same discount if payment is in cash; e) Notice from Quiroga shall be given at least 15 days before any change in price; f) Parsons binds himself not to sell any other kind of bed; and g) Contract is for an unlimited period. Parsons violated some of the conditions such as not to sell the beds at higher prices, pay for the advertisement expenses, and to order beds by the dozen. Quiroga alleged that Parsons was his agent and that the obligations are implied in a commercial agency contract. ISSUE: w/n Parsons, by reason of the contract, was a purchaser or an agent of Quiroga for the sale of the latter’s beds.
(AGENCY – ATTY. OBIETA)
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does not pay the price but delivers to the principal the price he obtains from the sale to a third person, and if he does not sell it, he returns it. The word ‘agency’ used in the contract only expresses that Parsons was the only one who could sell the petitioner’s beds in the Visayan Islands. A contract is what the law defines it to be and not what the parties call it. Shell Co. v. Firemen’s Insurance Facts: This is an action for recovery of sum of money, based on alleged negligence of the defendants A car was brought to a Shell gasoline station owned by dela Fuente for washing and greasing. The car was placed on a hydraulic lifter for greasing. As some parts of the car couldn’t be reached by the greaseman, the lifter was lowered. Unfortunately, for unknown reasons (probably due to mechanical failure or human error), while the lifter was being lowered, the car swung and fell from the platform. Said car was insured against loss or damage by Firemen's Insurance Company of Newark, New Jersey, and Commercial Casualty Insurance Company jointly for the sum of P10,000 The insurance companies after paying the sum of P1,651.38 for the damage and charging the balance of P100.00 to Salvador Sison in accordance with the terms of the insurance contract, have filed this action together with said Salvador Sison for the recovery of the total amount of the damage from the defendants on the ground of negligence Issue: WON dela Fuente is merely an agent of Shell Co. Held: D: Yes De la Fuente was the operator of the station "by grace" of the Defendant Company which could and did remove him as it pleased; that all the equipments needed to operate the station was owned by the Defendant Company which took charge of their proper care and maintenance, despite the fact that they were loaned to him; that the Defendant company did not leave the fixing of price for gasoline to De la Fuente; That the service station belonged to the company and bore its tradename and the operator sold only the products of the company; that the equipment used by the operator belonged to the company and were just loaned to the operator and the company took charge of their repair and maintenance As the act of the agent or his employees acting within the scope of his authority is the act of the principal, the breach of the undertaking by the agent is one for which the principal is answerable The latter was negligent and the company must answer for the negligent act of its mechanic which was the cause of the fall of the car from the hydraulic lifter.
Dela Cruz v Northern Theatrical Enterprises, Inc., et al Northern Theatrical Enterprises Inc. operated a movie house in Laoag, Ilocos Norte. Domingo Dela Cruz was one of their security guards. He carried a revolver. One day, a Benjamin Martin wanted to enter without a ticket but dela Cruz refused him entrance. Infuriated, Martin attacked him with a bolo and in order to save his life, dela Cruz shot and killed Martin. Martin, thereafter, was charged with homicide which, after re-investigation, was dismissed. A few years later, dela Cruz again figured in a homicide case related to his work as security guard for the theater. He was acquitted for the second charge. In both instances, dela Cruz employed a lawyer. He thereafter demanded reimbursement for his litigation expenses but was refused by the theater. After which, he filed an action for reimbursement plus damages.
(AGENCY – ATTY. OBIETA)
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Northern Theater moved for the dismissal of the complaint. The Court found for Northern Theater and dismissed the complaint saying that dela Cruz had no cause of action. Dela Cruz filed present appeal (for the reason that only questions of law are involved). Held: Judgment affirmed. Agency Doctrine CFI was correct in rejecting the theory of dela Cruz that he was an agent of the defendants and that as such agent he was entitled to reimbursement for the expenses incurred by him in connection with the agency. The relationship between the theater and the plaintiff was not that of principal and agent because the principle of representation was not involved. He was not employed to represent defendant corporation in its dealings with third parties. He was merely an employee hired to guard the cinema. Issue is primarily one of employer – employee. Whether an employee who in line with the performance of his duty incur expenses caused not directly by his employer or fellow employees but by a third party or stranger, may recover against his employer. In this case, there’s no legal obligation on the part of the employer, it might yet be regarded as a moral obligation. Since employer not legally obligated to give legal assistance, plaintiff naturally cannot recover the amount from defendant. SC also says that the damage incurred did not flow from the performance of his duties but only indirectly. Filing of the criminal charges was the efficient, intervening cause. As such, plaintiff cannot fix civil responsibility to the defendant. GUARDEX ENTERPRISES V. NLRC Facts: A claim for alleged unpaid commissions of an agent is what is basically involved in the action at bar. The two parties in this case are: Marcelina A. Escandor (engaged in the manufacture and sale of fire-fighting equipment and the building or fabrication of fire trucks under Guardex Enterprises) and Jumbee Orbeta (a “freelance” salesman). It appears that Orbeta somehow learned that Escandor had offered to fabricate a fire truck for Rubberworld (Phil) Inc. He wrote to Escandor inquiring about the amount of commission for the sale of a fire truck. Escandor wrote back on the same day to advise that it was P15,000 per unit. Four days later, Orbeta offered to “follow up” Escandor’s pending proposal to sell a fire truck to Rubberworld, and asked for P250 as representation expenses. Escandor agreed and gave him the money. When no word was received by Escandor from Orbeta after 3 days, she herself inquired in writing from Rubberworld about her offer of sale of a fire truck. After 7 months, Escandor finally concluded a contract with Rubberworld for the latter’s purchase of a fire truck. At this point, Orbeta suddenly reappeared and asked for his commission for the sale of the fire truck to Rubberworld. Escandor refused, saying that he had nothing to do with the offer, negotiation and consummation of the sale. Issue: Whether or not Orbeta (acting as an agent) is entitled to commission as regards the sale of a fire truck to Rubberworld? Held: No. He is not entitled to any commission. Ratio: Even finding that under these circumstances, an agency had indeed been constituted will not save the day for Orbeta, because nothing in the record tends to prove that he succeeded in carrying out its terms or ever as much as attempted to do so. The evidence in fact clearly indicates otherwise. The terms of Escandor’s letter – assuming that it was indeed an “authority to sell,” as Orbeta insists – are to the effect that entitlement to the P15,000 commission is contingent on the purchase by a customer of a fire truck, the implicit condition being that the agent would earn the commission if he was instrumental in bringing the sale about. Orbeta certainly had nothing to do with the sale of the fire truck, and is not therefore entitled to any commission at all.
(AGENCY – ATTY. OBIETA)
2D 2013 CLASS DIGEST
Furthermore, even if Orbeta is considered to have been Escandor’s agent for the time he was supposed to “follow up” the offer to sell, such agency would have been deemed revoked upon the resumption of direct negotiations between Escandor and Rubberworld, Orbeta having in the meantime abandoned all efforts (if indeed any were exerted) to secure the deal in Escandor’s behalf. between the parties was unenforceable under the Statute of Frauds. Absent the required memorandum or any written document connecting Luz with the subject receipts or authorizing Deganos to act on her behalf, the alleged agreement between the Bordadors and Luz was unenforceable.
The Bordadors elevated the case to the CA which affirmed said judgment, hence the instant petition.
Whether Luz is liable to the Bordadors for the latter's claim for money and damages despite the fact that Luz did not sign any of the subject receipts or authorized Deganos to receive the items of jewelry on her behalf
No, Luz is not liable to the Bordadors.
THE BASIS FOR AGENCY IS REPRESENTATION.
The basis for agency is representation. Here, there is no showing that Luz consented to the acts of Deganos or authorized him to act on her behalf, much less with respect to the particular transactions involved. The Bordadors' attempt to foist liability on Luz through the supposed agency relation with Deganos is groundless and illadvised.
A PERSON DEALING WITH AN AGENT IS PUT UPON INQUIRY AND MUST DISCOVER UPON HIS PERIL THE AUTHORITY OF THE AGENT.
Besides, it was grossly and inexcusably negligent of the Bordadors to entrust to Deganos, not once or twice but on at least 6 occasions as evidenced by 6 receipts, several pieces of jewelry of substantial value without requiring a written authorization from his alleged principal. A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent.
HAHN VS. CA and BAYERISCHE MOTOREN WERKE AKTIENGESELLSCHAFT (BMW) 266 SCRA 537 Facts Alfred Hahn is a Filipino citizen doing business under the name and style of “Hahn-Manila.” BMW is a non resident foreign corporation existing under the laws of Germany.
BORDADOR vs. LUZ
Petitioners Bordador spouses were engaged in the business of purchase and sale of jewelry, while respondent Brigida Luz was their regular customer. Respondent Narciso Deganos, Luz's brother, received several pieces of jewelry from the Bordadors amounting to P382,816.00, which items were indicated in 17 receipts covering the same--11 of the receipts stated that they were received by Deganos for a certain Evelyn Aquino, while the remaining 6 indicated that they were received by Deganos for Luz.
Deganos was supposed to sell the items at a profit and remit the proceeds and return the unsold items to the Bordadors. Deganos remitted only P53,207.00. He neither paid the balance of the sales proceeds, nor did he return any unsold item to the Bordadors, which led them to file an action for recovery of a sum of money and damages against Deganos and Luz with the RTC. The Bordadors claimed that Deganos acted as the agent of Luz when he received the items of jewelry, and because he failed to pay for the same, Luz, as principal, became solidarily liable with him.
Deganos asserted that it was he alone who was involved in the transaction with the Bordadors; that he neither acted as agent for nor was he authorized to act as an agent by Luz, notwithstanding the fact that 6 of the receipts indicated that the items were received by him for Luz. He added that he never delivered any of the items to Luz. Luz corroborated the claims of Deganos.
The RTC found that only Deganos was liable to the Bordados. It further found that it was petitioner Lydia Bordador who indicated in the receipts that the items were received by Deganos for Evelyn Aquino and for Luz. It said that it was "persuaded that Brigida D. Luz was behind Deganos," but because there was no memorandum to this effect, the agreement
(AGENCY – ATTY. OBIETA)
Hahn was informed that his exclusive dealership was in danger of being terminated due to deteriorating services and sales. He then filed for a complaint of specific performance and damages against BMW to compel it to continue with the exclusive dealership. OBIETA)
. including. BMW on the other hand filed for a motion to dismiss. An agent receives a commission upon the successful conclusion of a sale. On the other hand. This arrangement shows an agency. and reconfirmed the orders by signing and returning to Hahn the acceptance sheets. DE LA PENA did not answer the letter –
(AGENCY – ATTY. a broker earns his pay merely by bringing the buyer and the seller together. DE LA PENA V. Payment was made by the buyer directly to BMW. Title to cars purchased passed directly to the buyer and Hahn never paid for the purchase price of BMW cars sold in the Philippines. Upon confirmation in writing that the vehicles had been registered in the Philippines and serviced by him. Alfred Hahn was an agent of BMW and consequently. Before DE LA PENA went to Spain. notified Hahn of the scheduled production month for the orders. he executed a power of attorney in favor of FEDERICO and 3 other people. HIDALGO FACTS: 1887-1893 (1st period) FEDERICO 1893-1902 (2nd period) ANTONIO 1902-1904 (3rd period) FRANCISCO
Ratio The phrase "doing business" includes "appointing representatives or distributors in the Philippines". for which he received reimbursement from BMW. Hahn performed after-sale services. Their task is to represent him and administer various properties he owned in Manila. (Foreign Investments Act of 1991) The question is whether petitioner Alfred Hahn is the agent or distributor in the Philippines of private respondent BMW. If he is. BMW may be considered doing business in the Philippines and the trial court acquired jurisdiction over it by virtue of the service of summons on the Department of Trade and Industry. All orders were on invoices and forms of BMW. In February of 1993. FEDERICO wrote a letter to DE LA PENA. even if no sale is eventually made. It contains a request that DE LA PENA assign a person who might substitute FEDERICO in the event that he leaves the Philippines because one of the agents died and the other 2 are unwilling to take charge.2D 2013 CLASS DIGEST
In March of 1967 Hahn executed in favor of BMW a Deed of Assignment. Upon receipt of the orders. FEDERICO took charge in Nov. Hahn claimed he took orders for BMW cars and transmitted them to BMW. 1887. After a few years. respondent company was doing business in the Philippines. contending that the court did not acquire jurisdiction over it because it was a foreign corporation and was not doing business in the Philippines. warranty services. It further claimed that the execution of the Deed of Assignment was an isolated transaction and that Hahn was not its agent and was merely a middleman transacting business for his own name and for his own account. Hahn claimed that the termination of his exclusive dealership would be a breach of the deed of assignment. BMW fixed the down payment and pricing charges. Hahn received an additional 3% of the full purchase price. Hahn was credited with a commission equal to 14% of the purchase price upon the invoicing of a vehicle order by BMW. Issue Whether respondent company was doing business in the Philippines? Whether Alfred Hahn was an agent of BMW? Decision Yes.
together with her siblings. DE LA PENA must send ANTONIO a new power of attorney). and that if Dominga et.2D 2013 CLASS DIGEST
there was neither approval nor objection on the accounts and no appointment of another person who might substitute FEDERICO. And as stated in the case. that the representative of the CONDES. of the ALTERAS signed a document. a new agreement shall be made between the parties and in no case title and ownership shall be vested in the hand of the ALTERAS. it was pointed out that the appointment made by FEDERICO was not based on the power of attorney of DE LA PENA. Thus. The COURT ruled that the power of attorney given by DE LA PENA to FEDERICO did not include a power to appoint a substitute. al. DE LA PENA was duly informed of this but nevertheless kept his silence on the matter. repurchased the subject lot. of his principal. DE LA PENA alleges that FEDERICO has only remitted 1. Because of health reasons. Paciente Cordero. 1982) FACTS: 7 April 1938. OBIETA)
. DOCTRINE: The implied agency is founded on the lack of contradiction or opposition. Before he departed.. In substance. DE LA PENA files in court for the collection of revenue from his accounts which was handled by FEDERICO. son-in-law. Furthermore. Dominga Conde. to Casimira Pasagui married to Pio Altera (ALTERAS) with a right of repurchase. sold a parcel of land located in Burauen Leyte. within 10 years from said date. ISSUE: Whether there was a valid agency in the case of ANTONIO (2nd period) HELD: There was an implied agency in the case of ANTONIO. is thenceforward released and freed from the results and consequences of the management of the person who substituted him with the consent. DE LA PENA seeks to hold FEDERICO liable for the administration from the period of 1887 until 1904. Eusebio Amarille. The agent and administrator who was obliged to leave his charge for a legitimate cause and who duly informed his principal. that Alteras and Pio Cordero received the payment for the repurchase. FEDERICO went to Spain. he sent another letter to DE LA PENA a summary of accounts and informing that he will be leaving the Philippines and that he turned over the administration to ANTONIO (though FEDERICO stated that if DE LA PENA is not happy with this. RIVERA ( December 15. His reason for leaving the country is legitimate. The “Pacto de retro sale” provided that if the end of 10 years the said land is not repurchased. which constitutes simultaneous agreement on the part of the presumed principal to the execution of the contract. The appointment was grounded on a new power of attorney FEDERICO himself executed in favor of ANTONIO. FEDERICO asserts that he cannot be liable for the period after he renounced his agency. Furthermore. the said document provides that the original document was lost in spite of diligent efforts to locate the same. it must follow that the liability of FEDERICO only extends up to the point before his renunciation of the agency (1st period). There was a valid renunciation in the case of FEDERICO. SIDE NOTE ON POWER OF ATTORNEY: It was also argued by DE LA PENA that there was no authority on the part of FEDERICO to appoint a substitute.2k and still owes him roughly 72k. will be disturbed by other persons. he gave notice to DE LA PENA about his situation in which the latter failed to give his objection. CONDE v. On a later date. Altera and Pio will defend in behalf of
(AGENCY – ATTY. Being a valid agency on the part of ANTONIO and a valid renunciation on the party of FEDERICO. there was no violation incurred by FEDERICO. even tacit though it be. DE LA PENA created an implied agency in favor of ANTONIO because of his silence on the matter for a number of years. Nevertheless. Furthermore FEDERICO argues that his renunciation and appointment of a substitute was legal for there was no objection on the part of DE LA PENA.
contended that Pio was not their agent and Pio signed because he has no objection to the repurchase.00. Eventually. The Alteras did not repudiate the deed that Pio Cordero had signed. Furthermore. Lagdameo. acted in representation of the ALTERAS. After 24 years. If the contract is plain and unequivocal in its terms he is ordinarily bound thereby. If. Alteras must be held bound by the clear terms of the Memorandum of Repurchase. CA FACTS The Solomon spouses were the registered owners of a lot located in Davao.) PNB VS.
(AGENCY – ATTY.26 payable in eight equal annual amortizations. Perez as sole heir of the deceased spouses. Upon suggestion of Lagdameo. Al. the contract shall be automatically rescinded and the Bank shall be free to take possession of the land and sell it to a third person. They bought the disputed property despite the notice of the condition in the title that the property was subject to repurchase. Dominga contended that Pio signed the Memorandum in representation of the Pio Aletra. (The court also held that the ALTERAS were guilty of laches. the last price amounting to P8000. informed Perez that as soon as he pays the account due of P535. succeeded into the possession of the land in question. and a Certificate of Sale was executed in favor of the Bank. He also conveyed the comment of the head office as regards his "offer to purchase" which they found too low compared to the market value of the property. Acting on Perez’ notification of such court order. Perez was judicially declared heir. OBIETA)
. after the execution of the Certificate of Sale. Dominga Conde filed with the CFI of Leyte a civil case for quieting of title against the ALTERAS and the spouses CONDE. Solomon spouses defaulted on the seventh and eighth amortizations. this petition. Consequently. Hence. or their failure to repudiate the agency. created a "Promesa de Venta" whereby the Bank bound itself to sell to the Solomon spouses for P802. 7 years after default. represented by its manager. who was very ill on that occasion. Thus. For failure to pay the loan. they shall cause the release of the mortgage. both spouses died.45. The next day. Cortes. The CFI dismissed the complaint which was affirmed by the CA. neither did the Alteras repudiate the deed that Pio executed. Maceda.. it was stipulated that if the Solomon spouses should fail to pay any of the amortizations. the Solomon spouses and the Bank. in signing the memorandum.. On a relevant date. Possession of the property was likewise turned over to said spouses upon the execution of the contract. Pio Altera sold the disputed lo to the spouses Ramon Conde and Catalina Conde (their relationship to petitioner was not established). the mortgage was foreclosed. therefore he was asked to increase the price. They. HELD: YES! There was an impled agency. Perez then made several offers to the bank. Perez offered to pay the last two amortizations plus interest. because the same was already repurchased by them. as alleged. an implied agency must be held to have been created from their silence or lack of action. Alteras. all these offers were turned down by the Bank. To be noted is the fact that the Alteras did not sign the deed and only Pio was the signatory to the deed. In 1932. However. bank manager. Dominga never exerted any effort to procure the signature of Pio Altera after he had recovered from his illness.2D 2013 CLASS DIGEST
Dominga el. Perez filed an action in Court for a declaration of heirship. ISSUE: Whether Pio Cordero. the Solomon spouses mortgaged the land in favor of Philippine National Bank to secure a loan of P500. on the ground that the "Promesa de Venta" was executed by the Bank in favor of the Solomon spouses. the court also ruled that the spouses Conde were not purchasers in good faith. the property was sold at public auction. for 24 years. with the request that a Deed of Sale be executed in his favour but was rejected by the bank manager. Further. on the other hand. slept on their right to institute an action for quieting of title against petitioner.00.
unknown to Rallos. Thus. the spouses were allowed to remain in possession of the property. Hence. when Perez offered to pay the balance with the request that a Deed of Sale be executed in his favor. Rallos v Yangco Facts:
Through a letter. prior to the last delivery of tobacco. Perez was led to believe that he would be allowed to redeem the property.
Rallos accepted the invitation and transacted with Yangco through
Apparently. last transaction being the supply of tobacco. Perez appealed to the Court of Appeals which reversed the trial court's decision.
Yes.500. HELD: No. Having given special notice to Rallos
(AGENCY – ATTY. Perez filed a complaint.
Collantes. Failing to match the offer. Perez justifiably and reasonably relied upon the assurance of the bank managers that he would be allowed to pay the remaining obligation of his deceased parent. terms and conditions of which were also included in
the letter. (they) shall cause the release of the mortgage. issued a statement of account on the loan and informed Perez that "as soon as (he) could cause full payment of the above account. but on the ground that it was in favor of the Solomon spouses. the cost of
which that belonged to Rallos was misappropriated by Collantes." Relying on this commitment. Yangco invited Rallos in a consignment arrangement
for the business of buying and selling of leaf tobacco and other
native products. The Bank and De Castro spouses moved for reconsideration but were denied." In other words. upon payment of the last two installments and with interest. the petitions for review. upon whom Yangco conferred a public power of attorney to
perform on Yangco's behalf. Firstly the clear intention of the Bank was to allow the Solomon spouses to reacquire ownership of the property. his offer was rejected by Lagdameo not because the "Promesa de Venta " had been automatically rescinded and right to redeem was lost. that the Bank be ordered to accept from Perez payment of the outstanding balance and to deliver the property to him. the bank itself did not strictly adhering to it. is not well taken for well settled is the rule that if a private corporation intentionally or negligently clothes its officers or agents with apparent power to perform acts for it. Yangco was liable. Yangco introduced to Rallos the former's agent.
In the same letter. ISSUE: 1. in good faith and without knowledge of the termination of
the agency agreement. the "Promesa de Venta" was primarily created to favor the Solomon spouses giving them 8 years to reacquire their land. Secondly.00. on the other hand. praying among other things. Whether the CA erred in holding petitioners in estoppel The "Promesa de Venta" was not essentially a contract to sell real estate on installments but was more of a contract of redemption. The Bank's argument that it is not bound by the acts of its managers. the Bank did not register the same until 24 years later nor did it disturb Perez's possession of the property. Yangco had already
terminated his agency relation with Collantes. can recover from Yangco the amount
misappropriated by Collantes. all acts necessary for carrying out the
business. The court dismissed Perez' complaint. Maceda. Perez was allowed to redeem or purchase the said property. During those years.
W/N Rallos. OBIETA)
. Perez lost the land to the De Castro spouses and the Bank issued a new TCT under their name. Thirdly. the corporation will be estopped to deny that such apparent authority is real as to innocent third persons dealing in good faith with such officers or agents.2D 2013 CLASS DIGEST
De Castro spouses offered to buy the property for P13. Perez made several offers as to the amount but Maceda still asked for an increase in the "price. The automatic rescission clause contained in it should not be controlling because based on the facts.
for the purpose of carrying on that business. his principal. which the law expressly
(AGENCY – ATTY. was introduced in evidence. Held: Flores is an agent of Washington Café Ratio: In the absence of proof of the contrary we think that this evidence is sufficient to sustain a finding that Flores was the agent of the defendant in the management of the bar of the Washington Cafe with authority to bind the defendant. and at the foot of this inventory the word "received" (recibo) followed by the name "Ricardo Flores. known as the "Washington Cafe. it was then the duty of Yangco to give due and
timely notice to Rallos regarding the termination of the agency. The contract introduced in evidence sufficiently establishes the fact that the defendant was the owner of business and of the bar. H. he shipped the said goods to the defendants at the Washington Cafe. partners doing business under the firm name of Macke. said business being that of a hotel with a bar and restaurant. Macke and W. the defendant obligating himself not to sublet or subrent the building or the business without the consent of the said Galmes. from which it appears that one Galmes. Before instituting this action they made demand for the payment thereof. that the defendant has only paid on account of said accounts the sum of P174. they sold to the defendant and delivered at his place of business. This contract was signed by the defendant and the name of Ricardo Flores appears thereon as a witness. apparently in charge of the business and claiming to be the business manager of the defendant. 1904.2D 2013 CLASS DIGEST
Collantes was his (Yangco's) agent and having given him invitation to
deal with such agent." subrented the building wherein the business was conducted. and holds him out to the public as such.
Failing to do so. A written contract dated May 25. B. Flores." with the words "managing agent" Issue: W/n Flores was an agent of Washington Café. One who clothes another apparent authority as his agent. H. Flores was apparently in charge of the business. Yangco will be held liable to third parties acting
in good faith and properly relying upon such agency. Chandler. 1905. the former owner of the business now know as the "Washington Cafe. OBIETA)
. performing the duties usually entrusted to managing agent. B." various bills of goods amounting to P351. one of the plaintiffs. Macke v Camps Facts: The plaintiffs in this action. to the prejudice of innocent third parties dealing with such person in good faith and in the following preassumptions or deductions. and the title of "managing agent" attached to the signature of Flores which appears on that contract. who represented himself to be agent of the defendant. in the absence of the defendant in the provinces. together with the fact that. Macke. allege that during the months of February and March. at the time the purchases in question were made. that Flores later acknowledged the receipt of said goods and made various payments. and that he would have to wait the return of his principal. and that defendant had failed and refused to pay the said balance. for the payment of the goods mentioned in the complaint. and attached thereto is an inventory of the furniture and fittings which also is signed by the defendant with the word "sublessee" (subarrendatario) below the name. testified that on the order of one Ricardo Flores. leave little room for doubt that he was there as authorized agent of the defendant.50. can not be permitted to deny the authority of such person to act as his agent. Flores informed him that he did not have the necessary funds on hand. H. to the defendant for a period of one year. Chandler & Company.
Issue: Whether or not the conveyance between Nicolasa and Pedro Rabot was a valid. through a letter. county. institute and file an ejectment
(AGENCY – ATTY. it is insufficient. the principal cannot question the validity of his act. and he acts within those limits. Jimenez vs Rabot Facts: Gregorio was in need of money to pay off his debts. and if the character and extent of the power is so far defined as to leave no doubt as to the limits within which the agent is authorized to act. comes to make a contract to sell. against Cosmic Lumber)
FACTS: Cosmic Lumber Corporation executed a SPA to Villamil-Estrada as attorney in fact. to sell one of his two parcels of land so as to come up with cash. It is unquestionable that the deed which Nicolasa executed contains a proper description of the property which she purported to convey There is ample authority to the effect that a person may by a general power of attorney an agent to sell "all" the land possessed by the principal. there must be a description of the property which is the subject of the sale or conveyance. Ratio: The purpose in giving a power of attorney is to substitute the mind and hand of the agent for the mind and hand of the principal. This is necessary of course to define the object of the contract The general rule here applicable is that the description must be sufficiently definite to identify the land either from the recitals of the contract or deed or from external facts referred to in the document. to wit: (1) to initiate. or state. Nicolasa. Gregorio now sues for the land and learns later on that ownership was already with Rabot. When Gregorio asked for the parcel of land.2D 2013 CLASS DIGEST
directs to be made from particular facts. applicable to the present case. thereby enabling one to determine the identity of the land and if the description is uncertain on its face or is shown to be applicable with equal plausibility to more than one tract. or all that he possesses in a particular city. The question to be answered always. the authority of an agent must be presumed to include all the necessary and usual means of carrying his agency into effect. We can see no reason why the performance of an act within the scope of this authority should not bind the plaintiff to the same extent as if he had given the agent authority to sell "any or all" and she had conveyed only one. It is not necessary that the particular act to be accomplished should be predestinated by the language of the power. in our opinion. are deemed conclusive and unless the contrary appears. not to the sufficiency of the contract or conveyance. He instructed his sister. The principle embodied in these decisions is not.
COSMIC LUMBER vs. In the present case the agent was given the power to sell either of the parcels of land belonging to the plaintiff. Nicolasa refused. after the power has been exercised. the answer must be obviously in the affirmative. When the owner. There was proof of payment between Rabot and Nicolasa but there was no proof of the payment ever reaching Gregorio. Held: It was valid. is rather this: Was the act which the agent performed within the scope of his authority? In the case before us. following her brother's request. OBIETA)
. if the question is asked whether the act performed by Nicolasa Jimenez was within the scope of the authority which had been conferred upon her. Judgement of CA is reversed. or his agent. sold one of his parcels of land to Rabot for 500 pesos. which relates to the sufficiency of the authorization. or a conveyance to effect a transfer. COURT OF APPEALS (CA)
Petition for review on certiorari of Court of Appeals decision (CA decision: dismissed the case.
General Rule: principal is chargeable with and bound by the knowledge or notice to his agent (purpose: to protect those who exercise it in good faith)
HELD: petition granted. the authority of the latter should be in writing. Villamil-Estrada acted without or in obvious disregard of authority. whereby the defeated party is prevented from exhibiting fully his side of the case by deception practiced on him by his opponent) Villamil-Estrada deliberately concealed from her principal (Cosmic Lumber) that a compromise agreement had been forged with the end result of selling a portion of the property. without prejudice to the right of Cosmic Lumber to pursue a complaint against Perez for the recovery of the lot
(AGENCY – ATTY. Trial court had no jurisdiction to render judgment. Sale is ipso jure void and the judgment based thereon is also void. otherwise the sale is void. (3) Villamil-Estrada’s authority was limited. no such construction shall be given in the document. To wit. Price of Php. Cosmic Lumber is not in the position to question the compromise agreement in the action to revive the compromise agreement. (2) Villamil-Estrada’s authority was only to file an ejectment case. The express powers must be clear and unmistakable. Art. Villamil-Estrada’s acts constituted extrinsic fraud (any fraudulent act of the prevailing party in a litigation which is committed outside of the trial of the case. 1874 of Civil Code: when a sale of a piece of land or any interest thereon is through an agent.2D 2013 CLASS DIGEST
case against squatters/third persons on the Lot 9127 and 443.80/sqm is considerably less than its assessed value of Php. Perez filed a complaint to retrieve the judgment Cosmic Lumber asserts it did not know about the compromise agreement until summons for the revival of judgment was served. since it was never PRIVY to such agreement. When there is reasonable doubt. CA decision is nullified. The express mandate of the law requires of an appointed of an agency couched in general terms. (4) the consideration was never received by Cosmic Lumber. compromise agreement was coupled with an explicit limitation fixed by Cosmic Lumber that it should only be entered “so far as it shall protect the rights and interest of the corporation in the aforementioned lots”.80/sqm Recognizes ownership and possession of Perez over said lot Compromise Agreement was approved by trial court which became final without execution within the 5 yr period due to failure of petitioner to produce the owner’s duplicate copy. RATIO: SPA was explicit and exclusionary. in order for the company to take material possession of the entire lot and (2) to appear at the pre-trial conference and enter into any stipulation of facts and/or compromise agreement so far as to protect the rights and interest of the corporation.250/sqm and that Cosmic Lumber never received the proceeds of the sale. Compromise agreement is void. must include an express mention of a sale as a necessary ingredient. OBIETA)
. (5) Villamil-Estrada acted in bad faith and (6) disposal of corporate property indispensably requires a Board Resolution. Villamil-Estrada instituted an action for ejectment of private respondent Perez Villamil-Estrada entered into a Compromise Agreement which contained: Perez has been an occupant of a part of the lot for several years Pays Php 26.640 at Php. Cosmic Lumber sought annulment of the decision of the trial court to CA on the grounds of (1) Villamil-Estrada did not have authority.
000 (Mitra). PVDHC had allowed them to occupy certain units.
(AGENCY – ATTY. The plaintiff claims the sum of P9. the GSIS loans were disapproved. Elvira Raet filed an estafa case against Gatus. There is. The Housing and Land Use Arbiter ruled in favor of spouses. Niño Subdivision. it is contrary to common sense to expect the agent to communicate the facts to the principal) Villamil-Estrada’s acts were not for the principal. Later in an ejectment case by the PVDHC.000 (Raet) and 35. rather he was acting for his own benefit. and which Gatus issued receipts in her own name. From the evidence it appears undisputed that from February. to February. where the RTC acquitted her. the Office of the President sustained the HLU Arbiter. Yet. CA Facts In 1984 Spouses Raet and Spouses Mitra negotiated with Amparu Gatus concerning the possibility of buying his rights to certain units at the Las Villas de Sto.653 (Raet) and P27. the spouses were ordered to surrender possession of the units. equity and fair play. which was developed by Phil-Ville Development and Housing Corporation (PVDHC) primarily for parties qualified to obtain loans from the Government Service Insurance System (GSIS). They paid Gatus P40. Bulacan. However. therefore PVDHC told them to seek other sources of financing. the plaintiff rendered services to the deceased. therefore. In 1985. The basic tenets of an agency rest on justice. 1874 of the Civil Code requires for the validity of a sale involving land that the agent should have an authorization in writing. which would be credited to purchase units upon the loan’s approval. They paid P32. the spouses applied directly with PVDHC. the criminal case for estafa against her was dismissed because it was found that she never represented herself to be an agent of private respondent PVDHC. and the CA dismissed it. 1930.600 on two cause against the administrator.
RAET v.000 (Mitra) to PVDHC. Art. no basis in fact for the finding of the Housing and Land Use Arbiter that Gatus was the agent of private respondent PVDHC with respect to the transactions in question. Indeed. Aguna v Larena Facts This action is brought to recover the sum of P29. OBIETA)
. consisting in the collection of the rents due from the tenants occupying the deceased's houses in Manila and attending to the repair of said houses when necessary.2D 2013 CLASS DIGEST
Exception: conduct and dealings of agent are such as to raise a clear presumption that he will not communicate the facts in controversy (reason: when agent is committing fraud. while allowing them to stay in the units. the alleged value of the services rendered by him to said deceased as his agent in charge of the deceased's houses situated in Manila. and not as an agent of private respondent PVDHC. Issue: Whether Gatus was acting as an agent of PVDHC. Therefore the spouses filed a complaint for specific performances and damages against Gatus and PVDHC. Moreover. with the condition that their application would be processed upon the approval of the GSIS Loans using policy names of Casidsid (for Raet) and Lim (for Mitra). which Gatus did not possess. Petitioners knew from the beginning that Gatus was negotiating with them in her own behalf. Held: NO! Ratio Gatus was not the agent of private respondent PVDHC. In the meantime. since the spouses are not GSIS members. 1922. Agent is not permitted to pervert his authority to do such acts contrary to the interests of the principal.600. which the Board of Commissioners of Housing and Land Use Regulatory Board (HLURB) reversed.
and must abide by the consequences if the agent who indorses the same is without authority. The drug company saw fit to stand on the proposition that checks drawn in its favor were improperly and illegally cashed by the bank for Foerster’s personal account. Upon examination of the checks deposited by Foerster with PNB. the wife of U. an obligation to compensate them must necessarily arise. he did not receive any compensation. Foerster. Insular Drug Company VS National Bank Facts: U.92. however. The right of an agent to indorse commercial paper is a very responsible power and will not be lightly inferred. the Insular Drug Co. Any person taking checks made payable to a corporation.E. The bank is liable for the amount withdrawn by Foerster and will have to stand the loss occasioned by negligence of its agents. OBIETA)
. Issue W/n Agency is for compensation. When the Manila office of the drug company investigated and discovered the anomalies. de Foerster. it cannot be explained how the plaintiff could have rendered services as he did for eight years without receiving and claiming any compensation from the deceased. A salesman with authority to collect money belonging to his principal does not have the implied authority to indorse checks received in payment. This conclusion is correct. which was consequently withdrawn by the couple and a certain V. Held The service rendered by the agent was deemed to be gratuitous Ratio The plaintiff-appellant insists that. He also acted as a collector of the company. Foerster committed suicide. Although there was no evidence showing that the bank knew that Foerster was misappropriating the funds of his principal. Ratio: Yes on both issues.E.2D 2013 CLASS DIGEST
The evidence also shows that during the time the plaintiff rendered his services. It is. there were several indorsements guaranteed by the PNB manager Angel Padilla for Carmen E. claims that it never received the face value of the 132 checks in question covering a total of Php 18. mainly taking checks from the Iloilo branch of the drug company and depositing them to the company account with Philippine National Bank.
(AGENCY – ATTY. Bacaldo (stenographer of Foerster). Issue: Whether the bank is liable for the amount indorsed and withdrawn by Foerster using company checks even if the latter is an agent of the drug company. a fact admitted that during said period the plaintiff occupied a house belonging to the deceased without paying any rent at all. 285. Whether the bank is liable for the negligence of its agents when they allowed encashing of the checks without prior authority from the company. the services having been rendered. which can [be acted upon] only by agents does so at his peril. Foerster was formerly a salesman of the drug company for the island of Panay and Negros. The trial court held that the compensation for the services of the plaintiff was the gratuitous use and occupation of some of the houses of the deceased by the plaintiff and his family. if it were true that the plaintiff and the deceased had an understanding to the effect that the plaintiff was to receive compensation aside from the use and occupation of the houses of the deceased.
in his behalf and as counsel for the administratrix of Jose Ma. which was adjudicated by said court to Mauricio Cruz & Co. declaring valid and binding 1. be recorded in favor of Attorney Jose Evangelista. in favor of late Antero Soriano 2.000.000 each making a total of P12. Jose Evangelista and Jose Arroyo. as did also the Philippine National Bank. Inc. and by him. At the hearing on said claim. ISSUE: Whether the deeds of assignment in this case are null and void HELD: NO.000. Antero Soriano. 3514..966. which prayed that the amount of the judgment be turned over to it because the land taken over had been mortgaged to it. the assignment executed by the latter during his lifetime in favor of the defendant Mauricio Cruz & Co. Evangelista. Antero Soriano
(AGENCY – ATTY. Evangelista and Tan Toco FACTS: This is an appeal taken by Tan Toco of the decision of CFI of Iloilo. At the hearing of the instant case. the codefendants of Attorney Jose Evangelista agreed not to discuss the payment made to the latter by the clerk of the Court of First Instance of Iloilo of the amount of P6. the deed of assignment of the credit executed by Tan Toco's widow.Arroyo. the case being filed in the Court of First Instance of Iloilo. the claimants appeared. through her attorney-in-fact Tan Buntiong. Inc. assigned to Mauricio Cruz & Co. his wife or his clerk. is confined to the claim of Mauricio Cruz & Co. When the bank permitted the withdrawals without the authority from the drug company. Arroyo’s intestate estate. Then municipal treasurer of Iloilo deposited with the clerk of the Court of First Instance of Iloilo the amount of P6. In pursuance of the resolution of the court below ordering that the attorney's lien in the amount of 15 per cent of the judgment be recorded in favor of Attorney Jose Evangelista.40. filed a claim in the same case for professional services rendered by him. acting with the consent of the appellant widow. the bank made itself responsible to the drug company for the amounts represented by the checks. the judgment for P42.000 mentioned above in consideration of said lawyer's waiver of the remainder of the 15 per cent of said judgment amounting to P444.2D 2013 CLASS DIGEST
The fact that the bank acted in good faith does not relieve it from responsibility. OBIETA)
. Mauricio Cruz & Co.44 against the municipality of Iloilo was reduced to P30. The bank could tell by the checks themselves that the money belonged to the Insular Drug Company and not to Foerster. in his own behalf and as counsel for the administratrix of the deceased Jose Ma .000 on account of the judgment rendered in said civil case No.
The CFI of Iloilo rendered judgment in a case awarding Tan Toco the recovery of the value of a strip of land taken by the municipality of Iloilo from her. fixed at 15 per cent of the amount of the judgment. as alleged assignee of the rights of the late Attorney Antero Soriano by virtue of the said judgment in payment of professional services rendered by him to the said widow and her coheirs. the said clerk of court delivered on the same date to said Attorney Jose Evangelista the said amount of P6. the Philippine National Bank. and directed the municipality of Iloilo to file an action of interpleading against the adverse claimants. Atty. as was done. With these two payments of P6. Arroyo. which the court. in turn. then. in his own behalf and as counsel for the late Jose Ma.69. The bank could have relieved itself from the responsibility had it proven that the money withdrawn by Foerster passed to the drug company but it hasn’t done so. also appeared claiming the amount of the judgment as it had been assigned to him.. After the case was remanded to the court of origin.. This appeal. After hearing all the adverse claims on the amount of the judgment the court ordered that the attorney's lien in the amount of 15 per cent of the judgment. Municipal Council of Iloilo vs.966.
E and ordered Municipality of Iloilo to file an action of interpleading against the claimants CFI then rendered the following decision: 1. S of all the credits and rights of belonging to Tan Toco (from the “strip of land case”) is valid as payment for the professional services rendered by Atty. S is valid and binding 2. OBIETA)
. of the Civil Code. Inc is valid and binding 3. Municipal of Iloilo should pay Mauricio Cruz & Co Inc 30K++ But Tan Toco appealed and said that #1 and #2 were null and void and the balance of 30K++ should be given to her instead of Mauricio Cruz and Co Inc. E)(as counsel of Jose Maria’s intestate estate) filed a claim in the same case for professional services rendered by him o He acted with Tan Toco’s consent o And the court fixed at 15% of the amount of judgment as payment for his professional services Other claimants also appeared: PNB and Atty. BoonTiong in favour of Atty. not by Antero Soriano personally. E. but in order to facilitate the collection of the amount of said judgment in favor of the appellant. being Chinese. case 5. by the firm of Soriano & Arroyo. for they had already been satisfied before the execution of said deed of assignment. on the ground that they were considered as payments made for professional services rendered. S
CFI awarded to Tan Toco 42K++ for the value of a strip of land taken by the municipality to widen a public street
ISSUE: Whether the assignment made by Tan BoonTiong to Atty. does not contravene the prohibition of article 1459. that said assignments was not made in consideration of professional services by Attorney Antero Soriano. So Mauricio claimed the remaining amount since he is the assignee of the rights of Atty. Antero Soriano (Atty. That the deed of assignment by Atty. the appellant alleges that the payments admitted by the court in its judgment. S in favour of Mauricio Cruz & Co. In support of her contention on this point. in the first place. is impliedly empowered to pay the lawyer's fees for services rendered in the interests of said principal. who has not taken any part in the case wherein said judgment was rendered. An agent of attorney-in -fact empowered to pay the debts of the principal. S the 6K The Court also delivered 6K to Atty. as made by Tan Toco's widow to Attorney Antero Soriano for professional services rendered to her and to her coheirs. but Atty. Evangelista (Atty. amounting to P2. Evangelista and Tan Toco (widow) FACTS: 1924: Atty. for the reason that. E waived the remaining amount that should be given to him So from the 42K – 12K. she had encountered many difficulties in trying to collect. Inc.900. the consent of the one will not be required to validate the acts of the other unless that appears positively to have been the principal's attention The assignment of the amount of a judgment made by a person to his attorney.
Iloilo paid Atty. That the deed of assignment executed by Tan Toco’s widow thru Atty. must be added to the P700. and to employ lawyers to defend the latter's interests. S to Tan Toco HELD:
(AGENCY – ATTY.2D 2013 CLASS DIGEST
Tan Toco contends. S) (pero he died diba?) So the court judged in favour of Atty. Municipal Council of Iloilo vs. the 30K was awarded to Mauricio Cruz and Co. made in payment of professional services in other cases. and may satisfy them by an assignment of a judgment rendered in favor of said principal When a person appoints two attorneys-in-fact independently.
case 5. BoonTiong was VALID as payment for professional services rendered by Atty. The payment was already satisfied even before the execution of the deed of assignment b. S appeared as counsel for Tan Toco many times and won several times too for them. S for professional services rendered by the firm of “Soriano & Arroyo”. Atty. evidenced by receipts 2. The they only “hired” Atty. 2 ang attorney-in-fact ni Tan Toco. She already paid Atty. INDIRECTLY: the assignment made to Atty. Tan Toco still wired Atty. Atty. S was NOT counsel for Tan Toco in the case regarding the recovery of value of the strip of land 5. so it was not the principal’s intention that they should act jointly in order to make their acts valid. S to collect the amount of judgment. the consent of the one will not be required to validate the acts of the other unless that appears positively to have been the principal's attention Apparently. S money for his services in 1928 after the deed of assignment was executed 2. S.. and to employ lawyers to defend the latter's interests. OBIETA)
. since Tan Toco is Chinese. S – this was already decided! Because the rights. When the assignment was made to Atty. The loan of 3000 was
(AGENCY – ATTY. BoonTiong is authorized to employ and contract for the services of lawyers upon such conditions as he may deem convenient AND take charge of any actions necessary or expedient for the interests of his principal and defend suits brought against her [AGENCY!] Implied power: authority to pay for professional services thus engaged by the principal The assignment made by Atty. That the said assignment was not in consideration of the professional services by Atty. Valencia personally took care of all the requirement in order for Castro to secure said loan. etc. in that “strip of land case” was payment for his professional services rendered in connection with the other cases (client still Tan Toco)—so the only thing left to do is to COLLECT! 7. Atty. who has not taken any part in the case wherein said judgment was rendered. DOCTRINES: An agent of attorney-in -fact empowered to pay the debts of the principal. does not contravene the prohibition of article 1491. since: a. Rural Bank of Caloocan vs CA Maxima Castro with Severino Valencia went to the Rural Bank of Caloocan in order to apply for an industrial loan. The lawyers who represented her were Arroyo and Evangelista who filed a claim for professional fees!! 6. Atty. credit. The payment he received for his services is inadequate (10K) 3. of the Civil Code. made in payment of professional services in other cases. S. But they had different and separate letters of attorney. That the deed of assignment was drawn up in contravention of the prohibition that lawyers cannot acquire even by assignment (Article 1491 (5)) BUT THE COURT SAID THAT TAN TOCO’S CONTENTIONS ARE UNTENABLE: 1. Tan Toco (widow) contended the following: 1.2D 2013 CLASS DIGEST
YES. VALID. Montano did not consent to the assignment. and may satisfy them by an assignment of a judgment rendered in favor of said principal When a person appoints two attorneys-in-fact independently. The assignment of the amount of a judgment made by a person to his attorney. S to Tan Toco 4. she cannot make transactions properly (HAHA) c. S and determined in the previous judgment was made in consideration of the professional services rendered by Atty. is impliedly empowered to pay the lawyer's fees for services rendered in the interests of said principal.
2D 2013 CLASS DIGEST
approved and Castro. Herrera through her attorney-in-fact. The CA removed the award of moral damages but affirmed all other respects. it can be assumed that it did not entertain the notion that the Valencia spouses were in any manner acting as the agent of Castro Valencia defrauded Castro by making her sign the promissory note and the mortgage contract. Bank argues that they were led to believe that Valencia was Castro’s agent Issue: Whether the bank believed Valencia to be Castro’s agent Whether the promissory note is invalid insofar as they affect Castro and the Bank ? Held: SC affirmed the CA decision. Sy erected a residential building in the leased premises & w/in 4 years from the execution of the contract. The two loans were secured by a real estate mortgage on castro’s house and lot. If her acts had been understood by the bank to be a grant of authority to the Valencia’s it should have required a special power of attorney. In the case at bar. Chua’s successors-in-interest filed a suit claiming that the sale violated their right of option to buy the said lots. vitiated. Castro claims that she has no knowledge of the mortgage contract up until a notice from the sheriff was given. Ratio: the authority of the Valencias was only up to follow up Castro’s loan application. he sold the said building to Chua for P8. Chua’s successor-in-interest (Chua having died) continued the possession of the premises with an adjusted rental rate of P1000. Chua is also given the option to renew the contract. accompanied by Valencia spouses. But they were never authorized to borrow for her. They PN in effect may also be invalidated because of substantial mistake FACTS Herrera executed a Contract of Lease in favor of Sy whereby Herrera leased her lots in Cebu. Herrera was ordered to reimburse them for attorney’s fees and damages. both Castro and the bank committed mistake in giving their consents. signed a promissory note.000. Reynes sold the lot to the Go spouses. INTERMEDIATE APPELLATE COURT Sheriff informed Castro that her property will be sold at a public aution which shall cover the promissory note plus interest and attorney’s fee. Chua & his family resided in the said building and when the lease contract expired. For if Castro has been aware of what she signed and the bank of the true qualifications of the loan applicants. as a consequence of the fraud and misrepresentation (respectively) employed by the Valencias. The Deed of Absolute Sale contained provisions where Sy assigned all his rights and privileges on the leased lot with the corresponding obligations. This was registered with the RD and the lots were transferred in spouses’ names. the terms & conditions of the contract will continue for the duration of the contract. they would not have given their consents. the PN is valid only up to the amount of 3000 pesos VDA. they also misrepresented to the bank Castro’s qualifications in order to secure the Bank’s consent and grant the loan. Such mistake is deemed substantial thereby rendering such consents. DE CHUA VS. Castro filed a case against the bank. Both Chua’s heirs and Herrera appealed to the CA. The sale was made with the knowledge and consent of Herrera who is represented by her attorney-in-fact. The CA in
(AGENCY – ATTY. OBIETA)
. Chua and Herrera through her attorney-in-fact executed another Contract of Lease wherein & will lease the said lots for a period of 5 years for a monthly rental of P60 w/ Chua having an option to buy the said premises if he is qualified & when Herrera decides to sell the same. Since the bank did not. As a result . The RTC dismissed the complaint and ordered Chua’s heirs to vacate the premises & remove the building. After the expiration of the contract of lease. It also contained a stipulation that should the property leased be sold to any other party. mutually committed by the Bank and Castro. Reynes. On the same day Valencia spouses also secured a loan of 3000 and was also signed by castro as co-maker.
the contract entered into by Reynes and Chua was invalid because Reynes did not have a Special power of Attorney to enter into the contract. “Special Powers of Attorney are necessary to lease any real property to a person for more than 1 year. According to Art. which he acquired in 1957. the husband executed in favor of Rodriguez ( deceased. 1878 Facts: Petitioner Francisco Veloso was the sole owner of a registered parcel of land in Tondo. A tacit renewal is limited only to the terms of the contract w/c are germane to the lessee’s right of continued enjoyment of the property and does not extend to alien matters like the option to buy the lease premises. the law requires the agent to be armed with a special power of attorney to lease the premises. the sale is valid. there is no need to execute a separate special power of attorney. OBIETA)
. PAMINTUAN and DE JESUS
March 21. and (2) to secure payment of the loan by a mortgage on her property.
ISSUE W/N the lease contract entered into by Chua and Reynes is valid. leaving the plaintiffs as his testamentary heirs) an notarized instrument purporting on its face to be a deed of sale of the lands stated. In order for a contract of lease executed by an agent to be valid. RULING NO.2D 2013 CLASS DIGEST
declaring their contract of lease void noted that Reynes was not armed w/ a SPA to enter into a lease contract for a period of more than 1 year. Manila. His wife Irma.” Therefore. for the sum of P5. executed power of attorney in favor of her husband Pamintuan. This is a tacit renewal of the lease. RODRIGUEZ vs. 1878 of the NCC. Petitioner filed an action for annulment of the deed of sale and reconveyance of property Issue:
(AGENCY – ATTY. 1914. the owner of the three parcels of land and sugar mill. 49138” Thus. 1903. It is true that respondent Herrera allowed petitioners to occupy the leased premises after the expiration of the lease contract. this action was instituted to recover possession of the land and payment of the annual rental due thereon. 1903. Held/Ratio: Yes. and to continue occupying them under as annual rental of 120 pilones of sugar. Whether a general power of attorney may authorize an agent to sell real property. but alleged that the real purpose and intent of the parties in the execution of the document was to secure payment of the indebtedness by a mortgage upon the lands mentioned therein. Veloso v CA Applicable Provision: Art.
June 1. The assailed power of attorney had the following provision: “To buy or sell land. The defendant husband admitted the execution of the document purporting to be a deed of sale. said power of attorney sufficiently authorized the wife to sell the property. and that the instrument would not be enforced as a deed of sale.
September 2. sold said lot to the respondent spouses Escario in 1987. Although sale of real property requires a special power of attorney. if a general power of attorney expressly grants the power to sell to the agent. armed with a general power of attorney. the defendant de Jesus. authorizing him (1) to borrow money in such amount and upon such terms and conditions as he might deem proper. Therefore. more specifically TCT No.000 with a reserved right in the vendor to repurchase any time within ten years from the date of the deed.
000. this appeal. and of the instrument purporting to be a deed of sale with the right of repurchase reserved to the vendor. without prejudice to the rights of third parties. and interest thereon at the rate of P900 per annum. the trial court gave judgment in favor of the plaintiffs for the recovery of the possession of the land in question and for the recovery of 1. the husband did in fact borrow P5. but without prejudice to the right of third parties. evidencing the loan of the money mentioned therein and binding the property for the payment of the indebtedness.000 and to furnish security for its repayment from the properties mentioned therein. at such interest and for such periods and conditions as he may deem proper. and would reconvey it upon receipt of payment
The instrument was not recorded in the mortgage registry. and to collect or to pay the principal and interest thereon when due
This. and further that appropriate relief be granted the plaintiffs providing for the recovery of the loan as a debt secured by a mortgage on the lands described in the contract. and that he executed a public instrument purporting to be a deed of sale. may be and should be enforced in accordance with the real intent of the parties so far as innocent third persons are not adversely affected thereby. that is to say. receipt of which is acknowledged by the plaintiffs. Rosario and Leonila) executed a special power of attorney in his favor to
(AGENCY – ATTY. cannot be construed as sufficient authority to sell the real estate of the wife. that. less the sum of P300. The power of attorney from the defendant wife in favor of the defendant husband authorized merely
By means of a mortgage of my real property. Plaintiffs are not entitled to a judgment for a recovery of the lands but the judgment should be entered in their favor for the sum of P5.000 from Rodriguez.000) received by the husband at the time of the execution of the instrument.2D 2013 CLASS DIGEST
plaintiffs filed an amended complaint and alleged that the true intention and understanding of the parties in the execution of the instrument purporting to be a deed of sale with the right to repurchase reserved in favor of the vendor was to provide written evidence of a loan of P5. P5. OBIETA)
. at the rate of P6 a pilon. et al. payment of which is admitted by the plaintiffs. acting under and by virtue of the powers conferred upon him by his wife. Emeteria. with the understanding that although title to the land had been conveyed to him he would hold the land merely as security. except only the sum of P300. by way of security for the repayment of the loan. and on behalf of his wife. less P300.
Issue: whether the transaction is a sale or a security of a loan?
it is a security of loan. the equivalent of 120 pilones of sugar at the rate of P7. but we are of opinion that the contract which is proved to have been entered into by the husband acting by authority of. that it should be deemed to be a valid instrument. and nothing in the record which tends to disclose that she did in fact authorize her husband to sell her lands. The prayer of the amended complaint is for the amount of the loan.50 the pilon. Hence. Maria. with a reserved right of repurchase.000 together with interest thereon at the rate of P720 a year from the date of the execution of the document purporting to be a deed of sale. and further that the defendants have repaid neither the principal (P5. or ratified his action in executing a deed of sale therefor. nor its equivalent in money.440 pilones of sugar which he took to be the total amount due under the contract for the twelve full years which had expired from the date of the contract to the date of the judgment. It follows that neither she nor her lands would be bound by the instrument purporting on its face to be a deed of sale of these lands. less 50 pilones of sugar which he found to be equivalent of P300 admittedly paid on account thereof. Facts: Maximo’s six brothers and sisters (Valeriana. the total amount paid on account of interest during the life of the loan. Quintin. Teofilo. PNB vs. The instrument should be enforced in accordance with the true intent and purpose of the parties. nor any part of the annual payment of 120 pilones of sugar provided for in the contract. if that instrument set forth the true nature of the transaction. until paid. and it cannot therefore be given the effect of a legal mortgage.
The trial judge held that the evidence of record conclusively establishes the execution of the power of attorney.
The review of the whole record. to borrow and lend sums in cash. Sta.
Maria (sister of Maximo) alone also executed in favor of her brother. thus no estoppel can be claimed by PNB to them. It was found that such property was bought by defendant Sy-Juco for and in behalf of his parents. The trial court held that defendant Sy-Juco must return the launch Malabon to his parents. Maximo. They appointed defendant Sy-Juco as administrator of their property for a period of time. in the amount of P13. Included as security for these two loans are the parcel of land jointly owned by Maximo and his six brothers and sisters. The trial court rendered judgment in favor of PNB requiring Maximo and his six brothers and sisters together with the surety. and execute all the necessary documents and instruments for such delivery and the registration in the records of the Custom House of said launch as plaintiffs' property
Due to failure to pay said loans. A special power of attorney to mortgage real estate is limited to such authority to mortgage and does not bind the grantor personally to other obligations contracted by the grantee. until such was revoked. The authority granted by Maximo’s brothers and sisters (except Valeriana) unto their brother. the brothers and sisters did
(AGENCY – ATTY. Maximo alone. But they cannot be held personally liable for the payment of such obligations. Doctrine/Ratio: Authority to mortgage does not carry with it the authority to contract obligation. By virtue of the two aforementioned powers of attorney. not receive any centavo from the loan proceeds as benefit.000. respectively. the loan was guaranteed by surety bonds executed by Associate Insurance & Surety Co. to be liable jointly and severally. They did not grant Maximo any authority to contract for any loans in their names and behalf. a special power of attorney to borrow money and mortgage any real estate owned by her. in the absence of any ratification or other similar act that would estop the grantor from questioning or disowning such other obligations contracted by the grantee. In addition. jointly owned by all of them. Issue: Whether Maximo and his six brothers and sisters and surety are liable to PNB? Held: No. Defendant Sy-Juco bought launchMalabon(a boat) in his own name from Pacific Commercial Co. Maximo and his surety did not appeal the judgment.216. and execute all the necessary documents and instruments for such delivery and the registration in the records of the Custom House of said launch as plaintiffs' property. together with Valeriana who authorized him to borrow money. was merely to mortgage the property jointly owned by them. for the 19521953 and 1953-1954 crop years. Moreover. must answer for said loans and the other defendants-appellants' only liability is that the real estate authorized by them to be mortgaged would be subject to foreclosure and sale to respond for the obligations contracted by Maximo. Valeriana Sta. He used his parents’ money and registered it with the Custom House in his name. during the period of the agency. ISSUE: Whether the trial court erred in holding that defendant Sy-Juco must return the launch Malabon to his parents.2D 2013 CLASS DIGEST
mortgage a parcel of land. Maximo. PNB filed a case on collection of money.00. Only Maximo and his sister Valeriana are jointly liable to PNB. Also. however. Sy-Juco FACTS: Plaintiff Sy-Juco and Viardo are parents of defendant Sy-Juco. with PNB.11 and P23. his six brothers and sisters appeal the decision to the Supreme Court. The other five brothers and sisters are not liable. Maximo Sta. OBIETA)
. Sy-Juco v. Maria applied for two separate crop loans.
00 paid to him by defendant NFA.550 sacks of rice belonging to NFA from Occidental Mindoro to Malabon.
Article 1883 of the Civil Code provides that when an agent acts in his own name. Ratio: It is an undisputed fact that Gil Medalla was a commission agent of respondent Superior Shipping Corporation which owned the vessel "MV Sea Runner" that transported the sacks of rice belonging to petitioner NFA. cases involving things belonging to the principal are excepted. 1883.2D 2013 CLASS DIGEST
HELD: NO. Defendant Medalla. 1979. for freight services. On December 4. 1979.000. defendant NGA paid defendant Medalla the sum of P25. plaintiff wrote a letter around October 1979. The context of the law is clear. The contract obligated Medalla to transport on the MV Sea Runner 8. National Food Authority (NFA) v. by virtue of the agency. Metro Manila. to him alone must also belong the rights arising from the contract. the exception established in article 1883 is applicable to the instant case. Held: Yes. The provision of this article shall be understood to be without prejudice to the actions between the principal and agent. IAC Facts: Medalla. the principal shall have no right of action against the person with whom the agent has contracted. 1883. notwithstanding the fact that he bought it in his own name." Issue: Whether NFA is jointly and severally liable with defendant Medalla. Plaintiff wrote again around November 1979. as a commission agent of plaintiff Superior Shipping Corporation. The money with which the launch was bought having come the parents. Since the defendant contracted the obligation to but the launch for hisparents and in their representation. as if the transaction were his own. and. and they are entitled to be subrogated in these rights. in reality and in effect. "ignored the demand. Upon completion of the delivery. 1979. requesting NFA that it be allowed to collect the amount for freightage and other charges. plaintiff wrote defendant Medalla demanding that he turn over to plaintiff the amount of P27.90. the contract must be considered as entered into between the principal and the third person. Thereupon on November 19. specifically requesting that payment be made to it and not to Medalla because plaintiff was the owner of the vessel. This means that in the case of this exception the agent's apparent representation yields to the principal's true representation and that. NFA is solidarily liable with defendant Medalla. if the obligations belong to the former. entered into a contract for hire of ship (MV Sea Runner) with defendant NFA. this time
(AGENCY – ATTY. which is the applicable law in the case at bar provides: Art. NFA informed plaintiff that it could not grant its request because the contract to transport the rice was entered into by NFA and defendant Medalla who did not disclose that he was acting as a mere agent of plaintiff. According to this exception (when things belonging to the principal are dealt with) the agent is bound to the principal although he does not assume the character of such agent and appears acting in his own name. he is obliged to transfer to his parents the rights he received from the vendor. In such case the agent is the one directly bound in favor of the person with whom he has contracted. OBIETA)
. consequently. however. except when the contract involves things belonging to the principal. On November 16. If an agent acts in his own name.974. the principal has no right of action against the persons with whom the agent has contracted. neither have such persons against the principal. Art.
Of this amount.000 tons of hot asphalt. OBIETA)
.00 to Edgington Oil Refinery for 8.000. ISSUE: W/N PNB is negligent as an agent-creditor of ATACO in collecting sums due to it
(AGENCY – ATTY. An agent is required to act with the care of a good father of a family and becomes liable for the damages. CA ruled that PNB was negligent in having stopped collecting from BPW before ATACO’s debt is fully collected. if the principal can be obliged to perform his duties under the contract. A bank is answerable for negligence in failing to collect the sums due its debtor from the latter’s own debtor.. contrary to said bank’s duty as holder of an exclusive and irrevocable power of attorney to make such collections. Thus. when things belonging to the principal (in this case. in reality and in effect. PNB was able to regularly collect a total of P106. plus interests and damages. PNB asserts that the power of attorney executed in it is favor from ATACO was merely an additional security. MANILA SURETY & FIDELITY CO. that it was the duty of the surety to see to it that the obligor fulfills his obligation.01. PNB V. then it can also demand the enforcement of its rights arising from the contract. The CA did not hold PNB responsible for its negligence in failing to collect from ATACO for its debt to PNB. Of this amount.00 were released and delivered to Adams & Taguba Corporation (ATACO) under a trust receipt guaranteed by Manila Surety & Fidelity Co.000. the agent's apparent representation yields to the principal's true representation and that. to a total of P311.382. due to unexplained reasons.563. which the principal may suffer through its nonperformance(Art1884). PNB sued both ATACO and Manila Surety to recover the balance of P158. the contract must be considered as entered into between the principal and the third person. and that PNB has no obligation to the surety to collect any sum from ATACO. ATACO constituted the Bank its assignee and attorney-in-fact to receive and collect from the Bureau of Public Works the amount aforesaid out of funds payable to the assignor.41. HEREDIA was not able to collect until the investigators found out that more money were payable to ATACO from BPW. Corollarily. but for ITS NEGLECT IN COLLECTING SUMS DUE TO ATACO FROM BPW.18. up to the amount of P75. The latter allowed another creditor to collect funds due to ATACO under the same purchase order. To pay for the asphalt. PNB’s power to collect was expressly made irrevocable so that BPW could very well refuse to make payments to ATACO itself.466.000 tons worth P279. However. 2. NEPOMUCENO V. An agent is required to act with the care and diligence of a good father of a family(Art1887) and becomes liable for the damages. which the principal may suffer through his non-performance. the agent is bound to the principal although he does not assume the character of such agent and appears acting in his own name. ATACO delivered to BPW asphalt worth P431. FACTS: HELD: The Philippine National Bank had opened a letter of credit and advanced thereon $120.230. PNB YES. In other words. thereby allowing funds to be taken by other creditors to the prejudice of the surety.2D 2013 CLASS DIGEST
Consequently. INC.000. Superior Shipping Corporation) are dealt with.52. and reject any demands by the surety.00.
00 from Marciana’s account on Sept.made a joint investment on directed him to make the Deed of Conditional Leaño’s land with Sale. he appointed defendant Guillermo Severino. petitioner Fabiola Severino. Subsequently. The defendant merely denied said allegations. It is to be noted that the case is an action in personam against an agent to compel him to return.500 price evidenced by a notarized memorandum. or that he undertook to guarantee the vendors title to the land purchased by direction of the plaintiffs.principal of HEREDIA -proposed to MARCIANA CANON an investment on the land discussing it with HEREDIA and . There was recovery of possession instituted by 3rd parties prompting herein plaintiffs to seek recovery of the whole amount of the money invested from Heredia and alleging that the purchase of the land was not made in accordance with their instructions. That the defendant came into the possession of the property here in question as the agent of the deceased Melecio Severino in the administration of the
. Leaño continued to pay for more than a year to plaintiffs. or retransfer. who is the alleged natural daughter and sole heir of Melecio. Guillermo filed for the registration of the land in his name and consequently. such attempt is immaterial.Paid P1. NEPOMUCENO The Deed of Conditional Sale was executed on Sept. The Court reverses the lower court’s decision finding that Heredia was acting as mere agent and plaintiffs had full knowledge of the agent’s actions and ratified it. However. was a minor. The trial court decided in favor of petitioner as the acknowledged natural child of Melecio and ordered the defendant to convey said property to petitioner. to pay damages. At that time (when the cadastral proceedings were instituted). The title was placed in the name of Heredia. nothing in the record which would indicate that the defendant failed to exercise reasonable care and diligence in the performance of his duty as an agent. after the incapacity ceased. his brother. as his administrator for the said land.00 -Leaňo proposed to give a deed of conditional sale to a tract of land w/ buildings and improvements thereon for P2. On appeal. OBIETA)
. the court decreed the title in his favor.500.000 less the P500. Furthermore.Business adviser of MARCIANA CANON . 1904 CANON MARCIANA
Facts: Melecio Severino owned some 428 hectares of land recorded in his name. the property committed to his custody as such agent.500 balance HEREDIA . Severino
NEPOMUCENO -has unsecured debt receivable from Leaňo. Issue: Whether the lower court erred in its decision Decision: No. P500. the plaintiffs wanted modification of the RTC’s judgment on the grounds that Heredia invested their money under his name and account and not as their agent.
(AGENCY – ATTY. the petitioner filed a complaint for recovery of the litigated land on the ground of fraud and that the property has been wrongfully registered in the name of defendant. Reason: Although defendant denied the accusation of fraud and even offered evidence to rebut such accusation. to execute the necessary documents thereof.2D 2013 CLASS DIGEST
Severino vs. 24. 1904 with a right to
repurchase at the end of 1yr and obligating himself to make monthly payments in considerations of the right to retain the land in possession in sufficient amount to bring 17% interest per annum on Nepomuceno and Canon’s investments (proponent’s opinion is that this could effectively be called rent). 22. Canon and Nepomuceno indeed paid the P1. During his lifetime. This defendant continued to administer and occupy the land even after the death of Melecio. P1. The RTC ruled in favor of Nepomuceno and Canon. to the heirs or the estate of its principal.
3335.the defendants failed to pay interest stipulated which should have been paid one year in advance.000 payment for agent’s personal account re purchase price of real property on Ortiz street.200 paid to Rafael Santos to cancel mortgage of Salas. Felix S. the same defendant.2D 2013 CLASS DIGEST
property. The power of attorney was registered in the registry of deeds of the Province of Occidental Negros. Issues: Whether or not the agent’s act of employing part of the loan to pay his personal debts was ratified by the defendants?
(AGENCY – ATTY. Yulo used a part of the loan for his own benefit. disclaimed all personal interest in the land and averred that it was wholly the property of this brother Melecio.000 from plaintiff. with interest at 12 per cent per annum payable annually in advance. Facts: On September 2. be allowed to create in himself an interest in opposition to that of his principal or cestui que trust. in fact. is utterly disabled from acquiring for his own benefit the property committed to his custody for management. on March 27. The rule stands on the moral obligation to refrain from placing one's self in positions which ordinarily excite conflicts between self-interest and integrity. attorney. to which effect he signed a promissory note for said amount and executed a deed of mortgage of the real property with its improvements described in transfer certificate of title No. 3335. binding his principals jointly and severally. Felix S. Yulo. obtained a loan of P28. plus 10 per cent more on the unpaid capital as attorney’s fees in the event plaintiff would be constrained to file a case in court to recover the loan or its balance. he had been continuously in charge and occupation of the land as the encargado or administrator of Melecio Severino. The agent. His position is analogous to that of a trustee and he cannot consistently. On the next maturity date. Acting under said power of attorney.29 payment for mortgage constituted on TCT 3335. it was employed as follows: P3. In his answer filed in the same case. in the year 1913. CARLOTA SALAS and PAZ SALAS. He there stated under oath that from the year 1902 up to the time the testimony was given. P3. 1926 to March 26. Plaintiff-Appellant. No fraud in fact need be shown.800 amount delivered to agent Felix S. N. P1. continuous. but by agreement between him and the plaintiff. that he had always known the land as the property of Melecio Severino. or any other person occupying fiduciary relations respecting property or persons. by making it impossible to profit by yielding to temptation. the defendants executed a power of attorney in favor of their brother-in-law Felix S. OBIETA)
. he is estopped from acquiring or asserting a title adverse to that of the principal. This rule is entirely independent of the fact whether any fraud has intervened. It applies universally to all who come within its principle. 1927. trustee. An action was brought by the plaintiff to foreclose the real estate mortgage constituted by the defendants to secure a loan in the Courts of First Instance. conclusive in this respect. to pay it within ten (10) years. The plaintiff lost in the CFI. HODGES. and that the possession of the latter had been peaceful. and exclusive. through his attorney. 1926. and no excuse will be heard from the trustee. Yulo.391 personal check issued to Felix S. P9. agent. 1923. vs. P2. The sum of P28. with the principles of good faith. P8. Plaintiff appealed from the judgment of the CFI in absolving the defendants from the complaint. His testimony in a previous related case is. Defendants-Appellees." C. Yulo.188. It is to avoid the necessity of any such inquiry that the rule takes so general a form. Yulo. It seeks to remove the temptation that might arise out of such a relation to serve one's self-interest at the expense of one's integrity and duty to another. cannot be successfully disputed.000 was not delivered to Felix S. The relations of an agent to his principal are fiduciary and it is an elementary and very old rule that in regard to property forming the subject-matter of the agency. "A receiver. Yulo to enable him to obtain a loan and secure it with a mortgage on the real property described in transfer certificate of title No.360 advance interest from March 27.
particularly when it does not appear that such was the intention of the principals. and to pay the costs of the trial. With respect to a power of attorney of special character. it should be understood that the agent was obliged to turn over the money to the principals or. and one of the witnesses. Judgment modified. As such agent there was paid over to him for the account of his employers. OBIETA)
. however. Ratio: The pertinent clauses of the power of attorney from which may be determined the intention of the principals in authorizing their agent to obtain a loan. and in applying part of the funds to pay his personal obligations. the China Mutual Life Insurance Company. the agent was thereby authorized only to borrow any amount of money which he deemed necessary. the agent was not authorized to use the funds obtained by him to pay his personal obligation. Philippine currency. They said nothing about whether or not their agent was authorized to use the funds obtained by him in the payment of his personal obligations. stated that it was the contract of agency it purported to be.17 ) US vs Kiene The defendant was an insurance agent. which he failed and refused to turn over to them. it is contented that the execution of the document was not formally established. at least. he exceeded his authority In the case like the present one.20 pesos. (Defendants Salas will not pay the full amount of the loan to plaintiffs Hodges but will only pay the sums P 19. The plaintiff contends that the agent's act of employing part of the loan to pay his personal debts was ratified by the defendants in their letter to him dated August 21. place it at their disposal.50 and P1. the district agent of the China Mutual Life Insurance Company. Counsel for the defendant contends that the trial court erroneously admitted in evidence a certain document purporting to be a contract of agency signed by the defendant. but however this may be. without deduction for any purpose whatever. and the trial court erred in taking into consideration one of its provisions whereby the defendant appears to have expressly obligated himself to deliver to the China Mutual Life Insurance Company the funds collected on its account. An examination of the record seems to indicate that the failure of the witness to expressly identify the signature of the defendant attached to the document was due to an oversight. he was convicted of the crime of estafa in the Court of First Instance of the city Manila in sentenced to be imprisoned for one year and six months in Bilibid. For his failure and refusal so to do. This court has carefully read the contents of said document and has found nothing implying ratification or approval of the agent's act.539. There is nothing. 1927. but failed to state specifically that the signature attached thereto was the signature of the defendant. 133. 781. were quoted at the beginning. The terms thereof are limited. though he declared that he knew his signature and had seen him write it on various occasions. In it the defendants confined themselves to stating that they would notify their agent of the maturity of the obligation contracted by him.2D 2013 CLASS DIGEST
(AGENCY – ATTY. Issue: Whether there was a failure of the prosecution to establish the existence of a duty or obligation imposed on the defendant to turn over his principal the funds which he is charged with appropriating to his own use. the sum of 1. The name of the accused is attached to this document. to indicate that the defendants had likewise authorized him to convert the money obtained by him to his personal use. securing it with their real property. it cannot be interpreted as also authorizing the agent to dispose of the money as he pleased.
Legaspi. Sorsogon. Aragon established a central distributing agency or depot with the plaintiff Teofila del Rosario de Costa. claiming that plaintiffs had been improperly allowed a credit of 1. Nothing to the contrary appearing in the record. salaries of employees [other people hired by Aragon].795. which is as follows: Every agent is bound to give an account of his transactions and to pay to the principal all that he may have received by virtue of the agency. One of the locations chosen for the campaign was Albay. because we are of opinion that the obligation of the defendant to deliver the funds in question to his employers is determined by the provision of article 1720 of the Civil Code. no settlement of their accounts were ever made. Plaintiffs claim that they were the agents of the defendant. defendant started a selling campaign.43 [pesos].43 [pesos].795.25 [pesos] a balance alleged to be due Teofila del Rosario de Costa as the agent of the defendant corporation for services rendered and expenses incurred in the sale of its products. Albay to conduct the selling campaign. and the existence of the agency and the collection of the funds on account of the principal having been established. nominally in charge. advertising expenses. and other expenses incident to the conduct of business. the record is now before us on plaintiffs' bill of exceptions.25 [pesos].850 [pesos] which represented unpaid accounts due the business in Legaspi for cigars and cigarettes sold by it. with head office in Manila. the obligation to deliver these funds to the principal must be held to have been imposed upon the agent by virtue of the contract of agency. The defendant denied the claim and set up counterclaim for 55.25 [pesos]."
(AGENCY – ATTY. Celestino Aragon. La Badenia
Facts: "[P]laintiffs Teofila del Rosario de Costa and her husband. Judgment having been rendered in favor of the defendant. money paid over to the general agent.2D 2013 CLASS DIGEST
Held: We do not deem it necessary to review the action of the court in admitting this document in evidence. went to
Defendant claims that plaintiffs are just merchants who purchased the goods and were never employed as agents. withdrawals of goods from the depository at Legaspi shipped to other towns. Throughout the course of the business between plaintiffs and defendant. "that they received commissions on the sales made by the agency. Aragon took residence (rent was paid to plaintiffs) in the house of plaintiffs and used the lower part of the house as a store room for the tobacco products. If these uncollected items are charged to the defendant corporation a balance is left in favor of plaintiffs amounting to 1. and that they were authorized to extend a reasonable credit under the supervision of the general agent. "In this statement goods received by the Legaspi agency from the factory in Manila are charged against Teofila del Rosario Costa. refused to pay over to the plaintiffs the balance of 1."
Defendant La Badenia. Bernardino Costa. OBIETA)
. brought this action to recover from the defendant corporation the sum of 1. commissions on sales.795. and if charged to plaintiffs there remains a balance in favor of the defendant corporation amounting to 55. To introduce its products to the retail trade."
Eventually Aragon made a settlement of accounts with the plaintiff. such as. makes and sells tobacco products. x x x The defendant corporation however. a general agent of the corporation. though her husband appears to have been the actual manager of the agency. while credits are given on various items. even though what has been received is not owed to the principal. remittances made to the head office in Manila.
Del Rosario and Costa vs.
Together with a certain sum of money which accrued on the Company’s stock with lawful interest. OBIETA)
. unless it can show that he acted beyond the scope of his authority in making the arrangement he did with the plaintiffs. it can not now come into court and repudiate the account confirmed by him. x x x It appears further that the head office in Manila was fully informed of plaintiffs' relations with the general agent in extending the sales of its products. Neither the head office nor Aragon appear to have made any distinction between the business done by Aragon and that done by the plaintiffs."
Lyons v. would seem to negative the contention that plaintiffs were simply merchants purchasing their good in Manila at wholesale and selling them locally on their own account. x x x [T]he record does not disclose what were the precise terms of the arrangement made with the plaintiffs."
Lyons filed an action for recovery of 446 and 2/3 shares of the stock of J. but rather as subagents working under the supervision of the general agent. Lyons. but whether or not these were in addition to other profits allowed them the record does not show. and acknowledgment was made directly to the plaintiffs. left for US bu before leaning. and clearly did not consider them as independent merchants buying solely on their own account. and recognized them as agents of the company. Plaintiffs made direct remittances to the head office in Manila and these remittances were credited to the account of the agency at Legaspi.
The pieces of evidence of note were the two letters (sent by defendant to plaintiff) presented by plaintiffs which the Court deemed "sufficient to show that the defendant was fully aware of plaintiffs' connection with the agency at Legaspi. The record does not show what limitations.2D 2013 CLASS DIGEST
Issue: Are the plaintiffs merchants or sub-agents? The general agent did not consider plaintiffs as independent merchants. "The defendant carried no account whatever with the plaintiffs. Rosenstock
The parties in this case are Lyons and Rosenstock.
Ratio: "It is not denied however. that in many instances the plaintiffs were allowed commissions on the sales made by them. Aragon. Elser made a written statement
(AGENCY – ATTY. and having entrusted the entire management of the Legaspi business to Aragon."
Held: Plaintiffs are sub-agents for the defendant corporation. x x x The fact that the defendant corporation carried the Legaspi account in the name of the general agent. Plaintiffs won. In April 1919. if any. that Aragon was acting as the general agent of the defendant corporation and that as such he was invested with the authority to inaugurate and carry out a selling campaign with a view of interesting the sale of the defendant's products in the territory assigned to him. and carried no account with the plaintiffs. were placed upon his powers to act for the corporation. but rather as agents cooperating with him and working under his supervision. Aragon.
Lyons and Elser had been jointly associated in various real estate deals. as executor of the estate of Elser. The record does show however. Trial court absolved Rosenstock (Elser) in this complaint. K Pickering & Co.
. To satisfy his indebtedness. as principal. ELser bought a valuable piece of property known as San Juan Estate. to the mutual advantage of both. Elser began to look for other sources so he may relive the CArreido property from being mortgaged. Elser’s act of mortgaging the property was executed under a sufficient power of attorney. Elser and three associates organized a partnership under the name.
Also. When Elser was concluding the transaction for the purchase of the San Juan Estate.
Whether Elser.2D 2013 CLASS DIGEST
showing that Lyons was. Lyons as half owner of the said property. while Lyons was away. at that time. who arrived in Manila in September 1920. For this purpose. This surety company insisted upon having a security for the liability assumed by it.
Because of Lyons’ refusal to join the venture.
When Elser placed a mortgage upon the Carriedo property.K. as an agent. Thus. Pickerind & Company. became. Elser expected that Lyons would join him in this deal and contribute some capital to purchase and develop the property and to do so. He was successful in doing so by substituting another property owned by him. Elser indorsed to Lyons 200 shares of stock he owned from J. Elser was able to sell two of the three properties they jointly own thus. he found out that he was indebted to Lyons for a certain sum of money from profits and earnings derived from other properties they owned. he accepted these shares and sold them for his own benefit thus also gave his consent for the mortgage of the Carriedo property to remain until it was paid off. Lyons communicated to Elser though a letter that he declines the invitation to join the venture. involuntarily the owner of an undivided interest in the property acquired partly by that money. as it were. Elser mortgaged the Carriedo property owned by them jointly in favour of the surety company. which have been applied by Elser to purchase the San Juan Estate? (Whether Article 1724 of the Old Civil Code (or 1986 of NCC)is applicable?)
(AGENCY – ATTY. Elser borrowed money from a Chinese merchant who required that a personal note be signed by ELser and the surety company. half owner with Elser of three particular pieces of real property. J. Concurrently with this act. Lyons executed in his favour of a general power of attorney empowering him to manage and dispose of said properties at will and to represent Lyons fully and amply.
While Lyons was away. is liable for the interest on funds belonging to Lyons.
Lyons. K Pickering & CO. K Pickerings & Company. and it insisted that he is entitled to the 445 and 2/3 shares of the earnings of J. However. leaving a single piece of property known as the Carriedo property. Elser aimed to promote and develop this San Juan Estate as a suburban improvement.
Ltd.000. and on those which he still owes after the extinguishment of the agency (1724a)
SMITH BELL vs CA
Facts: Joseph Bengzon Chua doing business under the name of Tic Hin Chiong Importer.2D 2013 CLASS DIGEST
No. under a Marine Policy for US$19. The surveyor's report showed that of the 1. OBIETA)
. What really happened was that Elser merely subjected the property to a contingent liability. apart from the modest participation of his associates in the San Juan deal. Chua wrote a letter to Smith Bell refusing the redress contending that the discrepancy was a result of the loss from the vessel to arrastre to the
Article 1724 of Old CC: An agent is liable for the interest on funds belonging to his principal which have been applied by the agent to unauthorized uses. he would be obligated to pay interest upon the money he applied to his own use under Article 1724 (1896 of the New Civil Code) of the Civil Code. bought and imported to the Philippines from the firm Chin Gact Co.
Article 1896 of CC: The agent owes interest on the sums he has applied to his own use from the day on which he did so. and no actual liability ever resulted therefrom.546. Upon weighing. Elser is not liable. This shipment was insured by First Insurance Co.
(AGENCY – ATTY. of Taipei. 600 were damaged.3k.
No money from the mortgage of the Carreido property was ever applied to the purchase of the San Juan Estate. 50 metric tons of Dicalcium Phosphate valued at US$13. and Co stamped at the lower left side of the policy as "Claim Agent. The financing of the purchase of the San Juan Estate. was the work accomplished entirely upon his own account.250 bags and shipped from the Taiwan to Manila. These were contained in 1.
If Elser had used the money actually belonging to Lyons in the deal.500 "against all risks" at port of departure and with Smith.. Chua then filed with Smith Bell a formal statement of claim re the value of losses amounting to $7. with a number of the cargo in apparent bad order condition.
Article1724 (or 1896 of NCC) is not applicable in the case because there was no use of the principal’s funds by the agent’s personal dealings. Bell. Metroport Services Inc. Taiwan.250 bags of the imported material. the contents of the damaged bags were found to be 18." The cargo arrived at the Port of Manila on September 1982 and thereafter the entire cargo was discharged to the local arrastre contractor. Smith Bell informed Chua that its principal offered only 50% of the claim as redress on the ground of discrepancy of the items damaged between the record of Metroport and Chua’s surveyor. Dissatisfied. Chua secured the services of a cargo surveyor to conduct a survey of the damaged cargo which were delivered to Chua’s house.0 kg short.
Whenever he adjusts or settles a claim. His functions are merely to settle and adjusts claims in behalf of his principal if those claims are proven and undisputed.R. the agent does not assume any personal liability. and if the claim is disputed or is disapproved by the principal. He was already 76 years old when they applied for the loan. and his action is binding not upon himself but upon his principal. An adjustment and settlement agent is no different from any other agent from the point of view of his responsibility. for he also acts in a representative capacity. and the Chin Gact Co. The only involvement of Smith Bell in the subject contract of insurance was having its name stamped at the bottom left portion of the policy as "Claim Agent. Ltd. The recourse of the insured is to press his claim against the principal. contracts are binding only upon the parties (and their assigns and heirs) who execute them.
Dans died of cardiac arrest a few weeks later. Ltd. thus Chua filed a complaint against Smith Bell. Court of Appeals G. DBP then advised Dans to apply for a Mortgage Redemption Insurance (MRI) with the Mortgage Redemption Insurance Pool (DBP MRI Pool). Smith Bell contends it is not personally liable since it is merely a settling or claim agent of First Insurance Co. DBP then proceeded with deducting ten percent from the approved loan as payment for the MRI Premium. 110274
Ratio: A settling agent acting within the scope of its authority cannot be held personally liable and/or solidarily liable for the obligations of its disclosed principal. such stamp cannot even be deemed by the remotest interpretation to mean that Smith Bell participated in the preparation of said contract.
Juan Dans (Dans) and his family applied for a loan of 500.
March 21. No settlement has been made. No. OBIETA)
. he does it in behalf of his principal. Candida
(AGENCY – ATTY." Without anything else to back it up.2D 2013 CLASS DIGEST
warehouse—all of these loss were still within the “all risk” insurance cover. DBP MRI Pool later notified Dans’ family that he was never eligible for insurance since he was well above the ceiling age (60 years old) when they applied for the insurance policy.. There is absolutely nothing in the contract which mentions the personal liability of Smith Bell. Under Article 1311 of the Civil Code. 1994
The scope and extent of the functions of an adjustment and settlement agent do not include personal liability.000 Pesos with the Development Bank of the Philippines (DBP).
Issue: Whether a local settling agent is personally and/or solidarily liable upon a marine insurance policy issued by its disclosed foreign principal
Development Bank of the Philippines vs. The subject cargo insurance was between the First Insurance Company.
with Candida acting as administratix. What DBP led them to believe is that since they already paid for a premium. it is strikingly obvious that DBP acted beyond its capacity when it compelled Dans to secure an MRI coverage knowing full well that Dans was never going to be eligible for the insurance policy.
. DBP exceeded the scope of its authority when it accepted Dan’s application and deducted the necessary fees.’
Article 1897 of the Civil Code states
It is a settled rule that persons dealing with an assumed agent are bound at their peril to ascertain not only the fact of agency but also the nature and extent of the agent’s authority. wanted the sum paid in protest for the loan. The Dans Estate.
If the third person dealing with an agent is unaware of the limits of the authority conferred by the principal on the agent and such third person is deceived by the non-disclosure of the agent. the inevitability of approval is apparent.2D 2013 CLASS DIGEST
Dans (Juan’s wife) refused to accept the ten percent premium that DBP tried to return as well as 30 thousand Pesos as an ex gratia settlement. “The agent who acts as such is not personally liable to the party with whom he contracts. The DBP is not authorized to accept applications for MRI when its clients are more than 60 years of age. There was no showing that Dans was aware of such limitations when he applied for the policy. OBIETA)
Authority given to an officer to approve loans does not include the power to issue guarantees to 3rd persons in principal’s name. If either is controverted. This appalling act of deception is therefore a basis for damages for Dans’ aggrieved family.
(AGENCY – ATTY. the extinguishment of Juan’s initial loan of 300 thousand Pesos as well as damages.”
The lower court ruled in favour of the Dans Estate. the burden of proof is upon them to establish it. Hence this petition. then the latter is liable for damages to him.
Whether DBP exceeded its powers as an agent. Knowing all the while that Dans was ineligible for MRI coverage because of his advanced age.
Under the aforequoted provision. unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers.
Partial payments were made by Gaytano. therefore unenforceable and that it is not guilty of estoppels since it had no knowledge or notice of the guaranty. unsatisfied with the decision. it must be expressed and cannot be extended beyond its specified limits. Authority given to an officer to approve loans does not include power to issue guaranties to third persons in principal’s name. presented as evidence a memorandum given by BA Finance.. respondents
ISSUES (1) Whether Philip Wong had authority to issue guaranties (2) Whether BA Finance is estopped from questioning the guaranty
FACTS Traders Royal Bank (TRB). Wong. respondent. OBIETA)
. granted a loan worth P60.25 remained unpaid. A sentence in the memorandum stated that “contingent commitments” must be considered in granting loans. penalty and other bank charges. Court of Appeals and Traders Royal Bank. the Gaytano spouses executed a deed of suretyship where they agreed to pay the loan. BA Finance raised the
HELD (1) NO. The RTC ruled against the spouses but dismissed the case against BA Finance. BA Finance filed a petition for review. ordering both the spouses and BA Finance to jointly and severally pay TRB the aforementioned balance. which prompted TRB to file with the trial court a complaint for sum of money against the spouses and BA Finance. guaranty is not presumed. Philip Wong. It contended that the letterguaranty executed by Wong is ultra vires. The CA ruled that petitioner corporation was guilty of estoppel. undertook to guaranty the loan. Wong averred that the quoted phrase referred to guaranties. A power of attorney or authority of an agent should not be inferred from the use of vague or general words. which allegedly authorized him to approve and grant loans and issue guaranties. To secure the loan.000 in favor of Renato Gaytano (who is doing business under the name Gebbs International). nothing in the memorandum expressly vested him the power to issue guaranties. on his part. The phrase “contingent commitment” cannot be interpreted as referring to guaranties.2D 2013 CLASS DIGEST
defense that Wong had no authority to bind the corporation.
BA FINANCE CORPORATION v. Although Wong was clearly authorized to approve loans. Furthermore. but a balance of P85.807. The Court of Appeals (CA) modified the judgment. including interests. TRB. appealed.
(AGENCY – ATTY. credit administrator of petitioner BA Finance Corporation (BA Finance). petitioner Hon. COURT OF APPEALS BA Finance Corporation.
15. October 17. and no consequent ratification of the said transaction could have occurred. NEW YORK CO. 6. Deadline for delivery was Jan. NPC sued New York Co. 5. Trial Court dismissed the case as to New York for lack of jurisdiction because it wasn’t doing business in the Phils. (NAMERCO). CONTRARY TO NEW YOTK’S INSTRUCTIONS (not following instructions si NAMERCO) 9.. NAMERCO didn’t disclose this to NPC and went on ahead with the agreement with NPC that non-availability of a vessel was not justification for nonpayment of damages.80 because time was of the essence.2D 2013 CLASS DIGEST
(2) NO. it was stipulated that NAMERCO would deliver the sulfur at Iligan City within 60 days from notice of the establishment in its favor of a letter of credit and failure to deliver would subject NAMERCO and Domestic Insurance to the payment of damages.
(AGENCY – ATTY. In the sale contract. BA Finance is not estopped from alleging lack of authority. But TC held that NAMERCO acted beyond the bonds of its authority because it violated the Principal’s instructions. NAMERCO and Domestic Insurance for the recovery of damages. in favor of NPC to guarantee NAMERCO’s obligation. Both NPC and NAMERCO appealed on questions of law and for the amount of damages. According to the TC. NPC had no sulfur so their fertilizer plant had to shutdown. as the representative of the International Commodities Corporation of New York (New York Company – Principal) executed a contract for the purchase of 4.000 long tons of crude sulfur worth P450. LC was opened in Nov 12. NPC should have inquired into the extent of agent’s authority . NAMERCO’S contention was that the delivery of sulfur was conditioned on the availability of a vessel to carry the shipment. 7. NAMERCO’s Bid was even more explicit when it stated that it would be responsible for and guarantees the availability of the vessel. ISSUE: W/N NAMERCO acted beyond its limits as New York Company’s representative YES RATIO: NAMERCO’s CONTENTIONS (italics) AND SC’S RATIO: 1. 2. 1957. in its cable to NAMERCO. The Invitation to Bid issued by NPC provided that non-availability of vessel is not a ground for nonperformance and non payment of damages. New York Co. 1887 the agent who exceeds the limits of
NATIONAL POWER CORP VS. stated that the sale was SUBJECT TO THE AVAILABILITY OF THE VESSEL. 8. No evidence was presented proving that the disputed transaction of guaranty was in fact entered into the official records or files of the corporation. 1956: National Power Corp (NPC) and National Merchandising Corp. however. Government Corporate counsel rescinded the contract due to New York’s non performance. 1956. FACTS: 1. OBIETA)
. 3. 4. NATIONAL MERCHANDISING CORP. 716 for NPC’s Fertilizer plant in Iligan City. BA Finance could not have had notice or knowledge of the guaranty. liquidated damages ordered was P360. A performance bond was executed by the Domestic Insurance Company. Hence. WAS UNABLE TO DELIVER due to its inability to secure shipping space. NPC advised NAMERCO that non-availability of a bottom/vessel was not a fortuitous event that would excuse nonperformance and that NPC would resort to legal remedies. But evidence shows the contrary.NAMERCO is liable for damages because under art. 572.
i. whether penalty or indemnity. New York cabled NAMERCO instructing it not to sign the contract unless t wished to assume sole responsibility. Art.2D 2013 CLASS DIGEST
his authority without giving the party with whom he contracts sufficient notice of his powers is PERSONALLY LIABLE TO SUCH PARTIES. NAMERCO was in good faith. TC erred in holding enforceable the stipulation for liquidated damages despite its findings that the contract was executed by an agent who exceeded his authority. he immediately booked his Los Angeles-Manila return ticket with the PAL office. NAMERCO knew that the principal had problems securing shipping space. Agent is liable because New York repudiated the sale.. Upon his arrival in Los Angeles on the same day.1982
On March 27. ***Case 25 years in the making. which ticket expressly provided an expiry of date of one year from issuance. NAMERCO took chances and went beyond its authority therefore. 1897 says: “The agent who acts in excess of his authority is personally liable to the party with whom he contracted. (So yun lang ang auth. and considering that he would be there on 2 April 1990. not to sign contracts contrary pa to their instructions. 1957 .” Complimented by Art 1898: “if the agent contracts in the name of the principal.100. 1989. 1990 flight.100 is the amount of liquidated damages / 10% of the selling price of sulfur. for the sale of their products. Ng NAMERCO. written instructions. 1990. Cervantes
(AGENCY – ATTY. that they are empowered to present offers in New york’s behalf in accordance with their cabled. 3. 2227 provides that CERVANTES v. Should be unenforceable – Enforceable because it is enforced against the agent and the surety.
Upon learning that the same PAL plane would make a stop-over in San Francisco. shall be equitably reduced if iniquitous / unconscionable. 2.. SC ruled that P45. Philippine Airlines (PAL) issued to Nicholas Cervantes a round trip plane ticket for Manila-Honolulu-Los Angeles-Honolulu-Manila. OBIETA)
. and it was confirmed for the April 2. it shall be void if the party with whom the agent contracted is aware of the limits of the powers granted by the principal” According to New York Company’s letter they certified NAMERCO to be their exclusive representatives in the Phils. Art. rather it’s NAMERCO / the agent. Every person dealing with an agent is put upon inquiry and must discover upon his own peril the authority of an agent – this rule’s not applicable in this case since the principal isn’t the one being sought to be held liable. until March 27. The issuance of the said plane ticket was in compliance with a Compromise Agreement entered into between the contending parties in two previous suits (Civil Case 3392 and 3451 before the RTC in Surigao City). CA liquidated damages. Cervantes used it..e. SC ORDERED NAMERCO AND DOMESTIC INSURANCE TO PAY SOLIDARILY TO THE NPC THE SUM OF 45. not against the principal. acting in his own name. On March 23. 4 days before the expiry date of subject ticket. and the principal does not ratify the contract. Even before the sale was signed. 1990.) 4. Regarding damages. made persistent efforts to charter a vessel. Because NAMERCO’S liability should be based on tort / quasi delict and not on a contract of sale. exceeding the scope of authority.
the principal cannot be held liable for the acts of the agent. unless the latter ratifies the same expressly or impliedly. when Cervantes checked in at the PAL counter in San Francisco. Carson v. on 25 July 1995.” Held:
Aggrieved. but the said complaint was dismissed for lack of merit. Rickards and Smith Bell
(AGENCY – ATTY.
On 20 September 1993.
Article 1898. Cervantes knew this from the very start when he called up the Legal Department of appellee in the Philippines before he left for the USA. Acts of agent beyond scope of authority does not bind principal Under Article 1898 of the New Civil Code. Despite this knowledge. he was not allowed to board. which came out with a Decision. Civil Case 3807). 1990 and that to secure an extension. upholding the dismissal of the case. he cannot subsequently use what was done by airline agents. The PAL personnel concerned marked the following notation on his ticket: “TICKET NOT ACCEPTED DUE EXPIRATION OF VALIDITY. in confirming his flights. Furthermore. where a passenger is fully aware of the need to send a letter to a particular office of an airline for the extension of the period of validity of his ticket. and affirmed in toto the decision of the Court of Appeals dated 25 July 1995. The said agents acted without authority when they confirmed the flights of Cervantes. for breach of contract of carriage before the RTC of Surigao del Norte in Surigao City (Branch 32. Cervantes interposed an appeal to the Court of Appeals. without pronouncement as to costs. Cervantes came to the Suprame Court via the Petition for Review. he is to blame.
Whether the act of the PAL agents in confirming subject ticket extended the period of validity of petitioner’s ticket. he cannot use what the PAL agents did to his advantage. On 2 April 1990. the acts of an agent beyond the scope of his authority do not bind the principal. as both had no authority to do so. On 22 May 1996. Cervantes filed a Complaint for Damages. If the said third person is aware of such limits of authority.
The confirmation by the PAL’s agents in Los Angeles and San Francisco of Cervantes’ flights did not extend the validity or lifetime of the ticket. unless the latter undertook to secure the principal’s ratification. Cervantes persisted to use the ticket in question. who acted without authority. Since the PAL agents are not privy to the said Agreement and Cervantes knew that a written request to the legal counsel of PAL was necessary. and is not entitled to recover damages from the agent. Thus. He had first hand knowledge that the ticket in question would expire on March 27. he would have to file a written request for extension at the PAL’s office in the Philippines.2D 2013 CLASS DIGEST
made arrangements with PAL for him to board the flight in San Francisco instead of boarding in Los Angeles. when the third person knows that the agent was acting beyond his power or authority.
The Supreme Court denied the petition. OBIETA)
Bell & Co. with notice that it was the money of the plaintiff. Bell & Co. Trial Court: ordered petitioner to pay private respondent (PEPSI.) their overdue accounts. and at the time of its delivery by Rickards to the other agent he notified Smith.. Court of Appeals: declared said decision to be a nullity because the requirements of Section14. COURT OF APPEALS Petitioner EUGENIO is a dealer of the soft drinks of Private respondent (PEPSI). Issue petitient: W/N Smith Bell & Co is bound to pay Carson she turned over to Rickards Held: Yes. Bell & Co. less 5 per cent commission for collection.000 pesos. of which commission Smith.. Bell & Co. and that money is by the agent turned over to his principal. Bell & Co and Smith. and are therefore bound to pay it to her. for Rickards testified that he received express directions in regard to this particular transaction. Bell & Co. Bell & Co. Trial Court: Petitioners ordered to pay the amount plus legal interest. the sum of 2.. He also testified that he had seen the books of Smith. and they now have it in their possession. Bell & Co.2D 2013 CLASS DIGEST
Doctrine: When money is received as a deposit by an agent. They claim that the TPR are to be credited in their favour. that it was not the money of Smith. Bell & Co was responsible for this amount. Facts: The defendant Rickards was the agent of the other defendant.200 pesos. to repay to the plaintiff the sum of 4. Ratio: The question as to whether Rickards was authorized by Smith.. received the benefit.
EUGINIO VS. even if his agent was not authorized to receive such deposit. The question as to the general authority of Rickards to receive money on deposit for Smith. Rickards testified that he received the money and paid all of it out in the business of Smith. received ad used the same. Article VIII of the 1987 Constitution (basis of decision should clearly state facts and law on which they are based) are not met. Bell & Co. asking if it could be collected. Court of Appeals/ Motion for Reconsideration: Affirmed the judgement/ motion denied
(AGENCY – ATTY. a credit in favor of the plaintiff of 4.200 pesos. OBIETA)
. While he was such agent he received from the plaintiff Carson. less the commission of 5 per cent.200 pesos. This money was not mingled with other money belonging either to Richards or to Smith. Bell & Co. The identical money which he received from the plaintiff was by him turned over to Smith. of this 4. but was the money of the plaintiff.. Bell & Co. that he wrote Smith. Bell & Co contained an entry or entries of the receipt by Smith. The lower court held that Smith. Bell & Co. the principal is bound to deliver it to the depositor. with notice that it is the money of the depositor. Smith. that after he had received it he entered upon the books of Smith.000 pesos from the plaintiff. he received from her an order or warrant upon the Spanish treasury for the sum of 4. Smith Bell & Co is liable. PEPSI claimed that petitioner EUGNEIO has outstanding debts in the company. to receive deposits of this character for third persons is a matter of no consequence. by his orders. delivered to another agent of Smith. When he left the employ of the defendant company the 2. If this testimony is to be believed there is no doubt as to the liability of Smith. At the trial of this case Rickards testified that a few days after he received the 2. Bell & Co. Bell & Co.000 pesos were. has nothing to do with this cause of action.COLA BOTTLING COMPANY OF THE PHIL. as a deposit. Bell & Co.200 pesos. Petitioner EUGENIO in defense presented four Trade Provisional Receipts (TPR) issued by and received by them from Route Manager ESTRADA of Malate Warehouse.
to be officially confirmed by plaintiff within 15 days by delivering the original copy thereof stamped and paid and signed by cashier. ROSARIO) sent for Petitioner EUGENIO to review non-payment of company debts. Antonio N.2D 2013 CLASS DIGEST
Supreme Court FACTS: A review of the facts from the Supreme Court showed that PEPSI through head of its Legal Department. Under the measure of hearsay evidence AZURIN’s testimony on the validity of ESTRADA’s denial cannot be constituted as legal proof. There was also an issue on the signature of ESTRADA which is not relevant to AGENCY. Also there was no chance for EUGENIO to object nor was there a chance to cross-examine ESTRADA. In so far as the private respondent’s customers are concerned for as long as they pay their obligations to the sales representative of the private respondent using the latter’s official receipt. it was the responsibility of the collector to turn over the collection. FACTS:
(AGENCY – ATTY. Absence of ESTRADA also had no TOYOTA SHAW INC V. Payment shall be made to the person in whose favour the obligation has been constituted or his successor in inters or any person deemed to received it.40 debt in NORA STORE and ABIGAIL MINIMART (petitioners stores) and Loaned Empties after review. Hashim.T. to conduct investigation of petitioner’s claim. OBIETA)
. Atty. said payment extinguishes their obligations.. Testate Estate of N.. more on the Rules of Evidence. There is no authenticated stenographic report of the entire testimony of ESTRADA. did not receive those amounts from the latter. Rosario (ATTY. Issue 1 (not part of Agency): W/N ESTRADA’s affidavit is valid evidence? Answer: No. ESTRADA denied he ever issued or signed the TPRs and AZURIN presented to the Court ESTRADA’s affidavit alleging the same however ESTRADA was not present in any of the proceedings. ROSARIO Instructed Daniel AZURIN. The TPRs presented in evidence by petitioners are disputably presumed as evidentiary of payments made on the account of petitioners. They failed to prove that ESTRADA who is its duly authorized agent with respect to petitioners. et.. Private respondent failed to rebut the presumption in favour of valid payment by petitioners.. IMPORTANT! RESPONDENT COURT also alleged that the questioned TRP are merely provisional and were. assistant personal manager. Issue 2 (IMPORTANT): W/N petitioners failed in confirming the TPRs in question. Petitioner was shown to have a total of P74. Answer: No. al. CA -no file uploaded yet justifiable cause taking into consideration that PEPSI being ESTRADA’s employer had the means to find him.849. Also affidavit cannot seek sanctuary to the exception to the hearsay evidence rule because of the following reasons: There was no proper investigation but only an inter-office interview. Else they would make the burden of supervising its employees from PEPSI to its customers.
Commissioner of Public Highways and the Auditor General V. Simply put. Petitioners failed to present the original copies of the TPRs in question showing that they were never confirmed by PEPSI nor did they demand from PEPSI the confirmed copies thereof. CFI Rizal). EUGENIO submitted to ATTY. San Diego (Presiding Judge. ROSARIO the four TPRs.
Hashim. filed a money claim with the Quezon City Engineer's Office in the sum of P522.620. is public or government funds.64 as the provisional value of all the lots needed to construct the road. the estate of N. is held liable and has acted beyond the scope as the agent of the Bureau of Public Highways? HELD:
YES. it was "helpless to refuse delivery under the teeth" of the special order of October 18. allegedly acting in excess of his authority and without the knowledge and consent of the Board of Directors. Respondent bank replied that it was not liable for the said garnishment of government funds. and demanding that the bank credit the Bureau of Public Highways’ account in the amount of P209. 1968. needed to construct a public road. notwithstanding the bank's being charged with legal knowledge that government funds are exempt from execution or garnishment. through its Judicial Administrator.00 against the Bureau of Public Highways.
(AGENCY – ATTY. T. notifying said bank that levy was thereby made upon funds of petitioners Bureau of Public Highways and the Auditor General on deposit. In 1958. alleging said amount to be the fair market value of the property in question. however. The garnishment was said to cover the judgment of P209. Hashim. ISSUE: W/N the PNB through Coruna. Thereafter.076 in favor of the estate of Hashim. now already converted and used as a public highway. which is of its nature. wrote the PNB complaining that the bank acted precipitately in having delivered such a substantial amount to the special sheriff without affording them a reasonable time to contest the validity of the garnishment. the bank was holding the amount of P209.T. Tomas N. directing immediate delivery of the garnished amount.00. The Bank (PNB) is the agent of the Bureau of Public Highways as such that it was entrusted with the latter’s funds. the Bureau of Public Works and Auditor General. through then Solicitor General Makasiar. Benjamin Coruña.2D 2013 CLASS DIGEST
The Government of the Philippines filed a case of expropriation of a parcel of land belonging to N. as the Chief Documentation of the Bank who authorized the garnishment of the account. Later on. which had funds deposited with the Bank. respondent Coruña allegedly taking advantage of his position. In compliance to the Notice Of Garnishment. now known as EDSA. without notice to said petitioner.076 from the account of petitioner Bureau of Public Highways.076. Hashim. the Government took possession of the property upon deposit with the City Treasurer of the sum of P23. OBIETA)
. equivalent to the land's total assessed value and by then Solicitor General rendered judgment approving the Compromise Agreement and ordering the Bureau of Public Highways to pay respondent estate the total sum of P209. a complaint for the recovery of the fair market price of the said property in the sum of P672. Hashim’s estate having proposed the total amount of P209. Chief of Documentation Staff of PNB’s Legal Department. On the same date of the approval of the Compromise Agreement. alleging that it was not for the bank to decide the question of legality of the garnishment order and that much as it wanted to wait until it heard from the Bureau of Public Highways. replied to the notice of garnishment that in compliance therewith. taken out of the funds of the Bureau of Public Highways deposited in current account with the bank and paid the same to the estate of Hashim. the sheriff served a Notice of Garnishment issued by the Deputy Clerk of Court.00.076. authorized the issuance of a cashier's check of the bank in the amount of P209.413. who at that time had died. and neither party took any step thereafter to reconstitute the proceedings.076.030.076 which the bank had allowed to be illegally garnished.00 for the expropriated lot. In reply to the Notice of Garnishment. The respondent estate also filed with the CFI. The parties thereafter worked out a compromise agreement. on respondent Philippine National Bank. The records of the expropriation case were destroyed and lost during the second world war.
(n) Green Valley Poultry and Allied Products.
(AGENCY – ATTY. The moment the payment is made by respondent bank on such deposit. what it pays out represents the public funds thus deposited which are not garnishable and may be disbursed only for legitimate purposes such as legislative appropriation. since such government agencies or instrumentalities do not have any non-public or private funds of their own. Green Valley claimed that the contract with Squib was an agency to sell.00 delivered to respondent estate. as they wrongfully did in this case. Petitioner bureau's credit against respondent bank thereby never lost its character as a credit representing government funds thus deposited.2D 2013 CLASS DIGEST
The SC thus declared untenable the two arguments raised by PNB and its Chief Documentation Staff. Squib filed a suit to collect. remain government funds. since the relation between a depositor and a depository bank is that of creditor and debtor. "lost their kind and character as government funds".R. respondent bank and its officials should be the first ones to know that all government funds deposited with it by any agency or instrumentality of the government. This ruling is consistent with Article 1903 of the Civil Code. Said respondents shockingly ignore the fact that said government funds were deposited with respondent bank as the official depositary of the Philippine Government. Intermediate Appellate Court FACTS: E. Coruña as their defenses to justify their wrongful delivery of the garnished public funds to respondent estate. The Trial Court and the Court of Appeals ruled in favor of Squib saying the agreement was a sales contract and ordering Green Valley to pay Squib. v. First: Their first contention that the said government funds by reason of their being deposited by petitioner Bureau under a current account. Neither the PNB nor respondent Coruña are the duly authorized disbursing officers and auditors of the Government to authorize and cause payment of the public funds of petitioner Bureau for the benefit or private persons. whereby they are charged with the obligation of assuring that the funds are not illegally or wrongfully paid out. As the official depositary of the Philippine Government. Squib claimed that the contract was a contract to sell so that Green Valley was obligated to pay for the goods upon expiration of the 60 day period. whether by way of general or special deposit.076. Inc. unless upon receiving them he should make a written statement of the damage and deterioration suffered by the same. that the products received were on consignment only with the obligation to turn over proceeds less commission or to return unsold goods and since it has sold the goods but had not been able to collect from the purchasers the action was premature. OBIETA)
. PNB and Coruña faulted in the wrongful garnishment and delivery of the deposited funds of the Bureau. that they never purchased goods. Hence. instead of being deposited as special trust funds. For goods delivered to Green Valley but unpaid. SC: UNTENABLE. SC: UNTENABLE. which states: The commission agent shall be responsible for the goods received by him in the terms and conditions and as described in the consignment. Squib entered into an letter agreement with Green Valley which appointed Green Valley as an non-exclusive distributor for Squib Veterinary Products. Second: Their second contention that said government funds lost their character as such "the moment they were deposited with the respondent bank". the matter of payment of Hashim’s estate's judgment credit is not their concern as custodian and depositary of the public funds deposited with them. What was garnished was not the bank's own funds but the credit of the Bureau of Public Works by the garnishment of the bank of P209.
the former agent of the plaintiff company. Green Valley would still be liable because it sold on credit without authority from its principal. Civil Code). Ltd. It happened. the Lyric Film Exchange. Inc. Gabelman went to Vicente Albo's office and asked whether he could deposit the film in question in the vault of the Lyric Film Exchange. Bernard Gabelman.R. Facts: Bernard Gabelman was the Philippine agent of the plaintiff company International Films (China). 1933. does it relieve Green Valley of any liability? HELD: The Supreme Court ruled that whether the agreement was an sales contract or an agency to sell. the Lyric Film Exchange. This request was thereafter granted. entitled "Monte Carlo Madness".. telephoned said agent of the plaintiff company informing him that the showing of said film had already finished and asked.. 1933. plaintiff-appellant. through its said agent. L-42465 November 19. the International Films (China). defendant-appellee. did not yet have a safety vault.. Bernard Gabelman severed his connection with the plaintiff company. Vicente Albo. vs... to be shown in Cavite for two consecutive days. On August 13 and 19. whereby the latter would act as a subagent of the plaintiff company. THE LYRIC FILM EXCHANGE. 1933. Ltd. chief of the film department of the defendant company. together with the film "Monte Carlo Madness" which was not insured.2D 2013 CLASS DIGEST
ISSUE: Whether or not the agreement was a contract of agency and if so. Lazarus Joseph agreed to said exhibition. the Lyric Film Exchange. Bernard Gabelman informed Albo that he wished to see him personally in the latter's office. Decision: The verbal contract between Bernard Gabelman. On June 23. under Gabelman's own responsibility. might wish to show it after the expiration of the contract. Inc. Inc. returned the films entitled "Congress Dances" and "White Devils" to Lazarus Joseph. Inc. 1933. INC. Inc. Inc. No.. that the bodega of the Lyric Film Exchange.. with authority to show this film "Monte Carlo Madness" in any theater where said defendant company. At about 11 o'clock the next morning. was burned on August 19. 1933. is responsible to the plaintiff. but not the film "Monte Carlo Madness" because it was to be shown in Cebu on August 29 and 30. however. In answer. being succeeded by Lazarus Joseph. The Supreme Court further held that even if the contract was an agency to sell.. following the last showing of the film in question in the Paz Theater. the Lyric Film Exchange. Inc.. Issue: whether or not the defendant company. by virtue of a power of attorney executed in his favor on April 5. G. One of the conditions of the contract was that the defendant company would answer for the loss of the film in question whatever the cause.. On June 2. 1936 INTERNATIONAL FILMS (CHINA). was a sub-agency or a submandate. Inc. the Lyric Film Exchange. then chief of the film department of the Lyric Film Exchange. OBIETA)
. informed the latter of the deposit of the film "Monte Carlo Madness" in the vault of the defendant company as well as of the verbal contract entered into between him and the Lyric Film Exchange.. it received no instruction to that effect from its principal and the
(AGENCY – ATTY. Inc. 1933. at the same time. leased the film entitled "Monte Carlo Madness" to the defendant company. Green Valley was still liable. International Films (China) Ltd.. it was not obliged to fulfill more than the contents of the mandate and to answer for the damages caused to the principal by his failure to do so (art. International Films (China) Ltd. where he wished to have the film returned to him. the defendant company is not civilly liable for the destruction by fire of the film in question because as a mere submandatary or subagent. because as a subagent. Thus. Inasmuch as the plaintiff would profit by the showing of the film "Monte Carlo Madness". and Vicente Albo. as the International Films (China) Ltd.. for the destruction by fire of the film in question. The fact that the film was not insured against fire does not constitute fraud or negligence on the part of the defendant company. LTD. upon turning over the agency to the new agent. 1718.
the former agent of the plaintiff company. insisted upon his request. it is not liable to the latter. the defendant company did not collect from the insurance company an amount greater than that for which its films were insured. Inasmuch as the defendant company. notwithstanding the fact that the film in question was included in the vault. The Lyric Film Exchange. should pay the part corresponding to the film in question which was deposited therein. Inc. as this was one of the reasons why O'Malley at first refused to receive said film for deposit and he consented thereto only when Bernard Gabelman. As to the question whether or not the defendant company having collected the entire proceeds of the fire insurance policy of its films deposited in its vault. had not been enriched by the destruction by fire of the plaintiff company's film.. the evidence shows that the film "Monte Carlo Madness" under consideration was not included in the insurance of the defendant company's films. Furthermore. assuming all responsibility. and it would have collected the same amount even if said film had not been deposited in its safety vault.2D 2013 CLASS DIGEST
insurance of the film does not form a part of the obligation imposed upon it by law. OBIETA)
(AGENCY – ATTY.