Victoria Milling Co., Inc. v. CA and Consolidated Sugar Corporation G.R. No.

117356 June 19, 2000 Quisumbing, J. FACTS:

St. Therese Mer h!n"ising regu#!r#$ bought sug!r %rom &i tori!s Mi##ing 'o., (n . (n the ourse o% their "e!#ings, &i tori!s Mi##ing issue" se)er!# Shi**ing +ist,-e#i)er$ Re ei*ts .S+-Rs/ to St. Therese Mer h!n"ising !s *roo% o% *ur h!ses. 0mong these 1!s S+-R No. 1212M 1hi h o)ers 25,000 b!gs o% sug!r. 3! h b!g ont!ine" 50 4i#ogr!ms !n" *ri e" !t 5636.00 *er b!g. The tr!ns! tion it o)ere" 1!s ! "ire t s!#e.

7n 7 tober 25, 1969, St. Therese Mer h!n"ising so#" to 'onso#i"!te" Sug!r 'or*. its rights in S+-R No. 1212M %or 512,750,000.00. 'onso#i"!te" Sug!r 'or*. issue" he 4s in *!$ment. Th!t s!me "!$, 'onso#i"!te" Sug!r 'or*. 1rote &i tori!s Mi##ing th!t it h!" been !uthori8e" b$ St. Therese Mer h!n"ising to 1ith"r!1 the sug!r o)ere" b$ S+-R No. 1212M.

'onso#i"!te" Sug!r 'or*. surren"ere" S+-R No. 1212M to &i tori!s Mi##ing9s N0:0'7 1!rehouse !n" 1!s !##o1e" to 1ith"r!1 sug!r. ;o1e)er, !%ter 2,000 b!gs h!" been re#e!se", &i tori!s Mi##ing re%use" to !##o1 %urther 1ith"r!1!#s o% sug!r !g!inst S+-R No. 1212M be !use, ! or"ing to it, St. Therese Mer h!n"ising h!" !#re!"$ 1ith"r!1n !## the sug!r o)ere" b$ the #e!re" he 4s.

ISSUE: :7N the ontr! t 1!s one o% !gen $ or s!#e HEL : S!#e.

&i tori!s Mi##ing he!)i#$ re#ies u*on St. Therese Mer h!n"ising9s #etter o% !uthorit$ !##o1ing 'onso#i"!te" Sug!r 'or*. to 1ith"r!1 sug!r !g!inst S+-R No. 1212M to sho1 th!t the #!tter 1!s St. Therese Mer h!n"ising9s !gent. The *ertinent *ortion o% s!i" #etter re!"s< =This is to !uthori8e 'onso#i"!te" Sug!r 'or*or!tion or its re*resent!ti)e to 1ith"r!1 %or !n" in our beh!#% .stress su**#ie"/ the re%ine" sug!r o)ere" b$ Shi**ing +ist,-e#i)er$ Re ei*t > Re%ine" Sug!r .S-R/ No. 1212 "!te" 7 tober 16, 1969 in the tot!# ?u!ntit$ o% 25, 000 b!gs.@

0rt. 1666. A$ the ontr! t o% !gen $ ! *erson bin"s himse#% to ren"er some ser)i e or to "o something in re*resent!tion or on beh!#% o% !nother, 1ith the onsent or !uthorit$ o% the #!tter.

The b!sis o% !gen $ is re*resent!tion. 7n the *!rt o% the *rin i*!#, there must be !n ! tu!# intention to !**oint or !n intention n!tur!##$ in%er!b#e %rom his 1or"s or ! tionsB !n" on the *!rt o% the !gent, there must be !n intention to ! e*t the !**ointment !n" ! t on it, !n" in the !bsen e o% su h intent, there is gener!##$ no !gen $. 7ne %! tor 1hi h most #e!r#$ "istinguishes !gen $ %rom other #eg!# on e*ts is ontro#B one *erson C the !gent C !grees to ! t un"er the ontro# or "ire tion o% !nother the *rin i*!#.

&i tori!s Mi##ing %!i#e" to su%%i ient#$ est!b#ish the eDisten e o% !n !gen $ re#!tion bet1een 'onso#i"!te" Sug!r 'or*. !n" St. Therese Mer h!n"ising. The %! t !#one th!t it .St. Therese Mer h!n"ising/ h!" !uthori8e" 1ith"r!1!# o% sug!r b$ 'onso#i"!te" Sug!r 'or*. =%or !n" in our .St. Therese Mer h!n"ising9s/ beh!#%@ shou#" not be e$e" !s *ointing to the eDisten e o% !n !gen $ re#!tion. Eurther, 'onso#i"!te" Sug!r 'or*. h!s sho1n th!t the 25,000 b!gs o% sug!r o)ere" b$ the S+-R No. 1212M 1ere so#" !n" tr!ns%erre" b$ St. Therese Mer h!n"ising to it. 0 on #usion th!t there 1!s ! )!#i" s!#e !n" tr!ns%er to 'onso#i"!te" Sug!r 'or*. m!$, there%ore, be m!"e thus !*! it!ting 'onso#i"!te" Sug!r 'or*. to sue in its o1n n!me, 1ithout nee" o% Foining its im*ute" *rin i*!# St. Therese Mer h!n"ising !s oC*#!inti%%.

'onso#i"!te" Sug!r 'or*. 1!s ! bu$er o% the S+-ER %orm, !n" not !n !gent o% STM. 'onso#i"!te" Sug!r 'or*. 1!s not subFe t to St. Therese Mer h!n"ising9s ontro#. Th!t no !gen $ 1!s me!nt to be est!b#ishe" b$ the 'onso#i"!te" Sug!r 'or*. !n" STM is #e!r#$ sho1n b$ 'onso#i"!te" Sug!r 'or*.9s ommuni !tion to *etitioner th!t S+-R No. 1212M h!" been =so#" !n" en"orse"@ to it.27 The use o% the 1or"s =so#" !n" en"orse"@ me!ns th!t St. Therese Mer h!n"ising !n" 'onso#i"!te" Sug!r 'or*. inten"e" ! ontr! t o% s!#e, !n" not !n !gen $.

3"u!r"o +itonFu!, Jr. !n" 0ntonio +itonFu! ). 3ternit 'or*. .no1 3terton Mu#tiC Resour es'or*./, 3teroutremer, S.0. !n" E!r 3!st A!n4 G Trust 'o. G.R. No. 122605 June 6, 2006'!##eFo, Sr. E0'TS< 3ternit 'or*. is eng!ge" in the m!nu%! ture o% roo%ing m!teri!#s !n" *i*e *ro"u ts. (tsm!nu%! turing o*er!tions 1ere on"u te" on 6 *!r e#s o% #!n" #o !te" in M!n"!#u$ong 'it$, o)ere"b$ T'Ts 1ith E!r 3!st A!n4 G Trust 'om*!n$, !s trustee. 90H o% the sh!res o% sto 4s o% 3ternit 'or*.1ere o1ne" b$ 3teroutremer S.0. 'or*or!tion .3S0'/, ! or*or!tion org!ni8e" !n" registere" un"erthe #!1s o% Ae#gium. J! 4 G#!n)i##e, !n 0ustr!#i!n iti8en, 1!s the Gener!# M!n!ger !n" 5resi"ent o% 3ternit 'or*., 1hi#e '#!u"e Ere"eri 4 -e#s!uD 1!s the Region!# -ire tor %or 0si! o% 3S0'. (n 1966, the m!n!gement o% 3S0' gre1 on erne" !bout the *o#iti !# situ!tion in the 5hi#i**ines !n"1!nte" to sto* its o*er!tions in the ountr$. The 'ommittee %or 0si! o% 3S0' instru te" Mi h!e#0"!ms, ! member o% 3ternit 'or*.9s Ao!r" o% -ire tors, to "is*ose o% the eight *!r e#s o% #!n".0"!ms eng!ge" the ser)i es o% re!#tor,bro4er +!uro G. M!r?ue8 so th!t the *ro*erties ou#" beo%%ere" %or s!#e to *ros*e ti)e bu$ers.

M!r?ue8 o%%ere" the *!r e#s o% #!n" !n" the im*ro)ements thereon to 3"u!r"o A. +itonFu!, Jr. o% the+itonFu! G 'om*!n$, (n . M!r?ue8 "e #!re" th!t he 1!s !uthori8e" to se## the *ro*erties %or527,000,000.00 !n" th!t the terms o% the s!#e 1ere subFe t to negoti!tion. 3"u!r"o +itonFu!, Jr. res*on"e" to the o%%er. M!r?ue8 sho1e" the *ro*ert$ to 3"u!r"o +itonFu!, Jr.,!n" his brother 0ntonio I. +itonFu!. The +itonFu! sib#ings o%%ere" to bu$ the *ro*ert$ %or520,000,000.00 !sh. M!r?ue8 !**rise" G#!n)i##e o% the +itonFu! sib#ings9 o%%er !n" re#!$e" the s!meto -e#s!uD in Ae#gium, but the #!tter "i" not res*on". G#!n)i##e te#eDe" -e#s!uD in Ae#gium, in?uiringon his *osition, ounter*ro*os!# to the o%%er o% the +itonFu! sib#ings. -e#s!uD sent ! te#eD to G#!n)i##est!ting th!t, b!se" on the =Ae#gi!n,S1iss "e ision,@ the %in!# o%%er 1!s =JSK1,000,000.00 !n"52,500,000.00 to o)er !## eDisting ob#ig!tions *rior to %in!# #i?ui"!tion. +itonFu!, Jr. ! e*te" the ounter*ro*os!# o% -e#s!uD. M!r?ue8 on%erre" 1ith G#!n)i##e, !n" on%irme" th!t the +itonFu! sib#ings h!" ! e*te" the ounterC*ro*os!# o% -e#s!uD. ;e !#so st!te"th!t the +itonFu! sib#ings 1ou#" on%irm %u## *!$ment 1ithin 90 "!$s !%ter eDe ution !n" *re*!r!tiono% !## "o uments o% s!#e, together 1ith the ne ess!r$ go)ernment!# #e!r!n es. The +itonFu! brothers "e*osite" the !mount o% JSK1,000,000.00 1ith the Se urit$ A!n4 G Trust'om*!n$, 3rmit! Ar!n h, !n" "r!%te" !n 3s ro1 0greement to eD*e"ite the s!#e. :ith the !ssum*tion o% 'or!8on 0?uino !s 5resi"ent o% R5, the *o#iti !# situ!tion in the 5hi#i**inesh!" im*ro)e". M!r?ue8 re ei)e" ! te#e*hone !## %rom G#!n)i##e, !")ising th!t the s!#e 1ou#" no#onger *ro ee". G#!n)i##e %o##o1e" it u* 1ith ! #etter, on%irming th!t he h!" been instru te" b$ his*rin i*!# to in%orm M!r?ue8 th!t the "e ision h!s been t!4en !t ! Ao!r" Meeting not to se## the*ro*erties on 1hi h 3ternit 'or*. is situ!te".

:hen !**rise" o% this "e)e#o*ment, the +itonFu!s, through ounse#, 1rote 3ternit 'or*., "em!n"ing*!$ment %or "!m!ges the$ h!" su%%ere" on ! ount o% the !borte" s!#e. 3', ho1e)er, reFe te" their"em!n". (SSJ3< :7N M!r?ue8, G#!n)i##e, !n" -e#s!uD 1ere !uthori8e" b$ res*on"ent 3ternit 'or*. to ! t !s its!gents re#!ti)e to the s!#e o% the *ro*erties o% 3ternit 'or*., !n" i% so, 1h!t !re the boun"!ries o% their!uthorit$ !s !gents ;3+-< No. 0 or*or!tion is ! Furi"i !# *erson se*!r!te !n" "istin t %rom its members or sto 4ho#"ers !n" is not!%%e te" b$ the *erson!# rights, ob#ig!tions !n" tr!ns! tions o% the #!tter. (t m!$ ! t on#$ through itsbo!r" o% "ire tors or, 1hen !uthori8e" either b$ its b$C#!1s or b$ its bo!r" reso#ution, through itso%%i ers or !gents in the norm!# ourse o% business. The gener!# *rin i*#es o% !gen $ go)ern there#!tion bet1een the or*or!tion !n" its o%%i ers or !gents, subFe t to the !rti #es o% in or*or!tion, b$C#!1s, or re#e)!nt *ro)isions o% #!1. The *ro*ert$ o% ! or*or!tion is not the *ro*ert$ o% the sto 4ho#"ers or members, !n" !s su h, m!$not be so#" 1ithout eD*ress !uthorit$ %rom the bo!r" o% "ire tors. 5h$si !# ! ts, #i4e the o%%ering o% the*ro*erties o% the or*or!tion %or s!#e, or the ! e*t!n e o% ! ounterCo%%er o% *ros*e ti)e bu$ers o% su h *ro*erties !n" the eDe ution o% the "ee" o% s!#e o)ering su h *ro*ert$, !n be *er%orme" b$ the or*or!tion on#$ b$ o%%i ers or !gents "u#$ !uthori8e" %or the *ur*ose b$ or*or!te b$C#!1s or b$s*e i%i ! ts o% the bo!r" o% "ire tors. 0bsent su h )!#i" "e#eg!tion,!uthori8!tion, the ru#e is th!t the"e #!r!tions o% !n in"i)i"u!# "ire tor re#!ting to the !%%!irs o% the or*or!tion, but not in the ourse o%,

or onne te" 1ith, the *er%orm!n e o% !uthori8e" "uties o% su h "ire tor, !re not bin"ing on the or*or!tion.

 :hi#e ! or*or!tion m!$ !**oint !gents to negoti!te %or the s!#e o% its re!# *ro*erties, the %in!# s!$ 1i##h!)e to be 1ith the bo!r" o% "ire tors through its o%%i ers !n" !gents !s !uthori8e" b$ ! bo!r"reso#ution or b$ its b$C#!1s.30 0n un!uthori8e" ! t o% !n o%%i er o% the or*or!tion is not bin"ing on itun#ess the #!tter r!ti%ies the s!me eD*ress#$ or im*#ie"#$ b$ its bo!r" o% "ire tors. 0n$ s!#e o% re!#*ro*ert$ o% ! or*or!tion b$ ! *erson *ur*orting to be !n !gent thereo% but 1ithout 1ritten !uthorit$%rom the or*or!tion is nu## !n" )oi". 0n !gen $ m!$ be eD*resse" or im*#ie" %rom the ! t o% the *rin i*!#, %rom his si#en e or #! 4 o% ! tion,or his %!i#ure to re*u"i!te the !gen $ 4no1ing th!t !nother *erson is ! ting on his beh!#% 1ithout!uthorit$. 0 e*t!n e b$ the !gent m!$ be eD*resse", or im*#ie" %rom his ! ts 1hi h !rr$ out the!gen $, or %rom his si#en e or in! tion ! or"ing to the ir umst!n es. 0gen $ m!$ be or!# un#ess the#!1 re?uires ! s*e i%i %orm. ;o1e)er, to re!te or on)e$ re!# rights o)er immo)!b#e *ro*ert$, !s*e i!# *o1er o% !ttorne$ is ne ess!r$. The +itonFu!s %!i#e" to !""u e in e)i"en e !n$ reso#ution o% the Ao!r" o% -ire tors o% 3ternit 'or*.em*o1ering M!r?ue8, G#!n)i##e or -e#s!uD !s its !gents, to se##, #et !#one o%%er %or s!#e, %or !n" in itsbeh!#%, the 6 *!r e#s o% #!n" o1ne" b$ 3ternit 'or*. in #u"ing the im*ro)ements thereon. The b!re %! tth!t -e#s!uD m!$ h!)e been !uthori8e" to se## to Ru*erto T!n the sh!res o% sto 4 o% res*on"ent 3S0' !nnot be use" !s b!sis %or +itonFu!9s #!im th!t he h!" #i4e1ise been !uthori8e" b$ 3ternit 'or*. tose## the *!r e#s o% #!n". :hi#e G#!n)i##e 1!s the 5resi"ent !n" Gener!# M!n!ger o% 3ternit 'or*., !n" 0"!ms !n" -e#s!uD 1eremembers o% its Ao!r" o% -ire tors, the three ! te" %or !n" in beh!#% o% res*on"ent 3S0', !n" not !s"u#$ !uthori8e" !gents o% 3ternit 'or*.B ! bo!r" reso#ution e)in ing the gr!nt o% su h !uthorit$ isnee"e" to bin" 3ternit 'or*. to !n$ !greement reg!r"ing the s!#e o% the subFe t *ro*erties. Su h bo!r"reso#ution is not ! mere %orm!#it$ but is ! on"ition sine ?u! non to bin" 3ternit 'or*.Re?uisites o% !n !gen $ b$ esto**e#s< .1/ the *rin i*!# m!ni%este" ! re*resent!tion o% the !gent9s!uthorit$ or 4no1ing#$ !##o1e" the !gent to !ssume su h !uthorit$B

.2/ the thir" *erson, in goo" %!ith,re#ie" u*on su h re*resent!tionB .3/ re#$ing u*on su h re*resent!tion, su h thir" *erson h!s h!nge"his *osition to his "etriment