You are on page 1of 34

TOCAO VS COURT OF APPEALS FACTS: William Belo introduced Nenita Anay to his girlfriend, Marjorie Tocao.

The three agreed to form a joint venture for the sale of cooking wares. Belo was to contribute P2.5 million; Tocao also contributed some cash and she shall also act as president and general manager; and Anay shall be in charge of marketing. Belo and Tocao specifically asked Anay because of her experience and connections as a marketer. They agreed further that Anay shall receive the following: 10% share of annual net profits 6% overriding commission for weekly sales 30% of sales Anay will make herself 2% share for her demo services They operated under the name Geminesse Enterprise, this name was however registered as a sole proprietorship with the Bureau of Domestic Trade under Tocao. The joint venture agreement was not reduced to writing because Anay trusted Belos assurances. The venture succeeded under Anays marketing prowess. But then the relationship between Anay and Tocao soured. One day, Tocao advised one of the branch

managers that Anay was no longer a part of the company. Anay then demanded that the company be audited and her shares be given to her. ISSUE: Whether or not there is a partnership. HELD: Yes, even though it was not reduced to writing, for a partnership can be instituted in any form. The fact that it was registered as a sole proprietorship is of no moment for such registration was only for the companys trade name. Anay was not even an employee because when they ventured into the agreement, they explicitly agreed to profit sharing this is even though Anay was receiving commissions because this is only incidental to her efforts as a head marketer. The Supreme Court also noted that a partner who is excluded wrongfully from a partnership is an innocent partner. Hence, the guilty partner must give him his due upon the dissolution of the partnership as well as damages or share in the profits realized from the appropriation of the partnership business and goodwill. An innocent partner thus possesses pecuniary interest in every existing contract that was incomplete and in the trade name of the copartnership and assets at the time he was wrongfully expelled.

An unjustified dissolution by a partner can subject him to action for damages because by the mutual agency that arises in a partnership, the doctrine of delectus personae allows the partners to have the power, although not necessarily the right to dissolve the partnership. Tocaos unilateral exclusion of Anay from the partnership is shown by her memo to the Cubao office plainly stating that Anay was, as of October 9, 1987, no longer the vice-president for sales of Geminesse Enterprise. By that memo, petitioner Tocao effected her own withdrawal from the partnership and considered herself as having ceased to be associated with the partnership in the carrying on of the business. Nevertheless, the partnership was not terminated thereby; it continues until the winding up of the business.

into a partnership with the former after the WWII were they both pooled in their money in order to recapitalize the business. Petitioners wants to account, liquidate and wind up the partnership as well as the equal division of the net assets of the company. They alleged that since Tan Eng Kee was conducting the affairs of the company/business with his brother, Gave orders to the employees, prepared orders for the suppliers, their families beind employed in the business and that their families lived in the same compound where the Benguet Lumber Company is found then these establishes the existence of a partnership. They also allege that their father was a co-owner of some 80 pieces of G.I. Sheets and that their father was also receiving money from the company. Benguet Lumber Company, represented by Tan Eng Lay, answered by stating that Tan Eng Kee was merely an employee of the said company evidenced by payrolls and the SSS coverage of petitioners' father. They also showed the registration of the business as that of a proprietorship. The RTC of Baguio ruled that there was a partnership between the two brothers in the form of a joint-venture. The CA reversed the decision of the RTC.

HEIRS OF TAN ENG KEE VS COURT OF APPEALS

Facts: The heirs of Tan Eng Kee, composed of his children and his wife, claims that their father was a partner of Tan Eng Lay in Benguet Lumber Company. Tan Eng Lay is the brother of the petitioners' father who accordung to them entered

Issue: WON Tan Eng Kee and Tan Eng Lay were partners in Benguet Lumber? Held: No partnership was established as the evidence presented was insufficient. Tan Eng Kee was merely an employee receiving wages. The partnership contract is required to be in writing the capital of which exceeds P3,000 and the findings of the lower courts reveals the absence of such contract. Co-ownership or co-possession is not an indicium of the existence of a partnership. A demand for a periodic accounting is evidence of a partnership which was not done by Tan Eng Kee during his lifetime being his right if ever he was a partner. The documents presented, not validly declared falsified by another court, further proves the non-existence of a partnership relation between the two brothers but an employer-employee relationship. Furthermore, petitioners did not offer or present evidence that their father received amounts pertaining to his share in the profits of the company. The allegations of petitioners merely shows that their father was merely involved in the operations of Benguet Lumber but does not establish in what capacity.

Facts: Julia Buales died leaving as heirs her surviving spouse, Lorenzo Oa and her five children. A civil case was instituted for the settlement of her state, in which Oa was appointed administrator and later on the guardian of the three heirs who were still minors when the project for partition was approved. This shows that the heirs have undivided interest in 10 parcels of land, 6 houses and money from the War Damage Commission. Although the project of partition was approved by the Court, no attempt was made to divide the properties and they remained under the management of Oa who used said properties in business by leasing or selling them and investing the income derived therefrom and the proceeds from the sales thereof in real properties and securities. As a result, petitioners properties and investments gradually increased. Petitioners returned for income tax purposes their shares in the net income but they did not actually receive their shares because this left with Oa who invested them. Based on these facts, CIR decided that petitioners formed an unregistered partnership and therefore, subject to the corporate income tax, particularly for years 1955 and 1956. Petitioners asked for reconsideration, which was denied hence this petition for review from CTAs decision.

ONA VS CIR

Issue: W/N there was a co-ownership or an unregistered partnership W/N the petitioners are liable for the deficiency corporate income tax Held: Unregistered partnership. The Tax Court found that instead of actually distributing the estate of the deceased among themselves pursuant to the project of partition, the heirs allowed their properties to remain under the management of Oa and let him use their shares as part of the common fund for their ventures, even as they paid corresponding income taxes on their respective shares. Yes. For tax purposes, the co-ownership of inherited properties is automatically converted into an unregistered partnership the moment the said common properties and/or the incomes derived therefrom are used as a common fund with intent to produce profits for the heirs in proportion to their respective shares in the inheritance as determined in a project partition either duly executed in an extrajudicial settlement or approved by the court in the corresponding testate or intestate proceeding. The reason is simple. From the moment of such partition, the heirs are entitled already to their

respective definite shares of the estate and the incomes thereof, for each of them to manage and dispose of as exclusively his own without the intervention of the other heirs, and, accordingly, he becomes liable individually for all taxes in connection therewith. If after such partition, he allows his share to be held in common with his co-heirs under a single management to be used with the intent of making profit thereby in proportion to his share, there can be no doubt that, even if no document or instrument were executed, for the purpose, for tax purposes, at least, an unregistered partnership is formed. For purposes of the tax on corporations, our National Internal Revenue Code includes these partnerships The term partnership includes a syndicate, group, pool, joint venture or other unincorporated organization, through or by means of which any business, financial operation, or venture is carried on (8 Mertens Law of Federal Income Taxation, p. 562 Note 63; emphasis ours.) with the exception only of duly registered general copartnerships within the purview of the term corporation. It is, therefore, clear to our mind that petitioners herein constitute a partnership, insofar as

said Code is concerned, and are subject to the income tax for corporations. Judgment affirmed.

installments was made. This was granted on the condition that a bond be filed. Plaintiffs failed in their installment payments. Hence a request for execution of the warrant of distraint and levy was made. Plaintiffs paid under protest to avoid the execution. A claim for refund was made by the plaintiffs, which was dismissed, hence the appeal. Issue: Whether the plaintiffs formed a partnership hence liable for income tax. Held: Yes. According to the stipulation facts the plaintiffs organized a partnership of a civil nature because each of them put up money to buy a sweepstakes ticket for the sole purpose of dividing equally the prize which they may win, as they did in fact in the amount of P50,000. The partnership was not only formed, but upon the organization thereof and the winning of the prize, Jose Gatchalian personally appeared in the office of the Philippines Charity Sweepstakes, in his capacity as co-partner, as such collection the prize, the office issued the check for P50,000 in favor of Jose Gatchalian and company, and the said partner, in the same capacity, collected the said check. All these circumstances repel the idea that the plaintiffs organized and formed a community of property only.

GATCHALIAN VS CIR

Facts: Plaintiffs purchased, in the ordinary course of business, from one of the duly authorized agents of the National Charity Sweepstakes Office one ticket for the sum of two pesos (P2), said ticket was registered in the name of Jose Gatchalian and Company. The ticket won one of the third-prizes in the amount of P50,000. Jose Gatchalian was required to file the corresponding income taxreturn covering the prize won. Defendant-Collector made anassessment against Jose Gatchalian and Co. requesting the payment of the sum of P1,499.94 to the deputy provincial treasurer of Pulilan, Bulacan. Plaintiffs, however through counsel made a request for exemption. It was denied. Plaintiffs failed to pay the amount due, hence a warrant of distraint and levy was issued. Plaintiffs paid under protest a part of the tax and penalties to avoid the effects of the warrant. A request that the balance be paid by plaintiffs in

LIWANAG VS COURT OF APPEALS Facts: Liwanag asked Isidora Rosales to join her and Thelma Tagbilaran in the business of buying and selling cigarettes. Under their agreement, Rosales would give the money needed to buy the cigarettes while Liwanag and Tabligan would act as her agents, with acorresponding 40% commission to her if the goods are sold; otherwise the money wouldbe returned to Rosales. Rosales gave several cash advances amounting to 633,650. Money was misappropriated. Rosales files a complaint of estafa against them. Issue: 1. WON the parties entered into a partnership agreement; 2. If in the negative, WON the transaction is a simple loan Held: 1. No. Even assuming that a contract of partnership was indeed entered into by and between the parties, when money or property have been received by a partner for a specific purpose and he later misappropriated it, such partner is guilty of estafa.

2. No. In a contract of loan once the money is received by the debtor, ownership over the same is transferred. Being the owner, the borrower can dispose of it for whatever purpose he may deem proper

EVANGELISTA & CO v. ABAD SANTOS Doctrine: It is not disputed that the provision against the industrial partner engaging in business for himself seeks to prevent any conflict of interest between the industrial partner and the partnership, and to insure faithful compliance by said partner with this prestation. Facts: On Octorber 09, 1954, a co-partnership was formed named Evangelista and Co. On June 07, 1955, the Articles of the Co-partnership was amended in order to include herein respondent Estrella Abad Santos as an industrial partner. Furthermore, in the said amended article, it was agreed upon that the profits and losses shall be divided as follows: (1) 70% for the first three (3) partners; and (2) 30% for respondent Estrella Abad Santos. On December 17, 1963, herein respondent filed suit against the three other partners in the Court of First Instance of Manila, alleging that the partnership,

which was also made a party-defendant, had been paying dividends to the partners except to her; and that notwithstanding her demands the defendants had refused and continued to refuse and let her examine the partnership books or to give her information regarding the partnership affairs to pay her any share in the dividends declared by the partnership. She therefore prayed that the defendants be ordered to render accounting to her of the partnership business and to pay her corresponding share in the partnership profits after such accounting, plus attorney's fees and costs. The defendants, in their answer, alleged the following: (1) the amended Articles of Co-partnership did not express the true agreement of the parties, which was that the plaintiff was not an industrial partner; (2) that she did not in fact contribute industry to the partnership; and (3) that her share of 30% was to be based on the profits which might be realized by the partnership only until full payment of the loan which it had obtained in December, 1955 from the Rehabilitation Finance Corporation in the sum of P30,000, for which the plaintiff had signed a promissory note as co-maker and mortgaged her property as security; and (4) that in any event the respondent (as a Judge of the City Court of Manila)was lawfully (See Article 1789) excluded from, and deprived of, her alleged share, interests

and participation, as an alleged industrial partner, in the partnership Evangelista & Co., and its profits or net income. Issue: 1.) Whether or not the respondent Estrella Abad Santos is an industrial partner or merely a profit sharer (as alleged by petitioners) entitled to 30% of the net profits that may be realized by the partnership from June 07, 1955 until her mortgage loan shall be fully paid? 2.) Whether or not respondent as a Judge of the City Court of Manila is engaged in business and thereby lawfully excluded and deprived of, her alleged share, interests and participation, as an alleged industrial partner, in the partnership Evangelista & Co., and its profits or net income pursuant to Article 1789. Ruling: 1.) The Supreme Court affirmed the facts concluded by the Court of Appeals that respondent Estrella Santos is an industrial partner because the Articles of the co-partnership indubitably show the respondent is an industrial partner. Also by the fact that from June 7, 1955 up to the filing of their answer to the complaint on February 8, 1964 or a period of over eight (8) years appellants did nothing to

correct the alleged false agreement of the parties contained in the same. 2.) It is not disputed that the provision against the industrial partner engaging in business for himself seeks to prevent any conflict of interest between the industrial partner and the partnership, and to insure faithful compliance by said partner with this prestation. There is no pretense, however, even on the part of the appellee is engaged in any business antagonistic to that of appellant company, since being a Judge of one of the branches of the City Court of Manila can hardly be characterized as a business. The Supreme Court further held: What has gone before persuades us to hold with the lower Court that appellee is an industrial partner of appellant company, with the right to demand for a formal accounting and to receive her share in the net profit that may result from such an accounting, which right appellants take exception under their second assigned error. Our said holding is based on the following article of the New Civil Code: 'ART. 1899. Any partner shall have the right to a formal account as to partnership affairs:

(1) If he is wrongfully excluded from the partnership business or possession of its property by his copartners; (2) If the right exists under the terms of any agreement; (3) As provided by article 1807; (4) Whenever other circumstance render it just and reasonable. We find no reason in this case to depart from the rule which limits this Court's appellate jurisdiction to reviewing only errors of law, accepting as conclusive the factual findings of the lower court upon its own assessment of the evidence.

RAMNANI VS COURT OF APPEALS FACTS: Ishwar Jethmal Ramnani and his wife Sonya had their main business based in New York. Ishwar received US $150,000.00 from his father-inlaw in Switzerland. In 1965, Ishwar Jethmal Ramnani sent the amount of US $150,000.00 to Choithram in two bank drafts of US$65,000.00 and US$85,000.00 for the purpose of investing the same in real estate in the Philippines.

Subsequently, spouses Ishwar executed a general power of attorney appointing Ishwars full blood brothers Choithram and Navalrai as attorneys-in-fact, empowering them to manage and conduct their business concerns in the Philippines. Choithram, as attorney-in-factr, entered into two agreements for the purchase of two parcels of land located in Pasig Rizal from Ortigas & Company, Ltd. Partnership (Ortigas Ltd.) with a total area of approximately 10,048 square meters. Three buildings were constructed thereon and were leased out by Choithram as attorney-in-fact of spouses Ishwar. Two of these buildings were later burned. In 1970 Ishwar asked Choithram to account for the income and expenses relative to these properties during the period 1967 to 1970. Choithram failed and refused to render such accounting which prompted Ishwar to revoke the general power of attorney. Choithram and Ortigas Ltd. were duly notified by notice in writing of such revocation. It was also registered with the Securities and Exchange Commission and published in The Manila Times. Nevertheless, Choithram as such attorney-in-fact of Ishwar, transferred all rights and interests of Ishwar

spouses in favor of Nirmla Ramnani, the wife of Choitrams son, Moti. Ortigas also executed the corresponding deeds of sale in favor of Nirmla and the TCT ISSUEd in her favour.. Thus, spouses Ishwar filed a complaint in the Court of First Instance of Rizal against Choithram and spouses Nirmla and Moti (Choithram et al.) and Ortigas Ltd. for reconveyance of said properties or payment of its value and damages. Trial court dismissed the complaint ruling that the lone testimony of Ishwar regarding the cash remittance is unworthy of faith and credit because the cash remittance was made before the execution of the general power of attorney. Ishwar also failed to corroborate this lone testimony and did not exhibit any commercial document as regard to the alleged remittances. It believed the claim of Choitram that he and Ishwar entered into a temporary arrangement in order to enable Choithram, then a British citizen, to purchase the properties in the name of Ishwar who was an American citizen and who was then qualified to purchase property in the Philippines under the then Parity Amendment.

Upon appeal, the CA reversed the decision and gave credence to Ishwar. It upheld the validity of Ishwars testimony and gave cognizance to a letter written by Choihtram imploring Ishwar to renew the power of attorney after it was revoked. It states therein that Choithram reassures his brother that he is not after his money and that the revocation is hurting the reputation of Ishwar. Choithram also made no mention of his claimed temporary arrangement in the letter.. The CA ruled that Choithram is also estopped in pais or by deed from claiming an interest over the properties. Because of Choitrams admissions from (1) power of attorney, (2) the Agreements, and (3) the Contract of Lease It furthermore HELD that Choithram's 'temporary arrangement, by which he claimed purchasing the two (2) parcels in question in 1966 and placing them in the name of Ishwar who is an American citizen circumvents the disqualification provision of aliens acquiring real properties in the Philippines. Upholding the supposed "temporary arrangement" with Ishwar would be sanctioning the perpetration of an illegal act and culpable violation of the Constitution. During the pendency of the case, Choithram made several attempts to dispose of his properties by way

of donation and also mortgaged the properties under litigation for 3 million USD to a shell partnership with a mere capital of 100 USD. The Supreme Court affirms the findings of the Court of Appeals. ISSUE: Whether or not there was a partnership between the brothers Ishwar and Choithram HELD: Yes, Even without a written agreement, the scenario is clear. Spouses Ishwar supplied the capital of $150,000.00 for the business. They entrusted the money to Choithram to invest in a profitable business venture in the Philippines. For this purpose they appointed Choithram as their attorney-in-fact. Choithram in turn decided to invest in the real estate business. He bought the two (2) parcels of land in question from Ortigas as attorney-in-fact of IshwarInstead of paying for the lots in cash, he paid in installments and used the balance of the capital entrusted to him, plus a loan, to build two buildings. Although the buildings were burned later, Choithram was able to build two other buildings on the property. He rented them out and collected the rentals. Through the industry and genius of Choithram, Ishwar's property was developed and improved into what it is nowa valuable asset worth millions of pesos.

We have a situation where two brothers engaged in a business venture. One furnished the capital, the other contributed his industry and talent. Justice and equity dictate that the two share equally the fruit of their joint investment and efforts. Perhaps this Solomonic solution may pave the way towards their reconciliation. Both would stand to gain. No one would end up the loser. After all, blood is thicker than water. However, because of the devious machinations and schemes that Choithram employed he should pay moral and exemplary damages as well as attorney's fees to spouses Ishwar. ISSUE: Whether or not Ortigas Ltd. is liable. HELD: Yes, because Ortigas had several notices of the revocation. Despite said notices, Ortigas nevertheless acceded to the representation of Choithram, as alleged attorney-in-fact of Ishwar, to assign the rights of petitioner Ishwar to Nirmla. While the primary blame should be laid at the doorstep of Choithram, Ortigas is not entirely without fault. It should have required Choithram to secure another power of attorney from Ishwar. For recklessly believing the pretension of Choithram that his power of attorney was still good, it must, therefore, share in the latter's liability to Ishwar.

PNB VS LO Facts: 1916 Severo Eugenio Lo and Ng Khey Ling together with J.A. Say Lian Ping, Ko Tiao Hun, On Yem Ke Lam and Co Sieng Peng formed a commercial partnership under the name of Tai Sing Co., with a capital of P40,000 contributed by said partners. Articles of Copartnership states that: Partnership was to last for 5 years from after the date of its organization Purpose: to do business in the City of Iloilo or in any other part of the Philippines the partners might desire; purchase and sale of merchandise, goods, and native, as well as Chinese and Japanese products J.A. Say Lian Ping was appointed general manager A. Say Lian Ping executed a power of attorney in favor of A. Y. Kelam, authorizing him to act in his stead as manager and administrator of Tai Sing & Co. and to obtain a loan of P8,000 in current account from PNB. Kelam mortgaged certain personal property of the partnership.

The credit was renewed several times and Kelam, as attorney-in-fact of Tai Sing & Co., executed a chattel mortgage in favor of PNB as security as security for a loan P20,000. This mortgage was again renewed and Kelam as attorney-in-fact of Tai Sing & Co. executed another chattel mortgage for the said sum of P20,000. 1920 Yap Seng, Severo Lo, Kelam and Ng Khey Ling, the latter represented by M. Pineda Tayenko, executed a power of attorney in favor of Sy Tit. By virtue of the power of attorney, Sy Tit representing Tai Sing & Co. obtained a credit of P20,000 from PNB in 1921 and executed a chattel mortgage on certain personal property belonging to the partnership. Defendants had been using this commercial credit in a current account with the plaintiff bank from 1918 1922 and as of December 31, 1924 the debit balance of this account P 20, 239. PNB claims in the complaint this amount and an interest of P16, 518.74. Eugenio Los defense: Tai Sing & Co. was not a general partnership. Commercial credit in current account which Tai Sing & Co. obtained from PNB had not been authorized

by the board nor was the person who subscribed said contract authorized under the articles of copartnership Trial Court: in favor of PNB ISSUE: Whether or not Tai Sing & Co. is a general partnership in that the appellants can be held liable to pay PNB HELD: Yes. Tai Sing & Co. is a general partnership RATIO: Appellants admit and it appears from the articles of copartnership that Tai Sing & Co. is a general partnership and it was registered in the mercantile register of Iloilo. The fact that the partners opt to use Tai Sing & Co. as the firm name does not affect the liability of the general partners to third parties under Article127 of the Code of Commerce. Jurisprudence states that: The object of article 126 of the Code of Commerce in requiring a general partnership to transact business under the name of all its members, of several of them, or of one only, is to protect the public from imposition and fraud

It is for the protection of the creditors rather than of the partners themselves. The law must be unlawful and unenforceable only as between the partners and at the instance of the violating party, but not in the sense of depriving innocent parties of their rights who may have dealt with the offenders in ignorance of the latter having violated the law. Contracts entered into by commercial associations defectively organized are valid when voluntarily executed by the parties, and the only question is whether or not they complied with the agreement. Therefore, the defendants cannot invoke in their defense the anomaly in the firm name which they themselves adopted. As to the alleged death of the manager, Say Lian Ping before Kelam executed the contracts of mortgage with PNB, this would not affect the liability of the partnership Kelam was a partner who contracted in the name of the partnership and the other partners did not object Lo, Khey Ling, and Yap Seng appointed Sy Tit as manager, and he obtained from PNB the credit in current account Trial Court correctly held defendants to be jointly and severally liable to PNB

This is in accordance with Article 127 of the Code of Commerce all the members of a general partnership, be they managing partners thereof or not, shall be personally and solidarily liable with all their property, for the results of the transactions made in the name and for the account of the partnership, under the signature of the latter, and by a person authorized to use it.

COMPANIA MARITAMA VS MUNOZ

FACTS: In 1905, Francisco Muoz, Emilio Muoz, and Rafael Naval formed an ordinary general mercantile partnership in accordance with the Code of Commerce. They named the partnership Francisco Muoz & Sons. Francisco was the capitalist partner while the other two were industrial partners. In the articles of partnership, it was agreed upon by the three that for profits, Francisco shall have a 3/4th share while the other two would have 1/8th each. For losses, only Francisco shall bear it. Later, the partnership was sued by La Compaia Martitama for collection of sum of money amounting to P26,828.30. The partnership lost the case and was ordered to make said payment; that in case the

partnership cant pay the debt, all the partners should be liable for it. The ruling is in accordance with Article 127 of the Code of Commerce which states: All the members of the general copartnership, be they or be they not managing partners of the same, are liable personally and in solidum with all their property for the results of the transactions made in the name and for the account of the partnership, under the signature of the latter, and by a person authorized to make use thereof. (emphasis supplied) Francisco now argues that the industrial partners should NOT be liable pursuant to Article 141 of the Code of Commerce which states: Losses shall be charged in the same proportion among the partners who have contributed capital, without including those who have not, unless by special agreement the latter have been constituted as participants therein. (emphasis supplied)

HELD: Yes. The controlling law is Article 127. There is no injustice in imposing this liability upon the industrial partners. They have a voice in the management of the business, if no manager has been named in the articles; they share in the profits and as to third persons it is no more than right that they should share in the obligations. It is admitted that if in this case there had been a capitalist partner who had contributed only P100 he would be liable for this entire debt of P26,000. Article 141 relates exclusively to the settlement of the partnership affairs among the partners themselves and has nothing to do with the liability of the partners to third persons; that each one of the industrial partners is liable to third persons for the debts of the firm; that if he has paid such debts out of his private property during the life of the partnership, when its affairs are settled he is entitled to credit for the amount so paid, and if it results that there is not enough property in the partnership to pay him, then the capitalist partners must pay him. In relation to this, the Supreme Court noted that partnerships under the Civil Code provides for a scenario where all partners are industrial partners (like when it is a partnership for the exercise of a profession). In such case, if it is permitted that industrial partners are not liable to third persons then

ISSUE: Whether or not the industrial partners are liable to third parties like La Compaia Martitama.

such third persons would get practically nothing from such partnerships if the latter is indebted.

SANTIAGO SYJUCO VS CASTRO

FACTS: Eugenio Lim, along with his brothers, all hereinafter collectively called the Lims, borrowed from petitioner Santiago Syjuco, Inc. (hereinafter, Syjuco only) the sum of 800,000.00. The loan was given on the security of a first mortgage on property registered in the names of said borrowers as owners in common. Thereafter, additional loans on the same security were obtained by the Lims from Syjuco, so that the aggregate of the loans stood at 2,460,000.00, exclusive of interest. When the obligation matured,the Lims failed to pay it despite demands th erefor and consequently, Syjuco caused extrajudicialproceedings for the foreclosure of the mortgage and for the Sheriff of Manila to execute the scheduled auction sale. The attempt to foreclose triggered off a legal battle that has dragged on for 20 years, through 5 cases in the courts, one of which the respondents advocated the theory that the mortgage, which they had individually constituted, in fact no longer belonged to them, having been earlier deeded over by them to the partnership,

Heirs of Hugo Lim, making the said mortgage void because it was executed by them without authority from the partnership. Judgment was rendered by the trial court declaring void the mortgage in question because it was executed by the Lims without authority from the partnership which was and had been the exclusive owner of the mortgaged property, and making permanent an injunction against the foreclosure sale. Syjuco filed an instant petition for certiorari, prohibition and mandamus. It prays in its petition that the default judgment rendered against it by Judge Castro be annuled on the ground of, among others, estoppel, res judicata, and Article 1819 of the Civil Code. ISSUE: Whether or not the lower court erred in deciding the case. HELD: Yes. The court holds that the respondent partnership was inescapably chargeable with knowledge of the mortgage executed by all the partners thereof, and therefore its silence and failure to impugn said mortgage within a reasonable time, let alone a space of more than 17 years, brought into play the doctrine of estoppel to preclude any attempt to avoid the mortgage as allegedly unauthorized. Equally or even more preclusive of the respondent partnerships

claim to the mortgaged propertyis the last paragraph of Art. 1819 of the Civil Code, which contemplates a situation similar to the case at bar. It states that where the title to real property is in the names of all the partners, a conveyance executed by all the partners passes all their rights in such property. Consequently, those members' acts, declarations and omissions cannot be deemed to be simply the individual acts of said members, but in fact and in law, those of the partnership. Finally, the Court emphasizes that the right of the Lims to assert the existence of the partnership could have been stressed at the time they instituted their first action, considering that the actions involved property supposedly belonging to it, and therefore, the partnership was the real party in interest. What was done by them was to split their cause of action in violation of the well known rule that only one suit may be instituted for a single cause of action. Hence, the court orders that the assailed judgment be declared null and void and the complaint be dismissed from being barred by prior judgment and estoppel, and for lack of merit.

MUNASQUE VS COURT OF APPEALS

FACTS: Elmo Muasque, in behalf of Galan and Muasque partnership as Contractor,entered into a written contract with Tropical Commercial Co., through its branch manager Ramon Pons, for remodelling of Tropicals building in Cebu. The consideration for the entire services is P25,000 to be paid: 30% upon signing of contract, and balance on 3 equal instalments of P6,000 every 15working days. First payment of check worth P7,000 was payable to Muasque, who indorsed it to Galan for purposes of depositing the amount and paying the materials already used. But since Galan allegedly misappropriated P6,183.37 of the check for personal use, Muasque refused to indorse the second check worth P6,000. Galan then informed Tropical of the misunderstanding between him and Muasq ue and this prompted Tropical to change the payee o f the second check from Muasque to Galan andAs sociates (the duly registered name of Galan and Mu asque partnership).Despite the misappropriation, Muasque alone was able to finish the project. The two remaining checks were properly issued to Muasque. Muasque filed a complaint for payment of sum of money plus damages against Galan, Tropical and Pons for the amount covered by the first and second checks. Cebu Southern Hardware Co and Blue Diamond Gla

ss Palace were allowed as intervenors having legal interest claiming against Muasue and Galan for material sused. TC:-Muasque and Pons jointly and severally liable to intervenors-Tropical and Pons absolved CA affirmed with modification:-Muasque and Pons jointly liable to intervenors Issue: 1.W/N Muasque and Galan are partners? 2.W/N payment made by Tropical to Galan was good payment? 3.W/N Galan should shoulder exclusively the amount s payable to theintervenors (granting he misappropriated the amount from the two checks)? HELD: 1.YES. Tropical had every right to presume the existence of the partnership: a.Contract states that agreement was entered into by Galan andMuasque b.The first check issue in the name of Muasque was indorsed to Galan The relationship was made to appear as a partnership.

2.YES. Muasque and Galan were partners when the debts to the intervenors were incurred, hence, they are also liable to third persons who extended credit to their partnership.

DELUAO VS CASTEEL FACTS: Casteel was the original occupant and applicant of a fishpond area since before the last World War. He wanted to preclude subsequent applicants from entering and spreading themselves within the area by expanding his occupation thereof by the construction of dikes and the cultivation of marketable fishes.-Thus, he borrowed P27, 000 from the Deluaos to finance needed improvements for the fishpond, and was compelled by force of this circumstance to enter into the contract of partnership, with an agreement to divide the fishpond after the award. Eventually, Casteel administered the said property and single-handedly opposed rival applicants who occupied portions of the fishpond area. He relentlessly pursued his claim to the said area up to the Office of the DANR Secretary, until it was finally awarded to him. Issue: WON the parties can now validly divide the said fishpond as agreed upon by them? NO. Ruling:

Spouses Deluaos statement that the beneficial right over the fishpond in question is the "specific partnership property" contemplated by art. 1811 of the Civil Code is incorrect. A reading of the said provision will show that what is meant is tangible property, such as a car, truck or a piece of land, but not an intangible thing such as the beneficial right to a fishpond. If what they have in mind is the fishpond itself, they are grossly in error. A fishpond of the public domain can neve rbe considered a specific partnership property because only its use and enjoyment never its title or ownership is granted to specific private persons.-Since we held as illegal the second part of the contract of partnership between the parties to divide the fishpond between them after the award, a fortiori, no rights or obligations could have arisen therefrom. Inescapably, no trust could have resulted because trust is founded on equity and can never result from an act violative of the law. Art. 1452 of the Civil Code does not support the appellees' stand because it contemplates an agreement between two or more persons to purchase property capable of private ownership the legal title of which is to be taken in the name of one of them for the benefitof all. In the case at bar, the parties did not agree to purchase the fishpond, and even if they did, such is prohibited by law, a fishpond of the public domain not being susceptible of private ownership.-It must be

observed that, despite the decisions of the DANR Secretary in DANR cases 353 and 353-B awarding the area to Casteel, and despite the latter's proposal that they divide the fishpond between them, the Deluaos unequivocally expressed in their aforequoted letter their decision not to share the fishpond with Casteel. This produced the dissolution of the entire contract of partnership (to jointly administer and to divide the fishpond after the award) between the parties, not to mention its automatic dissolution for being contrary to law. PetItioners final proposition that only by giving effect to the confirmed intention of the parties may the cause of equity and justice be served, we must state that since the contract of service is contrary to law and, therefore, null and void, it is not and can never be considered as the law between the parties.

LIM TANHU VS RAMOLETE FACTS: Private respondent Tan Put alleged that she is the widow of Tee Hoon Lim Po Chuan, who was a partner and practically the owner who has controlling interest of Glory Commercial Company and a Chinese Citizen until his death. Defendant Antonio

Lim Tanhu and Alfonso Leonardo Ng Sua were partners in name but they were mere employees of Po Chuan and were naturalized Filipino Citizens. Tan Put filed complaint against spousespetitoner Lim Tanhu and Dy Ochay including their son Tech Chuan and the other spouses-petitoner Ng Sua and Co Oyo including also their son Eng Chong Leonardo, that through fraud and machination took actual and active management of the partnership and that she alleged entitlement to share not only in the capital and profits of the partnership but also in the other assets, both real and personal, acquired by the partnership with funds of the latter during its lifetime." According to the petitioners, Ang Siok Tin is the legitimate wife, still living, and with whom Tee Hoon had four legitimate children, a twin born in 1942, and two others born in 1949 and 1965, all presently residing in Hong Kong. Tee Hoon died in 1966 and as a result of which the partnership was dissolved and what corresponded to him were all given to his legitimate wife and children. Tan Put prior of her alleged marriage with Tee Hoon on 1949, was engaged in the drugstore business; that not long after her marriage, upon the suggestion

of the latter sold her drugstore for P125,000.00 which amount she gave to her husband as investment in Glory Commercial Co. sometime in 1950; that after the investment of the above-stated amount in the partnership its business flourished and it embarked in the import business and also engaged in the wholesale and retail trade of cement and GI sheets and under huge profits. Defendants interpose that Tan Put knew and was are that she was merely the common-law wife of Tee Hoon. Tan Put and Tee Hoon were childless but the former had a foster child, Antonio Nunez. ISSUE: Whether Tan Put, as she alleged being married with Tee Hoon, can claim from the company of the latters share. HELD: Under Article 55 of the Civil Code, the declaration of the contracting parties that they take each other as husband and wife "shall be set forth in an instrument" signed by the parties as well as by their witnesses and the person solemnizing the marriage. Accordingly, the primary evidence of a marriage must be an authentic

copy of the marriage contract. While a marriage may also be proved by other competent evidence, the absence of the contract must first be satisfactorily explained. Surely, the certification of the person who allegedly solemnized a marriage is not admissible evidence of such marriage unless proof of loss of the contract or of any other satisfactory reason for its nonproduction is first presented to the court. In the case at bar, the purported certification issued by a Mons. Jose M. Recoleto, Bishop, Philippine Independent Church, Cebu City, is not, therefore, competent evidence, there being absolutely no showing as to unavailability of the marriage contract and, indeed, as to the authenticity of the signature of said certifier, the jurat allegedly signed by a second assistant provincial fiscal not being authorized by law, since it is not part of the functions of his office. Besides, inasmuch as the bishop did not testify, the same is hearsay. An agreement with Tee Hoon was shown and signed by Tan Put that she received P40,000 for her subsistence when they terminated their relationship of common-law marriage and promised not to interfere with each others affairs since they are incompatible and not in the position to keep living together permanently. Hence, this document not only proves that her relation was that of a common-law wife but

had also settled property interests in the payment of P40,000. IN VIEW OF ALL THE FOREGOING, the petition is granted. All proceedings held in respondent court in its Civil Case No. 12328 subsequent to the order of dismissal of October 21, 1974 are hereby annulled and set aside, particularly the ex-parteproceedings against petitioners and the decision on December 20, 1974. Respondent court is hereby ordered to enter an order extending the effects of its order of dismissal of the action dated October 21, 1974 to herein petitioners Antonio Lim Tanhu, Dy Ochay, Alfonso Leonardo Ng Sua and Co Oyo. And respondent court is hereby permanently enjoined from taking any further action in said civil case gave and except as herein indicated. Costs against private respondent.

EUROTECH INDUSTRIAL VS CUIZON FACTS: Eurotech is engaged in the business of importation and distribution of various European industrial equipment. It has as one of its customers Impact Systems Sales which is a sole proprietorship owned by Erwin Cuizon. Eurotech sold to Impact Systems various products allegedly a

mounting to P91,338.00. Cuizonssought to buy from Eurotech 1 unit of sludge pump valued at P250,000.00 with Cuizons making a down payment of P50,000.00. When the sludge pump arrived from the United Kingdom, Eurotech refused to deliver the same to Cuizons without their having fully settled their indebtedness to Eurotech. Thus, Edwin Cuizon and Alberto de Jesus, general manager of Eurotech, executed a Deed of Assignment of receivables in favor of Eurotech. Cuizons, despite the existence of the Deed of Assignment, proceeded to collect from Toledo Power Company the amount of P365,135.29. Eurotech made several demands upon Cuizons to pay their obligations. As a result, Cuizons were able to make partial payments to Eurotech. Cuizons total obligations stood at P295,000.00 excluding interests and attorneys fees. Edwin Cuizon alleged that he is not a real party in interest in this case. According to him, he was acting as mere agent of his principal, which was the Impact Systems, in his transaction with Eurotech and the latter was very much aware of this fact. ISSUE:

WON Edwin exceeded his authority when he signed the Deed of Assignment thereby binding himself personally to pay the obligations to Eurotech HELD: No. Edwin insists that he was a mere agent of Impact Systems which is owned by Erwin and that his status as such is known even to Eurotech as it is alleged in the Complaint that he is being sued in his capacity as the sales manager of the said business venture. Likewise, Edwin points to the Deed of Assignment which clearly states that he was acting as a representative of Impact Systems in said transaction. Art. 1897. The agent who acts as such is not personally liable to the party with whom he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers. In a contract of agency , a person binds himself to render some service or to do something in representation or on behalf of another with the latters consent. Its purpose is to extend the personality of the principal or the party for whom another acts and from whom he or she derives the authority to act. The basis of agency is representation, that is, the agent acts for and on

behalf of the principal on matters within the scope of his authority and said acts have the same legal effect as if they were personally executed by the principal. Elements of the contract of agency: (1) consent, express or implied, of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for himself; (4) the agent acts within the scope of his authority An agent, who acts as such, is not personally liable to the party with whom he contracts. There are 2instances when an agent becomes personally liable to a third person. The first is when he expressly binds himself to the obligation and the second is when he exceeds his authority. In the last instance, the agent can be held liable if he does not give the third party sufficient notice of his powers. Edwin does not fall within any of the exceptions contained in Art. 1897. In the absence of an agreement to the contrary, a managing agent may enter into any contracts that he deems reasonably necessary or requisite for the protection of the interests of his principal entrusted to his management. Edwin Cuizon acted well-within his authority when he signed the Deed of Assignment. Eurotech refused to deliver the 1 unit of sludge pump unless it received,

in full, the payment for Impact Systems indebtedness. Impact Systems desperately needed the sludge pump for its business since after it paid the amount of P50,000.00 as down payment it still persisted in negotiating with Eurotech which culminated in the execution of the Deed of Assignment of its receivables from Toledo Power Company. The significant amount of time spent on the negotiation for the sale of the sludge pump underscores Impact Systems perseverance to get hold of the said equipment. Edwins participation in the Deed of Assignment was reasonably necessary or was required in order for him to protect the business of his principal BALATAZAR VS OMBUDSMAN FACTS: Paciencia Regala owns a seven (7)-hectare fishpond located at Sasmuan, Pampanga. Her Attorney-in-Fact Faustino R. Mercado leased the fishpond to Eduardo Lapid for a three (3)-year period. Lessee Eduardo Lapid in turn sub-leased the fishpond to Rafael Lopez during the last seven (7) months of the original lease. Ernesto Salenga was hired by EduardoLapid as fishpond watchman (bante-encargado). In the sub-lease, Rafael Lopez rehired respondent Salenga. Ernesto Salenga, sent the demand letter to Rafael Lopez and Lourdes Lapid for unpaid salaries and non-payment of the

10% share in the harvest. Salenga was promted to file a Complaint before the Provincial Agrarian Reform Adjudication Board (PARAB), Region III, San Fernando, Pampanga docketed as DARAB Case No. 552-P93 entitled Ernesto R. Salenga v. Rafael L. Lopez and Lourdes L. Lapid for Maintenance of Peaceful Possession, Collection of Sum of Money and Supervision of Harvest. Pending resolution of the agrarian case, the instant case was instituted by petitioner Antonio Baltazar, an alleged nephew of Faustino Mercado, through a ComplaintAffidavit against private respondents before the Office of theOmbudsman which was docketed as OMB-1-94-3425 entitled Antonio B. Baltazar v. Eulogio Mariano, Jose Jimenez, Jr.,Toribio Ilao, Jr. and Ernesto Salenga for violation of RA 3019. Petitioner maintains that respondent Ilao, Jr. had no jurisdiction to hear and act on DARAB Case No. 552-P93 filed by respondent Salenga as there was no tenancy relation between respondent Salenga and Rafael L. Lopez, and thus, the complaint was dismissible on its face. ISSUE: Whether or not the petitioner has legal standing to pursue the instant petition? Whether or not the Ombudsman likewise erred in reversing his own resolution where it was resolved that accused

as Provincial Agrarian Adjudicator has no jurisdiction over a complaint where there exist no tenancy relationship? HELD: The "real-party-in interest" is "the party who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit. The Complaint-Affidavit filed before the Office of the Ombudsman, there is no question on his authority and legal standing. The Ombudsman can act on anonymous complaints and motu proprio inquire into alleged improper official acts or omissions from whatever source, e.g., a newspaper. Faustino Mercado, is an agent himself and as such cannot further delegate his agency to another. An agent cannot delegate to another the same agency. Redelegation of the agency would be detrimental to the principal as the second agent has no privity of contract with the former. In the instant case, petitioner has no privity of contract with Paciencia Regala, owner of the fishpond and principal of Faustino Mercado. The facts clearly show that it was not the Ombudsman through the OSP who allowed respondent Ilao, Jr. to submit his Counter-Affidavit. It was the Sandiganbayan who granted the prayed for re-investigation and ordered the OSP to conduct the re investigation . The OSP simply followed the graft courts directive to conduct the re-investigation after the Counter-Affidavit of respondent Ilao, Jr. was

filed. Indeed, petitioner did not contest nor question the August 29,1997 Order of the graft court. Moreover, petitioner did not file any reply-affidavit in the re-investigation despite notice. The nature of the case is determined by the settled rule that jurisdiction over the subject matter is determined by the allegations of the complaint. The nature of an action is determined by the material averments in the complaint and the character of the relief sought not by the defenses asserted in the answer or motion to dismiss. Respondent Salengas complaint and its attachment clearly spells out the jurisdictional allegations that he is an agricultural tenant in possession of the fishpond and is about to be ejected from it, clearly, respondent Ilao, Jr. could not be faulted in assuming jurisdiction as said allegations characterize an agricultural dispute. Besides, whatever defense asserted in an answer or motion to dismiss is not to be considered in resolving the issue on jurisdiction as it cannot be made dependent upon the allegations of the defendant.

Facts: Petitioner Jaime Ong and Respondent spouses Robles an Agreement of Purchase and Sale (Nota Bene: Contract to Sell) with regards two parcels of land with a rice mill and piggery situated at Quezon for P2M. As part of the terms and conditions, petitioner shall advance downpayment of 300K, shall pay the loan of the spouses of the bank, and will pay the balance of the purchase price quarterly. Petitioner was able to pay the downpayment and subsequently occupied the property. However, he gave the spouses postdated checks which were dishonored due to insufficient funds. To make it worse, he was not able to fully pay the loan of the spouses in the bank. The bank threatened to foreclose the mortgage, so what the spouses did was to sell three of the transformers of the rice mill in order to satisfy the loan obligation. Respondents now want to rescind the contract on account of Ongs non-fulfillment of obligation and seek to recover the property with damages.

ONG VS COURT OF APPEALS

RTC upheld the rescission and ordered mutual restitution as well as awarded exemplary damages. The CA deleted the award of exemplary damages. Issue: 1. WON the respondent spouses may rescind the contract? YES, but rescind through 1191 and not 1381. 2. WON there was novation of obligation? NO. (But we wont tackle it here yet.) Held: The Robles spouses bound themselves to deliver a deed of absolute sale and clean title covering the two parcels of land upon full payment by the buyer of the purchase price of P2,000,000.00 (since it is a contract to sell diba?) This promise to sell was subject to the fulfillment of the suspensive condition of full payment of the purchase price by the petitioner. Petitioner, however, failed to complete payment of the purchase price. The non-fulfillment of the condition of full payment rendered the contract to sell ineffective and without force and effect. It must be stressed that the breach contemplated in Article 1191 of the New Civil Code is the obligors failure to comply with an obligation. Failure to pay, in

this instance, is not even a breach but merely an event which prevents the vendors obligation to convey title from acquiring binding force. Hence, the agreement of the parties in the case at bench may be set aside, but not because of a breach on the part of petitioner for failure to complete payment of the purchase price. Rather, his failure to do so brought about a situation which prevented the obligation of respondent spouses to convey title from acquiring an obligatory force. 1191 vs. 1381 Although both presuppose contracts validly entered into and subsisting and both require mutual restitution when proper, they are not entirely identical. Articles 1380 is a remedy granted by law to the contracting parties and even to third persons, to secure the reparation of damages caused to them by a contract, even if this should be valid, by restoration of things to their condition at the moment prior to the celebration of the contract. It implies a contract, which even if initially valid, produces a lesion or a pecuniary damage to someone. Article 1191 of the New Civil Code refers to rescission applicable to reciprocal obligations. Rescission under Article 1191

is a principal action which is based on breach of a party, while rescission under Article 1381 is a subsidiary action limited to cases of rescissible contracts.

SUNANCE INTERNATIONAL VS NLRC FACTS: There is an implied revocation of an agency relationship when after the termination of the original employment contract, the foreign principal directly negotiated with the employee and entered into a new and separate employment contract. Respondent Divina Montehermozo is a domestic helper deployed to Taiwan by Sunace International Management Services (Sunace) under a 12-month contract. Such employment was made with the assistance of Taiwanese broker Edmund Wang. After the expiration of the contract, Montehermozo continued her employment with her Taiwanese employer for another 2 years. When Montehermozo returned to the Philippines, she filed a complaint against Sunace, Wang, and her Taiwanese employer before the National Labor

Relations Commission (NLRC). She alleges that she was underpaid and was jailed for three months in Taiwan. She further alleges that the 2year extension of her employment contract was with the consent and knowledge of Sunace. Sunace, on the other hand, denied all the allegations. The Labor Arbiter ruled in favor of Montehermozo and found Sunace liable thereof. The National Labor Relations Commission and Court of Appeals affirmed the labor arbiters decision. Hence, the filing of this appeal. ISSUE: Whether or not the 2-year extension of Montehermozos employment was made with the knowledge and consent of Sunace HELD: Contrary to the Court of Appeals finding, the alleged continuous communication was with the Taiwanese broker Wang, not with the foreign employer. The finding of the Court of Appeals solely on the basis of the telefax message written by Wang to Sunace, that Sunace continually communicated with the foreign principal (sic) and therefore was aware of

and had consented to the execution of the extension of the contract is misplaced. The message does not provide evidence that Sunace was privy to the new contract executed after the expiration on February 1, 1998 of the original contract. That Sunace and the Taiwanese broker communicated regarding Montehermozos allegedly withheld savings does not necessarily mean that Sunace ratified the extension of the contract. As can be seen from that letter communication, it was just an information given to Sunace that Montehermozo had taken already her savings from her foreign employer and that no deduction was made on her salary. It contains nothing about the extension or Sunaces consent thereto. Parenthetically, since the telefax message is dated February 21, 2000, it is safe to assume that it was sent to enlighten Sunace who had been directed, by Summons issued on February 15, 2000, to appear on February 28, 2000 for a mandatory conference following Montehermozos filing of the complaint on February 14, 2000.

Respecting the decision of Court of Appeals following as agent of its foreign principal, [Sunace] cannot profess ignorance of such an extension as obviously, the act of its principal extending [Montehermozos] employment contract necessarily bound it, it too is a misapplication, a misapplication of the theory of imputed knowledge. The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal, employer, not the other way around. The knowledge of the principal-foreign employer cannot, therefore, be imputed to its agent Sunace. There being no substantial proof that Sunace knew of and consented to be bound under the 2year employment contract extension, it cannot be said to be privy thereto. As such, it and its owner cannot be held solidarily liable for any of Montehermozos claims arising from the 2-year employment extension. As the New Civil Code provides, Contracts take effect only between the parties, their assigns, and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law.

Furthermore, as Sunace correctly points out, there was an implied revocation of its agency relationship with its foreign principal when, after the termination of the originalemployment contract, the foreign principal directly negotiated with Montehermozo and entered into a new and separate employment contract in Taiwan. Article 1924 of the New Civil Code states that the agency is revoked if the principal directly manages the business entrusted to the agent, dealing directly with third persons.

office was opened, the same was run by the herein appellant Una 0. Sevilla payable to Tourist World Service Inc. by any airline for any fare brought in on the efforts of Mrs. Lina Sevilla, 4% was to go to Lina Sevilla and 3% was to be withheld by the Tourist World Service, Inc. On November 24, 1961 the Tourist World Service, Inc. appears to have been informed that Lina Sevilla was connected with a rival firm, the Philippine Travel Bureau, and, since the branch office was anyhow losing, the Tourist World Service considered closing down its office. On June 17,1963, appellant Lina Sevilla refiled her case against the herein appellees and after the issues were joined, the reinstated counterclaim of Segundina Noguera and the new complaint of appellant Lina Sevilla were jointly heard following which the court ordered both cases dismiss for lack of merit. In her appeal, Lina Sevilla claims that a joint bussiness venture was entered into by and between her and appellee TWS with offices at the Ermita branch office and that she was not an employee of the TWS to the end that her relationship with TWS was one of a joint business venture appellant made declarations.

SEVILLA VS CA Facts: The petitioners invoke the provisions on human relations of the Civil Code in this appeal by certiorari. Mrs. Segundina Noguera, party of the first part; the Tourist World Service, Inc., represented by Mr. Eliseo Canilao as party of the second part, and hereinafter referred to as appellants, the Tourist World Service, Inc. leased the premises belonging to the party of the first part at Mabini St., Manila for the former-s use as a branch office. In the said contract the party of the third part held herself solidarily liable with the party of the part for the prompt payment of the monthly rental agreed on. When the branch

Issue: Whether or not the padlocking of the premises by the Tourist World Service, Inc. without the knowledge and consent of the appellant Lina Sevilla entitled the latter to the relief of damages prayed for and whether or not the evidence for the said appellant supports the contention that the appellee Tourist World Service, Inc. unilaterally and without the consent of the appellant disconnected the telephone lines of the Ermita branch office of the appellee Tourist World Service, Inc.? Held: The trial court held for the private respondent on the premise that the private respondent, Tourist World Service, Inc., being the true lessee, it was within its prerogative to terminate the lease and padlock the premises. It likewise found the petitioner, Lina Sevilla, to be a mere employee of said Tourist World Service, Inc. and as such, she was bound by the acts of her employer. The respondent Court of Appeal rendered an affirmance. In this jurisdiction, there has been no uniform test to determine the evidence of an employer-employee relation. In general, we have relied on the so-called

right of control test, "where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end." Subsequently, however, we have considered, in addition to the standard of right-of control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, in determining the existence of an employer-employee relationship. the Decision promulgated on January 23, 1975 as well as the Resolution issued on July 31, 1975, by the respondent Court of Appeals is hereby REVERSED and SET ASIDE. The private respondent, Tourist World Service, Inc., and Eliseo Canilao, are ORDERED jointly and severally to indemnify the petitioner, Lina Sevilla, the sum of 25,00.00 as and for moral damages, the sum of P10,000.00, as and for exemplary damages, and the sum of P5,000.00, as and for nominal and/or temperate damages.

HAHN VS COURT OF APPEALS Facts: 1.Alfred Hahn is a Filipino citizen doing business under the name and style "HahnManila."

2.Bayerische Motoren Werke Aktiengesellschaft (BM W) is a nonresident foreign corporation existing under the laws of the former Federal Republic of Germany, with principal office at Munich, Germany. 3.In 1963, Hahn executed in favor of BMW a Deed of Assignment with Special Power of Attorney which essentially, makes Hahn as the exclusive dealer of BMW in the Philippines. Moreover, it stated there that Hahn and BMW shall continue business relations as has been usual in the past without a formal contract." 4.In 1993, BMW and Columbia Motors Corp (CMC) had a meeting which would grant CMC exclusive dealership of BMW cars. 5.Hahn was informed later that BMW was dissatisfied with how it carrying its business. However, BMW expressed willingness to continue business relations with the petitioner on the basis of a "standard BMW importer" contract, otherwise, it said, if this was not acceptable to petitioner, BMW would have no alternative but to terminate petitioner's exclusive dealership effective June 30, 1993. 6.Hahn protested alleging that such termination is a breach of the Deed of Assignment. Hahn insisted that as long as the assignment of its trademark and device subsisted, he remained BMW's exclusive dealer in the Philippines because the assignment was made inconsideration of the exclusive dealership.

7.BMW, however, went on to terminate its dealership with Hahn. 8.Hahn filed a complaint for specific performance and damages in the RTC. RTC issued a writ preliminary injunction. 9.BMW appealed to the CA. CA reversed on the ground that Hahn is not an agent of BMW and that BMW is not doing business in the Phils. By virtue of the latter, the writ of preliminary injunction should not have been issued since RTC did not have jurisdiction over it. Issue W/N Hahn is agent or a distributor (or broker) in the Philippines of BMW. HELD: There is nothing to support the appellate court's finding that Hahn solicited orders alone and for his own account and without "interference from, let alone direction of, BMW. To the contrary, Hahn claimed he took orders for BMW cars and transmitted them to BMW. Upon receipt of the orders, BMW fixed the down payment and pricing charges, notified Hahn of the scheduled production month for the orders, and reconfirmed the orders by signing and returning to Hahn the acceptance sheets. 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. Hahn was credited with a commission equal to 14% of the purchase price upon the invoicing of a vehicle order by BMW. Upon confirmation in writing that the vehicles had been registered in the Philippines and serviced by him, Hahn received an additional 3% of the full purchase price. Hahn performed after-sale services, including, warranty services, for which he received reimbursement from BMW. All orders were on invoices and forms of BMW.

government office or agency due to complainant and his co-heirs by reason of their application for Homestead Patent. Complainant refused to sign the SPA as he wanted to obtain the documents personally. The respondent argues that the allegations of complainant are purely hearsay. He stresses that complaint was instituted to harass him because he was the counsel of an opposing litigant against complainants corporation in an ejectment case entitled General Milling Corporation v. Cebu Autometic Motors, Inc. and Tirso Uytengsu III. Complainant charges that respondent committed an act meriting disbarment when the latter caused to have a special power of attorney, which the former reused to sign earlier, executed by Mrs. Connie Kokseng, former guardian of complainant and his coheirs, authorizing certain individuals to secure the release from the Register of Deeds and other government offices in General Santos City, titles and other documents pertaining to complainants and his co-heirs homestead application. ISSUE: Whether or not the respondent has the authority to represent the complainant in their homestead patent application. HELD: The relation of attorney and client is in many respects one of agency and the general rules of ordinary agency apply to such relation. The extent of

UYTENGU VS BADUEL

FACTS: Complainant is one of the heirs of Tirso Uytengsu, Jr. He and his co-heirs had a pending patent application. He alleges that sometime in December 1998 respondent requested him to sign a special power of attorney (SPA) authorizing Luis Wee (Wee) and/or Thomas Jacobo (Jacobo) to claim, demand, acknowledge and receive on his behalf the certificates of title from the Register of Deeds, General Santos City, Department of Environment and Natural Resources and from any

authority of a lawyer, when acting on behalf of his client outside of court, is measured by the same test as that which is applied to an ordinary agent. Such being the case, even respondent himself can acquire the certificates of title and other documents without need of an SPA from complainant and his co-heirs. In addition, the Court agrees with the investigating commissioner that the allegations of complainant constitutes mere hearsay evidence and may not be admissible in any proceeding. It was proven that the case at bar is without merit and that evidences are weak and proved to be just hearsay

certification. Consequently, a petition was filed before the Court of Appeals. While the case was pending in the Supreme Court, the respondent entered into a compromise agreement and signed Quitclaims and Release. The same has been subscribed and sworn to before the Labor Arbiter. Accordingly, the case was dismissed. ISSUES: Whether or not the compromise agreement entered into by the respondent, without his counsel, is valid HELD: A compromise agreement is valid as long as the consideration is reasonable and the employee signed the waiver voluntarily, with a full understanding of what he was entering into. A compromise agreement is valid as long as the consideration is reasonable and the employee signed the waiver voluntarily, with a full understanding of what he was entering into. All that is required for the compromise to be deemed voluntarily entered into is personal and specific individual consent. Thus, contrary to Dumalaoag's contention, the employee's counsel need not be present at the time of the signing of the compromise agreement. The relation of attorney and client is in many respects one of agency, and the general rules of agency apply to such relation. The acts of an agent are deemed the

J-PHIL MARINE VS NLRC FACTS: Worked as a cook on aboard vessels plying overseas, Warlito E. Dumalaog was employed as a cook on board vessels plying overseas. He filed a proforma complaint on March 4,2002 before the National Labor Relations Commission (NLRC) against J-Phil Marine, Inc., its then president Jesus Candava, and its foreign principal Norman Shipping Services. The Labor Arbiter dismissed the complaint for lack of merit. On appeal, the NLRC reversed the decision of the Labor Arbiter. The Court of Appeals affirmed the dismissal for failure to attach to the petition all material documents and for defective verification and

acts of the principal only if the agent acts within the scope of his authority. The circumstances of this case indicate that Dumalaoag's counsel is acting beyond the scope of his authority in questioning the compromise agreement.

not revoked since Ybaez requested that Lim stop payment of the checks payable to Saban only after the consummation of the sale. At that time, Saban had already performed his obligation as agent when the Deed of Absolute Sale was executed. To deprive Saban of his commission subsequent to the sale which was consummated through his efforts would be a breach of his contract of agency. The logical conclusion of Court is that Lim changed her mind in agreeing to purchase the lot at 600k after talking to Ybaez and realizing that Sabans commission was higher than the share of the owner. It was sufficient to conclude Ybaez and Lim connived to deprive Saban of his commission by dealing with each other directly and reducing the price and leaving nothing to compensate Saban for his effort.

LIM VS SABAN Facts: Ybez, owner of a lot entered into an Agency agreement with Saban authorizing the latter to look for a buyer of the Lot, with 200k as selling price which he can mark up to cover commission and transfer expenses. Saban sold the lot to Lim in the amount of 600k. Lim issued four checks to Saban but Ybaez asked Lim to cancel said checks and pay the remaining amount directly to Ybaez. Saban filed a case against Ybaez and Lim. Pending case, Ybaez died without being substituted. RTC dismissed Sabans complaint, the four checks issued by Lim were stale and non-negotiable and the Latter was absolved. CA reversed the decision. ISSUE: Whether or not as agent, Saban is entitled to receive his commission and Lim should pay the same. RULING: The court affirms the CAs finding that agency was

VELOSO VS COURT OF APPEALS

Applicable Provision: Art. 1878 Facts: Petitioner Francisco Veloso was the sole owner of a registered parcel of land in Tondo, Manila, which he acquired in 1957. His wife Irma, armed with a general power of attorney, sold said lot to the respondent spouses Escario in 1987.

Petitioner filed an action for annulment of the deed of sale and reconveyance of property Issue: Whether a general power of attorney may authorize an agent to sell real property. Held/Ratio: Yes. 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, there is no need to execute a separate special power of attorney. The assailed power of attorney had the following provision: To buy or sell land, more specifically TCT No. 49138 Thus, said power of attorney sufficiently authorized the wife to sell the property. Therefore, the sale is valid