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1. Santos VS.

Spouses Reyes FACTS: On June 13, 1986, a lending business venture was launched by Fernando Santos (petitioner), Nieves Reyes (respondent) and Meliton Zabat with the agreement that Santos will be the financer and will receive the lions share of 70%of the profit. The rest will receive 15% each. Thereafter, Zabat was replaced by the husband of Reyes because it was discoveredthat the latter was engaged in the same lending business in competition with their partnership.On June 5, 1987, Zabat filed a complaint for the recovery of sum of money from the spouses Reyes claiming that the latter misappropriated funds as employees. The spouses Reyes answered that they are not mere employees but partners of thepetitioner. The trial court ruled in favor of Spouses Reyes and was affirmed by the Court of Appeals. ISSUE: WON there was a partnership established to engage in a money-lendingbusiness.WON the CA is correct in granting the spouses Reyes counterclaim for their share inpartnership and for damages. HELD: As to the first ISSUE, there is an establishment of a partnership. Under the contract of partnership, two or more persons bind themselves to contribute money, property and industry to a common fund, with the intention of dividing the profit among themselves. The stipulation between the petitioner and the respondent spouses clearly shows that there is a partnership wherein the Articles of Agreement, there are signatories that they shall share the profits of the business in70-15-15 manner, with petitioner getting the lions share. As to the second ISSUE, the SC found a reason to disagree with CA. exhibit 10-Ishowed that the partnership earned a total income of P20,429,520 for the period of June 13, 1986 until April 19, 1987. It did not consider the expenses sustained by the partnership. All expenses incurred by the money-lending enterprise of the parties must first be deducted from the total income in order to arrive at the net profit. The respondents exhibits did not reflect the complete financial condition of the money-lending business. 2. Heirs of Tan Eng Kee vs. CA (October 3, 2000) 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 into a partnership with the former after the WWII were they both pooled in their money inorder to recapitalize the business. Petitioners wants to account, liquidate and windup 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 being 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 jointventure. The CA reversed the decision of the RTC. 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.

3. YULO V. YANG CHIAO SENG Facts: Yang Chiao Seng proposed to form a partnership with Rosario Yulo to run and operate a theatre on the premises occupied by Cine Oro, PlazaSta. Cruz, Manila, the principal conditions of the offer being (1) Yang guarantees Yulo a monthly participation of P3,000 (2) partnership shall be for aperiod of 2 years and 6 months with the condition that if the land is expropriated, rendered impracticable for business, owner constructs a permanent building, then Yulos right to lease and partnership even if period agreed upon has not yetexpired; (3) Yulo is authorized to personally conduct business in the lobby of the building; and (4) afterDec 31, 1947, all improvements placed by partnership shall belong to Yulo but if partnership is terminated before lapse of 1 and years, Yang shall have right to remove improvements. Parties established, Yang and Co. Ltd., to exist from July 1,1945 Dec 31, 1947.In June 1946, they executed a supplementary agreement extending the partnership for 3 years beginning Jan 1, 1948 to Dec 31, 1950. The land on which the theater was constructed was leased by Yulo from owners, Emilia Carrion and Maria Carrion Santa Marina for an indefinite period but that after 1 year, such lease may be cancelled by either party upon 90-day notice. In Apr 1949, the owners notified Yulo of their desire to cancel the lease contract come July. Yulo and husband brought a civil action to declare the lease for a indefinite period. Owners brought their own civil action for ejectment upon Yulo and Yang. Issue: Was the agreement a contract a lease or a partnership? Held: Dismissal. The agreement was a sublease nota partnership. The following are the requisites of partnership: (1) two or more persons who bind themselves to contribute money ,property or industry to a common fund; (2) The intention on the part of the partners to divide the profits among themselves (Article 1761, CC)Plaintiff did not furnish the supposed P20,000 capital nor did she furnish any help or intervention in the management of the theatre. Neither has she demanded from defendant any accounting of the expenses and earnings of the business. She was absolutely silent with respect to any of the acts that a partner should have done; all she did was to receive her share of P3,000 a month which cannot be interpreted in any manner than a payment for the use of premises which she had leased from the

4. Ortega vs CA Facts: Ortega, then a senior partner in the law firm Bito, Misa, and Lozada withdrew in said firm. He filed with SEC a petition for dissolution and liquidation of partnership. SEC en banc ruled that withdrawal of Misa from the firm had dissolved the partnership. Reason: since it is partnership at will, the law firm could be dissolved by any partner at anytime, such as by withdrawal there from, regardless of good faith or bad faith, since no partner can be forced to continue in the partnership against his will. Issue: 1. WON the partnership of Bito, Misa & Lozada (now Bito, Lozada, Ortega & Castillo)is a partnership at will; 2. WON the withdrawal of Misa dissolved the partnership regardless of his good or bad faith; Held: 1. Yes. The partnership agreement of the firm provides that *t+he partnership shall continue so long as mutually satisfactory and upon the death or legal incapacity of one of the partners, shall be continued by the surviving partners.2. Yes. Any one of the partne rs may, at his sole pleasure, dictate a dissolution of the partnership at will (e.g. by way of withdrawal of a partner). He must, however, act in good faith, not that the attendance of bad faith can prevent the dissolution of the partnership but that it can result in a liability for damages. Tocao vs CA Facts:

Petitioners maintain that there was no partnership between petitioner Belo, on one hand, and respondent Nenita Anay, on the other hand; and that the latter being merely an employee of petitioner Tocao. It was found out that Belo sometimes would participate in Geminesse Enterprise meetings to help petitioner Tocao. Issue: Whether or not Belo is a partner of Tocao Held: No. Belos presence in Geminesse Enterprises meetings was merely as guarantor of the company and to help Tocao his personal friend. Respondent herself professed lacked of knowledge that petitioner Belo received any share in the profits of Geminesse. On the other hand, Tocao declared that Belo was not entitled to any sharein the profits of the enterprise. With no participation in the profits, petitioner Belo cannot be deemed a partner; since the essence of a partnership is that the partners share in the profits and losses

JG Summit Holdings vs CA FACTS:

The National Investment and Development Corporation (NIDC), a government corporation, entered into a Joint Venture Agreement (JVA) with Kawasaki Heavy Industries, Ltd. for the construction, operation and management of the Subic National Shipyard, Inc., later became the Philippine Shipyard and Engineering Corporation (PHILSECO). Under the JVA, NIDC and Kawasaki would maintain a shareholding proportion of 60%-40% and that the parties have the right of first refusal in case of a sale.

Through a series of transfers, NIDCs rights, title and interest in PHILSECO eventually went to the National Government. In the interest of national economy, it was decided that PHILSECO should be privatized by selling 87.67% of its total outstanding capital stock to private entities. After negotiations, it was agreed that Kawasakis right of first refusal under the JVA be exchanged for the right to top by five percent the highest bid for said shares. Kawasaki that Philyards Holdings, Inc. (PHI), in which it was a stockholder, would exercise this right in its stead.

During bidding, Kawasaki/PHI Consortium is the losing bidder. Even so, because of the right to top by 5% percent the highest bid, it was able to top JG Summits bid. JG Summit protested, contending that PHILSECO, as a shipyard is a public utility and, hence, must observe the 60%-40% Filipino-foreign capitalization. By buying 87.67% of PHILSECOs capital stock at bidding, Kawasaki/PHI in effect now owns more than 40% of the stock.


Whether or not PHILSECO is a public utility Whether or not Kawasaki/PHI can purchase beyond 40% of PHILSECOs stocks


In arguing that PHILSECO, as a shipyard, was a public utility, JG Summit relied on sec. 13, CA No. 146. On the other hand, Kawasaki/PHI argued that PD No. 666 explicitly stated that a shipyard was not a public utility. But the SC stated that sec. 1 of PD No. 666 was expressly repealed by sec. 20, BP Blg. 391 and when BP Blg. 391 was subsequently repealed by EO 226, the latter law did not revive sec. 1 of PD No. 666. Therefore, the law that states that a shipyard is a public utility still stands. A shipyard such as PHILSECO being a public utility as provided by law is therefore required to comply with the 60%-40% capitalization under the Constitution. Likewise, the JVA between NIDC and Kawasaki manifests an intention of the parties to abide by this constitutional mandate. Thus, under the JVA, should the NIDC opt to sell its shares of stock to a third party, Kawasaki could only exercise its right of first refusal to the extent that its total shares of stock would not exceed 40% of the entire shares of stock. The NIDC, on the other hand, may purchase even beyond 60% of the total shares. As a government corporation and necessarily a 100% Filipino-owned corporation, there is nothing to prevent its purchase of stocks even beyond 60% of the capitalization as the Constitution clearly limits only foreign capitalization. Kawasaki was bound by its contractual obligation under the JVA that limits its right of first refusal to 40% of the total capitalization of PHILSECO. Thus, Kawasaki cannot purchase beyond 40% of the capitalization of the joint venture on account of both constitutional and contractual proscriptions.

Liwanag vs Workmens Compensation Commission Facts: Appellants Benito Liwanag and Maria Liwanag Reyes are co-owners of Liwanag Auto Supply, a commercial guard who while in line of duty, was skilled by criminal hands. His widow Ciriaca Vda. de Balderama and minor children Genara, Carlos and Leogardo, all surnamed Balderama, in due time filed a claim for compensation with the Workmen's Compensation Commission, which was granted in an award. n appealing the case to this Tribunal, appellants do not question the right of appellees to compensation nor the amount awarded. They only claim that, under the Workmen's Compensation Act, the compensation is divisible, hence the commission erred in ordering appellants to pay jointly and severally the amount awarded. They argue that there is nothing in the compensation Act which provides that the obligation of an employer arising from compensable injury or death of an employee should be solidary obligation, the same should have been specifically provided, and that, in absence of such clear provision, the responsibility of appellants should not be solidary but merely joint.

Issue: Whether or not the partnership is solidarily liable

Held: At first blush appellants' contention would seem to be well, for ordinarily, the liability of the partners in a partnership is not solidary; but the law governing the liability of partners is not applicable to the case at bar wherein a claim for compensation by dependents of an employee who died in line of duty is involved. And although the Workmen's Compensation Act does not contain any provision expressly declaring solidary obligation of business partners like the herein appellants, there are other provisions of law from which it could be gathered that their liability must be solidary. Arts. 1711 and 1712 of the new Civil Code provide: ART. 1711. Owners of enterprises and other employers are obliged to pay compensation for the death of or injuries to their laborers, workmen, mechanics or other employees, even though the event may have been purely accidental or entirely due to a fortuitous cause, if the death or personal injury arose out of and in the course of the employment. . . . . ART. 1712. If the death or injury is due to the negligence of a fellow-worker, the latter and the employer shall be solidarily liable for compensation. . . . .

And section 2 of the Workmen's Compensation Act, as amended reads in part as follows:

. . . The right to compensation as provided in this Act shall not be defeated or impaired on the ground that the death, injury or disease was due to the negligence of a fellow servant or employee, without prejudice to the right of the employer to proceed against the negligence party.

The provisions of the new Civil Code above quoted taken together with those of Section 2 of the Workmen's Compensation Act, reasonably indicate that in compensation cases, the liability of business partners, like appellants, should be solidary; otherwise, the right of the employee may be defeated, or at least crippled. If the responsibility of appellants were to be merely joint and solidary, and one of them happens to be insolvent, the amount awarded to the appellees would only be partially satisfied, which is evidently contrary to the intent and purposes of the Act. In the previous cases we have already held that the Workmen's Compensation Act should be construed fairly, reasonably and liberally in favor of and for the benefit of the employee and his dependents; that all doubts as to the right of compensation resolved in his favor; and that it should be interpreted to promote its purpose. Accordingly, the present controversy should be decided in favor of the appellees. Moreover, Art. 1207 of the new Civil Code provides: . . . . There is solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity. Since the Workmen's Compensation Act was enacted to give full protection to the employee, reason demands that the nature of the obligation of the employers to pay compensation to the heirs of their employee who died in line of duty, should be solidary; otherwise, the purpose of the law could not be attained.

Aldecao & Co. vs Warner, Barnes & Co. Facts: Warner, Barnes and Co. were conducting a business in Albay, the principal object of which was the purchase of hemp in the pueblos of Legaspi and Tobacco for the purpose of bringing it to Manila, here to sell if for exportation, and that on the said date of December 1, 1898, the plaintiff company became interested in the said business of Warner, Barnes and Co., in Albay and formed therewith a joint-account partnership whereby Aldecoa and Co., were to share equally in the gains and losses of the business in Albay; that the defendant is the successor to all the rights and obligations of Warner, Barnes and Co., among which is that of being manager of the said joint-account partnership with Aldecoa and Co.; that the defendant acted, and continues to act as such manager, and is obliged to render accounts supported by proofs, and to liquidate the business, which defendant not only has not done, in spite of the demand made upon it, but it has expressly denied the right of plaintiff to examine the vouchers, contenting itself with forwarding copies of the entries in its books, which entries contain errors and omissions that hereinafter will be mentioned.

Said entries moreover, whereas its operations should have commenced and did commence on December 1, 1898, on which date the jointaccount partnership commenced; that, with respect to the liquidation of the business, the operations having been closed on December 31, 1903, Warner, Barnes and Co., Ltd., the defendant, has not realized upon the assets of the firm by selling the property which constitutes its capital; that the persons who were the managers and general partners of Warner, Barnes and Co., Ltd., and are the managers and directors of that firm in the Philippine Islands and are the ones who, under the previous firm name of Warner, Barnes and Co., admitted Aldecoa and Co. as a participant in one-half of the said business, on the 1st day of December, 1898; that the said directors of the defendant company, unlawfully, maliciously, and criminally conspired with the persons who were managing the commercial firm of Aldecoa and Co. during the years 1899, 1900, 1901, 1902, and 1903, to defraud the latter of its interest in the said joint-account partnership, buying the silence of the said managers with respect to the operations of the joint-account partnership during the time comprised between the 1st of December, 1898, and the 30th of June, 1899, and also with respect to the errors and omission in the accounts relating to the second semester of 1899, and those relating to 1900, 1901, 1902, and 1903.

That the said fraudulent acts were not known to the partners of the plaintiff firm until the managers, in collusion with the managers of the defendant firm to defraud and injure the plaintiff firm, had ceased to hold their positions, to wit, until after the 31st of December, 1906, and that by reason of this conspiracy to defraud the plaintiffs, the defendants have been benefited; that the errors and omissions found in the entries of the books kept by the defendant firm as manager of the joint-account partnership.

Issue: Whether or not joint account partnership was formed

Held: With respect to the date on which the said partnership began, the plaintiff, Aldecoa and Co., submitted evidence unrebutted by that of the defendant, Warner, Barnes and Co., Ltd., and although the latter averred that the joint-account partnership began on June 30, 1899, denying that it was commenced, or was formed, on December 1, 1898, as the plaintiff says that it was, it is certain that the defendant has not proved its averment; and if, on the opening of this case de novo it shall not have done so within such period as the court may see fit to determine, it will be proper to find in accordance with the value of the evidence adduced by the plaintiff and to advise the defendant to render, within a fixed period, accounts, verified by vouchers, of the management of the partnership business and pertaining to the seven months from December 1, 1898, to June 29, 1899; and, in view of the evidence adduced by the plaintiff in proof of the aforesaid first point, if the defendant does not produce other evidence in rebuttal, they must, for some reason, be expressly rejected in the judgment, if they are not to be taken into account in reaching the conclusions or in considering the case upon the merits. Po Yeng Cheo vs Lim Ka Yam Facts: The plaintiff, Po Yeng Cheo, is the sole heir of one Po Gui Yao, deceased, and as such Po Yeng Cheo inherited the interest left by Po Gui Yao in a business conducted in Manila under the style of Kwong Cheong Tay. This business had been in existence in Manila for many years prior to 1903, as a mercantile partnership, with a capitalization of P160,000, engaged in the import and export trade; and after the death of Po Gui Yao the following seven persons were interested therein as partners in the amounts set opposite their respective names, to wit: Po Yeng Cheo, P60,000; Chua Chi Yek, P50,000; Lim Ka Yam, P10,000; Lee Kom Chuen, P10,000; Ley Wing Kwong, P10,000; Chan Liong Chao, P10,000; Lee Ho Yuen, P10,000. The manager of Kwong Cheong Tay, for many years prior of its complete cessation from business in 1910, was Lim Ka Yam, the original defendant herein. Among the properties pertaining to Kwong Cheong Tay and consisting part of its assets were ten shares of a total par value of P10,000 in an enterprise conducted under the name of Yut Siong Chyip Konski and certain shares to the among of P1,000 in the Manila Electric Railroad and Light Company, of Manila. In the year 1910 (exact date unstated) Kwong Cheong Tay ceased to do business, owing principally to the fact that the plaintiff ceased at that time to transmit merchandise from Hongkong, where he then resided. Lim Ka Yam appears at no time to have submitted to the partners any formal liquidation of the business, though repeated demands to that effect have been made upon him by the plaintiff.

Issue: Whether or not the managing partner is liable

Held: Proceeding then to consider the appealed decision in relation with the facts therein stated and other facts appearing in the orders and proceedings in the cause, it is quite apparent that the judgment cannot be sustained. In the first place, it was erroneous in any event to give judgment in favor of the plaintiff to the extent of his share of the capital of Kwong Cheong Tay. The managing partner of a mercantile enterprise is not a debtor to the shareholders for the capital embarked by them in the business; and he can only be made liable for the capital when, upon liquidation of the business, there are found to be assets in his hands applicable to capital account. That the sum of one hundred and sixty thousand pesos (P160,000) was embarked in this business many years ago reveals nothing as to the condition of the capital account at the time the concern ceased to do business; and even supposingas the court possibly didthat the capital was intact in 1908, this would not prove it was intact in 1910 when the business ceased to be a going concern; for in that precise interval of time the capital may have been diminished or dissipated from causes in no wise chargeable to the negligence or misfeasance of the manager.

Again, so far as appears from the appealed decision, the only property pertaining to Kwong Cheong Tay at the time this action was brought consisted of shares in the two concerns already mentioned of the total par value of P11,000. Of course, if these shares had been sold and converted into money, the proceeds, if not needed to pay debts, would have been distributable among the various persons in interest, that is, among the various shareholders, in their respective proportions. But under the circumstances revealed in this case, it was erroneous to give judgment in favor of the plaintiff for his aliquot part of the par value of said shares. It is elementary that one partner, suing alone, cannot recover of the managing partner the value of such partners individual interest; and a liquidation of the business is an essential prerequisite. It is true that in Lichauco vs. Lichauco (33 Phil., 350), this court permitted one partner to recover of the manager the plaintiffs aliquot part of the proceeds of the business, then long since closed; but in that case the affairs of the defunct concern had been actually liquidate by the manager to the extent that he had apparently converted all its properties into money and had pocketed the samewhich was admitted;and nothing remained to be done except to compel him to pay over the money to the persons in interest. In the present case, the shares referred to constituting the only assets of Kwong Cheong Tayhave not been converted into ready money and doubtless still remain in the name of Kwong Cheong Tay as owner. Under these circumstances it is impossible to sustain a judgment in favor of the plaintiff for his aliquot part of the par value of said shares, which would be equivalent to allowing one of several coowners to recover from another, without process of division, a part of an undivided property.

Another condition will be noted as present in this case which in our opinion is fatal to the maintenance of the appealed judgment. This is that, after the death of the original defendant, Lim Ka Yam, the trial court allowed the action to proceed against Lim Yock Tock, as his administrator, and entered judgment for a sum of money against said administrator as the accounting party,notwithstanding the insistence of the attorneys for the latter that the action should be discontinued in the form in which it was then being prosecuted. The error of the trial court in so doing can be readily demonstrated from more than one point of view.

In the first place, it is well settled that when a member of a mercantile partnership dies, the duty of liquidating its affair devolves upon the surviving member, or members, of the firm, not upon the legal representative of the deceased partner. (Wahl vs. Donaldson Sim & Co., 5 Phil., 11; Sugo and Shibata vs. Green, 6 Phil., 744) And the same rule must be equally applicable to a civil partnership clothed with the form of a commercial association (art. 1670, Civil Code; Lichauco vs. Lichauco, 33 Phil., 350) Upon the death of Lim Ka Yam it therefore became the duty of his surviving associates to take the proper steps to settle the affairs of the firm, and any claim against him, or his estate, for a sum of money due to the partnership by reason of any misappropriation of its funds by him, or for damages resulting from his wrongful acts as manager, should be prosecuted against his estate in administration in the manner pointed out in sections 686 to 701, inclusive, of the Code of Civil Procedure. Moreover, when it appears, as here, that the property pertaining to Kwong Cheong Tay, like the shares in the Yut Siong Chyip Konski and the Manila Electric Railroad and Light Company, are in the possession of the deceased partner, the proper step for the surviving associates to take would be to make application to the court having charge to the administration to require the administrator to surrender such property. But, in the second place, as already indicated, the proceedings in this cause, considered in the character of an action for an accounting, were futile; and the court, abandoning entirely the effort to obtain an accounting, gave judgment against the administrator upon the supposed liability of his intestate to respond for the plaintiffs proportionate share of the capital and assets. But of course the action was not maintainable in this aspect after the death of the defendant; and the motion to discontinue the action as against the administrator should have been granted.

Guidote vs Borja Facts:

Rallos vs Felix Go Chan Facts: Conception and Gerundia Rallos were sisters and registered co-owners of a parcel of land known as Lot No. 5983. In 1954, they executed as pecial power of attorney in favor of their brother, Simeon Rallos, authorizing him to sell for and intheir behalf the aforementioned parcel of land. OnMarch 1955, Concepcion Rallos died. On September 1955, Simeon Rallos sold the undivided shares of his sisters in lot 5983

to Felix Go Chanand Sons Realty Corporation. The deed of sale was registered and the previous TCT was cancelled.On May 1956, Ramos Rallos, as administrator of the Intestate Estate of Concepcion Rallos, filed acomplaint with the CFI of Cebu, praying (1) that the sale of the undivided share of the deceasedConcepcion Rallos be declared unenforceable, and said share be reconveyed to her estate; (2) thatthe TCT issued in the name of Felix Go Chan and Sons Realty Corporation be cancelled; and (3) that the plaintiff be indemnified by way of attorneys fees and payment of costs of suit. The trial court rendered judgment declaring the deed of sale null and void, insofar as the one-half pro-indiviso share of Concepcion Rallos in the property in question, and sentencing Juan Borromeo, the administrator of the estate of Simeon Rallos, to pay Felix Go Chan and Sons Realty Corporation the sum representing the price of one-half of the lot. The appellate court reversedthe decision and sustained the sale. ISSUE: Whether or not the sale of the agent of the principals property after the latters death is valid HELD: NO. The general rule in Article 1919 of the NCC is that death is one of the causes for the extinguishment of agency. There being an integration of the personality of the principal intothat of the agent, it is not possible for there presentation to continue once the death of either is established. There are certain exceptions, however, Article 1931 being one of them. Under this provision, an act done by the agent after the death of the principal is valid and effective if two conditions concur: (1) the agent acted without knowledge of the death of the principal; and (2)that the third person who contracted with the agent acted in good faith. But because it was established that Simeon Rallos had knowledge of the death of his principal when he made the sale, Article 1931 will not apply. The general rule shall apply then that any act of an agent after the death of his principal is void ab initio. Simeon Rallos act of selling the share of Concepcion after her death is therefore null and void. AGENCY: The relationship of agency is whereby one party, called the principal (mandante), authorizes another, called the agent (mandatario), to act for and in his behalf in transactions with third persons. The essential elements of agency are: (1) there isconsent, 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 agents acts as a representative and not for himself, and (4) the agent acts within the scope of his authority. Agency is basically personal representative, andderivative in nature. The authority of the agent to act emanates from the powers granted to him by his principal; his act is the act of the principal if done within the scope of the authority. Qui facit peralium facit se. "He who acts through another acts himself"

Nielson & Co. Inc. vs. Lepanto Consolidated Mining Co. Case Digest Facts: An operating agreement was executed before World War II (on 30 January 1937) between Nielson & Co. Inc. and the Lepanto Consolidated Mining Co. whereby the former operated and managed the mining properties owned by the latter for a management fee of P2,500.00 a month and a 10% participation in the net profits resulting from the operation of the mining properties, for a period of 5 years. In 1940, a dispute arose regarding the computation of the 10% share of Nielson in the profits. The Board of Directors of Lepanto, realizing that the mechanics of the contract was unfair to Nielson, authorized its President to enter into an agreement with Nielson modifying the pertinent provision of the contract effective 1 January 1940 in such a way that Nielson shall receive (1) 10% of the dividends declared and paid, when and as paid, during the period of the contract and at the end of each year, (2) 10% of any depletion reserve that may be set up, and (3) 10% of any amount expended during the year out of surplus earnings for capital account. In the latter part of 1941, the parties agreed to renew the contract for another period of 5 years, but in the meantime, the Pacific War broke out in December 1941. In January 1942 operation of the mining properties was disrupted on account of the war. In February 1942, the mill, power plant, supplies on hand, equipment, concentrates on hand and mines, were destroyed upon orders of the United States Army, to prevent their utilization by the invading Japanese Army.

The Japanese forces thereafter occupied the mining properties, operated the mines during the continuance of the war, and who were ousted from the mining properties only in August 1945. After the mining properties were liberated from the Japanese forces, LEPANTO took possession thereof and embarked in rebuilding and reconstructing the mines and mill; setting up new organization; clearing the mill site; repairing the mines; erecting staff quarters and bodegas and repairing existing structures; installing new machinery and equipment; repairing roads and maintaining the same; salvaging equipment and storing the same within the bodegas; doing police work necessary to take care of the materials and equipment recovered; repairing and renewing the water system; and retimbering. The rehabilitation and reconstruction of the mine and mill was not completed until 1948. On 26 June 1948 the mines resumed operation under the exclusive management of LEPANTO. Shortly after the mines were liberated from the Japanese invaders in 1945, a disagreement arose between NIELSON and LEPANTO over the status of the

operating contract which as renewed expired in 1947. Under the terms thereof, the management contract shall remain in suspense in case fortuitous event or force majeure, such as war or civil commotion, adversely affects the work of mining and milling. On 6 February 1958, NIELSON brought an action against LEPANTO before the Court of First Instance of Manila to recover certain sums of money representing damages allegedly suffered by the former in view of the refusal of the latter to comply with the terms of a management contract entered into between them on 30 January 1937, including attorney's fees and costs. LEPANTO in its answer denied the material allegations of the complaint and set up certain special defenses, among them, prescription and laches, as bars against the institution of the action.

After trial, the court a quo rendered a decision dismissing the complaint with costs. The court stated that it did not find sufficient evidence to establish LEPANTO's counterclaim and so it likewise dismissed the same. NIELSON appealed. The Supreme Court reversed the decision of the trial court and enter in lieu thereof another, ordering Lepanto to pay Nielson (1) 10% share of cash dividends of December, 1941 in the amount of P17,500.00, with legal interest thereon from the date of the filing of the complaint; (2) management fee for January, 1942 in the amount of P2,500.00, with legal interest thereon from the date of the filing of the complaint; (3) management fees for the sixty-month period of extension of the management contract, amounting to P150,000.00, with legal interest from the date of the filing of the complaint; (4) 10% share in the cash dividends during the period of extension of the management contract, amounting to P1,400,000.00, with legal interest thereon from the date of the filing of the complaint; (5) 10% of the depletion reserve set up during the period of extension, amounting to P53,928.88, with legal interest thereon from the date of the filing of the complaint; (6) 10% of the expenses for capital account during the period of extension, amounting to P694,364.76, with legal interest thereon from the date of the filing of the complaint; (7) to issue and deliver to Nielson and Co. Inc. shares of stock of Lepanto Consolidated Mining Co. at par value equivalent to the total of Nielson's 10% share in the stock dividends declared on November 28, 1949 and August 22, 1950, together with all cash and stock dividends, if any, as may have been declared and issued subsequent to November 28, 1949 and August 22, 1950, as fruits that accrued to said shares; provided that if sufficient shares of stock of Lepanto's are not available to satisfy this judgment, Lepanto shall pay Nielson an amount in cash equivalent to the market value of said shares at the time of default, that is, all shares of stock that should have been delivered to Nielson before the filing of the complaint must be paid at their market value as of the date of the filing of the complaint; and all shares, if any, that should have been delivered after the filing of the complaint at the market value of the shares at the time Lepanto disposed of all its available shares, for it is only then that Lepanto placed itself in condition of not being able to perform its obligation; (8) the sum of P50,000.00 as attorney's fees; and (9) the costs.

Lepanto seeks the reconsideration of the decision rendered on 17 December 1966.

Issue: Whether the management contract is a contract of agency or a contract of lease of services.

Held: Article 1709 of the Old Civil Code, defining contract of agency, provides that "By the contract of agency, one person binds himself to render some service or do something for the account or at the request of another." Article 1544, defining contract of lease of service, provides that "In a lease of work or services, one of the parties binds himself to make or construct something or to render a service to the other for a price certain." In both agency and lease of services one of the parties binds himself to render some service to the other party. Agency, however, is distinguished from lease of work or services in that the basis of agency is representation, while in the lease of work or services the basis is employment. The lessor of services does not represent his employer, while the agent represents his principal. Further, agency is a preparatory contract, as agency "does not stop with the agency because the purpose is to enter into other contracts." The most characteristic feature of an agency relationship is the agent's power to bring about business relations between his principal and third persons. "The agent is destined to execute juridical acts (creation, modification or extinction of relations with third parties). Lease of services contemplate only material (nonjuridical) acts." Herein, the principal and paramount undertaking of Nielson under the management contract was the operation and development of the mine and the operation of the mill. All the other undertakings mentioned in the contract are necessary or incidental to the principal undertaking these other undertakings being dependent upon the work on the development of the mine and the operation of the mill. In the performance of this principal undertaking Nielson was not in any way executing juridical acts for Lepanto, destined to create, modify or extinguish business relations between Lepanto and third persons. In other words, in performing its principal undertaking Nielson was not acting as an agent of Lepanto, in the sense that the term agent is interpreted under the law of agency, but as one who was performing material acts for an employer, for a compensation. It is true that the management contract provides that Nielson would also act as purchasing agent of supplies and enter into contracts regarding the sale of mineral, but the contract also provides that Nielson could not make any purchase, or sell the minerals, without the prior approval of Lepanto. It is clear, therefore, that even in these cases Nielson could not execute juridical acts which would bind Lepanto without first securing the approval of Lepanto. Nielson, then, was to act only as an intermediary, not as an agent. Further,

from the statements in the annual report for 1936, and from the provision of paragraph XI of the Management contract, that the employment by Lepanto of Nielson to operate and manage its mines was principally in consideration of the know-how and technical services that Nielson offered Lepanto. The contract thus entered into pursuant to the offer made by Nielson and accepted by Lepanto was a "detailed operating contract". It was not a contract of agency. Nowhere in the record is it shown that Lepanto considered Nielson as its agent and that Lepanto terminated the management contract because it had lost its trust and confidence in Nielson. Dela Cruz v Northern Theatrical Enterprises, Inc., et al Facts: Northern Theatrical Enterprises Inc. operated a movie house in Laoag, IlocosNorte. 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. 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). Issue: Whether or not Dela Cruz is an agent Held: 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 torepresent 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 inline 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, theres 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.

Shell Co. v. Firemens Insurance Facts:T his 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 couldnt 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: Whether or not Dela Fuente is merely an agent of Shell Co. Held: 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 trade name 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 hisauthority 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.

Fressel vs Mariano Uy Chaco & Co. Facts: Merritt undertook and agreed with the defendant to build for the defendant a costly edifice in the city of Manila at the corner of Calle Rosario and Plaza del Padre Moraga. In the contract it was agreed between the parties thereto, that Uy Chaco at any time, upon certain contingencies ,before the completion of said edifice could take possession of said edifice in the course of construction and of all the materials in and about said premises acquired by Merritt for the construction of said edifice. Fressel delivered to Merritt at the said edifice in the course of construction certain materials of the value of P1,381.21Uy Chaco took possession of the incomplete edifice in course of construction together with all the materials on said premises including the materials delivered. Neither Merittnor Uy Chaco paid for the materials even afterextrajudicial demand. The appellants insist that theabove quoted allegations show that Merritt actedas the agent of the defendant in purchasing the materials in question and that the defendant, by taking over and using such materials, accepted and ratified the purchase, thereby obligating itself to pay for the same. ISSUE: Whether or not Meritt acted as an agent for Uy Chaco and Sons Held: NO. Meritt is an independent contractor. Where one party to a contract was authorized to do work according to his own method and without being subject to the other partys control, except as to the result of the work, he is an independent contractor and not an agent. The fact that "the defendant entered into a contract with one E. Merritt, where by the saidMerritt undertook and agreed with the defendant to build for the defendant a costly edifice" showsthat Merritt was authorized to do the work according to his own method and without being subject to the defendant's control, except as to the result of the work. He could purchase his materials and supplies from whom he pleased and at such prices as he desired to pay. Again, the allegations that the "plaintiffs delivered the Merritt . . . .certain materials (the materials in question) of thevalue of P1,381.21, . . . . which price Merritt agreed to pay," show that there were no contractual relations whatever between the sellers and the defendant. The mere fact that Merritt and the defendant had stipulated in their building contractthat the latter could, "upon certain contingencies, "take possession of the incomplete building and all materials on the ground, did not change Merritt from an independent contractor to an agent. In the absence of a statute creating what is known as mechanics' liens, the owner of a building is not liable for the value of materials purchased by an independent contractor either as such owner or as the assignee of the contractor.

Africa vs Caltex Facts: In the afternoon of March 18, 1948, a fire broke out at the Caltex service station at the corner of Antipolo St. and Rizal Avenue, Manila. It started while gasoline was being hosed from a tank truck into the underground storage, right at the opening of the receiving tank where the nozzle of the hose was inserted. The fire spread to and burned several houses. The owners, among them petitioner spouses Africa and heirs of Ong, sued respondents Caltex Phil., Inc., the alleged owner of the station, and Mateo Boquiren, the agent in charge of its operation, for damages. The CFI and CA found that the petitioners failed to prove negligence of the respondents, and that there was due care in the premises and with respect to the supervision of their employees.

Issue: Whether or not, without proof as to the cause and origin of the fire, the doctrine of res ipsa loquitur should apply so as to presume negligence on the part of the respondents.

Held: Yes. Res ipsa loquitur literally means the thing or transaction speaks for itself. For the doctrine of res ipsa loquitur to apply, the following requisites should be present: (a) the accident is of a kind which ordinarily does not occur in the absence of someones negligence; (b) it is caused by an instrumentality within the exclusive control of the defendant or defendants; and (c) the possibility of contributing conduct which would make the plaintiff responsible is eliminated. In the case at bar, the gasoline station, with all its appliances, equipment and employees, was under the control of respondents. A fire occurred therein and spread to and burned the neighboring houses. The persons who

knew or could have known how the fire started were respondents and their employees, but they gave no explanation thereof whatsoever. It is a fair and reasonable inference that the incident happened because of want of care. The negligence of the employees was the proximate cause of the fire, which in the ordinary course of things does not happen. Therefore, the petitioners are entitled to the award for damages.

Jai Alai Corp. vs BPI Facts: Petitioner deposited 10 checks in its current account with BPI. The checks which were acquired by petitioner from Ramirez, a sales agent of the Inter-Island Gas were all payable to Inter-Island Gas Service, Inc. or order. After the checks had been submitted to Inter-bank clearing, Inter-Island Gas discovered that all the indorsements made on the checks purportedly by its cashiers were forgeries. BPI thus debited the value of the checks against petitioner's current account and forwarded to the latter the checks containing the forged indorsements which petitioner refused to accept. ISSUE: Whether BPI had the right to debit from petitioner's current account the value of the checks with the forged indorsements. HELD: BPI acted within legal bounds when it debited the petitioner's account. Having indorsed the checks to respondent bank, petitioner is deemed to have given the warranty prescribed in Section 66 of the NIL that every single one of those checks "is genuine and in all respects what it purports to be." Respondent which relied upon the petitioner's warranty should not be held liable for the resulting loss.

Quiroga vs Parsons Hardware FACTS: Quiroga and Parsons Hardware entered into a contract where the former granted the latter the exclusive right to sell Quiroga Beds in the Visayas. It provided for a discount of 25% as commission for the sales, among other conditions. Quiroga alleged that Parsons breached its contractual obligations by selling the beds at a higher price, not having an open establishment in Iloilo, not maintaining a public exhibition, and for not ordering beds by the dozen. Only the last imputation was provided for by the contract, the others were never stipulated. Quiroga argued that since there was a contract of agency between them, such obligations were necessarily implied. ISSUE: W/N the contract between them was one of agency, not sale HELD: NO. The agreement between Quiroga and Parsons was that of a simple purchase and salenot an agency. Quiroga supplied beds, while Parsons had the obligation to pay their purchase price. These are characteristics of a purchase and sale. In a contract of agency (or order to sell), the agent does not pay its price yet, and sells the products, remitting to the principal its proceeds. Unsold products must also be returned to the principal. The provisions on commission and the use of the word agency in the contract as well as the testimonies in court do not affect its nature. Contracts are what the law defines it to be, not what the parties call it.

PUYAT v ARCO AMUSEMENT CO. FACTS: Arco Amusement was engaged in the business of operating cinematopgraphs. Gonzalo Puyat & Sons Inc(GPS) was the exclusive agent in the Philippines for the Starr Piano Company. Desiring to equip its cinematograph with sound reproducing devices, Arco approached GPS, through its president, GIl Puyat, and an employee named Santos. After some negotiations, it was agreed between the parties that GPS would order sound reproducing equipment from Starr Piano Company and that Arco would pay GPS, in addition to the price of the equipment, a 10% commission, plus all expenses such as freight, insurance, etc. When GPS inquired StarrPiano the price (without discount) of the equipment, the latter quoted such at $1,700 FOB Indiana. Being agreeable to the price (plus 10% commission plus all other expenses), Arco formally authorized the order. The following year, both parties agreed for another order of sound reproducing equipment on the same terms as the first at $1,600 plus 10% plus all other expenses.

Three years later, Arco discovered that the prices quoted to them by GPS with regard to their first 2 orders mentioned were not the net prices, but rather the list price, and that it had obtained a discount from Starr Piano. Moreover, Arco alleged that the equipment were overpriced. Thus, being its agent, GPS had to reimburse the excess amount it received from Arco. ISSUE: W/N there was a contract of agency, not of sale HELD: NO. The letters containing Arco's acceptance of the prices for the equipment are clear in their terms and admit no other interpretation that the prices are fixed and determinate. While the letters state that GPS was to receive a 10% commission, this does not necessarily mean that it is an agent of Arco, as this provision is only an additional price which it bound itself to pay, and which stipulation is not incompatible with the contract of sale. It is GPS that is the exclusive agent of Starr Piano in the Philippines, not the agent of Arco. it is out of the ordinary for one to be the agent of both the seller and the buyer. The facts and circumstances show that Arco entered into a contract of sale with GPS, the exclusive agent of Starr Piano. As such, it is not duty bound to reveal the private arrangement it had with Starr Piano relative to the 25% discount. Thus, GPS is not bound to reimburse Arco for any difference between the cost price and the sales price, which represents the profit realized by GPS out of the transaction.

Lim vs People Facts: The appellant is a businesswoman. On January 10, 1966, the appellant went to the house of Maria Ayroso and proposed to sell Ayroso's tobacco. Ayroso agreed to the proposition of the appellant to sell her tobacco consisting of 615 kilos at P1.30 a kilo. The appellant was to receive the overprice for which she could sell the tobacco. This agreement was made in the presence of plaintiff's sister, Salud G. Bantug. Salvador Bantug drew the document, Exh. A, dated January 10, 1966. This was signed by the appellant and witnessed by the complainant's sister, Salud Bantug, and the latter's maid, Genoveva Ruiz. The appellant at that time was bringing a jeep, and the tobacco was loaded in the jeep and brought by the appellant. Of the total value of P799.50, the appellant had paid to Ayroso only P240.00, and this was paid on three different times. Demands for the payment of the balance of the value of the tobacco were made upon the appellant by Ayroso, and particularly by her sister, Salud Bantug. Salud Bantug further testified that she had gone to the house of the appellant several times, but the appellant often eluded her; and that the "camarin" the appellant was empty. Although the appellant denied that demands for payment were made upon her, it is a fact that on October 19, 1966, she wrote a letter to Salud Bantug. Issue: Whether or not the honorable Court of Appeals was legally right in holding that the foregoing receipt is a contract of agency to sell as against the theory of the petitioner that it is a contract of sale. Held: It is clear in the agreement, Exhibit "A", that the proceeds of the sale of the tobacco should be turned over to the complainant as soon as the same was sold, or, that the obligation was immediately demandable as soon as the tobacco was disposed of. Hence, Article 1197 of the New Civil Code, which provides that the courts may fix the duration of the obligation if it does not fix a period, does not apply. Anent the argument that petitioner was not an agent because Exhibit "A" does not say that she would be paid the commission if the goods were sold, the Court of Appeals correctly resolved the matter as follows: ... Aside from the fact that Maria Ayroso testified that the appellant asked her to be her agent in selling Ayroso's tobacco, the appellant herself admitted that there was an agreement that upon the sale of the tobacco she would be given something. The appellant is a businesswoman, and it is unbelievable that she would go to the extent of going to Ayroso's house and take the tobacco with a jeep which she had brought if she did not intend to make a profit out of the transaction. Certainly, if she was doing a favor to Maria Ayroso and it was Ayroso who had requested her to sell her tobacco, it would not have been the appellant who would have gone to the house of Ayroso, but it would have been Ayroso who would have gone to the house of the appellant and deliver the tobacco to the appellant. (p. 19, Rollo) The fact that appellant received the tobacco to be sold at P1.30 per kilo and the proceeds to be given to complainant as soon as it was sold, strongly negates transfer of ownership of the goods to the petitioner. The agreement (Exhibit "A') constituted her as an agent with the obligation to return the tobacco if the same was not sold.

Dela Pena vs Hidalgo Facts: Before DE LA PENA went to Spain, he executed a power of attorney in favor of FEDERICO and 3 other people. Their task is to represent him and administer various properties he owned in Manila. FEDERICO took charge in Nov. 1887.After a few years, FEDERICO wrote a letter to DE LA PENA. 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. DE LA PENA did not answer the letter there was neither approval nor objection on the accounts and no appointment of another person who might substitute FEDERICO. Because of health reasons, FEDERICO went to Spain. Before he departed, he sent another letter to DE LAPENA 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, DE LA PENA must send ANTONIO a new power of attorney).DE LA PENA files in court for the collection of revenue from his accounts which was handled by FEDERICO. DE LA PENA alleges that FEDERICO has only remitted 1.2k and still owes him roughly 72k. Furthermore, DE LA PENA seeks to hold FEDERICO liable for the administration from the period of 1887 until 1904.FEDERICO asserts that he cannot be liable for the period after he renounced his agency. 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. ISSUE: Whether there was a valid agency in the case of ANTONIO HELD: There was an implied agency in the case of ANTONIO. DE LA PENA created an implied agency in favor of ANTONIO because of his silence on the matter for a number of years. There was a valid renunciation in the case of FEDERICO. His reason for leaving the country is legitimate. Furthermore, he gave notice to DE LA PENA about his situation in which the latter failed to give his objection. Being a valid agency on the part of ANTONIO and a valid renunciation on the party of FEDERICO, it must follow that the liability of FEDERICO only extends up to the point before his renunciation of the agency DOCTRINE: The implied agency is founded on the lack of contradiction or opposition, which constitutes simultaneous agreement on the part of the presumed principal to the execution of the contract. The agent and administrator who was obliged to leave his charge for a legitimate cause and who duly informed his principal, is thenceforward released and freed from the results and consequences of the management of the person who substituted him with the consent, even tacit though it be, of his principal

Pacific Commercial Company vs Yatco Facts: Pacific sold for the account of Victoria Milling Co. refined sugar up to the total amount of 1M. Pacific received by way of commission 29K. Victoria Milling paid merchant sales tax in its capacity as manufacturer and owner of the sugar sold. Likewise, Pacific paid tax also. There were two ways in which Pacific made the sales of sugar after looking for purchasers and sending the purchase order to Victoria Milling: 1) the purchase is made for the delivery of the sugar EX-WAREHOUSE sugar is first deposited in the warehouse of Pacific before delivery to the purchaser. 2) the purchase is made for the delivery EX-SHIP Pacific would simply hand over the bill of lading to the purchaser and collect the price CFI of Manila: in the first case, Pacific acted as a commission merchant; in the second case as a broker ordered Yatco to return to Pacific the amount collected from it by way of tax on the sale of sugar to be delivered EX-SHIP and denied prayer for return of amount paid for the sales of sugar to be delivered EX-WAREHOUSE. Issues: 1) WON there is double taxation 2.) WON Pacific acted as a commission merchant as to the sugar delivered ex-warehouse 3.) WON Pacific acted as a mere commercial broker as to the sugar delivered ex-ship HELD 1) There is no double taxation. Tax is not upon property or products, but upon occupation or industry. 2) A commission merchant is one engaged in the purchase or sale for another of personal property which, for this purpose, is placed in his possession and at his disposal. He maintains a relation not only with his principal and the purchasers or vendors, but also with the property which is the property which is the subject matter of transaction. The deposit of the sugar in the warehouses of Pacific was made upon its own account and at its own risk until it was sold and taken by the purchaser.3) The broker has no relation with the thing he sells or buys. He is merely an intermediary between the purchaser and the vendor. He acquired neither the possession nor the custody of the things sold. His only office is to bring together the parties to the transaction. The sugar was

shipped by Pacific at its expense and risk until it reached its destination, where it was later taken ex-ship by the purchaser. Pacific never had possession of the sugar at any time. The bill of lading sent to the broker was sent only for the purpose of turning it over to the purchaser for the collection of the price. The sugar did not come to its possession in any sense.

Compania General de Tabacos vs Diaba Facts: On the 19th of July, 1909, the plaintiff commenced an action against the defendant in the Court of First Instance of the Province of Leyte, for the purpose of recovering the sum of P442, for goods sold and delivered by the plaintiff, through its agent (Gutierrez) to the defendant, between the 11th of January, 1909, and the 1st of April, 1909. To this complaint the defendant, in his special answer, admitted that he had purchased from the agent of the plaintiff (Gutierrez) goods, wares, and merchandise, between the 12th of January, 1909, and the 15th of March, 1909, amounting to the sum of P692, and that he had sold to the agent of the plaintiff (Gutierrez) abaca and other effects, between the 25th of January, 1909, and the 6th of February, 1909, amounting to P1,308.80, leaving a balance due him (the defendant) of P616.80. After hearing the evidence, the Hon. Charles A. Low, judge, found that the plaintiff was indebted to the defendant in the sum of P616.80, and rendered a judgment against the plaintiff for said sum. From that judgment the plaintiff appealed for said sum. From that judgment the plaintiff appealed and made several assignments of error in this court. Issue: Whether or not the sale of goods through the agent is valid Held: An examination of the record brought to this court shows by a large preponderance of the evidence that the agent of the plaintiff (Gutierrez) had been selling goods, wares, and merchandise to the defendant, and buying abaca and other agricultural products of the defendant for a period covering more than eight years; that the particular transactions to which the present action related took place between the 11th of January, 1909, and the 1st of April, 1909. The plaintiff attempted to show that it had suspended its agent (Gutierrez), as its agent, and that he (Gutierrez) had no further authority to represent it (the plaintiff). There is no convincing proof in the record that the orders given by the plaintiff to its agent (Gutierrez) had ever been communicated to the defendant. The defendant had a perfect right to believe, until otherwise informed, that the agent of the plaintiff, in his purchase of abaca and other effects was still representing the plaintiff in said transactions. The plaintiff, during the trial of the cause, placed Gutierrez, its agent, upon the stand as a witness. He testified that the abaca which was purchased of the defendant was purchased by him a agent of the plaintiff and that said abaca was actually delivered to the plaintiff. The plaintiff, it appears, was perfectly willing to ratify the acts of its agent in selling goods to the defendant, but seemed to be unwilling to ratify said agents acts in purchasing goods from the defendant. Under all of the facts of record, we see no reason for modifying the judgment of the lower court; the same is, therefore, hereby affirmed with costs.

Macke vs Camps Facts: The plaintiffs in this action, B. H. Macke and W. H. Chandler, partners doing business under the firm name of Macke, Chandler & Company, allege that during the months of February and March, 1905, they sold to the defendant and delivered at his place of business, known as the "Washington Cafe," various bills of goods amounting to P351.50; that the defendant has only paidon account of said accounts the sum of P174.Before instituting this action they made demand for the payment thereof; andthat defendant had failed and refused to pay the said balance. B. H. Macke, one of the plaintiffs, testified that on the order of one Ricardo Flores, who represented himself to be agent of the defendant, he shipped the said goods to the defendants at the Washington Cafe; that Flores later acknowledged the receipt of said goods and made various payments. Flores informed him that he did not have the necessary funds on hand, and that he would have to wait the return of

his principal. Flores, in the absence of the defendant in the provinces, apparently in charge of the business and claiming to be the business manager of the defendant, said business being that of a hotel with a bar and restaurant. A written contract dated May 25, 1904, was introduced in evidence, from which it appears that one Galmes, the former owner of the business now know as the "Washington Cafe," subrented the building wherein the business was conducted, to the defendant for a period of one year, for the purpose of carrying on that business, the defendant obligating himself not to sublet or subrent the building or the business without the consent of the said Galmes. This contract was signed by the defendant and the name of Ricardo Flores appears thereon as a witness, 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, and at the foot of this inventory the word "received" (recibo) followed by the name "Ricardo Flores," with the words "managing agent" Issue: W/N Flores was an agent of Washington Caf. Held: Flores is an agent of Washington Caf. 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, his principal, for the payment of the goods mentioned in the complaint. The contract introduced in evidence sufficiently establishes the fact that the defendant was the owner of business and of the bar, and the title of "managing agent" attached to the signature of Flores which appears on that contract, together with the fact that, at the time the purchases in question were made, Flores was apparently in charge of the business, performing the duties usually entrusted to managing agent, leave little room for doubt that he was there as authorized agent of the defendant. One who clothes another apparent authority as his agent, and holds him out to the public as such, cannot be permitted to deny the authority of such person to act as his agent, to the prejudice of innocent third parties dealing with such person in good faith and in the following presumptions or deductions, which the law expressly directs to be made from particular facts, are deemed conclusive and unless the contrary appears, the authority of an agent must be presumed to include all the necessary and usual means of carrying his agency into effect. Jimenez vs Rabot Facts: Gregorio was in need of money to pay off his debts. He instructed his sister, through a letter, to sell one of his two parcels of land so as to come up with cash. Nicolasa, following her brother's request, sold one of his parcels of land to Rabot for 500 pesos. There was proof of payment between Rabot and Nicolasa but there was no proof of the payment ever reaching Gregorio. When Gregorio asked for the parcel of land, Nicolasa refused. Gregorio now sues for the land and learns later on that ownership was already with Rabot. Issue: Whether or not the conveyance between Nicolasa and Pedro Rabot was a valid. Held: It was valid. Judgement of CA is reversed. ipal; 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, and he acts within those limits, the principal cannot question the validity of his act. It is not necessary that the particular act to be accomplished should be predestinated by the language of the power. The question to be answered always, after the power has been exercised, is rather this: Was the act which the agent performed within the scope of his authority? In the case before us, 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, the answer must be obviously in the affirmative. ansfer, there must be a description of the property which is the subject of the sale or conveyance. This is necessary of course to define the object of the contract identify the land either from the recitals of the contract or deed or from external facts referred to in the document, 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, it is insufficient. The principle embodied in these decisions is not, in our opinion, applicable to the present case, which relates to the sufficiency of the authorization, not to the sufficiency of the contract or conveyance. It is unquestionable that the deed which Nicolasa executed contains a proper description of the property which she purported to convey ll "all" the land possessed by the principal, or all that he possesses in a particular city, county, or state.

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

Linan vs Puno Facts: Linan an owner of a parcel of land executed a document stating the power, duties and obligations of Puno: I, Diego Lian, of age, married, a resident of Daet, Province of Ambos Camarines, Philippine Islands, and at the present time temporarily residing in this city of Tarlac, capital of the Province of Tarlac, P.I., set forth that I hereby confer sufficient power, such as the law requires, upon Mr. Marcos P. Puno, likewise a resident of this city of Tarlac, capital of the Province of Tarlac, in order that in my name and representation he may administer the interest I possess within this municipality of Tarlac, purchase, sell, collect and pay, as well as sue and be sued before any authority, appear before the courts of justice and administrative officers in any proceeding or business concerning the good administration and advancement of my said interests, and may, in necessary cases, appoint attorneys at law or attorneys in fact to represent him. June 1911 Puno sold and delivered the said parcel of land to the other defendants for a sum of 800pesosPlaintiff alleges that the document did not confer upon Puno the power to sell the land and prayed that the sale be set aside, the land be returned to him together with damages. Puno contend s that the sale was valid and prayed that he be relieved from any liability. Issue: Whether the sale of Puno acting as an agent of Linan was a valid sale ? Held: RTC: Favored plaintiff Linan That the document(1) did not give Puno authority to sell the land;(2) that the sale was illegal and void;(3) That defendants should return to the land to the plaintiff; and(4) That the defendants should pay to the plaintiff the sum of P1,000 as damages, P400 of which the defendant Puno should alone be responsible for, and to pay the costs SC Favored defendant puno : to quote; The SC examined the power conferred upon the defendant Puno (Exhibit A) and ascertain, if possible, what was the real intent of the plaintiff. The lower court held that the "only power conferred was the power to administer." Reading the contract we find it says that the plaintiff "I confer ... power ... that ... he may administer ... purchase, sell, collect and pay ... in any proceeding or business concerning the good administration and advancement of my said interests." The words "administer, purchase, sell," etc., seem to be used coordinately. Each has equal force with the other. There seems to be no good reason for saying that Puno had authority to administer and not to sell when "to sell" was as advantageous to the plaintiff in the administration of his affairs as "to administer." To hold that the power was "to administer" only when the power "to sell" was equally conferred would be to give to special words of the contract a special and limited meaning to the exclusion of other general words of equal import. The record contains no allegation on proof that Puno acted in bad faith or fraudulently in selling the land. It will be presumed that he acted in good faith and in accordance with his power as he understood it. That his interpretation of his power, as gathered from the contract the other defendants acted in good faith, we are of the opinion that the contract, liberally construed, as we think it should be, justifies the interpretation given it by Puno. In reaching this conclusion, we have taken into account the fact that the plaintiff delayed his action to annul said sale from the month of June, 1911, until the 15th of February, 1913. Neither have we overlooked the fact in the brief of the appellants that the plaintiff has not returned, nor offered to return, nor indicated a willingness to return, the purchase price In view of all the foregoing, we are of the opinion that the lower court committed the error complained of in the second assignment, and, without discussing the other assignments of error, we are of the opinion, and so hold, that the judgment of the lower court should be and is hereby revoked and that the appellants should be relieved from all liability under the complaint.

Katigbak vs Tai Hing Co Facts: Po Ejap was the owner of a titled land w/c was mortgaged to PNB in 1919 1921, Po Tecsi executed a general power of attorney in favor of his brother Po Ejap to perform on his behalf the ff: "to buy, sell, or barter, assign, admit in acquittance or in any other manner to acquire or convey all sorts of property, real and personal, businesses and industries, credits, rights, and actions belonging to me, for whatever prices and under the conditions which he may stipulate, paying and receiving payment in cash or in installments, and to execute the proper instruments with the formalities provided by the law."

Po Tecsi executed a document acknowledging an indebtedness to his brother Po Ejap of 68K, the price of the properties w/c the latter sold to him. Po Ejap then sold the said land with its improvements to his brother Po Tecsi for the sum of P10,000. 1923, making use of the power conferred by his brother, Po Ejap sold absolutely said land to Katigbak. 1924, Po Tecsi wrote Po Ejap, promising to remit the balance of the rents (meaning, Tecsi became a lessee). Nov 1926, Po Tecsi died and his son Po Sun Suy was appointed administrator of Tecsi's estate in 1927. In Dec 1926, Po Sun Suy submitted to Po Ejap a liquidation of accounts showing rents collected on the property. Later, Katigbak sold the property to Po Sun Boo (son of Po Ejap). As Po Tecsi had not paid a part of the rent due up to the time of his death, and his son Sun Suy also, rent due from his father's death until Katigbak sold the property to Sun Boo, Katigbak filed this action for the recovery of the rent. Po Sun Suy contends that Katigbak is not the owner of the property (so not entitled to rents) because Po Ejap was not authorized under the power executed by Po Tecsi to sell said land, because said power had been executed before Po Ejap sold said land to Tecsi. *Po Sun Suy and Po Ching are owners of the commercial firm Tai Hing Co. ISSUES: WON Po Ejap cannot have sold the property (on behalf of Tecsi) because the power was executed by Tecsi before Tecsi owned the property HELD: The power is general and authorizes Gabino Po Ejap to sell any kind of realty "belonging" (pertenezcan) to the principal. The use of the subjunctive "pertenezcan" (might belong) and not the indicative "pertenecen" (belong), means that Po Tecsi meant not only the property he had at the time of the execution of the power, but also such as he might afterwards have during the time it was in force. Under Act 496, every document which in any manner affects the registered land is ineffective unless it is recorded in the registry of deeds. But such inefficacy only refers to third persons who, in good faith, may have acquired some right to the registered land. While it is true that a power of attorney not recorded in the registry of deeds is ineffective in order that an agent or attorney-in-fact may validly perform acts in the name of his principal, and that any act performed by the agent by virtue of said' power with respect to the land is ineffective against a third person who, in good faith, may have acquired a right thereto, it does, however, bind the principal to acknowledge the acts performed by his attorney-in-fact regarding said property.

Amigo vs Teves Facts: On August 11, 1937, Macario Amigo and Anacleto Cagalitan executed in favor of their son, Marcelino Amigo, a power of attorney granting to the latter, among others, the power "to lease, let, bargain, transfer, convey and sell, remise, release ,mortgage and hypothecate, part or any of the properties . . . upon such terms and conditions, and under such covenants as he shall think fit."On October 30, 1938, Marcelino Amigo, in his capacity as attorney-in-fact, executed a deed of sale of a parcel of land for a price of P3,000 in favor of Serafin Teves stipulating therein that the vendors could repurchase the land within a period of 18months from the date of the sale. In the same document, it was also stipulated that vendors would remain in possession of the land as lessees for a period of 18 months subject to the following terms and conditions: (a) the lessees shall pay P180 as rent every six months from the date of the agreement; (b) the period of the lease shall terminate on April 30, 1940; (c) in case of litigation, the lessees shall pay P100 as attorney's fees; and (d) in case of failure to pay any rental as agreed upon, thelease shall automatically terminate and the right of ownership of vendee shall become absolute. On July 20, 1939, the spouses Macario Amigo and Anacleta Cagalitan donated to their sons Justino Amigo and Pastor Amigo several parcels of land including their right to repurchase the land in litigation. The deed of donation was made in a public instrument, was duly accepted by the donees, and was registered in the Office of the Register of Deeds. The vendors-lessees paid the rental corresponding to the first six months, but notthe rental for the subsequent semester, and so on January 8, 1940, Serafin Teves,the vendee-lessor, executed an "Affidavit of Consolidation of Title" in view of the failure of the lessees to pay the rentals as agreed upon, and registered said affidavit in the Office of the Register of Deeds who issued to

Serafin Teves the corresponding transfer of title over the land in question. On March 9, 1940, Justino Amigo and Pastor Amigo, as donees of the right to repurchase the land in question, offered to repurchase the land from Serafin Tevesby tendering to him the payment of the redemption price but the latter refused onthe ground that the ownership had already been consolidated in him as purchaser aretro. ISSUES: Whether or not the lease covenant contained in the deed of sale with pacto deretro executed by Marcelino Amigo as attorney-in-fact in favor of Serafin Teves is not germane to, nor within the purview of, the powers granted to said attorney-in-fact and, therefore, is ultra vires and null and void. HELD: We find no plausible reason to disturb this findings of the Court of Appeals. The same, in our opinion, is in consonance with the evidence presented and with the conclusions that should be drawn from said evidence. This can be shown from a mere examination of the power of attorney (Exhibit D.) A cursory reading thereof would at once reveal that the power granted to the agent is so broad that it practically covers the celebration of any contract and the conclusion of any covenant or stipulation. Thus, among the powers granted are: to bargain, contract, agree for, purchase, receive, and keep lands, tenements, hereditaments, and accept the seizing and possessing of all lands," or "to lease, let, bargain, transfer, convey and sell, remise, release, mortgage and hypothecate . . . upon such terms and conditions, and under such covenants as he shall think fit." (Emphasis supplied). When the power of attorney says that the agent can enter into any contract concerning the land, or can sell the land under any term or condition and covenant he may think fit, it undoubtedly means that he can act in the same manner and with the same breath and latitude as the principal could concerning the property. The fact that the agent has acted in accordance with the wish of his principals can be inferred from their attitude in donating to the herein petitioners the right to redeem the land under the terms and conditions appearing in the deed of sale executed by their agent. On the other hand, we find nothing unusual in the lease covenant embodied in the deed of sale for such is common in contracts involving sales of land with pacto de retro. The lease that a vendor executes on the property may be considered as a means of delivery or tradition by constitutum possessorium. Where the vendor a retrocontinues to occupy the land as lessee, by fiction of law, the possession is deemed to be constituted in the vendee by virtue of this mode of tradition (10 Manresa, 4th ed. p.124). We may say therefore that this covenant regarding the lease of the land sold is germane to the contract of sale with pacto de retro. Municipal Council of Iloilo vs Evangelista Facts: 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. After the case was remanded to the court of origin, Atty. Evangelista, in his behalf and as counsel for the administratrix of Jose Ma. Arroyos intestate estate, filed a claim in the same case for professional services rendered by him, which the court, acting with the consent of the appellant widow, fixed at 15 per cent of the amount of the judgment .At the hearing on said claim, the claimants appeared, as did also the Philippine National Bank, which prayed that the amount of the judgment be turned over to it because the land taken over had been mortgaged to it. Antero Soriano also appeared claiming the amount of the judgment as it had been assigned to him, and by him, in turn, assigned to Mauricio Cruz & Co., Inc. 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, be recorded in favor of Attorney Jose Evangelista, in his own behalf and as counsel for the administratrix of the deceased Jose Ma .Arroyo, and directed the municipality of Iloilo to file an action of interpleading against the adverse claimants, the Philippine National Bank, Antero Soriano, Mauricio Cruz & Co., Jose Evangelista and Jose Arroyo, as was done, the case being filed in the Court of First Instance of Iloilo. Then municipal treasurer of Iloilo deposited with the clerk of the Court of First Instance of Iloilo the amount of P6,000 on account of the judgment rendered in said civil case No. 3514. 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, in his own behalf and as counsel for the late Jose Ma. Arroyo, the said clerk of court delivered on the same date to said Attorney Jose Evangelista the said amount of P6,000. 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 P6,000 mentioned above inconsideration of said lawyer's waiver of the remainder of the 15 per cent of said judgment amounting to P444.69. With these two payments of P6,000 each making a total of P12,000, the judgment for P42,966.44 against the municipality of Iloilo was reduced to P30,966.40, which was adjudicated by said court to Mauricio Cruz & Co. This appeal, then, is confined to the claim of Mauricio Cruz & Co. 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. ISSUE: Whether the deeds of assignment in this case are null and void HELD: NO. assignments was not made in consideration of professional services by Attorney AnteroSoriano, for they had already been satisfied before the execution of said deed of assignment, but in order to facilitate the collection of the amount of said judgment in favor of the appellant, for the reason that, being Chinese, she had encountered many difficulties in trying to collect. In support

of her contention on this point, the appellant alleges that the payments admitted by the court in its judgment, as made by Tan Toco's widow to Attorney Antero Soriano for professional services rendered to her and to her coheirs, amounting to P2,900, must be added to the P700, on the ground that they were considered as payments made for professional services rendered, not by Antero Soriano personally, by the firm of Soriano & Arroyo. -in -fact empowered to pay the debts of the principal, and to employ lawyers to defend the latter's interests, is impliedly empowered to pay the lawyer's fees for services rendered in the interests of said principal, and may satisfy them by an assignment of a judgment rendered in favor of said principal -in-fact independently, 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 said judgment was rendered, made in payment of professional services in other cases, does not contravene the prohibition of article 1459, case5, of the Civil Code.

BPI vs Decoster Facts: De Coster, La Orden and Poizat issued a promissory note in favor of BPI for P292,000. The promissory note was secured by severa lmortgages on the several properties of the debtors however the debtors defaulted so BPI asked the court to foreclose the mortgages. CFI issued an execution order against the three debtors. Gabriela de Coster, wife of Poizat, complained that at the time of the filing of the complaint she was in Paris and was absent in the Philippines and has no knowledge of the actual facts. De Coster also alleged that the mortgage was made without her consent and made in excess of the authority given his husband and therefore it was null and void. Issue: W/N de Coster is also liable as to the debt incurred by his husband Held: No. Husband has no authority to execute a promissory note in behalf of his wife or to make the latter liable as an accommodation maker. Also, the debt was a preexisting debt of the husband wherein the wife was not a party and has no legal obligation to pay. Germann & Co vs Donaldson Facts: Max Leonard Tornow, the sole owner of the business carried on in Berlin and Manila under the name of Gemann & Co. executed an instrument in Berlin, Germany giving Kammerzell, his "true and lawful attorney with full power to enter the firm name of Germann & Co. in the Commercial Registry of the city of Manila as a branch of the house of Germann & Berlin. The first-named instrument was authenticated by a notary with the formalities required by the domestic laws. The other was not so authenticated. Both Tornow and Kammerzell are citizens of Germany. Tornow is a resident of Berlin and Kammerzell of Manila .By this instrument, the purpose of this power to invest said attorney will full legal powers and authorization to direct and administer in the city of Manila for us and in our name a branch of our general commercial business of important and exportation, for which purpose he may make contracts of lease and employ suitable assistants, as well as sign every kind of documents, accounts, and obligations connected with the business which may be necessary, take charge in general of the receipt and delivery of merchandise connected with the business, sign all receipts for sums of money and collect them and exact their payment by legal means, and in general execute all the acts and things necessary for the perfect carrying on of the business committed to his charge in the same manner as we could do ourselves if we were present in the same place."The defendants claim that the original power is invalid under article 1280, No. 5, of the Civil Code, which provides that powers for suits must be contained in a public instrument. No claim is made that the document was not executed with the formalities required by the German law in the case of such an instrument. He also claims that the original power cannot be construed as conferring upon Kammerzell authority to institute or defend suits, from which contention, if correct, it would of course follow that the delegated power is invalid. In support of this contention reliance is placed upon article1713 of the Civil Code, by which it is provided that "an agency stated in general terms only includes acts of administration," and that "in order to compromise, alienate, mortgage, or to execute any other act of strict ownership an express commission is required."Plaintiff argued that these provisions of the domestic law are not applicable to the case of an agency conferred by one foreigner upon another in an instrument executed in the country of which both were citizens. It appears that this case was brought to collect a claim accruing in the ordinary course of the plaintiff's business, as properly belonging to the class of acts described in article 1713 of the Civil Code as acts "of strict ownership." It seems rather to be something which is necessarily a part of the mere administration of such a business as that described in the instrument in question and only incidentally, if at all, involving a power to dispose of the title to property.

Issue: whether or not it is an act of strict ownership Held: It appears to be expressly and specially authorized by the clause conferring the power to "exact the payment" of sums of money "by legal means." This must mean the power to exact the payment of debts due the concern by means of the institution of suits for their recovery. The main object of the instrument is clearly to make Kammerzell the manager of the Manila branch of the plaintiff's business, with the same general authority with reference to its conduct which his principal would himself possess if he were personally directing it. It can not be reasonably supposed, in the absence of very clear language to that effect, that it was the intention of the principal to withhold from his agent a power so essential to the efficient management of the business entrusted to his control as that to sue for the collection of debts.