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i) Principal – Art. 1883 - one whom the agent represents and from whom
he derives his authority (Sec. 3, 2 C.J.S. 1024); one primarily concerned in
the contract;
Art. 1883. If an agent acts in his own name, the principal has no right of
action against the persons with whom the agent has contracted; neither
have such persons against the principal.
In such case the agent is the one directly bound in favor of the person
with whom he has contracted, as if the transaction were his own, except
when the contract involves things belonging to the principal.
The provisions of this article shall be understood to be without prejudice
to the actions between the principal and agent. (1717)

a. Disclosed – Comm. Bank & Trust Co. vs. Republic Armored Car Services – 9 SCRA 143
G.R. Nos. L-18223 and L-18224

September 30, 1963

AL., defendants-appellants.

PHILIPPINES, plaintiff-appellee,




Defendant-appellant Damaso Perez has presented a motion for new trial on the ground of newly
discovered evidence. It is claimed that movant was not aware of the nature of the power of attorney
that Ramon Racelis used, purportedly signed by him, to secure the loans for the Republic Armored
Car Service Corporation and the Republic Credit Corporation. In the motion it is claimed that a
photostatic copy of the power of attorney used by Ramon Racelis was presented at the trial. This
photostatic copy or a copy thereof has not been submitted to us, for this reason We cannot rule upon
his claim and contention that Ramon Racelis had no authority to bind the movant as surety for the
loans obtained from the appellee Commercial Bank & Trust Company. Not having before Us the
supposed photostatic copy of the power of attorney used to secure the loans, there is no reason for
Us to rule, in accordance with his contention, that Racelis exceeded his authority in securing the
loans subject of the present actions.
The motion for reconsideration, however, presents a copy of a power of attorney purportedly
executed by movant on October 22, 1952. It is not expressly mentioned that this is the precise power
of attorney that Ramon Racelis Utilized to secure the loans the collection of which is sought in these
cases. But assuming, for the sake of argument, that the said power of attorney incorporated in the
motion for reconsideration was the one used to obtain the loans. We find that the movant's
contention has no merit. In accordance with the document, Racelis was authorized to negotiate for a
loan or various loans .. with other being institution, financing corporation, insurance companies or
investment corporations, in such sum or sums, aforesaid Attorney-in-fact Mr. Ramon Racelis, may

deem proper and convenient to my interests, ... and to execute any and all documents he deems
requisite and necessary in order to obtain such loans, always having in mind best interest; ... We
hold that this general power attorney to secure loans from any banking institute was sufficient
authority for Ramon Racelis to obtain the credits subject of the present suits.
It will be noted furthermore that Racelis, as agent Damaso Perez, executed the documents
evidencing the loans signing the same "Damaso Perez by Ramon Racelis," and in the said contracts
Damaso Perez agreed jointly and severally to be responsible for the loans. As the document as
signed makes Perez jointly and severally responsible, there is no merit in the contention that Perez
was only being held liable as a guarantor.

Furthermore, the promissory notes evidencing the loan are attached to the complaint in G.R. Nos. L182 and L-18224. If the movant Perez claims that Raceli had no authority to execute the said
promissory notes, the authenticity of said documents should have been specifically denied under
oath in defendant's answers in the lower court. This was done; consequently Perez could not and
may not now claim that his agent did not have authority to execute the loan agreements.
Motion for new trial is denied.


Philippine Charter Insurance Corporation vs. Explorer Maritime Co. et al., 657 SCRA 165
G.R. No. 175409

September 7, 2011

CORPORATION, Petitioner,
SERVICES, INC., Respondents.

On March 22, 1995, petitioner Philippine Charter Insurance Corporation (PCIC), as
insurer-subrogee, filed with the RTC of Manila a Complaint against respondents, to
wit: the unknown owner of the vessel M/V "Explorer" (common carrier), Wallem
Philippines Shipping, Inc. (ship agent), Asian Terminals, Inc. (arrastre), and Foremost
International Port Services, Inc. (broker). PCIC sought to recover from the
respondents the sum of P342,605.50, allegedly representing the value of lost or
damaged shipment paid to the insured, interest and attorney’s fees.
PCIC filed a similar case against respondents Wallem Philippines Shipping, Inc.,
Asian Terminals, Inc., and Foremost International Port Services, Inc., but, this time,
the fourth defendant is "the unknown owner of the vessel M/V "Taygetus."
Respondents filed their respective answers with counterclaims. PCIC later filed its
answer to the counterclaims. PCIC filed an ex parte motion to set the case for pretrial conference, which was granted by the trial court. However, before the

scheduled date of the pre-trial conference, PCIC filed its Amended Complaint. The
"Unknown Owner" of the vessel M/V "Explorer" and Asian Terminals, Inc. filed anew
their respective answers with counterclaims.
Respondent common carrier, "the Unknown Owner" of the vessel M/V "Explorer,"
and Wallem Philippines Shipping, Inc. filed a Motion to Dismiss on the ground that
PCIC failed to prosecute its action for an unreasonable length of time. PCIC allegedly
filed its Opposition, claiming that the trial court has not yet acted on its Motion to
Disclose. In said motion, PCIC supposedly prayed for the trial court to order
respondent Wallem Philippines Shipping, Inc. to disclose the true identity and
whereabouts of defendant "Unknown Owner of the Vessel M/V ‘Explorer.’"
Hence, this Petition for Review on Certiorari. On June 27, 2007, this Court required
the counsel of the "Unknown Owner" of the vessel M/V Explorer and Wallem
Philippines Shipping, Inc. to submit proof of identification of the owner of said
vessel.4 On September 17, 2007, this Court, pursuant to the information provided
by Wallem Philippines Shipping, Inc., directed its Division Clerk of Court to change
"Unknown Owner" to "Explorer Maritime Co., Ltd." in the title of this case.5
The basis for the dismissal by the trial court of Civil Case No. 95-73340 is Section 3,
Rule 17 and Section 1, Rule 18 of the Rules of Court, which respectively provide:
Section 3. Dismissal due to the fault of the plaintiff. – If, for no justifiable cause, the
plaintiff fails to appear on the date of the presentation of his evidence in chief on
the complaint, or to prosecute his action for an unreasonable length of time, or to
comply with these Rules or any order of the court, the complaint may be dismissed
upon motion of the defendant or upon the court’s own motion, without prejudice to
the right of the defendant to prosecute his counterclaim in the same or in a
separate action. This dismissal shall have the effect of adjudication upon the
merits, unless otherwise declared by the court.
Section 1. When conducted. – After the last pleading has been served and filed, it
shall be the duty of the plaintiff to promptly move ex parte that the case be set for
It bears stressing that the sanction of dismissal may be imposed even
absent any allegation and proof of the plaintiff’s lack of interest to
prosecute the action, or of any prejudice to the defendant resulting from
the failure of the plaintiff to comply with the rules. The failure of the
plaintiff to prosecute the action without any justifiable cause within a
reasonable period of time will give rise to the presumption that he is no
longer interested in obtaining the relief prayed for.

In this case, there was no justifiable reason for petitioners’ failure to file a motion to
set the case for pre-trial. Petitioners’ stubborn insistence that the case was not yet
ripe for pre-trial is erroneous. Although petitioners state that there are strong and
compelling reasons justifying a liberal application of the rule, the Court finds none in
this case. The burden to show that there are compelling reasons that would
make a dismissal of the case unjustified is on petitioners, and they have
not adduced any such compelling reason.[9][9] (Emphases supplied.)
In the case at bar, the alleged Motion to Disclose was filed on November 19, 1997.
Respondents filed the Motion to Dismiss on December 5, 2000. By that time, PCIC’s
inaction was thus already almost three years. There is therefore no question that
the failure to prosecute in the case at bar was for an unreasonable length of time.
Consequently, the Complaint may be dismissed even absent any allegation and
proof of the plaintiff’s lack of interest to prosecute the action, or of any prejudice to
the defendant resulting from the failure of the plaintiff to comply with the rules. The
burden is now on PCIC to show that there are compelling reasons that would render
the dismissal of the case unjustified.
The only explanation that the PCIC can offer for its omission is that it was waiting for
the resolution of its Motion to Disclose, which it allegedly filed with another branch
of the court. According to PCIC, it was premature for it to move for the setting of
the pre-trial conference before the resolution of the Motion to Disclose.
We therefore hold that the RTC was correct in dismissing Civil Case No. 95-73340 for
failure of the plaintiff to prosecute the same for an unreasonable length of time. As
discussed by the Court of Appeals, PCIC could have filed a motion for the early
resolution of their Motion to Disclose after the apparent failure of the court to do so.
If PCIC had done so, it would possibly have discovered the error in the filing of said
motion much earlier. Finally, it is worth noting that the defendants also have the
right to the speedy disposition of the case; the delay of the pre-trial and the trial
might cause the impairment of their defenses.[19][19]

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated
July 20, 2006 in CA-G.R. CV No. 78834 is hereby AFFIRMED.