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Agency Digests
Agency Digests
DE LA CRUZ V NORTHERN
THEATRIAL ENTERPRISES ISSUE: W/N Plaintiff De la Cruz is
considered as an agent of the corporation
FACTS: and as such entitled to reimbursement
*The Northern Theatrical for expenses incurred in conncection
Enterprises, a domestic corporation with agency
opearated a movie house in Laoag,
Ilocos Norte and among the persons RULING: No, Plaintiff is mere
employed by it was plaintiff De La Cruz, employee
hired as special guard whose duties were The relationship between the
to guard the main entrance of the cine, to movie corporation and plaintiff was not
maintain peace and order and to report that of principal and agent because the
the commission of disorder within the principle of representation as a
premises characteristic of agency was in no way
*As such guard, he carried a involved.
revolver Plaintiff was not employed to
* One Benjamin Martin wanted represent corporation in its dealings with
to crash the gate or entrance of the 3rd parties
movie house. Infuriated by the refusal of Plaintiff is a mere employee
plaintiff to let him in without first hired to perform a certain specific duty
providing himself with a ticket, Martin or task, that of acting as a special guard
attacked him with a bolo and staying at the main entrance of the
*Plaintiff defended himself until movie house to stop gate crashers and to
he was cornered, at which moment to maintain peace and order within the
save himself, he shot gate crasher premises.
resulting in latter’s death
*Plaintiff was charged with Sub issue: W/N an employee or servant
homicide but was acquitted of charge who in line of duty and while in the
after trial. In both criminal cases against performance of the task assigned to him,
him, he employed a lawyer to defend performs an act which eventually results
him in his incurring in expenses caused not
*He then demanded from NLE directly by his master or employer or by
reimbursement of expenses but was reason of his performance of his duty,
refused thus filed present action against but rather by a 3rd party or stranger not in
the company and t3 members of its the employ of his employer may recover
Board of Directors to recover not only said damages against his employer
the amounts he had paid his lawyers but Ruling: No
also moral damages said to have been
suffered due to his worry, neglect of his Although the employer has a moral
interests and his family as well in the obligation to give employee legal
supervision of the cultivation of his land, assistance to aid the latter in his case, he
a total of P 15,000. has no legal obligation to do so.
*CFI rejected plaintiff’s theory If the employer is not legally obliged to
that he was an agent of the company and give legal assistance to employee and
that he had no cause of action and provide him with a lawyer, naturally said
dismissed the complaint
employee may not recover the amount *The shipments would cover
he may have paid a lawyer hired by him. products for “consumption in Cebu,
Damages suffered by plaintiff by Bohol, Leyte Samar, Jolo, Negros
reason of expenses incurred by him in Oriental and Mindanao except province
remunerating his lawyer is not caused by of Davao, Ker as distributor being
his act of shooting to death the gate precluded from disposing such products
crasher but rather by filing the charge of elsewhere than in the above places
homicide which made it necessary for unless written consent would first be
him to defend himself with the aid of obtained from the company
counsel. *Ker as distributor is required to
Had no criminal charge against exert every effort to have the shipment
him, there would have been no expenses of the products in the maximum quantity
incurred or damages suffered. and to promote in every way the sale
sale thereof.
* Crucial stipulation: The
2. KER AND CO, LTD V. LINGAD company shall from time to time consign
to Ker and Ker will receive, accept
FACTS: and/hold upon consignment the products
*Ker and Co, Ltd. was assessed specified under the terms of this
by then Commissioner of Internal agreement in such quantities as in the
Revenue Domingo the sum of P judgment of company may be necessary
20,272.33 as the commercial broker’s *It is further agreed that this
percentage tax, surcharge and agreement does not constitute Ker the
compromise penalty. agent or legal representative of the
* There was a request on the part company for any purpose whatsoever
of Ker for the cancellation of such
assessment which request was turned ISSUE: W/N the relationship thus
down created is one of vendor and vendee
*As a result, it filed a petition for (contract of sale) or of broker and
review with Court of Tax Appeals principal (contract of agency)
*CTA: Ker taxable except as to
the compromise penalty of P500, the RULING: Broker and principal- contract
amount due from it being fixed at of agency
P19,772.33 By taking the contractual
*Such liability arose from a stipulations as a whole and not just the
contract of Ker with the United States disclaimer, it would seem that the
Rubber International. The former being contract between them is a contract of
referred to as the distributor and the agency
latter specifically designated as the The CTA, in considering such
company stipulations provided in the contract,
*The contract was to apply to concluded that all these circumstances
transactions between the former and Ker, are irreconcilably antagonistic to the
as distributor from July 1, 1948 to idea of an independent merchant
continue in force until terminated by :CTA: upon analysis of the
either party giving to the other 60 days’ whole, together with actual conduct of
notice the parties thereto, that the relationship
between them is one of brokerage or *4 days later, Orbeta offered to
agency look after Escandor’s pending proposal
to sell a fire truck to Rubberworld, ans
National Internal Revenue Code: defined asked for P250 as representation
Commercial broker as all persons, other expenses to which Escandor agreed and
than importer, manufacturers, producers gave him the money
or bona fide employees who, for *When Escandor didn’t get any
compensation or profit, sell or bring word from Orbeta after 3 days, she
about sales or purchase of merchandise herself inquired in writing from
for other persons or bring proposed Rubberworld about her offer of sale of a
buyers and sellers together and also fire truck. She then sent a revised price
includes commission merchants such as quotation some ten days laeter.
Ker in this case *in the meantime, Orbeta sold to
*The mere disclaimer in a other individuals some of Escanodor’s
contract that an entity like Ker is not fire extinguishers, receiving traveling
“the agent or legal representative for any expenses in connection therewith as well
purpose whatsoever” does not suffice to as the corresponding commissions and
yield the conclusion that it is an after that he then dropped out of sight.
independent merchant if the control over *About 7 months afterwards,
the goods for resale of goods consigned Escandor herself finally concluded a
is pervasive in character contract with Rubberworld for the
*thus, SC rejected Ker’s petition latter’s purchase of a fire truck
to reverse decision of CTA *Orbeta suddenly reappeared an
asked for his commission for the sale of
the fire truck to Rubberworld to which
Escandor refused, saying that he had had
3. GUARDEX ENTERPRISES V NLRC nothing to do with the offer, negotiation
and consummation of the sale
FACTS: *Orbeta then filed a complaint
*Escandor-engaged, under the against Escandor with the Ministry of
name and style of Guardex Enterprises Labor which ruled in his favor. It was
in (a) manufacture and sale of fire- affirmed by the National Labor
fighting equipment such as fire Relations Commission on appeal taken
extinguishers, fire hose cabinets and by Escandor
related products, and (b) occasionally,
the building or fabrication of fire trucks ISSUE: W/N Orbeta is an agent of
*Junbee Orbeta- a “freelance” Guardex Enterprises thus entitled to
salesman sales commission
Orbeta somehow learned that
Escandor had offered to fabricate a fire RULING: No
truck for Rubberworld )Phil) inc thus he The claim that she gave verbal
wrote Escandor inquiring about the authority to Orbeta to offer to a fire truck
amount of commission for the sale of a to Rubberworld was belied from the fact
fire truck. Escandor replied saying that it that months prior to Orbeta’s
was P15,000 per unit approaching Escandor, the latter already
had made a written offer of a fire truck
to Rubberworld. All that she consented a. solict and promote passenger
to was for Orbeta to “follow up” that traffic for the services of American and
pending offer. It seems fairly evident if necessary, employ staff competen and
that the “representation allowance” of sufficient to do so
P250 was meant to cover the expenses b. provide and maintain a
for the “follow up” offered by Orbeta-an suitable area in its place of business to
ambiguous fact which does not of itself be used exclusively for the transaction of
suggest the creation of an agency and is the business of American
not at all inconsistent with the theory of c. arrange for distribution of
its absence in this case. American’s timetables, tariffs and
Even if Orbeta is considered to promotional material to sales agents nad
have been Escandor’s agent for the time the general public in the assigned
he was supposed to “follow up” the offer territory
to sell, such agency would have been d. service and supervise sales
deemed revoked upon the resumption of agents in the assigned territory including
direct negotiations between Escandor if required by American the control of
and Rubberworld, Orbeta having in the remittances and commissions retained
meantime abandoned all efforts (if e. hold out a passenger
indeed any were exerted) to secure the reservation facility to sales agents and
deal in Escandor’s behalf. general public in the assigned territory
*No jurisdiction for Labor *Alleging that Orient Air had
Arbiter or NLRC in dealing with this reneged on its obligations under the
case since jurisiction vested in tehm by Agreement by failing to remit the net
the Labor Code extends generally proceeds of sale in the amount of US $
speaking only to cases arising from 254,400, American Air by itself
employer-employee relationship. undertook the collection of the proceeds
of tickets sold originally by Orient Air
and terminated forthwith the Agreement
4. ORIENT AIR SERVCES AND *American Air instituted suit
HOTEL REPRESENTATIVES V CA against Orient Air for Accounting with
Preliminary Attachment or Garnishment,
FACTS: Mandatory Injunction and Restraining
*American Airlines, inc, an air Order averring the basis for the
carrier offering passenger and air cargo termination of the Agreement as well as
transportation in the Phils, and Orient Orient Air’s previous record of failures
Air Services and Hotel Representatives “to promptly settle past outstanding
entered into a General Sales Agency refunds of which there were available
Agreement whereby the former funds in the possession of the Orient Air
authorized the latter to act as its to the damage and prejudice of American
exclusive general sales agent within the Air
Phils for the sale of air passenger TC ruled in favor of Orient Air to
transportation which the Intermediate Appelalate
*Some of the pertinent Court (now CA) affirmed TC’s decision
provisions are: with modifications with respect to
Orient Air Services shall perform monetary awards granted.
these services:
ISSUE: W/N Orient Air is entitled to the construed against the party who cause
3% overriding commission the ambiguity and could have avoided it
by the exercise of a little more care.
RULING: Yes
It is a well settled principle that
in the interpretation of a contract, the
entirety thereof must be taken into 5. BORDADOR V LUZ
consideration to ascertain the meaning of
its provisions. The various stipulations in FACTS:
the contract must be read together to * Petitioners were engaged in the
give effect to all business of purchase and sale of jewelry
*The Agreement, when and respondent Brigida Luz, also known
interpreted in accordance with the as Aida Luz, was their regular customer.
foregoing principles, entitles Orient Air * On several occasions,
to the 3% overriding commission based respondent Deganos, brother of Luz,
on total revenue or as referred to by the received several pieces of gold and
parties, “total flown revenues”. jewelry from petitioners amounting to
As the designated General Sales P382, 816. These items and their prices
Agent of American Air, Orient Air was were indicated in seventeen receipts
responsible for the promotion and covering the same. 11 of the receipts
marketing of American Air’s services for stated that they were received for a
air passenger transportation and the certain Aquino, a niece of Deganos, and
solicitation of sales therefor. In return for the remaining 6 receipts indicated that
such efforts and services, Orient Air was they were received for Luz.
to be paid commissions of 2 kinds: first, * Deganos was supposed to sell
a sales agency commission, ranging the items at a profit and thereafter remit
from 7 to 8% of tariff fares and charges the proceeds and return the unsold items
from sales by Orient Air when made on to Bordador. Deganos remitted only the
American Air ticket stock; and second, sum of P53, 207. He neither paid the
an overriding commission of 3% of tariff balance of the sales proceeds, nor did he
fares and charges for all sales of return any unsold item to petitioners.
passenger transportation over American * The total of his unpaid account
Air services. to Bordador, including interest, reached
The second type of commissions the sum of P725, 463.98. Petitioners
would accrue for sales of American Air eventually filed a complaint in the
services made not on its ticket stocket barangay court against Deganos to
but on the ticket stock of other air recover said amount.
carriers sold by such carriers or other * In the barangay proceedings,
authorized ticketing facilities or travel Luz, who was not impleaded in the caes,
agents. appeared as a witness for Deganos and
In addition, it is clear from the ultimately, she and her husband, together
records that American Air was the party with Deganos signed a compromise
responsible for the preparation of the agreement with petitioners.
Agreement. Consequently, any *In that compromise agreement,
ambiguity in this “contract of adhesion” Deganos obligated himself to pay
is to be taken “contra proferentem” – petitioners, on installment basis , the
balance of his account plus interest The basis for agency is
thereon. However, he failed to comply representation. Here, there is no showing
with his aforestated undertakings. that Luz consented to the acts of
* Petitioners instituted a Deganos or authorized him to act on her
complaint for recovery of sum of money behalf, much less with respect to the
and damages, with an application for particular transactions involved.
preliminary attachment against Deganos It was grossly and inexcusably
and Luz. negligent of petitioner to entrust to
* Deganos and Luz was also Deganos, not once or twice but on at
charged with estafa least six occasions as evidenced by 6
8 During the trial of the civil cae, receipts, several pieces of jewelry of
petitioners claimed that Deganos acted substantial value without requiring a
as agent of Luz when received the written authorization from his alleged
subject items of jewelry, and because he principal.
failed to pay for the same, Luz, as A person dealing with an agent is
principal, and her spouse are solidarily put upon inquiry and must discover upon
liable with him his peril the authority of the agent.
* Trial court ruled that only Records show that neither an
Deganos was liable to Bordador for the express nor an implied agency was
amount and damages claimed. It held proven to have existed between Deganos
that while Luz did have transactions and Luz. Evidently, Bordador who were
with petitioners in the past, the items negligent in their transactions with
involved were already paid for and all Deganos cannot seek relief from the
that Luz owed Bordador was the sum or effects of their negligence by conjuring a
P21, 483 representing interest on the supposed agency relation between the
principal account which she had two respondents where no evidence
previously paid for. supports such claim
* CA affirmed TC’s decision