THOMAS vs.

PINEDA
June 28, 1951
Tuason, J.

FACTS
 Summary: Defendant managed the business as plaintiff’s employee or trustee during the Japanese occupation of the City of Manila and
on a share of the profits basis. The business burned down. After the war, defendant established a business of the same name, located in
the same place; he also refused to make an accounting of the business. The court held that the defendant is obliged to account for the
business while he was its manager, and that he acted in bad faith in his failure to do so.
 Plaintiff owns the bar and restaurant known as Silver Dollar Café located in Plaza Santa Cruz, Manila. In the course of time, the defendant
became successively cashier and manager of the business.
 On the onset of the war, plaintiff made a fictitious sale of the business to defendant to prevent the business and its property from falling
into enemy hands.
 Simultaneously with, or soon after the execution of the simulated sale, the plaintiff and defendant signed a private or secret document
stating that the deed of sale conveying the restaurant was fictitious and upon the restoration of peace and order, the document
automatically becomes null and void and of no effect.
 On February 3, 1945, the building was destroyed by fire but the defendant had been able to remove some of its furniture. According to
the defendant, all of these goods were accounted for and turned over to the plaintiff.
 On May 8, 1945, a bar was opened on Calle Bambang under the name Silver Dollar Café. On September of the same year, it was
transferred to its original location in Plaza Santa Cruz.
 It is alleged that after liberation, plaintiff brought a certified public accountant to the café for the purpose of examining the books of the
business. The defendant resisted, and even pointed a gun at them. Because of this incident, plaintiff brought the present action to compel
an accounting of the business. It also asked the court to enjoin the defendant from using the name of that business, Silver Dollar Café.
 The defendant avers that there was a third, verbal agreement, the import of which was that he was to operate the business with no
liability other than to turn it over to the plaintiff as the plaintiff would find it after the war. He insists therefore that he was relieved of any
duty to make an accounting.

ISSUE
WON defendant is obliged to render an accounting to the plaintiff.  YES.

HELD
 The defendant’s contention is at war with the care and precaution which the plaintiff took to insure his rights in the business and its
assets. Unless Thomas was willing to give away his property and its profits, no man in his right senses would have given his manager an
outright license such as the defendant claims to have gotten from his employer.
 The exact legal character of the defendant’s relation to the plaintiff matters not a bit. It was enough to show, and it had been shown, that
he had been entrusted with the possession and management of the plaintiff’s business and property for the owner’s benefit and had not
made an accounting.
 Neither did the defendant’s sweeping statement at the trial – that all the proceeds from the business had been used to support the
plaintiff and his daughters to entertain or bribe Japanese officers and civilians – dispense with defendant’s duty to account. It was clear
error for the court to declare that there were no surplus profits. The court’s inquiry ought to have been confined to the determination of
the plaintiff’s right to secure an accounting.
 The defendant denied that the plaintiff had any proprietary interest in the saloon in Bambang and at Plaza Sta. Cruz after liberation.
Thomas however said that he borrowed P2000 from a friend, and with that amount he constructed a temporary building in Bambang and
with the stocks saved by the defendant, opened the business there. He said that, as before, the defendant now worked as manager, with
the difference that under the new arrangement he was to get one-half the net profits.
 The defendant said that he returned several cases of whiskey, rum, gin and other kinds of liquor to the plaintiff, and he gave the latter
P2000 in cash. He avers that this payment was “in full and complete liquidation of the Silver Dollar Café.” The court said that this was
highly improbable, to put it mildly.
 The use of the old name for the bar in Bambang suggests that the business was in fact an extension and continuation of the Silver Dollar
Café.
 It was also the plaintiff who entered into a written contract of lease with the owner of the Santa Cruz location. Thomas was even named
as its proprietor.
 That the defendant was only a manager is also made evident by two sets of business cards of the Silver Dollar Café which he himself
caused to be printed. On the first set, David Thomas was held out as the proprietor and Hermogenes Pineda, as manager. On the second
set, which were ordered later, the defendant was not even mentioned as manager, but one Bill Magner, while David Thomas’ name was
retained as proprietor.
 At different times from May 8 to December 15, 1945, the defendant handed the plaintiff averse amounts totaling P24,100 without so
much as asking Thomas to sign a receipt for any of them. The defendant testified that these amounts were simple loans secured by
plaintiff’s mining shares of stock. The court held that the lack of any receipt is incompatible with the hypothesis of loans.
 There is no escaping the conclusion that the plaintiff was the sole owner of the post-war Silver Dollar bar and restaurant, that the
defendant was only an industrial partner, and that the said amounts were withdrawals on account of the profits.
 As to the use of the trade name:
o It appears that the defendant on September 27, 1945, registered the business and its name as his own. He contends that in
1940, the plaintiff’s right to use this trade name expired and by abandonment and non-use, the plaintiff ceased to have any title
thereto. The alleged abandonment or non-use is predicated on the testimony that the plaintiff expressly allowed the defendant
to appropriate the trade name in dispute.
o The court held that the defendant registered the business in bad faith.
o The plaintiff’s non-use of his trade name did not work as a forfeiture of his exclusive right to the name.
o As legal proposition and in good conscience, the defendant’s registration of the trade name Silver Dollar Café must be deemed
to have been affected for the benefit of its owner of whom he was a mere trustee or employee.
o "The relations of an agent to his principal are fiduciary and it is an elementary and very old rule that in regard to property
forming the subject matter of the agency, he is estopped from acquiring or asserting a title adverse to that of principal. His
position is analogous to that of a trustee and he cannot consistently, with the principles of good faith, be allowed to create in
himself an interest in opposition to that of his principal or cestui que trust. A receiver, trustee, attorney, agent or any other
person occupying fiduciary relations respecting property or persons utterly disabled from acquiring for his own benefit the
property committed to his custody for management. This rule is entirely independent of the fact whether any fraud has
intervened. No fraud in fact need be shown, and no excuse will be heard from any such inquiry that the rule takes so general
form. The rule stands on the moral obligation to refrain from placing one's self in position which ordinarily excite conflicts
between self-interest at the expense of one's integrity and duty to another, by making it possible to profit by yielding to
temptation"
CUI VS CUI

FACTS: Jesus and Antonio are the legitimate children of Don Mariano Cui and Doña Antonia Perales who died intestate in
1939. Jesus alleged that during the marriage of Don Mariano and Dona Antonia, their parents acquired certain properties
in the City of Cebu, namely, Lots Nos. 2312, 2313 and 2319. Upon the death of their mother, the properties were placed
under the administration of their dad.

that while the latter was 84 years of age, Antonio by means of deceit, secured the transfer to themselves the said lots
without any pecuniary consideration; that in the deed of sale executed on March 8, 1946, Rosario Cui appeared as one of
the vendees, but on learning of this fact she subsequently renounced her rights under the sale and returned her portion to
Don Mariano Cui by executing a deed of resale in his favor on October 11, 1946; that defendants, fraudulently and with
the desire of enriching themselves unjustly at the expense of their father, Don Mariano Cui, and of their brothers and co-
heirs, secured a loan of P130,000 from the Rehabilitation properties, and with the loan thus obtained, defendants
constructed thereon an apartment building of strong materials consisting of 14 doors, valued at approximately P130,000
and another building on the same parcels of land, which buildings were leased to some Chinese commercial firms a
monthly rental of P7,600, which defendants have collected and will continue to collect to the prejudice of the plaintiffs;

Jesus alleged that the sale should be invalidated so far as the portion of the property sold to Antonio Cui is concerned, for
the reason that when that sale was effected, Antonio was then acting as the agent or administrator of the properties of
Don Mariano Cui.

Jesus lays stress on the power of attorney Exhibit L which was executed by Don Mariano in favor of Antonio Cui on March
2, 1946, wherein the former has constituted the latter as his "true and lawful attorney" to perform in his name and that of
the intestate heirs of Doña Antonia Perales.

ISSUE: WON the sale of the property to Antonio was valid.

HELD: YES.

While under article 1459 of the old Civil Code an agent or administrator is disqualified from purchasing property in his
hands for sale or management, and, in this case, the property in question was sold to Antonio Cui while he was already
the agent or administrator of the properties of Don Mariano Cui, we however believe that this question cannot now be
raised or invoked.

The prohibition of the law is contained in article 1459 of the old Civil Code, but this prohibition has already been
removed. Under the provisions of article 1491, section 2, of the new Civil Code, an agent may now buy property placed in
his hands for sale or administration, provided that the principal gives his consent thereto. While the new Code came into
effect only on August 30, 1950, however, since this is a right that is declared for the first time, the same may be given
retroactive effect if no vested or acquired right is impaired (Article 2253, new Civil Code). During the lifetime Don Mariano,
and particularly on March 8, 1946, the herein appellants could not claim any vested or acquired right in these properties,
for, as heirs, the most they had was a mere expentancy. We may, therefore, invoke now this practical and liberal provision
of our new Civil Code even if the sale had taken place before its effectivity.
MACARIOLA VS ASUNCION

FACTS: A complaint for partition was filed by Sinforosa R. Bales, Luz R. Bakunawa, Anacorita Reyes, Ruperto Reyes,
Adela Reyes, and Priscilla Reyes against P Macariola concerning the properties left by their father, Francisco Reyes.
Judge Asuncion ruled in favor of Sinforosa et. al.The decision in civil case 3010 became final for lack of an appeal, and on
October 16, 1963, a project of partition was submitted to Judge Asuncion. Notwithstanding the fact that the project of
partition was not signed by the parties themselves, Judge Asuncion approved it.

One of the properties in the project of partition was Lot 1184 which was subdivided into 5 lots. Lot 1184 was sold to Dr.
Arcadio Galapon on July 31, 1964. On March 6, 1965, Dr. Galapon sold a portion of Lot 1184-E to Judge Asuncion and his
wife. Subsequently, Sps Asuncion and Sps Galapon conveyed their respective shares and interest to “The Traders
Manufacturing and Fishing Industries Inc." at the time of the sale, Judge Asuncion was one of its stockholder, with Judge
Asuncion as the President and his wife as the secretary.

Complainant Bernardita R. Macariola filed on August 9, 1968 the instant complaint alleging R Judge Asuncion violated
Article 1491, paragraph 5, of the New Civil Code in acquiring by purchase a portion of Lot No. 1184-E which was one of
those properties involved in Civil Case No. 3010 decided by him

ISSUE: WON Judge Asuncion violated Article 1491(5) of the NCC

HELD:NO.

Article 1491. The following persons cannot acquire by purchase, even at a public or judicial action, either in person or
through the mediation of another: xxx xxx xxx

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees
connected with the administration of justice, the property and rights in litigation or levied upon an execution before the
court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of
acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any
litigation in which they may take part by virtue of their profession [emphasis supplied].

The prohibition in the aforesaid Article applies only to the sale or assignment of the property which is the subject of
litigation to the persons disqualified therein. For the prohibition to operate, the sale or assignment of the property must
take place during the pendency of the litigation involving the property"

In the case at bar, when the respondent Judge purchased on March 6, 1965 a portion of Lot 1184-E, the decision in Civil
Case No. 3010 which he rendered on June 8, 1963 was already final because none of the parties therein filed an appeal
within the reglementary period; hence, the lot in question was no longer subject of the litigation. Moreover, at the time of
the sale on March 6, 1965, respondent's order dated October 23, 1963 and the amended order dated November 11, 1963
approving the October 16, 1963 project of partition made pursuant to the June 8, 1963 decision, had long become final for
there was no appeal from said orders.

Furthermore, respondent Judge did not buy the lot in question on March 6, 1965 directly from the plaintiffs in Civil Case
No. 3010 but from Dr. Arcadio Galapon who earlier purchased on July 31, 1964 Lot 1184-E from three of the plaintiffs,
namely, Priscilla Reyes, Adela Reyes, and Luz R. Bakunawa after the finality of the decision in Civil Case No. 3010. It may
be recalled that Lot 1184 or more specifically one-half thereof was adjudicated in equal shares to Priscilla Reyes, Adela
Reyes, Luz Bakunawa, Ruperto Reyes and Anacorita Reyes in the project of partition, and the same was subdivided into
five lots denominated as Lot 1184-A to 1184-E. As aforestated, Lot 1184-E was sold on July 31, 1964 to Dr. Galapon for
which he was issued TCT No. 2338 by the Register of Deeds of Tacloban City, and on March 6, 1965 he sold a portion of
said lot to respondent Judge and his wife who declared the same for taxation purposes only. The subsequent sale on
August 31, 1966 by spouses Asuncion and spouses Galapon of their respective shares and interest in said Lot 1184-E to
the Traders Manufacturing and Fishing Industries, Inc., in which respondent was the president and his wife was the
secretary, took place long after the finality of the decision in Civil Case No. 3010 and of the subsequent two aforesaid
orders therein approving the project of partition.

While it appears that complainant herein filed on or about November 9 or 11, 1968 an action seeking to annul the project
of partition and the two orders approving the same, as well as the partition of the estate and the subsequent conveyances,
the same, however, is of no moment.

The fact remains that respondent Judge purchased on March 6, 1965 a portion of Lot 1184-E from Dr. Arcadio Galapon;
hence, after the finality of the decision which he rendered on June 8, 1963 in Civil Case No. 3010 and his two questioned
orders dated October 23, 1963 and November 11, 1963. Therefore, the property was no longer subject of litigation.
FEDERICO VALERA v. MIGUEL VELASCO

1928 / Villa-real

FACTS

Valera appointed Velasco as his attorney-in-fact, with authority to manage his property [usufruct of a real property in Manila], by

virtue of [two] powers of attorney. Velasco presented the final account of his administration for March 1923, and it appears that

there is a P3k~ balance in Valera’s favor.

The liquidation of accounts revealed that Valera owed Velasco P1,100. They had a misunderstanding, so Velasco sued

Valera, and the former won. A writ of execution was issued, and the sheriff levied upon Valera’s right of usufruct.

Valera sold his right of redemption for P200 to one Eduardo Hernandez. Hernandez conveyed the same right of redemption

back to Valera some months later. One Salvador Vallejo, who had an execution upon a judgment against Valera, levied upon said

right of redemption, which was sold by the sheriff at public auction to Vallejo for P250 and was adjudicated to him. Later, Vallejo

transferred said right of redemption to Velasco, so the latter had the title to the right of usufruct to the property.

ISSUES & HOLDING

 WON the complaint is equivalent to an express renunciation of the agency. YES

 WON Velasco’s [agent] purchase of Valera’s [principal] right of usufruct at public auction is valid and legal. YES, since he

ceased ipso facto to be an agent by virtue of his suing Valera

Pertinent provisions

NCC 1732. Agency is terminated:

1. By revocation;
2. By the withdrawal of the agent;

3. By the death, interdiction, bankruptcy, or insolvency of the principal or of the agent.

NCC 1736. An agent may withdraw from the agency by giving notice to the principal. Should the latter suffer any damage through the

withdrawal, the agent must indemnify him therefore, unless the agent's reason for his withdrawal should be the impossibility of

continuing to act as such without serious detriment to himself.

Ratio

The fact that an agent institutes an action against his principal for the recovery of the balance in his favor resulting from the

liquidation of the accounts between them arising from the agency, and renders and final account of his operations, is equivalent to

an express renunciation of the agency, and terminates the juridical relation between them.

Applying to the case at hand

The events that transpired more than prove the breach of the juridical relation between them. Although the agent has not expressly

told his principal that he renounced the agency, yet neither dignity nor decorum permits the latter to continue representing a

person who has adopted such an antagonistic attitude towards him. When the agent filed a complaint against his principal for

recovery of a sum of money arising from the liquidation of the accounts between them in connection with the agency, Valera could

not have understood otherwise than that Velasco renounced the agency. In order to terminate their relations by virtue of the agency,

Velasco, as agent, rendered his final account on March 31, 1923 to Valera, as principal.

Jurisprudence – De la Peña vs. Hidalgo

Although the agent in his [aforementioned] letter did not use the words "renouncing the agency," yet such words,
were undoubtedly so understood and accepted by the principal, because of the lapse of nearly nine years up to
the time of the latter's death, without his having interrogated either the renouncing agent, disapproving what he
had done, or the person who substituted the latter.
 REPUBLIC OF THE PHILIPPINES, et al. vs. HON. VICTORINO EVANGELISTA, et al.

G.R. No. 156015. August 11, 2005.

Nature: PETITION for review on certiorari

Ponente: PUNO, J.

Facts:

 Private respondent Legaspi is the owner of a land located in Bulacan.

 Petitioner Calimlim (Lt. General), entered into a MOA with one Ciriaco Reyes. The MOA granted Reyes a permit

to hunt for treasure in a land in Bulacan. Reyes, with petitioners, started, digging, tunneling and blasting works

on the said land of Legaspi. It was also alleged that Calimlim assigned about 80 military personnel to guard the

area and intimidate Legaspi and other occupants of the area from going near the subject land.

 Legaspi executed an SPA appointing his nephew, private respondent Gutierrez, as his attorney-in-fact. Gutierrez

was given the power to deal with the treasure hunting activities on Legaspi’s land and to file charges against

those who may enter it without the latter’s authority. Legaspi agreed to give Gutierrez 40% of the treasure that

may be found in the land.

 Gutierrez filed a case against petitioners for illegally entering Legaspi’s land. He hired the legal services of Atty.

Adaza (as legal fees, Atty. Adaza shall be entitled to 30% of Legaspi’s share in whatever treasure may be found in

the land). Upon the filing of the complaint, a 72-hour TRO was issued against petitioners. The case was then

raffled to the court of Judge Evangelista, who then granted an extension to the TRO.

 Petitioners filed a Motion to Dismiss contending. One issue that they raised was that there is no real party-in-

interest as the SPA of Gutierrez to bring the suit was already revoked by Legaspi as evidenced by a Deed of

Revocation.

 RTC ruled in favor of the private respondents. CA affirmed the decision.

Issue: Whether the contract of agency between Legaspi and Gutierrez has been effectively revoked by Legaspi.

Held: NO. CA decision is Affirmed.

Ratio:

A contract of agency is generally revocable as it is a personal contract of representation based on trust and

confidence reposed by the principal on his agent.

An exception to the revocability of a contract of agency is when it is coupled with interest, i.e., if a bilateral

contract depends upon the agency. The reason for its irrevocability is because the agency becomes part of another

obligation or agreement. It is not solely the rights of the principal but also that of the agent and third persons which are

affected. Hence, the law provides that in such cases, the agency cannot be revoked at the sole will of the principal.

In the case at bar, we agree with the finding of the trial and appellate courts that the agency granted by Legaspi

to Gutierrez is coupled with interest as a bilateral contract depends on it. It is clear from the records that Gutierrez was

given by Legaspi, inter alia, the power to manage the treasure hunting activities in the subject land. It was likewise

agreed upon that Gutierrez shall be entitled to 40% of whatever treasure may be found in the land. When an agency is

constituted as a clause in a bilateral contract, that is, when the agency is inserted in another agreement, the agency

ceases to be revocable at the pleasure of the principal as the agency shall now follow the condition of the bilateral

agreement. Consequently, the Deed of Revocation executed by Legaspi has no effect. The authority of Gutierrez to file

and continue with the prosecution of the case at bar is unaffected.

G.R. No. L-67889 October 10, 1985

PRIMITIVO SIASAT and MARCELINO SIASAT, petitioners,

vs.

INTERMEDIATE APPELLATE COURT and TERESITA NACIANCENO, respondents.

GUTIERREZ, JR., J.:

FACTS: Sometime in 1974, respondent Teresita Nacianceno succeeded in convincing officials of the then Department of

Education and Culture, to purchase without public bidding, one million pesos worth of national flags for the use of public

schools throughout the country. And for her service, she was entitled to a commission of thirty (30%) percent.

On October 16, 1974, the first delivery of 7,933 flags was made by the United Flag Industry. The next day, on October 17,

1974, the respondent's authority to represent the United Flag Industry was revoked by petitioner Primitivo Siasat.

According to the findings of the courts below, Siasat, after receiving the payment of P469,980.00 on October 23, 1974 for

the first delivery, tendered the amount of P23,900.00 or five percent (5%) of the amount received, to the respondent as

payment of her commission. The latter allegedly protested. She refused to accept the said amount insisting on the 30%

commission agreed upon. The respondent was prevailed upon to accept the same because of the assurance of the

petitioners that they would pay the commission in full after they delivered the other half of the order. The respondent

states that she later on learned that petitioner Siasat had already received payment for the second delivery of 7,833 flags.

When she confronted the petitioners, they vehemently denied receipt of the payment, at the same time claiming that the

respondent had no participation whatsoever with regard to the second delivery of flags and that the agency had already

been revoked. She then filed a case in court.

The trial court decided in favor of the respondent.

In assailing the appellate court's decision, the petition tenders the following arguments: first, the authorization making the

respondent the petitioner's representative merely states that she could deal with any entity in connection with the

marketing of their products for a commission of 30%. There was no specific authorization for the sale of 15,666 Philippine

flags to the Department; second, there were two transactions involved evidenced by the separate purchase orders and

separate delivery receipts, The revocation of agency effected by the parties with mutual consent on October 17, 1974,
therefore, forecloses the respondent's claim of 30% commission on the second transaction; and last,regarding damages

and attorneys fees.

ISSUE: Whether or not respondent is an agent of petitioners.

HELD: YES, Respondent is indeed their agent. There are several kinds of agents. First, a universal agent – one who is

authorized to do all acts for his principal which can lawfully be delegated to an agent. Second, a general agent – one

authorized to do all acts pertaining to a business of a certain kind or at a particular place, or all acts pertaining to a business

of a particular class or series. And third, a special agent – one authorized to do some particular act or act upon some

particular occasion. He acts usually in accordance with specific instructions the respondent is upon close scrutiny be

classified as a general agent.

Indeed, it can easily be seen by the way general words were employed in the agreement that no restrictions were

intended as to the manner the agency was to be carried out or in the place where it was to be executed. The power

granted to the respondent was so broad that it practically covers the negotiations leading to, and the execution of, a

contract of sale of petitioners' merchandise with any entity or organization.

A cardinal rule of evidence embodied in Section 7 Rule 130 of our Revised Rules of Court states that "when the terms of

an agreement have been reduced to writing, it is to be considered as containing all such terms, and, therefore, there can

be between the parties and their successors-in-interest, no evidence of the terms of the agreement other than the

contents of the writing", except in cases specifically mentioned in the same rule. Petitioners have failed to show that their

agreement falls under any of these exceptions. The petitioners' evidence is overcome by other pieces of evidence proving

that there was only one transaction.

Since only one transaction was involved, we deny the petitioners' contention that respondent Nacianceno is not entitled to

the stipulated commission on the second delivery because of the revocation of the agency effected after the first delivery.

The revocation of agency could not prevent the respondent from earning her commission because as the trial court

opined, it came too late, the contract of sale having been already perfected and partly executed.
We do not mean to question the general doctrine as to the power of a principal to revoke the authority of his agent at will,

in the absence of a contract fixing the duration of the agency however, The principal cannot deprive his agent of the

commission agreed upon by canceling the agency and, thereafter, dealing directly with the buyer.

The petitioners are ordered to pay the respondent the amount of ONE HUNDRED FOURTY THOUSAND NINE

HUNDRED AND NINETY FOUR PESOS (P140,994.00) as her commission on the second delivery of flags with legal

interest from the date of the trial court's decision. No pronouncement as to costs.

SO ORDERED.
G.R. No. 2962, Macket et al. v. Camps, 7 Phil. 553
CASE DIGEST

Facts:

The plaintiffs in this action are partners doing business under the firm name of Macke,
Chandler & Company. Plaintiff 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 paid on account of said accounts the sum of P174; that there is still due
them on account of said goods the sum of P177.50;

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 thereon amounting in all to P174; that on demand for payment
of balance of the account 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, the defendant, who was at
that time visiting in the provinces;

A written contract was introduced in evidence from which it appears that one Galmes, the
former owner of the business now known as the "Washington Cafe," subrented the building
wherein the business was conducted, to the defendant for a period of one year, 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" below
the name, and at the foot of this inventory the word "received" followed by the name
"Ricardo Flores," with the words "managing agent" immediately following his name.

Issue: Whether or not, Flores is an agent of the defendant.

Held: Yes. One who clothes another apparent authority as his agent, and holds him out to
the public as such, can not 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 preassumptions or deductions, which the law expressly directs to be made from
particular facts, are deemed conclusive. "Whenever a party has, by his own declaration, act,
or omission, intentionally and deliberately led another to believe a particular thing true, and
to act upon such belief, he can not, in any litigation arising out such declaration, act, or
omission, be permitted to falsify it"; 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.

FULL TEXT

February 27, 1907

G.R. No. 2962

B. H. MACKE, ET AL., plaintiffs-appellees,
vs.
JOSE CAMPS, defendant-appellant.

Manuel G. Gavieres for appellant.

Gibbs & Gale for appellees.
CARSON, J.:
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 paid on account of said accounts the sum of P174; that there is still due them on
account of said goods the sum of P177.50; that before instituting this action they made
demand for the payment thereof; and that defendant had failed and refused to pay the said
balance or any part of it up to the time of the filing of the complaint.

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 thereon amounting in all to P174; that on demand for payment
of balance of the account 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, the defendant, who was at
that time visiting in the provinces; that Flores acknowledged the bill for the goods furnished
and the credits being the amount set out in the complaint; that when the goods were
ordered they were ordered on the credit of the defendant and that they were shipped by the
plaintiffs after inquiry which satisfied the witness as to the credit of the defendant and as to
the authority of Flores to act as his agent; that the witness always believed and still believes
that Flores was the agent of the defendant; and that when he went to the Washington Cafe
for the purpose of collecting his bill he found 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 annexed.

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" (el manejante encargado) immediately following
his name.
Galmes was called to the stand and identified the above- described document as the
contract and inventory delivered to him by the defendant, and further stated that he could
not tell whether Flores was working for himself or for some one else — that it to say, whether
Flores was managing the business as agent or sublessee.

The defendant did not go on the stand nor call any witnesses, and relies wholly on his
contention that the foregoing facts are not sufficient to establish the fact that he received
the goods for which payment is demanded.

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, can not 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 preassumptions or deductions,
which the law expressly directs to be made from particular facts, are deemed conclusive:

(1) "Whenever a party has, by his own declaration, act, or omission, intentionally and
deliberately led another to believe a particular thing true, and to act upon such belief, he can
not, in any litigation arising out such declaration, act, or omission, be permitted to falsify it"
(subsec. 1, sec. 333, Act no. 190); 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. (15 Conn., 347; 90 N. C. 101; 15 La. Ann, 247; 43 Mich., 364; 93 N. Y., 495; 87 Ind.,
187.)
That Flores, as managing agent of the Washington Cafe, had authority to buy such
reasonable quantities of supplies as might from time to time be necessary in carrying on the
business of hotel bar may fairly be presumed from the nature of the business, especially in
view of the fact that his principal appears to have left him in charge during more or less
prolonged periods of absence; from an examination of the items of the account attached to
the complaint, we are of opinion that he was acting within the scope of his authority in
ordering these goods are binding on his principal, and in the absence of evidence to the
contrary, furnish satisfactory proof of their delivery as alleged in the complaint.

The judgment of the trial court is affirmed with the costs of his instance against the
appellant. After expiration of twenty days judgment will be rendered in accordance herewith,
and ten days thereafter the case remanded to the lower court for proper action. So ordered.

Arellano, C.J., Torres and Willard, JJ., concur.

Tracey, J., dissents.