19.

Bedia vs. White

Facts: Bedia and White entered into a Participation Contract for the 1980 Dallas State Fair. White
and her husband sued Bedia and Hontiveros & Associated Producers Phil. Yields Inc. for damages
caused by their fraudulent violation of agreement. She averred that the defendants had not paid for
or registered any display space in her name and as a result of such she incurred losses.
In their joint answer, the defendant’s explained that no display space was registered in her name
as she was only supposed to share the space leased by Hontiveros and she had not paid her balance.
Bedia averred that she did not sign the contract in her own behalf but as an agent of Hontiveros.
The trial court dismissed the complaint against Hontiveros but found Bedia liable for fraud.
Issue: Whether or not Bedia should be held liable in the violation of the Contract.
Held: No. In her letter to the Minister of Trade, White acknowledged that Bedia was only acting
for Hontiveros when it recruited her as a participant in the Texas Fair and charged her a partial
payment. Significantly, Hontiveros has not repudiated Bedia’s agency as it would have if she had
really not signed in its name.
The court held that since it has not been found that Bedia was acting beyond the scope of her
authority when she entered into the Participation Contract on behalf of Hontiveros, it is the latter
that should be held answerable for any obligation arising from that agreement. By moving to
dismiss the complaint against the principal, they cannot now assert them against the agent.
20. Rural Bank of Milaor vs. Ocfemia
Facts: Marife O. Niño knows the five (5) parcels of land located in Camarines Sur and that they
are the ones possessing them which [were] originally owned by her grandparents, Juanita Arellano
Ocfemia and Felicisimo Ocfemia. During the lifetime of her grandparents, [respondents]
mortgaged the said five (5) parcels of land and two (2) others to the [petitioner] Rural Bank of
Milaor. The spouses Ocfemia failed to redeem the mortgaged properties and so the mortgaged was
foreclosed and thereafter ownership thereof was transferred to the [petitioner] bank. Five (5)
parcels of land were sold by the [petitioner] bank to the parents of Marife O. Niño as evidenced
by a Deed of Sale. Such Deed of sale must be registered with the Register of Deeds of Camarines
Sur in order to be transferred in the name of the parents of Merife O. Niño.
Marife O. Niño went to the Register of Deeds but she was informed that the document of sale
cannot be registered without a board resolution of the [petitioner] Bank. She then went to the bank
and requested a board resolution. Despite Marife’s compliance with the requested documents of
the bank, the latter still did not release the board resolution claiming that they had no records from
the old manager.
Issue: Whether or not the board of directors of a rural banking corp. be compelled to confirm a
deed of absolute sale of real property which deed of sale was executed by the bank manager
without prior authority of the board of directors of the rural banking corp.

Held: Yes. In any event, the bank acknowledged, by its own acts or failure to act, the authority of
Fe S. Tena (bank manager) to enter into binding contracts. After the execution of the Deed of Sale,
respondents occupied the properties in dispute and paid the real estate taxes due thereon. If the
bank management believed that it had title to the property, it should have taken some measures to
prevent the infringement or invasion of its title thereto and possession thereof.

Likewise, Tena had previously transacted business on behalf of the bank, and the latter had
acknowledged her authority. A bank is liable to innocent third persons where representation is
made in the course of its normal business by an agent like Manager Tena, even though such agent
is abusing her authority.

The bank is estopped from questioning the authority of the bank manager to enter into the contract
of sale. If a corporation knowingly permits one of its officers or any other agent to act within the
scope of an apparent authority, it holds the agent out to the public as possessing the power to do
those acts; thus, the corporation will, as against anyone who has in good faith dealt with it through
such agent, be estopped from denying the agent's authority.
21. Doles vs. Angeles

Facts: Ma. Aura Tina Angeles (respondent) alleged that Jocelyn Doles (petitioner) was
indebted to the former amounting to P405,430.00 and that by virtue of a "Deed of Absolute Sale",
petitioner, as seller, ceded to respondent, as buyer, a parcel of land in order to satisfy her personal
loan with respondent. The property was mortgaged to National Home Mortgage Finance
Corporation (NHMFC) therefore as a condition for the foregoing sale, respondent shall assume the
undue balance of the mortgage and pay the monthly amortization. Upon verification, respondent
learned that petitioner had incurred arrearages which she refused to pay despite repeated demands
and that she refused to cooperate with respondent to execute the necessary documents required by
the NHMFC to effect the transfer of the title.

Petitioner denied that she borrowed money from respondent and averred that she referred
her friends to respondent whom she knew to be engaged in the business of lending money in
exchange for personal checks through her capitalist Arsenio Pua. She further alleged that
respondent then threatened to initiate a criminal case against her for violation of Batas Pambansa
Blg. 22 for the bounced checks she issued when she could no longer locate the referred borrowers,
therefore the said deed had no valid consideration.

It is an admitted fact by both petitioner and defendant based on their testimonies, that
respondent knew that the money will be used by the friends of the petitioner, that the respondent
was merely representing Arsenio Pua, and that before the supposed friends of the petitioner
defaulted in payment, each issued their personal checks in the name of Arsenio Pua for the payment
of their debt.

Issue: Whether or not the petitioner and respondent were acting as agents.

Held: Yes. Under Article 1868 of the Civil Code, the basis of agency is representation. The
question of whether an agency has been created is ordinarily a question which may be established
in the same way as any other fact, either by direct or circumstantial evidence. The question is
ultimately one of intention. Agency may even be implied from the words and conduct of the parties
and the circumstances of the particular case. Though the fact or extent of authority of the agents
may not, as a general rule, be established from the declarations of the agents alone, if one professes
to act as agent for another, she may be estopped to deny her agency both as against the asserted
principal and the third persons interested in the transaction in which he or she is engaged.

In this case, petitioner knew that the financier of respondent is Pua; and respondent knew that the
borrowers are friends of petitioner.
22. Pahud vs CA

Facts: On 1992, Eufemia, Ferdinand and Raul executed a Deed of Absolute Sale of
Undivided Shares conveying in favor of petitioners (the Pahuds, for brevity) their respective shares
from the lot they inherited from their deceased parents for ₱525,000.00. Eufemia signed the deed
on behalf of her four (4) other co-heirs, namely: Isabelita on the basis of a special power of attorney,
and for Milagros, Minerva, and Zenaida but without their apparent written authority. The deed of
sale was also not notarized. After the payment of the Pahuds to the Los Baños Rural Bank where
the subject property was mortgaged, the bank issued a release of mortgage and turned over the
owner’s copy of the OCT to the Pahuds. When Eufemia and her co-heirs drafted an extra-judicial
settlement of estate to facilitate the transfer of the title to the Pahuds, Virgilio refused to sign it.

In the course of the proceedings for judicial partition filed by Virgilio’s co-heirs, a Compromise
Agreement was signed with seven (7) of the co-heirs agreeing to sell their undivided shares to
Virgilio for ₱700,000.00. The compromise agreement was, however, not approved by the court
because Atty. Dimetrio Hilbero, lawyer for Eufemia and her co-heirs, refused to sign the agreement
because he knew of the previous sale made to the Pahuds.

Virgilio then sold the entire property to Spouses Belarminos. The Belarminos immediately
constructed a building on the subject property. The Pahuds immediately confronted Eufemia who
confirmed to them that Virgilio had sold the property to the Belarminos. Aggrieved, the Pahuds
filed a complaint in intervention in the pending case for judicial partition.

ISSUE: Whether or not the sale to the petitioners is valid.

HELD: Yes, the sale is valid. Under Art. 1874 of the Civil Code provides that when a sale of a
piece of land or any interest therein is through an agent, the authority of the latter shall be in writing;
otherwise, the sale shall be void. Also, under Art. 1878, a special power of attorney is necessary
for an agent to enter into a contract by which the ownership of an immovable property is
transmitted or acquired.

The sale made by Eufemia, Isabelita and her two brothers to the Pahuds should be valid only with
respect to the 4/8 portion of the subject property. The sale with respect to the 3/8 portion,
representing the shares of Zenaida, Milagros, and Minerva, is void because Eufemia could not
dispose of the interest of her co-heirs in the said lot absent any written authority from the latter, as
explicitly required by law.

While the sale with respect to the 3/8 portion is void by express provision of law and not
susceptible to ratification, the court nevertheless uphold its validity on the basis of the common
law principle of estoppel.