Always pray and never give up

Always pray and never give up.
Luke 18:1
Agency and Trust (1 TQ) st
1. Castro vs. Castro, G.R. No. L-36199, December 10, 1932

Note ni Renz: a denial of the trust made by a trustee to one who at the time of the repudiation is a minor does not have the
effect of abrogating the trust relation.
Upon the foregoing facts it is evident, and it must be so declared, that, when the defendant procured the registration of this
land in his own name, he was acting in a trust capacity and as representative of all of his brothers and sisters. As a
consequence he is now holding the registered title thereto in a trust capacity, and it is proper for the court to declare that
the plaintiffs are entitled to their several pro rata shares, notwithstanding the fact that the certificate of registration is in the
name of the defendant alone. The case on this point is controlled by the doctrine of Severino vs. Severino (44 Phil., 343,
350), where an uncle who was acting as agent or administrator of property belonging to a niece had procured a Torrens
title in his own name. It was held that he must surrender the property to the niece and transfer the title to her.
But it is strongly urged for the defendant that, even supposing that the defendant in this case had procured the title to be
registered in his own name as representative of himself and his younger brothers and sisters, yet he had repudiated the
trust more than ten years before this action was begun, and it is insisted that he has acquired title by adverse possession. In
support of this contention, based upon the repudiation of the trust and subsequent adverse possession, the attorneys for the
defendant point to the testimony of Manuel Castro who exercises the role of chief promoter of this litigation on the part of
the plaintiffs. This witness testifies that back in 1916, 1918, and at other times, he had besought his uncle to recognize the
right of his younger brothers and sisters in the property and to give them their part of the produce. The defendant, Manuel
says, ignored the request and put aside the claim upon one excuse or another. We note, however, that this supposed
repudiation of the trust first took place before Manuel Castro had reached his majority, and we are unable to see how a
minor with whom another is in trust relation can be prejudiced by repudiation of the trust addressed to him by the person
who is subject to the trust obligation. The defendant in our opinion is not entitled to the benefit of prescription from his
supposed repudiation of the trust.
2. Rule on Prescriptibility of Action for Reconveyance based on:
A.
EXPRESS TRUST
The Court extensively discussed the prescriptive period for express

trusts in the Heirs of Maximo Labanon v. Heirs of Constancio Labanon,
to wit:
[65]
On the issue of prescription, we had the opportunity to rule

in Bueno v. Reyes that unrepudiated written express trusts are
imprescriptible:
While there are some decisions which hold that

an action upon a trust is imprescriptible, without
distinguishing between express and implied trusts, the
better rule, as laid down by this Court in other
decisions, is that prescription does supervene where
the trust is merely an implied one. The reason has
been expressed by Justice J.B.L. Reyes in J.M. Tuason
and Co., Inc. vs. Magdangal, 4 SCRA 84, 88, as
follows:
https://mail-attachment.googleusercontent.com/attachment/u…K5linE1ty-tZLL50lqIAR2zlHIhVfyCX5mp0mEEHdhROp0UfMk-2r 04/02/2019, 5Q22 PM

Page 1 of 32
Under Section 40 of the old Code of
Civil Procedure, all actions for recovery of
real property prescribed in 10 years,
excepting only actions based on continuing
or subsisting trusts that were considered by
section 38 as imprescriptible. As held in the
case of Diaz v. Gorricho, L-11229, March
29, 1958, however, the continuing or
subsisting trusts contemplated in section 38
of the Code of Civil Procedure referred only
to express unrepudiated trusts, and did not
include constructive trusts (that are imposed
by law) where no fiduciary relation exists
and the trustee does not recognize the trust
at all.
This principle was amplified in Escay v. Court of

Appeals this way: Express trusts prescribe 10 years from the
repudiation of the trust (Manuel Diaz, et al. vs. Carmen
Gorricho et al., 54 O.G. p. 8429, Sec. 40, Code of Civil
Procedure).
In the more recent case of Secuya v. De Selma, we again

ruled that the prescriptive period for the enforcement of an
express trust of ten (10) years starts upon the repudiation of the
trust by the trustee. [66]
To apply the 10-year prescriptive period, which would bar a

beneficiarys action to recover in an express trust, the repudiation of the
trust must be proven by clear and convincing evidence and made known to
the beneficiary. The express trust disables the trustee from acquiring for
[67]
his own benefit the property committed to his management or custody, at

least while he does not openly repudiate the trust, and makes such
repudiation known to the beneficiary orcestui que trust. For this reason,
the old Code of Civil Procedure (Act 190) declared that the rules on
adverse possession do not apply to continuing and subsisting (i.e.,
unrepudiated) trusts. In an express trust, the delay of the beneficiary is
directly attributable to the trustee who undertakes to hold the property for

Page 2 of 32
the former, or who is linked to the beneficiary by confidential or fiduciary
relations. The trustee's possession is, therefore, not adverse to the
beneficiary, until and unless the latter is made aware that the trust has been
repudiated.
IMPLIED TRUST
An action for the reconveyance of land based on implied or constructive trust prescribes within 10 years. And it is from
the date of the issuance of such title that the effective assertion of adverse title for purposes of the statute of limitation is
counted. PAZ GALVEZ, CARLOS TAM VS. COURT OF APPEALS, G.R. No. 157954, March 24, 2006
B.
Effect of laches on:
EXPRESS TRUST
In the more recent case of Heirs of Tranquilino Labiste v. Heirs of Jose

Labiste, the Court refused to apply prescription and laches and reiterated
[71]
that:
[P]rescription and laches will run only from the time the express
trust is repudiated. The Court has held that for acquisitive
prescription to bar the action of the beneficiary against the
trustee in an express trust for the recovery of the property held in
trust it must be shown that: (a) the trustee has performed
unequivocal acts of repudiation amounting to an ouster of
thecestui que trust; (b) such positive acts of repudiation have
been made known to the cestui que trust, and (c) the evidence
thereon is clear and conclusive. Respondents cannot rely on
the fact that the Torrens title was issued in the name of
Epifanio and the other heirs of Jose. It has been held that a
trustee who obtains a Torrens title over property held in
trust by him for another cannot repudiate the trust by
relying on the registration. The rule requires a clear
repudiation of the trust duly communicated to the beneficiary.
The only act that can be construed as repudiation was when
respondents filed the petition for reconstitution in October 1993.
And since petitioners filed their complaint in January 1995, their
cause of action has not yet prescribed, laches cannot be
attributed to them.
IMPLIED TRUST
Laches constitutes a bar to actions to enforce a constructive or implied trust, and repudiation is not required, unless there
is concealment of the facts giving rise to the trust. Continuous recognition of a resulting trust, however, precludes any
defense of laches in a suit to declare and enforce the trust. The beneficiary of a resulting trust may, without prejudice to
his right to enforce the trust, prefer the trust to persist and demand no conveyance from the trustee.
3. JOSUE ARLEGUI, petitioner, vs. HON. COURT OF APPEALS, G.R. No. 126437. March 6, 2002

Page 3 of 32
On the second matter of whether or not Mateo Tan Lu and petitioner Josue Arlegui, after him, breached the trust
reposed on them as officers of, and negotiators for, the tenants association, we are constrained to affirm the findings and
conclusions of the Court of Appeals. By acquiring for themselves the subject property without informing the respondent
spouses of the progress of the negotiations, or of their desire to purchase the said property, Mateo Tan Lu and the
petitioner did not act with the candor and honesty expected of them. Their successful, albeit clandestine, ploy to
appropriate the apartment unit that they knew fully well the Genguyons had every intention to buy from A.B. Barretto
Enterprises violated the trust and confidence so willingly and without reservation reposed on them.
The arguments advanced by the petitioner cannot detract from the cogency of the Court of Appeals findings in this
regard, to wit:
x x x They had a right to expect that because of their fiduciary dependence on the officers who were conducting the
negotiations in their behalf, the same would act with good faith in relation to the trust and confidence reposed in them. But
when Mateo Tan Lu later turned out to have purchased the residential unit occupied by the appellants (aside from the unit
he commercially leased from the Barrettos), he committed a breach of trust in utter disregard of the existing fiduciary
relationship between the trusted officers of the Association and the tenants-members thereof.
Without doubt, Mateo Tan Lu had breached the confidence reposed in him by the Association members, and a trust
was created by force of law in favor of spouses Genguyons, long time occupants of the apartment unit (24 years:
TSN, September 6, 1990, p. 4) which he surreptitiously bought. The Supreme Court has long stated that:
If a person obtains legal title to property by fraud and concealment, Courts of equity will impress upon the title a so
called constructive trust in favor of the defrauded party. (Gayondato v. The Treasurer of the Philippines Islands, 49 Phil.
244, 249).
In a similar vein, Tolentino opined: a receiver, trustee, attorney, agent, or any other person occupying fiduciary relations
respecting property of persons, is utterly disabled from acquiring for his own benefit the property committed to his
custody x x x. No fraud in fact need be shown and no excuse will be heard the trustee. x x x. The rule stands on the moral
obligation to refrain from placing ones self in positions which ordinarily excite conflicts between self interest and
integrity. It seeks to remove the temptation that might arise out of such a relation to serve ones self interest at the expense
of ones integrity and duty to another, by making it impossible to profit by yielding to temptation x x x (Tolentino,
Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. IV, 1973, pp. 638-639, citing Gilbert v.
[14]
Hemston, 79 Mich. 326 and Severino v. Severino, 44 Phil. 343). (Underscoring ours)
The petitioner cannot claim to be innocent or unaware of Mateo Tan Lus underhanded method of acquiring the
subject property. He himself bought the said apartment unit in a manner that cannot be countenanced by the courts. We
agree with the following pronouncements of the Court of Appeals:
x x x Like Mateo Tan Lu, Arlegui was one of the trusted officers of the Association charged with negotiating for the
purchase of the apartment units. In fact, he was the First Vice-President thereof. Thus, he was privy to all the
discussions that took place within and between both sides. Arlegui knew that like all the other bona fide tenants of the
apartment, the Genguyons had the right to purchase their apartment unit in accordance with the Associations original
agreement with the Barrettos. And so knowing the negotiation terms firsthand and employing the same to his own benefit
and profit, Arlegui could not be considered as an innocent purchaser for value, or a buyer in good faith (See TSN,
November 22, 1990, pp. 5-6 citing Exhs. B and C, Records, pp. 139-142). Corollarily, he is not and cannot be insulated
[15]
from the legal effects of the Genguyons right of first preference over the unit. (Underscoring ours)
The facts and evidence on record, as carefully perused by the Court of Appeals, conclusively show that Mateo Tan Lu
surreptitiously purchased the subject property from the original owners, and that the Genguyons were not aware of his
secret machinations to acquire the property for himself. In fact, Mateo Tan Lu did not inform the Genguyons of the sale to
him. It was Simeon Barretto, Jr. who wrote the Genguyons telling them that the apartment unit had been sold to Mateo
[16]
Tan Lu and that they had six (6) months within which to vacate the premises. Clearly, Mateo Tan Lu abused the
confidence and trust that the Genguyons bestowed on him. Petitioner, fully aware of the questionable circumstances
attending Mateo Tan Lus acquisition, added insult to injury when he in turn purchased the said property from Mateo Tan
Lu. The Genguyons had no inkling that Mateo Tan Lu or petitioner Arlegui were even interested to buy the subject
property. They trusted Mateo Tan Lu and the petitioner to negotiate in behalf of the other tenants, themselves
included. They never suspected that Mateo Tan Lu and the petitioner would appropriate for themselves the apartment unit

Page 4 of 32
they were leasing. That there was abuse of confidence cannot be denied.
The petitioner denies that a constructive trust was created and maintains that there was no fraud committed. He
neither received money from the Genguyons, nor was he unjustly enriched. However, the records show that the
Genguyons, along with the other tenants and members of the association, contributed money to enable the officers to
[17]
negotiate with the Barrettos. Besides, constructive trusts do not only arise out of fraud or duress, but also by
[18]
abuse of confidence, in order to satisfy the demands of justice.
The petitioner also argues that the Genguyons failed to prove the existence of an implied or constructive trust. We
disagree. There is ample documentary and testimonial evidence to establish the existence of a fiduciary relationship
between them, and that petitioners subsequent acts betrayed the trust and confidence reposed on him. Petitioner
points out that his lawyer wrote a letter informing the Genguyons that he had already bought the property and telling them
to vacate the premises. This cannot be taken as evidence of good faith. Moreover, it is rather too late for petitioner to
argue that the Genguyons could and should have negotiated directly with the Barrettos after he had already accepted the
responsibility and authority to negotiate in their behalf.
Petitioner suggests that the Genguyons were not financially capable of buying the subject property anyway so they
have no reason to complain. We are not persuaded by petitioners contentions. The Court of Appeals findings in this regard
is more than convincing, to wit:
It is appellees contention that the Genguyons never tendered the amount to make the payments for the unit, and that their
indication of a willingness to make the purchase does not really show a capacity to make the necessary
payment. However, we note that as early was 1987, when hearsay was preponderant among the tenants that some of the
apartment units were purchased by some officers of the Association who were entrusted with the negotiations, the
Genguyons, through Atty. Eriberto Guerrero, sent Mateo Tan Lu a letter verifying with him the truth to the information
that he, Tan Lu, had bought their unit from the Barrettos; they also stated that they were not defaulting from the monthly
rental payments, but since they did not know the true status of the negotiations, and since rumors were rife about the
purchase of the different units, they had put the payment for that month in the bank, after which they informed Tan Lu of
their continuing desire to buy their unit (in line with the Associations agreement with the Barrettos) if it is indeed true that
he had bought it from the same. They also told him that they await communications from him regarding the amount of the
purchase price. A xerox copy of their bank account accompanied their letter as proof of their capacity to pay (Records,
Exh. H, p. 153).
We found no written response from Tan Lu who sold the unit to Josue Arlegui after one year. Defendants-appellees claim
that Tan Lu had offered to sell the unit to Beatriz Genguyon (TSN, Ex Parte Proceedings of May 15, 1990, pp. 11-
12). Yet, such allegation is self-serving and is corroborated only by the self-serving testimony of Josue Arlegui (Ibid., p.
[19]
21), which was in fact controverted by Beatriz Genguyon in her own testimony (TSN, September 6, 1990, p. 13).
It is further argued that no implied trust, as defined under Article 1456 of the New Civil Code, was created because
the petitioner did not acquire the subject property through mistake or fraud. Nevertheless, the absence of fraud or mistake
on the part of the petitioner does not prevent the court from ruling that an implied or constructive trust was created
[20]
nonetheless. In the case of Roa, Jr. v. Court of Appeals, the Court held that:
While it is Our ruling that the compromise agreement between the parties did not create an express trust not an implied
trust under Art. 1456 of the New Civil Code, We may, however, make recourse to the principles of the general law of
trusts, insofar as they are not in conflict with the New Civil Code, Code of Commerce, the Rules of Court and special laws
which under Art. 1442 of the New Civil Code are adopted. While Articles 1448 to 1456 of the New Civil Code
enumerates cases of implied trust, Art. 1447 specifically stipulates that the enumeration of the cases of implied trust does
not exclude others established by the general law of trusts, but the limitations laid down in Art. 1442 shall be applicable.
In American law and jurisprudence, We find the following general principles:
A constructive trust, otherwise known as a trust ex maleficio, a trust ex delicto, a trust de son tort, an involuntary
trust, or an implied trust, is a trust by operation of law which arises contrary to intention and in invitum, against
one who, by fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any
form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity
and good conscience, either has obtained or holds the legal right to property which he ought not, in equity and
good conscience, hold and enjoy. It is raised by equity to satisfy the demands of justice. However, a constructive trust
does not arise on every moral wrong in acquiring or holding property or on every abuse of confidence in business or other
affairs; ordinarily such a trust arises and will be declared only on wrongful acquisitions or retentions of property of which

Page 5 of 32
equity, in accordance with its fundamental principles and the traditional exercise of its jurisdiction or in accordance with
statutory provision, takes cognizance. It has been broadly ruled that a breach of confidence, although in business or social
relations, rendering an acquisition or retention of property by one person unconscionable against another, raises a
constructive trust. (76 Am. Jr. 2d, Sec. 221, pp. 446-447).
And specifically applicable to the case at bar is the doctrine that A constructive trust is substantially an appropriate
remedy against unjust enrichment. It is raised by equity in respect of property, which has been acquired by fraud, or
where, although acquired originally without fraud, it is against equity that it should be retained by the person holding it.
(76 Am. Jur. 2d, Sec. 222, p. 447).
The above principle is not in conflict with the New Civil Code, Code of Commerce, Rules of Court and special laws. And
since We are a court of law and of equity, the case at bar must be resolved on the general principles of law on constructive
trust which basically rest on equitable considerations in order to satisfy the demands of justice, morality, conscience and
fair dealing and thus protect the innocent against fraud. As the respondent court said, It behooves upon the courts to shield
fiduciary relations against every manner of chickanery or detestable design cloaked by legal technicalities. (Underscoring
ours)
Thirdly, it is of no moment that the Genguyons filed the action for reconveyance more than a year after the subject
property was registered in favor of the petitioner. An action for reconveyance of registered land on an implied trust
[21]
prescribes in ten (10) years even if the decree of registration is no longer open to review. Besides, when the
Genguyons filed the action for reconveyance, they were at that time in possession of the subject property. This
Court has held that the 10-year prescription period applies only when the plaintiff or the person enforcing the trust
is not in possession of the property since if a person claiming to be the owner thereof is in actual possession of the
[22]
property the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe.
Even though the Genguyons filed the action for reconveyance after the case for ejectment against them was
instituted, the same was not rendered stale or improper. This Court has uniformly held that the one who is in actual
possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is
attacked before taking steps to vindicate his right. His undisturbed possession gives him a continuing right to seek the aid
of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own
title, which right can be claimed only by one who is in possession.
4.
5. VICTORIA JULIO vs. EMILIANO DALANDAN, G.R. No. L-19012 October 30, 1967, En Banc
But, defendants aver that recognition of the trust may not be proved by
evidence aliunde. They argue that by the express terms of Article 1443 of
the Civil Code, "[n]o express trusts concerning an immovable or any
interest therein may be proved by parol evidence." This argument
overlooks the fact that no oral evidence is necessary. The express trust
imposed upon defendants by their predecessor appears in the document
itself. For, while it is true that said deed did not in definitive words
institute defendants as trustees, a duty is therein imposed upon them —
when the proper time comes — to turn over both the fruits and the
possession of the property to Victoria Julio. Not that this view is without
statutory support. Article 1444 of the Civil Code states that: "No particular
words are required for the creation of an express trust, it being sufficient
that a trust is clearly intended." In reality, the development of the trust as a
method of disposition of property, so jurisprudence teaches, "seems in
large part due to its freedom from formal requirements." This principle 5

Page 6 of 32
perhaps accounts for the provisions in Article 1444 just quoted. For,
"technical or particular forms of words or phrases are not essential to the
manifestation of intention to create a trust or to the establishment
thereof." Nor would the use of some such words as "trust" or "trustee"
6
essential to the constitution of a trust as we have held in Lorenzo vs.

Posadas, 64 Phil. 353, 368. Conversely, the mere fact that the word "trust"
or "trustee" was employed would not necessarily prove an intention to
create a trust. What is important is whether the trust or manifested an
intention to create the kind of relationship which in law is known as a
trust. It is unimportant that the trust or should know that the relationship
"which he intends to create is called a trust, and whether or not he knows
the precise characteristics of the relationship which is called a
trust." Here, that trust is effective as against defendants and in favor of the
7
beneficiary thereof, plaintiff Victoria Julio, who accepted it in the

document itself.
6. MARLENE CRISOSTOMO vs. FLORITO M. GARCIA, JR., G.R.

No. 164787, January 31, 2006
The four-year prescriptive period relied upon by the petitioners apply only
if the complaint seeks to annul a voidable contract under Article 1390 of [32]
the Civil Code. In such case, the four-year prescriptive period under
Article 1391 begins to run from the time of discovery of the mistake,
[33]
violence, intimidation, undue influence or fraud. [34]
Generally, an action for reconveyance of real property based on fraud

prescribes in four years from the discovery of fraud; such discovery is
deemed to have taken place upon the issuance of the certificate of title
over the property. Registration of real property is a constructive notice to
all persons and, thus, the four-year period shall be counted therefrom. [35]
In the case at bar, respondents action which is for Reconveyance and

Cancellation of Title is based on an implied trust under Art. 1456 of
the Civil Code since he averred in his complaint that through fraud
petitioners were able to obtain a Certificate of Title over the
property. He does not seek the annulment of a voidable contract
whereby Articles 1390 and 1391 of the Civil Code would find
application such that the cause of action would prescribe in four
years.

Page 7 of 32
Art. 1456 of the Civil Code provides:
Art. 1456. If property is acquired through mistake or fraud,

the person obtaining it is, by force of law, considered a
trustee of an implied trust for the benefit of the person from
whom the property comes.
Thus, it was held that when a party uses fraud or concealment to

obtain a certificate of title of property, a constructive trust is created
in favor of the defrauded party. [36]
Constructive trusts are created by the construction of equity in order to

satisfy the demands of justice and prevent unjust enrichment. They arise
contrary to intention against one who, by fraud, duress or abuse of
confidence, obtains or holds the legal right to property which he ought not,
in equity and good conscience, to hold. [37]
When property is registered in anothers name, an implied or constructive

trust is created by law in favor of the true owner. The action [38]
for reconveyance of the title to the rightful owner prescribes in 10 years

from the issuance of the title. [39]
An action for reconveyance based on implied or constructive trust

prescribes in ten years from the alleged fraudulent registration or date of
issuance of the certificate of title over the property. [40]
It is now well-settled that the prescriptive period to recover property

obtained by fraud or mistake, giving rise to an implied trust under Art.
1456 of the Civil Code, is 10 years pursuant to Art. 1144. This ten-year
prescriptive period begins to run from the date the adverse party
repudiates the implied trust, which repudiation takes place when the
adverse party registers the land. [41]
Clearly, the applicable prescriptive period is ten years under Art. 1144
and not four years under Arts. 1389 and 1391. [42]
Applying the law and jurisprudential declaration above-cited to the

allegations of fact in the complaint, it can clearly be seen that
respondent has a period of 10 years from the registration of the title

Page 8 of 32
within which to file the action. Since the title was registered in the
name of the petitioners on 16 November 1993, respondent had a
period of 10 years from the time of the registration within which to
file the complaint. Since the complaint was filed on 20 June 2002, the
action clearly has not prescribed and was timely-filed.
WHEREFORE, premises considered, the instant petition is:
(1) GRANTED, with respect to the petitioners prayer that the

Court of Appeals should have resolved the petition on the
merits.
(2) DENIED, with respect to the prayer for the dismissal of Civil
Case No. C-20128 before
the RegionalTrial Court of Caloocan City, Branch 121.
7. JOVITA YAP ANCOG, and GREGORIO YAP, JR., petitioners, vs.

COURT OF APPEALS, G.R. No. 112260. June 30, 1997
We hold, however, that the Court of Appeals erred in ruling that the claim of petitioner Gregorio Yap, Jr. was
[9]
barred by laches. In accordance with Rule 74, 1 of the Rules of Court, as he did not take part in the partition, he
[10]
is not bound by the settlement. It is uncontroverted that, at the time the extrajudicial settlement was executed,
Gregorio Yap, Jr. was a minor.For this reason, he was not included or even informed of the partition.
Instead, the registration of the land in Rosario Diezs name created an implied trust in his favor by analogy to
Art. 1451 of the Civil Code, which provides:
When land passes by succession to any person and he causes the legal title to be put in the name of another, a trust
is established by implication of law for the benefit of the true owner.
[11]
In the case of OLaco v. Co Cho Chit, Art. 1451 was held as creating a resulting trust, which is founded on the
presumed intention of the parties. As a general rule, it arises where such may be reasonably presumed to be the intention
of the parties, as determined from the facts and circumstances existing at the time of the transaction out of which it is
[12]
sought to be established. In this case, the records disclose that the intention of the parties to the extrajudicial settlement
was to establish a trust in favor of petitioner Yap, Jr. to the extent of his share. Rosario Diez testified that she did not claim
[13] [14]
the entire property, while Atty. de la Serna added that the partition only involved the shares of the three participants.
A cestui que trust may make a claim under a resulting trust within 10 years from the time the trust is repudiated.
[15]
Although the registration of the land in private respondent Diezs name operated as a constructive notice of her claim of
ownership, it cannot be taken as an act of repudiation adverse to petitioner Gregorio Yap, Jr.s claim, whose share in the
property was precisely not included by the parties in the partition. Indeed, it has not been shown whether he had been
informed of her exclusive claim over the entire property before 1985 when he was notified by petitioner Jovita Yap Ancog
[16]
of their mothers plan to sell the property.
This Court has ruled that for prescription to run in favor of the trustee, the trust must be repudiated by unequivocal
acts made known to the cestui que trust and proved by clear and conclusive evidence. Furthermore, the rule that the
prescriptive period should be counted from the date of issuance of the Torrens certificate of title applies only to the

Page 9 of 32
[17]
remedy of reconveyance under the Property Registration Decree. Since the action brought by petitioner Yap to claim
his share was brought shortly after he was informed by Jovita Ancog of their mothers effort to sell the property, Gregorio
Yap, Jr.s claim cannot be considered barred either by prescription or by laches.
Agency and Trust (2 TQ) nd
1.
2.
3.
4. DY BUNCIO & COMPANY, INC. vs. ONG GUAN CAN, G.R. No.
L-40681, October 2, 1934 (Full Text)
This is a suit over a rice mill and camarin situated at Dao, Province of Capiz. Plaintiff claims that the property belongs to
its judgment debtor, Ong Guan Can, while defendants Juan Tong and Pua Giok Eng claim as owner and lessee of the
owner by virtue of a deed dated July 31, 1931, by Ong Guan Can, Jr.
After trial the Court of First Instance of Capiz held that the deed was invalid and that the property was subject to the
execution which has been levied on said properties by the judgment creditor of the owner. Defendants Juan Tong and Pua
Giok bring this appeal and insist that the deed of the 31st of July, 1931, is valid.
The first recital of the deed is that Ong Guan Can, Jr., as agent of Ong Guan Can, the proprietor of the commercial firm of
Ong Guan Can & Sons, sells the rice-mill and camarin for P13,000 and gives as his authority the power of attorney dated
the 23d of May, 1928, a copy of this public instrument being attached to the deed and recorded with the deed in the office
of the register of deeds of Capiz. The receipt of the money acknowledged in the deed was to the agent, and the deed was
signed by the agent in his own name and without any words indicating that he was signing it for the principal.
Leaving aside the irregularities of the deed and coming to the power of attorney referred to in the deed and
registered therewith, it is at once seen that it is not a general power of attorney but a limited one and does not give
the express power to alienate the properties in question. (Article 1713 of the Civil Code.)
Appellants claim that this defect is cured by Exhibit 1, which purports to be a general power of attorney given to the same
agent in 1920. Article 1732 of the Civil Code is silent over the partial termination of an agency. The making and accepting
of a new power of attorney, whether it enlarges or decreases the power of the agent under a prior power of attorney, must
be held to supplant and revoke the latter when the two are inconsistent. If the new appointment with limited powers does
not revoke the general power of attorney, the execution of the second power of attorney would be a mere futile
gesture.lawphi1.net
The title of Ong Guan cannot having been divested by the so-called deed of July 31, 1931, his properties are subject to
attachment and execution.
The judgment appealed from is therefore affirmed. Costs against appellants. So ordered.
5.
6.

Page 10 of 32
7. EULOGIO DEL ROSARIO vs. PRIMITIVO ABAD, G.R. No. L-
10881, September 30, 1958, En Banc
a. The issue of irrevocability of SPA
The power of attorney executed by Tiburcio del Rosario in favor of

Primitivo Abad (Annex A, complaint, pp. 7-9, Rec. on App.) providing,
among others, that is coupled with an interest in the subject matter thereof
in favor of the said attorney and are therefore irrevocable, and . . .
conferring upon my said attorney full and ample power and authority to do
and perform all things reasonably necessary and proper for the due
carrying out of the said powers according to the true tenor and purport of
the same, . . ." does not create an agency coupled with an interest nor does
it clothe the agency with an irrevocable character. A mere statement in the
power of attorney that it is coupled with an interest is not enough. In what
does such interest consist must be stated in the power of attorney. The fact
that Tiburcio del Rosario, the principal, had mortgaged the improvements
of the parcel of land to Primitivo Abad, the agent, (Annex B, complaint,
pp. 10-13, Rec. on App.) is not such an interest as could render irrevocable
the power of attorney executed by the principal in favor of the agent. In
fact no mention of it is made in the power of attorney. The mortgage on
the improvements of the parcel of land has nothing to do with the power of
attorney and may be foreclosed by the mortgagee upon failure of the
mortgagor to comply with his obligation. As the agency was not coupled
with an interest, it was terminated upon the death of Tiburcio del
Rosario, the principal, sometime in December 1945, and Primitivo
Abad, the agent, could no longer validly convey the parcel of land to
Teodorico Abad on 9 June 1947.
b. The status of the sale to Teodorico

The sale, therefore, to the later was null and void. But granting that the irrevocable power of attorney was lawful and
valid it would subject the parcel of land to an encumbrance. As the homestead patent was issued on 12 December 1936
and the power of attorney was executed on 24 February 1937, it was in violation of the law that prohibits the alienation or
encumbrance of land acquired by homestead from the date of the approval of the application and for a term of five years
from and after the issuance of the patent or grant. Appellants contend that the power of attorney was to be availed of by
the agent after the lapse of the prohibition period of five years, and that in fact Primitivo Abad sold the parcel of land on 9
June 1947, after the lapse of such period. Nothing to that effect is found in the power of attorney.
Appellants claim that the trial court should have directed the appellees to reimburse Teodorico Abad for what he had paid
to Primitivo Abad to discharge the mortgage in the latter's favor as part of the consideration of the sale. As the sale to
Teodorico Abad is null and void, the appellees can not be compelled to reimburse Teodorico Abad for what he had
paid to Primitivo Abad. The former's right of action is against the latter, without prejudice to the right of Primitive Abad
to foreclose the mortgage on the improvements of the parcel of land if the mortgage debt is not paid by the appellees, as

Page 11 of 32
heirs and successors-in-interest of the mortgagor.
8.
9. PHILIPPINE NATIONAL BANK vs. MAXIMO STA. MARIA, G.R. No. L-24765, August 29, 1969, En Banc
The judgment of the trial court against defendants-appellants Emeteria,

Teofilo, Quintin, Rosario and Leonila, all surnamed Sta. Maria is hereby
reversed and set aside, with costs in both instances against plaintiff.
The judgment against defendant-appellant Valeriana Sta. Maria is
modified in that her liability is held to be joint and not solidary, and the
award of attorney's fees is reduced as set forth in the preceding paragraph,
without costs in this instance.
The authority granted by defendants-appellants (except Valeriana) unto

their brother, Maximo, was merely to mortgage the property jointly
owned by them. They did not grant Maximo any authority to contract for
any loans in their names and behalf. Maximo alone, with Valeriana who
authorized him to borrow money, must answer for said loans and the
other defendants-appellants' only liability is that the real estate
authorized by them to be mortgaged would be subject to foreclosure
and sale to respond for the obligations contracted by Maximo. But
they cannot be held personally liable for the payment of such
obligations, as erroneously held by the trial court.
Maximo had indeed, secured the loan on his own account and the defendants-appellants had authorized him to mortgage
their respective undivided shares of the real property jointly owned by them as security for the loan. But that was the
extent of their authority land consequent liability, to have the real property answer for the loan in case of non-payment. It
is not unusual in family and business circles that one would allow his property or an undivided share in real estate to be
mortgaged by another as security, either as an accommodation or for valuable consideration, but the grant of such
authority does not extend to assuming personal liability, much less solidary liability, for any loan secured by the grantee in
the absence of express authority so given by the grantor.
The outcome might be different if there had been an express ratification of the loans by defendants-appellants or if it had
been shown that they had been benefited by the crop loans so as to put them in estoppel. But the burden of establishing
such ratification or estoppel falls squarely upon plaintiff bank. It has not only failed to discharge this burden, but the
record stands undisputed that defendant-appellant Quintin Sta. Maria testified that he and his co-defendants executed the
authority to mortgage "to accommodate (my) brother Dr. Maximo Sta. Maria ... and because he is my brother, I signed it
to accommodate him as security for whatever he may apply as loan. Only for that land, we gave him as, security" and that
11
"we brothers did not receive any centavo as benefit." The record further shows plaintiff bank itself admitted during the
trial that defendants-appellants "did not profit from the loan" and that they "did not receive any money (the loan proceeds)
12
from (Maximo)." No estoppel, therefore, can be claimed by plaintiff as against defendants-appellants.
9. Chapter 4 (Article 1919-1932)
Article 1919.
Agency is extinguished:
By its revocation;
By the withdrawal of the agent;
By the death, civil interdiction, insanity or insolvency of the principal or of the agent;
By the dissolution of the firm or corporation which entrusted or accepted the agency;

Page 12 of 32
By the accomplishment of the object or purpose of the agency;
By the expiration of the period for which the agency was constituted.
Agency and Trust (3rd TQ)
1. 1979 Bar Q
Suggested Answer: The bank cannot be compelled to accept the tender of

redemption by the heirs of DT. True, agency is extinguished by the death

Page 13 of 32
of the principal, but there are two well-known exceptions. The first
exception is where the agency is coupled with an interest and the second is
where the agent, unaware of the death of his principal, enters into a
contract in behalf of his principal with a third person who is also unaware
of the death of the principal (Arts. 1930, 1931, Civil Code) The instant
case falls squarely within the purview of agency coupled with an interest.
According to the Civil Code, the agency shall remain in full force and
effect even after the death of the principal, if it has been constituted in the
common interest of the latter and of the agent, or in the interest of a third
person who has accepted the stipulation in his favor. Hence, despite the
death of DT, the power granted by him to the bank to sell the property
mortgaged and to sign all documents and perform any act requisite and
necessary to accomplish the extra-judicial foreclosure in case he is unable
to pay the loan is still of full force and effect. The foreclosure,
therefore, and the consolidation by the bank of its title over the
mortgaged property are perfectly valid.
2. An action for reconveyance of property based on fraud prescribes in

four years from the discovery of fraud; such discovery is deemed to have
taken place upon the issuance of the certificate of title over the
property. (Registration of real property is a constructive notice to all
persons and, thus, the four-year period shall be counted therefrom.)
An action for reconveyance based on implied trust prescribes in ten years

which begins to run from the date of registration of the deed or the date
of the issuance of the certificate of title over the property (but this rule
applies only when the plaintiff or the person enforcing the trust is not in
possession of the property, since if a person claiming to be the owner
thereof is in actual possession of the property, as the defendants are in the
instant case, the right to seek reconveyance, which in effect seeks to quiet
title to the property, does not prescribe)
3. 1975 Bar Q
Suggested Answer: No, the Bank is not liable to B. The letter of A

to PNB is merely an authority given to PNB to pay B. PNB, therefore, is
merely an agent of A, and an agent cannot be personally liable as long as
be acts within the scope of his authority. Moreover, the Bank did not
assume the obligation to pay A's indebtedness to B, either as co-principal,

Page 14 of 32
surety or guarantor. (Hodges v. Rey, 111 Phil. 219)
4. GERONIMO AVECILLA, as administrator of the estate of

deceased Placido Alfonso vs. ON. NICASIO YATCO, ET AL., G.R.
No. L-11578 May 14, 1958, En Banc
The first ground on which the lower court dismissed the complaint is that it does not allege a cause of action against
Susana Realty, Inc. for the reason that while it alleges that Agueda Santos and Santiago Cruz acted fraudulently in
effecting the sale of the land by the former to the latter, there is, however, nothing alleged therein that in the transfer of the
land by Cruz to Susana Realty, Inc., the latter acted with knowledge of the fraud or of the defect vitiating the title of
Santiago Cruz. It is further inferred from the complaint that the land is covered by a Torrens title on the back of which no
encumbrance appears. It is for this reason that the trial court found Susana Realty, Inc. to have acted in good faith in
purchasing the land and held that the action cannot prosper against it under Section 55 of Act 496 which provides: "That
in all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties
to such fraud, without prejudice, however, to the rights of any innocent holder for value of a certificate of title."
We have examined the pertinent allegations contained in the amended complaint and have found the above findings of the
trial court correct. Indeed, there is nothing alleged therein which may implicate Susana Realty, Inc. in the commission of
the alleged fraud in the transfer made by Agueda Santos of the land to Santiago Cruz although the allegation therein is
clear that both Santos and Cruz have acted fraudulently. Being an innocent purchaser for value of the land, its right is
protected by law and the remedy of the persons prejudiced is to bring an action for damages against the persons
responsible therefor.
In fact, in view of the issuance of certificates of title, another line of approach conclusive against plaintiffs' side
suggests itself; There being no allegation of bad faith against Santos, his purchase of the duly registered title of
Afable may not be revoked even if Afable, as alleged in the complaint, obtained it thru fraud. Consequently
plaintiffs' action for annulment of the deed of sale will necessarily fail. Plaintiffs' remedy, if any, is an action for
damages against Afable by reason of fraud and that remedy may only be demanded judicially within four years
after discovery of the deception. (See. 43 Act No. 190.) Raymundo, et al. vs. Afable, et al., 96 Phil., 655.)
The second ground on which the order dismissing the complaint is predicated is that, even if plaintiff has a cause of action
against defendant Susana Realty, Inc., the same has already prescribed. The court said: "It is very clear that said
prescriptive period commences to run from the discovery of the fraud, which, in the instant case, is from April 11, 1947,
the date of registration of the alleged fraudulent document, the affidavit of extra-judicial settlement by the defendant
Agueda Santos. It is well-settled rule in land registration that registration of a document in the registry office operates, not
only to the parties to the same, but also against the whole world. It is obvious that the four-year Period has long expired
from aforesaid date of registration."
Again, we find correct the above finding of the trial court. Under Section 51 of Act 496, every conveyance affecting
registered lands if recorded, filed or entered in the office of the register of deeds, shall "be notice to all persons from the
time of such registration, filing, or entering." And it has been held that the period of prescription in relation to an action to
annul a sale of land bought by third persons should be counted from the date of registration of the same, which is notice to
the whole world (De Guinoo vs. The Court of Appeals, 97 Phil., 235).
But petitioner maintains that this cause of action has not yet prescribed because when Agueda Santos, through fraudulent
misrepresentation, secured a certificate of title in her name, a constructive trust in favor of the defrauded heirs of her late
husband was created which grants said heirs the right to vindicate the property regardless of the lapse of time. But the
right of action in this constructive trust should be exercised against the trustee, who caused the fraud, and not against an
innocent purchaser for value, as the Susana Realty, Inc. This right may also be exercised against Santiago Cruz who also
obtained title to the land with knowledge of the fraud, but not with regard to Susana Realty, Inc. which, as already stated,
has bought the property in good faith. The remedy in this case of the defrauded heirs is to bring an action for damages
against those who caused the fraud or were instrumental in depriving them of the property. Their action cannot reach an
innocent purchaser for value who is protected by law (Raymundo, et al. vs. Afable, et al., supra).
5. GREGORIO JIMENEZ, Plaintiff-Appellee, v. PEDRO RABOT, NICOLASA JIMENEZ, G.R. No. 12579. July
27, 1918, En Banc
In considering the questions presented by this appeal one or two

preliminary observations may be made. The first is that, as a matter of
formality, a power of attorney to convey real property ought to appear in a
public document, just as any other instrument intended to transmit or
convey an interest in such property ought to appear in a public document.

Page 15 of 32
(Art. 1280, Civil Code.) But inasmuch as it is an established doctrine that
a private document is competent to create, transmit, modify, or extinguish
a right in real property (Thunga Chui v. Que Bentec, 2 Phil. Rep., 561;
Couto Soriano v. Cortes, 8 Phil. Rep., 459), it follows that a power of
attorney to convey such property, even though in the form of a private
document, will operate with effect. Again, supposing that the letter
contained adequate authority for Nicolasa to sell the property in question,
her action in conveying the property in her own name, without showing
the capacity in which she acted, was doubtless irregular. Nevertheless,
such deed would in any event operate to bind her brother, the plaintiff, in
its character as a contract (Lyon v. Pollock, 99 U. S., 668; 25 L. ed.,-265),
and supposing that the authority was sufficient, he could be compelled by
a proper judicial proceeding to execute a document to carry such contract
into effect. (Art. 1279, Civil Code.)
The principal question for consideration therefore in the end resolves itself
into this, whether the authority conferred on Nicolasa by the letter of
February 7, 1911, was sufficient to enable her to bind her brother. The
only provisions of law bearing on this point are contained in article 1713
of the Civil Code and in section 335 of the Code of Civil Procedure.
Article 1713 of the Civil Code requires that the authority to alienate land
shall be contained in an express mandate; while subsection 5 of section
335 of the Code of Civil Procedure says that the authority of the agent
must be in writing and subscribed by the party to be charged. We are of
the opinion that the authority expressed in the letter is a sufficient
compliance with both requirements.
It has been urged here that in order for the authority to be sufficient under
section 335 of the Code of Civil Procedure the authorization must contain
a particular description of the property which the agent is to be permitted
to sell. There is no such requirement in subsection 5 of section 335; and
we do not believe that it would be legitimate to read such a requirement
into it. The purpose in giving a power of attorney is to substitute the
mind and hand of the agent for the mind and hand of the principal;
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.

Page 16 of 32
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.
It should not escape observation that the problem with which we are here
concerned relates to the sufficiency of the power of attorney under
subsection 5 of section 335 of the Code of Civil Procedure and not to the
sufficiency of the note or memorandum of the contract, or agreement of
sale, required by the same subsection, in connection with the first
paragraph of the same section. It is well settled in the jurisprudence of
England and the United States that when the owner, or his agent, comes to
make a contract to sell, or a conveyance to effect a transfer, 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. (Brockway v. Frost, 40 Minn., 155; Carr v. Passaic Land etc. Co.,
19 N. J. Eq., 424; Lippincott v. Bridgewater, 55 N. J. Eq., 208; Craig v.
Zelian, 137 Cal., 105; 20 Cyc., 271.)
The general rule here applicable is that the description must be sufficiently
definite to 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.
There is ample authority to the effect that a person may by a general

power of attorney authorize an agent to sell "all" the land possessed by the
principal, or all that he possesses in a particular city, county, or state.
(Roper v. McFadden, 48 Cal., 346; Rownd v. Davidson, 113 La., 1047;
Carson v. Ray, 52 N. C., 609; 78 Am. Dec., 267; 31 Cyc., 1229.) It is also
held that where a person authorizes an agent to sell a farm ("my farm") in

Page 17 of 32
a certain county, this is sufficient, if it be shown that such party has only
one farm in that county. (Marriner v. Dennison, 78 Cal., 202.) In Linton v.
Moorhead (209 Pa. St., 646), the power authorized the agent to sell or
convey "any or all tracts, lots, or parcels" of land belonging to the
plaintiff. It was held that this was adequate. In Lyon v. Pollock (99 U. S.,
668), the owner in effect authorized an agent to sell everything he had in
San Antonio, Texas. The authority was held sufficient. In Linan v. Puno
(31 Phil. Rep., 259), the authority granted was to the effect that the agent
might administer "the interests" possessed by the principal in the
municipality of Tarlac and to that end he was authorized to purchase, sell,
collect, and pay, etc. It was held that this was a sufficient power.
In the present case the agent was given the power to sell either of the
parcels of land belonging to the plaintiff. We can 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.
6.
7. SING JUCO and SING BENGCO,Plaintiffs Appellees, v. ANTONIO

SUNYANTONG and his wife VICENTA LLORENTE DE
SUNYANTONG, G.R. No. L-17131 June 30, 1922, En Banc
It is also sufficiently established in the record that in one of the conferences held by the plaintiffs among themselves,
relative to the purchase of the aforesaid estate, at which the defendant was present, the latter remarked that it would be
advisable to let some days elapse before accepting the terms of the transfer as proposed by Maria Gay, in order that the
latter might not think that they were coveting said, property. This mere remark alone in itself cannot be taken . to mean
any wrongful intent on the part of said defendant, but it ceases to be innocent when taken in connection with the fact, also
proven, that when the defendant met Alipio de los Santos after the latter's return to Iloilo, sent by the plaintiffs to examine
the estate and satisfy himself of its condition, and Alipio de los Santos told him of his favorable impression of the estate,
he advised De los Santos not to report the estate to the plaintiffs as being so highly valuable, for if it proved a failure they
might blame him, De los Santos. One becomes more strongly convinced that this defendant has been unfaithful to his
principals, the plaintiffs, when these circumstances are considered in connection with the fact that at an early hour in the
morning of June 17, 1919, on the midday of which the term of plaintiff's option to purchase was to expire, said defendant
Antonio Sunyantong called at the house of Maria Gay when she was having breakfast, and offered to buy the estate on the
same terms proposed by her and not yet accepted by the plaintiffs, making the offer to buy not for the benefit of the
plaintiffs, but for his own wife, his codefendant Vicenta Llorente de Sunyantong. In view of the opportunity that offered
itself, but respecting the option granted the plaintiffs, Maria Gay communicated by telephone with Manuel Sotelo, who
was acting as broker for the plaintiffs in these transactions, and told him that another buyer of the estate had presented
himself who would accept the terms proposed by her and that she would like to know immediately what decision had been
reached by the plaintiffs on the matter. In view of Maria Gay's insistence that the plaintiffs give a categorical answer, Sing
Bengco, one of the plaintiffs who happened to be present at the time the telephone conversation between Maria Gay and
Manuel Sotelo took place, instructed Sotelo to inform her at the time that if she did not care to wait until 12 o'clock, "ella
cuidado" (she could do as she pleased). This is a purely Philippine phrase, an exact translation of the Tagalog "siya ang
bahala" and approximately of the Visayan "ambut sa iya,"which has very different, and even contradictory, meanings.
It might be interpreted in several different ways, such as a threat on the part of Sing Bengco to take legal action against
Maria Gay in case she did not wait until the expiration of the option, or that they would waive all claims to the option and

Page 18 of 32
be agreeable to whatever action she might take. Interpreting the phrase to mean that the plaintiffs waived their option to
buy, Maria Gay closed the sale of the estate in favor of the defendant Antonio Sunyantong.
Even supposing that this latter interpretation of the phrase in question was the actual intention of Sing Bengco, the action
of the defendant Sunyantong in intervening in the negotiations in the manner in which he did does not make him innocent
of infidelity in view of the fact that he was an employee of the plaintiffs to whom he owed loyalty and faithfulness.
Even though it be conceded that when he closed the contract of sale with Maria Gay the plaintiff's option had
expired, but the fact cannot be denied that he was the cause of the option having precipitously come to such an end.
His disloyalty to his employers was responsible for Maria Gay not accepting the terms proposed by the plaintiffs, because
of being certain of another less exigent buyer. Without such intervention on the part of the defendant it is presumed, taking
into account all the circumstances of the case, that the sale of the estate in question would have been consummated
between Maria Gay and the plaintiffs, perhaps with such advantages to the plaintiffs, as they expected to obtain by
prolonging the negotiations.
Such an act of infidelity committed by a trusted employee calculated to redound to his own benefit and to the detriment of
his employers cannot pass without legal sanction. Nemo debet aliena jactura locupletari; nemo ex suo delicto meliorem
suam conditionem facere potest. It is an illicit act committed with culpa, and, therefore, its agent is liable (art. 1089, Civil
Code), for the damage caused (art. 1902, ibidem). Not identical, but similar, to this infidelity is the abuse of confidence
sanctioned in our Penal Code as a generic circumstance, nay as specific aggravating one, and even as an essential element
of certain crimes.
This reparation provided for in the Civil Code and applied to the case at bar seems to be limited to the indemnification of
damages, as we are not aware of any express provision in said Code which imposes upon the person thus held liable, any
obligation, such as that of transferring to plaintiffs the estate in question.
Such principle, however, in case of this nature is generally recognized in our laws, since in the case of commercial agents
(factores) it is expressly established. Undoubtedly, formerly under the circumstances then prevailing such sanction was
not necessary in the field of civil law, because its sphere of action is the general relations of society; but even then it was
deemed necessary expressly to protect with such sanction the commercial relations wherein the question of gain was
involved, which is sometimes so imperative as to ignore everything, even the very principles of loyalty, honesty, and
fidelity.
This specific relief, however, has already come to be applied in this jurisdiction in similar cases, among which can be
cited that of Camacho vs. Municipality of Baliuag (28 Phil., 466.)
And in the North American law such sanction is expressly recognized, and a transaction of this nature might be regarded
as an "equitable trust" by virtue of which the thing acquired by an employee is deemed not to have been acquired for his
own benefit or that of any other person but for his principal, and held in trust for the latter (21 R. C. L., 825; 2 Corpus
Juris, 353).
8. 1988 BAR Q
In 1950, A executed a power of attorney authorizing B to sell a parcel of
lancl consisting of more than 14 hectares. A died in 1954. In 1956, his four
childen sold more than 12 hectares of the land to C. In 1957, B sold. 8
hectares of the same land to D. It appears that C did not register the sale
executed by the children. D, who was not aware of the previous sale,
registered the sale executed by B, whose authority to sell was annotated at
the back of the Original Certificate of Title.
1. What was the effect of the death of A upon B’s authority to sell the
land?
2. Assuming that B still had the authority to sell the land—who has a
better right over the said land, C or D? (1988 Bar Question)

Page 19 of 32
SUGGESTED ANSWER:
1. While the death of the principal in 1954 ended the authority of the agent
to sell the land, it has not been shown that he was aware of his principal s
demise. Hence, the act of such agent is valid and shall be fully effective
with respect to third persons which may have contracted with him in good
faith in conformity with Art. 1931 of the Civil Code. (Buason vs. Panuyas,
105 Phil. 795, Herrera vs. Luy, 110 Phil. 1020.)
2. As the case at bar is a case of double sale of registered land he who

recorded the sale in good faith has a better right in conformity with Art.
1544 of the Civil Code. Since D was not aware of the previous sale, he
had to rely on the face of the certificate of title of the registered owner.
Hence, he now has a better right to the land. (Buason vs. Panuyas, supra.)
ALTERNATIVE ANSWERS:
(1) The agency is terminated upon the death of either the principal or
agent. Exceptionally, a transaction entered into by the agent with a third
person where both had acted in good faith is valid. Article 1930 of the
Civil Code provides that:
“The agency shall remain in full force and effect even after the death of
the principal, if it has been constituted in the common interest of the latter
and of the agent, or in the interest of a third person who has accepted the
stipulation in his favor.”
and Article 1931 provides that:
“Anything done by the agent, without knowledge of the death of the

principal or of any other cause which extinguishes the agency, is valid and
shall be fully effective with respect to third persons who may have
contracted with him in good faith.”
9. CORAZON CH. VELOSO Y RICABLANCA and ROBUSTIANO

M. ROSALES, Plaintiff-Appellee, vs.LA URBANA, Mutual Building
and Loan Association, and JOSE MARIA DEL MAR, G.R. No. L-
38384 November 3, 1933, En Banc
In view of the foregoing facts, the court held that pursuant to article 1714 of the Civil Code and under the Torrens Act in
force in this jurisdiction, the forged powers of attorney prepared by Del Mar were without force and effects and that
the registration of the mortgages constituted by virtue thereof were likewise null and void and without force and
effect, and that they could not in any way prejudice the rights of the plaintiff as the registered owners of her participations

Page 20 of 32
in the properties in question.
The defendant-appellant herein assign various alleged errors in its brief consideration thereof. Inasmuch as Del Mar is not
the registered owner of the mortgaged properties and inasmuch as the appellant was fully aware of the fact that it was
dealing with him on the strength of the alleged powers of attorney purporting to have been conferred upon him by the
plaintiff, it was its duty to ascertain the genuineness of said instruments and not the said powers of attorney
appeared to have been registered. In view of its failure to proceed in this manner, it acted negligently and should
suffer the consequences and damages resulting from such transactions.
Every person dealing with an agent is put upon inquiry, and must discover upon his peril the authority of the
agent, and this is specially true where the act of the agent is of an unusual nature.
If a person makes no inquiry, he is chargeable with knowledge of the agent's authority, and his ignorance of that
authority will not be any excuse. (Deen vs. Pacific Commercial Co., 42 Phil., 738.)
Persons dealing with an assumed agent, whether the assumed agency be a general or special one, are bound at their
peril, if they would hold the principal, to ascertain not only the fact of the agency but the nature and extent of the
authority, and in case either is controverted, the burden of proof is upon them to establish it. (Harry E. Keeler
Electric Co. vs. Rodriguez, 44 Phil., 19.)
As has been noted at the beginning, the court reserved to the appellant any right of action it might have against Del Mar
and the Insular Treasurer under the provisions of sections 99 to 107 of Act 496. We deem it unnecessary to repeat such
reservation in this decision. At all events, the appellant may exercise such right of action without the necessity of such
reservation if the facts of the case so warrant.
10. MARIANO TAMAYO v. AURELIO CALLEJO, GR No. L-25563, Jul 28, 1972
It should be noted, however, that although the trust created by the

application for registration filed by Mariano and Marcos Tamayo, on or
about September 29, 1913, and the inclusion in OCT No. 2612, issued in
their names, on November 15, 1915, of the tract of land previously sold by
their parents to Fernando Domantay and later conveyed by him to Aurelio
Callejo may have had a constructive or implied nature, its status was
substantially affected on June 28, 1918, by the following facts, namely:
On the date last mentioned, Fernando Domantay and petitioner Mariano
Tamayo the latter acting in his own behalf and on that of his brother
Marcos Tamayo executed the public instrument Exhibit I whereby
Mariano Tamayo explicitly acknowledged that his deceased parents,
Vicente Tamayo and Cirila Velasco, had sold to Fernando Domantay; for
the sum of P200, the parcel of land of about 22,125/3 square meters, then
held by the latter, and stipulating, interalia, that Fernando Domantay is the
absolute ,owner of said land, free from any lien or encumbrance thereon,
and that, in view of the sale thus made by his parents, he (Mariano
Tamayo) "quedo responsable al susodicho Don Fernando Domantay, sus
herederos y causa habientes por la propiedad, cuyo titulo me comprometo
a defender contra las reclamaciones * * * de quienes las presentare. (I am [1]
responsible to said Mr. Fernando Domantay, his heirs and successors for the property, the title to which I bind myself to defend against the claims of
whomsoever shall file the same. )"
This express recognition by Mariano Tamayo on his behalf and that of

his brother Marcos Tamayo of the previous sale, made by their

Page 21 of 32
parents, to Fernando Domantay had the effect of imparting to the
aforementioned trust the nature of an express trust it having been
created by the will of the parties, "no particular words" being
"required for the creation of an express trust, it being sufficient that a
trust is clearly intended" which express trust is a "continuing and
[2]
subsisting" trust, not subject to the statute of limitations, at least

until, repudiated, in which event the period of prescription begins to
run only from the time of the repudiation. The latter did not take place,
[3]
in the case at bar, until early in June, 1952, when Mariano Tamayo
rejected Aurelio Callejo's demand that the now disputed portion be
excluded from TCT No. 5486 in the farmer's name. But, then, the case at
bar was filed weeks later, or on June 25, 1952, when the period of
prescription had barely begun to run.

Page 22 of 32
th
Agency and Trust (4 TQ)
1. 1992 BAR Q (Gi change lang ang names pero same ang factual setting)
A as principal appointed B is his agent granting him general and unlimited management over A's properties, stating that A
withholds no power from B and that the agent may execute such acts as he may consider appropriate. Accordingly, B
leased A's parcel of land in Manila to C for four (4) years at P60.000.00 per year, payable annually in advance. B leased
another parcel of land of A in Caloocan City to D without a fixed term at P3,000.00 per month payable monthly. B sold to
E a third parcel of land belonging to A located in Quezon City for three (3) times the price that was listed in the inventory
by A to B. All those contracts were executed by B while A was confined due to illness in the Makati Medical Center. Rule
on the validity and binding effect of each of the above contracts upon A the principal. Explain your answers. (1992 Bar
Question)
SUGGESTED ANSWER:
The agency couched in general terms comprised only acts of administration (Art. 1877, Civil Code). The lease
contract on the Manila parcel is not valid, not enforceable and not binding upon A. For B to lease the property to
C, for more than one (1) year, A must provide B with a special power of attorney (Art. 1878, Civil Code).
The lease of the Caloocan City property to D is valid and binding upon A. Since the lease is without a fixed term, it
is understood to be from month to month, since the rental is payable monthly (Art. 1687, Civil Code).
The sale of the Quezon City parcel to E is not valid and not binding upon A. B needed a special power of attorney
to validly sell the land (Arts. 1877 and 1878. Civil Code). The sale of the land at a very good price does not cure the
defect of the contract arising from lack of authority.
2. 2001 BAR Q
Richard sold a large parcel of land in Cebu to Leo for P100 million payable in annual installments over a period of ten
years, but title will remain with Richard until the purchase price is fully paid. To enable Leo to pay the price, Richard gave
him a power-of-attorney authorizing him to subdivide the land, sell the individual lots, and deliver the proceeds to
Richard, to be applied to the purchase price. Five years later, Richard revoked the power of attorney and took over the sale
of the subdivision lots himself. Is the revocation valid or not? Why? (5%) (2001 Bar Question)
SUGGESTED ANSWER:
The revocation is not valid. The power of attorney given to the buyer is irrevocable because it is coupled with an
interest: the agency is the means of fulfilling the obligation of the buyer to pay the price of the land (Article 1927,
CC). In other words, a bilateral contract (contract to buy and sell the land) is dependent on the agency.
3. WOODCHILD HOLDINGS, INC. vs. ROXAS ELECTRIC AND CONSTRUCTION COMPANY, INC., G.R.
No. 140667, August 12, 2004
• The trial court rendered judgment in favor of the WHI.
• The RECCI appealed the decision to the CA, which rendered a decision on November 9, 1999 reversing that of the trial court, and ordering
the dismissal of the complaint. The CA ruled that, under the resolution of the Board of Directors of the RECCI, Roxas was merely

Page 23 of 32
authorized to sell Lot No. 491-A-3-B-2 covered by TCT No. 78086, but not to grant right of way in favor of the WHI over a portion of Lot
No. 491-A-3-B-1, or to grant an option to the petitioner to buy a portion thereof. The appellate court also ruled that the grant of a right of
way and an option to the respondent were so lopsided in favor of the respondent because the latter was authorized to fix the location as
well as the price of the portion of its property to be sold to the respondent. Hence, such provisions contained in the deed of absolute sale
were not binding on the RECCI. The appellate court ruled that the delay in the construction of WHIs warehouse was due to its fault.
• Judgment is hereby rendered AFFIRMING the assailed Decision of the Court of Appeals WITH MODIFICATION
In San Juan Structural and Steel Fabricators, Inc. v. Court of Appeals,

we held that:
[21]
A corporation is a juridical person separate and distinct from its

stockholders or members. Accordingly, the property of the
corporation is not the property of its stockholders or members
and may not be sold by the stockholders or members without
express authorization from the corporations board of
directors. Section 23 of BP 68, otherwise known as the
Corporation Code of the Philippines, provides:
SEC. 23. The Board of Directors or Trustees. Unless

otherwise provided in this Code, the corporate powers
of all corporations formed under this Code shall be
exercised, all business conducted and all property of
such corporations controlled and held by the board of
directors or trustees to be elected from among the
holders of stocks, or where there is no stock, from
among the members of the corporation, who shall hold
office for one (1) year and until their successors are
elected and qualified.
Indubitably, a corporation may act only through its board of

directors or, when authorized either by its by-laws or by its
board resolution, through its officers or agents in the normal
course of business. The general principles of agency govern the
relation between the corporation and its officers or agents,
subject to the articles of incorporation, by-laws, or relevant
provisions of law. [22]
Generally, the acts of the corporate officers within the scope of their
authority are binding on the corporation.However, under Article 1910 of
the New Civil Code, acts done by such officers beyond the scope of their
authority cannot bind the corporation unless it has ratified such acts

Page 24 of 32
expressly or tacitly, or is estopped from denying them:
Art. 1910. The principal must comply with all the obligations
which the agent may have contracted within the scope of his
authority.
As for any obligation wherein the agent has exceeded his power,
the principal is not bound except when he ratifies it expressly or
tacitly.
Thus, contracts entered into by corporate officers beyond the scope of

authority are unenforceable against the corporation unless ratified by the
corporation. [23]
In BA Finance Corporation v. Court of Appeals, we also ruled that [24]
persons dealing with an assumed agency, whether the assumed agency be

a general or special one, are bound at their peril, if they would hold the
principal liable, to ascertain not only the fact of agency but also the nature
and extent of authority, and in case either is controverted, the burden of
proof is upon them to establish it.
In this case, the respondent denied authorizing its then president Roberto
B. Roxas to sell a portion of Lot No. 491-A-3-B-1 covered by TCT No.
78085, and to create a lien or burden thereon. The petitioner was thus
burdened to prove that the respondent so authorized Roxas to sell the same
and to create a lien thereon.
Central to the issue at hand is the May 17, 1991 Resolution of the Board of
Directors of the respondent, which is worded as follows:
RESOLVED, as it is hereby resolved, that the corporation, thru

the President, sell to any interested buyer, its 7,213-sq.-meter
property at the Sumulong Highway, Antipolo, Rizal, covered by
Transfer Certificate of Title No. N-78086, at a price and on
terms and conditions which he deems most reasonable and
advantageous to the corporation;
FURTHER RESOLVED, that Mr. ROBERTO B. ROXAS,

President of the corporation, be, as he is hereby authorized to
execute, sign and deliver the pertinent sales documents and

Page 25 of 32
receive the proceeds of sale for and on behalf of the company. [25]
Evidently, Roxas was not specifically authorized under the said resolution
to grant a right of way in favor of the petitioner on a portion of Lot No.
491-A-3-B-1 or to agree to sell to the petitioner a portion thereof. The
authority of Roxas, under the resolution, to sell Lot No. 491-A-3-B-2
covered by TCT No. 78086 did not include the authority to sell a portion
of the adjacent lot, Lot No. 491-A-3-B-1, or to create or convey real rights
thereon. Neither may such authority be implied from the authority granted
to Roxas to sell Lot No. 491-A-3-B-2 to the petitioner on such terms and
conditions which he deems most reasonable and advantageous. Under
paragraph 12, Article 1878 of the New Civil Code, a special power of
attorney is required to convey real rights over immovable property.
Article 1358 of the New Civil Code requires that contracts which have
[26]
for their object the creation of real rights over immovable property must
appear in a public document. The petitioner cannot feign ignorance of
[27]
the need for Roxas to have been specifically authorized in writing by the
Board of Directors to be able to validly grant a right of way and agree to
sell a portion of Lot No. 491-A-3-B-1. The rule is that if the act of the
agent is one which requires authority in writing, those dealing with him
are charged with notice of that fact. [28]
Powers of attorney are generally construed strictly and courts will not
infer or presume broad powers from deeds which do not sufficiently
include property or subject under which the agent is to deal. The general [29]
rule is that the power of attorney must be pursued within legal strictures,
and the agent can neither go beyond it; nor beside it. The act done must be
legally identical with that authorized to be done. In sum, then, the [30]
consent of the respondent to the assailed provisions in the deed of absolute

sale was not obtained; hence, the assailed provisions are not binding on it.
We reject the petitioners submission that, in allowing Roxas to

execute the contract to sell and the deed of absolute sale and failing to
reject or disapprove the same, the respondent thereby gave him apparent
authority to grant a right of way over Lot No. 491-A-3-B-1 and to grant an
option for the respondent to sell a portion thereof to the petitioner. Absent
estoppel or ratification, apparent authority cannot remedy the lack of the
written power required under the statement of frauds. In addition, the [31]
petitioners fallacy is its wrong assumption of the unproved premise that

Page 26 of 32
the respondent had full knowledge of all the terms and conditions
contained in the deed of absolute sale when Roxas executed it.
It bears stressing that apparent authority is based on estoppel and can

arise from two instances: first, the principal may knowingly permit the
agent to so hold himself out as having such authority, and in this way, the
principal becomes estopped to claim that the agent does not have such
authority; second, the principal may so clothe the agent with the indicia of
authority as to lead a reasonably prudent person to believe that he actually
has such authority. There can be no apparent authority of an agent
[32]
without acts or conduct on the part of the principal and such acts or
conduct of the principal must have been known and relied upon in good
faith and as a result of the exercise of reasonable prudence by a third
person as claimant and such must have produced a change of position to
its detriment. The apparent power of an agent is to be determined by the
acts of the principal and not by the acts of the agent. [33]
For the principle of apparent authority to apply, the petitioner was

burdened to prove the following: (a) the acts of the respondent justifying
belief in the agency by the petitioner; (b) knowledge thereof by the
respondent which is sought to be held; and, (c) reliance thereon by the
petitioner consistent with ordinary care and prudence. In this case, there [34]
is no evidence on record of specific acts made by the

respondent showing or indicating that it had full knowledge of any
[35]
representations made by Roxas to the petitioner that the respondent had

authorized him to grant to the respondent an option to buy a portion of Lot
No. 491-A-3-B-1 covered by TCT No. 78085, or to create a burden or lien
thereon, or that the respondent allowed him to do so.
The petitioners contention that by receiving and retaining

the P5,000,000 purchase price of Lot No. 491-A-3-B-2, the respondent
effectively and impliedly ratified the grant of a right of way on the
adjacent lot, Lot No. 491-A-3-B-1, and to grant to the petitioner an option
to sell a portion thereof, is barren of merit. It bears stressing that the
respondent sold Lot No. 491-A-3-B-2 to the petitioner, and the latter had
taken possession of the property. As such, the respondent had the right to
retain the P5,000,000, the purchase price of the property it had sold to the
petitioner.For an act of the principal to be considered as an implied
ratification of an unauthorized act of an agent, such act must be

Page 27 of 32
inconsistent with any other hypothesis than that he approved and intended
to adopt what had been done in his name. Ratification is based on waiver
[36]
the intentional relinquishment of a known right. Ratification cannot be

inferred from acts that a principal has a right to do independently of the
unauthorized act of the agent. Moreover, if a writing is required to grant an
authority to do a particular act, ratification of that act must also be in
writing. Since the respondent had not ratified the unauthorized acts of
[37]
Roxas, the same are unenforceable. Hence, by the respondents retention

[38]
of the amount, it cannot thereby be implied that it had ratified the

unauthorized acts of its agent, Roberto Roxas.
4.PITTSBURG PLATE GLASS COMPANY, Petitioner, v. THE DIRECTOR OF PATENTS and CHUA TUA
HIAN AND COMPANY, doing business as "SIN TECH HENG & CO, G.R. No. L-22773. March 29, 1974
The main issue before this Court is whether the law firm of Lichauco, Picazo and Agcaoili was authorized to represent the
petitioner before the Philippine Patent Office on November 5, 1962 when the former pleaded for an extension of time to
register the petitioner’s opposition to the respondent’s application.
It is our considered view that the said law firm was so properly authorized by the petitioner. It should be noted that the
petitioner does not deny, as in fact it asserted in writing, that the said law firm was authorized to represent it by virtue of
the powers it had vested upon Langner, Et Al., a correspondent of Lichauco, Picazo and Agcaoili, to handle all foreign
trademark matters affecting the petitioner. It bears emphasis that the relationship between counsel and client is strictly a
personal one. It is a relationship the creation of which courts and administrative tribunals cannot but recognize on the faith
of the client’s word, especially when no substantial prejudice is thereby caused to any third party.
In the case at bar, the petitioner, which claims to be adversely affected by the respondent’s trademark application,
seasonably informed the Director of Patents that its counsel had the authority to represent it before the latter’s office. We
see no valid reason to interpose chevaux-de-frise upon that claim and deny the petitioner its basic right to be heard.
5. a. agency coupled with interest
As developer of the permanent improvement on the Property, BDAI has an

interest in the Property that is the subject matter of the agency, assuming
such agency exists. An agency coupled with interest is not revocable at the
will of principal. In Sevilla vs. CA, 160 SCRA 171, it was said:
“The reason is that it is one coupled with an interest, the agency having
been created for the mutual interest of the agent and the principal. It
appears that Lina Sevilla is a bona fide travel agent herself, and as such,
she had acquired an interest in the business entrusted to her. Moreover, she
had assumed a personal obligation for the operation thereof, holding
herself solidarily liable for the payment of rentals. She continued the
business, using her own name, after Tourist World had stopped further
operations. Her interest, obviously, is not limited to the commissions she
earned as a result of her business transactions, but one that extends to the

Page 28 of 32
very subject matter of the power of management delegated to her. It is an
agency that cannot be revoked at the pleasure of the principal.
(Bacaling vs. Muya, 430 Phil. 531 (2002); Wheelers Club International,
Inc. vs. Bonifacio, Jr., G.R. No. 139540, June 29, 2005; Lim vs. Saban,
G.R. No. 163720, December 11, 2004).
In an agency coupled with interest, it is the agency that cannot be revoked
or withdrawn by the principal due to an interest of a third party that
depends upon it, or the mutual interest of both principal and agent. In [19]
this case, the non-revocation or non-withdrawal under paragraph 5(c)

applies to the advances made by petitioner who is supposedly
the agent and not the principal under the contract. Thus, it cannot be
inferred from the stipulation that the parties’ relation under the agreement
is one of agency coupled with an interest and not a partnership.
[19]
CIVIL CODE,Art. 1927. An agency cannot be revoked if a bilateral
contract depends upon it, or if it is the means of fulfilling an obligation
already contracted, or if a partner is appointed manager of a partnership in
the contract of partnership and his removal from the management is
unjustifiable.
b. sub-agency (from UP reviewer sent by Atty. Cayetano)
SUB-AGENCY
A sub-agent or substitute is a person employed or appointed by an agent as
his agent, to assist him in the performance of an act for the principal,
which the agent has been empowered to perform.
The agent is a principal with respect to the subagent.
POWER TO APPOINT
General rule: The agent may appoint a sub-agent.
Ratio: The law allows such substitution for reasons of convenience and
practicality.
Exceptions:
(1) The appointment is prohibited by the principal [Article 1892];
(2) The work entrusted to the agent requires special knowledge, skill, or
competence, unless
authorized to do so by the principal [De Leon
(2010)].

Page 29 of 32
RELATIONS AMONG THE PARTIES
(1) When the sub-agent has been employed for own account of the agent,
to assist him, the sub-agent is a stranger to the principal.
(2) When the appointment was authorized by the principal, a fiduciary
relationship is created
between and among the principal, agent, and
sub-agent, such that neither the agent nor the
substitute can be held personally liable so long
as they act within the scope of their authority
[Macias & Co. v. Warner, Barnes & Co. (1922)].
EFFECTS OF SUBSTITUTION
(1) When substitution was prohibited by the principal, appointment by the
agent is an act in excess of the limits of his authority. All acts of the
substitute are void [Article 1892].
(2) When substitution was authorized, the agent is only liable when he
appointed one who is notoriously incompetent or insolvent, unless the
person was designated by the principal.
(3) When substitution was not authorized, but also not prohibited, the
appointment is valid, but the agent is liable for damage caused by the
substitution to the principal.
(4) When substitution was authorized and the subagent was designated by
the principal, the agent is released from any liability for the acts of the
sub-agent.
c. Article 1878. Special powers of attorney are necessary in the

following cases:
(1) To make such payments as are not usually considered as acts of administration;
(2) To effect novations which put an end to obligations already in existence at the time the agency was constituted;
(3) To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive
objections to the venue of an action or to abandon a prescription already acquired;
(4) To waive any obligation gratuitously;
(5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for
a valuable consideration;
(6) To make gifts, except customary ones for charity or those made to employees in the business managed by the agent;
(7) To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are
under administration;
(8) To lease any real property to another person for more than one year;
(9) To bind the principal to render some service without compensation;

Page 30 of 32
(10) To bind the principal in a contract of partnership;
(11) To obligate the principal as a guarantor or surety;
(12) To create or convey real rights over immovable property;
(13) To accept or repudiate an inheritance;
(14) To ratify or recognize obligations contracted before the agency;
(15) Any other act of strict dominion.
6. SALLY YOSHIZAKI, PETITIONER, VS. JOY TRAINING CENTER OF AURORA, INC., G.R. No. 174978,
July 31, 2013
The above documents do not convince us of the existence of the contract of agency to sell the real properties. TCT
No. T-25334 merely states that Joy Training is represented by the spouses Johnson. The title does not explicitly confer to
the spouses Johnson the authority to sell the parcel of land and the building thereon. Moreover, the phrase "Rep. by Sps.
[39]
Richard A. Johnson and LINDA S. JOHNSON" only means that the spouses Johnson represented Joy Training in land
registration.
The lower courts should not have relied on the resolution and the certification in resolving the case. The spouses
Yoshizaki did not produce the original documents during trial. They also failed to show that the production of pieces of
[40]
secondary evidence falls under the exceptions enumerated in Section 3, Rule 130 of the Rules of Court. Thus, the
general rule that no evidence shall be admissible other than the original document itself when the subject of inquiry is the
[41]
contents of a document applies.
Nonetheless, if only to erase doubts on the issues surrounding this case, we declare that even if we consider the
photocopied resolution and certification, this Court will still arrive at the same conclusion.
The resolution which purportedly grants the spouses Johnson a special power of attorney is negated by the phrase "land
[42]
and buildingowned by spouses Richard A. and Linda J[.] Johnson." Even if we disregard such phrase, the resolution
must be given scant consideration. We adhere to the CA's position that the basis for determining the board of trustees'
composition is the trustees as fixed in the articles of incorporation and not the actual members of the board. The second
[43]
paragraph of Section 25 of the Corporation Code expressly provides that a majority of the number of trustees as fixed
in the articles of incorporation shall constitute a quorum for the transaction of corporate business.
[44]
Moreover, the certification is a mere general power of attorney which comprises all of Joy Training's business. Article
1877 of the Civil Code clearly states that "[a]n agency couched in general terms comprises only acts of
administration, even if the principal should state that he withholds no power or that the agent may execute such acts as he
[45]
may consider appropriate, or even though the agency should authorize a general and unlimited management."
The contract of sale is unenforceable

[46]
Necessarily, the absence of a contract of agency renders the contract of sale unenforceable; Joy Training effectively did
not enter into a valid contract of sale with the spouses Yoshizaki. Sally cannot also claim that she was a buyer in good
faith. She misapprehended the rule that persons dealing with a registered land have the legal right to rely on the face of the
title and to dispense with the need to inquire further, except when the party concerned has actual knowledge of facts and
[47]
circumstances that would impel a reasonably cautious man to make such inquiry. This rule applies when the ownership
of a parcel of land is disputed and not when the fact of agency is contested.
At this point, we reiterate the established principle that persons dealing with an agent must ascertain not only the fact of
[48]
agency, but also the nature and extent of the agent's authority. A third person with whom the agent wishes to contract
on behalf of the principal may require the presentation of the power of attorney, or the instructions as regards the agency.
[49]
The basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover on his
[50]
own peril the authority of the agent. Thus, Sally bought the real properties at her own risk; she bears the risk of injury
occasioned by her transaction with the spouses Johnson.
7. EULOGIO DEL ROSARIO, AURELIO DEL ROSARIO, BENITO DEL ROSARIO, BERNARDO DEL
ROSARIO, ISIDRA DEL ROSARIO, DOMINGA DEL ROSARIO and CONCEPCION BORROMEO,Plaintiffs-
Appellees, v. PRIMITIVO ABAD, G.R. No. L-10881. September 30, 1958, En Banc

Page 31 of 32
The power of attorney executed by Tiburcio del Rosario in favor of Primitivo Abad (Annex A, complaint, pp. 7-9, Rec.
on App.) providing, among others, that is coupled with an interest in the subject matter thereof in favor of the said
attorney and are therefore irrevocable, and . . . conferring upon my said attorney full and ample power and authority to do
and perform all things reasonably necessary and proper for the due carrying out of the said powers according to the true
tenor and purport of the same, . . ." does not create an agency coupled with an interest nor does it clothe the agency
with an irrevocable character. A mere statement in the power of attorney that it is coupled with an interest is not
enough. In what does such interest consist must be stated in the power of attorney. The fact that Tiburcio del Rosario, the
principal, had mortgaged the improvements of the parcel of land to Primitivo Abad, the agent, (Annex B, complaint, pp.
10-13, Rec. on App.) is not such an interest as could render irrevocable the power of attorney executed by the principal in
favor of the agent. In fact no mention of it is made in the power of attorney. The mortgage on the improvements of the
parcel of land has nothing to do with the power of attorney and may be foreclosed by the mortgagee upon failure of the
mortgagor to comply with his obligation. As the agency was not coupled with an interest, it was terminated upon the death
of Tiburcio del Rosario, the principal, sometime in December 1945, and Primitivo Abad, the agent, could no longer
validly convey the parcel of land to Teodorico Abad on 9 June 1947. The sale, therefore, to the latter was null and
void. But granting that the irrevocable power of attorney was lawful and valid it would subject the parcel of land to an
encumbrance. As the homestead patent was issued on 12 December 1936 and the power of attorney was executed on 24
February 1937, it was in violation of the law that prohibits the alienation or encumbrance of lands acquired by homestead
from the date of the approval of the application and for a term of five years from and after the issuance of the patent or
grant. Appellants contend that the power of attorney was to be availed of by the agent after the lapse of the prohibition
period of five years, and that in fact Primitivo Abad sold the parcel of land on 9 June 1947, after the lapse of such period.
Nothing to that effect is found in the power of attorney.
Appellants claim that the trial court should have directed the appellees to reimburse Teodorico Abad for what he had paid
to Primitivo Abad to discharge the mortgage in the latter’s favor as part of the consideration of the sale. As the sale to
Teodorico Abad is null and void, the appellees can not be compelled to reimburse Teodorico Abad for what he had paid to
Primitivo Abad. The former’s right of action is against the latter, without prejudice to the right of Primitivo Abad to
foreclose the mortgage on the improvements of the parcel of land if the mortgage debt is not paid by the appellees, as
heirs and successors-in-interest of the mortgagor.
8.

Page 32 of 32

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Agency and Trust (1 TQ) st

1. Castro vs. Castro, G.R. No. L-36199, December 10, 1932

The Court extensively discussed the prescriptive period for express

On the issue of prescription, we had the opportunity to rule

While there are some decisions which hold that

https://mail-attachment.googleusercontent.com/attachment/u…K5linE1ty-tZLL50lqIAR2zlHIhVfyCX5mp0mEEHdhROp0UfMk-2r 04/02/2019, 5Q22 PM

This principle was amplified in Escay v. Court of

In the more recent case of Secuya v. De Selma, we again

To apply the 10-year prescriptive period, which would bar a

his own benefit the property committed to his management or custody, at

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In the more recent case of Heirs of Tranquilino Labiste v. Heirs of Jose

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essential to the constitution of a trust as we have held in Lorenzo vs.

beneficiary thereof, plaintiff Victoria Julio, who accepted it in the

6. MARLENE CRISOSTOMO vs. FLORITO M. GARCIA, JR., G.R.

violence, intimidation, undue influence or fraud. [34]

Generally, an action for reconveyance of real property based on fraud

In the case at bar, respondents action which is for Reconveyance and

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Art. 1456. If property is acquired through mistake or fraud,

Thus, it was held that when a party uses fraud or concealment to

Constructive trusts are created by the construction of equity in order to

When property is registered in anothers name, an implied or constructive

for reconveyance of the title to the rightful owner prescribes in 10 years

An action for reconveyance based on implied or constructive trust

It is now well-settled that the prescriptive period to recover property

Applying the law and jurisprudential declaration above-cited to the

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WHEREFORE, premises considered, the instant petition is:

(1) GRANTED, with respect to the petitioners prayer that the

7. JOVITA YAP ANCOG, and GREGORIO YAP, JR., petitioners, vs.

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Agency and Trust (2 TQ) nd

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a. The issue of irrevocability of SPA

The power of attorney executed by Tiburcio del Rosario in favor of

b. The status of the sale to Teodorico

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The judgment of the trial court against defendants-appellants Emeteria,

The authority granted by defendants-appellants (except Valeriana) unto

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Agency and Trust (3rd TQ)

Suggested Answer: The bank cannot be compelled to accept the tender of

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2. An action for reconveyance of property based on fraud prescribes in

An action for reconveyance based on implied trust prescribes in ten years

Suggested Answer: ​No, the Bank is not liable to B. The letter of A

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4. GERONIMO AVECILLA, as administrator of the estate of

In considering the questions presented by this appeal one or two

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There is ample authority to the effect that a person may by a general

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7. SING JUCO and SING BENGCO,Plaintiffs Appellees, v. ANTONIO

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Suggested Answer: No, the Bank is not liable to B. The letter of A