MODES OF EXTINGUISHMENT OF AGENCY

Case # 15 Ching v. Bantolo, 687 SCRA 134

DOCTRINE: Article 1919 states that an agency is extinguished: (1) By its revocation. xxx
Article 1927 states that 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.

FACTS:
PRINCIPAL – Felix Bantolo, Antonio Adriano and Eulogio Sta. Cruz (respondents); Sta. Cruz substituted by his children and
represented by Raul Sta. Cruz, Jr.
AGENT – Albert Ching and Romeo Bautista

 Respondents owned several parcels of land in Tagaytay and they executed a Special Power of Attorney in favor of Ching
and Bautista to obtain a loan using respondents’ properties as collateral.
 Without notice to the petitioners, respondents executed a Revocation of the SPA.
 PNB approved the loan application of petitioner Ching in the amount of P25M for a term of 5 years.
 Ching sent a letter to inform the respondents of the approval of the loan.
 Petitioners then knew about the revocation of the SPA and sent a letter to the respondents demanding them to comply
with the agreements by annulling the revocation of the SPA.

Petitioner’s Argument: They alleged that the Revocation of SPA must be annulled since it is irrevocable because it is a contract
of agency coupled with interest.

Respondent’s Argument: They contended that petitioners have no cause of action because respondents were the ones who
executed the SPA In favor of the petitioners because of their assurance that they would be able to get a loan in the amount of
P50 million and that P30 million would be given to respondents within a month’s time which Ching failed to do so.

Note: Ching paid P500k as per demand by the respondents on the condition that they hand over to him the original titles.

RTC – ruled in favor of the petitioners. They declared petitioners as owners of the 50% or ½ of all the parcels of land.

CA – modified decision of the RTC. The CA ruled that petitioners are not entitled to one-half of the subject properties because
it is contrary to human experience for a person to give one-half of his property to someone he barely knows.

ISSUE/S: Whether or not the SPA executed by the respondents in favor of the petitioner is a contract of agency coupled with interest
and is therefore not revocable.

RULING: YES. The respondents revoked the SPA because they were not satisfied with the amount of the loan approved, thus, the
revocation was based on the sole will of the principal. The court ruled that  the SPA executed by respondents in favor of petitioners
is a contract of agency coupled with interest. This is because their bilateral contract depends upon the agency. Hence, it "cannot
be revoked at the sole will of the principal."

The only issue therefore is the extent of the liability of respondents and the damages to be awarded to petitioners. Petitioner Ching
is entitled to actual damages of P500k but they are not entitled to ½ of the subject properties. Additionally, they are also not entitled
to reimbursement of all the expenses incurred in obtaining a loan since she agreed to shoulder the expenses and they are not
entitled to exemplary damages because the revocation was done in bad faith, respondents did not act in a wanton, fraudulent,
reckless, oppressive or malevolent manner. They revoked the SPA because they were not satisfied with the amount of the loan
approved. Thus, petitioners are not entitled to exemplary damages.

Case # 18 Manuel Buason, et.al v. Panuyas, 105 Phil 795

DOCTRINE: Article 1931 states 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 is the law applicable to the point raised by the appellants.

FACTS:
PRINCIPAL – Spouses Buenaventura Dayao and Eugenia Vega
AGENT – Eustaquio Bayuga
  Spouses Dayao and Vega acquired by homestead patent a parcel of land in Nueva Ecija and they executed a power of
attorney authorizing Bayuga to engage the services of attorney to prosecute their case against Leonardo Gambito for the
annulment of a contact of sale of the parcel of land and after the termination of the case in their favor to sell it, and from
the proceeds of the sale to deduct whatever expenses he had incurred in the litigation.
 Dayao died leaving his wife and children, all surnamed Dayao.
 4 children of Dayao executed a deed of sale to the petitioners, spouses Buason and Reyes and thereafter, Vega affixed
her thumbmark to the deed of sale and the appellants took possession of the parcel of land.
 Bayuga sold 8 hectares of the same parcel of land to the spouses Panuyas and Cruz. Bayuga and Vega died.
 The appellants and appellee claimed ownership to the same parcel of land.

Petitioner’s Argument: ordered respondents to deliver the possession of the part of the parcel of land held by the latter and
the deed of sale of that part of the parcel of land held by the appellee executed by Bayuga in his favor and of his wife be
declared null and void and that transfer certificate of title No. 8419 issued in their name be cancelled; that the deed of sale of
the parcel of land executed by the children and heirs of Buenaventura Dayao in their favor be declared valid.

Respondent’s Argument: They contended that he and his wife were buyers in good faith and for valuable consideration; that
appellant's causes of action are barred by the statute of limitations; that the complaint states no cause of action; that the claim
on which their action is based is unenforceable under the statute of frauds; and that the appellants are guilty of laches.

CFI (Nueva Ecija) – ruled in favor of the respondents

CA – affirmed the CFI’s decision.

ISSUE/S: Whether or not the agency between Dayao and Bayuga is extinguished upon death of the former.

RULING: NO. Bayuga, as agent, had no knowledge of his principal, Buenaventura Dayao’s, demise, and for that reason Article 1738,
old Civil code or 1931, new Civil Code, applies, which provides: “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 is the law applicable to the point raised by the appellants.”

It appears that the appellants did not register the sale of 12.8413 hectares of the parcel of land in question executed in their favor by
the Dayao children after the death of their father Buenaventura Dayao. On the other hand, the power of attorney executed by
Buenaventura Dayao authorizing Eustaquio Bayuga to sell the parcel of land was annotated or inscribed on the back of the original
certificate of title and the sale executed by Eustaquio Bayuga in favor of the appellee Mariano Panuyas and his wife Sotera B. Cruz
under the aforesaid power of attorney was annotated or inscribed on the back of the same original certificate of title. It does not
appear that the appellee and his wife had actual knowledge of the previous sale. In the absence of such knowledge, they had a right
to rely on the face of the certificate of title of the registered owners and of the authority conferred by them upon the agent also
recorded on the back of the certificate of title. As this is a case of double sale of land registered under the Land Registration Act, he
who recorded the sale in the Registry of Deeds has a better right than he who did not.