Rallos vs. Yangco., 20 Phil. 269, No.

6906 September 27, 1911

PRINCIPAL AND AGENT; TERMINATION OF THE AGENCY; DUTY OF PRINCIPAL TO GIVE DUE NOTICE.—
The defendant having advertised the fact that C was his agent, having given special notice to the
plaintiffs of the agency, and having also given them a special invitation to deal with such agent, it
became the defendant's duty, upon the termination of the relationship of principal and agent, to give
due and timely notice thereof to the plaintiffs.

2.ID; ID.; ID.; LIABILITY OF PRINCIPAL.—The general rule is that, when the relationship of principal and
agent is established, and the principal gives notice of the agency and holds out the agent as his
authorized representative, upon the termination of the agency it is the duty of the principal to give due
and timely notice thereof, otherwise, he will be held liable to third parties acting in good faith and
properly relying upon such agency Rallos vs. Yangco., 20 Phil. 269, No. 6906 September 27, 1911.

LA COMPAÑIA GENERAL DE TABACOS DE FILIPINAS, plaintiff and appellant, vs. DIABA, defendant and
appellee.

PRINCIPAL AND AGENT; TERMINATION OF AGENCY WITHOUT NOTICE; LIABILITY OF PRINCIPAL.—G. had
been an agent of the plaintiff in buying and selling merchandise for and on behalf of the plaintiff, for a
period of eight years. G.'s agency was terminated by the plaintiff but no notice of such f act was given to
the people who had for years theretofore been selling merchandise to him. Held: That the principal was
liable to one, for merchandise sold and delivered to the agent, who had not received notice of the
termination of such agency, following the decision in Rallos vs. Yangco (20 Phil. Rep., 269). Compañía
General de Tabacos vs. Diaba., 20 Phil. 321, No. 6530 October 6, 1911

B. H. MACKE ET AL., plaintiffs and appellees, vs. JOSÉ CAMPS, defendant and appellant.

1.AGENCY; ESTOPPEL.—One who clothes another with apparent authority as his agent and holds him
out to the public as such, can not be permitted to deny the authority of such person to act as his agent
to the prejudice of innocent third parties dealing with such agent in good faith and in the honest belief
that he is what he appears to be.

2.ID.; PRESUMPTION.—Unless the contrary appears, the authority of an agent must be presumed to
include all the necessary and usual means of carrying his agency into effect. Macke vs. Camps, 7 Phil.,
553, No. 2962 February 27, 1907

GREGORIO JIMENEZ, plaintiff and appellee, vs. PEDRO RABOT, NICOLASA JIMENEZ and her husband,
EMILIO RODRIGUEZ, defendants. PEDRO RABOT, appellant.

1.SALE OP LAND; POWER OF ATTORNEY; SPECIFIC DESCRIPTION OP PROPERTY UNNECESSARY.—Where

the owner of real property desires to confer upon an attorney in fact authority to sell the same, it is
necessary that the authority should be expressed in writing; but it is not necessary that the property to
be sold should be precisely described. It is sufficient if the authority is so expressed as to determine
without doubt the limits of the agent's authority.
2.ID.; ID.; ID.; CASE AT. BAR.—The plaintiff, being the owner of three parcels of land, left the same in the
care of his sister as his agent and went to live in another province. While so absent, he wrote her to sell
one of his parcels and to send him the money. The sister found a purchaser and sold one of the parcels
but failed to forward the proceeds to her brother. Afterwards the plaintiff returned and instituted an
action to recover the parcel which had been sold. Held: That the authority to sell was sufficient and that
the plaintiff could not recover. Jimenez vs. Rabot., 38 Phil. 378, No. 12579 July 27, 1918

DIEGO LIÑAN, plaintiff and appellee, vs. MARCOS P. PUNO ET AL., defendants and appellants.

1.PRINCIPAL AND AGENT; CONTRACTS; GENERAL RULES OF CONSTRUCTION.—Contracts of agency, as

well as general powers of attorney, must be interpreted in accordance with the language used by the
parties. The real intention of the parties is primarily to be determined from the language used. The
intention is to be gathered f rom the whole instrument. In case of doubt, resort must be had to the
situation, surroundings, and relations of the parties. Whenever it is possible, effect is to be given to
every word or clause used by the parties. It is to be presumed that the parties said what they intended
to say and that they used each word or clause with some purpose, and that purpose is, if possible, to be
ascertained and enforced. If the contract be open to two constructions, one of which would uphold
while the other would overthrow it, the former is to be chosen. If by one construction the contract
would be illegal, and by another equally permissible construction it would be lawful, the latter must be
adopted. The acts of the parties will be presumed to be done in conformity with and not contrary to the
intent of the contract. The meaning of general words must be construed with reference to the specific
object to be accomplished and limited by the recitals made in reference to such object.

2.ID.; ACCEPTANCE OF BENEFITS BY PRINCIPAL.—Where a principal has acquiesced in the acts of his
agent for a long period of time, and has received and appropriated to his own use the benefits resulting
from the acts of his agent, courts should be slow in declaring the acts of the agent null and void. Liñan
vs. Puno., 31 Phil. 259, No. 9608 August 7, 1915

JOSE M. KATIGBAK, plaintiff and appellee, vs. TAI HING CO., defendant. PO SUN SUY and PO CHING,
intervenors and appellants.

1.LESSOR AND LESSEE; ACTION FOR RECOVERY OF RENT; JURISDICTION.—An action for the recovery of
rent is a personal action, and as such is transitory and may be instituted in the province where the
defendant or the plaintiff resides, at the election of the plaintiff (sec. 377, Act No. 190; Boga Tan Chiao
Boc vs. Sajo Vecina, 11 Phil., 409). With respect to the collection of rents in the case at bar, the Court of
First Instance of Manila had jurisdiction to try the action instituted to that end.

2.ID. ; ID. ; ID.—The intervenors having submitted to the jurisdiction of the court by filing a third-party
claim, in which they raised the question of ownership of the premises, the rent of which it is sought to
recover, they cannot consistently object to the exercise of said jurisdiction.

3.PRINCIPAL AND AGENT; GENERAL POWER OF ATTORNEY.—The power of attorney given by the
principal authorized the agent to sell any kind of realty that "might belong" ,to the principal. The use of
the subjunctive "pertenezcan" (might belong) and not the indicative "pertenecen" (belong) means that
the authority given by the principal referred not only to the property he had at the time the power was
conferred, but also to such as he might afterwards have during the time it was in force. (2 Corpus Juris,
614.)
4.ID.; ID.; POWER OF ATTORNEY NOT RECORDED IN REGISTRY OF DEEDS.—While it is true that a power
of attorney not recorded in the registry of deeds is ineffective in order that an agent or at

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Katigbak vs. Tai Hing Co.

torney-in-fact may validly perform acts in the name of his principal, and that any act performed by the
agent by virtue of said power with respect to the land is ineffective against a third person who, in good
faith, may have acquired a right thereto, it does, however, bind the principal to acknowledge the acts
performed by his attorney-in-fact regarding said property. (Sec. 50, Act No. 496.) Katigbak vs. Tai Hing
Co., 52 Phil. 622, No. 29917 December 29, 1928

PASTOR AMIGO and JUSTINO AMIGO, petitioners, vs. SERAFIN TEVES, respondent.

1.AGENCY; POWER OF ATTORNEY; BROAD POWERS GRANTED TO AGENT CONSTRUED.—Where the

power granted to the agent is so broad that it practically covers the celebration of any contract and the
conclusion of any covenant or stipulation, the agent can act in the same manner and with the same
breath and latitude as the principal could concerning the property.

2."PACTO DE RETRO" SALE; LEASE COVENANT; LEASE is MADE OF DELIVERY BY "CONSTITUTUM

POSSESSORIUM"; COVENANT is GERMANE TO "PACTO DE RETRO" SALES.—The lease that a vendor a
retro executes on the property may be considered as a means of delivery or tradition by constitutum
possessorium. It may be said, therefore, that the covenant regarding the lease of the land sold is
germane to the contract of sale with pacto de retro.

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Amigo vs. Teves

3.ID.; ID.; PENAL CLAUSE PROVIDING FOR AUTOMATIC TERMINATION OF PERIOD OF REDEMPTION Is
NOT CONTRARY TO LAW, MORALS OR PUBLIC ORDER.—The lease covenant in question provided, among
others, that in case of failure of the vendors-lessees to pay the rentals as agreed upon, the lease shall
automatically terminate and the right of ownership of the vendee shall become absolute. Petitioners
contend that the penal clause is null and void. Held: While the lease covenant may be onerous or may
work hardship on the vendor because of its clause providing for the automatic termination of the period
of redemption, however, the same is not contrary to law, morals, or public order, which may serve as
basis for its nullification. Rather than obnoxious or oppressive, it is a clause common in a sale with pacto
de retro, and as such it received the sanction of the courts.

4.ID.; PRICE is USUALLY LESS THAN IN ABSOLUTE SALES.—In a contract of sale with pacto de retro, the
price is usually less than in absolute sales for the reason that in a sale with pacto de retro, the vendor
expects to re-acquire or redeem the property sold.

5.APPEALS; APPEAL BY CERTIORARI; FINDING OF COURT OF APPEALS ON QUESTIONS OF FACT, FINAL

AND CONCLUSIVE.—The finding of the Court of Appeals on questions of fact is final and conclusive upon
the Supreme Court. Amigo vs. Teves, 96 Phil. 252, No. L-6389 November 29, 1954

ROSA VILLA Y MONNA, plaintiff and appellee, vs. GUILLERMO GARCIA BOSQUE ET AL., defendants.
GUILLERMO GARCIA BOSQUE, F. H. GOULETTE, and R. G. FRANCE, appellants.

1.PRINCIPAL AND AGENT; ATTORNEY IN FACT UNDER SUBSTITUTED POWER; LACK OF AUTHORITY TO
RELEASE SURETIES.—A sale of property was made by the attorney in fact for a stated consideration, part
of which was paid in cash and the balance made payable in deferred instalments. The attorney in fact
then executed a substituted power of attorney in favor of a third person to enable the latter to collect
the deferred instalments. Held, That under this power the substituted attorney in fact had no authority
to enter into a new contract with a transferee of the original purchasers modifying the terms of the sale
and releasing two individuals who had joined as solidary sureties in the original contract.

2.PRINCIPAL AND SURETY ; EXTENSION OF TIME BY CREDITOR TO PRINCIPAL DEBTOR; EFFECT ON

LIABILITY OF SURETIES.—Where the purchase price of property is payable in various instalments, an
extension of time granted by the creditor to the debtor with respect to one instalment will discharge the
sureties, whether simple or solidary, from all liability as to such instalment but it does not affect their
liability for other instalments unconnected with the extension of time. Villa, vs. Garcia Bosque, 49 Phil.
126, No. 24543 July 12, 1926

THE DIRECTOR OF PUBLIC WORKS, plaintiff and appellee, vs. SING JUCO ET AL., defendants. SING Juco,
SING BENGCO and PHILIPPINE NATIONAL BANK, appellants.

1.PRINCIPAL AND AGENT; POWER OF ATTORNEY; CREATION OF OBLIGATION OF GUARANTY.—A power

of attorney to execute a contract of guaranty should not be inferred from the use of vague or general
words, especially where such words have their origin and explanation in particular powers of a different
nature. In article 1827 of the Civil Code it is declared that suretyship (including guaranty) shall not be
presumed; that it must be expressed, and cannot be extended beyond its specified limits. By analogy a
power of attorney should be construed in harmony with the same rule, in so far as relates to the
creation of the obligation of guaranty.

2.ID. ; ID. ; ID. ; INTERPRETATION OF PARTICULAR CONTRACT.—Where a power of attorney is executed

primarily to enable the attorney-in-fact, as manager of a mercantile business, to conduct its affairs for
and on behalf of the principal, who is owner of the business, and to this end the attorney-in-fact is
authorized to execute contracts relating to the principal's property, such power will not be interpreted
as giving the attorney-in-fact power to bind the principal by a contract of independent guaranty
unconnected with the conduct of the mercantile business. General words contained in such power will
not be so interpreted as to extend the power to the making of a contract of guaranty, but will be limited,
under the well-known rule of construction indicated in the expression ejusdem generis, as applying to
matters similar to those particularly mentioned.

3.MORTGAGE; PRIORITY OF MORTGAGE LIEN OVER LIEN FOR REFECTION SUBSEQUENT TO

REGISTRATION OF MORTGAGE.—An indebtedness resulting from a contract in accordance with which
low land is improved by the deposit of material dredged f rom nearby waters does not enjoy priority
over a mortgage executed by the owner of the fee and duly registered prior to the execution of the
filling contract; and this is true whether the supposed preference under the filling contract be claimed
under subsection 3 of article 1923 of the Civil Code or under a special stipulation in such contract
declaring the cost of filling to be a lien upon the property. The lien created in such case by the filling
contract can only operate upon the equity of redemption, without prejudice to the creditor under the
prior mortgage who has not assented to the creation of the lien. Director of Public Works vs. Sing Juco,
53 Phil. 205, No. 30181 July 12, 1929

THE BANK OF THE PHILIPPINE ISLANDS, plaintiff and appellee, vs. GABRIELA ANDREA DE COSTER Y
ROXAS ET AL., defendants. LA ORDEN DE DOMINICOS or PP. PREDICADORES DE LA PROVINCIA DEL
SANTÍSIMO ROSARIO, defendants and appellees; GABRIELA ANDREA DE COSTER Y ROXAS, defendant
and appellant.

1.WHEN SERVICE SHOULD BE SET ASIDE.—Where it appears that the defendant wife "has been absent
from the Philippine Islands and residing in the City of Paris, France, from 1908 to April 30, 1924," and
that on March 13, 1924, service of complaint and summons was made on her in the Philippine Islands by
the sheriff of the City of Manila by delivering a copy of the summons and complaint to her husband at
his usual place of residence in the City of Manila, the service is voidable and should be set aside and
vacated upon the application of the wife when a proper showing is made.

2.A MOTION TO QUASH SERVICE SHOULD BE MADE BY SPECIAL APPEARANCE ONLY.—In such a case
where it is designed by the wife to question the jurisdiction of the court, she should file a motion to
quash the service in a special appearance only to question the jurisdiction of the court which should be
for that purpose only, to which should be attached the necessary proof.

3.A MOTION UNDER THE PROVISIONS OF SECTION 113 (CODE OF CIVIL PROCEDURE) CONSTITUTES A
GENERAL APPEARANCE.—Where a wife, under the terms and provisions of section 113 of the Code of
Civil Procedure, applies to the court to have a judgment against her set aside and vacated and for leave
to file

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Bank of the Philippine Islands vs. De Coster

an answer and defend on the merits, it constitutes a general appearance as distinguished from a special
appearance, by reason of which she submits herself to the jurisdiction of the court.

4.WHEN PRINCIPAL is NOT ESTOPPED.—Where a person gave a power of attorney to an agent to appear
for and represent her in all court proceedings, and where the .agent fails and neglects to appear and
make a defense, the principal on a proper showing is not estopped from obtaining relief under section
113 of the Code of Civil Procedure.

5.WHEN A MERITORIOUS DEFENSE is A CONDITION PRECEDENT TO THE GRANTING OF RELIEF.—It is

elementary that to entitle a party to relief from a judgment "taken against him through his mistake,
inadvertence, surprise, or excusable neglect," that as a condition precedent to the granting of relief, he
must show to the court that he has a meritorious defense.

6.WHEN PARTY HAS RIGHT TO DEFEND.—Where it appears that a judgment was rendered against a
person through her mistake, inadvertence, surprise, or excusable neglect, and it further appears upon
the face of the record that she has a meritorious defense, the judgment should be set aside with leave
to answer and defend on the merits.

7.WHEN WIFE is NOT LIABLE UNDER HER POWER OF ATTORNEY FOR THE PREËXISTING DEBT OF HER
HUSBAND.—Where it appears that a wife gave her husband a power of attorney "to loan and borrow
money" and to mortgage her property, that fact does not carry with it or imply that he has a legal right
to sign her name to a promissory note which would make her liable for the payment of a preexisting
debt of the husband or that of his firm, for which she was not previously liable, or to mortgage her
property to secure the debt.

8.LIMITATION ON AUTHORITY OF AGENT.—Where it appears that an agent under a written authority

signed his wife's name to a promissory note and executed a mortgage on her real property to secure its
payment, the powers and duties of the agent are confined and limited to those which are specified and
defined in his power of attorney, which limitation is a notice to, and is binding upon, the person dealing
with such agent.
9.WHAT BILL OF INTERVENTION SHOULD ALLEGE AND UPON WHOM IT SHOULD BE SERVED.—Where a
third person, holding a prior mortgage, desires to intervene in an original suit and obtain a decree
foreclosing its mortgage, its bill of intervention should state all of the material facts with the same
formality as an original complaint, and a copy of the plea should be served

596

596

PHILIPPINE REPORTS ANNOTATED

Bank of the Philippine Islands vs. De Coster

both upon the plaintiff and, in particular, upon the defendants against whom it is sought to obtain the
foreclosure decree.

10.WHEN COURT DOES NOT HAVE JURISDICTION.—Where such material facts are not alleged in the bill
of intervention in which there is no prayer for a decree, and where a copy f the bill was not served upon
the parties against whom the foreclosure was sought, the court does not have any jurisdiction to render
a foreclosure decree on the bill of intervention, and for such reason any decree on the bill of
intervention is null and void.

11.WHEN DECREE SHOULD BE REVOKED WITHOUT PREJUDICE.—In such a case, the decree rendered on
the bill of intervention should be set aside and revoked without prejudice to the right of the intervenor
to file an original suit to foreclose its mortgage or to file a new bill of intervention in the original suit,
alleging all material facts, and serving copies of it on all adverse parties.

12.WHEN WIFE is BOUND.—Where a wife gave her husband a power of attorney "to loan and borrow
money," and for such purpose to mortgage her property, and where the husband signed his wife's name
to a note and gave a mortgage on her property to secure the note and the amount of the loan was
actually paid to her husband in money at the time the note and mortgage were executed, the
transaction is binding upon the wife under her power of attorney, regardless of What the husband may
have done with the money which he obtained on the loan. Bank of the Philippine Islands vs. De Coster,
47 Phil. 594, No. 23181 March 16, 1925

GERMANN & Co., plaintiffs and appellees, vs. DONALDSON, SIM & Co., defendants and appellants.

1.CONTRACT; CONFLICT OF LAWS.—The validity of a power of attorney executed in Germany between

German subjects should be considered according to the laws of that country.
2.AGENCY; POWER OF ATTORNEY.—The right to commence action for collection of debts owing to
principal is not an incident of strict ownership, which must be conferred in express terms.

3.POWER OF ATTORNEY; RIGHT TO SUE.—The power to "legally compel" the payment of debts owing to
the principal is an express grant of the right to bring suit for the collection of such debts. Germann & Co.
vs. Donaldson, Sim & Co., 1 Phil., 63, No. 439 November 11, 1901

B. H. MACKE ET AL., plaintiffs and appellees, vs. JOSÉ CAMPS, defendant and appellant.

1.AGENCY; ESTOPPEL.—One who clothes another with apparent authority as his agent and holds him
out to the public as such, can not be permitted to deny the authority of such person to act as his agent
to the prejudice of innocent third parties dealing with such agent in good faith and in the honest belief
that he is what he appears to be.

2.ID.; PRESUMPTION.—Unless the contrary appears, the authority of an agent must be presumed to
include all the necessary and usual means of carrying his agency into effect. Macke vs. Camps, 7 Phil.,
553, No. 2962 February 27, 1907

THE MUNICIPAL COUNCIL OF ILOILO, plaintiff and appellee, vs. JOSE EVANGELISTA ET AL., defendants
and appellees. TAN ONG SZE VDA. DE TAN Toco, appellant.

1.PRINCIPAL AND AGENT; POWER OF AGENT; PAYMENTS OF AT-TORNEYS' FEES.—An agent or attorney-
in-fact empowered to pay the debts of the principal, and to employ attorneys to defend the latter's
interests, is impliedly empowered to pay the attorneys' fees for services rendered in the interests of said
principal, and may satisfy them by an assignment of a judgment rendered in favor of said principal.

2.ID.; APPOINTMENT OF Two AGENTS.—When a person appoints two agents independently, the
consent of one will not be required to validate the acts of the other, unless that appears positively to
have been the principal's intention.

3.JUDGMENT; ASSIGNMENT OF AMOUNT FOR PROFESSIONAL SERVICES.—The assignment of the

amount of a judgment made by a person to his attorney, who has not taken any part in the case wherein
said judgment was rendered, made in payment of professional services in other cases, does not
contravene the prohibition of article 1459, case 5, of the Civil Code. Municipal Council of Iloilo vs.
Evangelista,, 55 Phil. 290, No. 32977 November 17, 1930