Case Digests For Atty. Ranada's ATAP Class

CASE DIGESTS FOR ATTY.
RANADA’S ATAP CLASS (2nd SEM, AY 21-22)

CASE CASE TOPIC FACTS ISSUE HELD
NO.
1. Santos v. Sps. Reyes 1. What is a In June 1986, Fernando Santos (70%), Nieves WON the spouses are YES. By the contract of partnership, two or more persons bind
G.R. No. 135813, contract of Reyes (15%), and Melton Zabat (15%) orally partners. themselves to contribute money, property or industry to a
October 25, 2001 partnership? instituted a partnership with them as common fund, with the intention of dividing the profits among
Panganiban, J. (Art. 1767, NCC) partners. Their venture is to set up a lending themselves. The “Articles of Agreement” stipulated that the
business where it was agreed that Santos signatories shall share the profits of the business in a 70-15-15
shall be financier and that Nieves and Zabat manner, with petitioner getting the lion’s share.
shall contribute their industry. The
percentages after their names denote their
share in the profit. Later, Nieves introduced
Cesar Gragera to Santos. Gragera was the
chairman of a corporation. It was agreed
that the partnership shall provide loans to
the employees of Gragera’s corporation and
Gragera shall earn commission from loan
payments. In August 1986, the three
partners put into writing their verbal
agreement to form the partnership. As
earlier agreed, Santos shall finance and
Nieves shall do the daily cash flow more
particularly from their dealings with
Gragera, Zabat on the other hand shall be a
loan investigator. But then later, Nieves and
Santos found out that Zabat was engaged in
another lending business which competes
with their partnership hence Zabat was
expelled. The two continued with the
partnership and they took with them Nieves’
husband, Arsenio, who became their loan
investigator. Later, Santos accused the
spouses of not remitting Gragera’s
commissions to the latter. He sued them for
collection of sum of money. The spouses
countered that Santos merely filed the
complaint because he did not want the
Compiled by Antonio T. Delgado (2022). All are sourced from lawphil.net and central.com.ph/escra, unless otherwise indicated. Page 1 of 106
CASE DIGESTS FOR ATTY. RANADA’S ATAP CLASS (2nd SEM, AY 21-22)
NO.
spouses to get their shares in the profits.

Santos argued that the spouses, insofar as
the dealing with Gragera is concerned, are
merely his employees. Santos alleged that
there is a distinct partnership between him
and Gragera which is separate from the
partnership formed between him, Zabat and
Nieves. The trial court as well as the Court of
Appeals ruled against Santos and ordered
the latter to pay the shares of the spouses.
2. Heirs of Tan Eng 2. Determining The complaint alleged that after the second WON there was a NO. Where circumstances taken singly may be inadequate to
Kee v. CA factors in the World War, Tan Eng Kee and Tan Eng Lay, partnership between the prove the intent to form a partnership, nevertheless,
G.R. No. 126881, existence of pooling their resources and industry brothers. the collective effect of these circumstances may be such as to
October 3, 2000 partnership (Art. together, entered into a partnership support a finding of the existence of the parties’ intent. Yet, in
DE LEON, JR., J. 1769) engaged in the business of selling lumber the case at bench, even the aforesaid circumstances when
and hardware and construction supplies. taken together are not persuasive indicia of a partnership.
They named their enterprise “Benguet They only tend to show that Tan Eng Kee was involved in the
Lumber” which they jointly managed until operations of Benguet Lumber, but in what capacity is unclear.
Tan Eng Kee’s death. Petitioners claimed
that Tan Eng Lay and his children caused the
conversion of the partnership “Benguet
Lumber” into a corporation called “Benguet
Lumber Company.” Petitioners prayed for
accounting of the partnership assets, and
the dissolution, winding up and liquidation
thereof, and the equal division of the net
assets of Benguet Lumber. The RTC ruled in
favor of petitioners, declaring that Benguet
Lumber is a joint venture which is akin to a
particular partnership. The Court of Appeals
reversed the RTC decision.
2.1 Evangelista, et. al. Petitioners borrowed sum of money from WON there was a YES. Their purpose was to engage in real estate transactions
v. Collector of their father and together with their own partnership for monetary gain and then divide the same among
Internal Revenue personal funds they used said money to buy themselves [enumerates 6 reasons]. Although, taken singly,
NO.
G.R. No. L-9996, several real properties. They then appointed they might not suffice to establish the intent necessary to
October 15, 1957 their brother (Simeon) as manager of the constitute a partnership, the collective effect of these
CONCEPCION, J. said real properties with powers and circumstances is such as to leave no room for doubt on the
authority to sell, lease or rent out said existence of said intent in petitioners herein.
properties to third persons. They realized BAUTISTA ANGELO, J., concurring:
rental income from the said properties for The sharing of the gross returns does not of itself establish a
the period 1945-1949. partnership whether or not the persons sharing therein have a
On September 24, 1954 respondent joint or common right or interest in the property. means that,
Collector of Internal Revenue demanded the aside from the circumstance of profit, the presence of other
payment of income tax on corporations, real elements constituting partnership is necessary, such as the
estate dealer's fixed tax and corporation clear intent to form a partnership, the existence of a juridical
residence tax for the years 1945-1949. The personality different from that of the individual partners, and
letter of demand and corresponding the freedom to transfer or assign any interest in the property
assessments were delivered to petitioners by one with the consent of the others.
on December 3, 1954, whereupon they
instituted the present case in the Court of
Tax Appeals, with a prayer that "the decision
of the respondent contained in his letter of
demand dated September 24, 1954" be
reversed, and that they be absolved from
the payment of the taxes in question. CTA
denied their petition and subsequent MR
and New Trials were denied. Hence this
petition.
https://www.scribd.com/doc/73269122/Dig
est-Evangelista-vs-CIR
3. Negado v. 2. Determining Plaintiffs filed a suit against the defendant WON partnership was YES. In determining whether or not a particular transaction
Makabenta factors in the for the recovery of possession and created among plaintiffs constitutes partnership, the intention as disclosed by the
54 O.G. 4082 existence of management of Liberty Theater located in and defendants. entire transaction, and as gathered from the facts and from
No. 10342, partnership (Art. Leyte and for an accounting of all money the language employed by the parties as well as their conduct.
February 28, 1958 1769) and property pertaining thereto. A partnership may be created without any definite intention to
The plaintiffs allege that the theater is create it, the intention of the parties being inferred from their
owned and operated by a partnership conduct and dealings with each other. For the purpose of
NO.
known as Hemarogui Company composed of showing the existence of a partnership, books, papers,
the plaintiffs and defendant. Conversely, the accounts and similar writings are admissible as evidence
defendant alleges that he is the sole and provided that the party against whom they are offered is
exclusive owner of the theater while the shown to have authorized or ratified them, or in any way to
plaintiffs are merely creditors. have been legally possible for them.
The trial court held that no partnership
exists and the oral and material evidence
(books, accounts, and papers) presented by
the plaintiffs are incompetent to establish
existence of the partnership.
4. Yulo v. Yang Chiaco 2. Determining Yang Chiao Seng proposed to form a WON relation between NO. Where one of the parties to a contract does not
Seng factors in the partnership with Rosario Yulo to run and Yulo and Yang Chiaco Seng contribute the capital he is supposed to contribute to a
No. L-12541 existence of operate a theatre on the premises occupied is a partnership. common fund; does not furnish any help or intervention in the
August 28, 1959 partnership (Art. by Cine Oro, Plaza Sta. Cruz, Manila, w/ the management of the business subject of the contract; does not
LABRADOR, J. 1769) ff principal conditions: (1) Yang guarantees demand from the other party an accounting of the expenses
Yulo a monthly participation of P3,000 (2) and earnings of the business; and is absolutely silent with
partnership shall be for a period of 2 years respect to any of the acts that a partner should have done,
and 6 months with the condition that if the but, on the other hand, receives a fixed monthly sum from the
land is expropriated, rendered impracticable other party, there can be no other conclusion than that the
for business, owner constructs a permanent contract between the parties is one of lease and not of
building, then Yulo’s right to lease and partnership.
partnership even if period agreed upon has
not yet expired; (3) Yulo is authorized to
personally conduct business in the lobby of
the building; and (4) after Dec 31, 1947, all
improvements placed by partnership shall
belong to Yulo but if partnership is
terminated before lapse of 1 and ½ years,
Yang shall have right to remove
improvements. Parties established, “Yang
and Co. Ltd.”, to exist from July 1, 1945 –
Dec 31, 1947.
NO.
In June 1946, they executed a

supplementary agreement extending the
partnership for 3 years = from 1/1/1948 to
12/31/1951
The land on which the theater was
constructed was leased by Yulo from
owners, Emilia Carrion and Maria Carrion
Santa Marina for an indefinite period but
that after 1 year, such lease may be
cancelled by either party upon 90-day
notice. In Apr 1949, the owners notified Yulo
of their desire to cancel the lease contract
come July. Yulo and husband brought a civil
action to declare the lease for a indefinite
period. Owners brought their own civil
action for ejectment upon Yulo and Yang.
CFI: Two cases were heard jointly; Complaint
of Yulo and Yang dismissed declaring
contract of lease terminated. CA: Affirmed
In 1950, Yulo demanded from Yang her
share in the profits of the business. Yang
answered saying he had to suspend
payment because of pending ejectment suit.
Yulo filed action in 1954, alleging the
existence of a partnership between them
and that Yang has refused to pay her shares.
Quiz1 Litonjua, Jr. vs. Joint Venture Aurelio and Eduardo are brothers. In 1973, WON petitioner and NO. Annex "A-1", on its face, contains typewritten entries,
Litonjua, Sr., 477 Agreement Aurelio alleged that Eduardo entered into a respondent Eduardo are personal in tone, but is unsigned and undated. As an unsigned
SCRA 576, G.R. Nos. contract of partnership with him. Aurelio partners in the theatre, document, there can be no quibbling that Annex "A-1" does
166299-300 showed as evidence a letter sent to him by shipping and realty not meet the public instrumentation requirements exacted
December 13, 2005 Eduardo that the latter is allowing Aurelio to business under Article 1771 of the Civil Code. Moreover, being unsigned
manage their family business (if Eduardo’s and doubtless referring to a partnership involving more than
away) and in exchange thereof he will be P3,000.00 in money or property, Annex "A-1" cannot be
giving Aurelio P1 million or 10% equity, presented for notarization, let alone registered with the
NO.
whichever is higher. A memorandum was Securities and Exchange Commission (SEC), as called for under
subsequently made for the said partnership the Article 1772 of the Code. And inasmuch as the inventory
agreement. The memorandum this time requirement under the succeeding Article 1773 goes into the
stated that in exchange of Aurelio, who just matter of validity when immovable property is contributed to
got married, retaining his share in the family the partnership, the next logical point of inquiry turns on the
business (movie theatres, shipping and land nature of petitioner’s contribution, if any, to the supposed
development) and some other immovable partnership.
properties, he will be given P1 Million or 10%
equity in all these businesses and those to be The CA, addressing the foregoing query, correctly stated that
subsequently acquired by them whichever is petitioner’s contribution consisted of immovables and real
greater. rights.
In 1992 however, the relationship between
the brothers went sour. And so Aurelio Lest it be overlooked, the contract-validating inventory
demanded an accounting and the liquidation requirement under Article 1773 of the Civil Code applies as
of his share in the partnership. Eduardo did long real property or real rights are initially brought into the
not heed and so Aurelio sued Eduardo. partnership. In short, it is really of no moment which of the
partners, or, in this case, who between petitioner and his
brother Eduardo, contributed immovables. In context, the
more important consideration is that real property was
contributed, in which case an inventory of the contributed
property duly signed by the parties should be attached to the
public instrument, else there is legally no partnership to speak
of.
Quiz2 Primelink Joint Venture Primelink is a domestic corporation engaged WON petitioners are NO. We agree with the CA ruling that petitioner Primelink and
Properties and Agreement in real estate development while entitled to reimbursement respondents entered into a joint venture as evidenced by their
Development respondents Lazatin are co-owners of 2 for the value of the JVA which, under the Court’s ruling in Aurbach, is a form of
Corporation vs. parcels of land in Tagaytay. In 1994, improvements on the partnership, and as such is to be governed by the laws on
Lazatin-Magat, 493 Primelink, represented by Lopez (President) parcels of land. partnership.
SCRA 444, G.R. No. and the Lazatins entered into a joint venture When the RTC rescinded the JVA on complaint of respondents
167379 June 27, agreement (JVA) for the development of the based on the evidence on record that petitioners willfully and
2006 subject property into a residential persistently committed a breach of the JVA, the court thereby
subdivision dissolved/cancelled the partnership. With the rescission of the
NO.
1. Under the JVA, the Lazatins obliged JVA on account of petitioners’ fraudulent acts, all authority of
themselves to contribute the subject any partner to act for the partnership is terminated except so
property as their share and for its far as may be necessary to wind up the partnership affairs or
part, Primelink undertook to to complete transactions begun but not yet finished. On
contribute, money, labor personnel, dissolution, the partnership is not terminated but continues
machineries, equipment, etc until the winding up of partnership affairs is completed.
2. For 4 years however, Primelink failed Unless otherwise agreed, the parties who have not wrongfully
to develop the said land. As such, the dissolved the partnership have the right to wind up the
Lazatins filed a complaint to rescind partnership affairs.
the JVA Until the partnership accounts are determined, it cannot be
3. The trial court ruled in favor of the ascertained how much any of the parties is entitled to, if at all.
Lazatins and ordered Primelink to On dissolution, the partnership is not terminated but
return the possession of the property continues until the winding up of partnership affairs is
without the Lazatins paying for said completed.
improvements. On appeal, CA It was thus premature for petitioner Primelink to be
affirmed the same. demanding that it be indemnified for the value of the
4. Primelink assailed the order that improvements on the parcels of land owned by the joint
turning over improvements to the venture/partnership. Notably, the JVA of the parties does not
Lazatins without reimbursement is contain any provision designating any party to wind up the
unjust; that Lazatin did not ask the affairs of the partnership.
properties to be placed under their
possession but merely asked for
rescission of the JVA
Quiz3 J. Tiosejo Joint Venture On December 28, 1995, petitioner entered WON petitioner is liable YES. Even prescinding from the foregoing procedural
Investment Corp. Agreement into a JVA with Primetown Property Group, alongside PPGI for considerations, we also find that the HLURB Arbiter and Board
vs. Ang, 630 SCRA Inc. for a residential condominium project respondents’ claims and correctly held petitioner liable alongside PPGI for respondents’
334, G.R. No. known as the Meditel on the former’s 9,502 the administrative fine. claims and the P10,000.00 administrative fine imposed
174149 September sq.m. lot in Mandaluyong City. On June 17, pursuant to Section 20 in relation to Section 38 of P.D. 957. By
8, 2010 1996, HLURB issued a license to sell in favor the express terms of the JVA, it appears that petitioner not only
of PPGI, with this, PPGI sold a unit to Sps. retained ownership of the property pending completion of the
Benjamin and Eleanor Ang on February 5, condominium project but had also bound itself to answer
1997. July 21, 1999, respondents filed a liabilities proceeding from contracts entered into by PPGI with
complaint for the rescission of the contracts third parties. Viewed in the light of the foregoing provision of
NO.
for the noncompletion and non-turnover of the JVA, petitioner cannot avoid liability by claiming that it was
the unit and parking space by December not in any way privy to the Contracts to Sell executed by PPGI
1998. PPGI filed its 7 September 1999 and respondents. As correctly argued by the latter, moreover,
answer alleging that the delay in the a joint venture is considered in this jurisdiction as a form of
completion of the project was attributable partnership and is, accordingly, governed by the law of
to the economic crisis which affected the partnerships. Under Article 1824 of the Civil Code of the
country at the time; that the unexpected Philippines, all partners are solidarily liable with the
and unforeseen inflation as well as increase partnership for everything chargeable to the partnership,
in interest rates and cost of building including loss or injury caused to a third person or penalties
materials constitute force majeure and were incurred due to any wrongful act or omission of any partner
beyond its control Petitioner asseverated acting in the ordinary course of the business of the partnership
that, by the terms of the JVA, each party was or with the authority of his co-partners. Whether innocent or
individually responsible for the marketing guilty, all the partners are solidarily liable with the partnership
and sale of the units pertaining to its share; itself.
that not being privy to the Contracts to Sell
executed by PPGI and respondents, it did
not receive any portion of the payments
made by the latter; and, that without any
contributory fault and negligence on its part,
PPGI breached its undertakings under the
JVA by failing to complete the condominium
project.
https://www.scribd.com/document/474161
432/J-Tiosejo-Investment-Corp-vs-Ang-
Digest
5. Ortega, et al. v. CA, b. Principle of On December 19, 1980, Misa, Bito and WON the withdrawal of YES. The birth and life of a partnership at will is predicated on
et al. Delectus Lozada associated themselves together, as private respondent the mutual desire and consent of the partners. The right to
G.R. No. 109248 Personae (Art. senior partners with Ortega, Del Castillo, Jr., dissolved the partnership choose with whom a person wishes to associate himself is the
July 3, 1995 1804, NCC) and Bacorro, as junior partners. On February regardless of his good or very foundation and essence of that partnership. Its continued
VITUG, J. 17, 1988, Miso wrote a letter to his partners bad faith existence is, in turn, dependent on the constancy of that
stating that he was withdrawing and retiring mutual resolve, along with each partner's capability to give it,
from the firm of Bito, Misa and Lozada, and the absence of a cause for dissolution provided by the law
effective at the end of the month. On the itself. Verily, any one of the partners may, at his sole pleasure,
NO.
same day, Miso brought up that he wanted dictate a dissolution of the partnership at will. He must,
to have a meeting regarding the mechanics however, act in good faith, not that the attendance of bad
of liquidation, more particularly, the two faith can prevent the dissolution of the partnership but that it
floors of the firm’s building because he had can result in a liability for damages. In passing, neither would
plans for it. On February 19, 1988, Miso the presence of a period for its specific duration or the
wrote another letter stating that the statement of a particular purpose for its creation prevent the
partnership ceased to be mutually dissolution of any partnership by an act or will of a partner.
satisfactory despite his effort to ameliorate Among partners, mutual agency arises and the doctrine of
the level of pay scale of their employees due delectus personae allows them to have the power, although
to disagreements with the other partners. not necessarily the right, to dissolve the partnership. An
On June 30, 1988, Miso filed with this unjustified dissolution by the partner can subject him to a
Commission’s Securities Investigation and possible action for damages.
Clearing Department (SICD) a petition for
dissolution and liquidation of partnership. A
hearing officer held that the partnership had
not been dissolved, but SEC en banc
reversed the ruling. During the pendency of
the subsequent motion for reconsideration
with the Court of Appeals, Atty. Misa asked
for appointment of receiver, and Atty. Bito
and Atty, Lozada both died on 1991. The
death of the two partners, as well as the
admission of new partners, in the law firm
prompted Attorney Misa to renew his
application for receivership. The CA affirmed
the decision of SEC en banc in toto.
6. Tocao, et al. v. CA b. Principle of Belo introduced Anay to Tocao, who WON a partnership exists YES. A mere falling out or misunderstanding between partners
G.R. No. 127405 . Delectus conveyed her desire to enter into a joint between petitioners and does not convert the partnership into a sham organization.
October 4, 2000 Personae (Art. venture with her for the importation and private respondent. The partnership exists until dissolved under the law. Since the
YNARES- 1804, NCC) distribution of cookware. The agreement partnership created by petitioners and private respondent has
SANTIAGO,J. was not reduced to writing. The business no fixed term and is therefore a partnership at will predicated
took off successfully and operated under the on their mutual desire and consent, it may be dissolved by the
name of Geminesse Enterprise, a sole will of a partner. He must, however, act in good faith, not that
proprietorship registered in Tocao’s name. the attendance of bad faith can prevent the dissolution of the
NO.
Thereafter, West Bend Company invited partnership but that it can result in a liability for damages. An
Anay to the distributor/dealer meeting in unjustified dissolution by a partner can subject him to action
Wisconsin, US. Anay arrived from the US and for damages because by the mutual agency that arises in a
undertook the task of saving the business on partnership, the doctrine of delectus personae allows the
account of the unsatisfactory sales record in partners to have the power, although not necessarily the right
the Makati and Cubao offices. Belo signed a to dissolve the partnership.
memo entitling her to a 37% commission for
her personal sales. Subsequently, Anay
learned that Tocao signed a letter addressed
to the Cubao sales office to the effect that
she was no longer the vice-president of
Geminesse Enterprise. Anay attempted to
contact Belo by writing him twice to demand
her overriding commission. Anay received
her overriding commission up to December
1987. The following year, she did not receive
the same commission. She filed a complaint
against Tocao and Belo before the RTC
Makati, praying that Tocao and Belo be held
jointly and severally. The RTC ruled in favor
of Anay. Tocao and Belo’s appeal to the CA
was dismissed, but the amount of damages
awarded by the RTC were reduced. Their
Motion for Reconsideration was denied.
Hence, this petition.
7. JG Summit Holdings b. Principle of The National Investment and Development Whether under the 1977 NO. The joint venture between the Philippine Government and
v. CA Delectus Corporation (NIDC), a government Joint Venture Agreement, KAWASAKI is in the nature of a partnership which, unlike an
G.R. No. 124293 Personae (Art. corporation, entered into a Joint Venture KAWASAKI can purchase ordinary corporation, is based on delectus personae. No one
Sept. 24, 2003 1804, NCC) Agreement (JVA) with Kawasaki Heavy only a maximum of 40% can become a member of the partnership association without
PUNO, J. Industries, Ltd. of Kobe, Japan (KAWASAKI) of PHILSECO's total the consent of all the other associates. The right of first refusal
for the construction, operation and capitalization. thus ensures that the parties are given control over who may
management of the Subic National Shipyard become a new partner in substitution of or in addition to the
Inc., (SNS) which subsequently became the original partners. Should the selling partner decide to dispose
all its shares, the non-selling partner may acquire all these
NO.
Philippine Shipyard and Engineering shares and terminate the partnership. No person or
Corporation (PHILSECO). corporation can be compelled to remain or to continue the
partnership. Of course, this presupposes that there are no
Under the JVA, the NDC and KAWASAKI will other restrictions in the maximum allowable share that the
contribute P330M for the capitalization of non-selling partner may acquire such as the constitutional
PHILSECO in the proportion of 60%-40% restriction on foreign ownership in public utility. The theory
respectively. One of its salient features is that KAWASAKI can acquire, as a maximum, only 40% of
the grant to the parties of the right of first PHILSECO's shares is correct only if a shipyard is a public utility.
refusal should either of them decide to sell, In such instance, the non-selling partner who is an alien can
assign or transfer its interest in the joint acquire only a maximum of 40% of the total capitalization of a
venture. public utility despite the grant of first refusal. The partners
NIDC transferred all its rights, title and cannot, by mere agreement, avoid the constitutional
interest in PHILSECO to the Philippine proscription. But as afore-discussed, PHILSECO is not a public
National Bank (PNB). Such interests were utility and no other restriction is present that would limit the
subsequently transferred to the National right of KAWASAKI to purchase the Government's share to
Government pursuant to an Administrative 40% of Philseco's total capitalization.
Order.
When the former President Aquino issued
Proclamation No. 50 establishing the
Committee on Privatization (COP) and the
Asset Privatization Trust (APT) to take title
to, and possession of, conserve, manage and
dispose of non-performing assets of the
National Government, a trust agreement
was entered into between the National
Government and the APT wherein the latter
was named the trustee of the National
Government’s share in PHILSECO.
In the interest of the national economy and

the government, the COP and the APT
deemed it best to sell the National
Government’s share in PHILSECO to private
entities. After a series of negotiations
NO.
between the APT and KAWASAKI , they

agreed that the latter’s right of first refusal
under the JVA be “exchanged” for the right
to top by 5%, the highest bid for the said
shares. They further agreed that KAWASAKI
woul.d be entitled to name a company in
which it was a stockholder, which could
exercise the right to top. KAWASAKI then
informed APT that Philyards Holdings, Inc.
(PHI) would exercise its right to top.
At the public bidding, petitioner J.G. Summit

Holdings Inc. submitted a bid of Two Billion
and Thirty Million Pesos
(Php2,030,000,000.00) with an
acknowledgement of KAWASAKI/PHILYARDS
right to top.
As petitioner was declared the highest
bidder, the COP approved the sale “subject
to the right of Kawasaki Heavy Industries,
Inc. / PHILYARDS Holdings Inc. to top JG’s bid
by 5% as specified in the bidding rules.”
On the other hand, the respondent by virtue
of right to top by 5%, the highest bid for the
said shares timely exercised the same.
Petitioners, in their motion for

reconsideration, raised, inter alia, the issue
on the maintenance of the 60%-40%
relationship between the NIDC and
KAWASAKI arising from the Constitution
because PHILSECO is a landholding
corporation and need not be a public utility
NO.
to be bound by the 60%-40% constitutional

limitation.
http://juristprudent.blogspot.com/2018/10/
jg-summit-holdings-v-ca-sept-24-2003-
gr.html
8. Pacific Commercial a. Requisites In April, 1919 Arnaldo F. de Silva, Guillermo WON Martinez, as a mere NO. The language of Article 127 of the Code of Commerce is
v. Aboitiz prescribed by law Aboitiz, Vidal Aboitiz and Jose Martinez industrial partner, cannot clear and specific that all the members of a general
No. 25007. in order that a formed a "regular, collective, mercantile be held responsible for copartnership are liable with all their property for the results
March 2, 1926, partnership may partnership" with a capital of P40,000 of the partnership's debt of the duly authorized transactions made in the name and for
OSTRAND, J. be held liable to which each of the partners Aboitiz and De the account of the partnership. On the other hand, article 141,
third persons for Silva furnished one-third. The partner Jose upon which the appellants relies and which provides that
the act of one Martinez was an industrial partner and "losses shall be computed in the same proportion among the
partner (Art. furnished no capital; it was provided in the capitalist partners without including the industrial partners,
1816, 1822, partnership article that he was to receive unless by special agreement the latter have been constituted
1823, 1824) 30% of the profits and that his responsibility as participants therein," is susceptible of two different
for losses should not exceed the amount of interpretations of which that given it in the Compania
the profits received by him. On April 27, Maritima case, supra, i. e., that it relates merely to the
1922, the partnership, through its duly distribution of losses among the partners themselves in the
authorized representative, Guillermo settlement of the partnership affairs and has no reference to
Aboitiz, executed a promissory note in favor partnership obligations to third parties, appears to us to be
of Pacific Commercial Company for the sum the more logical.
of P23,168.71 with a chattel mortgage as a
security. For failure of the partnership to pay
the debt the chattel mortgage was
foreclosed and P2000 was paid to Pacific
Commercial. No further payment on the
note appears to have been made. The trial
court rendered judgment in favor of Pacific
Commercial and against the partnership.
The judgment further provided that
execution should first issue against the
property of the partnership then it may
issue against the property of the partners De
NO.
Silva and Aboitiz. In the event of their

insolvency, then against the property of the
industrial partner Jose Martinez.
9. Island Sales v. a. Requisites The defendant company ( UNITED PIONEERS Whether the condonation NO. In the instant case, there were five (5) general partners
United Pioneers prescribed by law GENERAL CONSTRUCTION COMPANY ET .AL of a partner’s share in the when the promissory note in question was executed for and in
No. L-22493 . July in order that a ), a general partnership duly registered debts of the company behalf of the partnership. Since the liability of the partners is
31, 1975, partnership may under the laws of the Philippines, purchased increases the remaining pro rata, the liability of the appellant Benjamin C. Daco shall
CONCEPCION JR., J. be held liable to from the plaintiff ( ISLAND SALES, INC) a partners’ liability? be limited to only one-fifth ( 1/ 5 ) of the obligations of the
third persons for motor vehicle on installment basis and for defendant company. The fact that the complaint against the
the act of one this purpose executed a promissory note for defendant Romulo B. Lumauig was dismissed, upon motion of
partner (Art. P9,440.00, payable in twelve (12) equal the plaintiff, does not unmake the said Lumauig as a general
1816, 1822, monthly installments of P786.63, the first partner in the defendant company. In so moving to dismiss the
1823, 1824) installment payable on or before May 22, complaint, the plaintiff merely condoned Lumauig's individual
1961 and the subsequent installments on liability to the plaintiff.
the 22nd day of every month thereafter,
until fully paid, with the condition that
failure to pay any of said installments as
they fall due would render the whole unpaid
balance immediately due and demandable.
Having failed to receive the installment due
on July 22, 1961, the plaintiff sued the
defendant company for the unpaid balance
amounting to P7,119.07. Benjamin C. Daco,
Daniel A. Guizona, Noel C. Sim, Romulo B.
Lumauig, and Augusto Palisoc were included
as co-defendants in their capacity as general
partners of the defendant company.
Subsequently, on motion of the plaintiff, the
complaint was dismissed insofar as the
defendant Romulo B. Lumauig is concerned.
10. Muñasque v. Court a. Requisites Elmo Muñasque entered into a contract on WON the amounts NO. Since the two were partners when the debts were
of Appeals prescribed by law behalf of the partnership of “Galan and payable to the intervenors incurred, they are also both liable to third persons who
No. L-39780 . in order that a Muñasque” as contractor to remodel should be shouldered extended credit to their partnership. While it is true that under
November 11, partnership may Tropical’s Cebu branch building. A total of exclusively by Galan Article 1816 of the Civil Code, "All partners, including industrial
NO.
1985, GUTIERREZ, be held liable to Php 25,000 was to be paid in installments. ones, shall be liable pro rata with all their property and after
JR. , J. third persons for The first payment was made in the form of a all the partnership assets have been exhausted, for the
the act of one check for Php 7,000 pesos in the name of contracts which may be entered into the name and for the
partner (Art. Muñasque but indorsed it to Galan to account of the partnership, under its signature and by a
1816, 1822, enable the latter to deposit it in the bank person authorized to act for the partnership. . . .", this
1823, 1824) and pay for the materials and labor used in provision should be construed together with Article 1824
the project. Galan allegedly spent about Php which provides that: "All partners are liable solidarily with the
6, 183.37 of the money for personal use, partnership for everything chargeable to the partnership
prompting Muñasque to not indorse the rest under Articles 1822 and 1823." In short, while the liability of
of the payments to him. Galan told the Cebu the partners are merely joint in transactions entered into by
Branch of Tropical that there was a the partnership, a third person who transacted with said
misunderstanding between him and partnership can hold the partners solidarily liable for the
Muñasque, prompting them to change the whole obligation if the case of the third person falls under
name of the check to “Galan and Associates” Articles 1822 or 1823. The obligation is solidary because the
which was the duly registered name of the law protects him, who in good faith relied upon the authority
partnership, and enabling Galan to cash in of a partner, whether such authority is real or apparent. That
the second check. The remodeling continued is why under Article 1824 of the Civil Code all partners,
all with the efforts of Muñasque, and the whether innocent or guilty, as well as the legal entity which is
two remaining checks were issued to him, the partnership, are solidarily liable.
the last one pursuant to a court order. He
then filed a complaint for payment of sum of
money and damages against Tropical for the
first and second checks which fell to the
hands of Galan, additional expenses
incurred by him, exemplary damages, and
attorney’s fees. The business firms Cebu
Southern Hardware Company and Blue
Diamond Glass Palace were allowed to
intervene, both having legal interest in the
matter in litigation for the credit which the
intervenors extended to the partnership of
petitioner and Galan.
NO.
11. Liwanag v. c. Partner’s Liwanag and Reyes are co-owners of WON the responsibility of NO. Although the Workmen's Compensation Act does not
Workmen’s liability for Liwanag Auto Supply. They employed appellants should not be contain any provision expressly declaring solidary obligation of
Compensation partnership Balderama as security guard who, while in solidary but merely joint. business partners like the herein appellants, there are other
Commission obligation line of duty, was killed by criminal hands. His provisions of law from which it could be gathered that their
No. L-12164 . May (nature) (Art. widow and his minor children filed a claim liability must be solidary. Arts. 1711 and 1712 of the new Civil
22, 1959, 1816, NCC in for compensation with the Workmen’s Code taken together with those of Section 2 of the Workmen's
ENDENCIA, J. relation to Art. Compensation Commission, which was Compensation Act, reasonably indicate that in compensation
1824, NCC) granted in an award. On appeal, Liwanag cases, the liability of business partners, like appellants, should
and Reyes neither question the right of the be solidary; otherwise, the right of the employee may be
Balderamas to compensation nor the defeated, or at least crippled. If the responsibility of appellants
amount awarded. They only claim that, were to be merely joint and solidary, and one of them
under the Workmen’s Compensation Act, happens to be insolvent, the amount awarded to the appellees
the compensation is divisible, hence the would only be partially satisfied, which is evidently contrary to
Commission erred in ordering them to pay the intent and purposes of the Act. In the previous cases we
solidarily the amount awarded. have already held that the Workmen's Compensation Act
should be construed fairly, reasonably and liberally in favor of
and for the benefit of the employee and his dependents; that
all doubts as to the right of compensation resolved in his
favor; and that it should be interpreted to promote its
purpose.
12. Sy v. Court of Dissolution, Sy Yong Hu & Sons is a partnership between WON the 1988 Tongco NO. Petitioners fail to recognize the basic distinctions
Appeals Winding Up, Sy Yong Hu and his sons. Their shares as Decision varied the 1982 underlying the principles of dissolution, winding up and
G.R. No. 94285 Liquidation, and reflected in the Amended articles of Abello Decision affirming partition or distribution. The dissolution of a partnership is the
August 31, 1999 Termination partnership are as follows: Sy Yong Hu the dissolution of the change in the relation of the parties caused by any partner
PURISIMA, J. (31k), Jose Sy (205k), Jayme Sy (112k), partnership, contrary to ceasing to be associated in the carrying on, as might be
Marciano Sy (143k), Willie Sy (85k), Vicente the final and executory distinguished from the winding up, of its business. Upon its
Sy (85k), and Jesus Sy (88k), with Jose Sy as tenor of the said judgment dissolution, the partnership continues and its legal personality
managing partner. The partnership was is retained until the complete winding up of its business
registered with SEC on March 29, 1962. In culminating in its termination. The dissolution of the
1978, 1979, & 1987, Partners Sy Yong Hu partnership did not mean that the juridical entity was
and Jose Sy, Vicent Sy, &Marciano Sy died immediately terminated and that the distribution of the assets
respectively. At present, the partnership has to its partners should perfunctorily follow. On the contrary,
valuable assets in the business district of the dissolution simply effected a change in the relationship
Bacolod. among the partners. The partnership, although dissolved,
NO.
In Sept 1977, during the lifetime of all the continues to exist until its termination, at which time the
partners, Keng Sian brought an action winding up of its affairs should have been completed and the
against the partnership claiming she is net partnership assets are partitioned and distributed to the
entitled of ½ of the properties and the fruits partners. The error, therefore, ascribed to the Court of
bec she was the common law wife of Sy Appeals is devoid of any sustainable basis. The Abello Decision
Yong Hu which the latter denied. though, indeed, final and executory, did not pose any obstacle
During the pendency of the case, Marciano to the Hearing Officer to issue orders not inconsistent
Sy filed a petition for declaratory relief therewith. From the time a dissolution is ordered until the
against Vicente, Jesus, and Jayme, praying actual termination of the partnership, the SEC retained
he be appointed partner to replace the jurisdiction to adjudicate all incidents relative thereto. Thus,
deceased Jose. In an answer, Vicente, Jesus, the disputed order placing the partnership under a
Jayme, who claimed to represent the receivership committee cannot be said to have varied the final
majority interest sought the dissolution of order of dissolution. Neither did it suspend the dissolution of
partnership and appointed Vicente as the partnership. If at all, it only suspended the partition and
managing partner. distribution of the partnership assets pending disposition of
The Hearing Officer, in a decision (Sison Civil Case No. 903 on the basis of the agreement by the parties
Decision) dismissed the petition, and and under the circumstances of the case. It bears stressing
dissolved the partnership. The Sison that, like the appointment of a manager in charge of the
Decision was affirmed by the SEC En Banc. In winding up of the affairs of the partnership, said appointment
the meantime the Regional Trial Court of a receiver during the pendency of the dissolution is
appointed one Alex Ferrer as Special interlocutory in nature, well within the jurisdiction of the SEC.
Administrator. Thereafter, Alex Ferrer
moved to intervene in the proceedings in for
the partition and distribution of the of the
partnership assets on behalf of the
respondent intestate estate but was denied.
The Intestate Estate appealed to the SEC en
banc. In its decision, the SEC en banc
reiterated that the Abello decision, which
upheld the order of dissolution of the
partnership, had long become final and
executory. No further appeal was taken
from said decision. During the continuation
of SEC Case, the parties brought to the
NO.
attention of the Hearing Officer the fact of

existence of a Civil Case pending before the
RTC. They also agreed that during the
pendency of said case, there would be no
disposition of partnership assets. Hearing
Officer Tongco in an order placed the
partnership under a receivership committee.
Petitioners appealed to the SEC en banc. In
an order (Lopez Order), the SEC en banc
affirmed the Tongco order. Then they filed a
special civil action for certiorari with the
Court of Appeals. The appellate court
granted the petition and remanded the case
for further execution of the Decisions,
ordering partition and distribution of
partnership properties. On motion for
reconsideration by private respondents, the
Court of Appeals reversed its earlier decision
and remanded the case to the SEC for the
formation of a receivership committee as
envisioned in the Tongco Order. Hence the
present petition.
13. Rojas vs. Maglana Dissolution, Maglana and Rojas executed their articles of Whether or not Maglana YES. Hence, as there are only two parties when Maglana
G.R. No. 30616, Winding Up, co-partnership called EDE. It had an can unilaterally dissolve notified Rojas that he dissolved the partnership, it is in effect a
October 10, 1990 Liquidation, and indefinite term, was registered with the SEC, the partnership notice of withdrawal.
PARAS, J. Termination and had a Timber License. Later, Agustin
Pahamitang became an industrial partner Under Article 1830, par. 2 of the Civil Code, even if there is a
and another articles of co-partnership was specified term, one partner can cause its dissolution by
executed. The term of the second co- expressly withdrawing even before the expiration of the
partnership was fixed to 30 years. After period, with or without justifiable cause. Of course, if the
some time, the three executed a conditional cause is not justified or no cause was given, the withdrawing
sale of interest in the partnership where partner is liable for damages but in no case can he be
Magalana and Rojas shall purchase the compelled to remain in the firm. With his withdrawal, the
interest, share, and participation of number of members is decreased, hence, the dissolution. And
NO.
Pahamotang. It was agreed that, after in whatever way he may view the situation, the conclusion is
payment of such including the loan secured inevitable that Rojas and Maglana shall be guided in the
by Pahamotang, the two shall become liquidation of the partnership by the provisions of its duly
owners of all equipment contributed by registered Articles of Co-Partnership; that is, all profits and
Pahamotang. The two continued the losses of the partnership shall be divided "share and share
partnership without any written agreement alike" between the partners.
or reconstitution of the articles of
partnership. Subsequently, Rojas entered But an accounting must first be made and which in fact was
into a contract with CMS Estate. Maglana ordered by the trial court and accomplished by the
reminded him of his contribution to the commissioners appointed for the purpose.
capital investments and his duties to the
partnership. Rojas said he would not be able
to comply. Maglana told Rojas that the latter
is only entitled to 20% of the profits, which
was the sharing from 1957-1959 without
dispute. Rojas took funds from the
partnership which was more than his share.
Maglana notified Rojas that he had dissolved
the partnership. Rojas filed an action against
Maglana. The CFI ruled that the partnership
of the two after Pahamotang left was one de
facto and at will. The SC said that it was not,
considering that the first partnership was
never dissolved. With regard to the issue of
unilateral dissolution, the SC held that
Maglana had the power to do so.
14. Aldecoa & Co. v. 5. Duty to wind Warner, Barnes and Co. were conducting a WON the partnership YES. It is one of the duties of the manager of a joint-account
Warner, Barnes & up/ liquidate business in Albay, the principal object of property should be partnership, to liquidate the assets that form the common
Co. partnership which was the purchase of hemp in the included in the liquidation property, and to state the result obtained therefrom in the
GR No. L-5242, affairs (Art. 1836, pueblos of Legaspi and Tobacco for the of the said business and in final rendering of the accounts which he is to present at the
August 6, 1910 NCC) purpose of bringing it to Manila, here to sell the accounts appertaining conclusion of the partnership.
Torres, J. if for exportation, and that on the said date to the year 1903, when It is a recognized fact, and one admitted by both parties that
of December 1, 1898, the plaintiff company the existence of the the partnership herein concerned concluded its transactions
became interested in the said business of on December 31, 1903; wherefore the firm of Warner, Barnes
NO.
Warner, Barnes and Co., in Albay and partnership came to an & Co. Ltd., the manager of the partnership, in declaring the
formed therewith a joint-account end. latter's transactions concluded and in rendering duly verified
partnership whereby Aldecoa and Co., were accounts of its results, owes the duty to include therein the
to share equally in the gains and losses of property and effects belonging to the partnership in common.
the business in Albay. The defendant is the should it be duly and fully proved that the managing firm
successor to all the rights and obligations of acquired realty in the name and at the expense of the joint-
Warner, Barnes and Co., among which is account partnership with the plaintiff firm, it is just that, in
that of being manager of the said joint- liquidating the property of common ownership, such realty
account partnership with Aldecoa and Co.. Should be divided between the partners in the same manner
The defendant acted, and continued to act as were the profits and losses during the existence of the
as such manager, and was obliged to render business, from the beginning of the partnership to the date of
accounts supported by proofs, and to its dissolution.
liquidate the business, which defendant not
done. With respect to the liquidation of the NOTE: a new trial was ordered or the purpose of a final
business, the operations having been closed decision of all the questions involved in this litigation
on December 31, 1903, Warner, Barnes and
Co., Ltd., the defendant, has not realized
upon the assets of the firm by selling the
property which constitutes its capital.
15. Po Yeng Cheo v. 5. Duty to wind Po Yeng Cheo, is the sole heir of one Po Gui Whether or not the award NO. It is elementary that one partner, suing alone, cannot
Lim Ka Yan up/ liquidate Yao, deceased, and as such Po Yeng Cheo given to Po Yeng Cheo recover of the managing partner the value of such partner's
G.R. No. 18707. partnership inherited the interest left by Po Gui Yao in a constituting his interest to individual interest; and a liquidation of the business is an
December 9, 1922 affairs (Art. 1836, business conducted in Manila under the the extent of his share of essential prerequisite. Moreover, after the death of the
STREET, J. NCC) style of Kwong Cheong Tay. This business the capital of Kwong original defendant, Lim Ka Yam, the trial court allowed the
had been in existence in Manila for many Cheong Tay was proper. action to proceed against Lim Yock Tock, as his administrator,
years prior to 1903, as a mercantile and entered judgment for a sum of money against said
partnership, engaged in the import and administrator as the accounting party. This is an error because
export trade; and after the death of Po Gui it is well settled that when a member of a mercantile
Yao the following seven persons were partnership dies, the duty of liquidating its affair devolves
interested therein as: Po Yeng Cheo, Chua upon the surviving member, or members, of the firm, not
Chi Yek, Lim Ka Yam, Lee Kom Chuen, Ley upon the legal representative of the deceased partner.
Wing Kwong, Chan Liong Chao, Lee Ho Yuen.
The manager of Kwong Cheong Tay, for
many years prior of its complete cessation
NO.
from business in 1910, was Lim Ka Yam, the

original defendant herein. Among the
properties pertaining to Kwong Cheong Tay
and consisting part of its assets were ten
shares of a total par value of P10,000 in an
enterprise conducted under the name of Yut
Siong Chyip Konski and certain shares to the
among of P1,000 in the Manila Electric
Railroad and Light Company, of Manila. In
the year 1910 Kwong Cheong Tay ceased to
do business, owing principally to the fact
that the plaintiff ceased at that time to
transmit merchandise from Hongkong,
where he then resided. Lim Ka Yam appears
at no time to have submitted to the partners
any formal liquidation of the business,
though The trial judge rendered judgment in
favor of the plaintiff, Po Yeng Cheo, to
recover of the defendant Lim Yock Tock, as
administrator of Lim Ka Yam, the sum of
sixty thousand pesos (P60,000), constituting
the interest of the plaintiff in the capital of
Kwong Cheong Tay, plus the plaintiff's
proportional interest in shares of the Yut
Siong Chyip Konski and Manila Electric
Railroad and Light Company, estimated at
P11,000, together with the costs. From this
judgment the defendant appealed.
16. Guidote v. Borja 5. Duty to wind Santos and Guidote entered in a partnership WON Borja, the NO. In the case of Wahl vs. Donaldson Sim & Co. (5 Phil., 11,
G.R. No. L-28920 up/ liquidate contract. Santos was the one who managed representative of the 14), it was held that the death of one of the partners dissolves
October 24, 1928 partnership the vulcanizing shop business. However, he deceased partner, should the partnership, but that the liquidation of its affairs is by law
OSTRAND, J. affairs (Art. 1836, died. Subsequent to his death, Guidote render the accounting intrusted, not to the executors of the deceased partner, but to
NCC) managed the business. Guidote failed to the surviving partners or the liquidators appointed by them.
render an accounting to Borja, the
NO.
administratix. Guidote filed a case against The rule for the conduct of a surviving partner is thus stated in
Borja for recovery of his money allegedly 20 R. C. L., 1003:
advanced by him to the partnership. Borja
admitted the existence of the partnersip. He In equity surviving partners are treated as trustees of the
filed a cross claim praying that Guidote be representatives of the deceased partner, in regard to the
ordered to render an accounting of the interest of the deceased partner in the firm. As a consequence
partnership business and pay the estate of of this trusteeship, surviving partners are held in their dealings
the deceased. The court absolved Borja and with the firm assets and the representatives of the deceased
ordered Guidote to render an accounting to to that nicety of dealing and that strictness of accountability
the estate of the deceased. Hence, this required of and incident to the position of one occupying a
appeal. Guidote contends that it should be confidential relation. It is the duty of surviving partners to
Borja instead that should render an render an account of the performance of their trust to the
accounting to him. This is so because the personal representatives of the deceased partner, and to pay
deceased, up to the time of his death, over to them the share of such deceased member in the
generally took care of the payments and surplus of firm property, whether it consists of real or personal
collections of the partnership. assets.
17. Eurotech v. Court Agency: Nature, From January to April 1995, petitioner sold WON CA committed a NO. In a contract of agency, a person binds himself to render
of Appeals G.R. No. Concept, and to Impact Systems various products reversible error when it some service or to do something in representation or on
167552, April 23, Purpose allegedly amounting to P91,338.00 pesos. ruled that respondent behalf of another with the latter’s consent. The underlying
2007 CHICO- Subsequently, respondents sought to buy Edwin Cuizon, as agent of principle of the contract of agency is to accomplish results by
NAZARIO, J.: from petitioner one unit of sludge pump Impact Systems using the services of others – to do a great variety of things
valued at P250,000.00 with respondents Sales/Erwin Cuizon, is not like selling, buying, manufacturing, and transporting. Its
making a down payment of P50,000.00. personally liable, because purpose is to extend the personality of the principal or the
When the sludge pump arrived from the he has neither acted party for whom another acts and from whom he or she derives
United Kingdom, petitioner refused to beyond the scope of his the authority to act. It is said that the basis of agency is
deliver the same to respondents without agency nor did he representation, that is, the agent acts for and on behalf of the
their having fully settled their indebtedness participate in the principal on matters within the scope of his authority and said
to petitioner. Thus, on 28 June 1995, perpetuation of a fraud acts have the same legal effect as if they were personally
respondent EDWIN and Alberto de Jesus, executed by the principal. By this legal fiction, the actual or
general manager of petitioner, executed a real absence of the principal is converted into his legal or
Deed of Assignment of receivables in favor juridical presence – qui facit per alium facit per se (He who
of petitioner. Impact systems is owed by acts through another acts by or for himself).
ERWIN Cuizon.
NO.
Despite the existence of the Deed of

Assignment, respondents proceeded to
collect from Toledo Power Company the
amount of P365,135.29. Alarmed by this
development, petitioner made several
demands upon respondents to pay their
obligations. As a result, respondents were
able to make partial payments to petitioner.
On 7 October 1996, petitioner's counsel sent
respondents a final demand letter wherein it
was stated that as of 11 June 1996,
respondents' total obligations stood at
P295,000.00 excluding interests and
attorney's fees. Because of respondents'
failure to abide by said final demand letter,
petitioner instituted a complaint for sum of
money, damages, with application for
preliminary attachment against herein
respondents
By way of special and affirmative defenses,

respondent EDWIN alleged that he is not a
real party in interest in this case. According
to him, he was acting as mere agent of his
principal, which was the Impact Systems, in
his transaction with petitioner and the latter
was very much aware of this fact.
http://futurelawyertobe.blogspot.com/2014
/08/eurotech-industrial-technologies-inc-
v_2.html
18. Rallos v. Felix Go b. Essential Concepcion and Gerundia both surnamed WON the sale of the NO. In a relationship of agency, one party, called the principal
Chan & Sons Realty requisites/eleme Rallos were sisters and registered co-owners undivided share of (mandante), authorizes another, called the agent
Corp. of a parcel of land known as Lot No. 5983 of Concepcion Rallos in lot (mandatario), to act for and in his behalf in transactions with
NO.
G.R No. L-24332 nts (Art. 1318, the Cadastral Survey of Cebu covered by 5983 valid although it was third persons. The essential elements of agency are: (1) there
January 31, 1978 NCC) Transfer Certificate of Title No. 11116 of the executed by the agent is consent, express or implied of the parties to establish the
Justice Muñoz Registry of Cebu. On April 21, 1954, the after the death of his relationship; (2) the object is the execution of a juridical act in
Palma sisters executed a special power of attorney principal? relation to a third person; (3) the agents acts as a
in favor of their brother, Simeon Rallos, representative and not for himself, and (4) the agent acts
authorizing him to sell for and in their behalf within the scope of his authority.
lot 5983. On March 3, 1955, Concepcion Agency is basically personal representative, and derivative in
Rallos died. On September 12, 1955, Simeon nature. The authority of the agent to act emanates from the
Rallos sold the undivided shares of his sisters powers granted to him by his principal; his act is the act of the
Concepcion and Gerundia in lot 5983 to Felix principal if done within the scope of the authority. Qui facit
Go Chan & Sons Realty Corporation for the per alium facit se. "He who acts through another acts himself".
sum of P10,686.90. The deed of sale was There are various ways of extinguishing agency, but her We
registered in the Registry of Deeds of Cebu, are concerned only with one cause — death of the principal
TCT No. 11118 was cancelled, and a new Paragraph 3 of Art. 1919 of the Civil Code. By reason of the
transfer certificate of Title No. 12989 was very nature of the relationship between Principal and agent,
issued in the named of the vendee. The agency is extinguished by the death of the principal or the
administrator of the estate of the went to agent.
court to have the sale declared
uneanforceable and to recover the disposed
share. The trial court granted the relief
prayed for, but upon appeal the Court of
Appeals uphold the validity of the sale and
the complaint.
19. Loadmasters v. b. Essential In 2001, R&B Insurance issued Marine Policy WON petitioner NO. The elements of a contract of agency are: (1) consent,
Glodel requisites/eleme in favor of Columbia to insure the shipment Loadmasters can be express or implied, of the parties to establish the relationship;
G.R. No. 179446. nts (Art. 1318, of electric copper cathodes against All Risks. legally considered as an (2) the object is the execution of a juridical act in relation to a
January 10, 2011. NCC) Columbia engaged the services of Glodel for Agent of respondent third person; (3) the agent acts as a representative and not for
MENDOZA, J.: the release and withdrawal of the cargoes Glodel himself; (4) the agent acts within the scope of his authority.
from the pier and the subsequent delivery to Accordingly, there can be no contract of agency between the
its warehouses/plants. Glodel, in turn, parties. Loadmasters never represented Glodel. Neither was it
engaged the services of Loadmasters for the ever authorized to make such representation. It is a settled
use of its delivery trucks to transport the rule that the basis for agency is representation, that is, the
cargoes to Columbia’s warehouses/plants. agent acts for and on behalf of the principal on matters within
The goods were loaded on board owned by the scope of his authority and said acts have the same legal
NO.
Loadmasters, driven by its employed drivers effect as if they were personally executed by the principal. On
and accompanied by its employed truck the part of the principal, there must be an actual intention to
helpers. However, only five (5) reached the appoint or an intention naturally inferable from his words or
destination. One (1) truck, loaded with 11 actions, while on the part of the agent, there must be an
bundles or 232 pieces of copper cathodes, intention to accept the appointment and act on it. Such
failed to deliver its cargo. Because of this mutual intent is not obtaining in this case.
incident, Columbia filed with R&B Insurance
a claim for insurance indemnity. After the
requisite investigation and adjustment, R&B
Insurance paid Columbia as insurance
indemnity. R&B Insurance, thereafter, filed a
complaint for damages against both
Loadmasters and Glodel. It sought
reimbursement of the amount it had paid to
Columbia for the loss of the subject cargo.
The RTC rendered a decision holding Glodel
liable for damages for the loss of the subject
cargo and dismissing Loadmasters’
counterclaim for damages and attorney’s
fees against R&B Insurance. Both R&B
Insurance and Glodel appealed the RTC
decision to the Court of Appeals (CA). The
CA held that Loadmasters is liable to Glodel
for the insurance indemnity of Glodel which
has been held liable to R&B Insurance
Corporation. Glodel’s appeal to absolved
from any liability is dismissed.
20. Manila Memorial v. b. Essential Florencia Baluyot offered Atty. Linsangan at WON Baluyot is NO. The elements of agency are (i) consent, express or
Linsangan requisites/eleme the Holy Cross Memorial Park owned by considered an implied, of the parties to establish the relationship; (ii) the
G.R. No. 151319. nts (Art. 1318, petitioner (MMPCI). According to Baluyot, a independent contractor object is the execution of a juridical act in relation to a third
November 22, NCC) former owner of a memorial lot under and not an agent. person; (iii) the agent acts as a representative and not for
2004. Contract No. 25012 was no longer interested himself; and (iv) the agent acts within the scope of his
TINGA, J.:25 in acquiring the lot and had opted to sell his authority. Notwithstanding the claim of MMPCI that Baluyot
rights subject to reimbursement of the was an independent contractor, the fact remains that she was
NO.
amounts he already paid. The contract was authorized to solicit solely for and in behalf of MMPCI. As
for P95,000.00. Baluyot reassured Atty. properly found both by the trial court and the Court of
Linsangan that once reimbursement is made Appeals, Baluyot was an agent of MMPCI.
to the former buyer, the contract would be
transferred to him. Atty. Linsangan agreed Nevertheless, contrary to the findings of the Court of Appeals,
and gave Baluyot P35,295.00 representing MMPCI cannot be bound by the contract procured by Atty.
the amount to be reimbursed to the original Linsangan and solicited by Baluyot.
buyer and to complete the down payment
to MMPCI. Baluyot issued handwritten and Thus, the acts of an agent beyond the scope of his authority do
typewritten receipts for these payments. In not bind the principal, unless he ratifies them, expressly or
March 1985, Baluyot informed Atty. impliedly. Only the principal can ratify; the agent cannot ratify
Linsangan that he would be issued Contract his own unauthorized acts. Moreover, the principal must have
No. 28660, a new contract covering the knowledge of the acts he is to ratify. Ratification in agency is
subject lot in the name of the latter instead the adoption or confirmation by one person of an act
of old Contract No. 25012. Atty. Linsangan performed on his behalf by another without authority. The
protested, but Baluyot assured him that he substance of the doctrine is confirmation after conduct,
would still be paying the old price of amounting to a substitute for a prior authority. Ordinarily, the
P95,000.00 In May 1987, Baluyot verbally principal must have full knowledge at the time of ratification
advised Atty. Linsangan that Contract No. of all the material facts and circumstances relating to the
28660 was cancelled for reasons the latter unauthorized act of the person who assumed to act as agent.
could not explain and presented to him Thus, if material facts were suppressed or unknown, there can
another proposal for the purchase of an be no valid ratification and this regardless of the purpose or
equivalent property. With this and for the lack thereof in concealing such facts and regardless of the
alleged failure of MMPCI and Baluyot to parties between whom the question of ratification may arise.
conform to their agreement, Atty. Linsangan Nevertheless, this principle does not apply if the principal's
filed a Complaint against the former. MMPCI ignorance of the material facts and circumstances was willful,
stated that Baluyot was not an agent but an or that the principal chooses to act in ignorance of the facts.
independent contractor, and as such was However, in the absence of circumstances putting a
not authorized to represent MMPCI or to reasonably prudent man on inquiry, ratification cannot be
use its name except as to the extent implied as against the principal who is ignorant of the facts. No
expressly stated in the Agency Manager ratification can be implied in the instant case.
Agreement. The trial court held MMPCI and
Baluyot jointly and severally liable. It found
that Baluyot was an agent of MMPCI. On
NO.
appeal, the CA affirmed the trial court’s

ruling.
21. Eurotech v. Cuison b. Essential See facts of Case No. 17 above. WON respondent EDWIN NO. Article 1897 reinforces the familiar doctrine that an agent,
G.R. No. 167552. requisites/eleme exceeded his authority who acts as such, is not personally liable to the party with
April 23, 2007. nts (Art. 1318, when he signed the Deed whom he contracts. The same provision, however, presents
CHICO-NAZARIO, J.: NCC) of Assignment thereby two instances when an agent becomes personally liable to a
binding himself personally third person. The first is when he expressly binds himself to
to pay the obligations to the obligation and the second is when he exceeds his
petitioner. authority. In the last instance, the agent can be held liable if he
does not give the third party sufficient notice of his powers.
We hold that respondent EDWIN does not fall within any of
the exceptions contained in this provision.
It is well to state here that Article 1897 of the New Civil Code
upon which petitioner anchors its claim against respondent
EDWIN "does not hold that in case of excess of authority, both
the agent and the principal are liable to the other contracting
party." To reiterate, the first part of Article 1897 declares that
the principal is liable in cases when the agent acted within the
bounds of his authority. Under this, the agent is completely
absolved of any liability. The second part of the said provision
presents the situations when the agent himself becomes liable
to a third party when he expressly binds himself or he exceeds
the limits of his authority without giving notice of his powers
to the third person. However, it must be pointed out that in
case of excess of authority by the agent, like what petitioner
claims exists here, the law does not say that a third person can
recover from both the principal and the agent.
22. Tuazon v. Heirs of b. Essential Respondents alleged that between the WON petitioners are NO. In a contract of agency, one binds oneself to render some
Ramos requisites/eleme period of May 2, 1988 and June 5, 1988, agents of the respondents service or to do something in representation or on behalf of
G.R. No. 156262. nts (Art. 1318, spouses Leonilo and Maria Tuazon another, with the latter’s consent or authority. The following
July 14, 2005. NCC) purchased a total of 8,326 cavans of rice are the elements of agency: (1) the parties’ consent, express
PANGANIBAN, J.: from the deceased Bartolome Ramos or implied, to establish the relationship; (2) the object, which
[predecessor-in-interest of respondents]. is the execution of a juridical act in relation to a third person;
That of this quantity, only 4,437cavans have (3) the representation, by which the one who acts as an agent
NO.
been paid for so far, leaving unpaid 3,889 does so, not for oneself, but as a representative; (4) the
cavans valued at P1,211,919.00. In payment limitation that the agent acts within the scope of his or her
therefor, the spouses Tuazon issued several authority. As the basis of agency is representation, there must
checks. But when these checks were be, on the part of the principal, an actual intention to appoint,
encashed, all of the checks bounced due to an intention naturally inferable from the principal’s words or
insufficiency of funds. Respondents actions. In the same manner, there must be an intention on
advanced that before issuing said checks, the part of the agent to accept the appointment and act upon
spouses Tuazon already knew that they had it. Absent such mutual intent, there is generally no agency.
no available fund to support the checks, and The declarations of agents alone are generally insufficient to
they failed to provide for the payment of establish the fact or extent of their authority. The law makes
these despite repeated demands made on no presumption of agency; proving its existence, nature and
them. Respondents averred that because extent is incumbent upon the person alleging it. In the present
spouses Tuazon anticipated that they would case, petitioners raise the fact of agency as an affirmative
be sued, they conspired with the other defense, yet fail to prove its existence.
defendants to defraud them as creditors by
executing fictitious sales of their properties.
Defendants denied having purchased r ice
from Bartolome Ramos. They alleged that it
was Magdalena Ramos, wife of said
deceased, who owned and traded the
merchandise and Maria Tuazon was merely
her agent. They argued that it was
Evangeline Santos who was the buyer of the
rice and issued the checks to Maria Tuazon
as payments therefor. In good faith, the
checks were received by petitioner from
Evangeline Santos and turned over to Ramos
without knowing that these were not
funded. And it is for this reason that
petitioners have been insisting on the
inclusion of Evangeline Santos as an
indispensable party, and her non-inclusion
was a fatal error.
NO.
https://dokumen.tips/documents/tuazon-
vs-heirs-of-ramos-digest.html
23. Yu Eng Cho v. Pan b. Essential Plaintiff Yu Eng Cho is a businessman who WON Tagunicar is a sub- NO. By the contract of agency, a person binds himself to
American World requisites/eleme travels from time to time to Malaysia, Taipei agent of TWSI while TWSI render some service or to do something in representation or
Airways, Inc. nts (Art. 1318, and Hongkong. On July 10, 1976, plaintiffs is a duly authorized on behalf of another, with the consent or authority of the
G.R. No. 123560 NCC) bought plane tickets from defendant Claudia ticketing agent of Pan Am latter. The elements of agency are: (1) consent, express or
March 27, 2000 Tagunicar who represented herself to be an implied, of the parties to establish the relationship; (2) the
PUNO, J. agent of defendant Tourist World Services, object is the execution of a juridical act in relation to a third
Inc. (TWSI). The destination[s] are person; (3) the agent acts as a representative and not for
Hongkong, Tokyo, San Francisco, U.S.A. On himself; (4) the agent acts within the scope of his authority. It
said date, only the passage from Manila to is a settled rule that persons dealing with an assumed agent
Hongkong, then to Tokyo, were confirmed. are bound at their peril, if they would hold the principal liable,
[PAA] Flight 002 from Tokyo to San Francisco to ascertain not only the fact of agency but also the nature and
was on “RQ” status, meaning “on request”. extent of authority, and in case either is controverted, the
Per instruction of defendant Claudia burden of proof is upon them to establish it.
Tagunicar, plaintiffs returned after a few In the case at bar, petitioners rely on the affidavit of
days for the confirmation of the Tokyo-San respondent Tagunicar where she stated that she is an
Francisco segment of the trip. After calling authorized agent of TWSI. At any rate, even if such affidavit is
up Canilao of TWSI, defendant Tagunicar to be given any probative value, the existence of the agency
told plaintiffs that their flight is now relationship cannot be established on its sole basis. The
confirmed all the way. declarations of the agent alone are generally insufficient to
establish the fact or extent of his authority.
On July 23, 1978, plaintiffs left for Hongkong
and thereafter left for Tokyo. Upon their
arrival in Tokyo, they called up Pan-Am
office for reconfirmation of their flight to
San Francisco. Said office, however,
informed them that their names are not in
the manifest. Since plaintiffs were supposed
to leave on the 29th of July, 1978, and could
not remain in Japan for more than 72 hours,
they were constrained to agree to accept
airline tickets for Taipei instead, per advise
of JAL officials. Upon reaching Taipei, there
NO.
were no flight[s] available for plaintiffs, thus,

they were forced to return back to Manila
on instead of proceeding to the United
States. A complaint for damages was filed by
petitioners against private respondents the
Regional Trial Court held the defendants
jointly and severally liable, except defendant
Julieta Canilao. Only respondents Pan Am
and Tagunicar appealed to the Court of
Appeals. the appellate court rendered
judgment modifying the amount of damages
awarded, holding private respondent
Tagunicar solely liable therefor, and
absolving respondents Pan Am and TWSI
from all liability.
https://thelawyalstudent.blogspot.com/202
1/08/agency-trust-and-partnership-yu-eng-
cho.html
24. Orient Air Service v. b. Essential American Air, an air carrier offering WON CA erred in affirming YES. By affirming this ruling of the trial court, respondent
Court of Appeals requisites/eleme passenger and air cargo transportation, lower court’s decision appellate court, in effect, compels American Air to extend its
G.R. No. 76931. nts (Art. 1318, entered into a General Sales Agency ordering American Air to personality to Orient Air. Such would be violative of the
May 29, 1991. NCC) Agreement with Orient Air, authorizing the "reinstate defendant as its principles and essence of agency, defined by law as a contract
PADILLA, J.: latter to act as its exclusive general sales general sales agent for whereby "a person binds himself to render some service or to
agent for the sale of air passenger passenger transportation do something in representation or on behalf of another, WITH
transportation. Orient air failed to remit the in the Philippines in THE CONSENT OR AUTHORITY OF THE LATTER . (emphasis
net proceeds of sales for several months accordance with said GSA supplied) In an agent-principal relationship, the personality of
prompting American Air to undertake the Agreement." the principal is extended through the facility of the agent. In so
collection of the proceeds of tickets sold doing, the agent, by legal fiction, becomes the principal,
originally by Orient Air and terminating their authorized to perform all acts which the latter would have him
agreement. do. Such a relationship can only be effected with the consent
of the principal, which must not, in any way, be compelled by
American air instituted suit against Orient law or by any court.
Air for the settlement of past outstanding
NO.
funds in possession of the latter. Orient Air

contended that because of the unpaid
overriding commissions it retained the sales
proceeds before remitting the balance to
American Air. American Air contended that
the sale must be made by Orient Air and the
sale must be done with the use of American
Air’s ticket stocks in order for it to be
entitled to the overriding commission. On
the other hand, Orient Air contends that the
contractual stipulation of a 3% overriding
commission covers the total revenue of
American Air and not merely that derived
from ticketed sales undertaken by Orient Air
because it was an exclusive General Sales
Agent. CA held that Orient Air is entitled to
commissions and ordered American Air to
reinstate Orient Air as its General Sales
Agent.
https://www.lexanimo.com/2019/03/23/ori
ent-air-services-vs-ca/
25. Bordador v. Luz b. Essential The Bordador's were in the business of WON Deganos was an NO. The Civil Code provides:
G.R. No. 130148. requisites/eleme purchase and sale of jewelry, and Brigida Luz agent of Brigida D. Luz Art. 1868. By the contract of agency a person binds himself to
December 15, 1997 nts (Art. 1318, was their regular customer. Deganos, the render some service or to do something in representation or
REGALADO, J.: NCC) brother of Luz, received pieces of jewelry on behalf of another, with the consent or authority of the
worth P382,816.00, covered by seventeen latter.
receipts, eleven of them indicating that they The basis for agency is representation. Here, there is no
were received on behalf a certain Evelyn showing that Brigida consented to the acts of Deganos or
Aquino, and six indicated that they were authorized him to act on her behalf, much less with respect to
receive don behalf of Luz. Deganos was the particular transactions involved. Petitioners attempt to
supposed to sell the items, remit the foist liability on respondent spouses through the supposed
proceeds, and return the unsold ones to the agency relation with Deganos is groundless and ill-advised.
Bordadors. However, he was only able to
NO.
remit P53,207.00, failing to pay the balance Besides, it was grossly and inexcusably negligent of petitioners
of the sales proceeds and returning any to entrust to Deganos, not once or twice but on at least six
unsold items. The Bordadors filed a occasions as evidenced by six receipts, several pieces of
complaint before the barangay court, where jewelry of substantial value without requiring a written
Deganos along with the Sps. Luz signed a authorization from his alleged principal. A person dealing with
compromise agreement promising to pay an agent is put upon inquiry and must discover upon his peril
the unpaid account of P765,463.98. the authority of the agent.
Deganos, however, failed to comply. A civil The records show that neither an express nor an implied
case for the recovery of sum of money was agency was proven to have existed between Deganos and
instituted against Deganos and Brigida Luz in Brigida D. Luz. Evidently, Petitioners, who were negligent in
the Malolos RTC. Her husband Ernesto was their transactions with Deganos, cannot seek relief from the
impleaded as well. Four years later in 1994, effects of their negligence by conjuring a supposed agency
a criminal case for estafa was filed, which relation between the two respondents where no evidence
was still pending when this decision was supports such claim.
promulgated. Petitioners claimed that
Deganos was acting as the agent of Brigida
Luz and because he failed to pay for the
pieces of jewelry, the Sps. Luz, as principals,
are solidarily liable. The respondents
countered that only Deganos was liable, that
Brigida never authorized him to receive
jewelry on her behalf, neither did she
receive the articles in question. The RTC
ruled that there was no agency between
Brigida Luz and Deganos. It was Bordador
who indicated that the items were received
on behalf of Luz. Even if there was a contract
of agency, there was no memorandum to
this effect and was therefore unenforceable.
CA affirmed the judgment.
https://pdfcoffee.com/digest-bordador-v-
luz-pdf-free.html
NO.
26. Apex Mining Co., b. Essential The case involves the “Diwalwal Gold Rush W/N EP 133 and its NO. While it may be true that SEM, the assignee of EP 133, is a
Inc. v. Southeast requisites/eleme Area” (Diwalwal), a rich tract of mineral land subsequent transfer to 100% subsidiary corporation of MMC, records are bereft of
Mindanao Gold nts (Art. 1318, located inside the Agusan-Davao-Surigao SEM is valid. any evidence showing that the former is the duly authorized
Corp. NCC) Forest Reserve in Davao del Norte and agent of the latter. For a contract of agency to exist, it is
G.R. Nos. 152613 & Davao Oriental. Since the early 1980s, essential that the principal consents that the other party, the
No. 152628. June Diwalwal has been stormed by conflicts agent, shall act on its behalf, and the agent consents so as to
23, 2006 brought about by numerous mining claims act. In the case of Yu Eng Cho v. Pan American World Airways,
CHICO-NAZARIO, J.: over it.On March 10, 1986, Marcopper Inc., this Court had the occasion to set forth the elements of
Mining Corporation (MMC) was granted an agency, viz: (1) consent, express or implied, of the parties to
Exploration Permit(EP 133) by the Bureau of establish the relationship; (2) the object is the execution of a
Mines and Geo-Sciences (BMG). A long juridical act in relation to a third person; (3) the agent acts as a
battle ensued between Apex an dMMC with representative and not for himself; (4) the agent acts within
the latter seeking the cancellation of the the scope of his authority.
mining claims of Apex on the ground that
such mining claims were within a forest
reservation (Agusan-Davao-Surigao Forest
Reserve) and thus the acquisition on mining
rights should have been through an
application for a permit to prospect with the
BFD and not through registration of a DOL
with the BMG. When it reached the SC in
1991, the Court ruled against Apex holding
that the area is a forest reserve and thus it
should have applied for a permit to prospect
with the BFD .On February 16 1994, MMC
assigned all its rights to EP 133 to Southeast
Mindanao Gold Mining Corporation (SEM), a
domestic corporation which is alleged to be
a 100%-owned subsidiary of MMC.
Subsequently, BMG registered SEM’s
Mineral Production Sharing Agreement
(MPSA)application and the Deed of
Assignment. Several oppositions were filed.
The Panel of Arbitrators created by the
NO.
DENR upheld the validity of EP 133. During

the pendency of the case, DENR AO No.
2002-18 was issued declaring an emergency
situation in the Diwalwal Gold Rush Area
and ordering the stoppage of all mining
operations therein.
https://www.scribd.com/doc/109545106/DI
GEST-Apex-v-Southeast-Mindanao-Gold-
Mining-Corp
27. Victorias Milling v. b. Essential St. Therese Merchandising regularly bought Whether or not CSC was NO. It is clear from Article 1868 that the basis of agency is
CA requisites/eleme sugar from Victorias Milling Co., Inc. In the an agent of STM and representation. On the part of the principal, there must be an
G.R. No. 117356. nts (Art. 1318, course of their dealings, Victorias Milling hence, estopped to sue actual intention to appoint or an intention naturally inferable
June 19, 2000. NCC) issued several Shipping List/Delivery upon SLDR No. 1214M as from his words or actions; and on the part of the agent, there
QUISUMBING, J.: Receipts (SLDRs) to St. Therese an assignee. must be an intention to accept the appointment and act on it,
Merchandising as proof of purchases. and in the absence of such intent, there is generally no agency.
Among these was SLDR No. 1214M which One factor which most clearly distinguishes agency from other
covers 25,000 bags of sugar. Each bag legal concepts is control; one person—the agent—agrees to
contained 50 kilograms and priced at act under the control or direction of another—the principal.
P638.00 per bag. The transaction it covered Indeed, the very word “agency” has come to connote control
was a direct sale. by the principal. The control factor, more than any other, has
On October 25, 1989, St. Therese caused the courts to put contracts between principal and
Merchandising sold to Consolidated Sugar agent in a separate category.
Corp. its rights in SLDR No. 1214M for It appears plain to us that private respondent CSC was a buyer
P14,750,000.00. Consolidated Sugar Corp. of the SLDFR form, and not an agent of STM. Private
issued checks in payment. That same day, respondent CSC was not subject to STM’s control. The
Consolidated Sugar Corp. wrote Victorias question of whether a contract is one of sale or agency
Milling that it had been authorized by St. depends on the intention of the parties as gathered from the
Therese Merchandising to withdraw the whole scope and effect of the language employed. That the
sugar covered by SLDR No. 1214M. authorization given to CSC contained the phrase “for and in
Consolidated Sugar Corp. surrendered SLDR our (STM’s) behalf” did not establish an agency. Ultimately,
No. 1214M to Victorias Milling’s NAWACO what is decisive is the intention of the parties. That no agency
warehouse and was allowed to withdraw was meant to be established by the CSC and STM is clearly
sugar. However, after 2,000 bags had been shown by CSC’s communication to petitioner that SLDR No.
NO.
released, Victorias Milling refused to allow 1214M had been “sold and endorsed” to it. The use of the
further withdrawals of sugar against SLDR words “sold and endorsed” means that STM and CSC intended
No. 1214M because, according to it, St. a contract of sale, and not an agency. Hence, on this score, no
Therese Merchandising had already error was committed by the respondent appellate court when
withdrawn all the sugar covered by the it held that CSC was not STM’s agent and could independently
cleared checks. sue petitioner.
20/digest-of-Victoria-Milling-Co-Inc-v-CA-G-
R-No-117356
28. Dominion b. Essential Private respondent, Rodolfo Guevarra filed a Whether respondent NO. By the contract of agency, a person binds himself to
Insurance vs. Court requisites/eleme complaint for sum of money against the Guevarra acted within his render some service or to do something in representation or
of Appeals nts (Art. 1318, petitioner Dominion Insurance Corporation authority as agent for on behalf of another, with the consent or authority of the
G.R. No. 129919. NCC) (DIC), seeking to recover the sum of P 156, petitioner. latter. The basis for agency is representation. On the part of
February 6, 2002. 473.90, which he claimed to have advanced the principal, there must be an actual intention to appoint or
PARDO, J.: in his capacity as manager of the petitioner an intention naturally inferrable from his words or actions; and
to satisfy the claims filed by their clients. DIC on the part of the agent, there must be an intention to accept
however stated that they are not liable to the appointment and act on it, and in the absence of such
pay respondent because he had not acted intent, there is generally no agency.
within his authority as an agent for In the case at bar, the respondent, Guevarra, was only given a
Dominion. They have instructed the general power in the acts of administration, the payment of
respondent that the payment for the claims claims is not part of the general power granted to him by DIC,
of the insured should be taken from the hence under Article 1878 a Special Power of Attorney is
revolving fund, not from respondent’s required to make such payments. Also, respondent’s actions is
personal money. limited by the written standard authority to pay, where such
payment must be taken from the revolving fund, which the
respondent failed to do so.
29. Nielson & b. Lease of Lepanto Consolidated Mining Company W/N the management NO. It is a contract of lease of service.
Company, Inc. v. Work or Service seeks the reconsideration of the Supreme contract was a contract of In both agency and lease of services one of the parties binds
Lepanto (Art. 1644, NCC) Court’s decision rendered back in 1966 agency. himself to render some service to the other party. Agency,
Consolidated asserting that the Court failed to apply the however, is distinguished from lease of work or services in that
Mining Company proper law applicable to the contract it has the basis of agency is representation, while in the lease of
with Nielson & Company Inc. Lepanto work or services the basis is employment. The lessor of
contends that the contract between them is services does not represent his employer, while the agent
NO.
G.R. No. L-21601 a contract of agency making it have the right represents his principal. Agency is a preparatory contract, as
December 17, 1968 to revoke and terminate said contract. It agency "does not stop with the agency because the purpose is
ZALDIVAR, J.: also adds that it is a contract of agency to enter into other contracts." The most characteristic feature
because Nielson operated the mine on of an agency relationship is the agent's power to bring about
behalf of Lepanto and Nielson also business relations between his principal and third persons.
represented Lepanto in entering into "The agent is destined to execute juridical acts (creation,
contracts for the hiring of laborers. modification or extinction of relations with third parties).
Lease of services contemplate only material (non-juridical)
acts."
30. De la Cruz v. b. Lease of Northern Theatrical Enterprises Inc. WON De la Cruz was an NO. We agree with the trial court that the relationship
Northern Theatrical Work or Service employed Domingo De la Cruz as a special agent of Northern between the movie corporation and the plaintiff was not that
Enterprises (Art. 1644, NCC) guard whose duties were to guard the main Theatrical Enterprises and of principal and agent because the principle of representation
[No. L-7089. August entrance of the cine, to maintain peace and that as such agent he was was in no way involved. Plaintiff was not employed to
31, 1954] order and to report the commission of entitled to reimbursement represent the defendant corporation in its dealings with third
MONTEMAYOR, disorders within the premises. In the of the expenses incurred parties. He was a mere employee hired to perform a certain
J.:36 afternoon of July 4, 1941, one Benjamin by him in connection with specific duty or task, that of acting as special guard and staying
Martin wanted to crash the gate or entrance the agency at the main entrance of the movie house to stop gate crashers
of the movie house. Infuriated by the refusal and to maintain peace and order within the premises.
of plaintiff De la Cruz to let him in without
first providing himself with a ticket, Martin
attacked him with a bolo. De la Cruz
defended himself as best he could until he
was cornered, at which moment to save
himself he shot the gate crasher, resulting in
the latter's death. De la Cruz was charged
with homicide. After trial, he was finally
acquitted of the charge. In both criminal
cases De la Cruz employed a lawyer to
defend him. He demanded from his former
employer reimbursement of his expenses
but was refused. Plaintiff argued that he was
an agent of the defendants and that as such
agent he was entitled to reimbursement of
the expenses.
NO.
31. Fressel v. Mariano c. Independent MARIANO UY CHACO SONS & COMPANY Whether the relationship No. Meritt is an independent contractor. Where one party to a
Uy Chaco & Co. Contractor (Art. (MUCSC) entered into a contract with one E. of Meritt and MUCSC is contract was authorized to do work according to his own
[No. 10918. March 1713, NCC) Merritt to build a costly edifice in the city of that of a principal and an method and without being subject to the other party's control,
4, 1916.] Manila. In the contract, it was agreed agent? except as to the result of the work, he is an independent
TRENT, J.; between the parties, that MUCSC at any contractor and not an agent.
time, upon certain contingencies, before the
completion of said edifice, could take
possession of said edifice during
construction and of all the materials in and
about said premises acquired by Merritt for
the construction of said edifice. WILLIAM
FRESSEL, ET AL (William) delivered to Merritt
certain materials of the value of P1,381.21
which MUCSC took possession of. Neither
Merritt nor MUCSC has paid for the
materials although payment has been
demanded. In pursuance of the contract
between Merritt and the MUCSC, William
claims that Merritt acted as the agent for
defendant in the acquisition of the materials
from them.
32. Shell Company of c. Independent A car was brought to a Shell gasoline station WON the operator is an No. Where the operator of a gasoline and service station owed
the Phil. v. Contractor (Art. owned by Dela Fuente for washing and independent contractor his position to the company and the latter could remove him
Firemen’s 1713, NCC) greasing. The car was placed on a hydraulic and not an agent of the or terminate his services at will; that the service station
Insurance, lifter for greasing. As some parts of the car company belonged to the company and bore its tradename and the
G.R. No. L-8169, couldn’t be reached by the greaseman, the operator sold only the products of the company; that the
January 29, 1957 lifter was lowered. Unfortunately, for equipment used by the operator belonged to the company
PADILLA, J. unknown reasons (probably due to and were just loaned to the operator and the company took
mechanical failure or human error), while charge of their repair and maintenance; that an employee of
the lifter was being lowered, the car swung the company supervised the operator and conducted periodic
and fell from the platform. Said car was inspection of the company’s gasoline and service station; that
insured against loss or damage by Firemen's the price of the products sold by the operator was fixed by the
Insurance Company of Newark, New Jersey, company and not by the operator; and that the receipts signed
and Commercial Casualty Insurance by the operator indicated that he was a mere agent.
NO.
Company jointly for the sum of P10,000. The

insurance companies after paying the sum
of P1,651.38 for the damage and charging
the balance of P100.00 to Salvador Sison, in
accordance with the terms of the insurance
contract, filed this action together with said
Salvador Sison for the recovery of the total
amount of the damage from the defendants
on the ground of negligence.
33. Africa v. Caltex c. Independent It appears that in the afternoon of March 18, Whether the operator of Under the license agreement the operator would pay Caltex
Phil., Inc. Contractor (Art. 1948 a fire broke out at the Caltex service the gasoline station was the purely nominal sum of P1.00 for the use of the premises
No. L-12986. March 1713, NCC) station at the corner of Antipolo street and an independent and all equipment therein. The operator could sell only Caltex
31, 1966. Rizal Avenue, Manila. It started while contractor or an agent of products. Maintenance of the station and its equipment was
MAKALINTAL., J.: gasoline was being hosed from a tank truck Caltex. subject to the approval, in other words control, of Caltex. The
into the underground storage, right at the operator could not assign or transfer his rights as licensee
opening of the receiving tank where the without the consent of Caltex. Termination of the contract was
nozzle of the hose was inserted. The fire a right granted only to Caltex but not to the operator. These
spread to and burned several neighboring provisions of the contract show that the operator was virtually
houses, including the personal properties an employee of the Caltex, not an independent contractor.
and effects inside them. Their owners, Hence, Caltex should be liable for damages caused to
among them petitioners here, sued appellants.
respondents Caltex (Phil.), Inc. and Mateo
Boquiren, the first as alleged owner of the
station and the second as its agent in charge
of operation. Negligence on the part of both
of them was attributed as the cause of the
fire. The trial court and the Court of Appeals
found that petitioners failed to prove
negligence and that respondents had
exercised due care in the premises and with
respect to the supervision of their
employee.
NO.
34. De la Peña v. d. Negotiorum Dela Peña’s property was being Whether or not there is The person who took charge of the administration of property
Hidalgo Gestio (Arts. administered by Peña y Gomiz. Later, implied agency? without express authorization and without a power of
[No. 5486. August 2144–2145, NCC) Frederico Hidalgo took charge of the attorney executed by the owner thereof, and performed the
17, 1910.] administration of said property through the duties of his office without opposition or absolute prohibition
TORRES, J..' designation by Peña y Gomiz who had to on the owner's part, expressly communicated to the said
absent himself from the place for reasons of person, is concluded to have administered the said property
health. Dela Peña did not oppose the by virtue of an 'implied agency, in accordance with the
designation of Hidalgo nor did Dela Peña provisions of article 1710 of the Civil Code, since the said
appoint a new agent although the owner of the property, knowing perfectly well that the said
designation was expressly communicated to person took charge of the administration of the same, through
him. He remained silent for nearly nine designation by such owner's former agent who had to absent
years allowing Hidalgo to take charge of the himself from the place for well-founded reasons, remained
property. It must be concluded that Hidalgo silent for nearly nine years. Although he did not send a new
acted by virtue of an implied agency power of attorney to the said person who took charge of his
equivalent to a legitimate agency, tacitly property, the fact remains that, during the period stated, he
conferred by Dela Peña. neither opposed nor prohibited the new agent with respect to
the administration, nor did he appoint another person in his
confidence; wherefore it must be concluded that this new
agent acted by virtue of an implied agency, equivalent to a
legitimate agency, tacitly conferred by the owner of the
property administered.
It is improper to compare the case where the owner of the
property is unaware of the officious management of a third
party in the former's interests, with the case where, having
perfect knowledge that his interests and property were so
being managed and administered, he did not object, but in
fact consented to such management and administration for
many years; for the reason that an administration by virtue of
an implied agency derives its origin from a contract, and the
management of another's business without the knowledge of
the owner thereof, is based solely on a quasi-contract.
2 C.J.S. 1030 e. Loan (Art. From De Leon:
1933, NCC) Agency distinguished from loan.
NO.
Whether in a particular case the relation between the parties is one of lender and borrower or principal and agent depends on the terms of
the contract between them and their intention.
(1) Where money advanced to another is expressly regarded as money lent, no agency results. One who borrows money to conduct a
business in which the lender has no interest or concern in the manner of its conduct is not an agent of the lender, but the financing of
operations to be carried on by another for the mutual advantage of both, without any obligation of such other to return the money
advanced, makes such other an agent rather than a borrower. (2 C.J.S. 1030.)
(2) An agent may be given funds by the principal to advance the latter’s business, while a borrower is given money for purposes of his own
and he must generally return it whether or not his own business is successful. A lot, however, depends on the intent of the parties. (see
Ibid.)
35. Jai Alai Corp. v. BPI e. Loan (Art. Checks were deposited by petitioner in its Whether the respondent In our opinion, the respondent acted within legal bounds
No. L-29432. 1933, NCC) current account with the bank. These had the right to debit the when it debited the petitioner’s account. Where check is
August 6, 1975. checks were from a certain Ramirez, a petitioner’s current deposited with a collecting bank relationship created is that of
CASTRO, J.:40 consistent better in its games, who was a account in the amount agency, not creditor-debtor. Same rule follows where after
sales agent from Inter-Island Gas. Inter- corresponding to the total drawee-bank paid the collecting bank, it was found that
Island later found out that of the value of the checks in signature of payee of checks was forged by one who
forgeries committed in the checks and question after more than previously encashed them.
thus, it informed all the parties concerned. three months had elapsed
Upon the demands on the bank as the from the date their value
collecting bank, it debited the account of was credited to the
petitioner. Thereafter, petitioner tried to petitioner’s account
issue a check for payment of shares of
stock but such was dishonored for
insufficient funds. It filed a complaint
against the bank.
https://batasnatin.com/law-
library/mercantile-law/jurisprudence1/938-
jai-alai-v-bpi-66-scra-29.html
36. Quiroga v. Persons f. Sale (Art. 1458, On January 24, 1911, a contract was entered Whether the defendant, The defendant is a PURCHASER. The contract is one of
Hardware NCC) into between plaintiff and defendant (to by reason of the contract purchase and sale, and not of commercial agency. For the
[No. 11491. August whose rights and obligations the present hereinbefore transcribed, classification of contracts, due regard must be paid to their
23, 1918.] defendant later subrogated itself), with the was a purchaser or an essential clauses. In the contract in the instant case, what was
AVANCENA, J.: obligation, on the part of the defendant, not agent of the plaintiff for essential, constituting its cause and subject matter, was that
to sell the beds at higher prices than those the sale of his beds the plaintiff was to furnish the defendant with the beds which
NO.
of the invoices; to have an open the latter might order, at the stipulated price, and that the
establishment in Iloilo; itself to conduct the defendant was to pay this price in the manner agreed upon.
agency; to keep the beds on public These are precisely the essential features of a contract of
exhibition, and to pay for the advertisement purchase and sale. There was the obligation on the part of the
expenses for the same; and to order the plaintiff to supply the beds, and, on that of the defendant, to
beds by the dozen and in no other manner. pay their price. These features exclude the legal conception of
With the exception of the obligation on the an agency or order to sell whereby the mandatary or agent
part of the defendant to order the beds by receives the thing to sell it, and does not pay its price, but
the dozen and in no other manner, none of delivers to the principal the price he obtains from the sale of
the obligations imputed to the defendant in the thing to a third person, and if he does not succeed in
the causes of action are expressly set forth selling it, he returns it.
in the contract. But the plaintiff alleged that The testimony of the person who drafted this contract, to the
the defendant was his agent for the sale of effect that his purpose was to be an agent for the beds and to
his beds in Iloilo, and that said obligations collect a commission on the sales, is of no importance to prove
are implied in a contract of commercial that the contract was one of agency, inasmuch as the
agency. agreements contained in the contract constitute, according to
law, covenants of purchase and sale, and not of commercial
https://www.scribd.com/document/359758 agency. It must be understood that a contract is what the law
629/Quiroga-v-Parsons defines it to be, and not what it is called by the contracting
parties.
37. Gonzalo Puyat and f. Sale (Art. 1458, Gonzalo Puyat and Sons, Inc. (Puyat) was the WON the contract YES. The contract is the law between the parties and should
Sons v. Arco NCC) exclusive agent of Starr Piano Company between the petitioner include all the things they are supposed to have been agreed
Amusement Co. (Indiana, USA; Starr) in the Philippines. Arco and the respondent was upon. What does not appear on the face of the contract
[No. 47538. June Amusement Company (Arco) sought to one of purchase and sale, should be regarded merely as "dealer's" or "trader's talk",
20, 1941] purchase musical instruments from Starr via and not one of agency which can not bind either party. (Nolbrook v. Conner, 56 So.,
LAUREL, J.: Puyat. Under the agreement between Puyat 576; 11 Am. Rep., 212; Bank v. Brosscell, 120 111., 161; Bank v.
and Arco, the latter will pay cost, plus 10% Palmer, 47 111., 92; Hosser v. Copper, 8 Allen, 334; Doles v.
commission, and shall bear related costs and Merrill, 173 Mass., 411.) The letters, Exhíbits 1 and 2, by which
taxes. Arco placed and received two orders. the respondent accepted the prices of $1,700 and $1,600,
However, Arco later learned that Puyat was respectively, for the sound reproducing equipment subject of
able to obtain 25% discount from Starr. Arco its contract with the petitioner, are clear in their terms and
thus believed that it made overpayments to admit of no other interpretation than that the respondent
Puyat. The buyer filed an action to secure agreed to purchase from the petitioner the equipment in
reimbursement of alleged overpayments. question at the prices indicated which are fixed and
NO.
The RTC absolved Puyat, holding that the determinate. The respondent admitted in its complaint filed
contract between the parties was one of with the Court of First Instance of Manila that the petitioner
purchase and sale. The CA reversed, finding agreed to sell to it the first sound reproducing equipment and
an agent-principal relationship between the machinery.
parties. The SC reversed.
https://misguidedtheory.wordpress.com/20
20/06/28/puyat-vs-arco-amusement-co/
38. Far Eastern Export f. Sale (Art. 1458, Ignacio Delizalde, an agent of the Far Whether or not there was NO. Where a foreign company has an agent here selling its
& Import Co. vs. NCC) Eastern Export & Import Company, went to a contract of agency. goods and merchandise, that same agent could not very well
Lim Teck Suan, the store of Lim Teck Suan in Manila and act as agent for local buyers, because the interests of his
citing Velasco v. offered to sell textile. Having arrived at an foreign principal and those of the buyers would be in direct
Universal Trading agreement with Bernardo Lim, General conflict. He could not serve two masters at the same time.
Co. Manager of Lim Teck Suan, Delizalde
[No. L-7144. May returned with a buyer’s order. Suan
31, 1955] established a letter of credit in favour of
MONTEMAYOR, J.: Frenkel International Corporation through
HSBC. The textile arrived and was received
by Suan, but complained to Far Eastern of
the inferior quality of the textile. Upon the
instruction of Far Eastern, Suan deposited
the goods in a warehouse and withdrew the
same and was offered for sale. The net
direct loss is now being claimed against Far
Eastern. The defense set up is that Far
Eastern only acted as a broker in this
transaction. The lower court ruled in favor
of Far Eastern. CA reversed the judgment,
basing its decision of reversal on the case of
Jose Velasco v. Universal Trading where the
transaction therein involved was found by
the court to be one of purchase and sale and
not of brokerage or agency.
38.1 Velasco v. Universal
Trading Co.
NO.
39. Pearl Island f. Sale (Art. 1458, Manila Surety & Fidelity Co., Inc. (surety) Is the contract between The contract is partly agency and partly purchase and sale.
Commercial Corp. NCC) contends that it should not be held liable on Pearl Island and Lim Tan While the contract is not entirely clear, Manila Surety must
v. Lim Tiang Tong its bond for the reason that the latter was Tong one of agency so have understood the same to be one, at least partly, of agency
[No. L-10517. June filed on the theory that the contract that breach thereof would because (a) it also designates Tong as a sole distributor and (b)
28, 1957] between Pearl Island Commercial come within the terms of the bond itself says that Tong “has been appointed exclusive
MONTEMAYOR, J.: Corporation (manufacturer of floor wax) and the surety bond posted by agent” for Pearl. Whether the article was purchased by Tong
Lim Tan Tong (Pearl Island’s sole distributor Manila Surety? or whether it was consigned to him is immaterial. The contract
of said article in certain specified provinces) provides that A was to furnish surety bond to cover all
was one of agency as a result of which it shipments made by Pearl to Tong. It appeared to have been
guaranteed the faithful performance of Tong the sole concern and interest of Pearl to be sure that it was
as agent, but that it turned out that said paid the value of all shipments of the article to Tong, and
contract was one of purchase and sale, as Manila Surety, by its bond, guaranteed its payment by Tong,
shown by the very title of said contract, either as purchaser or agent.
namely, “contract of purchase and sale.”
However, the contract shows that while it
provides for sale of the floor wax from Pearl
Island to Tong, it also designates Tong as the
sole distributor of the article within a certain
territory; besides, the contract provides that
Tong is to furnish surety bond to cover all
shipments made by Pearl Island to him.
Source: De Leon
40. Lim v. People f. Sale (Art. 1458, Lourdes Lim (appellant) went to the house Whether the receipt, There is no contract of sale, but mere agency to sell, where
No. L-34338. NCC) of Maria Ayros (appellee) and proposed to Exhibit “A”, is a contract agreement was to pay over to tobacco owner the proceeds
November 21, sell the latter’s tobacco. Ayroso agreed to of agency to sell or a thereof as soon as it was sold. The fact that appellant received
1984. sell her tobacco consisting of 615 kilos at contract of sale of the the tobacco to be sold at P1.30 per kilo and the proceeds to be
RELOVA, J.: P1.30 a kilo. Lim was to receive the subject tobacco between given to complainant as soon as it was sold, strongly negates
overprice for which she could sell them. petitioner and the transfer of ownership of the goods to the petitioner. The
They made a written agreement which complainant, Maria de agreement (Exhibit “A”) constituted her as an agent with the
states that the proceed will be given to Guzman Vda. de Ayroso, obligation to return the tobacco if the same was not sold.
Ayroso as soon as it was sold. The thereby precluding
agreement reads: To Whom It May Concern: criminal liability of
This is to certify that I have received from
NO.
Mrs. Maria de Guzman Vda. de Ayroso. of petitioner for the crime

Gapan, Nueva Ecija, six hundred fifteen kilos charged
of leaf tobacco to be sold at Pl.30 per kilo.
The proceed in the amount of Seven
Hundred Ninety Nine Pesos and 50/100 (P
799.50) will be given to her as soon as it was
sold. Of the total value of P799.50 , Lim had
paid to Ayroso only P240.00, and this was
paid in three different times. Lim failed to
pay in full and return the goods. As no
further amount was paid, Ayroso filed a
complaint for estafa. As a defense, Lim
argues that the agreement was a contract of
sale, not of agency to sell. The trial court
found Lim guilty. The CA affirmed. Hence,
this appeal.
41. Green Valley f. Sale (Art. 1458, In 1969, GREEN VALEY POULTRY AND ALLIED Whether the case involves YES. We do not have to categorize the contract. Whether
Poultry & Allied NCC) PRODUCTS entered into a letter agreement a contract of sale viewed as an agency to sell or as a contract of sale, the liability
Products, Inc. v. IAC with SQUIBB & SONS PHILIPPINE of Green Valley is indubitable. Adopting Green Valley’s theory
No. L-49395. CORPORATION. The details of the that the contract is an agency to sell, it is liable because it sold
December 26, agreement state that Green Valley will be on credit without authority from its principal. The commission
1984. the nonexclusive distributor of the products agent cannot, without the express or implied consent of the
ABAD SANTOS, J.: of Squibb Veterinary Products. As its principal, sell on credit. Should he do so, the principal may
distributor, Green Valley is entitled to 10% demand from him payment in cash, but the commission agent
discount on Squibb’s whole sale price and shall be entitled to any interest or benefit, which may result
catalogue price. Green Valley is also limited from such sale. (Art. 1905, N.C.C.)
to selling Squibb’s products to central and
northern Luzon. Payment for purchases De Leon: He may ratify the sale on credit in which case it will
from Squibb will be due 60 days from date have all the risks and advantages to him.
of invoice, etc. For goods delivered to Green
Valley but unpaid, Squibb filed a suit to
collect. Squibb argues that their relationship
with Green Valley is a mere contract of sale
NO.
as evidenced by the stipulation that Green

Valley was obligated to pay for the goods
received upon the expiration of the 60-day
credit period. Green Valley counters that the
relationship between itself and Squibb is
that of an agency to sell; hence it is not
liable to Squibb. Trial court and CA ruled in
favor of Squibb, it ruled that the agreement
between the parties was a sales contract.
149/Green-Valley-vs-IAC
42. Bert Osmeña & f. Sale (Art. 1458, In 1971, a Contract of Sale over Lots 1 and 2 Whether Osmeña & NO. Petitioner’s plea for exception from liability for damages
Associates v. CA NCC) for a total price of P15, 200 was executed in Associates is an agent of on the ground that it was a mere agent of the Siguenzas is
No. L-56545. favor of the Quimbo spouses; the sellers the Siguenza in the sale of untenable. The contract of sale describes petitioner as seller
January 28, 1983. were Bert Osmeña & Associates, the the said lots? together with the Siguenzas. In fact, petitioner was the lone
MELENCIO- developer of the subdivision, and Carmen signatory for the sellers in said contract.
HERRERA, J.: and Helena Siguenza, owners of the
property. Antonio Osmeña signed the
contract on behalf of the company and one
C. Siguenza as the witness. On the pretext
that a road would traversed the said lots,
Helena Siguenza proposed to exchange the
said lots to Lot 409, which the spouses
hesitatingly agreed. After a few years, no
title was given to the spouses, and later
found out that the said lots were sold to
another person. Seeking for damages, the
spouses Quimbo filed a suit for Damages in
RTC, which ruled in favor of the spouses. The
CA, likewise, affirmed the judgment, hence
this case.
NO.
https://daisycherise.wordpress.com/2016/0
2/09/case-article-1297/
2 C.J.S. 1034 g. Trusteeship From De Leon:
(Art. 1440, NCC) Agency distinguished from trust.
The essential distinctions between a trust and an agency are found ordinarily in the fact that in a trust, the title and control of the property
under the trust instrument passes to the trustee who acts in his own name, while the agent represents and acts for his principal and in the
further fact that while a trust may ordinarily be terminated only by the fulfillment of its purpose, an agency may in general be revoked at
any time. (2 C.J.S. 1034.)
43. Pacific Commercial h. Broker Pacific sold for the account of Victoria WON the plaintiff acted as YES. The plaintiff merely acted as a commercial broker as to
Co. v. Yatco Milling Co. refined sugar up to the total a mere commercial broker the sale of the sugar delivered to the purchaser on board. The
G.R. No. L-45976 amount of Php1 million. Pacific received by as to the sugar delivered broker, unlike the commission merchant, has no relation with
July 20, 1939 way of commission Php29,000. Victoria ex-ship the thing he sells or buys. He is merely an intermediary
Avancena, C.J Milling paid merchant sales tax in capacity between the purchaser and the vendor. He acquires neither
as manufacturer and owner of the sugar the possession nor the custody of the things sold. His only
sold. Likewise, Pacific paid tax also. office is to bring together the parties to the transaction. These
There were 2 ways in which Pacific made the circumstances are present in connection with the plaintiff's
sales of sugar after looking for purchases sale of the sugar which was delivered to the purchaser on
and sending the purchase order to Victoria board. The sugar sold under these conditions was shipped by
Milling: 1) the purchase is made for the the plaintiff at its expense and risk until it reached its
delivery of the sugar ex-warehouse - sugar is destination, where it was later taken on board by the
first deposited in the warehouse of Pacific purchaser. The plaintiff never had possession of the sugar at
before delivery to the purchaser; and any time. The circumstance that the bill of lading was sent to
2) the purchase is made for the delivery ex- the plaintiff does not alter its character of being merely a
ship - Pacific would simply hand over the bill broker, or constitute possession by it of the sugar shipped,
of lading to the purchaser and collect the inasmuch as the same was sent to it for the sole purpose of
price. CFI Manila ruled that in the first case, turning it over to the' purchaser for the collection of the price,
Pacific acted as a commission merchant; in The sugar did not come to its possession in any sense.
the second case as a broker - ordered Yatco
to return to Pacific the amount collected De Leon: On the other hand, a broker has no relation with the
from it by way of tax on the sale of sugar to thing he buys or sells. He is merely an intermediary or
be delivered ex-ship and denied prayer for negotiator between the purchaser and the vendor relative to
return of amount paid for the sales of sugar the property with the custody or possession of which he has
to be delivered ex-warehouse. no concern. His only office is to bring together the parties to
NO.
https://www.scribd.com/document/422345 the transaction never acting in his own name but in the name
370/17-Pacific-Commercial-Co-v-Yatco of those who employed him.
2 C.J.S. 1027 i. From De Leon:
Guardianship Agency distinguished from guardianship.
The distinctions are:
(1) While the agent derives his authority from his principal, the guardian, although he acts for and on behalf of his ward, does not derive his
authority so to act from the ward (2 C.J.S. 1027.);
3 AmJur 2d 421 i. From De Leon:
Guardianship Agency distinguished from guardianship.
The distinctions are:
(4) A legal guardian is substituted by law, while ordinarily an agent is the appointee of the principal and his power may at any time be
abrogated or modified by the principal (see 3 Am. Jur. 2d 421.);
44. Fessenden v. Jones i. The plaintiff, who was a physician, declared WON a guardian who calls YES. A guardian is not in the condition of an ordinary agent or
52 N.C. 14 (N.C. Guardianship for medicines and medical services rendered in a physician to the slave factor, and therefore the same legal relations, in all respects,
1859) to a slave, the property of a ward of the of his ward can rightfully do not subsist between them and those whom they
Dec 1, 1859 defendant. The proof was that the plaintiff be charged with and made respectively represent. The former represents one who has no
MANLY, J. was called to attend the slave in question by responsible for the legal capacity to contract for himself; the latter, one fully able
persons having authority from the medicines and services to contract and bind where he presents. The former is
defendant, and that the plaintiff looked to rendered. substituted by the law, and stands in loco parentis. The latter
the defendant for payment when the is the appointee of his principal, and that principal can, at any
medicines were furnished and the services moment, abrogate or modify his powers.
rendered. This want of analogies between the two, in the sources and
The defendant contended that, as it was limits of their powers, makes it obvious there can be no
known to the plaintiff to whom the slave complete analogy between them as to liabilities or
belonged, the charge should have been exemptions.
made against the ward, and the action
brought against him. But the court thought
otherwise, and charged the jury upon the
facts proved that the plaintiff was entitled to
recover. Defendant's counsel excepted.
45. McDonald v. Spring i. The seven-year-old minor Margaret Whether or not appellant, YES. On review, the court reversed the appellate court's
Valley Guardianship McDonald was injured in June of 1916 in a a minor by her next friend, judgment and affirmed the judgment of the trial court. The
No. 12174 building constructed by the city as a place of may seek review of the court held that the statute in question was a general statute,
Oct. 21, 1918 amusement. The minor lost her third finger order of the Appellate which was to be read in conjunction with rules of law that had
NO.
Justice Cooke in her left hand. In March 1917, with the Court for the Second become well established. One such rule of law was the rule
assistance of her next friend Patrick District (Illinois), which that the status of a minor was recognized at law as being
McDonald , she filed a statement in the city entered judgment in favor different than that of an adult. Extrapolating from that
offices stating the time, place, and other of appellee city reasoning, the court ruled that the notice statute was
details of her injury. The minor filed a suit in intended to apply only to those who were mentally and
trespass alleging that the city's negligence physically able to comprehend and comply with its terms.
led to the loss of the third finger of her left It cannot be controverted that a minor is incapable of
hand. The city demurred to the minor's suit appointing an agent or an attorney, and it cannot be
on the grounds that the minor did not successfully contended that the statute can be complied with
comply with required notice of her injury by the filing of the required notice by the father, mother or
within six months. The jury in the trial court some friend of the child as next friend. While the parent of a
entered judgment for the minor, but the minor is its natural guardian, he cannot be said to be the agent
appellate court reversed. or attorney for the child. A child with a meritorious cause of
action but incapable of initiating any proceeding for its
https://www.scribd.com/document/262299 enforcement will not be left to the whim or mercy of some
885/McDonald-v-Spring-Valley-120-N-E-476- self-constituted next friend to enforce its rights.
2-ALR-1355-Case-Digest
2 C.J.S. 1027 j. Bailment From De Leon:
Agency distinguished from bailment.
While a bailment is frequently incident to the relation of principal and agent, as for example, where property is entrusted to another with
authority to sell, ordinarily in cases of bailment, the relation of principal and agent does not exist as the bailor has no control over the
bailee beyond what is given him by contract, and is not responsible to others for his acts. A bailee over whose actions the bailor has no
control is not an agent, even though he acts for the benefit of the bailor, and a bailee acting on behalf of himself and whose interests are
antagonistic to those of his bailor cannot be the agent of the bailor. (2 C.J.S. 1027.)
46. Switzerland k. Ship Agent On December 24, 1975, the petitioner filed Whether Citadel Lines, NO. A ship agent, according to Article 586 of the Code of
General Insurance an admiralty case against Oyama Shipping Inc. is not ship agent but a Commerce, is “the person entrusted with the provisioning of a
Co., Ltd. v. Ramirez Co., Ltd. and its agent Citadel Lines, Inc. mere agent and hence, vessel, or who represents her in the port in which she happens
No. L-48264. through the petitioner’s agent F.E. Zuellig, not liable. to be.” (Italics supplied).
February 21, 1980. Inc. The complaint alleged that on It is not disputed by the private respondent that it is the local
ANTONIO, J.: December 21, 1974, 60,000 bags of urea representative in the Philippines of the Oyama Shipping Co.,
nitrogen were shipped from Ninama, Japan Ltd. and, as alleged by petitioner, upon arrival of the vessel S/S
on board the S/S St. Lourdes, owned and “St. Lourdes” in Manila, it took charge of the unloading of the
operated by Citadel Lines, Inc. and insured cargo and issued cargo receipts (or tally sheets) in its own
by the petitioner for the sum of Php name, for the purpose of evidencing discharge of cargoes and
NO.
9,319,105.00 against all risks. The shipment the conditions thereof from the vessel to the arrastre
was discharged from the vessel S/S St. operators and/or unto barges/lighters, and that claims against
Lourdes shipside into lighters owned by the vessel S/S “St. Lourdes” for losses damages sustained by
Mabuhay Brokerage Company, Inc. but shipments were in fact filed and processed by respondent
when the same was subsequently delivered Citadel Lines, Inc. These facts point to the inevitable
to and acknowledged by the consignee, it conclusion that private respondent is the entity that
was found out to have sustained losses and represents the vessel in the port of Manila and hence is a ship
or damage amounting to Php 38,698.94. The agent within the meaning and context of Article 586 of the
amount was paid by petitioner insurance Code of Commerce.
company to the consignee by virtue of which
payment became subrogated to the rights of
the latter.
515/Switzerland-General-Insurance-vs-
Ramirez
47. Rallos v. Yangco b. Apparent or Yangco sent a letter to Rallos informing that WON Yangco is liable for Yes. The defendant having advertised the fact that Collantes
[No. 6906. Ostensible he has opened in his steamship office “a Collantes’ conversion? was his agent, having given special notice to the plaintiffs of
September 27, Agency (Art. shipping and commission department for the agency, and having also given them a special invitation to
1911.] 1873, NCC) buying and selling leaf tobacco and other deal with such agent, it became the defendant's duty, upon
MORELAND, J.: native products” and that he had conferred the termination of the relationship of principal and agent, to
upon Collantes a public power of attorney give due and timely notice thereof to the plaintiffs. The
“to perform in my name and on my behalf general rule is that, when the relationship of principal and
all acts necessary for carrying out my plans” agent is established, and the principal gives notice of the
with a request to “make due note of his agency and holds out the agent as principal to give due and
(Collantes’) signature hereto affixed.” timely notice thereof, otherwise, he will be held liable to third
Accepting the invitation, Rallos proceeded to parties acting in good faith and properly relying upon such
do a considerable business with Yangco agency.
through Collantes, as his factor. Collantes
converted to his own use part of the Casis:
proceeds from the sale of tobacco leaf The Court ruled that the principal had the duty to give due and
which were sent by Rallos to Collantes. Prior timely notice to such third persons of the termination of the
to the sending of said tobacco, Yangco had relationship and the principal is responsible to third persons
severed his relations with Collantes, which for whatever goods may have been in good faith and without
NO.
fact was not known to Rallos and no notice negligence sent to the agent without knowledge, actual or
of any kind was given to Rallos of the constructive, of the termination of such relationship.
termination of the relations between Yangco
and Collantes.
Source: De Leon
48. Compañia General b. Apparent or Gutierrez had been an agent of the plaintiff WON plaintiff is liable for YES. The principal was liable to one, for merchandise sold and
de Tabacos v. Diaba Ostensible La Compañia General de Tabacos de Filipinas merchandise sold to delivered to the agent, who had not received notice of the
[No. 6530. October Agency (Art. in buying and selling merchandise for and on Gutierrez after alleged termination of such agency, following the decision in Rallos vs.
6, 1911.] 1873, NCC) behalf of the plaintiff, for a period of eight termination of agency. Yangco (20 Phil. Rep., 269).
JOHNSON, J.: years. Gutierrez 's agency was terminated by
the plaintiff but no notice of such fact was
given to the people who had for years
theretofore been selling merchandise to
him.
2 C.J. 444-445 c. Agency by From Paras:
Estoppel Agency by Estoppel Distinguished from Implied Agency
(a) As between the principal and the agent:
1) In an implied agency, the agent is a true agent, with rights and duties of an agent.
2) In an agency by estoppel (caused for instance by estoppel on the part of the agent), the “agent” is not a true agent; hence he has no
rights as such. (See 2 C.J. 444-445).
(b) As to third persons:
1) If the estoppel is caused by the principal, he is liable, but only if the third person acted on the misrepresentation; in an implied agency, the
principal is always liable. (See 2 C.J. 444-445).
2) If the estoppel is caused by the agent, it is only the agent who is liable, never the alleged principal; in an implied agency, the agent is
never personally liable.
c. Agency by
2 C.J. 464-466
Estoppel
49. Macke v. Camps, 7 c. Agency by Macke and Chandler are business partners WON Jose Camps is liable YES. If the estoppel is caused by the principal, he is liable to
Phil. 553 Estoppel under the firm name of Macke, Chandler & for unpaid balance for any third person who relied on the misrepresentation. One
G.R. No. 2962. Company. They sold various goods for the payment of goods shipped who clothes another with apparent authority as his agent, and
February 27, 1907 Washington Café to Ricardo Flores, who by the plaintiffs. holds him out to the public as such, cannot be permitted to
CARSON, J.:50 represented himself as the agent of Jose deny the authority of such person to act as his agent to the
Camps. Flores paid a P174 leaving a balance prejudice of innocent third parties dealing with such person in
NO.
and informed them that he does not have good faith and in the honest belief that he is what he appears
the necessary funds on hand and that he to be.
would have to wait for the return of Jose
Camps. However, Jose Camps failed to pay
the said balance denying the authority of
Flores. A written contract was introduced as
evidence. The written contract shows that
Galmes (owner of the building) had
subrented the building where the business
was conducted which Jose Camps signed as
“sublessee” and Ricardo Flores’ signed as
“managing agent.”
930/Macke-v-Camps-Digest
50. Conde v. CA - Implied On 7 April 1938, Margarita Conde, Bernardo WON there was an YES. If, as opined by both the Court a quo and the Appellate
No. L-40242. Manifestation of Conde and Dominga Conde, as heirs of implied agency when Court, petitioner had done nothing to formalize her
December 15, Mandate Santiago Conde, sold with right to Cordero signed the repurchase, by the same token, neither have the vendees-a-
1982. repurchase, within 10 years from said date, Memorandum of retro done anything to clear their title of the encumbrance
MELENCIO- a 1 hectare parcel of agricultural land Repurchase. therein regarding petitioner’s right to repurchase. No new
HERRERA, J.: situated in Burauen, Leyte to Casimira agreement was entered into by the parties as stipulated in the
Pasagui and Pio Altera for P165. Three years deed of pacto de retro, if the vendors a retro failed to exercise
later, Original Certificate of Title No. N-534 their right of redemption after ten years. If, as alleged,
covering the land in question was issued in petitioner exerted no effort to procure the signature of Pio
the name of the Alteras subject to the Altera after he had recovered from his illness, neither did the
stipulated right of repurchase by the Alteras repudiate the deed that their son-in-law had signed.
Condes. On 28 November 1945, Paciente Thus, an implied agency must be held to have been created
Cordero, son-in-law of the Alteras and their from their silence or lack of action, or their failure to repudiate
representative, signed a document in Bisaya the agency.
stating that the Memorandum of
Repurchase got lost during World War II
despite all diligent searches being made;
that the two parcels of land were inherited
by the Condes; that Eusebio Amarille was
authorized by the Condes to repurchase the
NO.
land; that they received P165 in

consideration of the sale; and that the
Condes, by virtue of the repurchase, shall
repossess the said parcels of land. Neither
the vendees-a-retro, Pio Altera nor Casimira
Pasagui, were signatories to that document.
Many years later, the pacto de retro
document was found. In June 1965, Pio
Altera sold the disputed lot to Ramon and
Catalina Conde, whose relationship to
Dominga does not appear on record.
Consequently, in 1969, Dominga filed with
the CFI of Leyte a complaint for quieting of
title and declaration of ownership against all
the respondents. The trial court dismissed
the complaint and ordered Dominga to
vacate the premises and to deliver the
disputed land to respondents. The Court of
Appeals affirmed the decision and ruled that
Dominga failed to validly exercise her right
to repurchase because the Memorandum of
Repurchase was not signed by the Alteras
but by Paciente, who was not authorized to
sign for the said vendees-a-retro.
http://casedigestonline.blogspot.com/2015/
04/dominga-conde-vs-ca.html
51. Jimenez v. Rabot Implied This action was instituted by Gregorio WON the authority YES. Where the owner of real property desires to confer upon
No. 12579. July 27, Manifestation of Jimenez to recover from the defendant, conferred on Nicolasa by an attorney in fact authority to sell the same, it is necessary
1918. Acceptance (Arts. Pedro Rabot, a parcel of land. the parcel of the letter of February 7, that the authority should be expressed in writing; but it is not
STREET, J.; 1870–1872, NCC) land together with two other parcels 1911, was sufficient to' necessary that the property to be sold should be precisely
originally belonged to plaintiff Jimenez. enable her to bind her described. It is sufficient if the authority is so expressed as to
While Gregorio was staying at Vigan in 1911, brother. determine without doubt the limits of the agent's authority.
the subject property was confided by him to
NO.
the care of his elder sister Nicolasa Jimenez.

On February 7, 1911, he wrote his sister a
letter from Vigan informing her that he was
pressed for money and requested her to sell
one of his parcels of land. This letter
contains no description as to which land is
to be sold other than the indicated words
“one of my parcels of land”. Acting upon this
letter, Nicolasa approached defendant
Rabot and the latter agreed to buy the
parcel. A year later, Jimenez demanded that
his sister return the subject parcel to him.
Nicolasa refused. Gregorio, together with his
other siblings, then filed action for the
recovery of their land. The action was
decided in favor of the plaintiffs.
Meanwhile, Nicolasa executed and delivered
to defendant Rabot a deed purporting to
convey to him the subject parcel of land.
Defendant went into possession and the
property was found in his hands at the time
when the final judgment was entered in
favor of plaintiffs.
https://pdfcoffee.com/26-jimenez-v-rabot-
pdf-free.html
52. Liñan v. Puno Implied Plaintiff Liñan, was the owner of a certain WON defendant Puno was YES. The acts of the parties will be presumed to be done in
No. 9608. August 7, Manifestation of parcel of land. Plaintiff executed the authorized to sell the land conformity with and not contrary to the intent of the contract.
1915 Acceptance (Arts. following document, which conferred upon in question. Where a principal has acquiesced in the acts of his agent for a
JOHNSON, J.: 1870–1872, NCC) the defendant Marcos Puno the power, long period of time, and has received and appropriated to his
duties, and obligations. Contract provides own use the benefits resulting from the acts of his agent,
that: Liñan, plaintiff, confers sufficient courts should be slow in declaring the acts of the agent null
power upon Marcos Puno, respondent, to and void.
represent him in administering his interest
NO.
that the former possess within the A power of attorney stating that “I hereby confer sufficient
municipality of Tarlac, purchase, sell, as well power x x x upon A, in order that in my name and
as sue and be sued before any authority, representation he may administer the interest I possess within
appear before the courts of justice and this Municipality of Tarlac, purchase, sell, collect and pay, etc.”
administrative officers in any proceeding or is sufficient to cover the sale by the agent of land of the
business concerning the good administration principal in Tarlac.
and advancement of my interests and may,
in necessary cases, appoint attorneys at law TRENT, J., dissenting:
or attorneys in fact to represent him. Puno, When there is any reasonable doubt that the language so used
for the sum of P800 sold and delivered conveys such a power, no such construction should be given
parcel of land to the other defendants. the document.
Plaintiff alleges that the said document did
not confer upon Puno the power to sell the
land and prayed that the sale be set aside
and that the land be returned to him and
with damages.
53. Katigbak v. Tai Hing Implied The owner of the land, Po Tecsi, authorized WON Gabino Barreto Po YES. The power of attorney to sell any kind of realty belonging
Co. Manifestation of his brother Gabino to sell his property. Ejap was authorized under and “might belong” to the principal covers not only the
G.R. No. 29917. Acceptance (Arts. Gabino sold the land in question to Katigbak the power executed by Po property belonging to him at the time of the execution of the
December 29, 1928 1870–1872, NCC) without registering the power of attorney to Tecsi in his favor to sell power, but also such as he might afterwards have during the
the registry of deeds. Katigbak sued the said land time it is in force.
lessees to recover the unpaid rent. The While it is true that a power of attorney not recorded in the
lessees contend the Katigbak has no cause registry of deeds is ineffective in order that an agent or
of action because he did not validly buy the attorney-in-fact may validly perform acts in the name of his
land through Gabino because the power of principal, and that any act performed by the agent by virtue of
attorney is not registered in the registry of said power with respect to the land is ineffective against a
deeds and had been executed before' third person who, in good faith, may have acquired a right
Gabino sold said land to his brother Po Tecsi. thereto, it does, however, bind the principal to acknowledge
the acts performed by his attorney-in-fact regarding said
property.
The record contains many indications that Po Tecsi was not
unaware of said sale. His several letters complaining of the
pressing demands of his brother Gabino Barreto Po Ejap to
send him the rents of the land, his promises to send them to
NO.
him, and the remittance of the same were a tacit

acknowledgment that he occupied the land in question no
longer as an owner but only as lessee.
54. Amigo v. Teves Implied In 1937, Macario Amigo and Anacleto WON Marcelino had the YES. Where the power granted to the agent is so broad that it
No. L-6389. Manifestation of Cagalitan executed in favor of their son, power to execute a deed practically covers the celebration of any contract and the
November 29, 1954 Acceptance (Arts. Marcelio, a power of attorney granting him of sale with right to conclusion of any covenant or stipulation, the agent can act in
BAUTISTA ANGELO, 1870–1872, NCC) the power to “lease, let, bargain, transfer, repurchase. the same manner and with the same breath and latitude as
J.: convey and sell, remise, release, mortgage the principal could concerning the property.
and hypothecate, part or any of the Even in the supposition that the power to take the land under
properties . . . upon such terms and lease is not included within the authority granted, petitioners
conditions, and under such covenants as he cannot now impugn the validity of the lease covenant because
shall think fit." Marcelino, as attorney-in- such right devolves upon the principals, who are the only one
fact, executed a deed of sale of a parcel of who can claim that their agent has exceeded the authority
land for a price of P3,000 in favor of Serafin granted to him, and because said principals had tacitly ratified
Teves, stipulating that vendors could the act done by said agent.
repurchase the land within a period of 18
months from date of sale. It also said that
the vendors would remain in land as lessees
for 18 months, and that in case of failure to
pay any rental as agreed upon, the lease
auto terminates and right of ownership of
vendee shall become absolute.
In 1939, Spouses Amigo donated to their
sons Pastor and Justino (petitioners) several
parcels of land including their right to
repurchase the land in litigation. Vendor-
lessees paid the rental for the 1st 6 months
but not for the next ones. Teves, the
vendee-lessor, executed an “Affidavit of
Consolidation of Title” due to the failure of
the lessees to pay the rent and registered
the affidavit in the Office of the Register of
Deeds who then issued to Teves the
corresponding transfer of title over the land
NO.
in question. Justino and Pastor, as donees of

the right to repurchase, offered to
repurchase the land from Teves by
tendering the redemption price; but Teves
refused saying the ownership had already
been consolidated to him as purchaser a
retro. Thus, before the expiration of the
18th month period for the redemption of
the land, donees instituted the present
action.
Petitioners contend that, while the attorney
in-fact, Marcelino Amigo, had the power to
execute a deed of sale with right to
repurchase under the power of attorney
granted to him, however, the covenant of
lease contained in said deed whereby the
vendors agreed to remain in possession of
the land as lessees is not germane to said
power of attorney and, therefore, Marcelino
Amigo acted in excess of his powers as such
attorney-in-fact.
55. Villa v. Garcia Implied Rosa Villa y Monna (Monna), widow of WON Monna is bound by NO. Under this power the substituted attorney in fact had no
Bosque Manifestation of Enrique Bota, was the owner of La Flor de the agreement made by authority to enter into a new contract with a transferee of the
No. 24543. July 12, Acceptance (Arts. Cataluna, Viuda de E. Bota, a printing Figueras. original purchasers modifying the terms of the sale and
1926 1870–1872, NCC) establishment and bookstore. Said releasing two individuals who had joined as solidary sureties in
STREET, J.: establishment was sold to Guillermo Garcia the original contract.
Bosque (Bosque) and Jose Romar Ruiz (Ruiz) It should be noted that when the firm of Guillermo Garcia
by Manuel Pirretas as the attorney in fact of Bosque, S. en C., conveyed all its assets on April 21, 1922, to
Monna. The establishment was sold for the newly formed corporation, Bota Printing Co., Inc., the
P55,000, payable as follows: P15,000 on latter obligated itself to pay all the debts of the partnership,
November 1, next ensuing upon the including the sum of P32,000 due to the plaintiff. On April 23
execution of the contract, being the date thereafter, Bosque, acting for the Bota Printing Co., Inc., paid
when the purchasers were to take to Figueras the sum of P8,000 upon the third instalment due
possession; P10,000 at one year from the to the plaintiff under the original contract of sale, and the
NO.
same date; P15,000 at two years; and same was credited by Figueras accordingly. On May 16 a
P15,000 at the end of three years. By the further sum of P5,000 was similarly paid and credited; and on
contract of sale the deferred installments May 25, a further sum of P200 was likewise paid, making
bear interest 7% annually; in the same P14,000 in all. Now, it will be remembered that in the contract
document, defendants France and Goulette (Exhibit 1), executed on May 17, 1922, the Bota Printing Co.,
obligated themselves as solidary sureties Inc., undertook to pay the sum of P20,000; and the parties to
with the principals Bosque and Ruiz. The the agreement considered that the sum of P13,800 then
first installment of P15,000 was paid already paid by the Bota Printing Co., Inc., should be treated as
conformably to agreement. Manuel, the a partial satisfaction of the larger sum of P20,000 which the
attorney-in-fact, went to a prolonged visit to Bota Printing Co., Inc., had obligated itself to pay. In the light
Spain, and in consideration of that trip, he of these facts the proposition of the defendants to the effect
made a document purporting to be a partial that the plaintiff has ratified Exhibit 1 by retaining the sum of
substitution of agency, to Figueras P14,000, paid by the Bota Printing Co., Inc., as above stated, is
Hermanos, a mercantile entity so that "they untenable. By the assumption of the debts of its predecessor
may be able to effect the collection of the Bota Printing Co., Inc., had become a primary debtor to
money as may be due to the plaintiff by the plaintiff; and she therefore had a right to accept the
reason of the sale of the bookstore" When payments made by the latter and to apply the same to the
the second installment became due, Bosque satisfaction of the third instalment of the original
was unable to comply. After several indebtedness. Nearly all of this money was so paid prior to the
negotiations with Alfredo Rocha, execution of Exhibit 1 and although the sum of P200 was paid
representative of Figueras Hermanos, an a few days later, we are of the opinion that the plaintiff was
agreement was reached – Figueras will entitled to accept and retain the whole, applying it in the
accept P5, 800.00 plus three promissory manner above stated. In other words the plaintiff may lawfully
notes payable each month from December retain that money notwithstanding her refusal to be bound by
1920 to April 1921. The notes were not paid Exhibit 1.
promptly by Bosque but the balance due to
them was paid in full on December 24, 1921.
About this time the owners of La Flor de
Cataluña appear to have converted it into a
limited partnership under the style of
Guillermo Garcia Bosque, S. en C.;" and
presently a corporation was formed to take
over the business under the name "Bota
Printing Company, Inc.". The partnership
NO.
appears to have conveyed all its assets to

this corporation for the purported
consideration of P15, 000.00. Meanwhile
the seven notes representing the unpaid
balance of the second installment and
interest were failing due without being paid.
A certain M. T. Figueras later enters into an
agreement (Exhibit 1) with Bosque, stating
as follows: (a) Guillermo was indebted to
Rosa in the amount of P32, 000 for which R.
G. France and F. H. Goulette are bound as
joint and several sureties, and that the
partnership mentioned had transferred all
its assets to the Bota Printing Company, Inc.,
of which George Andrews was a principal
stockholder; (b) France and Goulette shall
be relieved from all liability on their contract
as sureties and that in lieu of Guillermo,
France and Goulette, the Bota Printing
Company, Inc., as debtor to the extent of
P20, 000, which indebtedness was expressly
assumed by it, and George Andrews as
debtor to the extent of P12, 000, will
undertake to pay Rosa. The name of the
plaintiff was affixed by M.T. Figueras in the
following style: "p.p. Rosa Villa, viuda de E.
Bota, M. T. Figueras, party of the second
part."58 No question is made as to the
authenticity of this document or as to the
intention of Figueras to release the sureties;
and the latter rely upon the discharge as
complete defense to the action. The
defendant Bosque also relies upon the same
agreement as constituting a novation such
NO.
as to relieve him from personal liability. All

of the defendants furthermore maintain
that even supposing that M. T. Figueras
authority to novate the original contract and
discharge the sureties therefrom,
nevertheless the plaintiff has ratified the
agreement by accepting part payment of the
amount due thereunder with full knowledge
of its terms. In her amended complaint the
plaintiff asserts that Figueras had no
authority to execute the contract containing
the release (Exhibit 1) and that the same had
never been ratified by her.
56. Dir. Of Public Implied Sing Juco, Sing Bengco, Gonzales WON Tan Ong Sze is NO. A power of attorney to execute a contract of guaranty
Works v. Sing Juco Manifestation of Tanboontien, and Mariano de la Rama (Sing bound as a surety by should not be inferred from the use of vague or general words,
No. 30181. July 12, Acceptance (Arts. Juco et al.) are co-owners of a parcel of land virtue of de la Rama’s act especially where such words have their origin and explanation
1929 1870–1872, NCC) located at the mouth of Iloilo river. In 1921, of signing as her attorney- in particular powers of a different nature. In article 1827 of the
STREET, J.: the government was planning extensive in-fact? Civil Code it is declared that suretyship (including guaranty)
harbor improvements in the vicinity which shall not be presumed; that it must be expressed, and cannot
required dredging to be carried out by the be extended beyond its specified limits. By analogy a power of
Bureau of Public Work (the Bureau). The attorney should be construed in harmony with the same rule,
Bureau contracted with the co-owners Sing in so far as relates to the creation of the obligation of
Juco et al. for this purpose, where the co- guaranty.
owners would pay the Bureau 20 to 75 It is true that the Government introduced in evidence two
centavos per cubic meter of material documents exhibiting powers of attorney, conferred by Tan
dredged from the river deposited on the Ong Sze, upon Mariano de la Rama. Neither of these powers
property. Bureau required that the co- specifically confers upon Mariano de la Rama the power to
owners provide a bond in the amount of bind the principal by a contract of suretyship. The clauses
Php150,000. The bond was executed quoted relate more specifically to the execution of contracts
contemporaneously with the main contract. relating to property; and the more general words at the close
One of the names appearing upon said of the quoted clauses should be interpreted, under the rule
contract was that of ‘Casa Viuda de Tan ejusdem generis, as referring to contracts of like character.
Toco,’ purporting to be signed by M. de la Power to execute a contract of so exceptional a nature as a
Rama x x x” as the former’s attorney-in-fact.
NO.
The Bureau, having completed the dredging, contract of suretyship or guaranty cannot be inferred from the
demanded payment for the dredged general words contained in these powers.
material. The coowners failed to pay,
prompting the Director of the Burea to file De Leon:
an action to recover the amount due from A power of attorney given to sell or to lease the property of
the parties of the suretyship and to enforce the principal and generally “to perform and execute all and
the obligation as a lien upon the property. every lawful and reasonable act as fully and effectively as I
Tan Ong Sze, the widow (viuda) of Tan Toco might or could do if personally present” does not operate to
was also impleaded “by reason of her authorize the agent to sign in behalf of the principal a surety
supposed liability derived from the act of De bond in favor of the government in connection with the
la Rama in signing the firm ‘Casa Viuda de purchase of certain materials dredged from a fish pond. The
Tan Toco’ as a surety on bond.” . Tan Ong power to create a contract of suretyship cannot be inferred; it
Sze avers that she should be released from must be expressed.
the bond since de la Rama signed “Casa
Viuda de Tan Toco” on the surety without
authority.
57. BPI v. De Coster Implied Gabriela Andrea de Coster y Roxas gave her Is the mortgage binding NO. Where it appears that a wife gave her husband a power of
No. 23181. March Manifestation of husband Jean M. Poizat a written power of upon the wife? attorney "to loan and borrow money" and to mortgage her
16, 1925 Acceptance (Arts. attorney “to loan and borrow money and to property, that fact does not carry with it or imply that he has a
1870–1872, NCC) mortgage her property.” Jean signed legal right to sign her name to a promissory note which would
Gabriela’s name to a promissory note which make her liable for the payment of a preexisting debt of the
would make her liable for the payment of husband or that of his firm, for which she was not previously
the pre-existing debt of Jean or that of his liable, or to mortgage her property to secure the debt.
firm, for which Gabriela was not previously Where it appears that an agent under a written authority
liable, mortgaging her property to secure signed his wife's name to a promissory note and executed a
said debt. mortgage on her real property to secure its payment, the
powers and duties of the agent are confined and limited to
Source: De Leon 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.
It appears that before the motion in question was filed, there
were certain negotiations between the bank and the attorney
for the wife with a view of a compromise or settlement of the
bank's claim against her, and that during such negotiations,
NO.
there was some evidence or admissions on the part of her

attorney that she was liable for the bank's claim. It now
contends that as a result of such negotiations and admissions,
the wife is estopped to deny her liability. But it also appears
that during such negotiations, both the wife and her attorney
did not have any knowledge of the actual facts, and that she
was then ignorant of the defense upon which she now relies.
Be that as it may, such negotiations were more or less in the
nature of a compromise which was rejected by the bank, and it
appears that in any event both the wife and her attorney did
not have any knowledge of the facts upon which they now rely
as a defense.
De Leon:
H acted outside the scope of his authority. (See Art. 1881.) The
powers and duties of H as agent of W are confined and limited
to those which are specified and defined his written power of
attorney, which limitation is a notice to, and is binding upon,
the person dealing with such agent.
58. Germann & Co. v. Implied This is an incident of want of personality of Whether Kammerzell can YES. The right to commence action for collection of debts
Donaldson Manifestation of Germann & Co’s attorney. The action is to act as an agent of Tornov owing to principal is not an incident of strict ownership, which
G.R. No. 439. Acceptance (Arts. recover a sum claimed to be due for freight and subsequently, of must be conferred in express terms. The power to "legally
November 11, 1901 1870–1872, NCC) under a charter party. It was brought by Germann & Co.? compel" the payment of debts owing to the principal is an
LADD, J.: virtue of a general power for suits, executed express grant of the right to bring suit for the collection of such
in Manila October 27, 1900, by Fernando debts.
Kammerzell, and purporting to be a If there could be any doubt as to the meaning of this language
substitution in favor of several attorneys of taken by itself, it would be removed by a consideration of the
powers conferred upon Kammerzell in an general scope and purpose of the instrument in which it
instrument executed in Berlin, Germany by occurs. (See Civil Code, art. 1286.) The main object of the
Max Leonard Tornow, the sole owner of the instrument is clearly to make Kammerzell the manager of the
business carried on in Berlin and Manila Manila branch of the plaintiff's business, with the same
under the name of Gemann & Co. The first- general authority with reference to its conduct which his
named instrument was authenticated by a principal would himself possess if he were personally directing
notary with the formalities required by the it. It can not be reasonably supposed, in the absence of very
domestic laws. The other was not so clear language to that effect, that it was the intention of the
NO.
authenticated. Both Tornow and principal to withhold from his agent a power so essential to
Kammerzell are citizens of Germany. Tornow the efficient management of the business entrusted to his
is a resident of Berlin and Kammerzell of control, as that to sue for the collection of debts.
Manila. Donaldson, Sim & Co. claim that the
original power is invalid under article 1280,
No. 5, of the Civil Code, which provides that
powers for suits must be contained in a
public instrument. Furthermore, the original
power cannot be construed as conferring
upon Kammerzell authority to institute or
defend suits, from which contention, if
correct, it would of course follow that the
delegated power is invalid. In support of this
contention reliance is placed upon article
1713 of the Civil Code, by which it is
provided that "an agency stated in general
terms only includes acts of administration,"
and that "to compromise, alienate,
mortgage, or to execute any other act of
strict ownership an express commission is
required."
201/German-vs-Donaldson-Macke-vs-Camps
59. Macke v. Camps Implied (Same as Case No. 49) Whether or not Flores was YES. Unless the contrary appears, the authority of an agent is
G.R. [No. 2962. Manifestation of On March 1905, B. H. Macke and W. H. acting within the scope of presumed to include all the necessary and usual means to carry
February 27, 1907 Acceptance (Arts. Chandler, partners doing business under the his authority as agent out the agency into effect. That Flores, as managing agent of
CARSON, J.:62 1870–1872, NCC) firm name of Macke, Chandler & Company, the Washington Café, had authority to buy such reasonable
delivered and sold various bills of goods quantities. of supplies as might from time to time be necessary
amounting to P351.50 to Camps through the in carrying on the business of a hotel bar may fairly be
latter’s authorize representative - Flores. presumed from the nature of the business, especially in view
Macke alleged that there was still remaining of the fact that his principal appears to have left him in charge
P177.50 balance which Camps refused to during more or less prolonged periods of absence; from an
pay even after demand. Macke always examination of the items of the account attached to the
believed that Flores was the agent of the complaint, we are of opinion that he was acting within the
NO.
Camps. Macke stated that he found Flores scope of his authority in ordering these goods, and that his
was in charge of the business of Flores as admissions as to the receipt of these goods are binding on his
business manager in the latter’s absence. To principal, and in the absence of evidence to the contrary,
support his belief, Galmes was presented as furnish satisfactory proof of their delivery as alleged in the
witness. Galmes, armed with a contract, complaint.
stated that he sub-rented the building
where the business of Camps was located,
where Flores was a signatory as the
contract’s witness and "managing agent".
Camps did not go on the stand nor call any
witnesses, and relied wholly on his
contention that the facts were not sufficient
to establish that he received the goods for
which payment is demanded.
60. Municipal Council Implied Tan Ong Sze Vda. de Tan Toco filed a WON the assignment YES. An agent or attorney-in-fact empowered to pay the debts
of Iloilo v. Manifestation of complaint with CFI Iloilo to recover from the made by Tan Boon Tiong, of the principal, and to employ attorneys to defend the latter's
Evangelista Acceptance (Arts. Municipality of Iloilo the value of a strip of as attorney-in-fact of the interests, is impliedly empowered to pay the attorneys' fees
G.R. No. 32977. 1870–1872, NCC) land taken by the Municipality to widen a Vda. de Tan Toco, to for services rendered in the interests of said principal, and may
November 17, 1930 public street. CFI rendered a judgment in Soriano, of all the credits, satisfy them by an assignment of a judgment rendered in favor
VILLA-REAL, J.: favor of Vda. de Tan Toco – entitled to rights and interests of said principal.
recover P42,966.40(value of the land). The belonging to Vda de Tan
SC affirmed the judgment. After the case Toco by virtue of the
was remanded to the court of origin, and judgment rendered in a
the judgment had become final and civil case is valid?
executory, Attorney Jose Evangelista, in his
own behalf and as counsel for the
administratrix of Jose Ma. Arroyo's intestate
estate, filed a claim in the same case for
professional services rendered by him,
which the court, acting with the consent of
Vda. de Tan Toco, fixed at 15% of the
amount of the judgment. PNB appeared at
the hearing of the claim and prayed that the
amount of the judgment be turned over to it
NO.
because the land taken over had been

mortgaged to it. Antero Soriano also
appeared claiming the amount of the
judgment as it had been assigned to him,
and by him, turn, assigned to Mauricio Cruz
& Co., Inc. Lower court ordered that the
attorney's lien in the amount of 15% of the
judgment, be recorded in favor of Atty.
Evangelista, in his own behalf and as counsel
for the administratrix of the deceased Jose
Ma. Arroyo, and directed the municipality of
Iloilo to file an action of interpleading
against the adverse claimants, the PNB,
Antero Soriano, Mauricio Cruz & Co., Jose
Evangelista and Jose Arroyo. Municipality of
Iloilo filed an action of interpleading against
the adverse claimants. CFI rendered a
judgment declaring valid and binding the
deed of assignment of the credit executed
by Vda. de Tan Toco, through her attorney-
in-fact Tan Buntiong, in favor of late Antero
Soriano; likewise the assignment executed
by the latter during his lifetime in favor of
the Mauricio Cruz & Co., Inc., and Vda. de
Tan Toco is ordered to pay the said Mauricio
Cruz & Co., Inc., the balance of P30,966.40;
Vda. de Tan Toco is also ordered to deposit
said sum in a local bank within the period of
90 from the time this judgment shall
become final, at the disposal of the Mauricio
Cruz & Co. Inc. Vda. de Tan Toco appealed.
(Municipal treasurer of Iloilo paid the
Soriano the amount of P6,000 in part
payment of the judgment, assigned to him
NO.
by Tan Boon Tiong, acting as attorney-in-fact

of the Vda. de Tan Toco. Municipal treasurer
of Iloilo deposited with the clerk of the
Court of First Instance of Iloilo the amount
of P6,000 on account of the judgment. Clerk
of court delivered to Atty. Evangelista the
said amount of P6,000. The judgment for
P42,966.44 against the municipality of Iloilo
was reduced to P30,966.40, which was
adjudicated by said court to Mauricio Cruz &
Co.). The sole issue - claim of Mauricio Cruz
& Co. as alleged assignee of the rights of the
Soriano by virtue of the said judgment in
payment of professional services rendered
by him to the said widow and her coheirs
61. Yu Chuck v. Kong Li Implied In, 1919, one CC Chen or TC Chen was WON Chen had authority NO. Except where the authority to employ servants and agents
Po Manifestation of appointed as general business manager of to bind Ko Ling Po by a is expressly vested in the board of directors or trustees, an
G.R. No. 22450. Acceptance (Arts. the newspaper, Kong Li Po. He entered into contract of employment. officer or agent who has general control and management of
December 3, 1924 1870–1872, NCC) a contract with the plaintiffs, Yu Chuck, the corporation's business or a specific part thereof, may bind
OSTRAND, J.: Mack Yueng and Ding Moon, by which the the corporation by reasonable contracts of employment of
latter bound themselves to do the necessary such agents and employees as are usual and necessary in the
printing for the newspaper for three years. conduct of such business.
Nearly a month after the contract of Before a contract can be ratified, knowledge of its existence
employment in question is alleged to have must be brought home to the parties who have the authority
been entered into, the defendant's business to ratify it or circumstances must be shown from which such
manager, over his own signature, inserted knowledge may be presumed. The fact that the president of
an announcement in the defendant's the defendant corporation saw the plaintiffs work as printers
newspaper stating that "all contracts, in the office of the defendant's newspaper is not sufficient
agreements and receipts are considered to proof of knowledge on his part of the existence and terms of a
be null and void unless signed by the general written contract of employment.
manager of this paper." Before the The announcement (To Whom It May Concern:
expiration of the contract of employment, a Announcement is hereby given that hereafter all contracts,
new manager, Tan Tian Hong, was agreements and receipts are considered to be null and void
appointed; Chen left for China and the unless duly signed by T. C. Chen, General Manager of this
NO.
services of the plaintiffs were discharged paper.”) was merely an assertion by the business manager
with no special reason. The plaintiffs then that he would recognize no contracts, agreements, or receipts
filed a complaint against Ko Ling Po. In its not duly signed by him, was not one of the circumstances
defense, Ko Ling Po claimed that Chen had which lead the plaintiffs to think that the business manager
no authority to enter into a contract of had authority to make the contract in question, and could not
employment. The trial court further found be considered a ratification of the contract by the defendant
that the contract had been impliedly ratified corporation.
by the defendant and rendered judgment in
favor of the plaintiffs for the sum of
P13,340.
62. Insular Drug v. PNB Implied 132 checks made out in the name of the WON Foerster had implied NO. The right of an agent to indorse commercial papers is a
G.R. No. 38816. Manifestation of Insular Drug Co., Inc., covering a total of authority to indorse all responsible power and will not be lightly inferred. A salesman
November 3, 1933 Acceptance (Arts. ₱18,285.92 were brought to the branch checks made out in the with authority to collect money belonging to his principal does
MALCOLM, J.: 1870–1872, NCC) office of the Philippine National Bank (PNB) name of the Insular Drug not have the implied authority to indorse checks received in
in Iloilo by Foerster, a salesman of the drug Co., Inc. payment. Any person taking checks made payable to a
company, Foerster’s wife, and Foerster’s corporation, which can only act by agents, does so at his peril,
clerk. The checks were in that bank placed in and must abide by the consequences if the agent who indorses
the personal account of Foerster. After the the same is without authority.
indorsement on the checks was written by When a bank accepts the indorsements on checks made out to
the Manager of PNB, the amounts stated a drug company of a salesman of the drug company and the
were subsequently withdrawn by U.E., indorsements of the salesman's wife and clerk, and credits the
Foerster, and Carmen E. de Foerster. checks to the personal account of the salesman and his wife,
However, upon the discovery of the permitting them to make withdrawals, the bank makes itself
anomalies by the Manila office of the drug responsible to the drug company for the amounts represented
company through its investigation of the by the checks, unless it is pleaded and proved that after the
transaction made by Foerster, the latter money was withdrawn from the bank, it passed to the drug
committed suicide. There is no evidence company which thus suffered no loss.
showing that the bank knew that Foerster
was misappropriating the funds of his
principal.
63. Int’l Films (China) v. Obligations of On June 2, 1933, the International Films WON defendant company NO. The defendant company, as subagent of the plaintiff in
Lyric Films the Agent leased the film entitled “Monte Carlo is civilly liable for the the exhibition of the film "Monte Carlo Madness", was not
Exchange Madness” to the Lyric Film Exchange. One of destruction by fire of the obliged to insure it against fire, not having received any
the conditions of the contract was that the film in question
NO.
G.R. No. 42465. Lyric Film Exchange company would answer express mandate to that effect, and it is not liable for the
November 19, 1936 for the loss of the film in question whatever accidental destruction thereof by fire.
VlLLA-REAL, J.:67 the cause. On the last day of the film
showing, the chief of the film department of De Leon:
LFE, Vicente Albo, telephoned and asked the It has been held that the failure of a sub-agent with whom film
agent of IF, who was Bernard Gabelman, has been left for safekeeping to insure against loss by fire does
where he wished to have the film returned not constitute negligence or fraud on its part when it has
as the showing was finished. Gabelman received no instruction to that effect from its principal, the
asked Albo to meet him in his office and insurance of the film not forming part of the obligation
there asked LFE to keep the film in LFE’s imposed upon it by law.
vault as IF had no safety vault yet. Vicente
Albo’s chief said that they could not keep
the film as the insurance would not cover it,
but Gabelman said to permit Albo to deposit
it in the vault under Gabelman’s care. A
verbal agreement was made whereby the
film “Monte Carlo Madness” would be
shown elsewhere. Gabelman was succeeded
by Lazarus and was told of the verbal
agreement. IF then asked for the return of
the said film alongside other two films. The
two films were returned except for the film
in question. A fire broke in the bodega of
LFE, together with the film “Monte Carlo
Madness.”
64. Nepomuceno, et al. Obligations of Defendant Gerardo Heredia is the business Whether or not purchase YES. It was clearly established at the trial that the defendant
v. Heredia the Agent adviser of co-petitioner Marciana Canon, of the land was made in was acting merely as the agent for the plaintiffs throughout
G.R. No. L-3298, and as such had in his hands P1,500 paid to accordance with the the entire transaction; that the purchase of the land was made
FEBRUARY 27, 1907 him on her account on 22 September 1904. plaintiffs’ instructions, or not only with their full knowledge and consent, but at their
Carson, J. At about the same time petitioner Felisa on their account. suggestion; and that after the purchase had been effected, the
Nepomuceno had an unsecured debt due plaintiffs, with full knowledge of the facts, approved and
her of 500 pesos from one Marcelo Leaño ratified the actions of their agent in the premises. There is
and that on demand for security Leaño nothing in the record which would indicate that the defendant
proposed to give her a deed of conditional failed to exercise reasonable care and diligence in the
NO.
sale to a certain tract of land, together with performance of his duty as such agent, or that he undertook to
the buildings and imprisonments thereon for guarantee the vendor's title to the land purchased by direction
P2,000 with Nepomuceno to be credited of the plaintiffs.
with 500 pesos and to advance the balance
of 1,500 pesos.
Nepomuceno, knowing that Heredia had in
his hands P1,500, she proposed to Canon
that they make a joint investment on the
land; that together Canon and Nepomuceno
discussed the proposition with Heredia and
later directed him to draw up the necessary
documents and on 24 September 1904, a
deed of conditional sale of the land was
executed with the vendor reserving the
privilege of repurchasing the land at the end
of one year and obligating himself to make
monthly payments to maintain the right to
retain the land.
The deed was placed under the name of
Heredia and a few days after upon the
request of the plaintiffs, a formal
memorandum was executed before a notary
public stating the fact that the plaintiffs had
furnished the money, the amount furnished
by each and their proportionate interest in
the investment.
More than a year after the transactions had
been consummated, a recovery of
possession by third parties was instituted
hence the petitioners brought the action to
recover from the defendant the whole
amount of the money invested with interest
from the date of investment. Petitioners
allege that the purchase of the land was not
NO.
made in accordance with their instructions,

or on their account. The lower court’s
judgment was in favor of plaintiffs hence
this appeal.
479/Nepomuceno-v-Heredia
65. Domingo v. Obligations of In a document Exhibit “A” executed on June WON the failure on the YES. Articles 1891 and 1909 of the Civil Code demand the
Domingo, 42 SCRA the Agent 2, 1956, Vicente M. Domingo granted part of Gregorio to utmost good faith, fidelity, honesty, candor and fairness on
131 Gregorio Domingo, a real estate broker, the disclose to Vicente the the part of the agent to his principal. The agent has an
G.R. No. L-30573. exclusive agency to sell his lot No. 883 of payment to him by Oscar absolute obligation to make a full disclosure or complete
October 29, 1971. Piedad Estate at the rate of P2.00 per square of the Php1,000 as gift or account to his principal of all his transactions and other
MAKASIAR, J.: meter (or for P176,954.00) with a propina constitutes fraud material facts relevant to the agency, so much so that the law
commission of 5% on the total price, if the as to cause the forfeiture as amended does not countenance any stipulation exempting
property is sold during the 30-day duration of his 5% commission on the agent from such an obligation and considers such an
of the agency or if the property is sold by the sale price. exemption as void.
Vicente within three months from the By taking such profit or bonus or gift or propina from the
termination of the agency to a purchaser vendee, the agent thereby assumes a position wholly
submitted by Gregorio during the inconsistent with that of being an agent for his principal, who
continuance of the agency with notice to has a right to treat him, insofar as his commission is
Vicente. concerned, as if no agency had existed. The fact that the
Gregorio authorized the intervenor Teofilo principal may have been benefited by the valuable services of
Purisima to look for a buyer, promising him the said agent does not exculpate the agent who has only
one-half of the 5% commission. himself to blame for such a result by reason of his treachery or
Thereafter, Teofilo introduced Oscar de perfidy.
Leon to Gregorio as a prospective buyer. The duty embodied in Article 1891 of the New Civil Code will
Oscar submitted a written offer which was not apply if the agent or broker acted only as a middleman
very much lower than the price of P2.00 per with the task of merely bringing together the vendor and
sqm. Subsequently, Oscar raised his offer to vendee, who themselves thereafter will negotiate on the
P109,000.00 as evidenced by Exhibit “C”. terms and conditions of the transaction. Neither would the
Upon agreement on the purchase price, rule apply if the agent or broker had informed the principal of
Oscar issued to Vicente a check in the the gift or bonus or profit he received from the purchaser and
amount of P1,000.00 as earnest money, his principal did not object thereto.
after which Vicente advanced to Gregorio
the sum of P300.00.
NO.
Exhibit “C” was amended to the effect that

Oscar de Leon will vacate his house and lot
at Denver Street, Quezon City which is part
of the purchase price.
Pursuant to his promise to Gregorio, Oscar
gave him as a gift or propina the sum of
P1,000.00 for succeeding in persuading
Vicente to sell his lot at P1.20 per sqm or a
total of P109,000.00.
This gift of One Thousand Pesos (P1,000.00)
was not disclosed by Gregorio to Vicente.
https://www.pinayjurist.com/domingo-v-
domingo-g-r-no-l-30573-october-29-1971-
contract-of-agency/amp/
66. U.S. v. Kiene Obligations of Kiene was an insurance agent of China WON Kiene is liable to YES. Where nothing to the contrary appears, the provisions of
G.R. No. L-3188, the Agent Mutual Life Insurance Company. The deliver the amount article 1720 of the Civil Code impose upon an agent the
March 12, 1907 defendant was convicted of the crime of collected to the insurance obligation to deliver to his principal all funds collected on his
CARSON, J. : estafa for his failure and refusal to turn over company. account.
to the insurance company the amount he
had collected on account of the company. De Leon:
Kiene contended that he should not be He cannot retain the commission pertaining to him by
charged with estafa since there was no subtracting the same from his collections.
obligation on his part to deliver to the
insurance company the amount collected. The agent must account for the very property or funds he has
received for his principal.
67. U.S. v. Reyes Obligations of R.B. Blackman is a surveyor in Pangasinan WON the Petitioner is YES. Under the oral contract Reyes was an agent who was
G.R. No. 12743 / the Agent who employed Domingo Reyes (Petitioner) guilty of estafa. bound to pay to the principal all that he had received by virtue
August 25, 1917 to collect amounts due from twelve of the agency.
Malcolm, J. individuals for Blackman’s survey work of The right to a commission does not make one a joint owner
their lands. Petitioner was tasked to collect with a right to money collected, but establishes the relation of
P860.00 but was only successful in obtaining principal and agent. The agent is under obligation to turn over
P540.00. The Petitioner returned P368.00 to to the principal the amount collected minus his commission.
Blackman, retaining P172.00 which is 20% of
NO.
the total amount supposed to be collected But the agent, having unlawfully retained more than his
(P860.00). Blackman alleged that their oral commission, is guilty of estafa.
agreement entitled Reyes only to 10%
commission of the amount actually collected De Leon:
(P54.00), while the Petitioner claims that he He cannot retain the commission pertaining to him by
is entitled to 20% of the total amount to be subtracting the same from his collections.
collected (P172.00). The trial court ruled in
favor of Blackman, holding that the
Petitioner was ordered to collect certain
debts for a 10% commission on all accounts
collected. The case at bar is an appeal from
a judgment finding Petitioner guilty of
estafa.
68. Ojinaga v. Estate of Obligations of Domingo Perez died and left his estate to WON Eladio’s agreement YES. In the management of property, where a principal
Perez the Agent Manuel Achondo to administer which was to the correctness of the receives from an agent periodical statements of account and,
G.R. No. L-3754. later administered by Tomas Perez, one of accounting effectively knowing all the facts in the case, repeatedly agrees to the
November 15, 1907 the heirs. A partition of the estate of the extinguished his part to correctness thereof and approves the same, the result is a
WILLARD, J.: deceased happened and Tomas continued in the profit? species of contract between the parties which can only be set
his role as administratix and guardian for all aside upon grounds similar to those upon which any other
except Eladio Ojinaga, who for him, Tomas contract may be annulled or rescinded.
acted only as agent. Tomas filed an account Eladio Ojinaga not only agreed to the correctness of this
of his administration in the lower court account in 1894, but after he was thoroughly informed in the
showing the net profits of the business. same year as to all the facts in the case he agreed to other
Other brothers refused and claimed that the accounts, which necessarily, as he then knew, involved in a
profits derived by Tomas were greater than repetition of his agreement to the account of 1894. And
what was shown. Eladio Ojinaga accepted knowing all the facts in the case, he not only did not join in
the account as rendered and permitted litigation commenced for the purpose of securing a true
Tomas R. Perez to continue in the statement of the profits but expressly refused to do so and
administration of his interest. A final censured the persons who promoted such litigation.
settlement was made, Tomas agreed to pay
all the heirs except Ojinaga. Ojinaga died, his Johnson, J., dissenting:
heirs wanted the accounting set aside on the It matters not how fair the conduct of the agent may have
ground of fraud. been in a particular case, nor that the principal would have
been no better off if the agent had strictly pursued his power,
NO.
nor that the principal was not, in fact, injured by the

intervention of the agent for his own profit. The result in both
cases is the same.
Article 1720 of the Civil Code provides: "Every agent is bound
to give an account of his transactions and to pay to the
principal all that he may have received by virtue of the agency,
even though what has been received is not owed to the
principal."
Not only is he liable to the principal for any sum or sums
resulting from such agency, but if he has applied the same to
his own use he is liable for interest upon the same.
De Leon:
He cannot retain the commission pertaining to him by
subtracting the same from his collections.
Article 1896 contemplates two distinct cases. The first refers to
sums belonging to the principal which the agent applied to his
own use and the second, to sums which the agent still owes
the principal after the expiration of the agency.
69. De Borja v. De Borja Obligations of Quintin, as administrator of Marcelo’s WON Quintin was entitled NO. The plaintiff-appellant's contention that the counterclaims
G.R. No. 38479. the Agent estate, filed an action to recover sum of to recover from Francisco presented by the defendant have already prescribed is
November 20, 1933 money loaned and collected by Francisco with legal interest untenable. The counterclaims in question are based on
IMPERIAL, J. with an obligation to render accounting. instruments in writing marked Exhibits 1 to 6. The period of
Francisco interposed counterclaims against prescription thereof is not six (6) years, as claimed, but ten
Quintin for alleged sums of money owed to (10) years, in accordance with the provisions of section 43 (1)
him (and rents for Marcelo allegedly using of the Code of Civil Procedure.
his factory and his buildings). Trial court held Neither is the plaintiff entitled to the interest claimed by him
that Quintin was entitled to P33,218.86 upon the alleged sums of money loaned to and collected by
while Francisco was entitled to P39,683.00 , the defendant from various persons for his deceased father. In
hence, Quintin owed Francisco P6,464.14 all the aforesaid transactions, the defendant acted in his
with legal interest. Both parties appealed capacity as attorney-in-fact of his deceased father and, there
such judgment. being no evidence showing that he converted the money
entrusted to him to his own use, he is not liable for interest
NO.
https://www.scribd.com/document/327598 thereon in accordance with the provisions of article 1724 of

001/03-Correct-Digest-de-Borja-v-de-Borja the Civil Code.
70. PNB v. Welch, Obligations of Welch, Fairland & Co., Inc., is a corporation Whether or not Welch Co. YES. The agent in any event must be precluded from doing any
Ffairchild, & Co., the Agent and a shareholder of La Compania Naviera, should turnover the positive act that could prevent performance on the part of his
GR L-19689, April Inc., another corporation and engaged in the collected proceeds from principal. This much, ordinary good faith towards the other
04, 1923 STREET, J. business of marine shipping. They applied to the insurance policy to contracting party requires. An agent who obligates his
PNB for a loan of $125,000 to purchase a PNB? principal to deliver specific property to a third party may not
boat called Benito Juarez found in the US thereafter, to the prejudice of such third party, appropriate
market. Welch, acting as an agent of La and apply the same property, or its proceeds, to the payment
Compania, sent a cablegram from USA to of debts owing by the principal to the agent; and the
PNB in the Philippines asking for the release circumstance that the principal assents to such application of
of the loan of $125,000 as purchase price for the property does not alter the case
the boat. In preparation for the boat’s
arrival, Welch took an insurance policy of
$150,000. While the boat is on its voyage to
the Philippines, it was capsized due to a
storm. Welch collected the insurance with
consent of La Compania. PNB is claiming
from Welch the $125,000 with interest.
Lower court absolved Welch Co. PNB
appealed.
71. Harry Keeler Obligations of Plaintiff is Harry E. Keeler Electric Co., a WON Rodriguez had a NO. The agent alone cannot enlarge or extend his authority by
Electric Co. v. the Agent domestic corporation based in Manila right to assume by any act his own acts or statements, nor can he alone remove
Rodriguez engaged in the electrical business, and or deed of Keeler Electric limitations or waive conditions imposed by his principal. To
G.R. No. L-19001 among other things in the sale of what is that Montelibano was charge the principal in such a case, the principal's consent or
November 11, 1922 known as the "Matthews" electric plant. authorized to receive the concurrence must be shown.
Johns, J. Defendant is Domingo Rodriguez a resident money. Where a person in making payment solely relied upon the
of Talisay, Occidental Negros. Montelibano, representation of an agent as to his authority to receive and
a resident of Iloilo, went to Keeler Electric receipt for the money, such payment is made at his own risk,
and made arrangement with the latter and where the agent was not so authorized, such payment is
wherein: He claimed that he could find not a valid defense against the principal.
purchaser for the "Matthews" plant; which He must act with ordinary prudence and reasonable diligence
later made Keeler Electric offer to pay a to ascertain whether the agent is acting and dealing with him
commission of 10% for his services, if the within the scope of his powers. Obviously, if he knows or has
NO.
sale was consummated. Through good reason to believe that the agent is exceeding his
Montelibano’s efforts, Keeler was able to authority, he cannot claim protection. So, if the character
sell to Rodriguez one of the "Matthews" assumed by the agent is of such a suspicious or unreasonable
plants. Rodriguez paid Montelibano (the nature, or if the authority which he seeks is of such an unusual
purchase price of P2,513.55) , after the or improbable character, as would suffice to put an ordinarily
installation of the plant and without the prudent man upon his guard, the party dealing with him may
knowledge of Keeler Electric. Hence, Keeler not shut his eyes to the real state of the case but should withal
Electric filed an action against Rodriguez for refuse to deal with the agent at all, or should ascertain from
the Payment of the purchase price. the principal the true condition of affairs.
Rodriguez countered and claimed to have
paid the purchase price of the plant to
Montelibano because the latter was the one
who sold, delivered, and installed the
electrical plant; and was assured that he was
duly authorized to collect the value of the
electrical plant. By evidence, he showed a
statement and receipt with Montelibano’s
signature. The witness of the plaintiff
(Keeler Electrics), Juan Cenar, who was sent
by Keeler Electric to install the plant in
Rodriguez’s premises in Iloilo testified that
he brought with him a statement of account
for Rodriguez but the latter said he would
pay in Manila. The Lower Court has decided
in favor of Rodriguez and held that Keeler
Electric had held out Montelibano to
Rodriguez as an agent authorized to collect.
Hence, Rodriguez is discharged from debt.
Thus, this present case - Keeler Electric filed
an Appeal and alleged that Montelibano had
no authority to receive the money. His
services were confined to the finding of
purchasers of for the “Matthews” plant.
Montellibano was not an electrician, could
NO.
not install the plant and did not know

anything about the mechanism.
72. Austria v. CA Obligations of Maria G. Abad received from Guillermo Whether or not in a NO. It is recognized in this jurisdiction that to constitute a caso
G.R. No. L-29640 the Agent Austria one (1) pendant with diamonds to be contract of agency fortuito that would exempt a person from responsibility, it is
June 10, 1971 sold on commission basis or to be returned (consignment of good for necessary that (1) the event must be independent of the
REYES, J.B.L., J. on demand. Maria Abad while walking sole) it is necessary that human will (or rather, of the debtor's or obligor's); (2) the
home, two men snatched her purse there be prior conviction occurrence must render it impossible for the debtor to fulfill
containing jewelry and cash, and ran away. for robbery before the the obligation in a normal manner; and that (3) the obligor
Thus, Abad failed to return the jewelry or loss of the article shall must be free of participation in, or aggravation of, the injury to
pay its value notwithstanding demands. exempt the consignee the creditor (Reyes & Puno, Outline of Philippine Civil Law, Vol.
Austria filed an action against Abad and from liability for such loss. IV, pages 25-26, citing Lasam v. Smith, 45 Phil. 657, 661). A
Abad’s husband for recovery of the pendant fortuitous event, therefore, can be produced by nature, e.g.,
or of its value, and damages. earthquakes. storms, floods, etc., or by the act of man, such as
Abad raised the defense that the alleged war, attack by bandits, robbery, (Tolentino, Civil Code of the
robbery had extinguished their obligation. Philippines, Vol. IV, 1962 ed., page 117, citing 3 Salvat 83-84),
provided that the event has all the characteristics
ennumerated above.
Where MA received from GA a pendant with diamonds to be
sold on commission basis, which MA later on failed to return
because of a robbery committed upon her, it is not necessary
that there be a conviction for robbery for MA to be relieved
from civil liability of returning the pendant under Art, 1174,
New Civil Code, as it would only be sufficient to establish that
the unforseeable event, the robbery in this case, did take place
without any concurrent fault on the debtor's part, and this can
be done by preponderant evidence. To require, moreover.
prior conviction in order to establish robbery as a fact, would
demand proof beyond reasonable doubt to prove a fact in a
civil case.
73. Gonzales & Gomez Obligations of The plaintiff spouses executed a deed of sale WON plaintiff Gonzalez NO. Where a sale of land is effected on the strength of
v. Haberer the Principal over a tract of land with the defendant. It cannot be charged with misrepresentations of the agent of the vendor, the latter
G.R. No. L-22604, was stipulated in their contract that if the the misrepresentations of cannot accept the benefit of such representations and at the
February 3, 1925 plaintiffs were found by court to not be the Gomez same time deny the responsibility for them.
Ostrand, J. owners of the land, they would return any
NO.
amount that the defendant had paid. It was

also stipulated that Gomez gave his wife
Gonzalez the “marital license” to execute
the deed. However, after making an initial
payment of P 30,000.00, the defendant
found that the land was in the adverse
possession of many others. Thus, he
stopped making payments. The plaintiffs
then filed an action to recover the sum of
unpaid balance. The defendant claimed that
when they entered into this contract, the
plaintiffs made false representations and
mislead him into thinking they had full
ownership of the land.
74. Albaladejo y Cia. Obligations of Albaladejo y Cia is a limited partnership, WON contract between NO. Under the contract of purchase above referred to the
Phil. Refining Co. the Principal which was engaged in the buying and selling the plaintiff and the plaintiff was not the agent of the Visayan Refining Company as
G.R. No. 20726, of copra. Visayan Refining Co(VRC), Visayan Refining Co. regards the original purchase of copra by the plaintiff from the
December 20, 1923 Philippine Refining Co(PRC) successor, was created the relation of producers. On the contrary those purchases were made by the
Street, J. engaged in the manufacturing of coconut principal and agent plaintiff in its own behalf. The defendant therefore was not
oil. Albaladejo made a contract with the between the parties, and liable to reimburse the plaintiff for expenses incurred by the
VRC, wherein they agreed that VRC will buy reliance is placed upon plaintiff in maintaining its purchasing organization intact over
for a period of 1 year all the copra that article 1729 of the Civil a period during which the actual buying of copra was
Albaladejo purchased in Albay. It was also Code which requires the suspended.
agreed upon that during the continuance of principal to indemnify the
the contract, VRC will not appoint any other agent for damages De Leon:
agent for the purchase of copra in Legaspi, incurred in carrying out Designation by the parties. — The manner in which the parties
nor buy copra from any vendor in the same the agency. designate the relationship is not controlling. If an act done by
place. In addition, VRC would provide one person in behalf of another is in its essential nature one of
transportation for the copra delivered to it agency, the former is the agent of the latter notwithstanding
by Albaladejo. At the end of said year, both he is not so called. Conversely, the use of the words “agency
parties found themselves satisfied with the agreement” and “agent” by the parties in a contract does not
existing arrangement, and they continued by necessarily have the effect of making one an agent who, in
tacit consent to govern their future relations fact, is not such.
by the same agreement. Later, VRC closed
NO.
down its factory and withdrew from the Similarly, there is no obligation to indemnify where no agency
copra market. After VRC ceased to buy relation exists, as where it appears that the supposed agent
copra, the copra supplies already purchased acted upon its own account and not as an agent, in the legal
by Albaladejo were gradually shipped out sense.
and accepted by the VRC, and in the course
of the next 8-10 months, the accounts
between the two parties were liquidated.
Later, Albaladejo filed a complaint against
PRC(former VRC), seeking to recover P110k,
the alleged amount that Albaladejo spent in
maintaining and extending its organization.
Albaladejo alleges that such maintenance
and extension was made at the express
request of PRC. Albaladejo contends that
the contract between them created the
relation of principal and agent; therefore,
the principal should indemnify the agent for
damages incurring in carrying out the
agency.
75. Barretto v. Santa Modes of The plaintiff, Antonio M.A. Barretto, was an Whether the contract of YES. The time during which the agent may hold his position is
Maria Extinguishment agent and manager of Jose Santa Marina, agency was validly indefinite or undetermined, when no period has been fixed in
G.R. No. 8169. of Agency the defendant, a resident of Spain and the revoked. his commission and so long as the confidence reposed in him
December 29, owner and proprietor of the business known by the principal exists; but as soon as this confidence
1913. TORRES, J.: as the La Insular Cigar and Cigarette Factory. disappears the principal has a right to revoke the power he
The petitioner alleged that the defendant, conferred upon the agent, especially when the latter has
without reason, justification, or pretext and resigned his position for good reasons.
in violation of the contract of agency, Even though a period is stipulated during which the agent or
summarily and arbitrarily dispensed with the employee is to hold his position in the service of the owner or
plaintiff's services and removed him from head of a mercantile establishment, yet the latter may, for any
the management of the business. The of the special reasons specified in article 300 of the Code of
evidence showed that the plaintiff Barretto's Commerce, dismiss such agent or employee even before the
renunciation or registration of the position termination of the period.
he held as agent and manager of the said
factory was freely and voluntarily made by De Leon:
NO.
him on the occasion of the insolvency and Moreover, confidence being the cardinal basis of the relation,
disappearance of a Chinese man who had it stands to reason that it should cease when such confidence
bought from the factory products and, disappears. If this were not so, the contract would become
without paying this large debt, disappeared unnatural, converting the representation into a real alienation
and has not been seen since. Barretto sent a of personality something repugnant to the principles of
letter of resignation to Santa Marina and modern law.
Santa Marina did not immediately reply and
tell him of his decision on the matter. After
several months, Barretto was informed that
the power conferred upon him by the
defendant has been revoked and the latter
had already appointed J. McGavin to
substitute him.
76. Coleongco v. Modes of : Since 1951, Claparols operated a factory Whether or not the YES. A power of attorney although coupled with interest in a
Claparols Extinguishment for the manufacture of nails under the style special power of attorney partnership can be revoked for a just cause, such as when the
G.R. No. L-18616, of Agency of "Claparols Steel & Nail Plant". The raw may be validly revoked. attorney-in-fact betrays the interest of the principal, as what
March 31, 1964 material, nail wire, was imported from happened in the case at bar.
REYES, J.B.L., J. foreign sources. Losses compelled Claparols
in 1953 to look for someone to finance his De Leon:
imports of nail wires. Coleongco became his Where there is a just cause. — A power of attorney can be
financier. A financing agreement was made irrevocable by contract only in the sense that the
perfected. In addition, a special power of principal may not recall it at his pleasure; but coupled with
attorney was executed authorizing interest or not, the authority certainly can be revoked for a
Coleongco to open and negotiate letters of just cause, such as when the agent betrays the interest of the
credit, to sign contracts, bills of lading, principal. It is not open to serious doubt that the irrevocability
invoices, and papers covering transactions; of a power of attorney may not be used to shield the
to represent appellee and the nail factory; perpetration of acts in bad faith, breach of confidence, or
and to accept payments and cash advances betrayal of trust, by the agent for that would amount to
from dealers and distributors. Thereafter, holding that a power coupled with an interest authorizes the
Coleongco also became the assistant agent to commit frauds against the principal.
manager of the factory. In 1956, Claparols
was surprised by service of an alias writ of
execution to enforce a judgment obtained
against him by the Philippine National Bank,
NO.
despite the fact that on the preceding

September he had submitted an
amortization plan to settle the account.
Claparols consequently revoked the power
of attorney, and informed Coleongco by
registered mail, demanding a full accounting
at the same time. Coleongco protested.
Claparols requested external auditors,
examination showed that Coleongco owed
the Claparols Nail Factory the amount of
P87,387.37, as of June 30, 1957.
77. De Buncio & Co. v. Modes of Ong Guan Can gave a general power of WON second power of YES. Article 1732 of the Civil Code is silent over the partial
Ong Guan Gan Extinguishment attorney to his son, Ong Guan Can, Jr.. attorney supplant the termination of an agency. The making and accepting of a new
G.R. No. L-40681 of Agency About eight (8) years later, Ong Guan Can first? power of attorney, whether it enlarges or decreases the power
October 2, 1934 executed in favor of Ong Guan Can, Jr. a of the agent under a prior power of attorney, must be held to
HULL, J.: special power of attorney which did not give supplant and revoke the latter when the two are inconsistent.
Ong Guan Can, Jr. the express power to If the new appointment with limited powers does not revoke
alienate the properties of Ong Guan Can. the general power of attorney, the execution of the second
Thereafter, Ong Guan Can, Jr. sold certain power of attorney would be a mere futile gesture.
properties of Ong Guan Can to Juan Tong The properties in question were subject to attachment and
and Pua Giok Eng. Plaintiff Dy Buncio & execution, the title of Ong Guan Can not having been divested
Company, Inc. subsequently obtained by the sale made by Ong Guan Can, Jr..
attachment and execution against the same
properties for a judgment debt against Ong De Leon:
Guan Can. Implied revocation of previous agency. — There is implied
revocation of the previous agency when the principal appoints
a new agent for the same business or transaction provided
there is incompatibility.
78. New Manila Modes of Plaintiff New Manila Lumber filed a WON the contractor YES. Where a contractor, after executing powers of attorney in
Lumber Co., Inc. v. Extinguishment complaint against the defendant Republic of (principal) validly revoked favor of another to collect whatever amounts may be due him
Republic of Agency the Philippines for the recovery of a sum of the authority of plaintiff to from the Government, demands and collects from the latter
G.R. NO. L-14248, money. The complaint sought to enforce collect from defendant the money the collection of which he entrusted to his
April 28, 1960 against the Republic a money claim for the attorney-in-fact, the agency is thereby revoked.
NO.
GUTIERREZ DAVID, payment of materials New Manila furnished Powers of attorney executed by one in favor of another are
J. for the construction of two public school obligatory only on the principal who executed the agency, and
buildings undertaken by Alfonso Mendoza though irrevocable and coupled with interest, cannot affect a
on the basis of powers of attorney executed person who is not a party thereto.
by the latter authorizing New Manila to
collect and receive from defendant any De Leon:
amount due or may be due to said P authorized A to collect whatever amounts may be due P
contractor as contract price for the payment from T. Subsequently, P demanded payment from T, telling the
of the materials so supplied. New Manila latter to remit to him (P) the amount the collection of which
contended that there was an implied he entrusted to A. The agency to A is revoked. (New Manila
contract between it and the Republic when Lumber Co., Inc. vs. Republic, 107 Phil. 824 [1960].)
the latter promised to make payment to
plaintiff for the materials supplied for the However, an irrevocable power of attorney is obligatory only
construction of the school buildings upon on the principal who executed the agency. It cannot affect one
being furnished copies of the powers of who is not a party thereto.
attorney executed by the contractor.
However, defendant nevertheless made
payments to the contractor without first
making payment to plaintiff.
79. Infante v. Cunanan Modes of Consejo Infante, was the owner of two Whether or not petitioner YES. The principal's act is unfair as would amount to bad faith,
G.R. No. L-5180 Extinguishment parcels of land, together with a house built was duty bound to pay and cannot be sanctioned without according to the agents the
August 31, 1953 of Agency thereon, situated in the City of Manila. commission reward which is due them.
BAUTISTA ANGELO, Sometime in November 1948, she notwithstanding that the
J.: contracted the services of Jose Cunanan and authority so sell has been De Leon:
Juan Mijares, to sell the above-mentioned cancelled. If the purpose of the principal in dealing directly with the
property for a price of P30,000 subject to purchaser and himself effecting the sale of the principal’s
the condition that the purchaser would property is to avoid payment of his agent’s commission, the
assume the mortgage existing thereon in the implied revocation is deemed made in bad faith and cannot be
favor of the Rehabilitation Finance sanctioned without according to the agent the commission
Corporation. She agreed to pay them a which is due him.
commission plus whatever overprice they
may obtain for the property. Plaintiffs found
Pio S. Noche who was willing to buy the
property under the terms agreed upon with
NO.
defendant, but when they introduced him to

defendant, the latter informed them that
she was no longer interested in selling the
property and succeeded in making them sign
a document stating therein that the written
authority she had given them was already
cancelled. However, on December 20, 1948,
defendant dealt directly with Pio S. Noche
selling to him the property for P31,000.
Upon learning this transaction, plaintiffs
demanded from defendant the payment of
their commission, but she refused and so
they brought the present action.
80. Valera v. Velasco Modes of By virtue of powers of Attorney, Exhibits X Whether the agency was The filing of a complaint by an agent against his principal for
G.R No. L-28050 13 Extinguishment and Z, executed by plaintiff Valera on 11 terminated by the express the collection of a balance in his favor resulting from a
March 1928 Justice of Agency April 1919, and on 8 August 1922, defendant or tacit renunciation of liquidation of the agency accounts between them, and his
Villa-Real Velasco was appointed attorney-in-fact of the agent? rendering of a final account of his operations, are equivalent
the said plaintiff with authority to manage to an EXPRESS renunciation of the agency and terminate the
his property in the Philippines, consisting of juridical relation between them.
the usufruct of a real property located in the
City of Manila. - Velasco accepted both De Leon:
powers of attorney, managed plaintiff’s When an agent institutes an action against his principal for the
property, reported his operations and recovery of the balance in his favor resulting from the
rendered accounts, and on 31 March 1923 liquidation of the accounts between them arising from the
presented exhibit F to Valera, which is the agency, and renders a final account of his operations, such
final account of his administration for said actions are equivalent to an express renunciation of the
month, wherein it appears that there is a agency, and terminates the juridical relation between them.
balance in favor of Valera. - The liquidation Although the agent has not expressly told his principal that he
of accounts revealed that Valera owed renounced the agency, yet neither dignity nor decorum
Velasco money, and as misunderstanding permits one to continue representing a person who has
arose, Velasco brough suit against Valera, adopted an antagonistic attitude towards him. The act of filing
Judgment was rendered in his favor, and a complaint against the principal is more expressive than
after the writ of execution was issued, the words renouncing the agency. (Valera vs. Velasco, 51 Phil. 695
sheriff levied upon Valera’s right of usufruct, [1928].)
NO.
sold it at public auction and adjudicated it to

Velasco in payment of all of his claim. -
Subsequently, on 11 May 1923, the plaintiff
sold his right of redemption to one Eduardo
Hernandez On 4 September 1923, this
purchaser conveyed the same right of
redemption to the plaintiff himself. - After
the plaintiff had recovered his right of
redemption, one Salvador Vallejo, who had
an execution upon a judgment against the
plaintiff rendered in a civil case against the
latter, levied upon said right of redemption,
which was sold by the sheriff at public
auction to Salvador and was definitely
adjudicated to him. Later, he transferred
said right of redemption to Velasco. This is
how the title to the right of usufruct to the
aforementioned property came to vest the
said defendant.
81. Buason and Reyes Modes of Spouses Buenaventura Dayao and Eugenia Whether the sale to the YES. The contention that as the death of the principal ended
v. Panuyas Extinguishment Vega executed a power of attorney defendant appellee was the authority of the agent, the sale made by the latter of the
G.R. No. L-11415. of Agency authorizing Eustaquio Bayuga to sell a valid? land in question after the death of the principal is null and
25 May 1959 certain parcel of land. On 14 March 1934 void, is untenable. it not having been shown that the agent
PADILLA, J.: Buenaventura Dayao died leaving his wife knew of his principal's demise, and for that reason the sale
Eugenia Vega and four children. On 21 made by the agent is valid and effective with respect to third
March 1939 his four children executed a persons who have contracted with him in good faith. (Art.
deed of sale conveying 12.8413 hectares of 1723, Old Civil Code, 1931, New Civil Code).
the parcel of land to the appellants, the
spouses Manuel Buason and Lolita M.The De Leon:
appellants took possession of the parcel of The death of the principal extinguishes the agency; but in the
land through their tenants in 1939. On 18 same way that revocation of the agency does not prejudice
July 1944 Eustaquio Bayuga sold 8 hectares third persons who have dealt with the agent in good faith
of the same parcel of land to the spouses without notice of the revocation (Arts. 1921, 1922.), such third
NO.
Mariano Panuyas) and Sotera B. Cruz. persons are protected where it is not shown that the agent
Eustaquio Bayuga died on 25 March 1946 had knowledge of the termination of the agency because of
and Eugenia Vega in 1954. the death of the principal or of any other cause which
The appellants and the appellee claim extinguishes the agency.
ownership to the same parcel of land. In
their complaint the appellants prayed that
the appellee be ordered to deliver
possession of the part of the parcel of land
held by him; that the deed of sale of that
part of the parcel of land held by the
appellee executed by Eustaquio Bayuga in
his favor and of his wife be declared null and
void and that transfer certificate of title
issued in their name be cancelled. After trial
Court rendered judgment holding that the
appellants' action is barred by the statute of
limitations and dismissing their complaint.
Their motion for reconsideration filed but
was denied.
https://www.scribd.com/doc/174140583/di
gest-Buason-and-Reyes-vs-Panuyas-CD
82. Herrera, et al. v. Modes of The Plaintiff Herrera is the legitimate WON these transactions NO. As found by the lower court, the date of death of Luis
Luy Kim Guam Extinguishment daughter of Luis Herrera, now deceased and are null and void and of no Herrera has not been satisfactorily proven. Be that as it may,
G.R. No. L-17043, of Agency who died in China sometime after he went effect because they were even granting arguendo that Luis Herrera did die in 1936,
January 31, 1961 to that country in the last part of 1931 or executed by the attorney- plaintiffs presented no proof and there is no indication in the
BARRERA, J.: early part of 1932. The said Luis Herrera in in fact after the death of record, that the age Luy Kim Guan was aware of the death of
his lifetime was the owner of three (3) his principal his prince at the time he sold the property. The death of the
parcels of land and their improvements, principal does not render the act of an agent unenforceable,
known as Lots 1740, 4465 and 4467. Before where the latter had no knowledge of such extinguishment of
leaving for China, however, Luis Herrera the agency.
executed on December 1, 1931, a deed of
General Power of Attorney, which De Leon:
authorized and empowered the defendant
NO.
Kim Guan, among others to administer and The death of the principal extinguishes the agency; but in the
sell the properties of said Luis Herrera. In same way that revocation of the agency does not prejudice
September 1939, Luy Kim in his capacity as third persons who have dealt with the agent in good faith
attorney-in-fact of the deceased Luis without notice of the revocation (Arts. 1921, 1922.), such third
Herrera sold Lot 1740. Lots 4465 and 4467 persons are protected where it is not shown that the agent
were originally registered in the of Luis had knowledge of the termination of the agency because of
Herrera, married to Go Bang In December the death of the principal or of any other cause which
1931, Luis Herrera sold one-half (½) extinguishes the agency.
undivided share and to Herrera and Go
Bang, the other half (½). In July 1937, Luis
Herrera thru his attorney-in-fact Luy Kim
Guan sold to Nicomedes Salazar his one half
(½) participation in these two (2) lots. The
following month, August 1937, the Luy Kim
Guan and Nicomedes Salazar also sold Lot
4465. It is the contention of plaintiff-
appellant that all the transactions made by
defendant Kim Guan were fraudulent and
were executed after the death of Luis
Herrera and, consequently, when the power
of attorney was no longer operative.
83. Del Rosario v. Abad Modes of Tiburcio del Rosario obtained a loan from WON the power of NO. A mere statement in the power of attorney that it is
G.R. No. L-10881 Extinguishment Primitivo Abad. As security, Tiburcio attorney create an agency coupled with interest is not enough. In what does such interest
September 30, of Agency mortgaged the improvements of a parcel of coupled with an interest? consist must be stated in the power of attorney. The fact that
1958 land in favor of Primitivo. On the same day, Tiburcio mortgaged the improvements of the parcel of land is
PADILLA, J.: Tiburcio executed an irrevocable power of not such interest as could render irrevocable the power of
attorney coupled with an interest in the attorney in favor of Primitivo. In fact, no mention of it is made
subject matter thereof in favor of Primitivo, in the power of attorney. The mortgage has nothing to do with
authorizing Primitivo, among others, to sell the power of attorney and may be foreclosed by Primitivo, as
and convey the parcel of land. Tiburcio died, mortgagee, upon failure of Tiburcio, as mortgagor, to comply
leaving the mortgage debt unpaid. Two with his obligation. As the agency was not coupled with an
years later, Primitivo, acting as attorney-in- interest, it was terminated upon the death of Tiburcio and,
NO.
fact of Tiburcio, sold the land to his son for therefore, Primitivo could no longer validly convey the parcel
and in consideration of the token sum of of land to his son. (Del Rosario vs. Abad and Abad, 104 Phil.
P1.00 and the payment by the vendee of the 648 [1958].)
mortgage debt of Tiburcio to Primitivo. The
heirs of Tiburcio sought to recover the De Leon:
possession and ownership of the land. Under Act No. 3135. — The power of sale in a deed of
mortgage is not revoked by the death of the principal
(mortgagor) as it is not an ordinary agency that contemplates
exclusively the representation of the principal by the agent but
is primarily an authority conferred upon the mortgagee for the
latter’s own protection. It is an ancillary stipulation supported
by the same cause or consideration for the mortgage and
forms an essential and inseparable part of that bilateral
agreement. That power survives the death of the mortgagor.
(Perez vs. Phil. National Bank, 17 SCRA 833 [1966]; see Del
Rosario vs. Abad and Abad, 104 Phil. 648 [1958], under Art.
1927.)
84. Pasno v. Ravina Modes of During Gabina Labitoria’s lifetime Whether the right of sale YES. The power of sale given in a real estate mortgage is a
G.R. No. L-31581; Extinguishment mortgaged 3 parcels of land to the of the mortgaged power coupled with an interest which survives the death of the
February 3, 1930 of Agency Philippine National Bank (PNB) to secure an property can survive and grantor. The mortgagee with a power of sale should, on the
Malcolm, J. indebtedness of Php 1,600.00. It was can be enforced under death of the mortgagor, foreclose the mortgage in accordance
stipulated in the mortgage that the special power while the with the procedure pointed out in section 708 of the Code of
mortgagee “may remove, sell or dispose of mortgaged property is in Civil Procedure. That would safeguard the interests of the
the mortgaged property or any buildings, custodia legis? estate by putting the estate on notice while it would not
improvements, or other property in, on or jeopardize any rights of the mortgagee. The only result is to
attached to it and belonging to the suspend temporarily the power to sell so as not to interfere
mortgagor in accordance with the provisions with the orderly administration of the estate of a decedent. A
of Act No. 3135 or take other legal action contrary holding would be inconsistent with the portion of our
that it may deem necessary.” The mortgagor law governing the settlement of estates of deceased persons.
died and a petition was presented in court
for the probate of her last will and
testament. During the pendency of these
NO.
proceedings, a special administrator was

appointed by the lower court who took
possession of the estate of deceased,
including the 3 parcels of land mortgaged to
PNB. The estate having failed to comply with
the conditions of the mortgage, PNB,
pursuant to the stipulations contained in the
same, asked the sheriff of Tayabas to
proceed with the sale of the parcels of land.
When the attorney for the special
administrator received notice of the
proposed action, he filed a motion in court
in which an order was asked requiring the
sheriff to vacate the attachment over the
mortgaged properties and to abstain from
selling the same. The lower court granted
the petition in an order of February 14, 1929
and later denied a motion for
reconsideration presented on behalf of the
PNB. The mortgage makes special reference
to Act. No. 3135. That Act regulates the sale
of property under special powers inserted in
or annexed to real estate mortgages. It fails
to make provision regarding the sale of the
mortgaged property which is in custodia
legis. Under the circumstances, it would be
logical to suppose that general provisions of
Philippine law would govern this latter
contingency. It is a familiar rule that the
statutes in pari materia are to be read
together. The legislative body which enacted
Act. No. 3135 must be presumed to have
been seen acquainted with the provisions of
such a well known law as the Code of Civil
NO.
Procedure and to have passed Act. No. 3135

with reference thereto.
85. Perez v. PNB Modes of Vicente Perez mortgaged a lot to the Whether or not NO. The power to foreclose is not an ordinary agency that
G.R. No. L-21813, Extinguishment appellant Philippine National Bank in order foreclosure is an ordinary contemplates exclusively the representation of the principal
July 30, 1966 of Agency to secure payment of a loan of P2,500 plus agency which is barred by by the agent, but is primarily an authority conferred upon the
REYES, J.B.L., J. interest payable in installments. Perez died death of the principal mortgagee for the latter’s own protection. It is an ancillary
intestate and at that time, there was an stipulation supported by the same cause or consideration for
outstanding indebtedness of P1,917. The the mortgage and forms an essential and. inseparable part of
widow of Perez instituted Special that bilateral agreement. That power survives the death of the
Proceedings No. 512 of the Court of First mortgagor.
Instance of Occidental Negros, for the
settlement of the estate of Vicente Perez. De Leon:
The widow was appointed Administratrix The power of sale in a deed of mortgage is not revoked by the
and notice to creditors was duly published. death of the principal (mortgagor) as it is not an ordinary
The bank did not file a claim. The Bank, agency that contemplates exclusively the representation of
pursuant to authority granted it in the the principal by the agent but is primarily an authority
mortgage deed, caused the mortgaged conferred upon the mortgagee for the latter’s own protection.
properties to be extrajudicially foreclosed It is an ancillary stipulation supported by the same cause or
and it was purchased by the Bank. The consideration for the mortgage and forms an essential and
widow and heirs of Perez were not notified. inseparable part of that bilateral agreement. That power
The widow and heirs of Vicente Perez survives the death of the mortgagor
instituted this case against the Bank in the
court below, seeking to annul the Note: But the power to foreclose a mortgage if the mortgage
extrajudicial foreclosure sale and the debt is not paid survives the death of the mortgagor.
transfer of the Certificate of Title, as well as
to recover damages, claiming that the Bank
had acted illegally and in bad faith. After
trial, the court rendered judgment holding
the extra-judicial foreclosure void because
the Bank should have foreclosed its
mortgage in court and that the power to sell
contained in the deed of mortgage had
terminated upon the death of the
mortgagor.
NO.
https://pdfcoffee.com/1-digest-perez-v-pnb-
gr-no-l-21813-july-30-1966-pdf-free.html
86. Ramos v. Ramos 1. Express Trust Spouses Martin Ramos and Candida Tanate WON plaintiffs’ shares NO. —In its technical sense, a trust is defined as the right,
G.R. No. L-19872, (Arts. 1443– died on October 4, 1906 and October 26, were held in trust by the enforceable solely in equity, to the beneficial enjoyment of
December 3, 1974 1446, NCC) 1880, respectively. They were survived by defendants. property, the legal title to which is vested in another, but the
AQUINO, J. their 3 children. Moreover, Martin was word “trust” is frequently employed to indicate duties,
survived by his 7 natural children. In relations, and responsibilities which are not strictly technical
December 1906, a special proceeding for the trusts.
settlement of the intestate estate of said No particular words are required for the creation of an express
spouses was conducted. Rafael Ramos, a trust, it being sufficient that a trust is clearly intended (Ibid,
brother of Martin, administered the estate Art. 1444; Tuason de Perez vs. Caluag, 96 Phil. 981; Julio vs.
for more than 6 years. Eventually, a Dalandan, L19012, October 30, 1967, 21 SCRA 543, 546).
partition project was submitted which was Express trusts are those which are created by the direct and
signed by the 3 legitimate children and 2 of positive acts of the parties, by some writing or deed, or will, or
the 7 natural children. A certain Timoteo by words either expressly or impliedly evincing an intention to
Zayco signed in representation of the other create a trust (89 C.J.S. 722).
5 natural children who were minors. The The plaintiffs did not prove any express trust in this case. The
partition was sworn to before a justice of expediente of the intestate proceeding, Civil Case No. 217,
peace. particularly the project of partition, the decision and the
manifestation as to the receipt of shares (Exhs. 3, 4 and 6)
The conjugal hereditary estate was negatives the existence of an express trust. Those public
appraised at P74,984.93, consisting of 18 documents prove that the estate of Martin Ramos was settled
parcels of land, some head of cattle and the in that proceeding and that adjudications were made to his
advances to the legitimate children. ½ seven natural children. A trust must be proven by clear,
thereof represented the estate of Martin. satisfactory, and convincing evidence. It cannot rest on vague
1/3 thereof was the free portion or and uncertain evidence or on loose, equivocal or indefinite
P12,497.98. The shares of the 7 natural declarations (De Leon vs. Peckson, 62 O.G. 994). As already
children were to be taken from that 1/3 free noted, an express trust cannot be proven by parol evidence
portion. Indeed, the partition was made in (Pascual vs. Meneses, L-18838, May 25, 1967, 20 SCRA 219,
accordance with the Old Civil code. 228; Cuaycong vs. Cuaycong, L-21616, December 11, 1967, 21
Thereafter, Judge Richard Campbell SCRA 1192).
approved the partition project. The court
declared that the proceeding will be De Leon:
NO.
considered closed and the record should be The general rule is that the burden of proving the existence of
archived as soon as proof was submitted a trust is on the party alleging its existence; and to discharge
that each heir had received the portion this burden, it is generally required that his proof be clear and
adjudicated to him. satisfactory and convincing. (54 Am. Jur. 465; Ramos vs.
On February 3, 1914, Judge Nepumoceno Ramos, 61 SCRA 284 [1974].)
asked the administrator to submit a report
showing that the shares of the heirs had A constructive trust is not a trust in a technical sense. (see Art.
been delivered to them as required by the 1456; Ramos vs. Ramos, 61 SCRA 284 [1974]
previous decision. Nevertheless, the
manifestation was not in strict conformity the evidence thereon should be clear and conclusive or
with the terms of the judge’s order and with convincing (Ramos vs. Ramos, 61 SCRA 284 [1974]
the partition project itself. 8 lots of the
Himamaylan Cadastre were registered in Not trust in the technical sense. — The use of the word “trust”
equal shares in the names of Gregoria in Article 1456 is not basically accurate. The law has styled
(widow of Jose Ramos) and her daughter, such a situation a “trust” and the person obtaining the
when in fact the administrator was property a “trustee” for want of a better term as such person
supposed to pay the cash adjudications to has no title to the property and really holds it for the true
each of them as enshrined in the partition owner.
project. Plaintiffs were then constrained to
bring the suit before the court seeking for
the reconveyance in their favor their
corresponding participations in said parcels
of land in accordance with Article 840 of the
old Civil Code. Note that 1/6 of the subject
lots represents the 1/3 free portion of
martin’s shares which will eventually
redound to the shares of his 7 legally
acknowledged natural children. The
petitioners’ action was predicated on the
theory that their shares were merely held in
trust by defendants. Nonetheless, no Deed
of Trust was alleged and proven. Ultimately,
the lower court dismissed the complaint on
NO.
the grounds of res judicata, prescription and

laches.
659/RAMOS-v-RAMOS-docx
87. Cuaycong v. 2. Implied Eduardo Cuaycong, married to Clotilde de Whether the trust is The plaintiffs alleged an EXPRESS trust. Our Civil Code defines
Cuaycong Trust (Artsq. Leon, died without issue but with three express or implied an express trust as one created by the intention of the trustor
G.R No. L-21616 11 1447–1457, NCC) brothers and a sister surviving him: Lino, or of the parties, and an implied trust as one that comes into
December 1967 Justo, Meliton and Basilisa. Upon his death, being by operation of law (Art. 1441). Express trusts are those
Justice Bengzon his properties were distributed to his heirs created by the direct and positive acts of the parties, by some
as he willed except two haciendas both writing or deed or will or by words evidencing an intention to
known as Hacienda Bacayan. Hacienda create a trust. On the other hand, implied trusts are those
Bacayan is comprised of eight (8) lots all of which, without being expressed, are deductible from the
which are titled in the name of Luis D. nature of the transaction by operation of law as matters of
Cuaycong, son of Justo Cuaycong. Meliton equity, independently of the particular intention of the parties.
and Basilisa died without any issue. Thus, if the intention to establish a trust is clear, the trust is
Plaintiffs, surviving heirs of Lino, filed a suit express; if the intent to establish a trust is to be taken from
against Justo, Luis and Benjamin Cuaycong circumstances or other matters indicative of such intent, then
for conveyance of inheritance and the trust is implied.
accounting alleging, among others, that Luis From these and from the provisions of paragraph 8 of the
thru clever strategy, fraud, complaint itself, We find it clear that the plaintiffs alleged an
misrepresentation and in disregard of express trust over an immovable, especially since it is alleged
Eduardo’s wishes by causing the issuance in that the trustor expressly told the defendants of his intention
his name of certificates of title covering to establish the trust. Such a situation definitely falls under
Hacienda Bacayan’s properties. The Article 1443 of the Civil Code.
plaintiffs also claimed that Eduardo had an
arrangement with Justo and Luis that the DE LEON:
latter will hold in trust what might belong to Express trusts are created by the intention of the trustor or
his brothers and sister as a result of the parties, while implied trusts come into being by operation of
arrangements and deliver to them their law. (Art. 1441.) Express trusts are created by the direct and
share when the proper time comes. The positive acts of the parties by some writing or deed or will or
plaintiffs repeatedly demanded for their by words evidencing an intention to create a trust. On the
share in the property after Eduardo and other hand, implied trusts are those which, without being
Clotilde’s death. expressed, are deducible from the nature of the transaction or
NO.
On the other hand, Luis Cuaycong moved to imposed by operation of law, independently of the particular
dismiss the case on the grounds of intention of the parties. Thus, if the intention to establish a
unenforceability of the claim under the trust is clear, it is express; if such intention is to be taken from
statute of frauds, no cause of action, and bar the circumstances or other matters indicative of such intent,
of causes of action by the statute of then it is implied
limitations. The CFI dismissed the case for
the plaintiffs’ failure to file an amended It is now well-settled that an action for reconveyance to
complaint mentioning or alleging therein the enforce an implied trust in one’s favor prescribes in ten (10)
written evidence of the alleged trust. years
Plaintiff thereafter manifested that the claim
is based on an implied trust as shown by
paragraph 8 of the complaint. They added
that there being no written instrument of
trust, they could not amend the complaint
to include such instrument.
137/Cuaycong-vs-Cuaycong
88. Fabian v. Fabian E.1. Enforcement Pablo Fabian bought from the Philippine Whether or not laches YES. Express trusts are created by the intention of the parties,
No. L-20449. of Trust In Government lot 164 of the Friar Lands may constitute a bar to an while or implied trusts are exclusively created by law, the
January 29, 1968. relation to laches Estate in Muntinlupa, Rizal. By virtue of this action to enforce a latter not being trusts in their technical sense. The express
CASTRO, J.: purchase, he was issued sale certificate 547. constructive trust? trusts disable the trustee from acquiring for his own benefit
He died on August 2, 1928, survived by four the property committed to his management or custody, at
children, namely, Esperanza, Benita I, Benita least while he does not openly repudiate the trust, and makes
II, and Silbina. On October 5, 1928 Silbina such repudiation known to the beneficiary or cestui que trust.
Fabian and Teodora Fabian, niece of the But in constructive trusts the rule is that laches constitutes a
deceased, executed an affidavit. On the bar to actions to enforce the trust, and no repudiation is
strength of this affidavit, sale certificate 547 required, unless there is a concealment of the facts giving rise
was assigned to them. The acting Director of to the trust.
Lands, on behalf of the Government, sold lot The principle is that: If property is acquired through fraud, the
164 to Silbina Fabian and Teodora Fabian. person obtaining it is considered a trustee of an implied trust
The vendees spouses forthwith took physical for the benefit of the person from whom the property comes
possession thereof, cultivated it, and (Gayondato vs. Insular Treasurer, 49 Phil. 244).
appropriated the produce. In that same
NO.
year, they declared the lot in their names for Overruling previous decisions to the contrary, the Court in
taxation purposes. In 1937 the RD of Rizal Gerona vs. De Guzman, et al., L-19060, May 29, 1964, held
issued a TCT over lot 164 in their names. that an action for reconveyance of real property based upon a
They later subdivided the lot into 2 equal constructive or implied trust, resulting from fraud, may be
parts. The plaintiffs filed the present action barred by the statute of limitations, and that the action
for reconveyance against the defendants therefor may be filed within four years from the discovery of
spouses, averring that Silbina and Teodora, the fraud, the discovery in that case being deemed to have
through fraud perpetrated in their affidavit taken place when new certificates of title were issued
aforesaid. That by virtue of this affidavit, the exclusively in the names of the respondent therein.
said defendants succeeded in having the
sale certificate assigned to them and De Leon:
thereafter in having lot 164 covered by said Repudiation of trust. — In order that laches or acquisitive
certificate transferred in their names; and prescription may bar an action to enforce an express trust, an
that by virtue also of these assignment and express repudiation made known to the beneficiary is
transfer, the defendants succeeded required, while laches constitutes a bar to actions to enforce
fraudulently in having lot 164 registered in an implied trust even where there is no repudiation, unless
their names. They further allege that the there is concealment of the fact giving rise to the trust
land has not been transferred to an innocent
purchaser for value. A reconveyance thereof
is prayed for. In their answer, the
defendants spouses claim that Pablo Fabian
was not the owner of lot 164 at the time of
his death on August 2, 1928 because he had
not paid in full the amortizations on the lot;
that they are the absolute owners thereof,
having purchased it from the Government,
and from that year having exercised all the
attributes of ownership thereof up to the
present; and that the present action for
reconveyance has already prescribed. The
dismissal of the complaint is prayed for. The
lower court rendered judgment declaring
that the defendants spouses had acquired a
valid and complete title to the property by
NO.
acquisitive prescription, and accordingly

dismissed the complaint. The latter’s motion
for reconsideration was thereafter denied.
Hence, the present recourse.
89. Sotto v. Teves E.1. Enforcement On June 13, 1967, respondents filed suit in Whether laches barred NO. In determining whether a delay in seeking to enforce a
No. L-38018. of Trust In the CFI of Cebu against Marcelo Sotto, as respondents from right constitutes laches, the existence of a confidential
October 31, 1978. relation to laches administrator of the intestate estate of enforcing a trust. relationship between the parties is an important circumstance
GUERRERO, J.: Filemon Sotto, for the recovery of for consideration, a delay under such circumstances not being
possession and ownership of the 5 parcels of so strictly regarded as where the parties are strangers to each
land described in the complaint, with other. The doctrine of laches is not strictly applied between
damages. The complaint was based mainly near relatives, and the fact that the parties are connected by
upon the theory that a trust relation was ties of blood or marriage tends to excuse an otherwise
established and created with respect to the unreasonable delay. The claim that the heirs of Concepcion
said properties, with Atty. Filemon Sotto as Rallos are guilty of laches and are estopped from claiming the
trustee and as cestuis que trust, his mother- properties deserves scant consideration, for in fiduciary
inlaw, Maria Fadullon Vda. de Rallos; his relationship, the beneficiaries have the right to relay on the
wife, Carmen Rallos; and his sister-in-law, trust and confidence reposed in the trustee. In the case at bar,
Concepcion Rallos (predecessor in interest there being no effective repudiation of the express trust
of herein private respondents); and that in created by and among the Rallos heirs, the defense of laches
gross violation of the trust reposed upon invoked by petitioner is unavailing. (Buencamino, et al. vs.
him by Concepcion Rallos and after her Matias, et al., 16 SCRA 849; Julio vs. Dalandan, et al., G.R. No.
death, by her heirs, the said Atty. Filemon L-19012, October 30, 1967). Moreover under the facts
Sotto, through sheer manipulation, established and showing the complete dominance of Atty.
fraudulent acts and means, non-existent and Sotto over the heirs and descendants of the Rallos family, the
void decrees, fictitious sales and transfers, confidential relationship between the parties connected by
succeeded in causing the transfer of the ties of marriage and the reliance of the heirs with complete
ownership of the properties to the name of and absolute confidence in their uncle-in-law, Atty. Sotto,
his wife Carmen Rallos, and finally to his who, however, kept the hears in total ignorance and
name alone. Florentino Rallos was survived suppressed from them the real truth regarding said properties
by his wife and 2 children. Atty.Sotto (who that they were already registered in Atty. Sotto’s name as
married one of the children) is the lawyer to finally revealed to them by Cesar Sotto, the nephew and
whom the Rallos heirs entrusted the protegee of Atty. Sotto and were in danger of being lost to
settlement of the estate of Florentino. total strangers, the doctrine of laches is not strictly applicable.
Respondent Teves found out that all the
NO.
properties in question are now titled in De Leon:

thename of Sotto. The Rallos heirs then The doctrine of laches, however, is less strictly applied
initiated an action for recovery of the between near relatives than when the parties are strangers to
subject lands. Sotto raised that assuming each other. The existence of a confidential relationship is an
there is a trust relation, respondents are important consideration as it tends to excuse an otherwise
now barred by laches. unreasonable delay.
90. Gerona v. De E.2. Enforcement Petitioners, Ignacio, Maria Concepcion, WON petitioners' action is YES. An action for reconveyance of real property based upon a
Guzman of Trust In Francisco and Delfin, all surnamed Gerona, barred by the statute of constructive or implied trust, resulting from fraud, may be
No. L-19060. May relation to allege in their complaint for reconveyance limitations barred by the statute of limitations.
29, 1964. Statute of that they are the legitimate children of Inasmuch as petitioners seek to annul the aforementioned
CONCEPCION, J.: Limitations Domingo Gerona and Placida de Guzman; deed of "extra-judicial settlement" upon the ground of fraud in
that the latter was a legitimate daughter of the execution thereof, the action therefor may be filed within
Marcelo de Guzman and his first wife, four (4) years from the discovery of the fraud (Mauricio v.
Teodora de la Cruz; that after the death of Villanueva, L-11072, September 24, 1959). Such discovery is
his first wife, Marcelo married Camila deemed to have taken place, in the case at bar, on June 25,
Ramos, who begot him several children, 1948, when said instrument was filed with the Register of
namely, respondents Carmen, Jose, Deeds and new certificates of title were issued in the name of
Clemente, Francisco, Rustica, Pacita and respondents exclusively, for the registration of the deed of
Victoria, all surnamed De Guzman; that extra-judicial settlement constitute constructive notice to the
subsequently after the death of Marcelo, whole world.
respondents executed a deed of "extra-
judicial settlement of the estate of the De Leon:
deceased, fraudulently misrepresenting It has been held that where the action for reconveyance of
therein that they were the only surviving real property is based on constructive trust (see Art. 1456.)
heirs, although they well knew that resulting from its fraudulent registration in the name of
petitioners were, also, his forced heirs; that another, the action may be filed from the discovery of the
respondents had thereby succeeded fraud or notice thereof, which is deemed to have taken place
fraudulently in causing the transfer from the inscription of the instrument and/or the issuance of
certificates of title to seven (7) parcels of the new certificate of title by virtue thereof.
land in their own name; that such fraud was
discovered by the petitioners only the year In Balbin vs. Medalla (108 SCRA 666 [1981]), the court, in
before the institution of this case; that holding that the prescriptive period for a reconveyance action
petitioners forthwith demanded from is four years, erroneously relied on Gerona vs. de Guzman (11
respondents share in said properties but the SCRA 153 [1964]). But in Gerona, the fraud was discovered on
NO.
respondents refused to heed said demand, June 25, 1948, before the effectivity of the new Civil Code on
thereby causing damages to the petitioners. August 30, 1950; hence, Section 43(3) of the old Code of Civil
In their answer, respondents maintained Procedure (Act No. 190.) was applied.
that petitioners’ mother, the deceased
Placida de Guzman, was not entitled to
share in the estate of Marcelo de Guzman,
she being merely a spurious child of the
latter, and that petitioners’ action is barred
by the statute of limitations.
https://pdfcoffee.com/ignacio-gerona-vs-
de-guzman-pdf-free.html
91. Carantes v. CA F. Period of Mateo Carantes was the original owner of a WON action had already YES. Definitely, no express trust was created in favor of the
No. L-33360. April Prescription for certain parcel of land. When he died, he was prescribed? private respondents. If trust there was, it could only be—as
25, 1977. Reconveyance of survived by his wife and six children. held by respondent court—a constructive trust, which is
CASTRO, C.J.: Real Property Subsequently, the parcel of land was imposed by law. In constructive trusts there is neither promise
Based on Implied subjected for expropriation, and was later nor fiduciary relation; the so-called trustee does not recognize
Trust on indeed expropriated. A deed any trust and has no intent to hold the property for the
denominated as Assignment of Right of beneficiary. In at least two cases, the rule of constructive
Inheritance was executed by four of Mateo’s notice was applied by this Court although a constructive trust
children assigning Maximo Carantes their had been created. Thus, in Lopez, et al. vs. Gonzaga, et al.,
rights to inheritance over the lot. Maximo where the plaintiffs and the defendants were co-heirs and the
then sold the remaining lots to the decedent owner of the lands had merely allowed the principal
government and also registered on Mar. 16, defendant to use the products and rentals of the lands for
1940 the deed of Assignment of Right to purposes of coconut oil experimentation, but said defendant
Inheritance. The still remaining lot was later caused the transfer of the certificates of title in his own
issued in the name of Maximo. A complaint name through the registration of certain judicial orders, this
was filed against Maximo alleging that the Court held that the recording of the judicial orders sufficed as
deed be annulled on the ground of fraud. notice to the other heirs, for the rule is that knowledge of
The trial court rendered a decision stating what might have been revealed by proper inquiry is imputable
that plaintiff’s right of action has prescribed. to the inquirer.
The CA reversed the decision. In any event, it is now settled that an action for reconveyance
https://mgakaso- based on implied or constructive trust is prescriptible; it
blog.tumblr.com/post/439045657/carantes- prescribes in ten years.
v-ca
NO.
From March 16, 1940, when the petitioner registered the deed
of assignment and had the certificate of title in the names of
the heirs cancelled and a new certificate of title issued in his
own name, he began to hold the property in open and clear
repudiation of any trust. It will be noted that on the same
date, the petitioner also executed a formal deed of sale over
portions of Lot No. 44 in favor of the government. In 1948 he
mortgaged Lot No. 44-D with the Philippine National Bank as
his exclusive property. The petitioner’s exercise of such rights
of dominion is anathema to the concept of a continuing and
subsisting trust.
De Leon:
It is now well-settled that an action for reconveyance to
enforce an implied trust in one’s favor prescribes in ten (10)
years
92. Alarcon v. Bidin F. Period of In 1923, Roberto Alarcon leased a property Whether or not the action YES. It may also be stated that if petitioners’ cause of action in
No. L-51791. Prescription for with OCT No. T-13,125 (0-9493) to Esteban is barred by the statute of seeking the nullification of the sales is predicated on fraud, the
January 28, 1983. Reconveyance of Sergas. On January 5, 1926, Roberto Alarcon limitation and that the same has prescribed for not having been brought within four
MELENCIO- Real Property sold a portion of his undivided share to petitioners are guilty of years from the inscription of the deed of sale in favor of
HERRERA, J.: Based on Implied Sergas. The date of instrument was January laches. Esteban Sergas in 1963.
Trust 5, 1926, but the inscription was on May 3,
1963. Also, the name of the vendor in the Note:
instrument was Roberto Alarcon but the Article 1456. If property is acquired through mistake or fraud,
typewritten name at the bottom of the the person obtaining it is, by force of law, considered a trustee
document, above which appears a of an implied trust for the benefit of the person from whom
thumbmark, reads Alberto Alarcon. On July the property comes.
9, 1928, Roberto Alarcon sold another
portion of his share of the land to Adela
Alvarez who later sold it to Domingo Rojas
Francisco on November 29, 1954. On
October 23, 1978, petitioners filed a suit for
recovery of what they allege is their portion
of cadastral lot 3178. Private respondents
NO.
moved to dismiss the complaint on the

ground that the action is barred by the
statute of limitations and that petitioners
are guilty of laches. On May 23, 1979,
respondent Judge dismissed the complaint
for the reason that it is barred by laches.
Also on August 27, 1979, motion for
reconsideration was denied by the court.
https://pdfcoffee.com/digest-alarcon-vs-
bidin-pdf-free.html
93. Bueno v. Reyes F. Period of On January 7, 1936 Francisco H. Reyes filed WON lower court erred in YES. While there are some decisions which hold that an action
No. L-22587. April Prescription for an answer in Cadastral Case No.47 of Ilocos dismissal of the complaint upon a trust is imprescriptible, without distinguishing between
28, 1969. Reconveyance of Norte, claiming lot No. 2857 of the Laoag on the ground of express and implied trusts, the better rule, as laid down by the
MAKALINTAL, J.: Real Property Cadastre as property belonging to himself prescription Supreme Court in other decisions, is that prescription does
Based on Implied and to his two brothers, Juan and Mateo. supervene where the trust is merely an implied one.
Trust The case was heard without opposition, and Upon the general proposition that an action for reconveyance
the lot was adjudicated in favor of the such as the present is subject to prescription in ten years the
claimants on March 27, 1939, in whose appellees and the court a quo are correct. The question here,
names Original Certificate of Title No.19074 however, is: from what time should the prescriptive period be
was issued on the following July 7. Twenty- counted, in the light of the allegations in the complaint? It
three years thereafter, or on December 12, should be remembered that the constructive trust arose by
1962 to be exact, the plaintiffs filed the reason of the “bad faith or mistake” of the deceased father of
action below for reconveyance of lot No. the plaintiffs, compounded by the “connivance” of the
2357. They allege in their complaint that the appellees. Consequently, the cause of action upon such trust
said lot originally belonged to Jorge Bueno, must be deemed to have accrued only upon the discovery of
who died leaving three children, namely, such bad faith or mistake, or to put it more specifically, upon
Brigida Bueno, Eugenia Bueno and Rufino the discovery by the appellants that their father, in violation of
Bueno, to whom the property descended by their agreement with him, had obtained registration of the
intestate succession; that subsequently disputed property in his own name and in the names of his
Brigida and Eugenia died, leaving their brothers. It would not do to say that the cadastral proceeding
respective children, who are now the itself, by virtue of its nature as a proceeding in rem, was
plaintiffs-appellants together with Rufino constructive notice to the appellants, for as far as they were
Bueno; that Francisco H. Reyes was concerned the cadastral answer they had authorized the
Eugenia’s husband and the father of the father of the plaintiffs to file was not adverse to them; and
NO.
plaintiffs surnamed Reyes, “who agreement neither he nor the appellees may invoke the construtive-
among the heirs of Jorge Bueno was notice rule on the basis of their own breach of the authority
entrusted in filing the answer in the thus given. On top of all this, it was the appellants and not the
cadastral proceedings and in obtaining the appellees who were in possession of the property as owners,
title thereto for and in behalf of all the heirs continuously up to 1962, when for the first time the latter
of Jorge Bueno, including his wife Eugenia appeared upon the scene and tried to get such possession,
Bueno.” thereby revealing ,to them the fact of the mistaken or
fraudulent registration.
De Leon:
In Bueno vs. Reyes (29 SCRA 1179 [1969].), where A, in
violation of his agreement, instead of registering the property
in B’s name, registered the same in his (A’s) and his brothers’
names, the Supreme Court held that where the constructive
trust arose by reason of “bad faith or mistake,” the cause of
action must be deemed to have accrued only upon discovery
of such bad faith or mistake, which in this case, was held to
start from the discovery of the registration by A of the
disputed property.
94. Varsity Hills, Inc. v. F. Period of A petition was filed by the respondents Whether the present NO. The respondents’ action was extinguished by the lapse of
Navarro Prescription for Raymunda Mejia et al as heirs of Quintin action should prosper 30 years from the time Quintin Mejia was ejected from the
No. L-30889. Reconveyance of Mejia and by Elpidio Tiburcio as assignee of based on claims of implied land in question by the Provincial Sheriff of Rizal (1934) under
February 29, 1972. Real Property a portion of the estate against petitioners or constructive trust. the writ of execution hereinbefore adverted to without any
REYES, J.B.L., J.:98 Based on Implied Tuason et. al. The complaint alleged that suit being attempted to recover the land during the interval.
Trust Quintin Mejia had obtained a Spanish title to Since under Section 40 of the old Code of Civil Procedure (Act
the land and that he and his successors in 190) in force in 1934 an action to recover land or interest
interest had occupied the land without therein prescribed in 10 years, it is evident that, independent
interruption until they were forcibly ejected of the previous judgment, this reinvindicatory action is
therefrom and their houses demolished in foreclosed by the Statute of Limitations (extinctive
1934 through a writ of execution. In 1914, prescription), as contended by petitioners. Actions on implied
the defendants Tuason had obtained a and constructive trusts (as distinguished from express ones)
decree of registration covering 35,403 are extinguished by laches or prescription of ten years.
hectares and that they had fraudulently and
insidiously included plaintiff’s land in the
NO.
area covered by the Certificate of Transfer

by inserting fake and false technical
descriptions. UP et al. as subsequent
acquirers whose titles are derived from the
original fraudulent certificates should
likewise be annulled. Herein Petitioners
contend that the decision in a civil case
wherein the Respondents were declared as
without title to the land and ejected by a
writ of execution was affirmed by the
Supreme Court. The Petitioners contend in
the present case that the causes of action
averred by the Respondents were barred by
the LRA and the statute of limitations over
51 years having elapsed since the decree of
registration was issued, barred by laches as
32 years have elapsed since the ejectment
and that the court had no jurisdiction to
review and revise the decree of registration.
They also maintain as affirmative defenses
that they had in possession for over 30 years
of the land thus acquiring title by acquisitive
prescription and that claims for ownership
were extinguished by the decree and that
they are purchasers for value and in good
faith of the lands standing in their names. A
motion to dismiss was filed yet was denied
by the lower court. The Petitioners resorted
to the SC for a special proceeding for writs
of certiorari and prohibition thus the trial
court was enjoined from proceeding with
the trial until further orders. Mejia and
Tiburcio claim that appeal in due time was
the proper remedy.
NO.
753/Varsity-Hills-Inc-vs-Navarro-Digest
95. Ecsay v. CA F. Period of Emilio Ecsay mortgaged his property now in WON the contract and the NO. Assuming that there was fraud in the transfer of the
No. L-37504. Prescription for question to the PNB. He was not able to pay supplementary contract properties, the lapse of time since the discovery of the alleged
December 18, Reconveyance of his loan before he died in 1924, thus the are null and void for lack fraud in 1941 has extinguished any right on the part of the
1974. Real Property bank filed a foreclosure suit against the of consideration; petitioners to seek the reconveyance of the properties. The
FERNANDEZ, J.: Based on Implied estate of the former. Pending the said suit, consequently, they are prescriptibility of an action for reconveyance based on implied
Trust on 1933 an original contract was entered non-existent contracts or constructive trust, is now a settled question in this
between the bank, the administrator, and because they are jurisdiction. It prescribes in ten years.
Jose Ecsay, brother of Emilio where the simulated and fictitious
latter assumed the mortgage indebtedness and the action to set them De Leon:
of his deceased brother. This was agreed to aside does not prescribe When prescriptive period begins to run. — The ten-year period
by Magdalena widow of Emilio, in her own of prescription of an action for reconveyance of property (real
behalf and as guardian of their children. or personal) based on an implied trust starts from the moment
When it was discovered that the original the law creates the trust (when the cause of action arises)
contract failed to state the transfer of because the so-called trustee does not recognize any trust,
ownership of the properties in question, in and has no intention to hold for the beneficiary.
consideration of Jose’s assumption of the
mortgaged, a supplementary contract was
entered by the parties which was approved
by the probate court taking cognizance of
the estate of the deceased Emilio in 1934. In
1941, Magdalena and the other children
filed a complaint against the petitioner and
the administrator for the recovery of the
ownership and possession of the properties
in question. Petitioners contend that since
the titles over the properties in question
were transferred by fraudulent means, an
implied trust was created between the
testate estate of Emilio and Jose Sr. under
which, by operation of law, the latter
became a trustee of the properties in
question in favor of the heirs of Emilio;
NO.
consequently, the respondents are duty

bound to reconvey the properties in
question to the petitioners whose right to
recover the properties does not prescribe.
96. Jaramil v. CA F. Period of The complaint alleged the Isidro dela Cruz WON petitioners- YES. An action for the reconveyance of land based on implied
No. L-31858. Prescription for was in life the owner of Lot 1422 located in appellants’ action for the or constructive trust prescribes within ten (10) years. And it is
August 31, 1977. Reconveyance of Umingan, Pangasinan, containing an area of reconveyance of title is from the date of the issuance of such title that the effective
FERNANDEZ, J.: Real Property 3,226 square meters, more less, embraced barred by the statute of assertion of adverse title for purposes of the statute of
Based on Implied in Original Certificate of Title No. 49228; that limitations.” limitations is counted.
Trust sometime in 1935 the spouses Faustino
Jaramil and Filomena Cabinar were De Leon:
permitted by the registered owners to It is now well-settled that an action for reconveyance to
established residence on the land with the enforce an implied trust in one’s favor prescribes in ten (10)
understanding that said spouses would years.
vacate the premises upon demand; and that
despite a demand to vacate made on or The reference point is the date of registration of the deed or
about August 23, 1958, the defendants the date of issuance of said new certificate of title of the
refused to leave the land in question. The property which constitutes constructive notice to the public.
defendants averred in their answer that they
are the true owners of the disputed lot and
that if Isidro dela Cruz and Sotera Medrana
were able to register the property in their
names, the registration must have been
done through fraud and bad faith. The
defendants interposed a counterclaim
wherein they asked for damages and for the
reconveyance to them of the land question.
The evidence in support of the claim of the
petitioners-appellants that Isidro dela Cruz
registered the land in question fraudulently
and in breach of trust consists of the
testimonies of Faustino Jaramil and Cornelio
Barba
NO.
97. Vda. De Nacalaban F. Period of The complaint 3 stated that the spouses WON plaintiffs- YES. The contention that an implied trust over the land in
vs. CA Prescription for Narciso Cababarros and Narcisa Edmilao, respondents’ action is question existed has no factual and legal basis. Granting,
No. L-39478. Reconveyance of during their lifetime, acquired a certain barred by prescription. arguendo, that such an implied trust existed, the cause of
November 29, Real Property parcel of land known as Lot No. 1162, action of the private respondents has prescribed. Their cause
1977. Based on Implied surveyed in the name of Heirs of Narciso of action arose on January 8, 1938 when Original Certificate of
FERNANDEZ, J.:102 Trust Cababarros, situated at Corrales Extension, Title No. 6929, was issued by the Register of Deeds of Misamis
Telegrapo, Cagayan de Oro City containing Oriental to the spouses Dioniciano Nacalaban and Faustina
an area of 4,082 square meters and declared Cababarros. The issuance of the title was constructive notice
in the name of Dioniciano Nacalaban under to the private respondents.
Tax Declaration No. 16358; that upon the The action for partition and reconveyance was commenced
death of Narciso Cababarros and Narcisa only on February 11, 1964, more than ten (10) years from the
Edmilao the said land was transmitted by date the cause of action arose in 1938. Actions on implied and
operation of law to the defendants and the constructive trusts are extinguished by laches or prescription of
parents of the plaintiffs; that the property in ten years.
question being owned in common, was
placed in trust and in the physical De Leon:
possession of defendant Faustina Vda. de It is now well-settled that an action for reconveyance to
Nacalaban and her late husband, Dioniciano enforce an implied trust in one’s favor prescribes in ten (10)
Nacalaban, on the understanding that they years.
should deliver the shares of the herein
plaintiffs in case the latter demanded the
same; that while the property in question
was in the possession of the defendant
Faustina Vda. de Nacalaban and her
husband Dioniciano Nacalaban, the said
spouses were able to secure fraudulently a
certificate of title in their names, without
the consent and knowledge of the plaintiffs;
and that upon knowing of the fraudulent
acquisition, the plaintiffs had exerted on
several occasions efforts to demand for their
respective shares but the defendants
arrogantly refused and ignored the plaintiffs’
demands.
NO.
98. Duque v. Domingo F. Period of The partial stipulation of facts and the WON the claim of private YES. Assuming implied or constructive trust existed between
No. L-33762. Prescription for evidence established that the land in respondents to enforce an Juana Duque and either Faustino or Mariano Duque, the right
December 29, Reconveyance of question, Lot 1083 of the Malinta Estate was implied trust over real of action upon the same had prescribed as 35 years had
1977. Real Property formerly a part of the Friar Land Estate of property had prescribed passed since the issuance of the transfer certificate of title on
FERNANDEZ, J.: Based on Implied the Government that on January 1, 1909 the or had been barred by the land in question to Mariano Duque; Registration of
Trust Government of the Philippine Islands sold to laches instrument with Register of Deeds is constructive notice to the
Faustino Duque Lot 1083 by virtue of Sale whole world and that fiduciary or trust relationship has been
Certificate No. 1138 for a consideration of P repudiated; Implied or constructive trusts prescribe in 10
503.00 payable in 20 annual installments of years.—No implied trust between Juana Duque and either
P 25.00 per year, effective on January 1, Faustino Duque or Mariano Duque has been established by
1909; that in 1915 Faustino Duque assigned sufficient evidence. At any rate, granting, arguendo, that such
his right on Lot 1083 in favor of Mariano an implied or constructive trust existed, the right of action
Duque, the legitimate father of the upon the same has prescribed. From 1931 when Transfer
petitioners Potenciana Duque, Amadeo Certificate of Title No. 7501 covering the land in question was
Duque and Arsenio Duque; that on issued to Mariano Duque until 1966 when the present case
September 15, 1931, Transfer Certificate of was commenced a period of 35 years had passed. The
Title No. 7501 was issued in the name of registration of an instrument in the Office of the Register of
Mariano Duque; that upon the death of Deeds constitutes constructive notice to the whole world, and,
Mariano Duque, his widow, Dorotea Vda. de therefore, discovery of the fraud is deemed to have taken
Duque and children, Potenciana, Amadeo, place at the time of registration. Such registration is deemed
Arsenio and Emilio, all surnamed Duque, as to be a constructive notice that the alleged fiduciary or trust
heirs, instituted in the Court of First Instance relationship has been repudiated. It is now settled that an
of Manila a proceeding for the settlement of action on an implied or constructive trust prescribes in ten (10)
the estate of said Mariano Duque; that in years from the date the right of action accrued. The issuance
the estate proceeding Lot 1083 was of Transfer Certificate of Title No. 7501 in 1931 to Mariano
adjudicated pro-indiviso to the widow and Duque commenced the effective assertion of adverse title for
children of Mariano Duque; that Transfer the purpose of the statute of limitations.
Certificate of Title No. 19924 was issued to
the said heirs; that when Dorotea Vda. de De Leon:
Duque and Emilio Duque died in 1954 and The reference point is the date of registration of the deed or
1956, respectively, their shares in Lot 1083 the date of issuance of said new certificate of title of the
were inherited by the petitioners to whom property which constitutes constructive notice to the public.
Transfer Certificate of Title No. 25195 was
issued; that in 1933 the land in question was
NO.
declared for taxation in the name of the

respondent, Paz Domingo; that beginning
with the year 1949 the tax declaration
embracing the land in question was in the
name of Mariano Duque and that Tax
Declaration No. 15214 is in the names of the
petitioners.
The private respondents adduced oral
evidence that sometime in 1908 Juana
Duque, through her nephew whom she had
employed as her agent, purchased from the
Government Lot 1083 of the Malinta Estate
in Polo, now Valenzuela, Bulacan; that
Faustino Duque, the agent, caused the
document of purchase, Sale Certificate No.
1138, to be issued by the government in his
name with the consent of his principal,
Juana Duque; and that in or about 1927
Juana Duque verbally donated and delivered
Lot 1083 to her niece, Julia Duque.
On September 5. 1966, Julia Duque, for
herself and as, natural guardian of her
daughter of unsound mind, Paz Domingo,
instituted against Potenciana Duque,
Amadeo Duque and Arsenio Duque Civil
Case No. 266-V in the Court of First Instance
of Bulacan for reconveyance of Lot 1083 of
Malinta Estate located in Polo, Bulacan and
in the alternative, to declare Transfer
Certificate of Title No. 25195 in the name of
the defendants void and to declare the
plaintiffs as the absolute owners of said Lot
1083.
NO.
99. Tongoy v. CA F. Period of This case is an action for reconveyance of WON respondents’ rights NO. Considering the law and jurisprudence on simulated or
No. L-45645. June Prescription for the 2 parcels of land in Bacolod City. The 1st have already prescribed fictitious contracts as aforestated, the within action for
28, 1983. Reconveyance of land is Hacienda Pulo which title was reconveyance instituted by herein respondents which is
MAKASIAR, J.: Real Property registered in the name of Luis D. Tongoy and anchored on the said simulated deeds of transfer cannot and
Based on Implied the 2nd is Cuaycong property which title was should not be barred by prescription. No amount of time could
Trust transferred to Luis D. Tongoy. The properties accord validity or efficacy to such fictitious transactions, the
were mortgaged in the year 1936 by said defect of which is permanent.
Luis D. Tongoy for a period of 15 years; that There is no implied trust that was generated by the simulated
the mortgage obligations to the PNB were transfers; because being fictitious or simulated, the transfers
fully paid on April 17, 1956; that the release were null and void ab initio—from the very beginning—and
of mortgage was recorded in the Registry of thus vested no rights whatsoever in favor of Luis Tongoy or his
Deeds on May 5, 1958; and that the case for heirs. That which is inexistent cannot give life to anything at
reconveyance was filed in the trial court on all.
June 2, 1966. But even assuming arguendo that such an implied trust exists
https://www.scribd.com/document/354139 between Luis Tongoy as trustee and the private respondents
008/164-Tongoy-vs-CA as cestui que trust, still the rights of private respondents to
claim reconveyance is not barred by prescription or laches.
Considering that the implied trust resulted from the simulated
sales which were made for the purpose of enabling the
transferee, Luis D. Tongoy, to save the properties from
foreclosure for the benefit of the co-owners, it would not do
to apply the theory of constructive notice resulting from the
registration in the trustee’s name. Hence, the ten-year
prescriptive period should not be counted from the date of
registration in the name of the trustee, as contemplated in the
earlier case of Juan vs. Zuniga (4 SCRA 1221). Rather, it should
be counted from the date of recording of the release of
mortgage in the Registry of Deeds, on which date—May 5,
1958— the cestui que trust were charged with the knowledge
of the settlement of the mortgage obligation, the attainment
of the purpose for which the trust was constituted.
De Leon:
NO.
In another case, however, where the ownership of land was

sold fictitiously to avoid a foreclosure of mortgage, it was ruled
that the ten-year prescriptive period should be counted not
from the registration of the simulated sale (see Arts. 1345,
1346.), but from the date of recording of the release of
mortgage, on which date the cestui que trust was charged
with the knowledge of the settlement of the mortgage
obligation, the attainment of the purpose for which the trust
was created.
100. Caragay-Lagno v. F. Period of After discovering a discrepancy between the WON the action for NO. Prescription cannot be invoked against JULIANA for the
CA Prescription for Inventory of Properties of deceased Mariano reconveyance which, in reason that as lawful possessor and owner of the Disputed
G.R. No. L-52064. Reconveyance of and his OCT in the area of the estate, effect, seeks to quiet title Portion, her cause of action for reconveyance which, in effect,
December 26, Real Property Salvador, the administrator, proceeded to to the property has seeks to quiet title to the property, falls within settled
1984. Based on Implied the disputed property and discovered prescribed. jurisprudence that an action to quiet title to property in one’s
MELENCIO- Trust petitioner Juliana occupying the same. possession is imprescriptible. Her undisturbed possession over
HERRERA, J.:106 Salvador demanded that she vacate but she a period of fifty two (52) years gave her a continuing right to
refused, asserting ownership and possession seek the aid of a Court of equity to determine the nature of
of the same for a long period of time. the adverse claim of a third party and the effect on her own
Salvador filed a suit to recover the property. title.
Juliana sought that the property be Besides, under the circumstances, JULIANA’S right to quiet
reconveyed to her. She also claimed that title, to seek reconveyance, and to annul OCT No. 63 accrued
there was fraud in the inclusion of the only in 1966 when she was made aware of a claim adverse to
property in the OCT. The RTC and CA her own. It was only then that the statutory period of
awarded the property to Salvador. prescription may be said to have commenced to run against
https://www.scribd.com/document/255179 her, following the pronouncement in Faja vs. Court of Appeals,
754/LTD-Caragay-Layno-v-CA-Flores supra, a case almost identical to this one.
De Leon:
If the legitimate owner of the subject property which was
fraudulently registered in the name of another had always
been in possession thereof, the constructive notice rule
cannot be applied. The action for reconveyance is in reality an
action to quiet title; therefore, the action is imprescriptible.

Case Digests For Atty. Ranada's ATAP Class

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Case Digests For Atty. Ranada's ATAP Class

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CASE DIGESTS FOR ATTY.

RANADA’S ATAP CLASS (2nd SEM, AY 21-22)

spouses to get their shares in the profits.

In June 1946, they executed a

In the interest of the national economy and

between the APT and KAWASAKI , they

At the public bidding, petitioner J.G. Summit

Petitioners, in their motion for

to be bound by the 60%-40% constitutional

Silva and Aboitiz. In the event of their

attention of the Hearing Officer the fact of

from business in 1910, was Lim Ka Yam, the

Despite the existence of the Deed of

By way of special and affirmative defenses,

appeal, the CA affirmed the trial court’s

were no flight[s] available for plaintiffs, thus,

funds in possession of the latter. Orient Air

DENR upheld the validity of EP 133. During

Company jointly for the sum of P10,000. The

Mrs. Maria de Guzman Vda. de Ayroso. of petitioner for the crime

as evidenced by the stipulation that Green

land; that they received P165 in

the care of his elder sister Nicolasa Jimenez.

him, and the remittance of the same were a tacit

in question. Justino and Pastor, as donees of

appears to have conveyed all its assets to

as to relieve him from personal liability. All

there was some evidence or admissions on the part of her

because the land taken over had been

by Tan Boon Tiong, acting as attorney-in-fact

made in accordance with their instructions,

Exhibit “C” was amended to the effect that

nor that the principal was not, in fact, injured by the

https://www.scribd.com/document/327598 thereon in accordance with the provisions of article 1724 of

not install the plant and did not know

amount that the defendant had paid. It was

despite the fact that on the preceding

defendant, but when they introduced him to

sold it at public auction and adjudicated it to

proceedings, a special administrator was

Procedure and to have passed Act. No. 3135

the grounds of res judicata, prescription and

acquisitive prescription, and accordingly

properties in question are now titled in De Leon:

moved to dismiss the complaint on the

area covered by the Certificate of Transfer

consequently, the respondents are duty

declared for taxation in the name of the

In another case, however, where the ownership of land was

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