Lim v.
Court of Appeals
G.R. No. 102784. February 28, 1996
Facts:
Petitioner Rosa Lim received from private respondent Victoria Suarez
a diamond ring and a bracelet worth P169,000 and P170,000
respectively to be sold on commission basis.
A few months later, petitioner returned the bracelet to Suarez but
failed to return the diamond ring or the proceeds from its sale if sold.
Suarez made several verbal and written demands to petitioner. In
response, petitioner replied that she has actually returned both
jewelries to Suarez.
Irked, Vicky Suarez filed a complaint for estafa.
Petitioner denied that the transaction was for her to sell the two
pieces of jewelry on commission basis. She claimed that she took the
jewelries because she was considering buying them for her own use
and that the real agreement between her and Suarez is a sale on
credit as evidenced by the fact that in the document Suarez made her
sign, she didn’t sign on the space provided for the person receiving
the jewelry. But she changed her mind so she said she will return
them. Suarez instructed her to give the jewelries to an Aurelia
Nadera. She followed and gave them to Nadera as evidenced by a
handwritten receipt.
Issue
Whether or not the transaction between Rosa Lim and Vicky Suarez is
a contract of agency.
Ruling:
YES. The receipt marked as Exhibit "A" establishes a contract of
agency to sell on commission basis between Vicky Suarez and Rosa
Lim.
Rosa Lim’s signature indeed appears on the upper portion of the
receipt immediately below the description of the items taken. We
find that this fact does not have the effect of altering the terms of the
transaction from a contract of agency to sell on commission basis to a
contract of sale. The moment she affixed her signature thereon,
petitioner became bound by all the terms stipulated in the receipt.
She, thus, opened herself to all the legal obligations that may arise
from their breach.
There are some provisions of the law which require certain formalities
for particular contracts. However, a contract of agency to sell on
commission basis does not belong to such categories, hence it is valid
and enforceable in whatever form it may be entered into.
Furthermore, there is only one type of legal instrument where the law
strictly prescribes the location of the signature of the parties thereto.
This is in the case of notarial wills.
In the case before us, the parties did not execute a notarial will but a
simple contract of agency to sell on commission basis, thus making
the position of petitioner’s signature thereto immaterial.
 Uniland Resources v. DBP
G.R. No. 95909, August 16, 1991
Facts
Long before this case arose, Marinduque Mining Corporation
obtained a loan from the DBP and mortgaged two lots in Makati, one
with an office building and the other a warehouse, as security
therefor.
The two lots, however, were already mortgaged to Caltex and the
mortgage in favor of DBP was entered on their titles as a second
mortgage. The DBP later transferred Marinduque Mining’s account to
the Assets Privatization Trust (APT).
Marinduque Mining failed to pay its obligations to Caltex so the latter
foreclosed the mortgage. APT meanwhile offered its right of
redemption on the two lots by public bidding.
The sole bidder was Counsel Realty Corp., an affiliate of Glaxo,
Philippines, the client of petitioner. It offered a bid of P23 million for
the warehouse lot but since Caltex required that both lots be
redeemed, DBP rejected its bid.
Seeing the two lots as profitable, DBP later retrieved the account
from APT and redeemed the lots from Caltex for P33 million. It later
sold the warehouse lot for P24 million in a public bidding where the
sole bidder is Clarges Realty, another affiliate of Glaxo.
After the sale, Petitioner Uniland wrote two letters to the DBP asking
for the payment of its broker's fee in instrumenting the sale of its
(DBP's) warehouse lot to Clarges Realty. It was denied.
The lower court ordered the DBP to pay petitioner but this was
reversed by the CA.
Issue
Whether or not there is a contract of agency between DBP and
Uniland.
Ruling:
NO. It is obvious that petitioner was never able to secure the required
accreditation from respondent DBP to transact business on behalf of
the latter. The letters sent by petitioner to the higher officers of the
DBP and the APT are merely indicative of petitioner's desire to secure
such accreditation. There was no express reply from the DBP or the
APT as to the accreditation sought by petitioner.
Petitioner contends that there is implied agency created under Art.
1869 of the CC. However, this is not a situation wherein a third party
was prejudiced by the refusal of respondent DBP to recognize
petitioner as its broker. Art. 1869, therefore, has no room for
operation in this case.
Petitioner would also disparage the formality of accreditation as
"merely a mechanical act.” Petitioner's stance goes against the basic
axiom in Civil Law that no one may contract in the name of another
without being authorized by the latter, unless the former has by law a
right to represent him.
For equity considerations though, P100,000 is awarded to petitioner
for its efforts.
 Nogales v. Capitol Medical Center
511 SCRA 204 (2006)
Facts:
Petitioner Rogelio Nogales’ wife Corazon Nogales was under the
exclusive prenatal care of Dr. Oscar Estrada. In her last trimester, Dr.
Estrada noted some complications in her pregnancy.
Later, Corazon would experience mild labor pains prompting the
Spouses Nogales to see Dr. Estrada at his home. She was admitted to
respondent Capitol Medical Center (CMC) under the advice of Dr.
Estrada.
During the delivery, Dr. Estrada misapplied the forceps which resulted
in a large cervical tear causing Corazon to bleed profusely. Dr. Estrada
failed to control the bleeding due to the mistake by his assistant.
Petitioners filed a complaint for damages with the RTC of Manila
against CMC, Dr. Estrada, and others. The trial court found Dr. Estrada
solely liable for damages.
Petitioners appealed the trial court's decision. Petitioners claimed
that aside from Dr. Estrada, the remaining respondents should be
held equally liable for negligence but the CA affirmed the decision of
the trial court.
Issue
Whether or not CMC is liable.
Ruling:
In general, a hospital is not liable for the negligence of an
independent contractor-physician. In general, a hospital is not liable
for the negligence of an independent contractor-physician. There is,
however, an exception to this principle. The hospital may be liable if
the physician is the "ostensible" agent of the hospital. This exception
is also known as the "doctrine of apparent authority."
The doctrine of apparent authority essentially involves two factors to
determine the liability of an independent-contractor physician.
1. Hospital's manifestations or whether the hospital acted in a
manner which would lead a reasonable person to conclude
that the individual who was alleged to be negligent was an
employee or agent of the hospital.
2. Patient's reliance or whether the plaintiff acted in reliance
upon the conduct of the hospital or its agent, consistent with
ordinary care and prudence.
As to the first factor, CMC impliedly held out Dr. Estrada as a member
of its medical staff. CMC granted staff privileges to Dr. Estrada. CMC
extended its medical staff and facilities to Dr. Estrada. CMC made
Rogelio sign consent forms printed on CMC letterhead.
Without any indication in these consent forms that Dr. Estrada was an
independent contractor-physician, the Spouses Nogales could not
have known that Dr. Estrada was an independent contractor.
And as to the second factor, records show that the Spouses Nogales
relied upon a perceived employment relationship with CMC in
accepting Dr. Estrada's services. Rogelio testified that he and his wife
specifically chose Dr. Estrada because of Dr. Estrada's "connection
with a reputable hospital, the [CMC].” In other words, Dr. Estrada's
relationship with CMC played a significant role in the Spouses
Nogales' decision in accepting Dr. Estrada's services.
 Yun Kwan Byung v. PAGCOR
608 SCRA 107, December 11, 2009
Facts:
PAGCOR launched its Foreign Highroller Marketing Program
(Program). The Program aims to invite patrons from foreign countries
to play at the dollar pit of designated PAGCOR-operated casinos.
The Korean-based ABS Corporation was one of the international
groups that availed of the Program. In a Junket Agreement, ABS
Corporation agreed to bring in foreign players to play at the five
designated gaming tables of the Casino Filipino.
Petitioner, a Korean national, alleges that he came to the Philippines
four times to play for high stakes at the Casino Filipino during which
he was able to accumulate gambling chips worth US$2.1 million.
when he presented the gambling chips for encashment with PAGCOR,
the latter refused to redeem them.
PAGCOR stated that petitioner is a junket player who played in the
dollar pit exclusively leased by ABS Corporation for its junket players.
As such, ABS is solely liable for the gambling chips.
Petitioner filed a complaint for a sum of money before the trial court.
He claims that he is a third party proceeding against the liability of a
presumed principal and claims relief, alternatively, on the basis of
implied agency or agency by estoppel.
The trial court dismissed the complaint. The CA affirmed the appealed
decision.
Issue:
Whether or not PAGCOR is liable to petitioner, under the doctrine of
implied agency, or agency by estoppel.
Ruling:
NO. There is no implied agency in this case because PAGCOR did not
hold out to the public as the principal of ABS Corporation. PAGCOR's
actions did not mislead the public into believing that an agency can be
implied from the arrangement with the junket operators, nor did it
hold out ABS Corporation with any apparent authority to represent it
in any capacity. The Junket Agreement was merely a contract of lease
of facilities and services.
The players brought in by ABS Corporation were covered by a
different set of rules in acquiring and encashing chips. The players
used a different kind of chip than what was used in the regular
gaming areas of PAGCOR, and that such junket players played
specifically only in the third-floor area and did not mingle with the
regular patrons of PAGCOR. PAGCOR also posted notices stating that
the players are playing under special rules, a precaution to warn the
gaming public that no agency relationship exists.
An agency by estoppel requires proof of reliance upon the
representations. There can be no apparent authority of an agent
without acts or conduct on the part of the principal and such acts or
conduct of the principal must have been known and relied upon in
good faith.
In the entire duration that petitioner played in Casino Filipino, he was
dealing only with ABS Corporation, and availing of the privileges
extended only to players brought in by ABS Corporation. The facts
that he enjoyed special treatment upon his arrival in Manila and
special accommodations in Grand Boulevard Hotel, and that he was
playing in special gaming rooms are all indications that petitioner
cannot claim good faith that he believed he was dealing with
PAGCOR.
 People’s AirCargo and Warehousing v. CA
G.R. No. 117847. October 7, 1998
Facts
People’s AirCargo operates a customs bonded warehouse at the old
MIA in Pasay City. To obtain a license for the corporation from the
Bureau of Customs, Antonio Punsalan Jr., they solicited a proposal
from private respondent, Stefani Saño for the preparation of a
feasibility study.
Private respondent submitted a letter-proposal to Punsalan which
was initially opposed by the stockholders of petitioner-corporation
because another company offered a lower price. However, Punsalan
preferred Saño because of the latter’s membership in the task force
supervising the transition of the Bureau of Customs from the Marcos
government to the Aquino administration.
As such, Punsalan confirmed their agreement to the proposal. And
later, they executed a Second Contract.
After receiving the operations manual prepared by Saño, petitioner
submitted said operations manual to the Bureau of Customs in
connection with the former’s application to operate a bonded
warehouse. The Bureau issued to it a license to operate.
Later, private respondent joined the Bureau of Customs while
Punsalan sold his shares in petitioner-corporation and resigned as its
president.
In 1988, Saño filed a collection suit against petitioner. He alleged that
he had prepared an operations manual for petitioner, conducted a
seminar-workshop for its employees and delivered to it a computer
program; but that, despite demand, petitioner refused to pay him for
his services.
Petitioner argues that the disputed contract is unenforceable,
because Punsalan, its president, was not authorized by its board of
directors to enter into said contract.
Issue
Whether the president of the petitioner-corporation had apparent
authority to bind petitioner to the Second Contract.
Ruling
YES. The existence of apparent authority may be ascertained through
(1) the general manner in which the corporation holds out an officer
or agent as having the power to act or, in other words, the apparent
authority to act in general, with which it clothes him; or (2) the
acquiescence in his acts of a particular nature, with actual or
constructive knowledge thereof, whether within or beyond the scope
of his ordinary powers.
In the case at bar, petitioner, through its president Antonio Punsalan
Jr., entered into the First Contract without first securing board
approval. Despite such lack of board approval, petitioner did not
object to or repudiate said contract, thus "clothing" its president with
the power to bind the corporation. Hence, private respondent should
not be faulted for believing that Punsalan’s conformity to the contract
in dispute was also binding on petitioner.
It is familiar doctrine that if a corporation knowingly permits one of its
officers, or any other agent, to act within the scope of an apparent
authority, it holds him out to the public as possessing the power to do
those acts; and thus, the corporation will, as against anyone who has
in good faith dealt with it through such agent, be estopped from
denying the agent’s authority.
Granting arguendo then that the Second Contract was outside the
usual powers of the president, petitioner’s ratification of said contract
and acceptance of benefits have made it binding, nonetheless. The
enforceability of contracts under Article 1403(2) is ratified "by the
acceptance of benefits under them" under Article 1405.
B.H. Macke v. Camps
G.R. No. 2962, February 27, 1907
Facts
Petitioners Macke and Chandler are business partners doing business
under the firm name of Macke, Chandler & Company. They allege that
they sold to the defendant and delivered at “Washington Café,” his
business, various bills of goods amounting to P351.50.
Macke testified that on the order of one Ricardo Flores, who
represented himself to be the agent of the defendant, he shipped the
said goods to the defendant. Flores acknowledged the receipt of the
said goods and made various payments thereon amounting in all to
P174. He demanded payment of the balance but Flores told him that
he did not have the necessary funds on hand so he would wait for the
return of his principal, herein defendant Jose Camps.
Petitioners submitted in evidence a sublease contract between
defendant Camps and Galmes, the former owner of “Washington
Café.” The name of Ricardo Flores appears in said contract as witness
and was therein designated as Camps’ managing agent.
The defendant did not go on the stand nor call any witnesses, and
relies wholly on his contention that the foregoing facts are not
sufficient to establish the fact that he received the goods for which
payment is demanded.
Issue
Whether or not Flores is an agent of Camps.
Ruling
YES. In the absence of proof to the contrary we think that this
evidence is sufficient to sustain a finding that Flores was the agent of
the defendant in the management of the bar of the Washington Cafe,
with authority to bind the defendant, his principal, for the payment of
the goods mentioned in the complaint.
The contract introduced in evidence sufficiently establishes the fact
that the defendant was the owner of the business and of the bar, and
the title of "managing agent" attached to the signature of Flores
which appears on that contract, together with the fact that, at the
time the purchases in question were made, Flores was apparently in
charge of the business, performing the duties usually intrusted to a
managing agent, leave little room for doubt that he was there as the
authorized agent of the defendant.
One who clothes another with apparent authority as his agent, and
holds him out to the public as such, cannot be permitted to deny the
authority of such person to act as his agent, to the prejudice of
innocent third parties dealing with such person in good faith and in
the honest belief that he is what he appears to be, for the following
presumptions or deductions, which the law expressly directs to be
made from particular facts, are deemed conclusive. Unless the
contrary appears, the authority of an agent must be presumed to
include all the necessary and usual means of carrying his agency into
effect.
 Litonjua v. Eternit
G.R. No. 144805 June 8, 2006
Facts
Respondent Eternit Corporation (EC) is in the business of
manufacturing roofing materials and pipe products. Its manufacturing
operations were conducted on eight parcels of land in Mandaluyong.
90% of EC’s stocks is owned by Belgian-based corporation, ESAC.
In 1986, ESAC wanted its operations in the Philippines to cease due to
worries about the political situation. Michael Adams, one of the board
members, was instructed to dispose of the 8 lots. Adams hired
realtor/broker Lauro Marquez to facilitate the sale.
Marquez offered the properties to petitioner Eduardo Litonjua of
Litonjua & Company, Inc. Marquez declared that he was authorized to
sell the properties for P27 million and the terms of the sale are
negotiable.
Eduardo and his brother, co-petitioner Antonio, offered to buy the
lands for P20 million in cash. Marquez informed Jack Glanville,
President of EC of the offer and the latter relayed the same to
Frederick Delsaux, Regional Director of ESAC. Delsaux sent a telex
with a counterproposal in the amount of $1 million and P2.5 million.
Petitioners accepted the counter and deposited the $1 million
Security Bank.
However, since Corazon Aquino became President, the political
situation in the Philippines improved. As such, Glanville informed
Marquez that the sale will no longer proceed.
When apprised of this development, petitioners demanded from EC
payment for damages they had suffered on account of the aborted
sale. EC, however, rejected their demand on the ground that the
Board and stockholders of EC never approved any resolution to sell
subject properties nor gave a written authorization to Marquez to sell
the same. It also claimed that the acts of Glanville was his own
personal making which did not bind EC.
Petitioners meanwhile assert that respondent EC never repudiated
the acts of Glanville, Marquez and Delsaux. Thus, respondent EC is
estopped to deny the existence of a principal-agency relationship
between it and Glanville or Delsaux.
Issue
Whether or not there is an agency by estoppel between EC, Glanville
and Delsaux.
Ruling
NO. For an agency by estoppel to exist, the following must be
established:
1. The principal manifested a representation of the agent's
authority or knowingly allowed the agent to assume such
authority;
2. The third person, in good faith, relied upon such
representation;
3. Relying upon such representation, such third person has
changed his position to his detriment.
An agency by estoppel, which is similar to the doctrine of apparent
authority, requires proof of reliance upon the representations, and
that, in turn, needs proof that the representations predated the
action taken in reliance. Such proof is lacking in this case. In their
communications to the petitioners, Glanville and Delsaux positively
and unequivocally declared that they were acting for and in behalf of
respondent ESAC.
 Naguiat v. CA
G.R. No. 118375, October 3, 2003
Facts
Aurora Queaño applied with Celestina Naguiat a loan for P200,000,
which the latter granted. Naguiat indorsed to Queaño Associated
bank Check No. 090990 for the amount of P95,000 and issued also
her own Filmanbank Check to the order of Queaño for the amount of
P95,000.
The proceeds of these checks were to constitute the loan granted by
Naguiat to Queaño. To secure the loan, Queaño executed a Deed of
Real Estate Mortgage in favor of Naguiat, and surrendered the
owner’s duplicates of titles of the mortgaged properties.
A demand was sent to Queaño. Queaño told Naguiat that she did not
receive the loan proceeds, adding that the checks were retained by
Reubenfeldt, who purportedly was Naguiat’s agent.
Unsatisfied, Naguiat applied for extrajudicial foreclosure of the
mortgage with the Sheriff of Rizal Province. Meanwhile, three days
before the scheduled sale, Queaño sought the annulment of the
mortgage deed with the RTC.
Naguiat questions the pronouncements of Ruebenfeldt, invoking the
rule on the non-binding effect of the admissions of third persons.
Issue
Whether or not Ruebenfeldt was an agent of Naguiat.
Ruling
YES. The existence of an agency relationship between Naguiat and
Ruebenfeldt is supported by ample evidence. Ruebenfeldt was not a
stranger or an unauthorized person. Naguiat instructed Ruebenfeldt
to withhold from Queaño the checks she issued or indorsed to
Queaño, pending delivery by the latter of additional collateral
Ruebenfeldt served as agent of Naguiat on the loan application of
Queaño's friend, Marilou Farralese, and it was in connection with that
transaction that Queaño came to know Naguiat. It was also
Ruebenfeldt who accompanied Queaño in her meeting with Naguiat.
There is an agency by estoppel. Apparently, it considered that at the
very least, as a consequence of the interaction between Naguiat and
Ruebenfeldt, Queaño got the impression that Ruebenfeldt was the
agent of Naguiat, but Naguiat did nothing to correct Queaño's
impression. In that situation, the rule is clear.
One who clothes another with apparent authority as his agent, and
holds him out to the public as such, cannot be permitted to deny the
authority of such person to act as his agent, to the prejudice of
innocent third parties dealing with such person in good faith, and in
the honest belief that he is what he appears to be.
 Woodchild v. Roxas
G.R. No. 140667, August 12, 2004
Facts
Respondent Roxas Electric and Construction Company, Inc. (RECCI)
owns two parcels of land, one of which has a dirt road accessing to
the Sumulong Highway. At a special meeting, RECCI’s Board of
Directors approved a resolution authorizing the corporation, through
its president, Roberto Roxas to sell one of the said lands.
Petitioner Woodchild Holdings, Inc. (WHI) wanted to buy the said land
to construct its warehouse building and a portion of the adjacent land
so that its 45-foot container van would be able to readily enter or
leave the property. WHI President Jonathan Dy offered to buy the lot
for P7.3 million. Roxas accepted and the two later executed a Deed of
Absolute Sale which includes the beneficial use of and a right of way
from Sumulong Highway to the property on the adjacent land.
Issue
Whether or not Roxas had authority to grant a right of way.
Ruling
NO. Generally, the acts of the corporate officers within the scope of
their authority are binding on the corporation. However, contracts
entered into by corporate officers beyond the scope of authority are
unenforceable against the corporation unless ratified by the
corporation. Evidently, Roxas was not specifically authorized under
the said resolution to grant a right of way in favor of the petitioner.
We reject the petitioner’s submission that, in allowing Roxas to
execute the contract to sell and the deed of absolute sale and failing
to reject or disapprove the same, the respondent thereby gave him
apparent authority to grant a right of way.

WHI later complained to Roxas that the vehicles of RECCI were parked
on a portion of the property over which it had been granted a right of
way. Roxas and Dy then agreed that WHI will purchase that portion of
the adjacent land. However, Roxas died soon thereafter. WHI then
demanded that RECCI sell a portion of the other lot for its beneficial
use within 72 hours from notice thereof, RECCI rejected the demand.

WHI filed a complaint against the RECCI with the RTC of Makati.

In its answer, RECCI alleged that it never authorized its former

president, Roxas, to grant the beneficial use of any portion of the
subject adjacent property. As such, the grant of a right of way and the
agreement to sell a portion of said lot is ultra vires.
 Professional Services v. Agana
G.R. No. 126297, January 31, 2007
Facts
Natividad Agana was admitted at the Medical City because of
difficulty of bowel movement and bloody anal discharge. Dr. Ampil
diagnosed her to be suffering from “cancer of the sigmoid.” Thus, Dr.
Ampil, assisted by the medical staff of Medical City, performed
surgery on her. During the surgery, he found that the malignancy had
spread to her left ovary, necessitating the removal of certain portions
of it. Thus, Dr. Ampil obtained the consent of Atty. Enrique Agana,
Natividad’s husband, to permit respondent Dr. Juan Fuentes to
perform hysterectomy upon Natividad.
Dr. Fuentes performed and completed the hysterectomy. Afterwards,
Dr. Ampil took over, completed the operation and closed the incision.
After a couple of days, Natividad complained of excruciating pain in
her anal region. Drs. Fuentes and Ampil told her it was natural due to
the surgery.
Despite Dr. Ampil’s assurance, the pains intensified, prompting
Natividad to seek treatment at another hospital. There, it was
discovered that there is a gauze in her vagina which caused some
complications. Natividad underwent another surgery.
Thereafter, Natividad and her husband filed with the RTC of Quezon
City a complaint for damages against petitioner PSI (owner of Medical
City), Dr. Ampil and Dr. Fuentes.
PSI contends that it is not liable there being no employer-employee
relationship between it and its consultant, Dr. Ampil. Further, PSI
argues that the doctrine of ostensible agency or agency by estoppel
cannot apply because spouses Agana failed to establish one requisite
of the doctrine, i.e., that Natividad relied on the representation of the
hospital in engaging the services of Dr. Ampil.
Issue
Whether or not PSI is liable under the doctrine of ostensible agency.
Ruling
YES. Atty. Agana categorically testified that one of the reasons why he
chose Dr. Ampil was that he knew him to be a staff member of
Medical City, a prominent and known hospital.
Clearly, PSI is estopped from passing the blame solely to Dr. Ampil. Its
act of displaying his name and those of the other physicians in the
public directory at the lobby of the hospital amounts to holding out to
the public that it offers quality medical service through the listed
physicians. This justifies Atty. Agana’s belief that Dr. Ampil was a
member of the hospital’s staff.
It must be stressed that under the doctrine of apparent authority, the
question in every case is whether the principal has by his voluntary
act placed the agent in such a situation that a person of ordinary
prudence, conversant with business usages and the nature of the
particular business, is justified in presuming that such agent has
authority to perform the particular act in question.
In these cases, the circumstances yield a positive answer.