AGENCY CASES URBAN BANK VS PENA FACTS Isabel Sugar Company, Inc.

(ISCI) owned a particular parcel of land along Roxas Boulevard in Metro Manila. The said land was leased to certain persons and subsequently constructed structures for nightclubs without the consent and in violation of the contract of lease. The ISCI designated Atty. Magdaleno Pena as its Director and informed the lessee prior to the expiration of their contract, that their contract will no longer be renewed and advised to vacate the said land upon expiration because the said land will be sold. ISCI contracted a Contract to Sell with Urban Bank which they agreed that the final installment will be released by the bank upon delivery of full and actual possession of the land free from tenants. ISCI thereafter instructed Atty. Pena, to act as its agent and evict the tenants after the expiration of their contract of lease. The lessee left but the sub lessee refused to leave prompting Pena to close the gates and hired numerous guards to ensure the safety of the property yet despite it, the sub-leasee continue their business. Pena filed a complaint in the Regional Trial Court and the court issued a TRO. During the filing of the said complaint in the RTC, a new title of the land was issued in the name of Urban Bank. Upon knowing of this information, the RTC court recalled the TRO and ordered a break-open order. Pena immediately called the ISCI president and informed him of the RTCs order on break-open, and that he will withdraw all the guards he posted. The ISCI president asked him to suspend the withdrawal of the guards so that the Urban Bank can be informed upon. Pena later called the Urban Bank President and was assured that they will retain his services and that he should never give up the land for possession. Upon the assurance of the president of the Urban Bank, Pena filed a separate complaint with the RTC-Makati to prevent the tenants from possessing the said property. The court issued a TRO. While this complaint is still pending, Pena made efforts to settle the issue of possession with the sub-tenants which he was subsequently exposed to several civil, criminal cases and threats against his life. Eventually, Pena was able to settle with the sub-tenants after paying P1.5M as settlement. At this point, Pena informed Urban Bank that they could now possess the property, but Urban Bank failed to mention the compensation due and owed services he had performed. Urban Bank took possession of the property and installed its own guards. Pena made several attempts to contact Urban Bank but failed as the bank officers would not even take even one of his calls.

Unable to contact Urban bank and seek compensation, Pena executed a formal demand from the court asking for a 10% as compensation and attorneys fees promised to him. However, Urban Bank insisted that it was ISCI who engaged the services of Pena as former owners of the said property and they cannot be held liable for it. Regional Trial Court ISSUE Whether or not there exist an agency relationship between Atty. Pena and the Urban Bank? RULING The RTC ruled in favor of Pena and find an agency relationship has been created with the Urban Bank. The eight directors and the bank officers with whom Pena sued are made to pay a total of P28,500,000.00. Court of Appeals ISSUE Whether or not there exist an agency relationship between Atty. Pena and the Urban Bank. RULING The CA annulled the RTC ruling and ruled that there exist NO AGENCY RELATIONSHIP between Atty. Pena and Urban Bank but ordered the Urban Bank to reimburse Pena for his expenses and efforts in clearing the said property for P3M as reasonable compensation. It also absolved the bank directors and its officers from solidary liability. Supreme Court ISSUE Whether or not Atty. Pea is entitled to payment for the services he rendered as agent of Urban Bank? RULING Yes, Atty Pena should be paid as an agent for his services rendered based on the civil law doctrine of unjust enrichment and not on the basis of a mere oral contract. The contract of an agency is for reasonable compensation but not to the extent of enriching one self. There was no concrete evidence to prove that Urban bank and Atty Pena had an agreement on the amount of compensation as payment for his services rendered, thus, the principle of quantum meruit is deemed applicable.

J-Phil Marine, Inc. VS NLRC FACTS Warlito Dumalaog, employed as a ship cook plying abroad, filed a pro-forma complaint against J-Phil Marine, Inc, and its president Jesus Candava and its foreign primcipal Norman Shipping Services for unpaid money claims, moral, exemplary damages and attorneys fees. The Labor Arbiter dismissed the complaint for lack of merit. Warlito Dumalaog filed an appeal and the NLRC reversed the decision of the Labor Arbiter, awarding him of $50,000.00 as the disability benefit. The respondent files a petition for Certiorari before the Court of Appeals. The CA dismissed J-Phil Marine, Inc petition for, inter alia, failure to attache a petition to all material documents, and for defective verification and certification. J-Phil, Inc filed a Motion of for consideration but was denied. They filed a petition for Review on Certiorari. However, during the pendency of the case, Warlito Dumalaog against and without the knowledge of his counsel, entered into a compromised agreement with the respondents and signed a Quitclaim and Release subscribed and sworn before the Labor Arbiter. Thence, the case was dismissed. Dumalaogs counsel objected to the compromised agreement stating among others that the Full and Final settlement of judgement award of P450,000.00 is unconscionably low and unchristian. He argues further that his client must receive P2,300,000.00 equivalent to $50,000 instead of that measly sum of P450,000.00. ISSUE Whether or not the compromised agreement entered into by Warlito Dumalaog with the respondents without his counsel is valid? RULING The compromised agreement is valid. A compromised agreement is valid as long the consideration is reasonable and it was done with full understanding of what he is entering into, devoid of vitiation. The relation of the attorney and client is in many respects one of agency and the case at bar applies to it. The acts of the agent are deemed acts of the principal provided it acts within the scope of his authority. The counsel of Dumalaog is acting beyond his scope of authority as an agent in questioning the compromise agreement made by the principal. The principal in all legal capacity has the right to enter into the compromise agreement without the agent.

Philex Mining Corporation VS Commissioner of Internal Revenue FACTS Philex Mining Corporation entered into an agreement with Baguio Gold wherein the former will manage the mining operation. The said agreement was stipulated under the Power of Attorney wherein it was indicated that Baguio Gold will contribute P11M under the owners account any of its income that is left in the project, in addition to its actual mining claim. Meanwhile, it was agreed that Philex Mining Corporation contribution would be its expertise in the management and operation of the mines. The mining suffered losses, which resulted to the withdrawal of the Philex Mining Corporation. Both parties entered into a compromised agreement wherein the debt of Baguio Gold amounting to P112,136,000.00 be deducted by Philex Mining Corporation from its gross income in its annual tax income return as losses on the settlement of receivables from Baguio Gold against reserves and allowances. BIR assessed Philex Mining Corporation for tax deficiencies but Baguio Gold denied the allegation stressing that Philex Mining Corporation entered into a partnership agreement with Baguio and the compromised agreement served as evidence that the advances of money and property are in the nature of loans. Philex Mining Corporation filed an appeal before the Court of Tax Appeal and rejected the claim of partnership. ISSUE: Whether or not Philex Mining Corporation entered into a partnership with Baguio Gold? RULING: Yes, the parties entered into a partnership agreement as evidence in the Power of Attorney wherein it stipulates the nature of their partnership. The compromise agreement entered into as a consequence of the dissolution of their partnership explained the real nature of their relationship. While a corporation cannot generally enter into a contract of partnership unless authorized by law or its charter, it has been held that it may enter into a joint venture, which is similar to a particular partnership. The Power of Attorney establishes a fact on the true intention of the parties wherein it intended to create an establishment of a common fund for that purpose. It also showed that there was a stipulation on the equal sharing of income derived from the business.

TRUST CASES REPUBLIC VS SANDIGANBAYAN FACTS A case was file against Eduardo Cojuangco Jr., ACCRA lawyers and, Danilo Ursua and 71 other corporations by the PCGG referred to as the Republic of the Philippines concerning the shares of stocks at San Miguel Corporation (SMC) which were allegedly purchased through the CIIF Holding Companies which was funded by the coco levy fund passing through the Unicom Oil Mills and from UCPB. Eduardo Cojuangco Jr. took advantage of his association with President Ferdinand Marcos and created a scheme which includes the ACCRA lawyers as nominee shareholders and the 71 corporations as fronts to channel $150 million from the coco levy fund for the purchase of the 33 million shares of stocks in SMC. There were actually two sets of SMC shares purchased by the defendant either through him and through his 14 holding companies. The first set was worth 33 million shares and the second set was 16,276,879 shares. The actual total purchased price of the shares of stocks is equivalent to the 20% of the capital stock of SMC. All SMC stocks purchased by the defendant are being claimed by the Government through PCGG. The Sandiganbayan however ruled that the first set belong to the government while the second set belongs to the Cojuangco for failure to prove by preponderance of evidence hence this action of suit. ISSUES Whether or not Cojuangco breached his fiduciary duties as an officer and member of the Board of Directors of UCPB and did his acquisition and holding and acquisition of the contested SMC shares come under a constructive trust in favor of the Philippines? RULING No, Eduardo Cojuangco Jr. did not breached his fiduciary duties as an officer and member of the Board of Director of the UCPB nor his acquisition and holding of the contested SMC shares of stocks do not come under the constructive trust in favor of the Government and the Filipino people. The applications of Articles 1455 and 1456 of the New Civil Code of the Philippines pertaining to the trustee using trust funds to purchase or a person acquiring property through mistake or fraud, and Section 31 of the Corporation Code require factual foundations to be first laid out in appropriate judicial proceedings. Hence, Cojuangco never breached its fiduciary duties as an officer and a member of the Board of Director basing on the incompetent evidence which are unwarranted and unreasonable.

Claims of the defendant that money in a form of loans was used to purchased shares of stocks at SMC, can be gleaned that dealing between creditor and debtor are not fiduciary in nature. As such, the only liability of the defendant is to pay the loan with accrued interest as stipulated or by existing laws. Wherefore, the Court dismisses the petitions and accordingly affirms the decision of the Sandiganbayan. It further declares that the block of shares in SMC are exclusive property of Cojuangco et al. as registered owners.

MARCOS-ARANETA vs COURT OF APPEALS FACTS Sometime in 1968 and 1972, the late Ambassador Roberto Benedicto and his business associates organized Far East Managers and Investors, Inc. and Universal Equity Corporation. According to Irene Marcos-Araneta both corporations were organized pursuant to a contract whereby Benedicto, as trustor, placed in his name and inn the name of his associates , as trustees, the shares of stocks of both companies with the obligation to hold those shares and their fruits in trust and for the benefit of Irene to the extent of 65% of such shares. After several years, Irene demanded the reconveyance of the 65% stockholdings, but the Benedicto Group refused to oblige. Somewhere in March of 2000, Irene filed before the RTC two similar complaints for conveyance of shares of stock with accounting and receivership against the Benedicto Group with prayer for the issuance of a TRO. Benedicto opposed the filing of the suit and moved to dismiss the complaints on five grounds, among those is the venue which was improperly laid. During the preliminary proceedings, Benedicto presented the joint affidavits of Gilmia Valdex, Catalino Bactat and Conchita rasco who attested being employed as household staff of Irene Marcos at the Marcos Mansion in Brgy. Lacub, Batac, Ilocos Norte. Benedicto also claimed that Irene did not maintain residence in the aforementioned place but only visited the mansion twice in 1999; and that Irene never voted in Batac during the 1998 national elections; and that she was actuallya staying at the house of his husband at Makati City. On the other hand, Irene presented her CTC issued on November 7,1999 in Curimao, Ilocos Norte to support her residencyclaims in Batac, Ilocos Norte. However, RTC dismissed Irenes both complaints on the rationale that these partly constituted real action and that Irene did not actually reside in Batac, Ilocos Norte and thus the venue was improperly laid. The RTC allowed Irene to amend a complaint dispositively speaking: (1)Irene may opt to file, as a matter of right in the amended complaint; (2)the inclusion of additional plaintiffs, one of whom was a Batac resident setting out the same cause to cure the defect of improper venue. (3) Sections 2 and 3 of rule 3 in relation to section 2 of Rule 4 allowing the filing of the amended complaint in question in the place of residence of any of Irenes co-plaintiffs. The Benedictos filed on April 10,2001 their Answer to the amended complain and filing a petition for Certiorari at the CA seeking to nullify the RTC order. The CA rendered a decision and set aside the assailed RTC orders and also dismissing the amended complaints in Civil Case Nos. 3341-17 and 3342-17

ISSUE Whether or not the Benedictos waive improper venue by their subsequent acts of filing numerous pleadings? Whether or not RTC has jurisdiction over Irene on the basis of her residence? RULING Supreme Court affirms with some modifications in the CAs decision. On the first issue of waiving of improper venue by the respondents, the court ruled that they did not waive. Essentially it concerns the rule of procedure which personal in nature, is fixed for the greatest convenience possible for the plaintiff and his witnesses. The ground of improper venue as duly laid down by the respondents. Furthermore, the defendant ( Irene Marcos-Araneta) failed to file a motion dismissing on the ground of improper venue or include the same as an affirmative defense thus waive her right to object on the improper venue. On the second issue, the SC ruled that RTS has no jurisdiction on the ground of improper venue because according to the Benedictos the venue was improperly laid on the basis that the question in suit partakes of real action involving real properties located outside of the territorial jurisdiction of the RTC of Batac. This is a real action over real properties not a recovery of personal properties thus the contention of the defendants are in appropriate and without legal basis. Furthermore, the court found out that Irene is also not a resident of Batac putting the contention out of the equation. It would have been filed on a different court of jurisdiction within where the property is situated.

ESTATE OF MARGARITA CABACUNGAN vs LAIGO FACTS The late Margarita Cabacungan owned three parcels of unregistered land in Baccuit, La Union. In 1968, his son, Roberto Laigo, who was then applying a non-immigrant visa to the US requested his mother (Margarita) to transfer the tax declaration of properties in his name. Unknown to the other children, Margarita executed an Affidavit of Transfer of Real Property whereby the said properties were transferred to Roberto by donation. Roberto adopted a certain Pedro Laigo and Marilou Laigo and subsequently married Estrella Balagot. It was then that he sold the said properties to spouses Mario and Julia Campos for a sum of P23,000.00 on the other lot and P100,000.00 and P40,000.00 on the other two respective lots. The said sale was never known to Margarita and his other siblings. It was only in August ,1995, at Robertos wake that Margarita came to know about the purported sales as told by Pedro, Robertos adopted son. Somewhere in February 1996, Margarita throught her daughter, Luz instituted an instant complaint for the annulment of the said sales and for recovery of ownership and possession of the subjected properties as well as the cancellation of the Tax Declaration of Roberto. The spouses Campos argued that they were innocent purchaser for value and in good faith and merely relied on the Robertos representation and that they were not bound by the previous agreement between Roberto and Margarita. The further posited that the alleged gross inadequacy of the price of the said lots would not invalidate the sale absent a vitiation of consent or proof of any other agreement. They claimed that Margarita is barred by prescription and laches owing her long inaction to recover the said properties. Margarita , must have instead addressed the claim against the Estate of Roberto. Just prior to pre-trial and right before Margarita died, Margarita and the Spouses Campos entered into an amicable settlement whereby waiving all other claims therewith. After the RTC rendered a decision dismissing the complaint against the 1998 Affidavit of Transfer, stating that it only operated as a simple transfer of subject from Margarita to Roberto. It found no express trust created between Margarita and Roberto as there was no other document to prove such, that Roberto will return the said property to Margarita in due time. The Court of Appleals also found Margarita guilty of laches by her inaction and barred from recovery of the said disputed property from the respondents who were found to have entered into a contract of sales in good faith. At this point, the Estate of Margarita filed a Petition for Review under Rule 45 of the Rules of Court assailing the decision of the Court of Appeals.

ISSUE Whether or not Roberto was merely a trustee of the subject properties and as a consequence the respondents can be compelled to reconvey the subject properties to the petitioner? RULING It is profound to note that the circumstances derived from the unwritten understanding between Margarita and Roberto that by their acts requires no absolute transfer of ownership would be effected. That the inscription of the name of Roberto in the Affidavit of Transfer as Margaritas transferee is not for the purpose of transferring ownership but only to enable him to hold such properties in trust for Margarita. Indeed, the two witnesses and the testimony of a witness in the Municipal Assessors Office did not show the ownership of Roberto in the said properties. As a trustee of a resulting trust, Roberto is merely a depositary of a legal title of which his conversion of the property to his amounts to a breach of trust. It follows that because of the breach of trust, the respondents can be compelled to reconvey the properties to the Estate of Margarita. The invocation of the rules on limitation of actions relative to a resulting trust is thereby extinguish through the death of Margarita and Roberto. A trust, according to law terminates upon death, because trust is personal in nature. On the issue of laches and prescription, the law says that prescription can be effected 10 years from the right of action accrues which is based on an obligation created by law. It sets the time where the petitioner performs acts of repudiation in 1996 which is so far away from alleged prescription. On the issues of laches, laches are rooted in equity and cannot be applied strictly in a way that will obliterate a claim especially between blood relatives. The existence of a confidential relationship based on consanguinity is a vital point which warrant consideration and the doctrine of laches cannot be applied mechanically. Moreover, here lies a principle in agency that when a certain property is entrusted to an agent where the agent breaches the trust and wrongfully diverted the property from the principal, such trust follows the property in the hands of the third party. The Principal has every right to pursue and recover the said property held in trust as long it can be traced and identified. Wherefore, the petition is granted. The decision of the CA and the RTC are hereby set aside and reversed. A new one is entered and directing the cancellation of the Tax Declarations covering the subject properties in the name of Roberto Laigo and his transferees; nullifying the deeds of sale executed by Roberto Laigo in favor of Pedro Roy Laigo and Marilou Laigo and directing said respondents to execute reconveyance in favor of the petitioner.