Illustrative Cases on Partnership, Trust, and Agency YEEN 1

SANTOS vs. BUENCONSEJO

FACTS:
1. Petitioner Jose A. Santos y Diaz seeks the reversal of an
order of the Court of First Instance of Albay, denying his
petition:
a. Cancellation of original certificate of title No. RO-3848
(25322), issued in the name of Anatolio Buenconsejo,
Lorenzo Bon and Santiago Bon, and covering Lot No. 1917
of the Cadastral Survey of Tabaco, Albay, and
b. Issuance in lieu thereof, of a separate transfer certificate
of title in his name.
2. Lot No. 1917 covered by Original Certificate of Title No.
RO-3848 (25322) was originally owned in common by
Anatolio Buenconsejo to the extent of undivided portion
and Lorenzo Bon and Santiago Bon to the extent of the other
(Exh. B)
3. Anatolio Buenconsejo's rights, interests and participation
over the portion abovementioned were by a Certificate of
Sale executed by the Provincial Sheriff of Albay, transferred
and conveyed to Atty. Tecla San Andres Ziga, awardee in
the corresponding auction sale conducted by said Sheriff
4. By a certificate of redemption issued by the Provincial
Sheriff of Albay, the rights, interest, claim and/or or
participation which Atty. Tecla San Andres Ziga may have
acquired over the property in question by reason of the
aforementioned auction sale award, were transferred and
conveyed to the herein petitioner in his capacity as Attorney-
in-fact of the children of Anatolio Buenconsejo, namely,
Anastacio Buenconsejo, Elena Buenconsejo and Azucena
Buenconsejo (Exh. C).
5. Petitioner Santos had redeemed the aforementioned
share of Anatolio Buenconsejo, upon the authority of a
special power of attorney executed in his favor by the
children of Anatolio Buenconsejo.
6. Relying upon this power of attorney and redemption made
by him, Santos now claims to have acquired the share of
Anatolio Buenconsejo in the aforementioned Lot No. 1917;
7. As the alleged present owner of said share, Santos
caused a subdivision plan of said Lot No. 1917 to be made,
in which the portion he claims as his share thereof has been
marked as Lot No. 1917-A; and that he wants said
subdivision at No. 1917-A to be segregated from Lot No.
1917 and a certificate of title issued in his name exclusively
for said subdivision Lot No. 1917-A.
8. Lower court: ruled in favor of the respondents.

ISSUE:
Whether or not petitioner Santos claim that he has acquired
the share of Anatolio Buenconsejo in Lot No. 1917 relying
upon a power of attorney and redemption made by him is
tenable?

RULING:

No. SC affirmed the lower courts decision that petitioner's
claim is clearly untenable, for three reasons:
a. Said special power of attorney authorized him to act on
behalf of the children of Anatolio Buenconsejo, and, hence, it
could not have possibly vested in him any property right in
his own name;
b. The children of Anatolio Buenconsejo had no authority to
execute said power of attorney, because their father is still
alive and, in fact, he and his wife opposed the petition of
Santos;
c. In consequence of said power of attorney (if valid) and
redemption, Santos could have acquired no more than the
share pro indiviso of Anatolio Buenconsejo in Lot No. 1917,
so that petitioner cannot without the conformity of the
other co-owners (Lorenzo and Santiago Bon), or a judicial
decree of partition issued pursuant to the provisions of Rule
69 of the new Rules of Court (Rule 71 of the old Rules of
Court) which have not been followed By Santos
adjudicate to himself in fee simple a determinate portion of
said Lot No. 1917, as his share therein, to the exclusion of
the other co-owners. Inasmuch as the appeal is patently
devoid of merit, the order appealed from is hereby affirmed,
with treble cost against petitioner-appellant Jose A. Santos y
Diaz. It is so ordered.
AFRICA VS. CALTEX PHIL, INC. 16 SCRA 448 (1966)
PETITIONERS APPELLANTS: Spouses Bernabe Africa
and Soledad C. Africa and the Heirs of Dominga Ong
RESPONDENTS APPELLEES: Caltex (Phil.), Inc., Mateo
Boquiren, Court of Appeals
FACTS:
In the afternoon of March 18, 1948 a fire broke out
at the Caltex Service Station at the corner of Antipolo Street
and Rizal Avenue, Manila. It started while gasoline was
being hosed from a tank truck into the
underground storage right at the opening of the receiving
tank where the nozzle of the hose was inserted. The fire
then burned several houses including the petitioners
(Spouses Bernabe and Soledad Africa, and the heirs of
Dominga Ong). They sued Caltex and Mateo Boquiren (the
agent in-charge of the operation). The gasoline station with
all its appliances, equipment and employees was under the
control of the appellees and their employees but they gave
no explanation thereof.
ISSUE:
Whether or not Mateo Boquiren was an independent
contractor of Caltex?
HELD:
NO. The Supreme Court affirmed the findings of
the Court of Appeals that the operator was an agent of the
company. Taking into considerations of the following: (1)
Caltex has cotrol over Baquiren and the company could
remove him or terminate his services; (2) he only sells the
products of the company; (3) equipment in the station
belonged to the company and loaned only to him; (4) repairs
and maintenance were conducted by Caltex; (5) prices were
fixed by Caltex; and (6) the receipt he signed indicated only
that he was a mere agent.
NEWMAN v. SEARS, ROEBUCK & CO. et al.
GRIMSON, Judge.
The defendant, Alfred S. Dale, was the owner of an
apartment house in the City of Bismarck, North Dakota. In
August 1947, he ordered from Sears, Roebuck & Company,
three folding beds. Sears, Roebuck & Company contracted
their supply of said beds from the manufacturer, Superior
Sleeprite Corporation of Chicago. When the Dale order was
received Sears, Roebuck & Company directed the shipment
Illustrative Cases on Partnership, Trust, and Agency YEEN 2

of three beds to be made by the Superior Sleeprite
Corporation direct to the defendant, Dale, at Bismarck.
When they were received defendant Dale had one Christ
Nelson install one of these beds in one of his furnished
apartments. A Mrs. Holum was then the occupant of the
apartment and immediately made use of the bed. Later
defendant, Dale, and his wife occupied the apartment and
used the bed. Then *413 about the 27th. day of December
1947, the plaintiff and his wife rented the premises, including
the bed. About 10 o'clock on the evening of Feb. 28, 1948,
after plaintiff had gone to bed, the bed collapsed and plaintiff
was seriously injured. For the damages so sustained plaintiff
brings this action.
In his complaint the plaintiff claims that the defendant, Sears,
Roebuck & Company manufactured or supervised the
manufacture of this bed and gave instructions for its
installation. That it was faulty and defective in design and
construction and in particular that the screws furnished to
attach it to the floor were insufficient to hold the bed in
position; that because thereof said bed was inherently
dangerous; that the defendant, Sears, Roebuck & Company
had, or should have had, knowledge thereof; That it,
nevertheless, sold the same without giving notice of such
defect. Then he claims that the defendant, Dale negligently
installed said bed with insufficient wood screws, which he
knew, or should have known, made said bed inherently
dangerous for use. He claims that the plaintiff rented the
apartment furnished with this defective bed; that no notice of
this latent defect was given the plaintiff although the
defendant, Dale, knew or should have known thereof; that
instead the bed was represented as safe for the purpose for
which it was intended to be used. He claims that the
negligence of the defendants in connection with the
manufacture and installation of the bed resulted in the
collapse of the bed and was the proximate cause of the
injuries the plaintiff received. Both the defendants deny all
negligence and defendant, Sears, Roebuck & Company,
specifically denies that it had anything to do with the delivery
or installation of the bed. A jury was waived and the case
tried to the court. After hearing the evidence and the
argument of counsel the court found for the defendants and
dismissed the action. This appeal was taken and a trial de
novo demanded.
The first question involved in this lawsuit is the liability of the
defendants or either of them. Not unless liability is
established does the amount of damages become material
in this case. The District Court found no liability against the
defendants so did not pass on the amount of damages.
The evidence shows that this folding bed is made of iron;
that the feet under the head of the bed are welded to an
angle iron frame which has seven holes through which lag
screws attach it to the floor; that there were furnished with
the bed for that purpose seven lag screws, of a size and
design, specified to have a sufficient holding power when
screwed into a wooden floor to hold the bed in place. These
lag screws were 1 inches long, 5/16th. inches in diameter.
Connecting the angle iron and the frame of the bed were six
coil springs about ths. of an inch in diameter and 11
inches long. The coil was of 12 guage, steel wire, a little
heavier than the wire used for ten penny nails. As the bed is
lifted up or down these springs act as a counter balance
making it easier to raise or lower the bed.
The District Court found that there was no fault in the design
or manufacture of the folding bed and that there was nothing
inherently dangerous in its construction or operation; that
sufficient lag screws were furnished by the manufacturer for
the proper installation of the bed; that the defendant, Sears,
Roebuck & Company had nothing to do with the installation
and was in nowise liable for the collapse of the bed or
injuries of the plaintiff. That finding is in accord with the
evidence.
The evidence further shows that there was a double floor 1
inches thick in the Dale apartment where this bed was
installed. The top floor was of 13/16 inch oak, comparatively
new. While Nelson testified that he did not remember the
kind of screws he used in attaching the bed to the floor the
evidence warrants the conclusion that he did not use the lag
screws furnished, but, instead, used ordinary wood screws
1 inches long but only 5/32nds. inches in diameter. Not
only the size but also the threads of the screws show that
the lag screws designated to hold the bed in place had at
least four times the holding power of the wood screws used.
As the bed is lowered the coil springs stretch and pull up on
the angle iron with *414 considerable force. When the angle
iron becomes loosened from the floor the pull of these
springs causes the bed to roll forward, fall to the floor and
the head to collapse over the bed. The evidence shows that
that is what happened.
Assuming that the use by Nelson of those wood screws for
fastening the bed was negligence and was the proximate
cause of the bed becoming loose and collapsing to the injury
of the plaintiff, the question arises whether the defendant,
Dale, is liable therefor. That raises the question whether
Nelson was an independent contractor or a servant of Dale.
As a general rule an employer is not liable for the torts of an
independent contractor. "This rule of the nonliability of an
employer is based upon the theory that the characteristic
incident of the relation created by an independent contract is
that the employer does not possess the power of controlling
the person employed as to the details of the stipulated work,
and it is, therefore, a necessary judicial consequence that
the employer shall not be answerable for an injury resulting
from the manner in which the details of the work are carried
out by the independent contractor." 27 Am. Jur. 504; 18
A.L.R. 801 Annotation. An employer may become liable for
the torts of his servants under the doctrine of respondeat
superior, 57 C.J.S., Master and Servant, 555, p. 266, 35
Am.Jur. 959.
Section 34-0401, NDRC 1943, defines a servant as "one
who is employed to render personal service to his employer
otherwise than in the pursuit of an independent calling and
who, in such service, remains entirely under the control and
direction of the latter, who is called his master." Of this
definition, Chief Justice Bruce in Montain v. Fargo, 38 N.D.
432, 440, 166 N.W. 416, 417, L.R.A.1918C, 600,
Ann.Cas.1918D, 826, writing for this court says: "This
definition of a servant where it is sought to distinguish
between a servant and an independent contractor, affords by
inference a definition of an independent contractor, an
independent contractor being considered a person employed
to execute work, who was not within the definition of a
servant."
Illustrative Cases on Partnership, Trust, and Agency YEEN 3

"One of the most important tests to be applied in determining
whether a person who is doing work for another is an
employee or an independent contractor is whether the
person for whom the work is done has the right to control,
not merely the result, but the manner in which the work is
done, as well as the method used." Janneck v. Workmen's
Compensation Bureau, 67 N.D. 303, 272 N.W. 188, 189.
See also Bernardy v. Beals, 75 N.D. 377, 28 N. W.2d 374
and cases cited.
In determining whether a workman is an independent
contractor or employee all the circumstances of the case and
the attitude and intent of the parties must be considered. 27
Am.Jur. 480, 58 Am.Jur. 670. Knuffke v. Bartholomew, 106
Neb. 763; 184 N.W. 889. Lowe v. Chicago Lumber Co. of
Omaha, 135 Neb. 735, 283 N.W. 841, 1 Schneider's
Workmen's Compensation Law 285.
The evidence shows that Nelson was a carpenter of many
year's experience; that his brother and his two sons worked
together; that there was a general agreement between Dale
and Nelson that Nelson should make repairs on Dale's
apartments whenever called by Dale or his tenants; that the
only instructions given by Dale to Nelson was to make the
repairs called for according to his best judgment; that
instructions were given by Dale to his tenants to call Nelson
if carpenter repairs were needed. Nelson drew no salary.
Instead such repairs were paid by Dale on a bill rendered at
the completion of each job. Dale exercised no supervision
over any particular job. Nelson had the right to hire help or to
have others do the job for him in case he was otherwise
employed. The particular job here involved was an
installation of a folding bed, making it a processed, usable
article. Nelson was, by the owner, Dale, given the right to
possession of the premises as far as necessary for the
installation, which provision was acquiesced in by Mrs.
Holum, the tenant at the time. Some alterations in a partition
were necessary.
*415 It required the special skill of a carpenter. That work
was not a part of Dale's regular business but was in line with
Nelson's regular work. No directions were given as to when
or how the job should be done. Neither Dale nor his wife
were present when it was done. They accepted the finished
product of the work. From that evidence it is clear that Dale
had no control and reserved no right of control over how
Nelson performed the work of installation nor the methods
he used.
In the case of Hilliard v. Richardson, 3 Gray 349, 69 Mass.
349, 63 Am.Dec. 743, the court held: "Relation of Master and
Servant does not exist between owner of land and a
carpenter, over whom he has no direction or control, whom
he employs to alter and repair certain buildings and furnish
the materials therefor, for a specified price; their relation is
that of employer and contractor, and such land-owner is
therefore not liable for damages resulting to a third person."
In the case of Starkenberg v. North Dakota Workmen's
Compensation Bureau, 73 N.D. 234, 235, 13 N.W.2d 395,
396, this court held that: "One who contracts to construct a
building for another, in accord with a stipulated plan, without
being subject to the latter's superintendence, orders, or
control in respect of the details of the work; who has
absolute control of the work, may work such hours as he
sees fit to work, may do the work himself or employ others to
assist, and is to be paid a definite, stipulated sum when the
building has been fully completed, is not an employee but is
an independent contractor." The facts in that case are quite
parallel with the facts in the case a bar, excepting the job
there was erecting a building at a stipulated price instead of
doing a repair job as here. Starkenberg agreed to build a
number of granaries for a lumber company according to
plans and specifications furnished. He had complete charge
of the work and was paid for each granary as it was finished
and accepted. That is in substance the agreement between
Dale and Nelson. Nelson was to do each repair job in such
manner as he thought best and was to be paid when each
job was finished and accepted.
The District Court found that Nelson was an independent
contractor. That finding must be given appreciable weight by
this court. State for Benefit of Workmen's Compensation
Fund v. City of Williston, 72 N.D. 486; 8 N.W.2d 564, 568.
Considering that finding and all the circumstances shown in
the evidence Nelson must be held to have been an
independent contractor in installing the bed.
The appellant, however, argues that even if Nelson is held to
have been an independent contractor the nature of the work
done was such as to render Dale, the employer, liable. He
cites the case of Ruehl v. Lidgerwood Telephone Company,
23 N.D. 6, 135 N.W. 793, L.R.A.1918C, 1063,
Ann.Cas.1914C, 680, which holds "Where, in the making of
an improvement, it is manifest that injury is likely to result,
unless due precautions are taken, a duty rests upon him who
causes the work to be done to see that such necessary
precautions are taken." In that case the telephone company
hired a man to dig holes for telephone poles at so much per
hole. He dug a hole in the yard of a man for whom the
company had contracted to install a telephone and left it
unguarded. A 3 year old boy fell into the hole and was
either drowned or smothered in the mud. The court held that
even if the man who dug the hole was an independent
contractor the telephone company employer was liable. The
principle laid down in that case was further discussed in
Taute v. J. I. Case Threshing Machine Company, 25 N.D.
102, 141 N.W. 134, 135. In that case one, Kerr, contracted
to bring into the town of Tolley from a distance of 12 miles, a
steam engine. On the way a fire started nearby and the suit
was brought for damages on the theory that the fire was
started from the engine because of the negligence of Kerr.
The court says: "It is no doubt the law that an owner of
property can be held liable in damages in certain cases
even, where the work is intrusted to an independent
contractor, and where the work ordered to be done or the
structure ordered to be erected is, in itself, intrinsically
dangerous or a nuisance. The origin and reason of this rule
is the *416 duty of due consideration which one in a civilized
community owes to his fellows and to the public, and that
such a duty precludes the ordering of that which, if done, will
be inherently dangerous. These considerations are hardly
applicable to the case at bar. It can hardly be said, as a
matter of law, that the machine was a nuisance, or that the
moving of it was an essentially dangerous transaction."
The distinction between the cases in which the owner is held
liable for work which he engaged an independent contractor
to perform and that for which he is not held liable is thus
made clear. In the first classification is the work which even if
carried out according to the orders of the owner is inherently
dangerous to people, such as the open hole dug in the
Illustrative Cases on Partnership, Trust, and Agency YEEN 4

Ruehl case. In the second classification is such work which
when accomplished is not in itself dangerous to people such
as the moving of the engine in the Taute case. Applying that
distinction to the case at bar the folding bed itself when
properly installed is not inherently dangerous and does not
constitute a nuisance per se. It was, we shall assume, the
use of the wood screws, not the bed itself or the ordinary
installation of it that was dangerous. The use of wood screws
was not ordered by Dale and not known by him. Clearly the
evidence here shows that the work delegated by Dale to
Nelson comes within the second classification for which Dale
cannot be held responsible.
Appellant argues further that there is a statutory duty on
defendant Dale to put the premises devised in condition fit
for human use and to keep them in repair. He cites Sec. 47-
1612, NDRC 1943, which provides: "The lessor of a building
intended for the occupation of human beings must put it into
a condition fit for such occupation and must repair all
subsequent dilapidations thereof in the absence of an
agreement to the contrary, except that the lessee must
repair all deteriorations or injuries thereto occasioned by his
ordinary negligence. The following Section 47-1613, NDRC
1943, provides that if the lessor fails to repair after notice
then the lessee may repair at lessor's cost or vacate the
premises.
There is some question whether the bed in question can be
considered a part of the realty so as to come within these
sections. In the case of Fisher v. Pennington, 116 Cal.App.
248, 2 P.2d 518, 520, it is said that "Renting of the bed,
personal property, attached to the door, real property,
presents a mixed contract of hiring of personalty and realty."
However, it may be argued that because the bed was
attached to the floor it became a fixture. Furthermore, Sec.
47-1502, subsection 3 and 4, and Sec. 47-1503, NDRC
1943, make similar provision regarding renting of personal
property as Sec. 47-1612 and 47-1613 do for real property.
These statutes plaintiff claims are incorporated in every
leasing contract and it is so held in Armstrong v. Thompson,
62 S.D. 567, 255 N.W. 561, 96 A.L.R. 561.
Housing laws have been passed in many states varying in
different degree the common law rule of nonliability of
landlord to his tenant. The courts have differed in their
interpretation of the statutes according to the language
thereof. 52 C.J.S., Landlord and Tenant, 417, p. 20, 4
Thompson on Real Property 35; Johnson v. Carter, 218 Iowa
587, 255 N.W. 864, 93 A.L.R. 778; 32 Am.Jur. 524. The
main purpose of these housing laws seems to have been to
promote the health, safety and welfare of the people in
general. Unless there is a direct liability imposed upon the
landlord these statutes are generally held not to alter the
common law relationship of landlord and tenant, but merely
to give the tenant a right of action to enforce better housing
conditions. It is generally held that such statutes are not to
be extended by implication. Palmigiani v. D'Argenio, 234
Mass. 434, 436; 125 N.E. 592. Callahan v. Loughran, 102
Cal. 476; 366 P. 835. Of statutes similar to our Section 47-
1612, NDRC 1943 it is said in 52 C.J.S., Landlord and
Tenant, 417, p. 20 that "a landlord is not liable for personal
injuries where the statute requires the landlord to put the
premises in a condition fit for occupation and to make repairs
on *417 notice, but gives the tenant the right to make repairs
if the lessor neglects to do so and to deduct the expense of
such repairs from the rent."
A Massachusetts law provided that every structure "shall be
maintained in such repair as not to be dangerous. The owner
shall be responsible for the maintenance of all buildings and
structures." St.1907, c. 550, 127. In construing that law the
court said that it "does not expressly attempt to modify or
affect in any way the relations between landlord and tenant
as they exist at common law." Vallen v. Cullin, 238 Mass.
145, 130 N.E. 216, 217.
There are decisions to the contrary especially in Michigan,
Annis v. Britton, 232 Mich. 291, 205 N.W. 128, and in cases
brought under the Tenement House Law of New York,
McK.Consol.Laws, c. 61. Altz v. Leiberson, 233 N.Y. 16, 134
N.E. 703, 704. In the case of Johnson v. Carter, 218 Iowa
587, 255 N.W. 864, 867, 93 A.L. R. 774, the Iowa court
analyzes many of those cases especially those of New York,
Michigan and Massachusetts. It is pointed out that in the
New York statute the liability is expressly directed against
the landlord and of the Michigan and Massachusetts
decisions the court says: "We are inclined to the view that
the construction placed upon statutes of this nature by the
Massachusetts court is preferable to that of the Michigan
court."
Our sections 47-1612 and 47-1613, NDRC 1943 are almost
verbatim the same as sections 1941 and 1942 of the Civil
Code of California. In the case of De Motte v. Arkell, 77
Cal.App. 610, 247 P. 254, 258, it is held: "The allegations of
the complaint setting forth the substance of section 1941 of
the Civil Code that the building was intended for human
occupation does not present a situation where the common
law in relation to the duties and liabilities of landlords to
tenants does not apply. As set forth in 15 Cal.Jur. 704: `In
the absence of fraud, concealment, or covenant in the lease,
a landlord is not liable to a tenant for injuries due to the
defective condition or faulty construction of the demised
premises. This is the rule at common law, and it has not
been changed by section 1941 of the Civil Code.' Willson v.
Treadwell, 81 Cal. 58, 22 P. 304; Van Every v. Ogg, 59 Cal.
563."
In Sieber v. Blanc, 76 Cal. 173, 18 P. 260, 261, the court
held, "That the obligations imposed upon the landlord by
section 1941 `should be limited by the extent of the privilege
conferred upon the tenant' by section 1942; and that
therefore the only consequence of a breach of the landlord's
obligation is that the tenant may either vacate the premises,
or expend one month's rent towards the repairs after notice,
etc." See also Gately v. Campbell, 124 Cal. 520, 57 P. 567;
Johnson v. Carter, 218 Iowa 587, 255 N.W. 864, 93 A.L. R.
774; Angevine v. Knox-Goodrich, 3 Cal.Un.Rep.Cas. 648, 31
P. 529, 18 L.R.A. 264. Consistent with these authorities we
hold, that while Sections 47-1612 and 47-1613 give the
tenant new remedies against a landlord they do not
otherwise alter the relationship of landlord and tenant under
the rule of the common law and that under that rule there is
no liability on Dale in this case.
There is, however, an exception to the common law rule to
the effect that there is liability on the landlord for injuries
suffered by the tenant on account of defects in leased
premises when such defects are latent but known to the
landlord and not communicated to the tenant. In Shotwell v.
Bloom, 60 Cal.App.2d 303, 140 P.2d 728, 732, it is held that
"If there is some hidden defect in the premises, or danger
thereon, which is known to the lessor at the time of making
Illustrative Cases on Partnership, Trust, and Agency YEEN 5

the lease, but which is not apparent to the intending lessee,
the lessor is bound to inform the latter thereof, and failing so
to do, is liable for injuries to the tenant arising therefrom."
See also Restatement of the Law of Torts, Vol. 2, Page 969,
Sec. 538; 1 Toffany, Landlord and Tenant, 562. Stanley v.
Lander, 3 Cal.App.2d 284, 39 P. 2d 225.
It is generally held, however, that lessor is under no duty to
make an inspection of the premises to ascertain their actual
condition. "The views supported by *418 the better reason as
well as by courts carrying a greater weight limits the
obligation of the landlord to disclosing defects already known
to him without examining the property to discover defects." 4
Thompson on Real Property, 19. See also Restatement of
the Law on Torts, supra.
The only agreement between the Plaintiff and Dale for the
renting of this apartment shown in the evidence is that a
sister of plaintiff's wife called up either Dale or his wife in
Fargo asking if plaintiff could rent that apartment which
request was granted. There were no inducements or
representations made by Dale or his wife to the plaintiff or
his agent to secure him as a tenant. No warranties of any
kind as to the apartment or its furnishings were made to the
plaintiff. Dale had no knowledge of the latent defect in the
installation of the folding bed. No deceit or fraud on his part
appears in the evidence. The plaintiff had not called upon
Dale for any repairs, nor given any notice of any defects.
Under these circumstances Dale can not be held for
damages resulting from a latent defect in the folding bed
here involved. "Generally, a landlord is not liable for injuries
to tenant resulting from latent defect in premises, in absence
of proof of knowledge and concealment on his part."
Forrester v. Hoover Hotel & Investment Company, 87
Cal.App.2d 226, 196 P.2d 825.
The judgment of the District Court is affirmed.
NUESSLE, C. J., and CHRISTIANSON, BURKE and
MORRIS, JJ., concur.
SEVILLA VS. CA
FACTS:
A contract by and between Noguera and Tourist
World Service (TWS), represented by Canilao, wherein TWS
leased the premises belonging to Noguera as branch office
of TWS. When the branch office was opened, it was run by
appellant Sevilla payable to TWS by any airline for any fare
brought in on the efforts of Mrs. Sevilla, 4% was to go to
Sevilla and 3% was to be withheld by the TWS.
Later, TWS was informed that Sevilla was
connected with rival firm, and since the branch office was
losing, TWS considered closing down its office. On January
3, 1962, the contract with appellee for the use of the branch
office premises was terminated and while the effectivity
thereof was January 31, 1962, the appellees no longer used
it.
Because of this, Canilao, the secretary of TWS,
went over to the branch office, and finding the premises
locked, he padlocked the premises. When neither appellant
Sevilla nor any of his employees could enter, a complaint
was filed by the appellants against the appellees. TWS
insisted that Sevilla was a mere employee, being the branch
manager of its branch office and that she had no say on the
lease executed with the private respondent, Noguera.

ISSUE:
W/N ER-EE relationship exists between Sevilla
and TWS

HELD:
The records show that petitioner, Sevilla, was not subject to
control by the private respondent TWS. In the first place,
under the contract of lease, she had bound herself in
solidum as and for rental payments, an arrangement that
would belie claims of a master-servant relationship. That
does not make her an employee of TWS, since a true
employee cannot be made to part with his own money in
pursuance of his employers business, or otherwise, assume
any liability thereof.
In the second place, when the branch office was
opened, the same was run by the appellant Sevilla payable
to TWS by any airline for any fare brought in on the effort of
Sevilla. Thus, it cannot be said that Sevilla was under the
control of TWS. Sevilla in pursuing the business, relied on
her own capabilities.
It is further admitted that Sevilla was not in the
companys payroll. For her efforts, she retained 4% in
commissions from airline bookings, the remaining 3% going
to TWS. Unlike an employee, who earns a fixed salary, she
earned compensation in fluctuating amount depending on
her booking successes. The fact that Sevilla had been
designated branch manager does not make her a TWS
employee. It appears that Sevilla is a bona fide travel agent
herself, and she acquired an interest in the business
entrusted to her. She also had assumed personal obligation
for the operation thereof, holding herself solidary liable for
the payment of rentals.
Wherefore, TWS and Canilao are jointly and
severally liable to indemnify the petitioner, Sevilla.

HALSEY VS. MONTEIRO No Case
CHUA NGO vs. UNIVERSAL TRADING CO., INC.
Facts:
Chua Ngo ordered 300 boxes of Sunkist oranges
from Universal Trading Company Inc to be gotten
from the United States
The latter ordered the said boxes from Gabuardi
Company of San Francisco and in due course, the
goods were shipped from that port to Manila
Only 120 boxes were delivered to Chua Ngo and
the 180 were lost in transit
Plaintiff is now asking for reimbursement of the
price paid for the lost boxes.
ISSUES:
WON A CONTRACT OF AGENCY EXIST BETWEEN CHUA
NGO AND UTC
WON UNIVERSAL TRADING CO., INC IS LIABLE FOR
THE PAYMENT FOR THE LOST GOODS
Illustrative Cases on Partnership, Trust, and Agency YEEN 6

HELD:
NO, the court held that the circumstances of record
sufficiently indicate a sale. First, no commission was paid.
Second, Exhibit 1 says that "if balance is not paid within
48 hours of notification, merchandise may be resold by
the Universal Trading Company and the deposit
forfeited." "Resold" implies the goods had been sold to
Chua Ngo. And forfeiture of the deposit is incompatible
with a contract of agency. Third, immediately after
executing Exhibit 1 wherein oranges were quoted at $6.30
per box, Universal Trading placed an order for purchase of
the same with Gabuardi Company at $6 per box. If Universal
Trading Gabuardi Company was agent of Chua Ngo, it could
not properly do that. Inasmuch as good faith is to be
presumed, we must hold that Universal Trading acted thus
because it was not acting as agent of Chua Ngo, but as
independent purchaser from Gabuardi Company. Fourth, the
defendant charged the plaintiff the sum of P218.87 for 3
percent sales tax, thereby implying that their transaction was
a sale. Fifth, if the purchase of the oranges had been made
on behalf of Chua Ngo, all claims for losses thereof against
the insurance company and against the shipping company
should have been assigned to Chua Ngo. Instead, the
defendant has been pressing such claims for itself.
The appealed judgment for plaintiff in the sum of
P3,882.60 is affirmed.
In Lim v. Court of Appeals, 254 SCRA 170 (1996), it was
held that as a general rule, an agency to sell on commission
basis does not belong to any of the contracts covered by
Articles 1357 and 1358 of the Civil Code requiring them to
be in a particular form, and not one enumerated under the
Statutes of Frauds in Article 1403. Hence, unlike a sale
contract which must comply with the Statute of Frauds for
enforceability, a contract of agency to sell is valid and
enforceable in whatever form it may be entered into.
G. EIDI & CO. V. CU BONG LIONG No case

PUYAT & SONS V. ARCO AMUSEMENT (GR 47538, 20
JUNE 1941)
72 PHIL 402

Facts: Gonzalo Puyat & Sons is the exclusive agent of Starr
Piano Company of Richmond, Indiana USA, in the
Philippines. Teatro Arco, or Arco Amusement Company,
desiring to equip its cinematograph with sound reproducing
devices, approached Puyat. It was agreed by the parties that
Puyat would in behalf of Arco order equipment from Starr
Piano and that Arco would pay Puyat in addition to price of
the equipment, 10% commission plus all expenses such as
freight, insurance, banking charges, cables, etc. Puyat
informed Arco that the price of the equipment was $1,700, to
which Arco agreed. Later, a similar arrangement was made
by Arco for the purchase of similar equipment for $1,600 with
10% commission, with Puyat charging an additional flat
charge of $160 for all expenses and charges. 3 years later,
Arco learned that the price quoted by Puyat on the 2 orders
were not the net price but the list price for the equipment.
Arco filed a complaint with the trial court (CFI) demanding
reimbursement from said overpriced sales. The trial court
ruled in favor of Puyat, but the Court of Appeals reversed
such decision and declared Puyat an agent of Arco
Amusement in the purchase of said equipment.

Issue: Whether the agreement made between Puyat and
Arco Amusement is that of purchase and sale or that of
agency.

Held: Gonzalo Puyat & Sons cannot be the agent of Arco
Amusement in the purchase of equipment from Starr Piano
Company as Puyat & Sons is already the exclusive agent of
Starr Piano in the Philippines. Puyat cannot be the agent of
both vendor and purchaser. The fact that a commission was
offered to the other does not necessarily mean that the latter
has become the agent of the former, as this was only an
additional price which Arco bound itself to pay and which is
not incompatible with the contract of purchase and sale.
Puyat is not bound to reimburse the profit acquired in the
transaction, as this is the very essence of commerce
involving middlemen and merchants. The contract is the law
between the parties. What does not appear on the face of
the contract should be regarded as dealers or traders talk
which cannot bind either party. Not every concealment is
fraud, short of fraud, and such as that in this case, is
considered as business acumen.


PEARL ISLAND COMMERCIAL CORPORATION, plaintiff-
appellee, vs. LIM TAN TONG and MANILA SURETY &
FIDELITY CO., INC., defendants-appellants.

MONTEMAYOR, J.:

In June, 1951, plaintiff Pearl Island Commercial Corporation,
engaged in the manufacture of floor wax under the name of
"Bee Wax", in the City of Manila, entered into a contract,
Exhibit A, with defendant Lim Tan Tong, wherein the latter,
designated as sole distributor of said article in the provinces
of Samar, Leyte Cebu Bohol and Negros Oriental and all the
provinces in the island of Mindanao, was going to buy the
said floor wax for resale in the territory above-mentioned.
The plaintiff undertook not to appoint any other distributor
within the said territory; to sell to defendant Tong at factory
price in Manila, F. O. B. Manila; that Tong could sell the
article in his territory at any price he saw that fit; that
payment for any floor wax purchased shall he delivered to
plaintiff within sixty days from the date of shipment; that (this
is important) Tong was to furnish surety bond to cover all
shipments of the floor wax that are damaged or
unmerchantable, at its expense; and that in case of loss due
to fortuitous event or force majeure, the plaintiff was to
shoulder the loss, provided the goods were still in transit.

On the same day said contract were executed on June 16,
1951, defendant Manila Surety & Fidelity Co., Inc., with Tong
as principal, filed the surety bond (Exhibit B), binding itself
unto the plaintiff in the sum of P5,000, by reason of the
appointment of Tong as exclusive agent for plaintiff for the
Visayas-Mindanao provinces, the bond being conditioned on
the faithful performance of Tong's duties, in accordance with
the agreement. It would appear that for its security, the
Surety Company had Ko Su Kuan and Marciano Du execute
in its favor an indemnity agreement that they would
indemnify said surety company in whatever amount it may
pay to the plaintiff by reason of the bond filed by it.

Illustrative Cases on Partnership, Trust, and Agency YEEN 7

On June 18, 1951, plaintiff shipped 299 cases of Bee Wax,
valued at P7,107, to Tong, duly received by the latter. Tong
failed to remit the value within sixty days, and despite the
demand made by plaintiff on him to send that amount, he
sent only P770, leaving a balance of P6,337, which he
admits to be still with him, but which he refuses to remit to
the plaintiff, claiming that the latter owed him a larger
amount. To enforce payment of the balance of P6,337,
plaintiff filed this present action not only against Tong, but
also against the Surety Company, to recover from the latter
the amount of its bond of P5,000.

The Surety Company in its answer filed a cross-claim
against Tong, and with the trial courts permission, filed a
third-party complaint against Ko Su Kuan and Marciano Du
who, as already stated, had executed an indemnity
agreement in its favor. After trial, the lower court, presided
by Judge Hermogenes Concepcion, rendered judgment, the
dispositive part of which reads as follows:

IN VIEW OF ALL THE FOREGOING, the Court renders
judgment in favor of the plaintiff and against the defendants
as follows:

(a) The Court orders the defendants Lim Tan Tong and the
Manila Surety & Fidelity Co., Inc., to pay jointly and severally
the plaintiff Pearl Island Commercial Corporation the sum of
P5,000.00 plus legal interest from the date of the filing of this
complaint, until it is fully paid;

(b) the Court orders the defendant Lim Tan Tong to pay to
the plaintiff the sum of P1,337.00 with legal rate of interest
from the date of the filing of this complaint until said amount
is fully paid;

(c) The two defendants shall pay jointly and severally
another amount of P500 to the plaintiff as attorney's fees,
plus the costs of this suit;

(d) The Court orders the cross-defendant Lim Tan Tong and
the third-party defendants Ko Su Kuan and Marciano Du to
pay jointly and severally to the Manila Surety & Fidelity Co.,
Inc., the sum of P5,000 with legal rate of interest from the
date of the filing of this complaint until fully paid, plus P500
as attorney's fees, plus the costs of this suit.

The Surety company is appealing said decision. The appeal
originally taken to the Court of Appeals was later certified to
us as involving only questions of law.

Appellant assigns the following errors:

I. The trial court erred in holding that the contract between
the Pearl Island Commercial Corporation and Lim Tan tong
was one of agency so that breach thereof would come within
the terms of the surety bond posted by appellant therein.

II. The trial court erred in ordering the defendant-appellant
herein to pay attorney's fees and other charges stated in the
judgement.

It is appellant's contention that it cannot be held liable on its
bond for the reason that the latter was filed on the theory
that the contract between the plaintiff and Tong was one of
agency as a result of which, said surety Company
guaranteed the faithful performance of tong as agent, but
that it turned out that said contract was one of purchase and
sale, shown by the very title of said contract (Exhibit A),
namely, "Contract of Purchase and Sale", and appellant
never undertook to guaranty the faithful performance of Tong
as a purchaser. However, a careful examination of the said
contract shows that appellant is only partly right, for the
reason that the terms of the said contract, while providing for
sale of Bee Wax from the plaintiff to Tong and purchase of
the same by Tong from the plaintiff, also designates Tong as
the sole distributor of the article within a certain territory.
Besides, paragraph 4 of the contract entitled "Security",
provides that tong was to furnish surety bond to cover all
shipments made by the plaintiff to him. Furthermore,
appellant must have understood the contract to one, at least
partly, of agency because the bond itself (Exhibit B) says the
following:

WHEREAS, the above bounden principal has been
appointed as exclusive agent for Pearl Islands Commercial
Corporation of Manila, Philippines, for the Visayas-Mindanao
Provinces; . . .

Under the circumstances, we are afraid that the Surety
Company is not now in a position to deny its liability for the
shipment of the 299 cases of Bee Wax duly received by
Tong and his failure to pay its value of P7,107, minus P770
or a balance of P6,337, of course, up to the limit of P5,000,
the amount of the bond. True, the contract (Exhibit A) is not
entirely clear. It is in some respects, even confusing. While it
speaks of sale of Bee Wax to Tong and his responsibility for
the payment of the value of every shipment so purchased, at
the same time it appoints him sole distributor within a certain
area, the plaintiff undertaking not to appoint any other agent
or distributor within the same area. Anyway, it seems to have
been the sole concern and interest of the plaintiff to be sure
that it was paid the value of all shipments of Bee Wax to
Tong and the Surety Company by its bond, in the final
analysis said payment by Tong, either as purchaser or as
agent. Whether the article was purchased by Tong or
whether it was consigned to him as agent to be sold within
his area, the fact is that Tong admits said shipment, admits
its value, admits keeping the same (P7,107 minus the P770
he had paid on account), but that he is retaining it for
reasons of his own, namely, that plaintiff allegedly owes him
a larger amount. Moreover, the Surety Company is
adequately protected, especially by the judgment because
by its express terms, appellant can recover from Ko Su Kuan
and Marciano Du whatever amounts, including attorney's
fees it may pay to plaintiff, and said two persons evidently
have not appealed from the decision.

In view of the foregoing, the decision appealed from is
hereby affirmed, with costs.

Paras, C.J., Bengzon, Padilla, Reyes, A., Bautista Angelo,
Labrador, Concepcion, Reyes, J.B.L., and Felix, JJ., concur.

YSMAEL & CO., vs. WILLIAM LINES No case


NATIONAL RICE AND CORN CORPORATION (NARIC)
VS. CA ET AL
G.R. NO. L-32320, JULY 16, 1979

FACTS: The National Rice and Corn Corporation (Naric) had
on stock 8000 metric tons of corn which it could not dispose
of due to its poor quality. Naric called for bids for the
purchase of the corn and rice. But precisely because of the
poor quality of the corn, a direct purchase of said corn even
with the privilege of importing commodities did not attract
Illustrative Cases on Partnership, Trust, and Agency YEEN 8

good offers. Davao Merchandising Corporation (Damerco)
came in with its offer to act as agent in the exportation of the
corn, with the agent answering for the price thereof and
shouldering all expenses incidental thereto, provided it can
import commodities, paying the NARIC therefor from the
price it offered for the corn. Damerco was to open a
domestic letter of credit, which shall be available to the
NARIC drawing therefrom through sight draft without
recourse. The availability of said letter or letters of credit to
the NARIC was dependent upon the issuance of the export
permit. The payment therefor depended on the importation
of the collateral goods, that is after its arrival.

The first half of the collateral goods were successfully
imported. Due to the inferior quality of the corn, it had to be
replaced with more acceptable stock. This caused such
delay that the letters of credit expired without the NARIC
being able to draw the full amount therefrom. Checks and
PN were issued by DAMERCO for the purpose of securing
the unpaid part of the price of the corn and as guaranty that
DAMERCO will purchase the corresponding collateral
goods.

But because of the change of administration in the
government, barter transactions were suspended. Hence,
DAMERCO was not able to import the remaining collateral
goods.

NARIC instituted in the CFI of Manila against DAMERCO
and Fieldmens Insurance Co. Inc. an action for recovery of
a sum of money representing the balance of the value of
corn and rice exported by DAMERCO.

The trial court rendered in favor of NARIC ordering
DAMERCO and Fieldmens Insurance Co. Inc., to pay, jointly
and severally. CA reversed the trial courts decision and
rendered a new judgement dismissing the complaint as
premature and for lack of cause of action. Hence this petition
for certiorari.

ISSUE: Whether DAMERCO only acted as an agent of
NARIC or is a buyer

HELD: the petition for review is denied and the resolution of
the CA appealed from is hereby affirmed.

AGENT

Clearly from the contract between NARIC and DAMERCO:
bids were previously called for by the NARIC for the
purchase of corn and rice to be exported as well as of the
imported commodities that will be brought in, but said
biddings did not succeed in attracting good offers.
Subsequently, Damerco made an offer. Now, to be sure, the
contract designates the Naric as the seller and the Damerco
as the buyer. These designations, however, are merely
nominal, since the contract thereafter sets forth the role of
the buyer (Damerco) as agent of the seller in exporting
the quantity and kind of corn and rice as well as in importing
the collateral goods thru barter and to pay the
aforementioned collateral goods.

The contract between the NARIC and the DAMERCO is
bilateral and gives rise to a reciprocal obligation. The said
contract consists of two parts: (1) the exportation by the
DAMERCO as agent for the NARIC of the rice and corn; and
(2) the importation of collateral goods by barter on a back to
back letter of credit or no-dollar remittance basis. It is evident
that the DAMERCO would not have entered into the
agreement were it not for the stipulation as to the importation
of the collateral goods which it could purchase.

It appears that we were also misled to believe that the
Damerco was buying the corn. A closer look at the pertinent
provisions of the contract, however, reveals that the price as
stated in the contract was given tentatively for the purpose of
fixing the price in barter. It should likewise be stressed that
the aforesaid exportation and importation was on a no-dollar
remittance basis. In other words, the agent, herein
defendant Damerco, was not to be paid by its foreign buyer
in dollars but in commodities. Damerco could not get paid
unless the commodities were imported, and Damerco was
not exporting and importing on its own but as agent of the
plaintiff, because it is the latter alone which could export and
import on barter basis according to its charter. Thus, unless
Damerco was made an agent of the plaintiff, the former
could not export the corn and rice nor import at the same
time the collateral goods. This was precisely the intention of
the parties.

He is not to be considered a buyer, who should be liable for
the sum sought by NARIC because the contract itself clearly
provides the Damerco was to export the rice and corn, AND
TO BUY THE collateral goods. There is nothing in the
contract providing unconditionally that Damerco was buying
the rice and corn. To be more specific, if the agreement was
just a sale of corn to Damerco, the contract need not specify
that Damerco was to buy the collateral goods.

ALFRED HAHN, petitioner, vs. COURT OF APPEALS and
BAYERISCHE MOTOREN
WERKEAKTIENGESELLSCHAFT (BMW), respondents.
January 22, 1997

Facts:
1 .Alfred Hahn is a Filipino citizen doing business under the
name and style "Hahn-Manila."
2. Bayerische Motoren Werke Aktiengesellschaft (BMW) is a
nonresident foreign corporation existing under the laws of
the former Federal Republic of Germany, with principal office
at Munich, Germany.
3. In 1963, Hahn executed in favor of BMW a Deed of
Assignment with Special Power of Attorney which
essentially, makes Hahn as the exclusive dealer of BMW in
the Philippines. Moreover, it stated there that Hahn and
BMW shall continue business relations as has been usual in
the past without a formal contract."
4. In 1993, BMW and Columbia Motors Corp (CMC) had a
meeting which would grant CMC exclusive dealership of
BMW cars.
5. Hahn was informed later that BMW was dissatisfied with
how it carrying its business. However, BMW expressed
willingness to continue business relations with the petitioner
on the basis of a "standard BMW importer" contract,
otherwise, it said, if this was not acceptable to petitioner,
BMW would have no alternative but to terminate petitioners
exclusive dealership effective June 30, 1993.
6. Hahn protested alleging that such termination is a breach
of the Deed of Assignment. Hahn insisted that as long as the
assignment of its trademark and device subsisted, he
remained BMW's exclusive dealer in the Philippines because
the assignment was made inconsideration of the exclusive
dealership.
7. BMW, however, went on to terminate its dealership with
Hahn.
Illustrative Cases on Partnership, Trust, and Agency YEEN 9

8. Hahn filed a complaint for specific performance and
damages in the RTC. RTC issued a writ preliminary
injunction.
9. BMW appealed to the CA. CA reversed on the ground that
Hahn is not an agent of BMW and that BMW is not doing
business in the Phils. By virtue of the latter, the writ of
preliminary injunction should not have been issued since
RTC did not have jurisdiction over it.

Issues
1. W/N Hahn is agent or a distributor (or broker) in the
Philippines of BMW.
He is an agent.
2. W/N BMW is doing business here in the Philippines.
YES
Held/Ratio:
1. There is nothing to support the appellate court's
finding that Hahn solicited orders alone and for his own
account and without "interference from, let alone direction of,
BMW. To the contrary, Hahn claimed he took orders for
BMW cars and transmitted them to BMW. Upon receipt of
the orders, BMW fixed the down payment and pricing
charges, notified Hahn of the scheduled production month
for the orders, and reconfirmed the orders by signing and
returning to Hahn the acceptance sheets. Payment was
made by the buyer directly to BMW. Title to cars purchased
passed directly to the buyer and Hahn never paid for the
purchase price of BMW cars sold in the Philippines. Hahn
was credited with a commission equal to 14% of the
purchase price upon the invoicing of a vehicle order by
BMW. Upon confirmation in writing that the vehicles had
been registered in the Philippines and serviced by him, Hahn
received an additional 3% of the full purchase price. Hahn
performed after-sale services, including, warranty services,
for which he received reimbursement from BMW. All orders
were on invoices and forms of BMW.
BMW periodically inspected the service centers to
see to it that BMW standards were maintained. Indeed, it
would seem from BMW's letter to Hahn that it was for Hahn's
alleged failure to maintain BMW standards that BMW was
terminating Hahn's dealership. The fact that Hahn invested
his own money to put up these service centers and
showrooms does not necessarily prove that he is not an
agent of BMW. For as already noted, there are facts in the
record which suggest that BMW exercised control over
Hahn's activities as a dealer and made regular inspections of
Hahn's premises to enforce compliance with BMW standards
and specifications. This was proven by a letter.
These allegations were admitted by BMW.
This arrangement shows an agency.
2. Hahn and BMW had a Representative Agreement
or a Licensing Agreement. This arrangement is whereby a
domestic corporation, by virtue of which the latter was
appointed exclusive representative" in the Philippines for a
stipulated commission. Pursuant to these contracts, the
domestic corporation sold products exported by the foreign
corporation and put up a service center for the products sold
locally. This Court held that these acts constituted doing
business in the Philippines. The arrangement showed that
the foreign corporations purpose was to penetrate the
Philippine market and establish its presence in the
Philippines.
In addition, BMW held out private respondent
Hahn as its exclusive distributor in the Philippines, even as it
announced in the Asian region that Hahn was the "official
BMW agent in the Philippines.

CONDE vs. CA
G.R. No. L-40242 December 15, 1982

FACTS:
1. Margarita Conde, Bernardo Conde and the petitioner
Dominga Conde, as heirs of Santiago Conde, sold with right
of repurchase, within ten (10) years, a parcel of agricultural
land with to Casimira Pasagui, married to Pio Altera), for
P165.00.
2. On 17 April 1941, the Cadastral Court of Leyte
adjudicated Lot No. 840 to the Alteras" subject to the right of
redemption by Dominga Conde.
3. Original Certificate of Title No. N-534 in the name of the
spouses Pio Altera and Casimira Pasagui was then
transcribed in the "Registration Book" of the Registry of
Deeds of Leyte.
4. On 28 November 1945,
private respondent Paciente Cordero, son-in-law of
theAlteras, signed a document in the Visayan dialect.
Neither of the vendees-a-retro, Pio Altera nor Casimira
Pasagui, was a signatory to the deed.
5. Petitioner maintains that because Pio Altera was very ill
at the time, Paciente Cordero executed the deed of resale
for and on behalf of his father-in-law. Petitioner further states
that she redeemed the property with her own money as her
co-heirs were bereft of funds for the purpose
6. After which, Pio Altera sold the disputed lot to the spouses
Ramon Conde and CatalinaT. Conde (not related to
petitioner).
7. Contending that she had validly repurchased the lot in
question in 1945, Dominga Conde filed, a Complaint against
the respondents for quieting of title to real property and
declaration of ownership.

ISSUE:
WON there was an implied agency when Cordero signed the
repurchase document

HELD:
YES.
If petitioner had done nothing to formalize her
repurchase, by the same token, neither have the vendees-a-
retro done anything to clear their title of the encumbrance
therein regarding petitioners right to repurchase. No new
agreement was entered into by the parties as stipulated in
the deed of pacto de retro, if the vendors a retro failed to
exercise their right of redemption after ten years. If,
petitioner exerted no effort to procure the signature of Pio
Altera after he had recovered from his illness, neither did the
Alteras repudiate the deed that their son-in-law had signed.
Thus, an implied agency must be held to have been created
from their silence or lack of action, or their failure to
repudiate the agency.
Possession of the lot in dispute having been
adversely and uninterruptedly with petitioner from1945 when
the document of repurchase was executed, to 1969, when
she instituted this action, or for 24 years, the Alteras must be
deemed to have incurred in laches.

PITTSBURG PLATE GLASS COMPANY vs. THE
DIRECTOR OF PATENTS and CHUA TUA HIAN AND
COMPANY

Facts:
Petition for review of two resolutions of the
Director of Patents in Inter Partes Case 283, dismissing the
opposition of the Pittsburg Plate Glass Company (hereinafter
Illustrative Cases on Partnership, Trust, and Agency YEEN 10

referred to as the petitioner) to the registration of a
trademark applied for by Chua Tua Hian Company
(hereinafter referred to as the respondent).
On November 5, 1962, the law firm of Lichauco,
Picazo and Agcaoili filed with the Philippine Patent Office a
petition for extension of 30 days from November 8, 1962
within which to file in behalf of the petitioner a notice of
opposition to the respondent's application for registration of
"Solex Bluepane" as trademark for its glass products. The
plea was made pursuant to a cablegram from Langner,
Parry, Card and Langner International Patent and
Trademark Agents, USA, asking that the respondent's
application be opposed. A copy of the cablegram was
attached to the request. The extension was granted.
On December 7, 1962 an unverified notice of
opposition to the trademark application was filed by
Lichauco, Picazo and Agcaoili, pursuant to Rule 187(c) of
the Rules of Practice before the Patent Office which
authorizes the filing of such a notice provided it is verified by
the opposer within 60 days thereafter. On the same day, the
same counsel filed a duly authenticated power of attorney
executed by the petitioner on November 12, 1962 in favor of
the former for the prosecution of its opposition.
On February 5, 1963 the petitioner's verified
opposition to the respondent's application was filed.
On October 14, 1963 the Director of Patents,
acting upon a motion of the respondent, issued a resolution
dismissing the petitioner's opposition on the ground that on
November 5, 1962 when the petitioner's counsel asked for
an extension of time to file a notice of opposition, the said
counsel was not yet authorized by the petitioner to file the
said pleading as the aforementioned power of attorney was
executed only on November 12, 1962.

ISSUE:
WON THE LAW FIRM OF LICHAUCO, PICAZO AND
AGCAOILI WAS AUTHORIZED TO REPRESENT THE
PETITIONER BEFORE THE PHILIPPINE PATENT OFFICE
ON NOVEMBER 5, 1962 WHEN THE FORMER PLEADED
FOR AN EXTENSION OF TIME TO REGISTER THE
PETITIONER'S OPPOSITION TO THE RESPONDENT'S
APPLICATION.

HELD/RATIO DECIDENDI:
YES, the court held that the said law firm was so properly
authorized by the petitioner. It should be noted that the
petitioner does not deny, as in fact it asserted in writing, that
the said law firm was authorized to represent it by virtue of
the powers it had vested upon Langner, et al., a
correspondent of Lichauco, Picazo and Agcaoili, to handle
all foreign trademark matters affecting the petitioner. It bears
emphasis that the relationship between counsel and client is
strictly a personal one. It is a relationship the creation of
which courts and administrative tribunals cannot but
recognize on the faith of the client's word, especially when
no substantial prejudice is thereby caused to any third party.
The Director of Patents is directed to proceed with the
determination of the application and the opposition thereto
with costs against Chua Tua Hian & Company.

SIASAT vs. INTERMEDIATE APPELLATE COURT

FACTS:
the Department of Education and Culture to purchase
without public bidding, one million pesos worth of national
flags for the use of public schools throughout the country.
purchase.
requirements had been complied with, except
the release of the purchase orders.
the Department that the purchase orders could not be
released unless a formal offer to deliver the flags was first
submitted for approval.

Flag Industry came up with a document which read:
Mrs. Tessie Nacianceno,
This is to formalize our agreement for you to represent
United Flag Industry to deal with any entity or organization,
private or government in connection with the marketing of
our products-flags and all its accessories.
For your service, you will be entitled to a commission of thirty
(30%) percent.
Signed
Mr. Primitive Siasat
Owner and Gen. Manager
The first delivery of 7,933 flags was made by the United
Flag Industry.
Then, Nanciancenos authority to represent the United Flag
Industry was revoked by Primitivo Siasat on theground that
she was not authorized to sell 16, 666 Philippine flags to the
Department.
Industry tendered the amount of P23,900.00 or five percent
(5%) of the amount received as payment of her commission.
She refused to accept the said amount insisting on the 30%
commission agreed upon.
received payment for the second delivery of 7,833 flags.
When she confronted the petitioners, they vehemently
denied receipt of the payment, at the same time claimed that
the respondent had no participation whatsoever with regard
to the second delivery of flags and that the agency had
already been revoked.
Manila to recover the following commissions: 25%, as
balance on the first delivery and 30%, on the second
delivery.

Appellate Court.

ISSUE:
1. Did Nancianceno have the capacity to represent United
Flag in the transaction with the Department?
2. Did the revocation of agency foreclose the respondent's
claim of 30% commission on the second transaction?
3. Was the award for attorneys fees and moral damages
proper?

RULING:
1. YES, she had the capacity to represent United Flag In
fact, she was a general agent.
- There are several kinds of agents. An agent may be (1)
universal: (2) general, or (3) special. A universal; agent is
Illustrative Cases on Partnership, Trust, and Agency YEEN 11

one authorized to do all acts for his principal which can
lawfully be delegated to an agent. So far as such a condition
is possible, such an agent may be said to have universal
authority.
- A general agent is one authorized to do all acts pertaining
to a business of a certain kind or at a particular place, or all
acts pertaining to a business of a particular class or series.
He has usually authority either expressly conferred in
general terms or in effect made general by the usages,
customs or nature of the business which he is authorized to
transact.
- An agent, therefore, who is empowered to transact all the
business of his principal of a particular kind or in a particular
place, would, for this reason, be ordinarily deemed a general
agent.
- A special agent is one authorized to do some particular act
or to act upon some particular occasion. Lie acts usually in
accordance with specific instructions or under limitations
necessarily implied from the nature of the act to be done.
- By the way general words were employed in the
agreement; no restrictions were intended as to the manner
the agency was to be carried out or in the place where it was
to be executed. The power granted to the respondent was so
broad that it practically covers the negotiations leading to,
and the execution of, a contract of sale of petitioners'
merchandise with any entity or organization.
- There was nothing to prevent the petitioners from stating in
the contract of agency that the respondent could represent
them only in the Visayas or to state that the Department of
Education and Culture and the Department of National
Defense, which alone would need a million pesos worth of
flags, are outside the scope of the agency.

2. NO, the revocation did not foreclose the respondents
claim of 30% commission on the second transaction.
- The revocation of agency could not prevent the
Nancianceno from earning her commission because the
contract of sale had been already perfected and partly
executed.
- The principal cannot deprive his agent of the commission
agreed upon by cancelling the agency and, thereafter,
dealing directly with the buyer.

3. NO, the award was not proper.
- Moral damages: To support a judgment for damages, facts
which justify the inference of a lack or absence of good faith
must be alleged and proven. There is no evidence on record
from which to conclude that the revocation of the agency
was deliberately effected by the petitioners to avoid payment
of the respondent's commission.
- Attorneys fees: Fo r one thing, the respondent did not
come to court with completely clean hands. For another, the
petitioners apparently believed they could legally revoke the
agency in the manner they did and deal directly with
education officials handling the purchase of Philippine flags.
They had reason to sincerely believe they did not have to
pay a commission for the second delivery of flags.
The decision of the respondent court was MODIFIED. The
petitioners were ordered to pay the respondent the amount
of ONE HUNDRED FOURTY THOUSAND NINE HUNDRED
AND NINETY FOUR PESOS (P140, 994.00) as her
commission on the second delivery of flags with legal
interest from the date of the trial court's decision.

RUGGLES VS. AMERICAN INC. CO No Case

PNB vs. STA. MARIA

FACTS:
as involving purely legal issues, we hold that a special power
of attorney to mortgage real estate is limited to such
authority to mortgage and does not bind the grantor
personally to other obligations contracted by the grantee, in
the absence of any ratification or other similar act that would
estop the grantor from questioning or disowning such other
obligations contracted by the grantee.
defendant Maximo Sta. Maria and his six brothers and
sisters, defendants-appellants, Valeriana, Emeteria, Teofilo,
Quintin, Rosario and Leonila, all surnamed Sta. Maria, and
the Associated Insurance & Surety Co., Inc. as surety, for
the collection of certain amounts representing unpaid
balances on two agricultural sugar crop loans due allegedly
from defendants.
Maximo Sta. Maria from plaintiff bank under a special power
of attorney, executed in his favor by his six brothers and
sisters, defendants-appellants herein, to mortgage a 16-odd
hectare parcel of land, jointly owned by all of them.
favor of her brother, Maximo, a special power of attorney to
borrow money and mortgage any real estate owned by her.
he two above powers, Maximo Sta. Maria
applied for two separate crop loans, for the 1952-1953 and
1953-1954 crop years, with plaintiff bank, one in the amount
of P15,000.00, of which only the sum of P13,216.11 was
actually extended by plaintiff, and the other in the amount of
P23,000.00, of which only the sum of P12,427.57 was
actually extended by plaintiff. As security for the two loans,
Maximo Sta. Maria executed in his own name in favor of
plaintiff bank two chattel mortgages on the standing crops,
guaranteed by surety bonds for the full authorized amounts
of the loans executed by the Associated Insurance & Surety
Co., Inc. as surety with Maximo Sta. Maria as principal. The
records of the crop loan application further disclose that
among the securities given by Maximo for the loans were a
"2nd mortgage on 25.3023 Has. of sugar land, including
sugar quota rights therein" including, the parcel of land jointly
owned by Maximo and his six brothers and sisters herein for
the 1952-1953 crop loan, with the notation that the bank
already held a first mortgage on the same properties for the
1951-1952 crop loan of Maximo, and a 3rd mortgage on the
same properties for the 1953-1954 crop loan.
against defendants: condemning the defendant Maximo R.
Sta. Maria and his co-defendants Valeriana, Quintin,
Rosario, Emeteria, Teofilo, and Leonila all surnamed Sta.
Maria and the Associated Insurance and Surety Company,
Inc., jointly and severally, to pay the plaintiff, the Philippine
National Bank, Del Carmen Branch the sum of P8,500.72
and P14,299.79 .
Associated Insurance & Surety Co., Inc. who did not resist
the action, did not appeal the judgment. This appeals been
taken by his six brothers and sisters, defendants-appellants
who reiterate in their brief their main contention in their
answer to the complaint that under this special power of
attorney, they had not given their brother, Maximo, the
authority to borrow money but only to mortgage the real
estate jointly owned by them; and that if they are liable at all,
their liability should not go beyond the value of the property
which they had authorized to be given as security for the
loans obtained by Maximo. In their answer, defendants-
appellants had further contended that they did not benefit
whatsoever from the loans, and that the plaintiff bank's only
Illustrative Cases on Partnership, Trust, and Agency YEEN 12

recourse against them is to foreclose on the property which
they had authorized Maximo to mortgage.

ISSUE:
Whether the 6 brothers and sisters are liable for the loan
obtained by Maximo.

RULING:
-appellants (except
Valeriana) unto their brother, Maximo, was merely to
mortgage the property jointly owned by them. They did not
grant Maximo any authority to contract for any loans in their
names and behalf. Maximo alone, with Valeriana who
authorized him to borrow money, must answer for said loans
and the other defendants-appellants' only liability is that the
real estate authorized by them to be mortgaged would be
subject to foreclosure and sale to respond for the obligations
contracted by Maximo. But they cannot be held personally
liable for the payment of such obligations, as erroneously
held by the trial court.
l in family and business circles that one
would allow his property or an undivided share in real estate
to be mortgaged by another as security, either as an
accommodation or for valuable consideration, but the grant
of such authority does not extend to assuming personal
liability, much less solidary liability, for any loan secured by
the grantee in the absence of express authority so given by
the grantor.
express ratification of the loans by defendants-appellants or
if it had been shown that they had been benefited by the
crop loans so as to put them in estoppel. Quintin Sta. Maria
testified that he and his co-defendants executed the
authority to mortgage "to accommodate (my) brother Dr.
Maximo Sta. Maria ... and because he is my brother, I signed
it to accommodate him as security for whatever he may
apply as loan. Only for that land, we gave him as, security"
and that "we brothers did not receive any centavo as
benefit." The record further shows plaintiff bank itself
admitted during the trial that defendants-appellants "did not
profit from the loan" and that they "did not receive any
money (the loan proceeds) from (Maximo)." No estoppel,
therefore, can be claimed by plaintiff as against defendants-
appellants.
liable not merely on the mortgage of her share in the
property, but also for the loans which Maximo had obtained
from plaintiff bank, since she had expressly granted Maximo
the authority to incur such loans. The Court hold that
Valeriana's liability for the loans secured by Maximo is not
joint and several or solidary as adjudged by the trial court,
but only joint, pursuant to the provisions of Article 1207 of
the Civil Code that "the concurrence ... of two or more
debtors in one and the same obligation does not imply that
... each one of the (debtors) is bound to render entire
compliance with the prestation. There is a solidary liability
only when the obligation expressly so states, or when the
law or the nature of the obligation requires solidarity." It
should be noted that in the additional special power of
attorney, executed by Valeriana, she did not grant Maximo
the authority to bind her solidarity with him on any loans he
might secure thereunder.
defendants-appellants Emeteria, Teofilo, Quintin, Rosario
and Leonila, all surnamed Sta. Maria is hereby reversed and
set aside, with costs in both instances against plaintiff. The
judgment against defendant-appellant Valeriana Sta. Maria
is modified in that her liability is held to be joint and not
solidary.