Professional Documents
Culture Documents
65) ORIENT AIR SERVICES AND HOTEL REPRESENTATIVES vs. COURT OF APPEALS
CASE NUMBER: GR. NO. 76931 DATE: MAY 29, 1991 PONENTE: PADILLA, J.
FACTS:
January 15 1977- American Airlines, Inc. an air carrier offering passenge
r and air cargo transportation in the Philippines, and Orient Air Services and H
otel Representatives entered into a General Sales Agency Agreement, whereby the
former authorized the latter to act as its exclusive general sales agent within
the Philippines for the sale of air passenger transportation.
May 11 1981- Ameri
can Air took charge of the collection of the proceeds of tickets sold originally
by Orient Air and terminated the Agreement in accordance with Paragraph 13 ther
eof (Termination).
13. Termination American may terminate the Agreement on two days' notice in the
event Orient Air Services is unable to transfer to the United States the funds p
ayable by Orient Air Services to American under this Agreement. Either party may
terminate the Agreement without cause by giving the other 30 days' notice by le
tter, telegram or cable.
May 15 1981- American Air instituted suit against Orient Air with the Court of F
irst Instance of Manila, for Accounting with Preliminary Attachment or Garnishme
nt, Mandatory Injunction and Restraining Order
In its Answer with counterclaim d
ated 9 July 1981, Orient Air denied the material allegations of the complaint wi
th respect to plaintiff's entitlement to alleged unremitted amounts, contending
that after application thereof to the commissions due it under the Agreement, pl
aintiff in fact still owed Orient Air a balance in unpaid overriding commissions
. Further, the defendant contended that the actions taken by American Air in the
course of terminating the Agreement as well as the termination itself were unte
nable, Orient Air claiming that American Air's precipitous conduct had occasione
d prejudice to its business interests. Trial Court ruled in favor of Orient Air
ON APPEAL: Intermediate Appellate Court affirmed the ruling of TC ISSUE: W/N the
respondent appellate court correctly ruled that Orient Air be reinstated again
as sales agent of American Air RULING: By affirming this ruling of the trial cou
rt, respondent appellate court, in effect, compels American Air to extend its pe
rsonality to Orient Air. Such would be violative of the principles and essence o
f agency, defined by law as a contract whereby "a person binds himself to render
some service or to do something in representation or on behalf of another, WITH
THE CONSENT OR AUTHORITY OF THE LATTER . In an agent-principal relationship, th
e personality of the principal is extended through the facility of the agent. In
so doing, the agent, by legal fiction, becomes the principal, authorized to per
form all acts which the latter would have him do. Such a relationship can only b
e effected with the consent of the principal, which must not, in any way, be com
pelled by law or by any court. The Agreement itself between the parties states t
hat "either party may terminate the Agreement without cause by giving the other
30 days' notice by letter, telegram or cable." (emphasis supplied) We, therefore
, set aside the portion of the ruling of the respondent appellate court reinstat
ing Orient Air as general sales agent of American Air. WHEREFORE, with the foreg
oing modification, the Court AFFIRMS the decision and resolution of the responde
nt Court of Appeals, dated 27 January 1986 and 17 December 1986, respectively. C
osts against petitioner American Air.
Page 1
CASE DIGEST
66) RALLOS vs. FELIX GO CHAN & SONS REALTY CORPORATION
CASE NUMBER: L-24332 DATE: January 31, 1978 FACTS:
Concepcion and Gerundia Rallo
s were sisters and registered co-owners of a parcel of land known as Lot No. 598
3 of the Cadastral Survey of Cebu covered by Transfer Certificate of Title No. 1
1116 of the Registry of Cebu.
They executed a special power of attorney in favor
of their brother, Simeon Rallos, authorizing him to sell such land for and in t
heir behalf. After Concepcion died, Simeon Rallos sold the undivided shares of h
is sisters Concepcion and Gerundia to Felix Go Chan & Sons Realty Corporation fo
r the sum of P10,686.90. New TCTs were issued to the latter.
Petitioner Ramon Ra
llos, administrator of the Intestate Estate of Concepcion filed a complaint pray
ing (1) that the sale of the undivided share of the deceased Concepcion Rallos i
n lot 5983 be unenforceable, and said share be reconveyed to her estate; (2) tha
t the Certificate of 'title issued in the name of Felix Go Chan & Sons Realty Co
rporation be cancelled and another title be issued in the names of the corporati
on and the "Intestate estate of Concepcion Rallos" in equal undivided and (3) th
at plaintiff be indemnified by way of attorney's fees and payment of costs of su
it. CFI: [Plaintiffs Complaint] Sale of land was null and void insofar as the one
-half pro-indiviso share of Concepcion Rallos
Ordered the issuance of new TCTs t
o respondent corporation and the estate of Concepcion in the proportion of share
each pro-indiviso and the payment of attorneys fees and cost of litigation [Resp
ondent filed cross claim against Simon Rallos(*Simon and Gerundia died during pe
ndency of case)] Juan T. Borromeo, administrator of the Estate of Simeon Rallos
was ordered to pay defendant the price of the share of the land (P5,343.45) plus
attorneys fees [Borromeo filed a third party complaint against Josefina Rallos,
special administratrix of the Estate of Gerundia]
Dismissed without prejudice to
filing either a complaint against the regular administrator of the
PONENTE: Munoz-Palma, J.
Estate of Gerundia Rallos or a claim in the IntestateEstate of Cerundia Rallos,
covering the same subjectmatter CA: CFI Decision reversed, upheld the sale of Co
ncepcions share. MR: denied. ISSUES & RULING: 1) WON sale was valid although it w
as executed after the death of the principal, Concepcion.? Sale was void. o No o
ne may contract in the name of another without being authorized by the latter, o
r unless he has by law a right to represent him (Art. 1317 of the Civil Code). o
Simons authority as agent was extinguished upon Concolacions death 2) WON sale fe
ll within the exception to the general rule that death extinguishes the authorit
y of the agent The sale did not fall under the exceptions to the general rule th
at death ipso jure extinguishes the authority of the agent o Art. 1930 inapplica
ble: SPA in favor of Simon Rallos was not coupled with interest o Art. 1931 inap
plicable:
Simon Rallos knew (as can be inferred from his pleadings) of principal
Concepcions death
For Art 1931 to apply, both requirements must be present 3) WO
N agents knowledge of the principals death is a material factor. Yes, agents knowle
dge of principals death is material. o Respondent asserts that: there is no provi
sion in the Code which provides that whatever is done by an agent having knowled
ge of the death of his principal is void even with respect to third persons who
may have contracted with him in good faith and without knowledge of the death of
the principal o Court says: this contention ignored the ignores the existence o
f the general rule enunciated in Article 1919 that the death of the principal
Page 2
ny fraudulent conduct or bad faith. 10. TC dismissed the Complaint of the GANAS
based on Partial and Additional Stipulations of Fact .
Page 3
CASE DIGEST 11. The GANAS appealed to the CA. During the pendency of the appeal,
Jose Gana, the principal plaintiff, died. 12. CA set aside and reversed the TCs
decision ordering Air France to pay appellants moral damages in the total sum P9
0,000.00 plus costs. 13. Reconsideration sought by AIR FRANCE was denied, hence,
petitioner s recourse before this instance, to which we gave due course. ISSUE:
1. Whether or not, under the environmental milieu the GANAS have made out a cas
e for breach of contract of carriage entitling them to an award of damages? No!
2. Whether or not Teresita was the agent of the GANAS and notice to her of the r
ejection of the request for extension of the validity of the tickets was notice
to the GANAS, her principals? YES! RULING: No! SC reversed the affirmative rulin
g of the CA. (As for the mainFIRST issue) AIR FRANCE cannot be faulted for breach
of contract when it dishonored the tickets of the GANAS after 8 May 1971 since
those tickets expired on said date; nor when it required the GANAS to buy new ti
ckets or have their tickets re-issued for the Tokyo/Manila segment of their trip
. Neither can it be said that, when upon sale of the new tickets, it imposed add
itional charges representing fare differentials, it was motivated by self-intere
st or unjust enrichment considering that an increase of fares took effect, as au
thorized by the Civil Aeronautics Board (CAB) in April, 1971. This procedure is
well in accord with the IATA tariff rules which provide: 6. TARIFF RULES 7. APPL
ICABLE FARE ON THE DATE OF DEPARTURE 3.1 General Rule. All journeys must be char
ged for at the fare (or charge) in effect on the date on which transportation co
mmences from the point of origin. Any ticket sold prior to a change of fare or c
harge (increase or decrease) occurring between the date of commencement of the j
ourney, is subject to the above general rule and must be adjusted accordingly. A
new ticket must be issued and the difference is to be collected or refunded as
the case may be. No adjustment is necessary if the increase or decrease in fare
(or charge) occurs when the journey is already commenced. The GANAS cannot defen
d by contending lack of knowledge of those rules since the evidence bears out th
at Teresita, who handled travel arrangements for the GANAS, was duly informed by
travel agent Ella of the advice of Reno, the Office Manager of Air France, that
the tickets in question could not be extended beyond the period of their validi
ty without paying the fare differentials and additional travel taxes brought abo
ut by the increased fare rate and travel taxes. Teresita was the agent of the GA
NAS and notice to her of the rejection of the request for extension of the valid
ity of the tickets was notice to the GANAS, her principals. (AGENCY: NOTICE TO T
HE AGENT IS NOTICE TO THE PRINCIPAL) The circumstances that AIR FRANCE personnel
at the ticket counter in the airport allowed the GANAS to leave is not tantamou
nt to an implied ratification of travel agent Ella s irregular actuations. It sh
ould be recalled that the GANAS left in Manila the day before the expiry date of
their tickets and that "other arrangements" were to be made with respect to the
remaining segments. Besides, the validating stickers that Ella affixed on his o
wn merely reflect the status of reservations on the specified flight and could n
ot legally serve to extend the validity of a ticket or revive an expired one. Th
e conclusion is inevitable that the GANAS brought upon themselves the predicamen
t they were in for having insisted on using tickets that were due to expire in a
n effort, perhaps, to beat the deadline and in the thought that by commencing th
e trip the day before the expiry date, they could complete the trip even thereaf
ter. It should be recalled that AIR FRANCE was even unaware of the validating SA
S and JAL. stickers that Ella had affixed spuriously. Consequently, Japan Air Li
nes and AIR FRANCE merely acted within their contractual rights when they dishon
ored the tickets on the remaining segments of the trip and when AIR FRANCE deman
ded payment of the adjusted fare rates and travel taxes for the Tokyo/Manila fli
ght. WHEREFORE, the judgment under review is hereby reversed and set aside, and
the Amended Complaint filed by private respondents hereby dismissed.
Page 4
CASE DIGEST
69) ALBADEJO y CIA vs. PHILIPPINE REFINING CO.
CASE NUMBER: G.R. No. L-20726 DATE: December 20, 1923 PONENTE: Street, J.
FACTS:
It appears that Albaladejo y Cia. is a limited partnership, organized in conform
ity with the laws of these Islands, and having its principal place of business a
t Legaspi, Albay. The firm was engaged in the buying and selling of the products
of the country, especially copra. The Visayan Refining Co. is a corporation org
anized engaged in operating its extensive plant at Opon, Cebu, for the manufactu
re of coconut oil. On August 28, 1918, the plaintiff made a contract with the Vi
sayan Refining Co., the material parts of which are as follows: (important provi
sions) The party of the first part (Albadejo) agrees and binds itself to sell to
the party of the second part (Visayan Refining Co.) , and the party of the seco
nd part agrees and binds itself to buy from the party of the first part, for a p
eriod of one (1) year During the continuance of this contract the party of the s
econd part will not appoint any other agent for the purchase of copra in Legaspi
, nor buy copra from any vendor in Legaspi. The party of the second part will pr
ovide transportation by sea to Opon, Cebu, for the copra delivered to it by the
party of the first part, but the party of the first part must deliver such copra
to the party of the second part free on board the boats of the latter s ships o
r on the pier alongside the latter s ships. When the contract above referred to
was originally made, Albaladejo y Cia. apparently had only one commercial establ
ishment. After the Visayan Refining Co. had ceased to buy copra, the supplies of
copra already purchased by the plaintiff were gradually shipped out and accepte
d by \the Visayan Refining Co. In next eight or ten months the accounts between
the two parties were liquidated. The last account rendered by the Visayan Refini
ng Co. to the plaintiff was for the month of April, 1921, and it showed a balanc
e of P288 in favor of the defendant. Under date of June 25, 1921, the plaintiff
company addressed a letter from Legaspi to the Philippine Refining Co. (which ha
d now succeeded to the rights and liabilities of the Visayan Refining Co.), expr
essing its approval of said account. In this letter no dissatisfaction was expre
ssed by the plaintiff as to the state of affairs between the parties; but about
six weeks thereafter the present action was begun. This action was instituted in
the CFI Albay by Albaladejo to recover a sum of money from the Philippine Refin
ing Co., as successor to the Visayan Refining Co., two causes of action being st
ated in the complaint. Upon hearing the cause, the trial judge absolved the defe
ndant from the first cause of action but gave judgment for the plaintiff to reco
ver the sum of P49,626.68, with costs, upon the second cause of action. The plai
ntiff appealed the first cause of action, and the defendant appealed with respec
t to the action taken upon the second cause of action. It results that, by the a
ppeal of the two parties, the decision of the lower court is here under review.
Pursuant to this agreement the plaintiff bought copra extensively for the Visaya
n Refining Co. for a year. At the end of said year both parties found themselves
satisfied with the existing arrangement, and they therefore continued by tacit
consent to govern their future relations by the same agreement.
ISSUE: Whether he defendant liable for the expenses incurred by the plaintiff in
keeping its organization intact during the period now under consideration. RULI
NG: NO
Page 6
CLASS RECITATION First cause of action: The alleged negligent failure of the Vis
ayan Refining Co. to provide opportune transportation for the copra collected by
the plaintiff and deposited for shipment. Upon consideration of all the facts r
evealed in evidence (records of shipping), court found that the Visayan Refining
Co. had used reasonable promptitude in its efforts to get out the copra from th
e places where it had been deposited for shipment, notwithstanding occasional ir
regularities due at times to the condition of the weather as related to transpor
tation by sea and at other times to the inability of the Visayan Refining Co. to
dispatch boats to the more remote ports. This finding of the trial judge, that
no negligence of the kind alleged can properly be imputed to the Visayan Refinin
g Co., is in our opinion supported by the proof. The trial judge calls attention
to the fact that it is expressly provided in paragraph two of the contract that
the shrinkage of copra from the time of its delivery to the party of the second
part till its arrival at Opon should fall upon the plaintiff, from whence it is
to be interfered that the parties intended that the copra should be paid for ac
cording to its weight upon arrival at Opon regardless of its weight when first p
urchased. From what has been said it follows that the first cause of action set
forth in the complaint is not well founded, and the trial judge committed no err
or in absolving the plaintiff therefrom. Second cause of action: Plaintiff seeks
to recover the sum of P110,000, the alleged amount expended by the plaintiff in
maintaining and extending its organization for Visayan Refining Co. As a basis
for the defendant s liability in this respect it is alleged that said organizati
on was maintained and extended at the express request, or requirement, of the de
fendant, in conjunction with repeated assurances that the defendant would soon r
esume activity as a purchaser of copra. SC: We note that in his letter of July 1
0, 1920, Mr. Day suggested that if the various purchasing agents of the Visayan
Refining Co. would keep their organization intact, the company would endeavour t
o see that they should not lose by the transaction in the long run. These words
afford no sufficient basis for the conclusion, which the trial judge deduced the
re from, that the defendant is bound to compensate the plaintiff for the expense
s incurred in maintaining its organization. The correspondence sufficiently show
s on its face that there was no intention on the part of the company to lay a ba
sis for contractual liability of any sort; and the plaintiff must have understoo
d the letters in that light. The parties could undoubtedly have contracted about
it, but there was clearly no intention to enter into contractual relation; and
the law will not raise a contract by implication against the intention of the pa
rties. The inducement held forth was that, when purchasing should be resumed, th
e plaintiff would be compensated by the profits then to be earned for any expens
e that would be incurred in keeping its organization intact. It is needless to s
ay that there is no proof showing that the officials of the defendant acted in b
ad faith in holding out this hope. In the appellant s brief the contention is ad
vanced that the contract between the plaintiff and the VisayanRefining Co. creat
ed the relation of principal and agent between the parties, and the reliance is
placed upon article1729 of the Civil Code which requires the principal to indemn
ify the agent for damages incurred in carrying out the agency. Attentive perusal
of the contract is, however, convincing to the effect that the relation between
the parties was not that of principal and agent in so far as relates to the pur
chase of copra by the plaintiff. It is true that the Visayan Refining Co. made t
he plaintiff one of its instruments for the collection of copra; but it is clear
that in making its purchases from the producers the plaintiff was buying upon i
ts own account In paragraph three of the contract it is declared that during the
continuance of this contract the Visayan Refining Co. would not appoint any oth
er agent forthe purchase of copra in Legaspi; and this gives rise indirectly to
the inference that the plaintiff was considered its buying agent. But the use of
this term in one clause of the contract cannot dominate the real nature of the
agreement as revealed in other clauses, no less than in the caption of the agree
ment itself. In some of the trade letters also the various instrumentalities use
d by the Visayan Refining Co. for the collection of copra are spoken of as agent
s. But this designation was evidently used for convenience; and it is very clear
that in its activities as a buyer the plaintiff was acting upon its own account
and not as agents of the Visayan Refining Co. The title to all of the copra pur
chased by the plaintiff undoubtedly remained in it until it was delivered by way
of subsequent sale to said company. For the reasons stated we are of the opinio
n that no liability on the part of the defendant is shown upon the plaintiff s s
econd cause of action, and the judgment of the trial court on this part of the c
ase is erroneous.
Page 7
2 CoA- Thomas is the owner of the trade name - In the fictitious bill of sale Pi
neda acknowledged Thomas ownership of the business - Business cards: Thomas is th
e proprietor No abandonment because when Thomas set up a new saloon it used the
same name The most that can be said is that the plaintiff instructed Pineda to r
enew the registration of the trade-name and the defendant understood the instruc
tion as permission to make the registration in his favor As legal proposition an
d in good conscience, the defendants registration of the trade name Silver Dolla
r Cafe must be deemed to have been affected for the benefit of its owner of whom
he was a mere trustee or employee. "The relations of an agent to his principal
are fiduciary and it is an elementary and very old rule that in regard to proper
ty forming the subject matter of the agency, he is estopped from acquiring or as
serting a title adverse to that of principal. His position is analogous to that
of a trustee and he cannot consistently, with the principles of good faith, be a
llowed to create in himself an interest in opposition to that of his principal o
r cestuique trust. A receiver, trustee, attorney, agent or any other person occu
pying fiduciary relations respecting property or persons utterly disabled from a
cquiring for his own benefit the property committed to his custody for managemen
t. The rule stands on the moral obligation to refrain from placing one s self in
position which ordinarily excite conflicts between self-interest at the expense
of one s integrity and duty to another, by making it possible to profit by yiel
ding to temptation
nd
Page 9
888), the Supreme Court declared that In Palet vs. Tejedor (55 Phil. 790), it wa
s declared that This right to recover is sanctioned by section 55 of Act No. 496
, as amended by Act No. 3322. There is no showing why the conclusions of facts o
f the Court of Appeals should be disturbed, and upon said facts petitioners first
assignment of errors appears to be untenable in the light of law and of the dec
ision of this court. Petitioner alleged that the Court of Appeals erred in not h
olding ISSUE: Whether the respondent is estopped from claiming that petitioner i
s not the absolute owner of the property in question.
RULING: No
The fact that respondent has been a party to the deception which resu
lted in petitioners securing in his na me the title to a property not belonging t
o him, is not valid reason for changing the legal relationship between the latte
r and its true owners to such an extent as to let them lose their ownership to a
person trying to usurp it.
Respondent is not barred because his appearance as a
ttorney for petitioner was not a misrepresentation which would induce petitioner
to believe that respondent recognized the former as the sole owner of the prope
rty in controversy. Respondents appearance, as attorney for petitioner in 1923, w
as a consequence of the understanding, and petitioner could not legitimately ass
ume that it had the effect of breaking or reversing said understanding. Lastly,
it is contended by petitioner that, even conceding that the controverted propert
y was owned in common by several co-owners, yet the Court of Appeals erred in no
t holding that, as against respondent, ISSUE: Whether petitioner had acquired ab
solute ownership of the property through prescription. Upon the premise that the
registration in 1909 in the name of petitioner and his wife, Luisa Cristobal, w
as in accordance with an agreement among the co-owners, petitioner advances the
theory that when he, upon the death of his wife in 1922, caused the trust proper
ty to be registered in his sole name in 1923, and subsequently partitioned betwe
en himself and his daughter, Ildefonsa Cristobal Ditangco, as heirs of the deced
ent, he openly breached the agreement of 1909 as well as the promise made to his
dying wife of giving the co-owners their respective shares, concluding that that b
reach was an assumption of ownership, and could be the basis of title by prescri
ption. RULING No, Petitioners pretension of building his right to claim ownership
by prescription upon his own breach of a trust cannot be countenanced by any cou
rt, being subversive of generally accepted ethical principles. Petitioner held t
he property and secured its registration in his name in a fiduciary capacity, an
d it is elementary that a trustee cannot acquire by prescription the ownership o
f the property entrusted to him. The position of a trustee is of representative
nature. His position is the position of a cestui que trust.
It is logical that a
ll benefits derived by the possession and acts of the agent, as such agent, shou
ld accrue to the benefit of his principal. The registration of the property in t
he name of the trustees in possession thereof, must be deemed to have been effec
ted for the benefit of the cestui que trust. whether or not there is bad faith o
r fraud in obtaining a decree with respect to a registered property, the same do
es not belong to the person in whose favor it was issued, and the real owners be
entitled to recover the ownership of the property so long as the same has not b
een transferred to a third person who has acquired it in good faith and for a va
luable consideration.
Page 11
his favor resulting from the liquidation of the accounts between them arising fr
om the agency, and renders a final account of his operations, is equivalent to a
n express renunciation of the agency, and terminates the juridical relation betw
een them. Article 1732 of the Civil Code reads as follows: Art. 1732. Agency is
terminated: 1. By revocation; 2. By the withdrawal of the agent; 3. By the death
, interdiction, bankruptcy, or insolvency of the principal or of the agent. And
article 1736 of the same Code provides that: Art. 1736. An agent may withdraw fr
om the agency by giving notice to the principal. Should the latter suffer any da
mage through the withdrawal, the agent must indemnify him therefore, unless the
agent s reason for his withdrawal should be the impossibility of continuing to a
ct as such without serious detriment to himself.
The misunderstanding between th
e plaintiff and the defendant over the payment of the balance of P1,000 due the
latter, as a result of the liquidation of the accounts between them arising from
the collections by virtue of the former s usufructuary right, who was the princ
ipal, made by the latter as his agent, and the fact that the said defendant brou
ght suit against the said principal on March 28, 1928 for the payment of said ba
lance, more than prove the breach of the juridical relation between them; for, a
lthough the agent has not expressly told his principal that he renounced the age
ncy, yet neither dignity nor decorum permits the latter to continue representing
a person who has adopted such an antagonistic attitude towards him.
When the ag
ent filed a complaint against his principal for recovery of a sum of money arisi
ng from the liquidation of the accounts between them in connection with the agen
cy, Federico Valera could not have understood otherwise than that Miguel Velasco
renounced the agency; because his act was more expressive than words and could
not have caused any doubt. In order to terminate their relations by virtue of th
e agency the defendant, as agent, rendered his final account on March 31, 1923 t
o the plaintiff, as principal.
The defendant-appellee Miguel Velasco, in adoptin
g a hostile attitude towards his principal, suing him for the collection of the
balance in his favor, resulting from the liquidation of the agency accounts, cea
sed ipso facto to be the agent of the plaintiff-appellant, said agent s purchase
of the aforesaid principal s right of usufruct at public auction held by virtue
of an execution issued upon the judgment rendered in favor of the former and ag
ainst the latter, is valid and legal.
The defendant-appellee, Miguel Velasco, ha
ving acquired Federico Valera s right of redemption from Salvador Vallejo, who h
ad acquired it at public auction by virtue of a writ of execution issued upon th
e judgment obtained by the said Vallejo against the said Valera, the latter lost
all right to said usufruct. The disagreements between an agent and his principa
l with respect to the agency, and the filing of a civil action by the former aga
inst the latter for the collection of the balance in favor of the agent, resulti
ng from a liquidation of the agency accounts, are facts showing a rupture of rel
ations, and the complaint is equivalent to an express renunciation of the agency
, and is more expressive than if the agent had merely said, "I renounce the agen
cy."
Page 13
degree or diploma of Bachelor of Laws. 10. Jesus Ma. Cui believed he was entitle
d to the office in as long ago as 1932. On January 26 of that year he filed a co
mplaint in quo warranto against Dr. Teodoro Cui, who assumed the administration
of the Hospicio. Mariano Cui, the plaintiff s father and Antonio Ma. Cui came in
as intervenors. The case was dismissed by the Court of First Instance upon a de
murrer by the. Upon appeal to the Supreme Court from the order of dismissal, the
case was remanded. The plaintiff, did not prosecute the case as decided by the
Court, but entered into an arrangement whereby Teodoro Cui continued as administ
rator, Mariano Cui was named "legal adviser" and plaintiff Jesus Ma. Cui accepte
d a position as assistant administrator. 11. The plaintiff tried to get the posi
tion by a series of extra-judicial maneuvers. However, the Commissioner to the S
ecretary of Justice ruled that the plaintiff, not being a lawyer, was not entitl
ed to the administration of the Hospicio. 12. Defendant Antonio Ma. Cui was rein
stated by this Court as member of the Bar, and succeeded Dr. Teodoro Cui when he
resigned as administrator pursuant to the "convenio" between them.
ISSUE & RULING: WON the administrator should only have possession of the academi
c degree of Bachelor of Laws. NO. The Court is of the opinion, that whether take
n alone or in context the term "titulo de abogado" means not mere possession of
the academic degree of Bachelor of Laws but membership in the Bar after due admi
ssion, qualifying one for the practice of law. In Spanish the word "titulo" is d
efined as "testimonies o instrumento dado para ejercer un empleo, dignidad o pro
fesion" and the word "abogado," as follows: "Perito en el derecho positivo que s
e dedica a defender en juicio, por escrito o de palabra, los derechos o interese
s de los litigantes, y tambien a dar dictmen sobre las cuestiones o puntos legal
es que se le consultan (Id., p.5) A Bachelor s degree alone, conferred by a law
school upon completion of certain academic requirements, does not entitle its ho
lder to exercise the legal profession. The English equivalent of "abogado" is la
wyer or attorney-at-law. This term has a fixed and general signification, and ha
s reference to that class of persons who are by license officers of the courts,
empowered to appear, prosecute and defend, and upon whom peculiar duties, respon
sibilities and liabilities are devolved by law as a consequence. 2) WON Jesus Cu
i is disqualified as being an administrator. YES. He only has the academic degre
e of Bachelor of Laws. The founders of the Hospicio de San Jose de Barili provid
ed in the deed of donation that if not a lawyer, the administrator should be a d
octor or a civil engineer or a pharmacist, in that order; or failing all these,
should be the one who pays the highest taxes among those otherwise qualified. A
lawyer, first of all, because under Act No. 3239 the managers or trustees of the
Hospicio shall "make regulations for the government of said institution (Sec. 3
, b); shall "prescribe the conditions subject to which invalids and incapacitate
d and destitute persons may be admitted to the institute" (Sec. 3, d); shall see
to it that the rules and conditions promulgated for admission are not in confli
ct with the provisions of the Act; and shall administer properties of considerab
le value for all of which work, it is to be presumed, a working knowledge of the
law and a license to practice the profession would be a distinct asset . 3) WON
Antonio Cui is entitled as administrator despite his past disbarment. YES. It i
s argued that although the latter (Antonio) is a member of the Bar he is neverth
eless disqualified by virtue of paragraph 3 of the deed of donation, which provi
des that the administrator may be removed on the ground, among others, of inepti
tude in the discharge of his office or lack of evident sound moral character. Re
ference is made to the fact that the defendant was disbarred by this Court in195
7 for immorality and unprofessional conduct. It is also a fact, however, that he
was reinstated in 1960, before he assumed the office of administrator. His rein
statement is a recognition of his moral rehabilitation, upon proof no less than
that required for his admission to the Bar in the first place. As far as moral c
haracter is concerned, the standard required of one seeking reinstatement to the
office of attorney cannot be less exacting than that implied in paragraph 3 of
the deed of donation as a requisite for the office which is disputed in this cas
e. When the defendant was restored to the roll of lawyers the restrictions and d
isabilities resulting from his previous disbarment were wiped out.
Page 15
This action must fail on one other ground: it is already barred by lapse of time
amounting the prescription or laches. Under Section 16 of Rule 66, this kind of
action must be filed within one (1) year after the right of plaintiff to hold t
he office arose. 4) WON the action of the plaintiff for administrator has prescr
ibed. YES. The failure of the plaintiff to prosecute his claim judicially after
this Court decided the first case of Cui v. Cui in 1934 remanding it to the tria
l court for further proceedings; his acceptance instead of the position of assis
tant administrator, allowing Dr. Teodoro Cui to continue as administrator and hi
s failure to file an action in quo warranto against said Dr. Cui after 31 July 1
956, when the appeal in Civil Case No. R-1216 of the Cebu Court was dismissed up
on motion of the parties precisely so that the conflicting claims of the parties
could be ventilated in such an action all these circumstances militate against
the plaintiff s present claim in view of the rule that an action in quo warranto
must be filed within one year after the right of the plaintiff to hold the offi
ce arose. The excuse that the plaintiff did not file an action against Dr. Teodo
ro Cui after 31 July 1956 because of the latter s illness did not interrupt the
running of the statutory period. And the fact that this action was filed within
one year of the defendant s assumption of office in September 1960 does not make
the plaintiff s position any better, for the basis of the action is his own rig
ht to the office and it is from the time such right arose that the one-year limi
tation must be counted, not from the date the incumbent began to discharge the d
uties of said office. 5) WON Romulo Cui is entitled as administrator. NO. Now fo
r the claim of intervenor and appellant Romulo Cui. This party is also a lawyer,
grandson of Vicente Cui, one of the nephews of the founders of the Hospicio men
tioned by them in the deed of donation. He is further, in the line of succession
, than defendant Antonio Ma. Cui, who is a son of Mariano Cui, another one of th
e said nephews. The deed of donation provides: "a la muerte o incapacidad de est
os administradores (those appointed in the deed itself) pasara a una sola person
a que sera el varon, mayor de edad, que descienda legitimamente de cualquiera de
nuestros sobrinos legitimos Mariano Cui, Mauricio Cui, Vicente Cui, Victor Cui,
y que posea titulo de abogado ... En igualdad de circumstancias, sera preferido
el varon de mas edad descendiente de quien tenia ultimamente la administration.
" Besides being a nearer descendant than Romulo Cui, Antonio Ma. Cui is older th
an he and therefore is preferred when the circumstances are otherwise equal. The
intervenor contends that the intention of the founders was to confer the admini
stration by line and successively to the descendants of the nephews named in the
deed, in the order they are named. Thus, he argues, since the last administrato
r was Dr. Teodoro Cui, who belonged to the Mauricio Cui line, the next administr
ator must come from the line of Vicente Cui, to whom the intervenor belongs. Thi
s interpretation, however, is not justified by the terms of the deed of donation
. IN VIEW OF THE FOREGOING CONSIDERATIONS, the judgment appealed from is reverse
d and set aside, and the complaint as well as the complaint in intervention are
dismissed, with costs equally against plaintiff-appellee and intervenorappellant
.
Page 16
possibly be in a better class than AFWU which dealt with MARITIMA. a. Under the
CONTRACT, AFWU was an independent contractor of MARITIMA. i. The petitioner unio
n operated as a labor contractor under the so-called "cabo" system has a complet
e set of officers and office personnel and its organizational structure. ii. The
payrolls where laborers are listed and paid were prepared by the union itself w
ithout the intervention or control of the respondent company and/or its agent at
. The respondent never had any knowledge of the individual names of laborers and
/or workers listed in the union payroll or in their roster of membership. iii. T
he union engaged the services of their members in undertaking the work of arrast
re and stevedoring geither to haul shippers goods from their warehouses to the
MARITIMA boat or from the boat to the different consignees. The charges for such
service were known by the union and collected by them through their bill collec
tor, who are employees of the union and not of the respondent. The respondent ha
d no intervention whatsoever in the collection of those charges.
iv. The union members who were hired by the union to perform arrastre and steved
oring work on respondents vessels at Iligan port were being supervised and cont
rolled by the general foreman of the petitioner union or by any union assistant
when performing arrastre and/or stevedoring work aboard vessels of the Compaia MA
RITIMA. There were no instances where offices and employees of the respondent Co
mpaia MARITIMA and/or its agent had interferred in the giving of instructions to
the laborers performing the arrastre and/or stevedoring work. b. It is true that
MARITIMA admits that it did not answer AFWU s proposal for a collective bargain
ing agreement. From this it does not necessarily follow that it is guilty of unf
air labor practice. Under the law the duty to bargain collectively arises only b
etween the "employer" and its "employees". Where neither party is an
employer"
nor an "employee" of the other, no such duty would exist. Needless to add, wher
e there is no duty to bargain collectively the refusal to bargain violates no ri
ght. The facts as found by the court a quo strongly indicate that it is AFWU its
elf who is the "employer" of those laborers. The facts very succinctly show that
it was AFWU, through its officers, which (1) selected and hired the laborers, (
2) paid their wages, (3) exercised control and supervision over them, and (4) ha
d the power to discipline and dismiss them. These are the very elements constitu
ting an employer-employee relationship.
c.
2.
An agent can not represent two conflicting interests that are diametrically oppo
sed. And that the cases sought to be relied upon did not involve representatives
of opposing interests.
Page 18
75) FAR EASTERN EXPORT & IMPORT CO, vs. LIM TECK SUAN
CASE NUMBER: L-7144 DATE: May 31, 1955 and sale? FACTS:
Ignacio Delizalde, an ag
ent of the Far Eastern Export & Import Company, went to the store of Lim Teck Su
an in Manila and offered to sell textile. Having arrived at an agreement with Be
rnardo Lim, General Manager of Lim Teck Suan, Delizalde returned with a buyers or
der. Suan established a letter of credit in favour of Frenkel International Corp
oration through HSBC.
The textile arrived and was received by Suan, but complain
ed to Far Eastern of the inferior quality of the textile.
Upon the instruction o
f Far Eastern, Suan deposited the goods in a warehouse and withdrew the same and
was offered for sale. The net direct loss is now being claimed against Far East
ern. The defense set up is that Far Eastern only acted as a broker in this trans
action.
The lower court acquitted Far Eastern. CA reversed the judgment, basing
its decision of reversal on the case of Jose Velasco v. Universal Trading where
the transaction therein involved was found by the court to be one of purchase an
d sale and not of brokerage or agency. ISSUE: Was the transaction one of agency
that will exonerate Far Eastern from liability, or one of purchase RULING: One o
f purchase and sale
SC agreed with the CA that the facts in this case are very s
imilar to those in the Velasco case. o In the Velasco case, Universal Trading co
ntends that it merely acted as agent for Velasco and could not be held responsib
le for the substitution of Blended Whisky for Bourbon Whisky. PONENTE: Montemayo
r, J.
o The Court held that the transaction was purchase and sale and ordered the defe
ndant to refund his deposit with legal interest. Where a foreign company has an
agent here selling its goods and merchandise, that same agent could not very wel
l act as agent for local buyers, because the interests of his foreign principal
and those of the buyer would be in direct conflict. o He could not serve two mas
ters at the same
Page 19
time. o Far Eastern, being an agent of Frenkel, could not have acted as an agent
or broker for Suan.
The transaction entered into by Far Eastern with Suan is on
e of purchase and sale. o Far Eastern acted as agent for Frenkel International C
orporation, presumably the supplier of the textile sold. o Suan according to the
first part of the agreement is said merely to be commissioning Far Eastern to p
rocure for him the merchandise in question. o The price of the merchandise bough
t was paid for by Suan by means of an irrevocable letter of credit opened in fav
our of the supplier, Frenkel International Corporation.
o The agreement speaks of the items involved as sold, and the sale was even conf
irmed by Far Eastern. o Far Eastern dealt directly with Suan without expressly i
ndicating or revealing the principal. o There was no privity of contract between
the buyer and supplier. o No commission or monetary consideration was paid or a
greed to be paid by the buyer to export company proof that there was no agency o
r brokerage, and that the profit of the latter was undoubtedly the difference be
tween the price listed to the buyer and the net or special price quoted to the s
eller by the supplier.
76) NIELSON & CO., INC. vs LEPANTO CONSOLIDATED MINING CO.
CASE NUMBER: L-21601 DATE: December 28, 1968 FACTS:
Nielson & Company, Inc. and
Lepanto Consolidated Mining Company entered into a management contract. o Nielso
n had agreed, for a period of five years, with the right to renew for a like per
iod, to explore, develop and operate the mining claims of Lepanto, and to mine,
or mine and mill, such pay ore as may be found and to market the metallic produc
ts recovered therefrom which may prove to be marketable, as well as to render fo
r Lepanto other services specified in the contract. o Nielson was to take comple
te charge, subject at all times to the general control of the Board of Directors
of Lepanto, of the exploration and development of the mining claims, of the hir
ing of a sufficient and competent staff and of sufficient and capable laborers,
of the prospecting and development of the mine, of the erection and operation of
the mill, and of the benefication and marketing of the minerals found on the mi
ning properties. o Nielson was also to act as purchasing agent of supplies, equi
pment and other necessary purchases by Lepanto, but no purchase shall be made wi
thout the prior approval of Lepanto and no commission shall be claimed or retain
ed by Nielson on such purchase. o The principal and paramount undertaking of Nie
lson under the management contract was the operation and development of the mine
and the operation of the mill. All the other undertakings mentioned in the cont
ract are necessary or incidental to the principal. o In the performance of this
principal undertaking, Nielson was not in any way executing juridical acts for L
epanto. Lepanto terminated the contract in 1945, 2 years before its expiration,
when it took over and assumed exclusive management of the work previously entrus
ted to Nielson under the contract. Lepanto finally maintains that Nielson as an
agent is not entitled to damages since the law gives to the principal the right
to terminate the agency at will. PONENTE: Zaldivar, J.
ISSUE: Was the management contract entered into by and between Nielson and Lepan
to a contract of agency such that it has the right to revoke and terminate the c
ontract at will, or a contract of lease of services?
Page 20
o Respondent de la Fuente, the operator of the gasoline and service station was
the AGENT of the petitioner Shell Company of the Philippines, Ltd. o Facts which
show that de la Fuente is a mere agent:
The operator, de la Fuente, owned his p
osition to the company and the company could remove him or terminate his service
s at will
The service station belonged to the company and bore its trade name an
d the operator sold only the products of the company The equipment used by the o
perator belonged to the company and were just loaned to the operator and the com
pany took charge of their remain and maintenance An employee of the company supe
rvised the operator and conducted periodic inspection of the companys gasoline an
d service station, etc. ISSUE: WON petitioner Shell should be liable for the act
s of an agent or his employee acting within the scope of his authority?
RULING: YES. The breach of the undertaking by the agent (defendant de la Fuente)
is one for which the principal (Shell) is answerable. Decision: Judgment under
review is AFFIRMED. Costs against petitioner 1. Rule: As the act of the agent or
his employees acting within the scope of his authority is the act of the princi
pal, the breach of the undertaking by the agent is one for which the principal i
s answerable. The petitioner-company undertook to "answer and see to it that the
equipments are in good running order and usable condition;" Also, the CA found
that the Company s mechanic failed to make a thorough check up of the hydraulic
lifter and the check up made by its mechanic was "merely routine" by raising "th
e lifter once or twice and after observing that the operator was satisfactory, h
e (the mechanic) left the place." The latter was negligent and the company must
answer for the negligent act of its mechanic which was the cause of the fall of
the car from the hydraulic lifter.
2.
3.
4.
78) SEVILLA VS. COURT OF APPEALS
CASE NUMBER: L-41182-3 DATE: APRIL 15, 1988 PONENTE: SARMIENTO, J.
FACTS: 1. Mrs. Segundina Noguera leased her premises located at Ermita, Manila t
o Tourist World Service, Inc. (TWSI), represented by Eliseo Canilao, for the lat
ters use as branch office. 2. In the said contract Mrs. Lina Sevilla held herself
solidarily liable with TWSI for the prompt payment of the monthly rental agreed
on. 3. When the branch office was opened, the same was run by petitioner Mrs. S
evilla, who was designated as branch manager by TWSI. For any fare bought in on
the efforts of Mrs. Sevilla,, 4% was to go her and 3% was to be withheld by TWSI
4. In November 1961, TWSI was allegedly informed that Mrs. Sevilla was connecte
d with a rival travel firm. Since the branch office was losing, TWSI considered
closing it down. The firms board of directors issued two resolutions; the first a
bolishing the office of manager of the Ermita Branch Office and the second, auth
orizing the corporate secretary to receive the property of TWSI in said branch 5
. In January 1962, the lease contract to use the premises as branch office was t
erminated. In June 1962, the Corporate Secretary went over to the office to comp
ly with the mandate of the resolutions. Finding the premises locked and unable t
o contact Mrs. Sevilla, he padlocked the premises to protect the interests of TW
SI 6. As such, petitioners Spouses Sevilla filed a complaint against respondents
TWSI, Canilao and Noguera, praying for mandatory preliminary injunction. Petiti
oners claim that Mrs. Sevillas relationship with TWSI was one of joi nt business
venture and notone of employment. 7. In its answer, TWSI contend that Mrs. Sevil
la was its employee and as such was designated manager. 8. The trial court held
for the private respondents. It ruled that TWSI, being the true lessee, has the
privilege to terminate the lease and padlock the premises. It also held that Mrs
. Sevilla was a mere employee of TWSI and that she was bound by the act of her e
mployer. 9. The Court of Appeals affirmed said decision, Hence, the instant peti
principal TWSI be liable for damages for its unwarranted revocation of the contr
act of agency?
YES for both. Decision: Decision of CA is REVERSED and SET ASIDE.
Costs against respondent TWSI RULING: 1. This case involves a contract of Agenc
y. There is neither joint venture between nor partnership TWSI and Mrs. Sevilla
The relationship of said parties is one that of a principal and an agent. Case a
t bar: o Petitioner Sevilla agreed to man the Ermita office of respondent TWSI b
ased on a contract of agency. o It is the essence of this contract that the agen
t renders services in representation or on behalf of another o Sevilla solicited a
irline fares but she did so for and on behalf of her principal TWSI. As compensa
tion, she received 4% of the proceeds in the concept of commissions. Sevilla pre
-assumed her principals authority as owner of the business undertaking. Consideri
ng the facts, this case involves a principal-agent relationship rather than a jo
int management or partnership. o But unlike simple grants of a power of attorney
, the agency that the Court here by declares to be compatible with the intent of
the parties cannot be revoked at will. o The reason is that it is an agency cou
pled with an interest, the agency having been created for mutual interest of the
agent and the principal. o In this case, the agency cannot be revoked at the pl
easure of the principal. This unwarranted revocation of the contract of agency e
ntitles petitioner Sevilla to damages Respondent TWIS is liable for P 25,000 mor
al damages, P 10,000 exemplary damages, P 5,000 nominal damages and/or temperate
damages.
Other issues: 2. No Employer-Employee Relationship between TWSI and Mrs. Sevilla
. There has been no uniform test to determine the existence of an employer-emplo
yee relation.
In general, The Court has relied in the so-called control test, whe
re the person for whom the services are performed reserves a right to control no
t only the end to be achieved but also the means to be used in reaching such end
. Case at bar: o The records will show that the petitioner, Lina Sevilla, was not
subject to control by the private respondent Tourist World Service, Inc., eithe
r as to the result to the means used in connection therewith. In the first place
, under the contract of lease covering the Tourist Worlds Ermita office, she had
bound herself in solidum as and for rental payments. o Also, when the branch of
fice was opened, the same was run by Mrs. Sevilla payable to TWSI. It cannot be
said that she was under the control of TWSI as to the means used. She obviously re
lied on her own capabilities o Sevilla was also not in the companys payroll. She
retained commissions based on her booking successes and its not based on a fixed
salary
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 that even
t, the parties must be bound by some other relation, but certainly not employmen
t.
Page 23
the court, since leasing has been considered an act of administration. Par. 8 of
Article 1878 states that Special powers of attorney are necessary to lease any rea
l property to another person for more than one (1) year.This provision, according
to San Diego, is a limitation to the right of a judicial administrator to lease
real property without prior judicial authority if it exceeds one (1) year. Howe
ver, the same argument falls becauseprovisions on Agency do not apply to judicia
l administrators. A judicial administrator is appointed by the court. He is not
only the representative of the court, but also the heirs and creditors of the es
tate. Before conducting his duties, he is required to file a bond. His actions a
re subject to specific provisions of law and orders of the appointing court. The
se circumstances are not true in case of agency.
81) DELA PENA VS. HIDALGO
CASE NUMBER: G.R. No. L-5486 DATE: August 17, 1910 PONENTE: TORRES, J.
FACTS: 1. Before Jose de la Pea y Gomiz embarked for Spain, on November 12, 1887,
he executed a power of attorney in favor of Federico Hidalgo, Antonio L. Rocha,
Francisco Roxas and Isidro Llado, so that, as his agents, they might represent
him and administer various properties he owned and possessed in Manila. 2. After
Federico Hidalgo had occupied the position of agent and administrator of De la
Pea s property, he wrote to the latter requesting him to designate a person who m
ight substitute him in his said position in the event of his being obliged to ab
sent himself from the country.
one of those appointed in the said power of attor
ney had died and the others did not wish to take charge of the administration of
their principal s property. 3. Hidalgo stated that Pea y Gomiz, did not even ans
wer his letters, to approve or object to the former s accounts, and did not appo
int or designate another person who might substitute him. 4. For reasons of heal
th and by order of his physician, Federico Hidalgo was obliged to embark for Spa
in, and, on preparing for his departure, he rendered the accounts of his adminis
tration by letter of the date of March 22, 1894, addressed to his principal, Pea
y Gomiz. 5. In this letter the defendant informed the dela Pena of the his inten
ded departure from this country and of his having provisionally turned over the
administration of the said property to his cousin, Antonio Hidalgo, upon whom he
had conferred a general power of attorney.He added thatin case that this was no
t sufficient, that Pea send to Antonio Hidalgo a new power of attorney. 6. TC con
cluded that despite the denial, the was sent to, and was received by Jose de la
Pea y Gomiz, during his lifetime and that the constituent he was informed of the
departure of his agent of the latter s having turned over the
Page 26
administration of the property to Antonio Hidalgo, and of his agent s the defend
ant s petition that he send a new power of attorney to the substitute. ISSUE: (1
) WON Federico had renounced his agency (2) WON Federico can be held liable with
the wrongful administration of the subsequent agents RULING: 1. YES Federico ha
d definitely renounced his agency was duly terminated, according to the provisio
ns of article 1732 of the Civil Code, because, althoughthe word "renounce" was n
ot employed in connection with the agency or power of attorney executed in his f
avor, yet when the agent informs his principal that for reasons of health and by
medical advice he is about to depart from the place where he is exercising his
trust and where the property subject to his administration is situated, abandons
the property, turns it over a third party, without stating when he may return t
o take charge of the administration, renders accounts of its revenues up to a ce
rtain date , December 31, 1893, and transmits to his principal a general stateme
nt which summarizes and embraces all the balances of his accounts since he began
to exercise his agency to the date when he ceased to hold his trust, and asks t
hat a power of attorney in due form in due form be executed and transmitted to a
nother person who substituted him and took charge of the administration of the p
rincipal s property , it is then reasonable and just to conclude that the said a
gent expressly and definitely renounced his agency, and it may not be alleged th
at the designation of Antonio Hidalgo to take charge of the said administration
was that of a mere proceed lasted for more than fifteen years, for such an alleg
ation would be in conflict with the nature of the agency. In permitting Antonio
Hidalgo to administer his property in this city during such a number of years, i
t is inferredthatthe deceased consented to have Antonio Hidalgo administer his p
roperty, and in fact created in his favor an implied agency, as the true and leg
itimate administrator. Antonio Hidalgo administered the aforementioned property
of De la Pea y Gomiz, not in the character of business manager, but as agent by v
irtue of an implied agency vested in him by its owner who was not unaware of the
fact, who knew perfectly well that the said Antonio Hidalgo took charge of the
administration of that property on account of the obligatory absence of his prev
ious agent for whom it was an impossibility to continue in the discharge of his
duties. **Difference between agency and business management: The implied agency
is founded on the lack of contradiction or opposition , which constitutes simult
aneous agreement on the part of the presumed principal to the execution of the c
ontract, while in the management of another s business there is no simultaneous
consent, either express or implied, but a fiction or presumption of consent beca
use of the benefit received. In the power of attorney executed by Pea y Gomizin f
avor of Federico Hidalgo, no authority was conferred upon the latter by his prin
cipal to substitute the power or agency in favor of another person; wherefore th
e agent could not, by virtue of the said power of attorney, appoint any person t
o substitute or relieve him in the administration of the principal s property, f
or the lack of a clause of substitution in the said instrument authorizing him s
o to do. HOWEVER, from the time of that notification the agent who, for legitima
te cause, ceased to exercise his trust, was free and clear from the results and
consequences of the management of the person who substituted him with the consen
t, even only a tacit one, of the principal, inasmuch as the said owner of the pr
operty could have objected to could have prohibited the continuance in the admin
istration thereof, of the party designated by his agent, and could have opportun
ely appointed another agent or mandatory of his own confidence to look after his
property and if he did not do so, he is obliged to abide by the consequences of
his negligence and abandonment and has no right to claim damages against his pr
evious agent, who complied with his duty and did all that he could and ought to
have done, in accordance with the law.
Page 27
2. NO If the defendant Federico is not responsible for the results of the admini
stration of said property administered by Antonio Hidalgo during the second peri
od before referred to, neither is he responsible for that performed during the t
hird period by Francisco Hidalgo, inasmuch as the latter was not even chosen whe
n Francisco Hidalgo took charge of Peas property that had been turned over to hi
m by Antonio Hidalgo. Hence, the defendant can in no manner be obliged to pay to
the plaintiff any sum that may be found owing by Francisco Hidalgo.
82) Conde vs. Court of Appeals, 119 SCRA 245
CASE NUMBER: DATE: PONENTE: FACTS: ISSUE: RULING:
Page 28
PONENTE: Johns, J.
this is a case filed by harry keeler, an electric co. which sold a mathews elect
ric plant to rodriguez. harry keeler co. authorized ac montelibano to find buyer
s for the mathews electric plant. montelibano informed harry that he found a buy
er in iloilo. harry then shipped the electric plant to iloilo, which was then in
stalled by cenar cenar, the mechanic of harry keeler, testified that he in fact
presented a bill to rodriguez. when he presented this bill, rodriguez informed h
im that payment would just be made in manila. allegedly, rodriguez already made
payment to montelibano. when harry wanted to collect the 2500 pesos from rodrigu
ez, rodriguez said that he already paid montelibano. a case for collection was t
he filed by harry against rodriguez the lower court ruled in favor of rodriguez.
the lower court said that: 1.) that the bill was given to montelibano for colle
ction 2.) that harry represented montelibano as an agent authorized to collect.
ISSUE: Was the lower court correct in ruling that montelibano was an agent of ha
rry keeler authorized to make collection?
Page 29
This then forced rallos to file a collection case. The lower court ruled in favo
r of rallos.
ISSUE: Should yangco still be liable for the acts of collantes, considering that
collantes was no longer his agent at the time of the transaction? RULING: YES!!
Yangco is still liable
Yangco did not even inform rallos that collantes was no
longer his agent. Furthermore, yangco advertised collantes to be his agent, he s
hould have given rallos timely notice that he had already severed ties with coll
antes. The negligence of yangco to give timely notice to rallos, makes him liabl
e for the acts of collantes.
It was the duty of yangco to notify rallos regardin
g the severed relation with collantes.
85) MACKE vs. CAMPS
CASE NUMBER: G.R. No. 2962 DATE: 27 February 1907 PONENTE: CARSON, J.
FACTS: The plaintiffs are partners doing business under the firm name of Macke,
Chandler & Company, allege that during the months of February and March, 1905, t
hey sold to the defendant and delivered at his place of business, known as the "
Washington Cafe," various bills of goods amounting to P351.50.
The plaintiffs fu
rther alleged that the defendant has only paid on account of said accounts the s
um of P174; that there is still due sum of P177.50; that before instituting this
action they made demand for the payment but the defendant had failed and refuse
d to pay. The plaintiffs, testified that on the order of one Ricardo Flores, who
represented himself to be agent of the defendant, he shipped the said goods to
the defendants at the Washington Cafe; that Flores later acknowledged the receip
t of said goods and made various payments amounting in all to P174. On demand fo
r payment of balance of the account Flores informed him that he did not have the
necessary funds on
Page 31
hand, and that he would have to wait the return of his principal, the defendant,
who was at that time visiting in the provinces.
The plaintiffs were satisfied a
s to the credit of the defendant and as to the authority of Flores to act as his
agent who was apparently in charge of the business and claiming to be the busin
ess manager of the defendant. A written contract (for the hotel with a bar and r
estaurant business of the defendant) dated May 25, 1904, was introduced in evide
nce to establish the relationship between the defendant and Flores. The defendan
t relies wholly on his contention that the foregoing facts are not sufficient to
establish the fact that he received the goods for which payment is demanded.
ISSUE: WON Flores was managing the business as agent? RULING:
YES, the evidence
is sufficient to sustain a finding that Flores was the agent of the defendant in
the management of the bar of the Washington Cafe with authority to bind the def
endant, his principal, for the payment of the goods mentioned in the complaint.
Lastly, from an examination of the items of the account attached to the complain
t, we are of opinion that Flores was acting within the scope of his authority. I
t is a well settled rule that: One who clothes another apparent authority as his
agent, and holds him out to the public as such, can not be permitted to deny the
authority of such person to act as his agent, to the prejudice of innocent thir
d parties dealing with such person in good faith and in the honest belief that h
e is what he appears to be.
Page 32
latter agreed to buy the parcel in question for the sum of P500.
Nicolasa admits
having received this payment of P250 at the time stated; but there is no eviden
ce that she sent any of it to her brother. About one year later Gregorio came do
wn to Alaminos and demanded that his sister should surrender this piece of land
to him, it being then in her possession. She refused upon some pretext. Gregorio
, in conjunction with others of his brothers and sisters, whose properties were
also in the hands of Nicolasa, instituted an action in the Court of First Instan
ce for the purpose of recovering their land from her control. This action was de
cided favorably to the plaintiffs upon August 12, 1913. May 31, 1912, Nicolasa J
imenez executed and delivered to Pedro Rabot a deed purporting to convey to him
the parcel of land which is the subject of this controversy. Pedro Rabot went in
to possession, and the property was found in his hands at the time when final ju
dgment was entered in favor of the plaintiffs in the action above mentioned. It
will thus be seen that Pedro Rabot acquired possession under the deed from Nicol
asa during the pendency of the litigation in which she was defendant.
ISSUE: WON the authority conferred on Nicolasa by the letter of February 7, 1911
, was sufficient to enable her to bind her brother? RULING: YES, under Article 1
713 of the Civil Code it requires that the authority to alienate land shall be c
ontained in an express mandate; while subsection 5 of section 335 of the Code of
Civil Procedure says that the authority of the agent must be in writing and sub
scribed by the party to be charged; as such we are of the opinion that the autho
rity expressed in the letter is a sufficient compliance with both requirements a
nd Nicolasa Jimenez acted within the scope of her authority.
It is a rule that: w
here the owner of real property desires to confer upon an attorney in fact autho
rity to sell the same, it is necessary that the authority should be expressed in
writing; but it is not necessary that the property to be sold should be precise
ly described. It is sufficient if the authority is so expressed as to determine
without doubt the limits of the agents authority. The purpose in giving a power o
f attorney is to substitute the mind and hand of the agent for the mind and hand
of the principal; and if the character and extent of the power is so far define
d as to leave no doubt as to the limits within which the agent is authorized to
act, and he acts within those limits, the principal cannot question the validity
of his act.
ISSUE: Did the document (Exhibit A)give Puno authority to sell the land? RULING:
1) Contracts of agency as well as general powers of attorney must be interprete
d in accordance with the language used by the parties. The real intention of the
parties is primarily to be determined from the language used. The intention is
to be gathered from the whole instrument. In case of doubt resort must be had to
the situation, surroundings and relations of the parties. The intention of the
parties must be sustained rather than defeated. If the contract be open to two c
onstructions, one of which would uphold while the other would overthrow it, the
former is to be chosen. The acts of the parties will be presumed to have been do
ne in conformity with and not contrary to the intent of the contract. 2) The low
er court held that the "only power conferred was the power to administer." Readi
ng the contract we find it says that the plaintiff "I confer ... power ... that
... he may administer ... purchase, sell, collect and pay ... in any proceeding
or business concerning the good administration and advancement of my said intere
sts." The words "administer, purchase, sell," etc., seem to be used coordinately
. Each has equal force with the other. There seems to be no good reason for sayi
ng that Puno had authority to administer and not to sell when "to sell" was as a
dvantageous to the plaintiff in the administration of his affairs as "to adminis
ter." 3) To hold that the power was "to administer" only when the power "to sell
" was equally conferred would be to give to special words of the contract a spec
ial and limited meaning to the exclusion of other general words of equal import.
4) The record contains no allegation on proof that Puno acted in bad faith or f
raudulently in selling the land. It will be presumed that he acted in good faith
and in accordance with his power as he understood it. That his interpretation o
f his power, as gathered from the contract (Exhibit A), is tenable cannot, we be
lieve, be successfully denied. Neither have we overlooked the fact in the brief
of the appellants that the plaintiff has not returned, nor offered to return, no
r indicated a willingness to return, the purchase price. (Art. 1308 of the Civil
Code; Manikis vs. Blas, No. 7585.). Disposition: In view of all the foregoing,
we are of the opinion that the lower court committed the error complained of in
the second assignment, and, without discussing the other assignments of error, w
e are of the opinion, and so hold, that the judgment of the lower court should b
e and is hereby revoked and that the appellants should be relieved from all liab
ility under the complaint. Without any finding as to costs, it is so ordered.
88) KATIGBAK vs. TAI HING CO.
CASE NUMBER: G.R. No. L-29917 DATE: December 29, 1928 FACTS: 1) Gabino Barreto P
o Ejap, as attorney-in-fact of Po Tecsi, sold in favor of Jose M. Katigbak the s
ubject land; after said sale, Po Tecsi leased the property sold, from Gabino Bar
reto Po Ejap, who administered it in the name of Jose M. Katigbak, at a rental o
f P1,500 per month, payable in advance, leaving unpaid the rents accrued from th
at date until his death which occurred on November 26, 1926, having paid the acc
rued rents up to October 22, 1925; 2) from November 26, 1926, the defendants Po
Sun Suy and Po Ching leased said land for the sum of P1,500 per month; on Februa
ry 11, 1927, Po Sun Suy was appointed administrator of the estate of his father
Po Tecsi, and filed with the court an inventory of said estate including the lan
d in question; and on May 23, 1927, Jose M. Katigbak sold PONENTE: Villareal, J.
Page 34
the same property to Po Sun Boo. 3) Take note that all these transfers happened
even though the power of attorney was not registered in the Registry of deeds. I
SSUE: Can the Principal be bound by the acts of the agent even though the power
of attorney is not registered the Registry of deeds? RULING: YES 1) Inasmuch as
in accordance with section 39 of said Act No. 496, Every applicant receiving a ce
rtificate of title in pursuance of a decree of registration, and every subsequen
t purchaser of registered land who takes a certificate of title for value in goo
d faith, shall hold the same free of all incumbrance except noted on said certif
icate, every document which in any manner affects the registered land is ineffect
ive unless it is recorded in the registry of deeds. But such inefficacy only ref
ers to third persons who, in good faith, may have acquired some right to the reg
istered land. 2) While it is true that a power of attorney not recorded in the r
egistry of deeds is ineffective in order than an agent or attorney-in-fact may v
alidly perform acts in the name of his principal, and that any act performed by
the agent by virtue of said with respect to the land is ineffective against a th
ird person who, in good faith, may have acquired a right thereto, it does, howev
er, bind the principal to acknowledge the acts performed by his attorney-in-fact
regarding said property (sec. 50, Act No. 496).
3) In the present case, while it is true that the non-registration of the power
of attorney executed by Po Tecsi in favor of his brother Gabino Barreto Po Ejap
prevents the sale made by the latter of the litigated land in favor of Jose M. K
atigbak from being recorded in the registry of deeds, it is not ineffective to c
ompel Tecsi to acknowledge said sale. 4) From the fact that said power and sale
were not recorded in the registry of deeds, and from the omission of any mention
in the deed of sale of the mortgage lien in favor of Antonio M. H. Limjenco, an
d the lease of a part of said land in favor of Uy Chia, the appellants deduce th
at said sale is fraudulent.
5) The record contains many indication that Po Tecsi was not unaware of said sal
e. His several letters complaining of the pressing demands of his brother Gabino
Barreto Po Ejap to send him the rents of the land, his promises to send them to
him, and the remittance of the same were a tacit acknowledgment that he occupie
d the land in question no longer as an owner but only as lessee.
89) DANONA vs. BRIMO & CO.
CASE NUMBER: G.R. No. 15823 DATE: September 12, 1921 PONENTE: JOHNSON, J.:
Danon was employed byHolland American Oil Co thru its manager, Antonio A.
FACTS:
Brimo,to look for a purchaser of its factoryfor the sum of P1,200,000, payable
in cash; Brimopromised to pay the Danon, as compensation for his services, a com
mission of five per cent on the said sum of P1,200,000, if the sale was consumma
ted, or if he should find a purchaser ready, able and willing to buy said factor
y for the said sum of P1,200,000;
No definite period of time was fixed where Dan
on should effect the sale. It seems that another broker, Sellner, was also
Page 35
negotiating the sale, or trying to find a purchaser for the same property and th
at the plaintiff was informed of the fact either by Brimo himself or by someone
else; at least, it is probable that Dano was aware that he was not alone in the
field, and his whole effort was to forestall his competitor by being the first t
o find a purchaser and effect the sale.
Danon found such a purchaser, but Brimo
refused to sell the said factory without any justifiable motive or reason theref
or and without having previously notified Danon of its desistance or variation i
n the price and terms of the sale. RTC ruled in favor of Danon
CA affirmed RTCs r
uling ISSUE: Was Danon as broker entitled to payment of his commission? RULING:
NO The broker must be the efficient agent or the procuring cause of sale. The me
ans employed by him and his efforts must result in the sale. He must find the pu
rchaser, and the sale must proceed from his efforts acting as broker. Under the
proofs in this case, the most that can be said as to what the plaintiff had acco
mplished is, that he had found a person who might have bought the defendant s fa
ctory if the defendant had not sold it to someone else. The evidence does not sh
ow that the Santa Ana Oil Mill had definitely decided to buy the property in que
stion at the fixed price of P1,200,000. The board of directors of said corporati
on had not resolved to purchase said property; and even if its president could l
egally make the purchase without previous formal authorization of the board of d
irectors, yet said president does not pretend that he had definitely and formall
y agreed to buy the factory in question on behalf of his corporation at the pric
e stated. In all the cases, under all and varying forms of expression, the funda
mental and correct doctrine, is, that the duty assumed by the broker is to bring
the minds of the buyer and seller to an agreement for a sale, and the price and
terms on which it is to be made, and until that is done his right to commission
s does not accrue. It follows, as a necessary deduction from the established rul
e, that a broker is never entitled to commissions for unsuccessful efforts. The
risk of a failure is wholly his. The undertaking to procure a purchaser requires
of the party so undertaking, not simply to name or introduce a person who may b
e willing to make any sort of contract in reference to the property, but to prod
uce a party capable, and who ultimately becomes the purchaser. Where no time for
the continuance of the contract is fixed by its terms either party is at libert
y to terminate it at will , subject only to the ordinary requirements of good fa
ith. Usually the broker is entitled to a fair and reasonable opportunity to perf
orm his obligation, subject of course to the right of the seller to sell indepen
dently. But having been granted him, the right of the principal to terminate his
authority is absolute and unrestricted, except only that he may not do it in ba
d faith, and as a mere device to escape the payment of the broker s commissions.
90) INFANTE vs. CUNANAN
CASE NUMBER: G.R. No. L-5180 DATE: August 31, 1953 FACTS: 1. 2. Consejo Infante
owns of two parcels of land with a house built thereon in Manila Infante contrac
ted the services of Jose Cunanan and Juan Mijares, to sell the property for a pr
ice of P30,000 subject to the condition that the purchaser would assume the mort
gage existing thereon in the favor of the Rehabilitation Finance Corporation. In
fante agreed to pay them a commission of 5% on the purchase price plus whatever
overprice they may obtain for PONENTE: BAUTISTA ANGELO, J.
3.
Page 36
4.
5. 6.
the property. Cunanan & Mijares found one Pio S. Noche who was willing to buy th
e property under the terms agreed upon with Infante but when they introduced him
to Infante the latter informed them that she was no longer interested in sellin
g the property and succeeded in making them sign a document stating therein that
the written authority she had given them was already can-celled. However, Infan
tedealt directly with Pio S. Noche selling to him the property for P31,000. Upon
learning this transaction, Cunanan & Mijares demanded from Infante the payment
of their commission, but she refused and so they brought the present action.
ISSUE: Were Cunanan and Mijares as brokers entitled to payment of their commissi
on? RULING: YES 1. After infante had given the written authority to respondents
to sell her land for the sum of P30,000, respondents found a buyer in the person
of one Pio S. Noche who was willing to buy the property under the terms agreed
upon, and this matter was immediately brought to the knowledge of Infante. Infan
te, perhaps by way of strategem, advised respondents that she was no longer inte
rested in the deal and was able to prevail upon them to sign a document agreeing
to the cancellation of the written authority. Infante had changed her mind even
if respondents had found a buyer who was willing to close the deal, is a matter
that would not give rise to a legal consequence if respondents agree to call of
f the transaction in deference to the request of the petitioner. But the situati
on varies if one of the parties takes advantage of the benevolence of the other
and acts in a manner that would promote his own selfish interest. This act is un
fair as would amount to bad faith. This act cannot be sanctioned without accordi
ng to the party prejudiced the reward which is due him. This is the situation in
which respondents were placed by petitioner. Infante took advantage of the serv
ices rendered by respondents, but believing that she could evade payment of thei
r commission, she made use of a ruse by inducing them to sign the deed of cancel
lation Exhibit 1. This act of subversion cannot be sanctioned and cannot serve a
s basis for petitioner to escape payment of the commission agreed upon.
2.
3.
4.
91) MANOTOK BROTHERS, INC. VS. COURT OF APPEALS
CASE NUMBER: G.R. No. 94753 DATE: April 7, 1993. PONENTE: Campos Jr., J.
FACTS:
The petitioner in this case is the owner of a parcel of land and building
which was leased to the City of Manila and was used by Claro M. Recto High scho
ol. Respondent here, Salvador Saligumba was the agent of the petitioner who nego
tiated with the city for the sale of the said property.
Page 37
Accordingly as such, he was given letters of authority that allowed him to negot
iate the property at a price not less than 425k
He was to get a 5% commission fr
om the said sale His authority was extended several times, the last one lasting
for 180 days from November 16, 1987, also it was at this time that petitioner al
lowed the sale to be consummated for the amount of 410k. However, it was only on
April 26, 1968, passed Ordinance No. 6603, appropriating the sum of P410,816.00
for the purchase of the property which private respondent was authorized to sel
l. Said ordinance however, was signed by the City Mayor only on May 17, 1968, on
e hundred eighty three (183) days after the last letter of authorization. On Jan
uary 14, 1969, the parties signed the deed of sale of the subject property. The
initial payment of P200,000.00 having been made, the purchase price was fully sa
tisfied with a second payment on April 8, 1969 by a check in the amount of P210,
816.00.
Respondent now asks that the 5% commission be paid to him in the amount
of P20,554.50. But petitioners refused to pay up, arguing that:
(1) Private resp
ondent would be entitled to a commission only if the sale was consummated and th
e price paid within the period given in the respective letters of authority; (2)
Private respondent was not the person responsible for the negotiation and consu
mmation of the sale; instead it was Filomeno E. Huelgas, the PTA president for 1
967-1968 of the Claro M. Recto High School. Petitioner presented as its witnesse
s Filomeno Huelgas and the petitioner s President, Rufino Manotok.
Huelgas testi
fied to the effect that after being inducted as PTA president in August, 1967 he
followed up the sale from the start with Councilor Magsalin until after it was
approved by the Mayor on May 17, 1968
He also said that he came to know Rufino M
anotok only in August, 1968, at which meeting the latter told him that he would
be given a "gratification" in the amount of P20,000.00 if the sale was expedited
. Petitioners contention that as a broker, private respondent s job is to bring t
ogether the parties to a transaction.
Accordingly, if the broker does not succee
d in bringing the minds of the purchaser and the vendor to an agreement with res
pect to the sale, he is not entitled to a commission. The Court ruled in favor o
f the respondent, with the CA affirming the RTC decision. Hence the appeal
ISSUE: is the private respondent entitled to the 5% commission? -> Yes RULING: C
ourt says: it is to be noted that the ordinance was approved on April 26, 1968 w
hen private respondent s authorization was still in force.
Moreover, the approva
l by the City Mayor came only three days after the expiration of private respond
ent s authority.
It is also worth emphasizing that from the records, the only pa
rty given a written authority by petitioner to negotiate the sale from July 5, 1
966 to May 14, 1968 was private respondent.
When there is a close, proximate and
causal connection between the agent s efforts and labor and the principal s sal
e of his property, the agent is entitled to a commission.
Private respondent is
the efficient procuring cause for without his efforts, the municipality would no
t have anything to pass and the Mayor would not have anything to approve.
The SC
agrees with respondent Court that the City of Manila ultimately became the purc
haser of petitioner s property mainly through the efforts of private respondent.
Disposition: Decision of the RTC is affirmed.
92) DOMINGO VS. DOMINGO
CASE NUMBER: GR No. L-30573 DATE: Oct. 29, 1971 PONENTE: Makasiar, J.
FACTS:
clusive agency to sell his Lot No. 883, Piedad Estate in a document.
Page 38
An agent who takes a secret profit in the nature of a bonus, gratuity or persona
l benefit from the vendee, without revealing the same to his principal, the vend
or, is guilty of a breach of his loyalty to the principal and forfeits his right
to collect the commission from his principal, even if the principal does not su
ffer any injury by reason of such breach of fidelity, or that he obtained better
results or that the agency is a gratuitous one, or that usage or custom allows
it.
This is to prevent the possibility of any wrong not to remedy or repair an a
ctual damage agent thereby assumes a position wholly inconsistent with that of b
eing an agent for his principal, who has a right to treat him, insofar as his co
mmission is concerned, as if no agency had existed
The fact that the principal m
ay have been benefited by the valuable services of the said agent does not excul
pate the agent who has only himself to blame for such a result by reason of his
treachery or perfidy.
As a necessary consequence of such breach of trust, Gregor
io Domingo must forfeit his right to the commission and must return the part of
the commission he received from his principal. Decisive Provisions Article 1891
and 1909 CC Article 1891 consists in changing the phrase "to pay" to "to deliver
", which latter term is more comprehensive than the former.
Paragraph 2 of Artic
le 1891 is a new addition designed to stress the highest loyalty that is require
d to an agent condemning as void any stipulation exempting the agent from the du
ty and liability imposed on him in paragraph one thereof. Article 1909 demands t
he utmost good faith, fidelity, honesty, candor and fairness on the part of the
agent, the real estate broker in this case, to his principal, the vendor.
The la
w imposes upon the agent the absolute obligation to make a full disclosure or co
mplete account to his principal of all his transactions and other material facts
relevant to the agency, so much so that the law as amended does not countenance
any stipulation exempting the agent from such an obligation and considers such
an exemption as void. Situations where the duty mandated by Art 1891 does not ap
ply: Agent or broker acted only as a middleman with the task of merely bringing
together the vendor and vendee, who themselves thereafter will negotiate on the
terms and conditions of the transaction.
Agent or broker had informed the princi
pal of the gift or bonus or profit he received from the purchaser and his princi
pal did not object Teofilo Purisimas entitlement to his share in the 5% commissio
n Teofilo can only recover from Gregorio his share of whatever amounts Gregorio
Domingo received by virtue of the transaction as his sub-agency contract was wit
h Gregorio Domingo alone and not with Vicente Domingo, who was not even aware of
such sub-agency.
Since Gregorio already received a total of P1,300 from Oscar a
nd Vicente, P650 of which should be paid by Gregorio to Teofilo. Disposition: CA
decision reversed.
93) SIASAT vs. INTERMEDIATE APPELLATE COURT
CASE NUMBER: G.R. No. L-67889 DATE: October 10, 1985 PONENTE: GUTIERREZ, JR., J.
FACTS: Teresita Nacianceno succeeded in convincing officials of the Department o
f Education and Culture to purchase
Page 40
without public bidding, one million pesos worth of national flags for the use of
public schools throughout the country. Nancianceno was able to expedite the app
roval of the purchase. All the legal requirements had been complied with, except
the release of the purchase orders. She was informed by the Chief of the Budget
Division of the Department that the purchase orders could not be released unles
s a formal offer to deliver the flags was first submitted for approval She conta
cted the owners of the United Flag Industry. Mr. Primitivo Siasat, owner and gen
eral manager of United Flag Industry came up with a document which read: Mrs. Te
ssie 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. Sig
ned Mr. Primitive Siasat Owner and Gen. Manager The first delivery of 7,933 flag
s was made by the United Flag Industry. Then, Nanciancenos authority to represent
the United Flag Industry was revoked by Primitivo Siasat on the ground that she
was not authorized to sell 16, 666 Philippine flags to the Department. Nancianc
eno said that for the first delivery, United Flag Industry tendered the amount o
f P23,900.00 or five percent (5%) of the amount received as payment of her commi
ssion. She refused to accept the said amount insisting on the 30% commission agr
eed upon. She later learned that petitioner Siasat had already received payment
for the second delivery of 7,833 flags. When she confronted the petitioners, the
y vehemently denied receipt of the payment, at the same time claimed that the re
spondent had no participation whatsoever with regard to the second delivery of f
lags and that the agency had already been revoked. Nancianceno filed an action i
n the Court of First Instance of Manila to recover the following commissions: 25
%, as balance on the first delivery and 30%, on the second delivery. The trial c
ourt decided in favor of the respondent. The decision was affirmed in toto by th
e Intermediate Appellate Court.
ISSUE: 1. Did Nancianceno have the capacity to represent United Flag in the tran
saction with the Department? 2. Did the revocation of agency foreclose the respo
ndent 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 univers
al; agent is 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 c
ertain 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 t
he business which he is authorized to transact. An agent, therefore, who is empo
wered 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
Page 41
FACTS:
A general power for suits was executed in Manila in favor of Fernando Kam
merzell, a German national. It was purported to be a substitution in favor of se
veral attorneys of powers conferred upon Kammerzell in an instrument executed in
Berlin, Germany by Max Leonard Tornow, the sole owner of the business carried o
n in Berlin and Manila under the name of Germann & Co.
Kammerzell, by virtue of
the general power for suits, filed an action against Donaldson, Sim & Co. to rec
over a sum claimed to be due for freight under a charter party.
The Court of Fir
st Instance of Manila ruled in favor of Germann & Co. ISSUE: 1. Is the original
power invalid under article 1280, No. 5, of the Civil Code, which provides that
powers for suits must be contained in a public instrument? 2. RULING: 1. No, bec
ause no claim is made that the document was not executed with the formalities re
quired by the German law in the case of such an instrument. The Court saw no rea
son why the general principle that the formal validity of contracts is to be tes
ted by the laws of the country where they are executed should not apply. Yes, be
cause the instrument contains an explicit grant of a power broad enough to autho
rize the bringing of the present action, even assuming the applicability of the
domestic law as claimed by the defendants. - By this instrument Tornow constitut
es Kammerzell his "true and lawful attorney with full power to enter the firm na
me of Germann & Co. in the Commercial Registry of the city of Manila as a branch
of the house of Germann & Co. in Berlin, it being the purpose of this power to
invest said attorney will full legal powers and authorization to direct and admi
nister in the city of Manila for us and in our name a branch of our general comm
ercial business of important and exportation, for which purpose he may make cont
racts of lease and employ suitable assistants, as well as sign every kind of doc
uments, accounts, and obligations connected with the business which may be neces
sary, take charge in general of the receipt and delivery of merchandise connecte
d with the business, sign all receipts for sums of money and collect them and ex
act their payment by legal means, and in general execute all the acts and things
necessary for the perfect carrying on of the business committed to his charge i
n the same manner as we could do ourselves if we were present in the same p lace
. - The Court did not consider the institution of the suit to collect a claim acc
ruing in the ordinary course of the plaintiff s business, as properly belonging
to the class of acts described in article 1713 of the Civil Code as acts "of str
ict ownership. - It is necessarily a part of the mere administration of such a bu
siness as that described in the instrument in question and only incidentally, if
at all, involving a power to dispose of the title to property. Can the original
power be construed as conferring upon Kammerzell authority to institute or defen
d suits?
2.
The judgment was affirmed.
95) Municipal Council of Iloilo vs. Evangelista, 55 Phil. 290
CASE NUMBER: DATE:
Page 43
FACTS: 1. This involves a dispute over a parcel of land and the acts committed b
y the plaintiff lawyer which were not intended by his client, the plaintiff. 2.
That during the lifetime of Bucao she with her second husband acquired by joint
purchase a parcel of land from the Talisay-Minglanilla Estate 3. That in 1932 Bu
cao and Tomas executed jointly a notarial instrument identified as Annex "B" whe
rein they acknowledged that Antonio Caballero had contributed the amount therein
stated for the purchase of the property and they sold 1/4 of the lot to him; wh
en the title to said lot was issued, VicentaBucao and Tomas Raga held it in trus
t for their co-owner. 4. That the portion mentioned as sold to plaintiff Antonio
Caballero remained unsegregated from Lot 2072 and the deed of sale, Annex "B" o
f the Complaint; nor had it been registered in the Register of Deeds; but he, ha
d been in occupation of a portion of this lot peacefully until the present. 5. B
ucaosold her undivided 1/2 of the above parcel to her co-owner, Tomas Raga. 6. D
efendants Olimpio Raga, Adriano Raga, Magdalena Raga and Tomas Raga executed an
instrument known as "Declaration and confirmation of sale" without the participa
tion of plaintiffs Antonio Caballero and Concordia Caballero, wherein they state
d that they are the heirs of VicentaBucao of the 1/2 of the property to Tomas Ra
ga, a certified true copy of which document is identified as Annex "E" in the Co
mplaint. 7. Alma Deiparine acquired in good faith, with a just title and for a v
aluable consideration, the whole of Lot 2072 from Tomas Raga as per deed of abso
lute sale identified as Annex "C" in the complaint which cancelled Transfer Cert
ificate of Title No. RT-2482 (T-17232) and the issuance in her name of Transfer
Certificate of Title No. 9934 on April 1, 1963, a certified true copy of which i
s identified as Annex "D" in the complaint; 8. That defendant Alma Deiparine cam
e to know only of Annex "B" when it was presented by plaintiff Antonio Caballero
at the trial of an ejectment case filed by the former in the Municipal Court of
Talisay. 9. This case was decided in favor of Antonio Caballero but the decisio
n was appealed by Alma Deiparine to the Court of First Instance of Cebu which af
firmed the decision for Caballero. The case is now in the Court of Appeals on ap
peal by Alma Deiparine. 10. Caballero and the defendant parties entered into a c
ompromise agreement. And the lawyer of Caballero admitted to certain facts witho
ut the authority of his client, Caballero. ISSUE: Is the compromise valid, consi
dering that the lawyer admitted to facts which were not authorized by his client
to make? No RULING: 1. A reading of the stipulation of facts convinced the cour
t that it is a compromise agreement of the parties. The stipulation concludes wi
th this prayer: "WHEREFORE, it is most respectfully prayed that the foregoing St
ipulation of Facts be approved and that a decision be handed down on the legal i
ssues submitted on the basis of said Stipulation of Facts." Apparently it is int
ended to terminate the case. 2. Attorneys have authority to bind their clients i
n any case by any agreement in relation thereto made in writing, and in taking a
ppeals, and in all matters of ordinary judicial procedure. But they cannot, with
out special authority, compromise their client s litigation, or receive anything
in discharge of a client s claim but the full amount in cash 3. It may be true
that during the pre-trial hearing held on February 3, 1968, the parties concerne
d agreed to execute a stipulation of facts but it does not mean that the respect
ive counsels of the contending parties can prepare a stipulation of facts the co
ntents of which is prejudicial to the interest of their clients and sign it them
selves without the intervention of their clients. 4. Counsel for plaintiffs-appe
llants, Atty. Melecio C. Guba, agreed that defendant-appellee Alma Deiparine bou
ght the land in question in good faith and for a valuable consideration; that du
ring the lifetime of their mother VicentaBucao, she, with the conformity of her
husband, sold her undivided of the land in question to her co-owner and son, Tom
as Raga. 5. All these adverse facts were made the basis of the appealed decision
against the plaintiffs. No further evidence was presented as there was no heari
ng. 6. The attorney for the plaintiffs in making such admission went beyond the
scope of his authority as counsel and practically gave away the plaintiffs case
. The admission does not refer to a matter of judicial procedure related to the
enforcement of the remedy. It related to the very subject matter of the cause of
action, or to a matter on which
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7. 8.
the client alone can make the admission binding on him. The broad implied or app
arent powers of an attorney with respect to the conduct or control of litigation
are, however, limited to matters which relate only to the procedure or remedy.
The employment of itself confers upon the attorney no implied or power or author
ity over the subject matter of the cause of action or defense; and, unless the a
ttorney has expressly been granted authority with respect thereto, the power to
deal with or surrender these matters is regarded as remaining exclusively in the
client.
97) PHILIPPINE NATIONAL BANK vs. STA. MARIA
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sure and sale to respond for the obligations contracted by Maximo. But they cann
ot be held personally liable for the payment of such obligations, as erroneously
held by the trial court.
It is not unusual in family and business circles that
one would allow his property or an undivided share in real estate
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102) COMMERCIAL BANK & TRUST CO. OF THE PHILS Vs. REP. ARMORED CAR SERVICE CORP.
CASE NUMBER: G.R. Nos. L-18223-24 DATE: September 30, 1963 PONENTE: LABRADOR, J.
FACTS: 1. Defendant-appellant Damaso Perez has presented a motion for new trial
on the ground of newly discovered evidence. 2. Damaso Perez claims that he was n
ot aware of the nature of the power of attorney that Ramon Racelis used, purport
edly signed by him, to secure the loans for the Republic Armored Car Service Cor
poration and the Republic Credit Corporation. 3. He claims that Ramon Racelis on
ly used a photastic copy as proof of the Power of Attorney. He further presents
the original purporting the alleged true authority granted by the movant. - It i
s not expressly mentioned that this is the precise power of attorney that Ramon
Racelis Utilized to secure the loans the collection of which is sought in these
cases. ISSUE: Whether or not the claim of the movant is tenable as to invalidate
the security loans secured under the name of movant? NO, it is not. RULING: Ass
uming, for the sake of argument, that the said power of attorney incorporated in
the motion for reconsideration was the one used to obtain the loans. We find th
at the movant s contention has no merit. In accordance with the document, Raceli
s was authorized to negotiate for a loan or various loans .. with other being in
stitution, financing corporation, insurance companies or investment corporations
, in such sum or sums, aforesaid Attorney-in-fact Mr. Ramon Racelis, may deem pr
oper and convenient to my interests, ... and to execute any and all documents he
deems requisite and necessary in order to obtain such loans, always having in m
ind best interest; ... We hold that this general power attorney to secure loans
from any banking institute was sufficient authority for Ramon Racelis to obtain
the credits subject of the present suits.
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appears that Santiago used to render accounts of his agency after each transacti
on, to the Syjucos satisfaction.
106) NATIONAL FOOD AUTHORITY vs. INTERMEDIATE APPELLATE COURT CASE NUMBER: GR NO
. 75640 DATE: April 5, 1990 PONENTE: Paras
FACTS: Medalla, as commission agent of Superior Shipping Corporation (SSC), ente
red into a contract for hire of ship with the National Grains Authority (NGA), w
here sacks of rice belonging to the latter would be transported from Occidental
Mindoro to Manila. SSC then asked payments from NGA and it requested that the pa
yment be made to it and not to Medalla. NGA replied that it could not grant its
request because the contract was entered into by NGA and Medalla who did not dis
close that he was acting as a mere agent of SSC. NGA paid Medalla. The SSC asked
Medalla for the payment but the latter ignored the request. ISSUE: : Is NGA lia
ble to SSC? RULING:
NGA is liable under Art 1883 of the Civil Code. Relevant portion of the provisio
n states, In such case the agent is the one directly bound in favor of the perso
n with whom he has contracted, as if the transaction were his own, except when t
he contract involves things belonging to the principal. Consequently, when things
belonging to the principal (in this case, SSC) are dealt with, the agent is bou
nd to the principal although he does not assume the character of such agent and
appears acting in his own name. Thus, in effect, the contract must be considered
as entered into between the principal and the third person.
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