Laureano T. Angeles vs.

Philippine National Railways (PNR) and

Rodolfo Flores, August 31, 2006 G.R. No. 150128

Whether or not the CA erred in affirming the trial court's holding that
petitioner and his spouse, as plaintiffs a quo, had no cause of action as they
were not the real parties-in-interest in this case.

Facts:
Held:
Respondent Philippine National Railways (PNR) informed a certain
GaudencioRomualdez (Romualdez, hereinafter) that it has accepted the
latters offer to buythe PNRs scrap/unserviceable rails located in Del
Carmen and Lubao, Pampanga at P1,300.00 and P2,100.00 per metric ton,
respectively, for the total amount of P96,600.00. Romualdez paid the
purchase price and addressed a letter to Atty. CiprianoDizon, PNRs Acting
Purchasing Agent. The letter authorized LIZETTE R. WIJANCOto be his
(Romualdez) lawful representative in the withdrawal of the
scrap/unserviceable rails awarded to him. Furthermore, the original copy of
the award which indicates the waiver of rights, interest and participation in
favor of Lizetter R. Wijanco was also given.
The Lizette R. Wijanco was petitioner's now deceased wife. That very same
day, Lizette requested the PNR to transfer the location of withdrawal for the
reason that the scrap/unserviceable rails located in Del Carmen and Lubao,
Pampanga were not ready for hauling.The PNR granted said request and
allowed Lizette to withdraw scrap/unserviceable rails in Murcia, Capas and
San Miguel, Tarlac instead. However, PNR subsequently suspended the
withdrawal in view of what it considered as documentary discrepancies
coupled by reported pilferages of over P500,000.00 worth of PNR scrap
properties in Tarlac.Consequently, the spouses Angeles demanded the
refund of the amount of P96,000.00. The PNR, however, refused to pay,
alleging that as per delivery receipt duly signed by Lizette, 54.658 metric
tons of unserviceable rails had already been withdrawn. The spouses
Angeles filed suit against the PNR for specific performance and damages
before the Regional Trial Court. Lizette W. Angeles passed away and was
substituted by her heirs, among whom is her husband, herein petitioner
Laureno T. Angeles.
The trial court, on the postulate that the spouses Angeles are not the real
parties-in-interest, rendered judgment dismissing their complaint for lack of
cause of action. As held by the court, Lizette was merely a representative of
Romualdez in the withdrawal of scrap or unserviceable rails awarded to him
and not an assignee to the latter's rights with respect to the award. Petitioner
appealed with the Court of Appeals which dismissed the appeal and affirmed
that of the trial court.
Issue:

No.The CAs conclusion, affirmatory of that of the trial court, is that Lizette
was not an assignee, but merely an agent whose authority was limited to the
withdrawal of the scrap rails, hence, without personality to sue.Where
agency exists, the third party's (in this case, PNR's) liability on a contract is
to the principal and not to the agent and the relationship of the third party to
the principal is the same as that in a contract in which there is no agent.
Normally, the agent has neither rights nor liabilities as against the third party.
He cannot thus sue or be sued on the contract. Since a contract may be
violated only by the parties thereto as against each other, the real party-ininterest, either as plaintiff or defendant in an action upon that contract must,
generally, be a contracting party.
The legal situation is, however, different where an agent is constituted as an
assignee. In such a case, the agent may, in his own behalf, sue on a
contract made for his principal, as an assignee of such contract. The
rulerequiring every action to be prosecuted in the name of the real party-ininterest recognizes the assignment of rights of action and also
recognizesthat when one has a right assigned to him, he is then the real
party-in-interest and may maintain an action upon such claim or right.
WHEREFORE, the petition is DENIED and the assailed decision of the CA is
AFFIRMED.Costs against the petitioner.
VICTORIAS MILLING CO. vs. COURT OF APPEALS
FACTS:
St. Therese Merchandising (STM) regularly bought sugar from
Victorias Milling Co (VMC). In the course of their dealings, VMC issued
several Shipping List/Delivery Receipts (SLDRs) to STM as proof of
purchases. Among these was SLDR No. 1214M. SLDR No. 1214M, dated
October 16, 1989, covers 25,000 bags of sugar. Each bag contained 50 kg
and priced at P638.00 per bag. The transaction covered was a direct sale.
On October 25, 1989, STM sold to private respondent Consolidated
Sugar Corporation (CSC) its rights in the same SLDR for P14,750,000.00.

CSC issued checks in payment. That same day, CSC wrote petitioner that it
had been authorized by STM to withdraw the sugar covered by the said
SLDR. Enclosed in the letter were a copy of SLDR No. 1214M and a letter of
authority from STM authorizing CSC to withdraw for and in our behalf the
refined sugar covered by the SLDR On Oct. 27, 1989, STM issued checks
to VMC as payment for 50,000 bags, covering SLDR No. 1214M. CSC
surrendered the SLDR No. 1214M and to VMCs NAWACO Warehouse and
was allowed to withdraw sugar. But only 2,000 bags had been released
because VMC refused to release the other 23,000 bags.

be proved, with the burden of proof resting upon the persons alleging the
agency, to show not only the fact of its existence but also its nature and
extent. It appears that CSC was a buyer and not an agent of STM. CSC was
not subject to STMs control. The terms for and in our behalf should not be
eyed as pointing to the existence of an agency relation. Whether or not a
contract is one of sale or agency depends on the intention of the parties as
gathered from the whole scope and effect of the language employed.
Ultimately, what is decisive is the intention of the parties. (In fact, CSC even
informed VMC that the SLDR was sold and endorsed to it.)

Therefore, CSC informed VMC that SLDR No. 1214M had been sold
and endorsed to it. But VMC replied that it could not allow any further
withdrawals of sugar against SLDR No. 1214M because STM had already
withdrawn all the sugar covered by the cleared checks. VMC also claimed
that CSC was only representing itself as STMs agent as it had withdrawn
the 2,000 bags against SLDR No. 1214M for and in behalf of STM. Hence,
CSC filed a complaint for specific performance against Teresita Ng Sy (doing
business under STM's name) and VMC. However, the suit against Sy was
discontinued because later became a witness. RTC ruled in favor of CSC
and ordered VMC to deliver the 23,000 bags left. CA concurred. Hence this
appeal.

Agency distinguished from sale.

In an agency to sell, the agent, in dealing with the thing received, is bound to
act according to the instructions of his principal, while in a sale, the buyer
can deal with the thing as he pleases, being the owner. The elementary
notion of sale is the transfer of title to a thing from one to another, while the
essence of agency involves the idea of an appointment of one to act for
another. Agency is a relationship which often results in a sale, but the sale is
a subsequent step in the transaction. (Teller, op. cit., p. 26; see
Commissioner of Internal Revenue vs. Manila Machinery & Supply Co., 135
SCRA 8 [1985].) An authorization given to another containing the phrase for
and in our behalf does not necessarily establish an agency, as ultimately
what is decisive is the intention of the parties. Thus, the use of the words
sold and endorsed may mean that the parties intended a contract of sale,
and not a contract of agency.

ISSUES:
W/N CA erred in not ruling that CSC was an agent of STM and hence,
estopped to sue upon SLDR No. 1214M as assignee.
HELD:
NO. CSC was not an agent of STM. VMC heavily relies on STMs letter of
authority that said CSC is authorized to withdraw sugar for and in our
behalf. It is clear from Art. 1868 that the: basis of agency is representation.
On the part of the principal, there must be an actual intention to appoint or
an intention naturally inferable from his words or actions, and on the part of
the agent, there must be an intention to accept the appointment and act on
it, and in the absence of such intent, there is generally NO agency. One
factor, which most clearly distinguishes agency from other legal concepts, is
control; one person the agent agrees to act under the control or direction
of another the principal. Indeed, the very word agency has come to
connote control by the principal. The control factor, more than any other, has
caused the courts to put contracts between principal and agent in a separate
category. Where the relation of agency is dependent upon the acts of the
parties, the law makes no presumption of agency and it is always a fact to

G.R. No. 149353

June 26, 2006
JOCELYN B. DOLES, Petitioner, vs. MA. AURA TINA ANGELES,
Respondent.
AUSTRIA-MARTINEZ, J.:
Facts: Respondent alleged that petitioner was indebted to the former in the
concept of a personal loan amounting to P405,430.00 representing the
principal amount and interest; that on October 5, 1996, by virtue of a "Deed
of Absolute Sale",3petitioner, as seller, ceded to respondent, as buyer, a
parcel of land, as well as the improvements thereon, with an area of 42
square meters, in order to satisfy her personal loan with respondent.
Petitioner, denied that she borrowed money from respondent, and averred
that from June to September 1995, she referred her friends to respondent
whom she knew to be engaged in the business of lending money in
exchange for personal checks through her capitalist Arsenio Pua. She
alleged that her friends, borrowed money from respondent and issued
personal checks in payment of the loan; that the checks bounced for
insufficiency of funds; that despite her efforts to assist respondent to collect
from the borrowers, she could no longer locate them; that she was forced to

issue eight checks amounting to P350,000 to answer for the bounced

checks of the borrowers she referred; that prior to the issuance of the checks
she informed respondent that they were not sufficiently funded but the latter
nonetheless deposited the checks and for which reason they were
subsequently dishonored, that she was forced by respondent to execute an
"Absolute Deed of Sale" over her property in Bacoor, Cavite, to avoid
criminal prosecution.
RTC: Plaintiff Angeles admission that the borrowers are the friends of
defendant Doles and further admission that the checks issued by these
borrowers in payment of the loan obligation negates the cause or
consideration of the contract of sale executed by and between plaintiff and
defendant.
CA Reversed: The CA concluded that petitioner was the borrower and, in
turn, would "re-lend" the amount borrowed from the respondent to her
friends. Hence, the Deed of Absolute Sale was supported by a valid
consideration, which is the sum of money petitioner owed respondent
amounting to P405,430.00, representing both principal and interest.
Petitioner filed her Motion for Reconsideration, arguing that respondent
categorically admitted in open court that she acted only as agent or
representative of Arsenio Pua, the principal financier and, hence, she had no
legal capacity to sue petitioner. Hence this petition.
Issues:
Whether or not the petitioner can be considered as a debtor of the
respondent.
Whether or not an agent who was not authorized by the principal to collect
debt in his behalf could directly collect payment from the debtor.
Held: No. No.
Ratio: Petitioner knew that the financier of respondent is Pua; and
respondent knew that the borrowers are friends of petitioner. This Court has
affirmed that, under Article 1868 of the Civil Code, the basis of agency is
representation. In the case at bar, both petitioner and respondent have
undeniably disclosed to each other that they are representing someone else,
and so both of them are estopped to deny the same. And since plaintiff,
being an agent, was not authorized by the principal to collect the debt in his
behalf, and respondent was acting only as an agent with regards to the

debtors, the sale of the respondent's property having been predicated on the
loan is void for lack of consideration.