Dominion Insurance vs CA
F: Rodolfo Guevarra instituted
a civil case for sum of money
against petitioner to recover a
sum w/c he advanced in is
capacity as defendants
manager to satisfy certain
claims by defendants. (used
his own money) RTC, CA ruled
in favor of Guevarra.
H: SPOA showed that
petitioner and Guevarra
intended to enter into a
principal-agent relationship
-despite the word special in
the title of the document, the
contents reveal that what was
constituted was actually a
general agency
- agency comprises all the
business of the principal BUT
couched in general terms
limited only to administration
-general power permits the
agent to do all acts for which
the law does not require a
special power.
-payment of claims is not an
act of administration
-settlement of claims is not
included among the acts
enumerated in the Special
Power of Attorney, neither is it
of a character similar to the
acts enumerated therein.
SPOA is required before
respondent Guevarra could
settle the insurance claims of
the insured.
-Respondent Guevarra was
authorized to pay the claim of
the insured, but the payment
shall come from the revolving
fund or collection in his
possession.
D: To cover all the business of
the principal, it is not
necessary to state all the
business of the principal. It is
sufficient that the listed
authorized transactions
apparently cover all that is
required to run the business.
PNB vs Maximo sta. Maria et
al
F: Petitioner filed action
against Maximo and his
siblings for unpaid balances
on 2 agricultural sugar crop
loans obtained from the bank
by Maximo under SPOA to
mortgage a parcel of land
jointly owned by them
-Valeriiana alone executed in
favor of her Maximo an SPOA
to borrow money and
mortgage any real estate
owned by her
-in virtue of 2 above powers,,
Maximo applied for 2 crop
loans and as security, Maximo
executed in his own name 2
chattel mortgage on the
standing crops guaranteed by
a surety
-the siblings appealed the
decision and said they did not
give their borhter the power
to borrow mone, only to
mortgage the real estate
owned by them
H: De Villa vs. Fabricante:
when the power given to the
agent was limited to a grant
of authority to mortgage a
parcel of land in the
principals name, the latter
may not be held liable for the
payment of the mortgage
debt contracted by the agent
as the authority to mortgage
does not carry with it the
authority to contract
obligation
-Maximo alone with Valeriana
who authorized him must
answer for the loans (join
liability)
BPI vs De Coster
Gabriela executed a SPA in
favor of her husband,
empowering him to loan and
borrow money on her behalf.
Her husband was able to
obtain a loan secured by a
chattel mortgage on the
steamers of his company,
which was already subject to
another mortgage. RTC
declared the defendants in
default for their failure to
appear and ruled in favor of
BPI.
H: The Court reversed the
decision and held that
Gabriela cannot be held liable
for the debts secured by her
husband as husband
exceeded his power of
attorney. The real mortgage
was void
-no provision in either of them
which authorizes or empowers
him to sign anything or to do
anything which would make
his wife liable as a surety for a
preexisting debt.
D: A power of attorney to
loan and borrow money and
to mortgage the principals
property does NOT carry with
it or imply that the agent has
a legal right to make the
principal liable for the
personal debts of the agent;
Where in an instrument
powers and duties are
specified and defined, all of
such powers and duties are
limited and confined to those
which are specified and
defined, and that all other
powers and duties are
excluded.
Hodges vs Salas
F: The defendants executed a
power of attorney in favor of
their brother-in- law Felix S.
Yulo to enable him to obtain a
loan and secure it with a
mortgage on the real property.
Acting under said power of
attorney, Felix S. Yulo
obtained a loan of P28,000
from the plaintiff to which
effect he executed a deed of
mortgage of the real property.
The P28,000 loan was not
delivered to agent Yulo.
Instead, an agreement
between him and Hodges
indicate that the P28,000 loan
was applied to pay his
personal debts to Hodges. The
defendants failed to pay at
maturity the interest
stipulated which should have
been paid one year in
advance. Plaintiff therefore
brought an action for
foreclosure of the mortgage.
-Hodges claim the act was
ratified through a letter
H: agent Yulo was not
authorized to borrow money
and invest it as he wished
obligated to turn over the
money to the principals
-nothing in the letter implied
that defendants ratified
only said they will notify the
agent of the maturity of
obligation contracted by him
nothing about whether or not
their agent was authorized to
use the funds obtained by him
in the payment of his personal
obligations.
Strong vs Gutierrez Repide
F: an action was brought to
recover the shares of capital
stock of Philippine Sugar
estates development
company (an anonymous
society formed to hold the
Dominican Friars lands)
-the shares were owned by
Mrs Strong as part of the
estate of her first husband
-they were bought by Repide
through a broker who dealt
with petitioners agent who
made the sale without the
knowledge of the petitioner
-defendant was a director,
was the managing agent, and
was in his own right the
majority stockholder of the
society.
-Pettitioner said agent had no
power to sell or deliver the
stocks and the sale was
procured by fraud by Repide
H: The Court held that the
agent had no power to sell or
deliver plaintiffs stocks
because there was no express
grant of such power to the
agent. Moreover, defendant
violated no duty in not
communicating to the plaintiff
his purpose in buying her
shares and has been shown
guilty of no fraud. The agent
did not have the power to sell
the shares. An agency stated
in general terms only includes
acts of administration. In
order to compromise,
alienate, mortgage, or to
execute any, other act of
strict ownership, an express
mandate is required. The
express mandate required by
law to enable an appointee
must be one that expressly
mentions sale.
-3 qualifications whereby the
principal is held bound even
though the agent acted
beyond his powers:
First. Where his acts have
contributed to deceive a third
person in good faith;
Second. Where the limitations
upon the power created by
him could not have been
known by a third person; and
Third. Where he has placed in
the hands of the agent
instruments signed by him in
blank.
-No Fraud
D: An agency stated in
general terms only includes
acts of administration. In
order to compromise,
alienate, mortgage, or to
execute any other act of strict
ownership an express
mandate is required. Such a
mandate may be either oral or
written, may stand by itself or
may be included in the
general power, the one vital
thing being that the right to
sell shall be express or shall
be a necessary ingredient of
the power that is expressed.
JOSE M. KATIGBAK v. TAI HING
CO.
F: Gabino was the owner of a
piece of land in Tacloban
whom he sold to his brother
Po Tecsi. But prior to the sale,
Po Tecsin conferred a general
power of attorney in favor of
Gabino to buy and sell all
sorts of property belonging to
the former.
After Gabino had sold his land
to Po Tecsin, the former, by
virtue of the power executed
in his favor by the latter, sold
the same land to Jose
Katigbak, who, in turn, made
Gabino the administrator of
the property. Gabino then
entered into a lease contract
with Po Tecsi, who then sub-
leased the property to Tai
Hing Co. Po Tecsi failed to
remit the lease payments to
Gabino. Subsequently,
Katigbak sold the property to
Po Sun Boo, who later
demanded the payment of all
the rentals due. As a defense,
the estate of Po Tecsi
(represented by Po Tecsos
son, Po Sun Suy) alleged that
the property was theirs since
Gabino could not sell said land
to Katigbak by virtue of a
power of attorney executed by
Po Tecsi before the land was
sold to him by Gabino.
H: the power of attorney was
couched in general terms and
involved all of Po Tecsis
present and future property.
As such, the sale of the land
to Katigbak was valid and that
the estate of Po Tecsi should
pay all the lease payments
due.
D: A special power of attorney
is necessary in order to enter
into any contract by which the
ownership of an immovable is
transmitted or acquired either
gratuitously or for a valuable
consideration.
Chua vs IAC
F: PR Herrera executed a
contract of lease in favor of
Tian On with the option to buy
the land
-Tian On built a house on the
land and sold it to petitioner
and transferred the lease to
him.
-Chua and Herrera executed
another contract of lease after
the expiration of the old one
-Herrera through her attorney-
in-fact, Mrs. Luz Tormis, who
was authorized with a special
power of attorney, sold the
lots in question to defendants-
spouses, Vicente and Victoria
Go.
-petitioner sought the
annulment of the sale
violated his option to buy the
lease property
-petitioners relied on the
Contract of lease entered into
by and between Chua Bok and
Vicenta R. de Reynes, as
attorney-in-fact of respondent
Herrera, as well as on the tacit
renewal thereof by
respondent Herrera
-CA noted that Vicenta R. de
Reynes was not armed with a
special power of attorney to
enter into a lease contract for
a period of more than one
year.
H: The contract was entered
into by the agent of the lessor
and not the lessor herself. In
such a case, the law requires
that the agent be armed with
a special power of attorney to
lease the premises.
-Herrera allowed them to
occupy after expiration of
contract and a tacit renewal
(Article1670) is deemed to
have taken place. However,
Dizon vs. Magsaysay states
that a tacit renewal is limited
only to the terms of the
contract which are germane
to the lesses right of
continued enjoyment of the
property and does not extend
to alien matters, like the
option to buy the leased
premises.
Dungo vs Lopena
F: Anastacio and Rodrigo
bought 3 parcels of land from
Adriano and Rosa. However,
they defaulted on the first
installment. They executed a
Compromise Agreement
wherein Anastacio was not a
signatory but his counsel was.
Thereafter, they executed a
Tri-Party Agreement which
also acknowledged the
Compromise Agreement.
Again, they failed to pay. The
parcels of land were then sold
at a public auction. Anastacio
now says that the
Compromise Agreement was
null and void insofar as it
affects him because he did
not sign the same and so the
sale was also null and void.
H: A compromise is a contract
and a third person cannot
bind another to a compromise
agreement. However, the
compromise agreement was
only unenforceable until
ratified. Since the petitioner
sign the tri-party agreement,
he is estopped from
questioning its validity.
D: Under Art. 1878 of the
Civil Code, a third person
cannot bind another to a
compromise agreement
unless he, the third person,
has obtained a special power
of attorney for that purpose
from the party intended to be
bound. Although the Civil
Code expressly requires a
special power of attorney in
order that one may
compromise an interest of
another, it is neither accurate
nor correct to conclude that
its absence renders the
compromise agreement void.
In such a case, the
compromise is merely
unenforceable.
Vicente vs Geraldez
The lawyers of HCC and of the
petitioners entered into a
compromise agreement with
respect to a mining property
in dispute. Atty. Ventura, one
of the lawyers of HCC, notified
the HCC Board of Directors of
said compromise agreement
which the latter disapproved.
Atty. Ventura then filed a
motion before the trial court
to disregard the compromise
agreement. The trial court
granted and ruled in favor of
HCC.
H: The SC ruled that the
compromise agreement is not
binding because the HCC
lawyers had no express
authority from the HCC Board
of Directors to enter into a
compromise agreement.
There was no special power of
attorney authorizing the three
lawyers to enter into a
compromise agreement. This
is even if the lawyers declared
in open court that they are
authorized to do so by the
corporation (in this case, the
transcript of stenographic
notes does not show that the
lawyers indeed declare such
in open court).
D: Special powers of attorney
are necessary, among other
cases, in the following: to
compromise and to renounce
the right to appeal from a
judgment. As a general rule
an officer or agent of the
corporation has no power to
compromise or settle a claim
by or against the corporation,
except to the extent that such
power is given to him either
expressly or by reasonable
implication from the
circumstances.
Insular Drug vs National Bank
F: Foerster, a salesman of and
collector for Insular indorsed
some checks made out in the
name of Insular to his
personal account with PNB.
Eventually, the anomalies
were discovered by Insular
and Foerster committed
suicide. Thereafter, Insular
sued PNB for the face value of
the checks plus interest. The
CFI ordered PNB to pay
Insular.
H: The SC affirmed the CFI
saying that Foerster did not
have implied authority to
indorse the checks which were
made out in the name of
Insular. The bank permitted
the agent to indorse the
checks. The bank credited
those checks to the personal
account of the agent and
permitted him and his wife to
make withdrawals without
there being any authority
from the drug company to do
so.
D: The right of an agent to
indorse commercial paper is a
very responsible power and
will not be lightly inferred. A
salesman with authority to
collect money belonging to his
principal does not have the
implied authority to indorse
checks received in payment.
Any person taking checks
made payable to a
corporation, which can act
only by agents does so at his
peril, and must abide by the
consequences if the agent
who indorses the same is
without authority;
Indorsement of checks = act
of strict dominion
Austria vs CA
F: Abad, who received some
jewelry from Austria to be sold
on commission basis, was
alleged to have been robbed
by 2 men. Among the stolen
items was the consigned
pendant. The incident was the
subject of a criminal case.
Austria filed a civil case
against Abad for recovery of
the pendant or its value.
-CA ruled that the facts of the
robbery had been proven and
thus Abad is not liable. Austria
contends, saying that the
occurrence of the robbery
should be proved by a final
judgment of conviction in the
criminal case. SC affirms CA.
D: The emphasis of the
provision (about the
occurrence of a fortuitous
event exempting the debtor
from liability) is on the events,
not on the agents or factors
responsible for them It is
not necessary that the
persons responsible for the
occurrence should be found or
punished; it would only be
sufficient to established that
the enforceable event, the
robbery in this case did take
place without any concurrent
fault on the debtor's
part, and this can be done by
preponderant evidence.
PNB vs Manila Surety
F: PNB opened a letter of
credit on favor of ATACO.
ATACO then assigned and
made PNB its attorney in fact
in the collection of the
amounts due to ATACO from
the Bureau of Public Works.
PNB stopped collecting from
the Bureau for unexplained
reasons. When it found out
that other creditors of ATACO
were able to collect more than
what is due, it filed a case
against ATACO and Manila
Surety. The CFI ordered ATACO
and Manila Surety to pay PNB,
however, the CA reversed it
and held that PNBs
negligence resulted to the
exoneration of the surety.
H: The Court of Appeals is
erroneous for holding that the
Bank is not answerable for
negligence in failing to collect
from the principal debtor but
for its neglect in collecting the
sums due to the debtor from
the Bureau of Public Works;
contrary to its duty as holder
of an exclusive and
irrevocable power of atty. to
make such collections. The
bank deprived the surety of
any possibility of recoursing
against that security
D: An agent is required to act
with the care of a good father
of a family and becomes liable
for the damages, which the
principal may suffer through
his non-performance.
Domingo vs Domingo
F: Vicente and Gregorio had
an exclusive agency contract
wherein the commission of 5%
would be awarded if a lot is
sold for P2/sqm to a buyer
introduced by Gregorio.
Gregorio then authorized
Purisima to look for a buyer
and promised him of the
5% commission. Purisima
introduced Oscar to Gregorio
and Oscar submitted an offer
which was then amended to
P1.2/sqm. Vicente gave
Gregorio an advance in his
commission of P300 but the
contract was never perfect.
Oscar gave Gregorio P1,000
as a gift since he succeeded in
persuading Vicente to sell his
lot at P1.2 instead of P2.
Gregorio went to the register
of deeds and found out that
the sale was consummated
already. He confronted Vicente
and demanded the 5% who
tore the agreement. Gregorio
then confronted Oscar who
told him that Vicente wanted
Gregorio out of the picture
and in so doing, Vicente would
sell the property at a lower
price. Vicente also told
Gregorio that he is not
entitled to 5% because the lot
was sold not to Oscar but to
Oscars wife.
H: Commission is withheld.
The agent who takes a secret
profit, without revealing the
same to the principal, even if
the principal does not suffer
any injury by reason of such
breach of fidelity, is guilty of a
breach of his loyalty and is
bereft of his right to collect
commission from his principal.
Severino vs Severino
Green Valley Poultry vs IAC
F: Petitioner and Squibb
entered into a letter
agreement wherein latter
appointed former as a non-
exclusive distributor for
Squibb Veterinary Products
-Squibb delivered goods to
Green Valley which remained
unpaid so they filed a suit to
collect and judgment by both
the lower court and the CA
ruled in Squibbs favor
-Green Valleys defense:
Contract with Squibb was a
mere agency to sell; that it
never purchased goods from
Squibb; that the goods
received were on consignment
only with the obligation to
turn over the proceeds, less
its commission, or to return
the goods if not sold, since
it had sold the goods but had
not been able to collect from
the purchasers thereof, the
action was premature.
-Squibb on the other hand
claimed that the contract is
one of sale which was upheld
by the lower courts
H: do not have to categorize
the contract. Whether viewed
as an agency to sell or as a
contract of sale, the liability of
Green Valley is indubitable.
Adopting Green Valley's
theory that the contract is an
agency to sell, it is liable
because it sold on credit
without authority from its
principal.
Municipal Council of Iloilo vs
Evangelista
F: Vda de Tan Toco appointed
Tan Boon Tiong and Tan
Montano as her attorneys-in-
fact. She obtained a favorable
judgment of money against
the Municipal City of Iloilo, in
consideration of the
expropriation of a strip of
land. Several parties filed
their claims against this
judgment. The CFI allowed
Atty. Evangelista, to claim
15% of this judgment as
counsel of the administratrix
of Jose Ma. Arroyos estate,
and in his own behalf for
professional services rendered
by him. (Arroyo and
Evangelista were the counsels
for Vda de Tan Toco on the
expropriation case.)
Atty. Antero Soriano also
appeared claiming that the
amount of the judgment had
been assigned to him and in
turn to Mauricio Cruz and Co.
Inc. (It was not stated in the
case but presumably there
was a prior case where he
served as counsel for Vda de
Tan Toco and in consideration
of this, the attorneys-in-fact
assigned the amount to him,
and in turn Soriano assigned it
to Mauricio Cruz and Co. Inc.)
H: The Court made three
pertinent rulings.
1.) With regard to the
assignment to Atty.
Soriano/Mauricio Cruz
by the attorneys-in-fact,
the Court held that
since the attorneys-in-
fact were empowered
to pay the debts and
protect the interests of
their principals, they
are also impliedly
empowered to pay the
attorneys fees by way
of assignment of
judgment rendered in
favor of the principal to
the attorneys.
2.) With regard to the
presence of two
attorneys-in-fact, the
Court held that the
consent of one will not
be required to validate
the acts of the other
unless it appears to be
positively the intention
of the principal.
3.) With regard to the
legality of the
assignment to Atty.
Soriano of the amount
of the judgment in
relation to the
prohibition on attorneys
from acquiring the
property of their clients,
the Court held that Atty.
Soriano was not the
counsel for Vda de Tan
Toco in the case she
instituted against the
municipality of Iloilo for
expropriation. The
lawyers who
represented her were
Arroyo and Evangelista.
Thus, the prohibition
does not apply.
D: An agent empowered to
pay the debts of the principal,
and to employ lawyers to
defend the latter's interests, is
impliedly empowered to pay
the lawyer's fees for services
rendered in the interests of
said principal, and may satisfy
them by an assignment of a
judgment rendered in favor of
said principal. When a person
appoints two attorneys-in-fact
independently, the consent of
the one will not be required to
validate the acts of the other
unless that appears positively
to have been the principal's
attention.