THE SHELL COMPANY OF THE PHILIPPINES, LTD.

, petitioner,
vs.
FIREMEN'S INSURANCE COMPANY OF NEWARK, NEW JERSEY COMMERCIAL CASUALTY INSURANCE CO., SALVADOR
SISON, PORFIRIO DE LA FUENTE and THE COURT OF APPEALS (First Division), respondents.

Ross, Selph, Carrascoso & Janda for petitioner.

J. A. Wolfson and Manuel Y. Macias for respondents.

PADILLA, J.:

Appeal by certiorari under Rule 46 to review a judgment of the Court of Appeals which reversed that of the Court of First Instance of
Manila and sentenced ". . . the defendants-appellees to pay, jointly and severally, the plaintiffs-appellants the sum of P1,651.38, with
legal interest from December 6, 1947 (Gutierrez vs. Gutierrez, 56 Phil., 177, 180), and the costs in both instances."

The Court of Appeals found the following:

Inasmuch as both the Plaintiffs-Appellants and the Defendant-Appellee, the Shell Company of the Philippine Islands, Ltd.
accept the statement of facts made by the trial court in its decision and appearing on pages 23 to 37 of the Record on Appeal,
we quote hereunder such statement:

This is an action for recovery of sum of money, based on alleged negligence of the defendants.

It is a fact that a Plymounth car owned by Salvador R. Sison was brought, on September 3, 1947 to the Shell Gasoline and
Service Station, located at the corner of Marques de Comillas and Isaac Peral Streets, Manila, for washing, greasing and
spraying. The operator of the station, having agreed to do service upon payment of P8.00, the car was placed on a hydraulic
lifter under the direction of the personnel of the station.

What happened to the car is recounted by Perlito Sison, as follows:

Q. Will you please describe how they proceeded to do the work?

A. Yes, sir. The first thing that was done, as I saw, was to drive the car over the lifter. Then by the aid of the two
grease men they raised up my car up to six feet high, and then washing was done. After washing, the next step was
greasing. Before greasing was finished, there is a part near the shelf of the right fender, right front fender, of my car
to be greased, but the the grease men cannot reached that part, so the next thing to be done was to loosen the lifter
just a few feet lower. Then upon releasing the valve to make the car lower, a little bit lower . . .

Q. Who released the valve?

A. The greasemen, for the escape of the air. As the escape of the air is too strong for my ear I faced backward. I
faced toward Isaac Peral Street, and covered my ear. After the escaped of the air has been finished, the air coming
out from the valve, I turned to face the car and I saw the car swaying at that time, and just for a few second the car
fell., (t.s.n. pp. 22-23.)

The case was immediately reported to the Manila Adjustor Company, the adjustor of the firemen's Insurance Company and the
Commercial Casualty Insurance Company, as the car was insured with these insurance companies. After having been inspected by
one Mr. Baylon, representative of the Manila Adjustor Company, the damaged car was taken to the shops of the Philippine Motors,
Incorporated, for repair upon order of the Firemen's Insurance Company and the Commercial Casualty Company, with the consent of
Salvador R. Sison. The car was restored to running condition after repairs amounting to P1,651.38, and was delivered to Salvador R.
Sison, who, in turn made assignments of his rights to recover damages in favor of the Firemen's Insurance Company and the
Commercial Casualty Insurance Company.

On the other hand, the fall of the car from the hydraulic lifter has been explained by Alfonso M. Adriano, a greaseman in the
Shell Gasoline and Service Station, as follows:

Q. Were you able to lift the car on the hydraulic lifter on the occasion, September 3, 1947?

A. Yes, sir.

Q. To what height did you raise more or less?

A. More or less five feet, sir.

 Q. After lifting that car that height, what did you do with the car?

A. I also washed it, sir.

Q. And after washing?

A. I greased it.

Q. On that occasion, have you been able to finish greasing and washing the car?

A. There is one point which I could not reach.

Q. And what did you do then?

A. I lowered the lifter in order to reach that point.

Q. After lowering it a little, what did you do then?

A. I pushed and pressed the valve in its gradual pressure.

Q. Were you able to reach the portion which you were not able to reach while it was lower?

A. No more, sir.

Q. Why?

A. Because when I was lowering the lifter I saw that the car was swinging and it fell.

THE COURT. Why did the car swing and fall?

WITNESS: 'That is what I do not know, sir'. (t.s.n., p.67.)

The position of Defendant Porfirio de la Fuente is stated in his counter-statement of facts which is hereunder also reproduced:

In the afternoon of September 3, 1947, an automobile belonging to the plaintiff Salvador Sison was brought by his son, Perlito
Sison, to the gasoline and service station at the corner of Marques de Comillas and Isaac Peral Streets, City of Manila,
Philippines, owned by the defendant The Shell Company of the Philippine Islands, Limited, but operated by the defendant
Porfirio de la Fuente, for the purpose of having said car washed and greased for a consideration of P8.00 (t.s.n., pp. 19-20.)
Said car was insured against loss or damage by Firemen's Insurance Company of Newark, New Jersey, and Commercial
Casualty Insurance Company jointly for the sum of P10,000 (Exhibits "A', "B", and "D").

The job of washing and greasing was undertaken by defendant Porfirio de la Fuente through his two employees, Alfonso M.
Adriano, as greaseman and one surnamed de los Reyes, a helper and washer (t.s.n., pp. 65-67). To perform the job the car
was carefully and centrally placed on the platform of the lifter in the gasoline and service station aforementioned before raising
up said platform to a height of about 5 feet and then the servicing job was started. After more than one hour of washing and
greasing, the job was about to be completed except for an ungreased portion underneath the vehicle which could not be
reached by the greasemen. So, the lifter was lowered a little by Alfonso M. Adriano and while doing so, the car for unknown
reason accidentally fell and suffered damage to the value of P1, 651.38 (t.s.n., pp. 65-67).

The insurance companies after paying the sum of P1,651.38 for the damage and charging the balance of P100.00 to Salvador
Sison in accordance with the terms of the insurance contract, have filed this action together with said Salvador Sison for the
recovery of the total amount of the damage from the defendants on the ground of negligence (Record on Appeal, pp. 1-6).

The defendant Porfirio de la Fuente denied negligence in the operation of the lifter in his separate answer and contended
further that the accidental fall of the car was caused by unforseen event (Record on Appeal, pp. 17-19).

The owner of the car forthwith notified the insurers who ordered their adjustor, the Manila Adjustor Company, to investigate the incident
and after such investigation the damaged car, upon order of the insures and with the consent of the owner, was brought to the shop of
the Philippine Motors, Inc. The car was restored to running condition after thereon which amounted to P1,651.38 and returned to the
owner who assigned his right to collect the aforesaid amount to the Firemen's Insurance Company and the Commercial Casualty
Insurance Company.
On 6 December 1947 the insures and the owner of the car brought an action in the Court of First Instance of Manila against the Shell
Company of the Philippines, Ltd. and Porfirio de la Fuente to recover from them, jointly and severally, the sum of P1,651.38, interest
thereon at the legal rate from the filing of the complaint until fully paid, the costs. After trial the Court dismissed the complaint. The
plaintiffs appealed. The Court of Appeals reversed the judgment and sentenced the defendant to pay the amount sought to be
recovered, legal interest and costs, as stated at the beginning of this opinion.

In arriving at the conclusion that on 3 September 1947 when the car was brought to the station for servicing Profirio de la Fuente, the
operator of the gasoline and service station, was an agent of the Shell Company of the Philippines, Ltd., the Court of Appeals found that

. . . De la Fuente owned his position to the Shell Company which could remove him terminate his services at any time from the
said Company, and he undertook to sell the Shell Company's products exculusively at the said Station. For this purpose, De la
Fuente was placed in possession of the gasoline and service station under consideration, and was provided with all the
equipments needed to operate it, by the said Company, such as the tools and articles listed on Exhibit 2 which the hydraulic
lifter (hoist) and accessories, from which Sison's automobile fell on the date in question (Exhibit 1 and 2). These equipments
were delivered to De la Fuente on a so-called loan basis. The Shell Company took charge of its care and maintenance and
rendered to the public or its customers at that station for the proper functioning of the equipment. Witness Antonio Tiongson,
who was sales superintendent of the Shell Company, and witness Augusto Sawyer, foreman of the same Company,
supervised the operators and conducted periodic inspection of the Company's gasoline and service station, the service station
in question inclusive. Explaining his duties and responsibilities and the reason for the loan, Tiongson said: "mainly of the
supervision of sales or (of) our dealers and rountinary inspection of the equipment loaned by the Company" (t.s.n., 107); "we
merely inquire about how the equipments are, whether they have complaints, and whether if said equipments are in proper
order . . .", (t.s.n., 110); station equipments are "loaned for the exclusive use of the dealer on condition that all supplies to be
sold by said dealer should be exclusively Shell, so as a concession we loan equipments for their use . . .," "for the proper
functioning of the equipments, we answer and see to it that the equipments are in good running order usable condition . . .,"
"with respect to the public." (t.s.n., 111-112). De la Fuente, as operator, was given special prices by the Company for the
gasoline products sold therein. Exhibit 1 Shell, which was a receipt by Antonio Tiongson and signed by the De la Fuente,
acknowledging the delivery of equipments of the gasoline and service station in question was subsequently replaced by
Exhibit 2 Shell, an official from of the inventory of the equipment which De la Fuente signed above the words: "Agent's
signature" And the service station in question had been marked "SHELL", and all advertisements therein bore the same sign. .
..

. . . De la Fuente was the operator of the station "by grace" of the Defendant Company which could and did remove him as it
pleased; that all the equipments needed to operate the station was owned by the Defendant Company which took charge of
their proper care and maintenance, despite the fact that they were loaned to him; that the Defendant company did not leave
the fixing of price for gasoline to De la Fuente; on the other hand, the Defendant company had complete control thereof; and
that Tiongson, the sales representative of the Defendant Company, had supervision over De la Fuente in the operation of the
station, and in the sale of Defendant Company's products therein. . . .

Taking into consideration the fact that the operator owed his position to the company and the latter could remove him or terminate his
services at will; that the service station belonged to the company and bore its tradename and the operator sold only the products of the
company; that the equipment used by the operator belonged to the company and were just loaned to the operator and the company
took charge of their repair and maintenance; that an employee of the company supervised the operator and conducted periodic
inspection of the company's gasoline and service station; that the price of the products sold by the operator was fixed by the company
and not by the operator; and that the receipt signed by the operator indicated that he was a mere agent, the finding of the Court of
Appeals that the operator was an agent of the company and not an independent contractor should not be disturbed.

To determine the nature of a contract courts do not have or are not bound to rely upon the name or title given it by the contracting
parties, should there be a controversy as to what they really had intended to enter into, but the way the contracting parties do or
perform their respective obligation stipulated or agreed upon may be shown and inquired into, and should such performance conflict
with the name or title given the contract by the parties, the former must prevail over the latter.

It was admitted by the operator of the gasoline and service station that "the car was carefully and centrally placed on the platform of the
lifter . . ." and the Court of Appeals found that

. . . the fall of Appellant Sison's car from the hydraulic lift and the damage caused therefor, were the result of the jerking and
swaying of the lift when the valve was released, and that the jerking was due to some accident and unforeseen shortcoming of
the mechanism itself, which caused its faulty or defective operation or functioning,

. . . the servicing job on Appellant Sison's automobile was accepted by De la Fuente in the normal and ordinary conduct of his
business as operator of his co-appellee's service station, and that the jerking and swaying of the hydraulic lift which caused
the fall of the subject car were due to its defective condition, resulting in its faulty operation. . . .

As the act of the agent or his employees acting within the scope of his authority is the act of the principal, the breach of the undertaking
by the agent is one for which the principal is answerable. Moreover, the company undertook to "answer and see to it that the
equipments are in good running order and usable condition;" and the Court of Appeals 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 "the lifter once
or twice and after observing that the operator was satisfactory, he (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.

The judgment under review is affirmed, with costs against the petitioner.

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

G.R. No. L-5486 August 17, 1910

JOSE DE LA PEA Y DE RAMON, plaintiff-appellant,

vs.
FEDERICO HIDALGO, defendant-appellant.

O'Brien and DeWitt, for plaintiff and appellant.

E. Gutierrez Repilde, for defendant and appellant.

TORRES, J.:

On May 23, 1906, Jose dela Pea y de Ramon, and Vicenta de Ramon, in her own behalf and as the legal guardian of her son Roberto
de la Pea, filed in the Court of First Instance of Manila a written complaint against of Federico Hidalgo, Antonio Hidalgo, and Francisco
Hidalgo, and, after the said complaint, already amended, had been answered by the defendants Antonio and Francisco Hidalgo, and
the other defendant, Federico Hidalgo, had moved for the dismissal of this complaint, the plaintiff, Jose de la Pea y de Ramon, as the
judicial administrator of the estate of the deceased Jose de la Pea y Gomiz, with the consent of the court filed a second amended
complaint prosecuting his action solely against Federico Hidalgo, who answered the same in writing on the 21st of may and at the same
time filed a counterclaim, which was also answered by the defendant.

On October 22, 1907, the case was brought up for hearing and oral testimony was adduced by both parties, the exhibits introduced
being attached to the record. In view of such testimony and of documentary evidence, the court, on March 24, 1908, rendered judgment
in favor of the plaintiff-administrator for the sum of P13,606.19 and legal interest from the date of the filing of the complaint on May 24,
1906, and the costs of the trial.

Both the plaintiff and the defendant filed notice of appeal from this judgment and also asked for the annulment of the same and for a
new trial, on the ground that the evidence did not justify the said judgment and that the latter was contrary to law. The defendant, on
April 1, 1908, presented a written motion for new hearing, alleging the discovery of new evidence favorable to him and which would
necessarily influence the decision such evidence or to introduce it at the trial of the case, notwithstanding the fact that he had used all
due diligence. His petition was accompanied by affidavits from Attorney Eduardo Gutierrez Repilde and Federico Hidalgo, and was
granted by order of the court of the 4th of April.

At this stage of the proceedings and on August 10, 1908, the plaintiff Pea y De Ramon filed a third amended complaint, with the
permission of the court, alleging, among other things, as a first cause of action, that during the period of time from November 12, 1887,
to January 7, 1904, when Federico Hidalgo had possession of and administered the following properties, to wit; one house and lot at
No. 48 Calle San Luis; another house and lot at No. 6 Calle Cortada; another house and lot at 56 Calle San Luis, and a fenced lot on
the same street, all of the district of Ermita, and another house and lot at No. 81 Calle Looban de Paco, belonging to his principal, Jose
de la Pea y Gomiz, according to the power of attorney executed in his favor and exhibited with the complaint under letter A, the
defendant, as such agent, collected the rents and income from the said properties, amounting to P50,244, which sum, collected in
partial amounts and on different dates, he should have deposited, in accordance with the verbal agreement between the deceased and
himself, the defendant, in the general treasury of the Spanish Government at an interest of 5 per cent per annum, which interest on
accrual was likewise to be deposited in order that it also might bear interest; that the defendant did not remit or pay to Jose de la Pea
y Gomiz, during the latter's lifetime, nor to nay representative of the said De la Pea y Gomiz, the sum aforestated nor any part thereof,
with the sole exception of P1,289.03, nor has he deposited the unpaid balance of the said sum in the treasury, according to agreement,
wherefore he has become liable to his principal and to the defendant-administrator for the said sum, together with its interest, which
amounts to P72,548.24 and that, whereas the defendant has not paid over all nor any part of the last mentioned sum, he is liable for the
same, as well as for the interest thereon at 6 per cent per annum from the time of the filing of the complaint, and for the costs of the
suit.

In the said amended complaint, the plaintiff alleged as a second cause of action: That on December 9, 1887, Gonzalo Tuason
deposited in the general treasury of the Spanish Government, to the credit of Pea y Gomiz, the sum of 6,360 pesos, at 5 per cent
interest per annum, and on December 20, 1888, the defendant, as the agent of Pea y Gomiz, withdrew the said amount with its
interest, that is, 6,751.60 pesos, and disposed of the same for his own use and benefit, without having paid all or any part of the said
sum to Pea y Gomiz, or to the plaintiff after the latter's death, notwithstanding the demands made upon him: wherefore the defendant
now owes the said sum of 6,751.60 pesos, with interest at the rate of 5 per cent per annum, compounded annually, from the 20th of
December, 1888, to the time of the filing of this complaint, and from the latter date at 6 per cent, in accordance with law.
The complaint recites as a third cause of action: that, on or about November 25, 1887, defendant's principal, Pea y Gomiz, on his
voyage to Spain, remitted from Singapore, one of the ports to call, to Father Ramon Caviedas, a Franciscan friar residing in this city,
the sum of 6,000 pesos with the request to deliver the same, which he did, to defendant, who, on receiving this money, appropriated it
to himself and converted it to his own use and benefit, since he only remitted to Pea y Gomiz in Sapin, by draft, 737.24 pesos, on
December 20, 1888; and, later, on December 21, 1889, he likewise remitted by another draft 860 pesos, without having returned or
paid the balance of the said sum, notwithstanding the demands made upon him so to do: wherefore the defendant owes to the plaintiff,
for the third cause of action, the sum of P4,402.76, with interest at the rate of 5 per cent per annum, compounded yearly, to the time of
the filing of the complaint and with interest at 6 per cent from that date, as provided by law.

As a fourth cause of action the plaintiff alleges that, on or about January 23, 1904, on his arrival from Spain and without having any
knowledge or information of the true condition of affairs relative to the property of the deceased Pea y Gomiz and its administration, he
delivered and paid to the defendant at his request the sum of P2,000, derived from the property of the deceased, which sum the
defendant has not returned notwithstanding the demands made upon him so to do.

Wherefore the plaintiff petitions the court to render judgment sentencing the defendant to pay, as first cause of action, the sum of
P72,548.24, with interest thereon at the rate of 6 per cent per annum from May 24, 1906, the date of the filing of the complaint, and the
costs; as a second cause of action, the sum of P15,774.19, with interest at the rate of 6 per cent per annum from the said date of the
filing of the complaint, and costs; as a third cause of action, P9,811.13, with interest from the aforesaid date, and costs; and, finally, as
a fourth cause of action, he prays that the defendant be sentenced to refund the sum of P2,000, with interest thereon at the rate of 6
per cent per annum from the 23d of January, 1904, and to pay the costs of trial.

The defendant, Federico Hidalgo, in his answer to the third amended complaint, sets forth: That he admits the second, third, and fourth
allegations contained in the first, second, third, and fourth causes of action, and denies generally and specifically each one and all of
the allegations contained in the complaint, with the exception of those expressly admitted in his answer; that, as a special defense
against the first cause of action, he, the defendant, alleges that on November 18, 1887, by virtue of the powers conferred upon him by
Pea y Gomiz, he took charge of the administration of the latter's property and administered the same until December 31, 1893, when
for reasons of health he ceased to discharge the duties of said position; that during the years 1889, 1890, 1891, and 1892, the
defendant continually by letter requested Pea y Gomiz, his principal, to appoint a person to substitute him in the administration of the
latter's property, inasmuch as the defendant, for reasons of health, was unable to continue in his trust; that, on March 22, 1894, the
defendant Federico Hidalgo, because of serious illness, was absolutely obliged to leave these Islands and embarked on the
steamer Isla de Luzon for Sapin, on which date the defendant notified his principal that, for the reason aforestated, he had renounced
his powers and turned over the administration of his property to Antonio Hidalgo, to whom he should transmit a power of attorney for
the fulfillment, in due form, of the trust that the defendant had been discharging since January 1, 1894, or else execute a power of
attorney in favor of such other person as he might deem proper;

That prior to the said date of March 22, the defendant came, rendered accounts to his principal, and on the date when he embarked for
Spain rendered the accounts pertaining to the years 1892 and 1893, which were those that yet remained to be forwarded, and
transmitted to him a general statement of accounts embracing the period from November 18, 1887, to December 31, 1893, with a
balance of 6,774.50 pesos in favor of Pea y Gomiz, which remained in the control of the acting administrator, Antonio Hidalgo; that
from the 22nd of March, 1894, when the defendant left these Islands, to the date of his answer to the said complaint, he has not again
intervened nor taken any part directly or indirectly in the administration of the property of Pea y Gomiz, the latter's administrator by
express authorization having been Antonio Hidalgo, from January 1, 1894, to October, 1902, who, on this latter date, delegated his
powers to Francisco Hidalgo, who in turn administered the said property until January 7, 1904; that the defendant, notwithstanding his
having rendered, in 1894, all his accounts to Jose Pea y Gomiz, again rendered to the plaintiff in 1904 those pertaining to the period
from 1887 to December 31, 1893, which accounts the plaintiff approved without any protest whatever and received to his entire
satisfaction the balance due and the vouchers and documents and documents relating to the property of the deceased Pea y Gomiz
and issued to the defendant the proper acquaintance therefor.

As a special defense to the second cause of action, the defendant alleged that, on December 9, 1886, Jose de la Pea y Gomiz himself
deposited in the caja general de depositos (General Deposit Bank) the sum of 6,000 pesos, at 6 per cent interest for the term of one
year, in two deposit receipts of 3,000 pesos each, which two deposit receipts, with the interest accrued thereon, amounted to 6,360
pesos, ad were collected by Gonzalo Tuason, through indorsement by Pea y Gomiz, on December 9, 1887, and on this same date
Tuason, in the name of Pea y Gomiz, again deposited the said sum of 6,360 pesos in the General Deposit Bank, at the same rate of
interest, for the term of one year and in two deposit receipts of 3,180 pesos each, registered under Nos. 1336 and 1337; that, on
December 20, 1888, father Ramon Caviedas, a Franciscan friar, delivered to the defendant, Federico Hidalgo, by order of De la Pea y
Gomiz, the said two deposit receipts with the request to collect the interest due thereon viz., 741.60 pesos an to remit it by draft on
London, drawn in favor of De la Pea y Gomiz, to deposit again the 6,000 pesos in the said General Deposit Bank, for one year, in a
single deposit, and in the latter's name, and to deliver to him, the said Father Caviedas, the corresponding deposit receipt and the draft
on London for their transmittal to Pea y Gomiz: all of which was performed by the defendant who acquired the said draft in favor of De
la Pea y Gomiz from the Chartered Bank of India, Australia and China, on December 20, 1888, and delivered the draft, together with
the receipt from the General Deposit Bank, to Father Caviedas, and on the same date, by letter, notified Pea y Gomiz of the
transactions executed; that on December 20, 1889, the said Father Hidalgo, by order of Pea y Gomiz, the aforesaid deposit receipt
from the General Deposit Bank, with the request to remit, in favor of his constituent, the interest thereon, amounting to 360 pesos,
besides 500 pesos of the capital, that is 860 pesos in all, and to again deposit the rest, 5,500 pesos, in the General Deposit Bank for
another year in Pea y Gomiz's own name, and to deliver to Father Caviedas the deposit receipt and the draft on London, for their
transmittal to his constituent; all of which the defendant did; he again deposited the rest of the capital, 5,500 pesos, in the General
Deposit Bank, in the name of Pea y Gomiz, for one year at 5 per cent interest, under registry number 3,320, and obtained from the
house of J. M. Tuason and Co. a draft on London for 860 pesos in favor of Pea y Gomiz, on December 21, 1889, and thereupon
delivered the said receipt and draft to Father Caviedas, of which acts, when performed, the defendant advised Pea y Gomiz by letter
of December 24, 1889' and that, on December 20, 1890, the said Father Ramon Caviedas delivered to the defendant, by order of Pea
y Gomiz, the said deposit receipt for 5,500 pesos with the request that he withdraw from the General Deposit Bank the capital and
accrued interest, which amounted all together to 5,775 pesos, and that he deliver this amount to Father Caviedas, which he did, in
order that it might be remitted to Pea y Gomiz.

The defendant denied each of the allegations contained in the third cause of action, and avers that they are all false and calumnious.

He likewise makes a general and specific denial of all the allegations of the fourth cause of action.

As a counterclaim the defendant alleges that Jose Pea y Gomiz owed and had not paid the defendant, up to the date of his death, the
sum of 4,000 pesos with interest at 6 per cent per annum, and 3,600 pesos, and on the plaintiff's being presented with the receipt
subscribed by his father, Pea y Gomiz, on the said date of January 15th, and evidencing his debt, plaintiff freely and voluntarily offered
to exchange for the said receipt another document executed by him, and transcribed in the complaint. Defendant further alleges that, up
to the date of his counterclaim, the plaintiff has not paid him the said sum, with the exception of 2,000 pesos. Wherefore the defendant
prays the court to render judgment absolving him from the complaint with the costs against the plaintiff, and to adjudge that the latter
shall pay to the defendant the sum 9,000 pesos, which he still owes defendant, with legal interest thereon from the date of the
counterclaim, to wit, May 21, 1907, and to grant such other and further relief as may be just and equitable.

On the 25th of September, 1908, and subsequent dates, the new trial was held; oral testimony was adduced by both parties, and the
documentary evidence was attached to the record of the proceedings, which show that the defendant objected and took exception to
the introduction of certain oral and documentary evidence produced by the plaintiff. On February 26, 1909, the court in deciding the
case found that the defendant, Federico Hidalgo, as administrator of the estate of the deceased Pea y Gomiz, actually owed by the
plaintiff, on the date of the filing of the complaint, the sum of P37,084.93; that the plaintiff was not entitled to recover any sum whatever
from the defendant for the alleged second, third, and fourth causes of action; that the plaintiff actually owed the defendant, on the filing
of the complaint, the sum of P10,155, which the defendant was entitled to deduct from the sum owing by him to the plaintiff. Judgment
was therefore entered against the defendant, Federico Hidalgo, for the payment of P26,629.93, with interest thereon at the rate of 6 per
cent per annum from May 23, 1906, and the costs of the trial.

Both parties filed written exceptions to this judgment and asked, separately, for its annulment and that a new trial be ordered, on the
grounds that the findings of fact contained in the judgment were not supported nor justified by the evidence produced, and because the
said judgment was contrary to law, the defendant stating in writing that his exception and motion for a new trial referred exclusively to
that part of the judgment that was condemnatory to him. By order of the 10th of April, 1909, the motions made by both parties were
denied, to which they excepted and announced their intention to file their respective bills of exceptions.

By written motions of the 24th of March, 1909, the plaintiff prayed for the execution of the said judgment, and the defendant being
informed thereof solicited a suspension of the issuance of the corresponding writ of execution until his motion for a new trial should be
decided or his bill of exceptions for the appeal be approved, binding himself to give such bond as the court might fix. The court,
therefore, by order of the 25th of the same month, granted the suspension asked for, conditioned upon the defendants giving a bond,
fixed at P34,000 by another order of the same date, to guarantee compliance with the judgment rendered should it be affirmed, or with
any other decision that might be rendered in the case by the Supreme Court. This bond was furnished by the defendant on the 26th of
the same month.

On April 16 and May 4, 1909, the defendant and the plaintiff filed their respective bills of exceptions, which were certified to and
approved by order of May 8th and forwarded to the clerk of this court.

Before proceeding to examine the disputed facts to make such legal findings as follows from a consideration of the same and of the
questions of law to which such facts give rise, and for the purpose of avoiding confusion and obtaining the greatest clearness and an
easy comprehension of this decision, it is indispensable to premise: First, that as before related, the original and first complaint filed by
the plaintiff was drawn against Federico Hidalgo, Antonio Hidalgo, and Francisco Hidalgo, the three persons who had successively
administered the property of Jose de la Pea y Gomiz, now deceased; but afterwards the action was directed solely against Federico
Hidalgo, to the exclusion of the other defendants, Antonio and Francisco Hidalgo, in the second and third amended complaints, the
latter of the date of August 10, 1908, after the issuance by the court of the order of April 4th of the same year, granting the new trial
solicited by the defendant on his being notified of the ruling of the 24th of the previous month of March; second, that the administration
of the property mentioned, from the time its owner left these Islands and returned to Spain, lasted from November 18, 1887, to January
7, 1904; and third that, the administration of the said Federico, Antonio, and Francisco Hidalgo, having lasted so long, it is necessary to
divide it into three periods in order to fix the time during which they respectively administered De la Pea's property: During the first
period, from November 18, 1887, to December 31, 1893, the property of the absent Jose de la Pea y Gomiz was administered by his
agent, Federico Hidalgo, under power of attorney; during the second period, from January 1, 1894, to September, 1902, Antonio
Hidalgo administered the said property, and during the third period, from October, 1902, to January 7, 1904, Francisco Hidalgo was its
administrator.

Before Jose de la Pea y Gomiz embarked for Spain, on November 12, 1887, he executed before a notary 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, in the order in which they were appointed, various properties he owned and possessed in Manila. The first agent, Federico
Hidalgo, took charge of the administration of the said property on the 18th of November, 1887.

After Federico Hidalgo had occupied the position of agent and administrator of De la Pea's property for several years, the former wrote
to the latter requesting him to designate a person who might substitute him in his said position in the event of his being obliged to
absent himself from these Islands, as one of those appointed in the said power of attorney had died and the others did not wish to take
charge of the administration of their principal's property. The defendant, Hidalgo, stated that his constituent, Pea y Gomiz, did not
even answer his letters, to approve or object to the former's accounts, and did not appoint or designate another person who might
substitute the defendant in his administration of his constituent's property. These statements were neither denied nor proven to be the
record show any evidence tending to disapprove them, while it does show, attached to the record and exhibited by the defendant
himself, several letters written by Hidalgo and addressed to Pea y Gomiz, which prove the said statements, and also a letter from the
priest Pedro Gomiz, a relative of the deceased Jose de la Pea y Gomiz, addressed to Federico Hidalgo, telling the latter that the writer
had seen among the papers of the deceased several letters from the agent, Federico Hidalgo, in which the latter requested the
designation of a substitute, because he had to leave this country for Spain, and also asked for the approval or disapproval of the
accounts of his administration which had been transmitted to his constituent, Pea y Gomiz.

For reasons of health and by order of his physician, Federico Hidalgo was obliged, on March 22, 1894, to embark for Spain, and, on
preparing for his departure, he rendered the accounts of his administration corresponding to the last quarters, up to December 31,
1893, not as yet transmitted, and forwarded them to his constituent with a general statement of all the partial balances, which amounted
to the sum total of 6,774.50 pesos, by letter of the date of March 22, 1894, addressed to his principal, Pea y Gomiz. In this letter the
defendant informed the latter of the writer's intended departure from this country and of his having provisionally turned over the
administration of the said property to his cousin, Antonio Hidalgo, upon whom the writer had conferred a general power of attorney, but
asking, in case that this was not sufficient, that Pea send to Antonio Hidalgo a new power of attorney.

This notifications is of the greatest importance in the decision of this case. The plaintiff avers that he found no such letter among his
father's papers after the latter's death, for which reason he did not have it in his possession, but on the introduction of a copy thereof by
the defendant at the trial, it was admitted without objection by the plaintiff (p. 81 of the record); wherefore, in spite of the denial of the
plaintiff and of his averment of his not having found that said original among his father's papers, justice demands that it be concluded
that this letter of the 22d of March, 1894, was sent to, and was received by Jose de la Pea y Gomiz, during his lifetime, for its
transmittal, with inclosure of the last partial accounts of Federico Hidalgo's administration and of the general resume of balances, being
affirmed by the defendant, the fact of the plaintiff's having found among his deceased father's paper's the said resume which he
exhibited at the trial, shows conclusively that it was received by the deceased, as well as the letter of transmittal of the 22nd of March,
1894, one of the several letters written by Hidalgo, which the said priest, Father Gomiz, affirms that he saw among the papers of the
deceased Pea, the dates of which ran from 1890 to 1894; and it is also shown by the record that the defendant Hidalgo positively
asserted that the said letter of March was the only one that he wrote to Pea during the year 1894; From all of which it is deduced that
the constituent, Pea y Gomiz, was informed of the departure of his agent from these Islands for reasons of health and because of the
physician's advice, of the latter's having turned over the administration of the property to Antonio Hidalgo, and of his agent's the
defendant's petition that he send a new power of attorney to the substitute.

The existence, amount the papers of the deceased, of the aforementioned statement of all accounts rendered, which comprise the
whole period of the administration of the property of the constituent by the defendant, Federico Hidalgo, from November 18, 1887, to
December 31, 1893 a statement transmitted with the last partial accounts which were a continuation of those already previously
received and the said letter of March 22, 1894, fully prove that Jose de la Pea y Gomiz also received the said letter, informed
himself of its contents, and had full knowledge that Antonio Hidalgo commenced to administer his property from January of that year.
They likewise prove that he did no see fit to execute a new power of attorney in the letter's favor, nor to appoint or designate a new
agent to take charge of the administration of his property that had been abandoned by the defendant, Federico Hidalgo.

From the procedure followed by the agent, Federico Hidalgo, it is logically inferred that he had definitely renounced his agency was duly
terminated, according to the provisions of article 1732 of the Civil Code, because, although in the said letter of March 22, 1894, the
word "renounce" was not employed in connection with the agency or power of attorney executed in his favor, 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 to take charge of the administration, renders accounts of its revenues up to a certain date, December 31, 1893,
and transmits to his principal a general statement 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 that a power of attorney in due form in due form be
executed and transmitted to another person who substituted him and took charge of the administration of the principal's property, it is
then reasonable and just to conclude that the said agent expressly and definitely renounced his agency, and it may not be alleged that
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 allegation would be in conflict with the nature of the agency.

This renouncement was confirmed by the subsequent procedure, as well as of the agent as of the principal, until the latter died, on
August 2, 1902, since the principal Pea did not disapprove the designation of Antonio Hidalgo, nor did he appoint another, nor send a
new power of attorney to the same, as he was requested to by the previous administrator who abandoned his charge; and the trial
record certainly contains no proof that the defendant, since he left these Islands in March, 1894, until January, 1904, when he returned
to this city, took any part whatever, directly or even indirectly, in the said administration of the principal's property, while Antonio Hidalgo
was the only person who was in charge of the aforementioned administration of De la Pea y Gomiz's property and the one who was to
represent the latter in his business affairs, with his tacit consent. From all of which it is perfectly concluded (unless here be proof to the
contrary, and none appears in the record), that Antonio Hidalgo acted in the matter of the administration of the property of Jose de la
Pea y Gomiz by virtue of an implied agency derived from the latter, in accordance with the provisions of article 1710 of the Civil Code.

The proof of the tacit consent of the principal, Jose de la Pea y Gomiz, the owner of the property administered a consent embracing
the essential element of a legitimate agency, article 1710 before cited consists in that Pea, knowing that on account of the
departure of Federico Hidalgo from the Philippines for reasons of health, Antonio Hidalgo took charge of the administration of his
property, for which Federico Hidalgo, his agent, who was giving up his trust, requested him to send a new power of attorney in favor of
the said Antonio Hidalgo, nevertheless he, Jose de la Pea y Gomiz, saw fit not to execute nor transmit any power of attorney whatever
to the new administrator of his property and remained silent for nearly nine years; and, in that the said principal, being able to prohibit
the party designated, Antonio Hidalgo, from continuing in the exercise of his position as administrator, and being able to appoint
another agent, did neither the one nor the other. Wherefore, in permitting Antonio Hidalgo to administer his property in this city during
such a number of years, it is inferred, from the procedure and silence of the owner thereof, that he consented to have Antonio Hidalgo
administer his property, and in fact created in his favor an implied agency, as the true and legitimate administrator.

Antonio Hidalgo administered the aforementioned property of De la Pea y Gomiz, not in the character of business manager, but as
agent by virtue 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 previous agent for whom
it was an impossibility to continue in the discharge of his duties.

It is improper to compare the case where the owner of the property is ignorant of the officious management of the third party, with the
case where he had perfect knowledge of the management and administration of the same, which administration and management, far
from being opposed by him was indeed consented to by him for nearly nine years, as was done by Pea y Gomiz. The administration
and management, by virtue of an implied agency, is essentially distinguished from that management of another's business, in this
respect, that while the former originated from a contract, the latter is derived only from a qausi-contract.

The implied agency is founded on the lack of contradiction or opposition, which constitutes simultaneous agreement on the part of the
presumed principal to the execution of the contract, while in the management of another's business there is no simultaneous consent,
either express or implied, but a fiction or presumption of consent because of the benefit received.

The distinction between an agency and a business management has been established by the jurisprudence of the supreme court (of
Spain) in its noteworthy decision of the 7th of July, 1881, setting up the following doctrine:

That laws 28 and 32, title 12 Partida 3, refer to the expenses incurred in things not one's own and without power of attorney
from those to whom they belong, and therefore the said laws are not applicable to this suit where the petition of the plaintiff is
founded on the verbal request made to him by the defendant or the latter's employees to do some hauling, and where,
consequently, questions that arise from a contract that produces reciprocal rights and duties can not be governed by the said
laws.

It being absolutely necessary for Federico Hidalgo to leave this city and abandon the administration of the property of his principal,
Pea y Gomiz, for reasons of health, he made delivery of the property and of his administration to Antonio Hidalgo and gave notice of
what he had done to his constituent, Pea, in order that the latter might send a new power of attorney to Antonio Hidalgo, the person
charged with the administration of the property. Pea y Gomiz did not send the power of attorney requested, did not oppose or prohibit
Antonio Hidalgo's containing to administer his property, and consented to his doing so for nearly nine years. Consequently the second
administrator must be considered as a legitimate agent of the said principal, as a result of the tacit agreement on the latter's part, and
the previous agent, who necessarily abandoned and ceased to hold his position, as completely free and clear from the consequences
and results of the second administration, continued by a third party and accepted by his principal; for it is a fact, undenied nor even
doubted, that the said first administrator had to abandon this country and the administration of Pea's property for reasons of health,
which made it possible for him to continue in the discharge of his duties without serious detriment to himself, his conduct being in
accordance with the provisions of article 1736 of the Civil Code.

In the power of attorney executed by Pea y Gomiz in this city on November 12, 1887, in favor of, among others, Federico Hidalgo, no
authority was conferred upon the latter by his principal to substitute the power or agency in favor of another person; wherefore the
agent could not, by virtue of the said power of attorney, appoint any person to substitute or relieve him in the administration of the
principal's property, for the lack of a clause of substitution in the said instrument authorizing him so to do.

The designation of Antonio Hidalgo was not made as a result of substitution of the power of attorney executed by Pea in favor of the
defendant, but in order that the principal's property should not be abandoned, inasmuch as, for the purposes of the discharge of the
duties of administrator of the same, the agent, who was about to absent himself from this city, requested his principal to send to the
party, provisionally designated by the former, a new power of attorney, for the reason that the general power of attorney which Federico
Hidalgo had left, executed in favor of his cousin Antonio Hidalgo, was so executed in his own name and for his own affairs, and not in
the name of Pea y Gomiz, as the latter had not authorized him to take such action.

If the owner of the property provisionally administered at the time by Antonio Hidalgo, saw fit to keep silent, even after having received
the aforesaid letter of March 22, 1894, and during the lapse of nearly ten years, without counter commanding or disapproving the
designation of the person who took charge of the administration of his property, knowing perfectly well that his previous agent was
obliged, by sickness and medical advice to leave this city where such property was situated, he is not entitled afterwards to hold
amenable the agent who had to abandon this country for good and valid reasons, inasmuch as the latter immediately reported t o his
principal the action taken by himself and informed him of the person who had taken charge of the administration of his property, which
otherwise would have been left abandoned. From the time of that notification the agent who, for legitimate 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 consent,
even only a tacit one, of the principal, inasmuch as the said owner of the property could have objected to could have prohibited the
continuance in the administration thereof, of the party designated by his agent, and could have opportunely 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 previous agent, who complied with his duty and did all that
he could and ought to have done, in accordance with the law.

The defendant Federico Hidalgo, having ceased in his administration of the property belonging to Pea y Gomiz, on account of physical
impossibility, which cessation he duly reported to his principal and also informed him of the person who relieved him as such
administrator, and for whom he had requested a new power of attorney, is only liable for the results and consequences of his
administration during the period when the said property was in his charge, and therefore his liability can not extend beyond the period of
his management, as his agency terminated by the tacit or implied approval of his principal, judging from the latter's silence in neither
objecting to nor in anywise prohibiting Antonio Hidalgo's continuing to administer his property, notwithstanding the lapse of the many
years since he learned by letter of the action taken by his previous agent, Federico Hidalgo.

Moreover, this latter, in announcing the termination of his agency, transmitted the last partial accounts that he had not rendered, up to
December 31, 1893, together with a general statement of all the resulting balances covering the period of his administration, and Jose
de la Pea y Gomiz remained silent and offered no objection whatever to the said accounts and did not manifest his disapproval of the
same nor of the general statement, which he must have received in April or may, 1894, to the time he died, in August, 1902; and when
his son, the plaintiff, came to this city in company with the defendant, Federico Hidalgo, they traveled together from Spain and arrived in
Manila during one of the early days of January, 1904, the former, for the purpose of taking charge of the estate left by his father, and
after the plaintiff had examined the accounts kept by Federico Hidalgo, his deceased father's first agent, he approved them and
therefore issued in favor of the defendant the document, Exhibit 5, found on page 936 of the second record of trial, dated January 15,
1904, in which Jose de la Pea y de Ramon acknowledged having received from his deceased father's old agent the accounts,
balances, and vouchers to his entire satisfaction, and gave an acquittance in full settlement of the administration that had been
commended to the defendant Hidalgo.

This document, written in the handwriting of the plaintiff, Pea y de Ramon, appears to be executed in a form considered to be
sufficient by its author, and, notwithstanding the allegations of the said plaintiff, the record contains no proof of any kind of Federico
Hidalgo's having obtained it by coercion, intimidation, deceit, or fraud; neither is its shown to have been duly impugned as false,
criminally or civilly, for the statements therein made by the plaintiff are too explicit and definite to allow, without proof of some vice or
defect leading to nullification, of its being considered as void and without value or legal effect.

With respect to the responsibility contracted by the defendant, as regards the payment of the balance shown by the accounts rendered
by him, it is not enough that the agent should have satisfactorily rendered the accounts pertaining to his trust, but it is also
indispensable that it be proved that he had paid to his principal, or to the owner of the property administered, the balance resulting from
his accounts. This balance, which was allowed in the judgment appealed from, notwithstanding the allegations of the plaintiff, which
were not deemed as established, amounts to P6,774.50, according to the proofs adduced at the trial. It was the imperative duty of the
administrator, Federico Hidalgo, to transmit this sum to his principal, Jose de la Pea y Gomiz, as the final balance of the accounts of
his administration, struck on December 31, 1893, and by his failure so to do and delivery of the said sum to his successor, Antonio
Hidalgo, he acted improperly, and must pay the same to the plaintiff.

Antonio Hidalgo took charge of the administration of Pea y Gomiz's property from January, 1894, to September, 1902, that is, during
the second period of administration of the several properties that belonged to the deceased Pea.

Although the plaintiff, in his original complaint, had included the said Antonio Hidalgo as one of the responsible defendants, yet he
afterwards excluded him, as well from the second as from the third amended complaint, and consequently the liability that might attach
to Antonio Hidalgo was not discussed, nor was it considered in the judgment of the lower court; neither can it be in the decision, for the
reason that the said Antonio Hidalgo is not a party to this suit. However, the said liability of Antonio Hidalgo is imputed to Federico
Hidalgo, and so it is that, in the complain t, the claim is made solely against Federico Hidalgo, in order that the latter might be adjudged
to pay the amounts which constitute the balance owing from him who might be responsible, Antonio Hidalgo, during the period of this
latter's administration.

Federico Hidalgo, in our opinion, could not and can not be responsible for the administration of the property that belonged to the
deceased Pea y Gomiz, which was administered by Antonio Hidalgo during eight years and some months, that is, during the second
period, because of the sole fact of his having turned over to the latter the administration of the said property on his departure from this
city of Spain. Neither law nor reason obliged Federico Hidalgo to remain in this country at the cost of his health and perhaps of his life,
even though he were the administrator of certain property belonged to Pea y Gomiz, since the care of the property and interests of
another does not require sacrifice on the part of the agent of his own life and interests. Federico Hidalgo was obliged to deliver the said
property belonging to Pea y Gomiz to Antonio Hidalgo for good and valid reasons, and reasons, and in proceeding in the manner
aforesaid he complied with the duty required of him by law and justice and acted as a diligent agent. If the principal, Jose de la Pea
Gomiz, the owner of the property mentioned, although informed opportunely of what had occurred saw fit to keep silent, not to object to
the arrangements made, not to send the power of attorney requested by Federico Hidalgo in favor of Antonio Hidalgo, and took no
action nor made any inquiry whatever to ascertain how his property was being administered by the second agent, although to the time
of his death more than eight years had elapsed, the previous agent, who ceased in the discharge of his duties, can in nowise be held
liable for the consequences of such abandonment, nor for the results of the administration of property by Antonio Hidalgo, for the
reason that, since his departure from this country, he has not had the least intervention nor even indirect participation in the
aforementioned administration of the said Antonio Hidalgo who, under the law, was the agent or administrator by virtue of an implied
agency, which is equivalent in its results to an express agency, executed by the owner of the property. Consequently, Federico Hidalgo
is not required to render accounts of the administration corresponding to the second period mentioned, nor to pay the balance that such
accounts may show to be owing.

At the first trial of this cause, Federico Hidalgo, testified under oath that his principal, Jose Pea y Gomiz, did not agree to the
appointment of Antonio Hidalgo, chosen by the witness, not to such appointee's taking charge of the administration of his property.
Aside from the fact that the trial record does not show honor on what date Pea expressed such disagreement it is certain that, in view
of the theory of defense maintained by the defendant Hidalgo could have said, by means of a no, that his principal did not agree to the
appointment of the said Antonio Hidalgo, and the intercalation of the word no in the statement quoted is more inexplicable in that the
attorney for the adverse party moved that the said answer be stricken from the record, as he objected to its appearing therein.

Were it true that the principal Jose de la Pea by Gomiz, had neither agreed to the designation of Antonio Hidalgo, nor to the latter's
administering his property, he would immediately have appointed another agent and administrator, since he knew that Federico Hidalgo
had left the place where his property was situated and that it would be abandoned, had he not wished that Antonio Hidalgo should
continue to administer it. If the latter continued in the administration of the property for so long a time, nearly nine years, it was because
the said Pea agreed and gave his consent to the acts performed by his outgoing agent, and for this reason the answer given by
Federico Hidalgo mistakenly, or not, that his principal, Pea, did not agree to the appointment of Antonio Hidalgo, is immaterial and
does not affect the terms of this decision.

If the defendant is not responsible for the results of the administration of said property administered by Antonio Hidalgo during the
second period before referred to, neither is he responsible for that performed during the third period by Francisco Hidalgo, inasmuch as
the latter was not even chosen by the defendant who, on October 1, 1902, when Francisco Hidalgo took charge of Peas' property that
had been turned over to him by Antonio Hidalgo, was in Spain and had no knowledge of nor intervention in such delivery; wherefore the
defendant can in no manner be obliged to pay to the plaintiff any sum that may be found owing by Francisco Hidalgo.

The trial judge taking into consideration that, by the evidence adduced at the hearing, it was proved that Francisco Hidalgo rendered
accounts to the plaintiff of the administration of the property in question during the said third period, that is, for one year, three months,
and someday, and that he delivered to the plaintiff the balance of 1,280.03 pesos, for which the latter issued to the said third
administrator the document Exhibit 2, written in his own handwriting under date of January 7, 1904, and the signature which, affixed by
himself, he admitted in his testimony was authentic, on its being exhibited to him found that the plaintiff, Pea y de Ramon, was not
entitled to recover any sum whatever for the rents pertaining to the administration of his property by the said Francisco Hidalgo.

All the reasons hereinbefore given relate to the first cause of action, whereby claim is made against Federico Hidalgo for the payment
of the sum of P72,548.24 and interest at the rate of 6 per cent per centum, and they have decided some of the errors assigned by the
appellants in their briefs to the judgment appealed from.

Two amounts are have claimed which have one and the same origin, yet are based on two causes of action, the second and the third
alleged by the plaintiff; and although the latter, afterwards convinced by the truth and of the impropriety of his claim, had to waive the
said third cause of action during the second hearing of this cause (pp. 57 and 42 of the record of the evidence), the trial judge, on the
grounds that the said second and third causes of action refer to the same certificates of deposit of the treasury of the Spanish
Government, found, in the judgment appealed from, that the plaintiff was not entitled to recover anything for the aforesaid second and
third causes of action a finding that is proper and just, although qualified as erroneous by the plaintiff in his brief.

It appears, from the evidence taken in this cause, that Jose de la Pea y Gomiz, according to the certificates issued by the chief of the
division his lifetime, after having in 1882 withdrawn from the General Deposit Bank of the Spanish Government a deposit of 17,000
pesos and its interest deposit any sum therein until December 9, 1886, when he deposited two amounts of 3,000 pesos each, that is,
6,000 pesos in all, the two deposit receipts for the same being afterwards endorsed in favor of Gonzalo Tuason. The latter, on
December 9, 1887, withdrew the deposit and took out the said two amounts, together with the interest due thereon, and on the same
date redeposited them in the sum of 6,360 pesos at 5 per cent per annum in the name of Jose de la Pea y Gomiz. On the 20th of
December of the following year, 1888, the defendant Hidalgo received from his principal, Pea y Gomiz, through Father Ramon
Caviedas, the two said letters of credit, in order that he might withdraw from the General Deposit Bank the two amounts deposited,
together with the interest due thereon, amounting to 741 pesos, and with this interest purchase a draft on London in favor of its owner
and then redeposit the original capital of 6,000 pesos. This, the defendant Hidalgo did and then delivered the draft and the deposit
receipt to Father Caviedas, of all of which transactions he informed his principal by letter of the same date, transcribed on page 947 of
the second trial record.

In the following year, 1889, Father Ramon Caviedas again delivered to the defendant Hidalgo the aforementioned deposit receipt with
the request to withdraw from the General Deposit bank the sum deposited and to purchase a draft of 860 pesos on London in favor of
their owner, Jose de la Pea y Gomiz, and, after deducting the cost of the said draft from the capital and interest withdrawn from
deposit, amounting to 6,360 pesos, to redeposit the remainder, 5,500 pesos, in the bank mentioned, in accordance with the instructions
from Pea y Gomiz: All of which was done by the defendant Hidalgo, who delivered to Father Caviedas the receipt for the new deposit
of 5,500 pesos as accredited by the reply-letter, transcribed on page 169 of the record, and by the letter addressed by Hidalgo to Pea,
of the date of December 20 of that year and shown as an original exhibit by the plaintiff himself on page 29 of the record of the
evidence.

Lastly, in December, 1890, Father Caviedas, aforementioned, delivered to the defendant Hidalgo the said deposit receipt for 5,500
pesos in order that he might withdraw this amount from deposit and deliver it with the interest thereon to the former for the purpose of
remitting it by draft to Jose de la Pea; this Hidalgo did, according to a reply-letter from Father Caviedas, the original of which appears
on page 979 of the file of exhibits and is copied on page 171 of the trial record, and is apparently confirmed by the latter in his sworn
testimony.

So that the two amounts of 3,000 pesos each, expressed in two deposit receipts received from De la Pea y Gomiz by Father Ramon
Caviedas and afterwards delivered to Francisco Hidalgo for the successive operations of remittance and redeposit in the bank before
mentioned, are the same and only ones that were on deposit in the said bank in the name of their owner, Pea y Gomiz. The defendant
Hidalgo made two remittances by drafts of London, one in 1888 for 741.60 pesos, through a draft purchased from the Chartered Bank,
and another in 1889 for 860 pesos, through a draft purchased from the house of Tuason & Co., and both in favor of Pea y Gomiz, who
received through Father Ramon Caviedas the remainder, 5,500 pesos, of the sums deposited. For these reasons, the trial judge was of
the opinion that the certificates of deposit sent by Pea y Gomiz to Father Ramon Caviedas and those received from the latter by the
defendant Hidalgo were identicals, as were likewise the total amounts expressed by the said receipts or certificates of deposit, from the
sum of which were deducted the amounts remitted to Pea y Gomiz and the remainder deposited after each anual operation until,
finally, the sum of 5,500 pesos was remitted to its owner, Pea y Gomiz, according to his instructions, through the said Father
Caviedas. The lower court, in concluding its judgment, found that the plaintiff was entitled to recover any sum whatever for the said
second and third causes of action, notwithstanding that, as hereinbefore stated, the said plaintiff withdrew the third cause of action. This
finding of the court, with respect to the collection of the amounts of the aforementioned deposit receipts, is perfectly legal and in
accordance with justice, inasmuch as it is a sustained by abundant and conclusive documentary evidence, which proves in an
incontrovertible manner the unrighteousness of the claim made by the plaintiff in twice seeking payment, by means of the said second
and third causes of action, of the said sum which, after various operations of deposit and remittance during three years, was finally
returned with its interest to the possession of its owner, Pea y Gomiz.

From the trial had in this case, it also appears conclusively proved that Jose de la Pea y Gomiz owed, during his lifetime, to Federico
Hidalgo, 7,600 pesos, 4,000 pesos of which were to bear interest at the rate of 6 per cent per annum, and the remainder without any
interest, and that, notwithstanding the lapse of the period of three years, from November, 1887, within which he bound himself to repay
the amount borrowed, and in spite of his creditor's demand of payment, made by registered letter, the original copy of which is on page
38 of the file of exhibits and a transcription thereof on page 930 of the first and second record of the evidence, the debt was not paid up
to the time of the debtor's death. For such reasons, the trial court, in the judgment appealed from, found that there was a
preponderance of evidence to prove that this loan had been made and that the plaintiff actually owed the defendant the sum loaned, as
well as the interest thereon, after deducting therefrom the 2,000 pesos which the defendant received from the plaintiff on account of the
credit, and that the former was entitled to recover.

It appears from the pleadings and evidence at the trial that in January, 1904, on the arrival in this city of Federico de la Pea de Ramon,
and on the occasion of the latter's proceeding to examine the accounts previously rendered, up to December 31, 1893, by the
defendant Hidalgo to the plaintiff's father, then deceased, Hidalgo made demand upon the plaintiff, Pea y de Ramon, for the payment
of the said debt of his father, although the creditor Hidalgo acceded to the requests of the plaintiff to grant the latter an extension of time
until he should be able to sell one of the properties of the estate. It was at that time, according to the defendant, that the plaintiff Pea
took up the instrument of indebtedness, executed by his deceased father during his lifetime, and delivered to the defendant in exchange
therefor the document of the date of January 15, 1904, found on page 924 of the second record of evidence, whereby the plaintiff, Jose
de la Pea, bound himself to pay his father's debt of 11,000 pesos, owing to the defendant Hidalgo, out of the proceeds of the sale of
some of the properties specified in the said document, which was written and signed by the plaintiff in his own handwriting.

The plaintiff not only executed the said document acknowledging his father's debt and binding himself to settle it, but also, several days
after the sale of a lot belonging to the estate, paid to the creditor on account the sum of 2,000 pesos, according to the receipt issued by
the latter and exhibited on page 108 of the first record of evidence.

The said document, expressive of the obligation contracted by the plaintiff Pea y de Ramon that he would pay to the defendant the
debt of plaintiff's deceased father, amounting to 11,000 pesos, out of the proceeds from some of the properties of the estate, has not
been denied nor impugned as false; and not withstanding the averment made by the plaintiff that when he signed he lacked information
and knowledge of the true condition of the affairs concerning Hidalgo's connection with the property that be absolutely no proof
whatever is shown in the trial record of the creditor's having obtained the said document through deceit or fraud circumstances in a
certain manner incompatible with the explicit statements contained therein. For these reasons, the trial court, weighing the whole of the
evidence furnished by the record, found that the loan of the said 7,600 pesos was truly and positively made, and that the plaintiff must
pay the same to the defendant, with the interest thereon, and that he was not entitled to recover the 2,000 pesos, as an undue payment
made by him to the defendant creditor. For the foregoing reason the others errors assigned by the plaintiff to the judgment appealed
from are dismissed.

With respect to the obligation to pay the interest due on the amounts concerned in this decision, it must be borne in mind that, as
provided by article 1755 of the Civil Code, interest shall only be owed when it has been expressly stipulated, and that should the debtor,
who is obliged to pay a certain sum of money, be in default and fail to fulfill the agreement made with his creditor, he must pay, as
indemnity for losses and damages, the interest agreed upon, and should there be no express stipulation, the legal interest (art. 1108 of
the Civil Code); but, in order that the debtor may be considered to be in default and obliged to pay the indemnity, it is required, as a
general rule, that his creditor shall demand of such debtor the fulfillment of his obligation, judicially or extrajudicially, except in such
cases as are limitedly specified in article 1100 of the Civil Code.

It was not expressly stipulated that either the balance of the last account rendered by the defendant Federico Hidalgo in 1893, or the
sum which the plaintiff bound himself to pay to the defendant, in the instrument of the 15th of January, 1904, should bear interest; nor is
there proof that a judicial or extrajudicial demand was made, on the part of the respective creditors concerned, until the date of
complaint, on the part of the plaintiff, and that of the counterclaim, on the part of the defendant. Therefore no legal interest is owing for
the time prior to the respectives dates of the complaint and counterclaim.

By virtue, then, of the reasons herein before set forth, it is proper, in our opinion, to adjudge, as we do hereby adjudge, that the
defendant, Federico Hidalgo, shall pay to the plaintiff, Jose de la Pea y de Ramon, as administrator of the estate of the deceased Jose
de la Pea y Gomiz, the sum of P6,774.50, and the legal interest thereon at the rate of 6 per cent per annum from 23rd of May, 1906,
the date of the filing of the original complaint in this case; that we should and hereby do declare that the said defendant Federico
Hidalgo, is not bound to gibe nor render accounts of the administration of the property of the said deceased Jose de la Pea y Gomiz
administered, respectively, by Antonio Hidalgo, from January, 1894, to September 30, 1902, and by Francisco Hidalgo, from October 1,
1902, to January 7, 1904, and therefore the defendant, Federico Hidalgo, not being responsible for the results of the administration of
the said property administered by the said Antonio and Francisco Hidalgo, we do absolve the said defendant from the complaint filed by
the plaintiff, in so far as it concerns the accounts pertaining to the aforesaid two periods of administration and relates to the payment of
the balances resulting from such accounts; and that we should and hereby do absolve the defendant Hidalgo from the complaint with
respect to the demand for the payment of the sums of P15,774.19 and P2,000, with their respective interests, on account of the second
and the fourth cause of action, respectively, and because the plaintiff renounced and withdrew his complaint, with respect to the third
cause of action; and that we should and do likewise adjudge, that the plaintiff, Jose de la Pea y de Ramon, shall pay to Federico
Hidalgo, by reason of the counterclaim, the sum of P9,000 with legal interest thereon at the rate of 6 per cent per annum from 21st of
may, 1907, the date of the counterclaim.

The judgment appealed from, together with that part thereof relative to the statement it contains concerning the equivalence between
the Philippine peso and the Mexican peso, is affirmed in so far as it is in agreement with the findings of this decision, and the said
judgment is reversed in so far as it is not in accordance herewith. No special finding is made as to costs assessed in either instance,
and to the plaintiff is reserved any right that he may be entitled to enforce against Antonio Hidalgo.

Arellano, C.J., Johnson, Moreland and Trent, JJ., concur.

G.R. No. L-40242 December 15, 1982

DOMINGA CONDE, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, MANILA PACIENTE CORDERO, together with his wife, NICETAS ALTERA, RAMON
CONDE, together with his wife, CATALINA T. CONDE, respondents.

MELENCIO-HERRERA, J.:

An appeal by certiorari from the Decision of respondent Court of Appeals 1 (CA-G.R. No. 48133- R) affirming the judgment of the Court
of First Instance of Leyte, Branch IX, Tacloban City (Civil Case No. B-110), which dismissed petitioner's Complaint for Quieting of Title
and ordered her to vacate the property in dispute and deliver its possession to private respondents Ramon Conde and Catalina Conde.

The established facts, as found by the Court of Appeals, show that on 7 April 1938. Margarita Conde, Bernardo Conde and the
petitioner Dominga Conde, as heirs of Santiago Conde, sold with right of repurchase, within ten (10) years from said date, a parcel of
agricultural land located in Maghubas Burauen Leyte, (Lot 840), with an approximate area of one (1) hectare, to Casimira Pasagui,
married to Pio Altera (hereinafter referred to as the Alteras), for P165.00. The "Pacto de Retro Sale" further provided:

... (4) if at the end of 10 years the said land is not repurchased, a new agreement shall be made between the parties
and in no case title and ownership shall be vested in the hand of the party of the SECOND PART (the Alteras).

xxx xxx xxx (Exhibit "B")

On 17 April 1941, the Cadastral Court of Leyte adjudicated Lot No. 840 to the Alteras "subject to the right of redemption by Dominga
Conde, within ten (10) years counting from April 7, 1983, after returning the amount of P165.00 and the amounts paid by the spouses in
concept of land tax ... " (Exhibit "1"). Original Certificate of Title No. N-534 in the name of the spouses Pio Altera and Casimira Pasagui,
subject to said right of repurchase, was transcribed in the "Registration Book" of the Registry of Deeds of Leyte on 14 November 1956
(Exhibit "2").
On 28 November 1945, private respondent Paciente Cordero, son-in-law of the Alteras, signed a document in the Visayan dialect, the
English translation of which reads:

MEMORANDUM OF REPURCHASE OVER A PARCEL OF LAND SOLD WITH REPURCHASE WHICH

DOCUMENT GOT LOST

WE, PIO ALTERA and PACIENTE CORDERO, both of legal age, and residents of Burauen Leyte, Philippines, after
having been duly sworn to in accordance with law free from threats and intimidation, do hereby depose and say:

1. That I, PIO ALTERA bought with the right of repurchase two parcels of land from DOMINGA
CONDE, BERNARDO CONDE AND MARGARITA CONDE, all brother and sisters.

2. That these two parcels of land were all inherited by the three.

3. That the document of SALE WITH THE RIGHT OF REPURCHASE got lost in spite of the diligent
efforts to locate the same which was lost during the war.

4. That these two parcels of land which was the subject matter of a Deed of Sale with the Right of
Repurchase consists only of one document which was lost.

5. Because it is about time to repurchase the land, I have allowed the representative of Dominga
Conde, Bernardo Conde and Margarita Conde in the name of EUSEBIO AMARILLE to repurchase
the same.

6. Now, this very day November 28, 1945, 1 or We have received together with Paciente Cordero
who is my son-in-law the amount of ONE HUNDRED SIXTY-FIVE PESOS (P165. 00) Philippine
Currency of legal tender which was the consideration in that sale with the right of repurchase with
respect to the two parcels of land.

That we further covenant together with Paciente Cordero who is my son-in-law that from this day the said Dominga
Conde, Bernardo Conde and Margarita Conde will again take possession of the aforementioned parcel of land
because they repurchased the same from me. If and when their possession over the said parcel of land be disturbed
by other persons, I and Paciente Cordero who is my son-in-law will defend in behalf of the herein brother and sisters
mentioned above, because the same was already repurchased by them.

IN WITNESS WHEREOF, I or We have hereunto affixed our thumbmark or signature to our respective names below
this document or memorandum this 28th day of November 1945 at Burauen Leyte, Philippines, in the presence of two
witnesses.

PIO ALTERA (Sgd.) PACIENTE CORDERO

WITNESSES:

1. (SGD.) TEODORO C. AGUILLON

To be noted is the fact that neither of the vendees-a-retro, Pio Altera nor Casimira Pasagui, was a signatory to the deed. Petitioner
maintains that because Pio Altera was very ill at the time, Paciente Cordero executed the deed of resale for and on behalf of his father-
in-law. Petitioner further states that she redeemed the property with her own money as her co-heirs were bereft of funds for the
purpose.

The pacto de retro document was eventually found.

On 30 June 1965 Pio Altera sold the disputed lot to the spouses Ramon Conde and Catalina T. Conde, who are also private
respondents herein. Their relationship to petitioner does not appear from the records. Nor has the document of sale been exhibited.

Contending that she had validly repurchased the lot in question in 1945, petitioner filed, on 16 January 1969, in the Court of First
Instance of Leyte, Branch IX, Tacloban City, a Complaint (Civil Case No. B-110), against Paciente Cordero and his wife Nicetas Altera,
Ramon Conde and his wife Catalina T. Conde, and Casimira Pasagui Pio Altera having died in 1966), for quieting of title to real
property and declaration of ownership.

Petitioner's evidence is that Paciente Cordero signed the Memorandum of Repurchase in representation of his father-in-law Pio Altera,
who was seriously sick on that occasion, and of his mother-in-law who was in Manila at the time, and that Cordero received the
repurchase price of P65.00.
Private respondents, for their part, adduced evidence that Paciente Cordero signed the document of repurchase merely to show that he
had no objection to the repurchase; and that he did not receive the amount of P165.00 from petitioner inasmuch as he had no authority
from his parents-in-law who were the vendees-a-retro.

After trial, the lower Court rendered its Decision dismissing the Complaint and the counterclaim and ordering petitioner "to vacate the
property in dispute and deliver its peaceful possession to the defendants Ramon Conde and Catalina T. Conde".

On appeal, the Court of Appeals upheld the findings of the Court a quo that petitioner had failed to validly exercise her right of
repurchase in view of the fact that the Memorandum of Repurchase was signed by Paciente Cordero and not by Pio Altera, the vendee-
a-retro, and that there is nothing in said document to show that Cordero was specifically authorized to act for and on behalf of the
vendee a retro, Pio Altera.

Reconsideration having been denied by the Appellate Court, the case is before us on review.

There is no question that neither of the vendees-a-retro signed the "Memorandum of Repurchase", and that there was no formal
authorization from the vendees for Paciente Cordero to act for and on their behalf.

Of significance, however, is the fact that from the execution of the repurchase document in 1945, possession, which heretofore had
been with the Alteras, has been in the hands of petitioner as stipulated therein. Land taxes have also been paid for by petitioner yearly
from 1947 to 1969 inclusive (Exhibits "D" to "D-15"; and "E"). If, as opined by both the Court a quo and the Appellate Court, petitioner
had done nothing to formalize her repurchase, by the same token, neither have the vendees-a-retro done anything to clear their title of
the encumbrance therein regarding petitioner's right to repurchase. No new agreement was entered into by the parties as stipulated in
the deed of pacto de retro, if the vendors a retro failed to exercise their right of redemption after ten years. If, as alleged, petitioner
exerted no effort to procure the signature of Pio Altera after he had recovered from his illness, neither did the Alteras repudiate the deed
that their son-in-law had signed. Thus, an implied agency must be held to have been created from their silence or lack of action, or their
failure to repudiate the agency. 2

Possession of the lot in dispute having been adversely and uninterruptedly with petitioner from 1945 when the document of repurchase
was executed, to 1969, when she instituted this action, or for 24 years, the Alteras must be deemed to have incurred in laches. 3 That
petitioner merely took advantage of the abandonment of the land by the Alteras due to the separation of said spouses, and that
petitioner's possession was in the concept of a tenant, remain bare assertions without proof.

Private respondents Ramon Conde and Catalina Conde, to whom Pio Altera sold the disputed property in 1965, assuming that there
was, indeed, such a sale, cannot be said to be purchasers in good faith. OCT No. 534 in the name of the Alteras specifically contained
the condition that it was subject to the right of repurchase within 10 years from 1938. Although the ten-year period had lapsed in 1965
and there was no annotation of any repurchase by petitioner, neither had the title been cleared of that encumbrance. The purchasers
were put on notice that some other person could have a right to or interest in the property. It behooved Ramon Conde and Catalina
Conde to have looked into the right of redemption inscribed on the title, and particularly the matter of possession, which, as also
admitted by them at the pre-trial, had been with petitioner since 1945.

Private respondent must be held bound by the clear terms of the Memorandum of Repurchase that he had signed wherein he
acknowledged the receipt of P165.00 and assumed the obligation to maintain the repurchasers in peaceful possession should they be
"disturbed by other persons". It was executed in the Visayan dialect which he understood. He cannot now be allowed to dispute the
same. "... If the contract is plain and unequivocal in its terms he is ordinarily bound thereby. It is the duty of every contracting party to
learn and know its contents before he signs and delivers it." 4

There is nothing in the document of repurchase to show that Paciente Cordero had signed the same merely to indicate that he had no
objection to petitioner's right of repurchase. Besides, he would have had no personality to object. To uphold his oral testimony on that
point, would be a departure from the parol evidence rule 5 and would defeat the purpose for which the doctrine is intended.

... The purpose of the rule is to give stability to written agreements, and to remove the temptation and possibility of
perjury, which would be afforded if parol evidence was admissible. 6

In sum, although the contending parties were legally wanting in their respective actuations, the repurchase by petitioner is supported by
the admissions at the pre-trial that petitioner has been in possession since the year 1945, the date of the deed of repurchase, and has
been paying land taxes thereon since then. The imperatives of substantial justice, and the equitable principle of laches brought about
by private respondents' inaction and neglect for 24 years, loom in petitioner's favor.

WHEREFORE, the judgment of respondent Court of Appeals is hereby REVERSED and SET ASIDE, and petitioner is hereby declared
the owner of the disputed property. If the original of OCT No. N-534 of the Province of Leyte is still extant at the office of the Register of
Deeds, then said official is hereby ordered to cancel the same and, in lieu thereof, issue a new Transfer Certificate of Title in the name
of petitioner, Dominga Conde.

No costs.
SO ORDERED.

Teehankee (Chairman), Plana, Vasquez, Relova and Gutierrez, Jr., JJ., concur.

G.R. No. 6906 September 27, 1911

FLORENTINO RALLOS, ET AL., plaintiff-appellee,

vs.
TEODORO R. YANGCO, defendant-appellant.

Mariano Escueta, for appellant.

Martin M. Levering, for appellees.

MORELAND, J.:

This is an appeal from a judgment of the Court of First Instance of the Province of Cebu, the Hon. Adolph Wislizenus presiding, in favor
of the plaintiffs, in the sum of P1,537.08, with interest at 6 per cent per annum from the month of July, 1909, with costs.

The defendant in this case on the 27th day of November, 1907, sent to the plaintiff Florentino Rallos, among others, the following letter:

CIRCULAR NO. 1.

MANILA, November 27, 1907

MR. FLORENTINO RALLOS, Cebu.

DEAR SIR: I have the honor to inform you that I have on this date opened in my steamship office at No. 163 Muelle de la
Reina, Binondo, Manila, P. I., a shipping and commission department for buying and selling leaf tobacco and other native
products, under the following conditions:

1. When the consignment has been received, the consignor thereof will be credited with a sum not to exceed two-thirds of the
value of the goods shipped, which may be made available by acceptance of a draft or written order of the consignor on five to
ten day's sight, or by his ordering at his option a bill of goods. In the latter case he must pay a commission of 2 per cent.

2. No draft or written order will be accepted without previous notice forwarding the consignment of goods to guarantee the
same.

3. Expenses of freight, hauling and everything necessary for duly executing the commission will be charged in the commission.

4. All advances made under sections (1) and (3) shall bear interest at 10 per cent a year, counting by the sale of the goods
shipped or remittance of the amount thereof.

5. A commission of 2 per cent will be collected on the amount realized from the sale of the goods shipped.

6. A Payment will be made immediately after collection of the price of the goods shipped.

7. Orders will be taken for the purchase of general merchandise, ship-stores, cloths, etc., upon remittance of the amount with
the commission of 2 per cent on the total value of the goods bought. Expenses of freight, hauling, and everything necessary
for properly executing the commission will be charged to the consignor.

8. The consignor of the good may not fix upon the consignee a longer period than four months, counting from the date of
receipt, for selling the same; with the understanding that after such period the consignee is authorized to make the sale, so as
to prevent the advance and cost of storage from amounting to more than the actual value of said goods, as has often
happened.

9. The shipment to the consignors of the goods ordered on account of the amount realized from the sale of the goods
consigned and of the goods bought on remittance of the value thereof, under sections (1) and (3), will not be insured against
risk by sea and land except on written order of the interested parties.
 10. On all consignments of goods not insured according to the next preceding section, the consignors will bear the risk.

11. All the foregoing conditions will take effect only after this office has acknowledged the consignor's previous notice.

12. All other conditions and details will be furnished at the office of the undersigned.

If you care to favor me with your patronage, my office is at No. 163 Muelle de la Reinna, Binondo, Manila, P. I., under the
name of "Teodoro R. Yangco." In this connection it gives me great pleasure to introduce to you Mr. Florentino Collantes, upon
whom I have conferred public power of attorney before the notary, Mr. Perfecto Salas Rodriguez, dated November 16, 1907,
to perform in my name and on my behalf all acts necessary for carrying out my plans, in the belief that through his knowledge
and long experience in the business, along with my commercial connections with the merchants of this city and of the
provinces, I may hope to secure the most advantageous prices for my patrons. Mr. Collantes will sign by power of attorney, so
I beg that you make due note of his signature hereto affixed.

Very respectfully,

(Sgd.) T. R. YANGCO.

(Sgd.) F. COLLANTES.

Accepting this invitation, the plaintiffs proceeded to do a considerable business with the defendant through the said Collantes, as his
factor, sending to him as agent for the defendant a good deal of produce to be sold on commission. Later, and in the month of
February, 1909, the plaintiffs sent to the said Collantes, as agent for the defendant, 218 bundles of tobacco in the leaf to be sold on
commission, as had been other produce previously. The said Collantes received said tobacco and sold it for the sum of P1,744. The
charges for such sale were P206.96. leaving in the hands of said Collantes the sum of P1,537.08 belonging to the plaintiffs. This sum
was, apparently, converted to his own use by said agent.

It appears, however, that prior to the sending of said tobacco the defendant had severed his relations with Collantes and that the latter
was no longer acting as his factor. This fact was not known to the plaintiffs; and it is conceded in the case that no notice of any kind was
given by the defendant to the plaintiffs of the termination of the relations between the defendant and his agent. The defendant refused
to pay the said sum upon demand of the plaintiffs, placing such refusal upon the ground that at the time the said tobacco was received
and sold by Collantes he was acting personally and not as agent of the defendant. This action was brought to recover said sum.

As is seen, the only question for our decision is whether or not the plaintiffs, acting in good faith and without knowledge, having sent
produce to sell on commission to the former agent of the defendant, can recover of the defendant under the circumstances above set
forth. We are of the opinion that the defendant is liable. Having advertised the fact that Collantes was his agent and having given them
a special invitation to deal with such agent, it was the duty of the defendant on the termination of the relationship of principal and agent
to give due and timely notice thereof to the plaintiffs. Failing to do so, he is responsible to them for whatever goods may have been in
good faith and without negligence sent to the agent without knowledge, actual or constructive, of the termination of such relationship.

For these reasons the judgment appealed from is confirmed, without special finding as to costs.

Torres, Mapa, Johnson and Carson, JJ., concur.

G.R. No. L-12579 July 27, 1918

GREGORIO JIMENEZ, plaintiff-appellee,

vs.
PEDRO RABOT, NICOLASA JIMENEZ and her husband EMILIO RODRIGUEZ, defendants.
PEDRO RABOT, appellant.

Antonio Bengson for appellant.

Jose Rivera for appellee.

STREET, J.:

This action was instituted by the plaintiff, Gregorio Jimenez, to recover from the defendant, Pedro Rabot, a parcel of land situated in the
municipality of Alaminos, in the Province of Pangasinan, and described in the complaint as follows:

Approximate area of three hectares; bounded on the north and west with land of Pedro Reynoso, on the south with land of
Nicolasa Jimenez, and on the east with land of Calixta Apostol before, at present with that of Juan Montemayor and Simon del
Barrio. It is situated in Dinmayat Tancaran, barrio of Alos of this same municipality of Alaminos, Pangasinan.
From a judgment rendered in favor of the plaintiff, Pedro Rabot has appealed; but his co-defendants, Nicolasa Jimenez and her
husband, who were cited by the defendant for the purpose of holding her liable upon her warranty in case of his eviction, have not
appealed.

It is admitted that the parcel of land in question, together with two other parcels in the same locality originally belonged of the heirs in
the division of the estate of his father. It is further appears that while Gregorio was staying at Vigan, in the Province of Ilocos Sur, during
the year 1911, his property in Alaminos was confided by him to the care of his elder sister Nicolasa Jimenez. On February 7 of that year
he wrote this sister a letter from Vigan in which he informed her that he was pressed for money and requested her to sell one of his
parcels of land and send him the money in order that he might pay his debts. This letter contains no description of the land to be sold
other than is indicated in the words "one of my parcels of land" ("uno de mis terrenos").

Acting upon this letter Nicolasa approached the defendant Pedro Rabot, and the latter agreed to buy the parcel in question for the sum
of P500. Two hundred and fifty peso were paid at once, with the understanding that a deed of conveyance would be executed when the
balance should be paid. Nicolasa admits having received this payment of P250 at the time stated; but there is no evidence that she sent
any of it to her brother.

About one year later Gregorio came down 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 or other to do so; and as a result 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 Instance for the
purpose of recovering their land from her control. This action was decided favorably to the plaintiffs upon August 12, 1913; and no
appeal was taken from the judgment.

Meanwhile, upon May 31, 1912, Nicolasa Jimenez executed and delivered to Pedro Rabot a deed purporting to convey to him the
parcel of land which is the subject of this controversy. The deed recites that the sale was made in consideration of the sum of P500, the
payment of which is acknowledged. Pedro Rabot went into possession, and the property was found in his hands at the time when final
judgment 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 Nicolasa during the pendency of the litigation appear that he was at the time cognizant of that circumstance.

In considering the questions presented by this appeal one or two preliminary observations may be made. The first is that, as a matter of
formality, a power of attorney to convey real property ought to appear in a public document, just as any other instrument intended to
transmit or convey an interest in such property ought to appear in a public document. (Art. 1280, Civil Code.) But inasmuch as it is an
established doctrine that a private document is competent to create, transmit, modify, or extinguish a right in real property (Thunga
Chui vs. Que Bentec, 2 Phil. Rep., 561; Couto Soriano vs. Cortes, 8 Phil. Rep., 459), it follows that a power of attorney to convey such
property, even though in the form of a private document, will operate with effect. Again, supposing that the letter contained adequate
authority for Nicolasa to sell the property in question, her action in conveying the property in her own name, without showing the
capacity in which she acted, was doubtless irregular. Nevertheless, such deed would in any event operate to bind her brother, the
plaintiff in its character as a contract (Lyon vs. Pollock, 99 U.S., 668; 25 L. ed., 265), and supposing that the authority was sufficient, he
could be compelled by a proper judicial proceeding to execute a document to carry such contract into effect. (Art. 1279, Civil Code.)

The principal question for consideration therefore in the end resolves itself into this, whether the authority conferred on Nicolasa by the
letter of February 7, 1911, was sufficient to enable her to bind her brother. The only provisions of law bearing on this point are
contained in article 1713 of the Civil Code and in section 335 of the Code of Civil Procedure. Article 1713 of the Civil Code requires that
the authority to alienate land shall be contained 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 subscribed by the party to be charged. We are of the opinion that
the authority expressed in the letter is a sufficient compliance with both requirements.

It has been urged here that in order for the authority to be sufficient under section 335 of the Code of Civil Procedure the authorization
must contain a particular description of the property which the agent is to be permitted to sell. There is no such requirement in
subsection 5 of section 335; and we do not believe that it would be legitimate to read such a requirement into it. The purpose in giving a
power of 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 defined 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. It is not necessary that the particular act to be accomplished should be
predestinated by the language of the power. The question to be answered always, after the power has been exercised, is rather this:
Was the act which the agent performed within the scope of his authority? In the case before us, if the question is asked whether the act
performed by Nicolasa Jimenez was within the scope of the authority which had been conferred upon her, the answer must be
obviously in the affirmative.

It should not escape observation that the problem with which we are here concerned relates to the sufficiency of the power of attorney
under subsection 5 of section 335 of the Code of Civil Procedure and not to the sufficiency of the note or memorandum of the contract,
or agreement of sale, required by the same subsection, in connection with the first paragraph of the same section. It is well-settled in
the jurisprudence of England and the United States that when the owner, or his agent, comes to make a contract to sell, or a
conveyance to effect a transfer, there must be a description of the property which is the subject of the sale or conveyance. This is
necessary of course to define the object of the contract. (Brockway vs. Frost, 40 Minn., 155; Carr vs. Passaic Land etc. Co., 19 N. J.
Eq., 424; Lippincott vs. Bridgewater, 55 N. J. Eq., 208; Craig vs. Zelian, 137 Cal., 105; 20 Cyc., 271.)
The general rule here applicable is that the description must be sufficiently definite to identify the land either from the recitals of the
contract or deed or from external facts referred to in the document, thereby enabling one to determine the identity of the land and if the
description is uncertain on its face or is shown to be applicable with equal plausibility to more than one tract, it is insufficient. The
principle embodied in these decisions is not, in our opinion, applicable to the present case, which relates to the sufficiency of the
authorization, not to the sufficiency of the contract or conveyance. It is unquestionable that the deed which Nicolasa executed contains
a proper description of the property which she purported to convey.

There is ample authority to the effect that a person may by a general power of attorney an agent to sell "all" the land possessed by the
principal, or all that he possesses in a particular city, county, or state. (Roper vs. McFadden, 48 Cal., 346; Rownd vs. Davidson, 113
La., 1047; Carson vs. Ray, 52 N. C., 609; 78 Am. Dec., 267; 31 Cyc., 1229.) It is also held that where a person authorizes an agent to
sell a farm ("my farm") in a certain county, this is sufficient, if it be shown that such party has only one farm in that country.
(Marriner vs. Dennison, 78 Cal., 202.) In Linton vs. Moorhead (209 Pa. St., 646), the power authorized the agent to sell or convey "any
or all tracts, lots, or parcels" of land belonging to the plaintiff. It was held that this was adequate. In Lyon vs. Pollock (99 U.S., 668), the
owner in effect authorized an agent to sell everything he had in San Antonio Texas. The authority was held sufficient. In Linan vs. Puno
(31 Phil. Rep., 259), the authority granted was to the effect that the agent might administer "the interests" possessed by the principal in
the municipality of Tarlac and to that end he was authorized to purchase, sell, collect, and pay, etc. It was held that this was a sufficient
power.

In the present case the agent was given the power to sell either of the parcels of land belonging to the plaintiff. We can see no reason
why the performance of an act within the scope of this authority should not bind the plaintiff to the same extent as if he had given the
agent authority to sell "any or all" and she had conveyed only one.

From what have been said it is evident that the lower court should have absolved the defendant Pedro Rabot from the complaint.
Judgment will accordingly be reversed, without any express adjudication of costs this instance. So ordered.

Torres, Johnson, Malcolm, Avancea and Fisher, JJ., concur.

G.R. No. 2962 February 27, 1907

B. H. MACKE, ET AL., plaintiffs-appellees,

vs.
JOSE CAMPS, defendant-appellant.

Manuel G. Gavieres for appellant.

Gibbs & Gale for appellees.

CARSON, J.:

The plaintiffs in this action, B. H. Macke and W. H. Chandler, partners doing business under the firm name of Macke, Chandler &
Company, allege that during the months of February and March, 1905, they sold to the defendant and delivered at his place of
business, known as the "Washington Cafe," various bills of goods amounting to P351.50; that the defendant has only paid on account
of said accounts the sum of P174; that there is still due them on account of said goods the sum of P177.50; that before instituting this
action they made demand for the payment thereof; and that defendant had failed and refused to pay the said balance or any part of it
up to the time of the filing of the complaint.

B. H. Macke, one of 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 receipt of said
goods and made various payments thereon amounting in all to P174; that on demand for payment of balance of the account Flores
informed him that he did not have the necessary funds on hand, and that he would have to wait the return of his principal, the
defendant, who was at that time visiting in the provinces; that Flores acknowledged the bill for the goods furnished and the credits being
the amount set out in the complaint; that when the goods were ordered they were ordered on the credit of the defendant and that they
were shipped by the plaintiffs after inquiry which satisfied the witness as to the credit of the defendant and as to the authority of Flores
to act as his agent; that the witness always believed and still believes that Flores was the agent of the defendant; and that when he
went to the Washington Cafe for the purpose of collecting his bill he found Flores, in the absence of the defendant in the provinces,
apparently in charge of the business and claiming to be the business manager of the defendant, said business being that of a hotel with
a bar and restaurant annexed.

A written contract dated May 25, 1904, was introduced in evidence, from which it appears that one Galmes, the former owner of the
business now know as the "Washington Cafe," subrented the building wherein the business was conducted, to the defendant for a
period of one year, for the purpose of carrying on that business, the defendant obligating himself not to sublet or subrent the building or
the business without the consent of the said Galmes. This contract was signed by the defendant and the name of Ricardo Flores
appears thereon as a witness, and attached thereto is an inventory of the furniture and fittings which also is signed by the defendant
with the word "sublessee" (subarrendatario) below the name, and at the foot of this inventory the word "received" (recibo) followed by
the name "Ricardo Flores," with the words "managing agent" (el manejante encargado) immediately following his name.
Galmes was called to the stand and identified the above- described document as the contract and inventory delivered to him by the
defendant, and further stated that he could not tell whether Flores was working for himself or for some one else that it to say,
whether Flores was managing the business as agent or sublessee.

The defendant did not go on the stand nor call any witnesses, and 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.

In the absence of proof of the contrary we think that this 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 defendant, his principal, for the payment of
the goods mentioned in the complaint.

The contract introduced in evidence sufficiently establishes the fact that the defendant was the owner of business and of the bar, and
the title of "managing agent" attached to the signature of Flores which appears on that contract, together with the fact that, at the time
the purchases in question were made, Flores was apparently in charge of the business, performing the duties usually entrusted to
managing agent, leave little room for doubt that he was there as authorized agent of the defendant. 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 third parties dealing with such person in good faith and in the following preassumptions or
deductions, which the law expressly directs to be made from particular facts, are deemed conclusive:

(1) "Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular
thing true, and to act upon such belief, he can not, in any litigation arising out such declaration, act, or omission, be permitted to falsify
it" (subsec. 1, sec. 333, Act no. 190); and unless the contrary appears, the authority of an agent must be presumed to include all the
necessary and usual means of carrying his agency into effect. (15 Conn., 347; 90 N. C. 101; 15 La. Ann, 247; 43 Mich., 364; 93 N. Y.,
495; 87 Ind., 187.)

That Flores, as managing agent of the Washington Cafe, had authority to buy such reasonable quantities of supplies as might from time
to time be necessary in carrying on the business of hotel bar may fairly be presumed from the nature of the business, especially in view
of the fact that his principal appears to have left him in charge during more or less prolonged periods of absence; from an examination
of the items of the account attached to the complaint, we are of opinion that he was acting within the scope of his authority in ordering
these goods are binding on his principal, and in the absence of evidence to the contrary, furnish satisfactory proof of their delivery as
alleged in the complaint.

The judgment of the trial court is affirmed with the costs of his instance against the appellant. After expiration of twenty days judgment
will be rendered in accordance herewith, and ten days thereafter the case remanded to the lower court for proper action. So ordered.

Arellano, C.J., Torres and Willard, JJ., concur.

Tracey, J., dissents.

G.R. No. 15823 September 12, 1921

JULIO DANON, plaintiff-appellee,

vs.
ANTONIO A. BRIMO & CO., defendant-appellant.

Claro M. Recto for appellant.

Canillas & Cardenas for appellee.

JOHNSON, J.:

This action was brought to recover the sum of P60,000, alleged to be the value of services rendered to the defendant by the plaintiff as
a broker. The plaintiff alleges that in the month of August, 1918, the defendant company, through its manager, Antonio A. Brimo,
employed him to look for a purchaser of its factory known as "Holland American Oil Co.," for the sum of P1,200,000, payable in cash;
that the defendant promised to pay the plaintiff, as compensation for his services, a commission of five per cent on the said sum of
P1,200,000, if the sale was consummated, or if the plaintiff should find a purchaser ready, able and willing to buy said factory for the
said sum of P1,200,000; that subsequently the plaintiff found such a purchaser, but that the defendant refused to sell the said factory
without any justifiable motive or reason therefor and without having previously notified the plaintiff of its desistance or variation in the
price and terms of the sale.

To that complaint the defendant interposed a general denial. Upon the issue thus presented, the Honorable Simplicio del Rosario,
judge, after hearing and considering the evidence adduced during the trial of the cause, rendered a judgment in favor of the plaintiff and
against the defendant for the sum of P60,000, with costs. From that judgment the defendant appealed to this court.

The proof with regard to the authority of the plaintiff to sell the factory in question for the defendant, on commission, is extremely
unsatisfactory. It consists solely of the testimony of the plaintiff, on the one hand, and of the manager of the defendant company,
Antonio A. Brimo, on the other. From a reading of their testimony we believe that neither of them has been entirely free from
prevarications. However, after giving due weight to the finding of the trial court in this regard and after carefully considering the inherent
probability or improbability of the testimony of each of said witnesses, we believe we are approximating the truth in finding: (1) That
Antonio A. Brimo, in a conversation with the plaintiff, Julio Danon, about the middle of August, 1918, informed the latter that he (Brimo)
desired to sell his factory, the Holland American Oil Co., for the sum of P1,200,000; (2) that he agreed and promised to pay to the
plaintiff a commission of 5 per cent provided the latter could sell said factory for that amount; and (3) that no definite period of time was
fixed within which the plaintiff should effect the sale. It seems that another broker, Sellner, was also negotiating the sale, or trying to find
a purchaser for the same property and that the plaintiff was informed of the fact either by Brimo himself or by someone else; at least, it
is probable that the plaintiff was aware that he was not alone in the field, and his whole effort was to forestall his competitor by being
the first to find a purchaser and effect the sale. Such, we believe. was the contract between the plaintiff and the defendant, upon which
the present action is based.

The next question to determine is whether the plaintiff had performed all that was required of him under that contract to entitle him to
recover the commission agreed upon. The proof in this regard is no less unsatisfactory. It seems that immediately after having an
interview with Mr. Brimo, as above stated, the plaintiff went to see Mr. Mauro Prieto, president of the Santa Ana Oil Mill, a corporation,
and offered to sell to him the defendant's property at P1,200,000. The said corporation was at that time in need of such a factory as the
plaintiff was offering for sale, and Mr. Prieto, its president, instructed the manager, Samuel E. Kane, to see Mr. Brimo and ascertain
whether he really wanted to sell said factory, and, if so, to get permission from him to inspect the premises. Mr. Kane inspected the
factory and, presumably, made a favorable report to Mr. Prieto. The latter asked for an appointment with Mr. Brimo to perfect the
negotiation. In the meantime Sellner, the other broker referred to, had found a purchaser for the same property, who ultimately bought it
for P1,300,000. For that reason Mr. Prieto, the would be purchaser found by the plaintiff, never came to see Mr. Brimo to perfect the
proposed negotiation.

Under the proofs in this case, the most that can be said as to what the plaintiff had accomplished is, that he had found a person
who might have bought the defendant's factory if the defendant had not sold it to someone else. The evidence does not show that the
Santa Ana Oil Mill had definitely decided to buy the property in question at the fixed price of P1,200,000. The board of directors of said
corporation had not resolved to purchase said property; and even if its president could legally make the purchase without previous
formal authorization of the board of directors, yet said president does not pretend that he had definitely and formally agreed to buy the
factory in question on behalf of his corporation at the price stated. On direct examination he testified for the plaintiff as follows:

Q. You say that we were going to accept or that it was beneficial for us; will you say to whom your refer, when you say
"we?"

A. Our company, the Santa Ana Oil Mill.

Q. And is that company able to pay the sum of P1,200,000?

A. Yes, sir.

Q. And you accepted it at that price of P1,200.000?

A. Surely, because as I already said before, we were in the difficult position of not being able to operate our factory,
because of the obstacle placed by the Government.

Q. And did you inform Mr. Danon of this acceptance?

A. I did not explain to Mr. Danon.

On cross-examination the same witness testified:

Q. What actions did the board of directors of the Santa Ana Oil Mill take in order to acquire or to make an offer to Mr.
Brimo of the Holland American Oil Company?

A. But nothing was effected, because Mr. Danon stated that the property had been sold when I was going to deal with
him.

Q. But do you not say that you made an offer of P1,200,000?

A. No; it was Mr. Danon who made the offer and we were sure to put the deal through because we have bound
ourselves.

The plaintiff claims that the reasons why the sale to the Santa Ana Mill was not consummated was because Mr. Brimo refused to sell to
a Filipino firm and preferred an American buyer; that upon learning such attitude of the defendant the plaintiff endeavored to procure
another purchaser and found a Mr. Leas, who delivered to the plaintiff a letter addressed to Mr. Brimo, offering to buy the factory in
question at P1,200,000. the offer being good for twenty-four; that said offer was not accepted by Brimo because while he was reading
the letter of Leas, Sellner came in, drew Brimo into another room, and then and there closed the deal at P1,300,000. The last statement
is admitted by the defendant.

Such are the facts in this case, as nearly accurate as we can gather them from the conflicting evidence before us. Under those facts, is
the plaintiff entitled to recover the sum of P60,000, claimed by him as compensation for his services? It will be noted that, according to
the plaintiff's own testimony, the defendant agreed and promised to pay him a commission of 5 per cent provided he (the plaintiff) could
sell the factory at P1,200.000 ("con tal que V. me venda la fabrica en P1,200.000"). It will also be noted that all that the plaintiff had
accomplished by way of performance of his contract was, that he had found a person who might have bought the factory in question
had not the defendant sold it to someone else. (Beaumont vs. Prieto, 41 Phil., 670; 249 U.S., 554.)

Under these circumstances it is difficult to see how the plaintiff can recover anything in the premises. The plaintiff's action is not one for
damages for breach of contract; it is an action to recover "the reasonable value" of services rendered. this is unmistakable both from
the plaintiff's complaint and his testimony as a witness during the trial.

Q. And what is the reasonable value of the services you rendered to Mr. Brimo?

A. Five per cent of the price at which it was sold.

Q. Upon what do you base your qualification that those services were reasonable?

A. First, because that is the common rate in the city, and, secondly, because of the big gain that he obtained from the
sale.

What benefit did the plaintiff, by his "services," bestow upon the defendant to entitle him to recover from the latter the sum of P60,000?
It is perfectly clear and undisputed that his "services" did not any way contribute towards bringing about the sale of the factory in
question. He was not "the efficient agent or the procuring cause of the sale."

The broker must be the efficient agent or the procuring cause of sale. The means employed by him and his efforts must result
in the sale. He must find the purchaser, and the sale must proceed from his efforts acting as broker. (Wylie vs. Marine National
Bank, 61 N. Y., 414; 416; citing: McClure vs. Paine, 49 N. Y., 561; Lloyd vs. Mathews, 51 id., 124; Lyon vs. Mitchell, 36 id.,
235; Briggs vs. Rowe, 4 Keyes, 424; Murray vs. Currie, 7 Carr. and Payne, 584; Wilkinson vs. Martin, 8 id., 5.)

A leading case on the subject is that of Sibbald vs. Bethlehem Iron Co. (83 N. Y., 378; 38 Am. Rep., 441). In the case, after an
exhaustive review of various cases, the Court of Appeals of New York stated the rule as follows:

In all the cases, under all and varying forms of expression, the fundamental 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 commissions does not accrue. (McGavock vs. Woodlief, 20 How., 221;
Barnes vs. Roberts, 5 Bosw., 73; Holly vs. Gosling, 2 E. D., Smith, 262; Jacobs vs. Kolff, 2 Hilt., 133; Kock vs. Emmerling, 22
How., 72; Corning vs. Calvert, 2 Hilt., 56; Trundy vs. N.Y. and Hartf. Steamboat Co., 6 Robt., 312; Van Lien vs. Burns, 1 Hilt.,
134.)

xxx xxx xxx

It follows, as a necessary deduction from the established rule, that a broker is never entitled to commissions for unsuccessful
efforts. The risk of a failure is wholly his. The reward comes only with his success. That is the plain contract and contemplation
of the parties. The broker may devote his time and labor, and expend his money with ever so much of devotion to the interest
of his employer, and yet if he fails, if without effecting an agreement or accomplishing a bargain, he abandons the effort, or his
authority is fairly and in good faith terminated, he gains no right to commissions. He loses the labor and effort which was
staked upon success. And in such event it matters not that after his failure, and the termination of his agency, what he has
done proves of use and benefit to the principal. In a multitude of cases that must necessarily result. He may have introduced to
each other parties who otherwise would have never met; he may have created impressions, which under later and more
favorable circumstances naturally lead to and materially assist in the consummation of a sale; he may have planted the very
seed from which others reap the harvest; but all that gives him no claim. It was part of his risk that failing himself, not
successful in fulfilling his obligation, others might be left to some extent to avail themselves of the fruit of his labors. As we said
in Wylie vs. Marine National Bank (61 N.Y., 416), in such a case the principal violates no right of the broker by selling to the
first party who offers the price asked, and it matters not that sale is to the very party with whom the broker had been
negotiating. He failed to find or produce a purchaser upon the terms prescribed in his employment, and the principal was
under no obligation to wait longer that he might make further efforts. The failure therefore and its consequences were the risk
of the broker only. This however must be taken with one important and necessary limitation. If the efforts of the broker are
rendered a failure by the fault of the employer; if capriciously he changes his mind after the purchaser, ready and willing,
and consenting to the prescribed terms, is produced; or if the latter declines to complete the contract because of some defect
of title in the ownership of the seller, some unremoved incumbrance, some defect which is the fault of the latter, then the
 broker does not lose his commissions. And that upon the familiar principle that no one can avail himself of the nonperformance
of a condition precedent, who has himself occasioned its nonperformance. But this limitation is not even an exception to the
general rule affecting the broker's right for it goes on the ground that the broker has done his duty, that he has brought buyer
and seller to an agreement, but that the contract is not consummated and fails though the after-fault of the seller. The cases
are uniform in this respect. (Moses vs. Burling, 31 N.Y., 462; Glentworth vs. Luther, 21 Barb., 147; Van Lien vs. Burns, 1 Hilt.,
134.)

One other principle applicable to such a contract as existed in the present case needs to be kept in view. Where no time for
the continuance of the contract is fixed by its terms either party is at liberty to terminate it at will, subject only to the ordinary
requirements of good faith. Usually the broker is entitled to a fair and reasonable opportunity to perform his obligation, subject
of course to the right of the seller to sell independently. 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 bad faith, and as a mere device to escape the
payment of the broker's commissions. Thus, if in the midst of negotiations instituted by the broker, and which were plainly and
evidently approaching success, the seller should revoke the authority of the broker, with the view of concluding the bargain
without his aid, and avoiding the payment of commission about to be earned, it might be well said that the due performance his
obligation by the broker was purposely prevented by the principal. But if the latter acts in good faith, not seeking to escape the
payment of commissions, but moved fairly by a view of his own interest, he has the absolute right before a bargain is made
while negotiations remain unsuccessful, before commissions are earned, to revoke the broker's authority, and the latter cannot
thereafter claim compensation for a sale made by the principal, even though it be to a customer with whom the broker
unsuccessfully negotiated, and even though, to some extent, the seller might justly be said to have availed himself of the fruits
of the broker's labor. (Ibid. pp. 444, 445 and 446.)

The rule laid down in the foregoing case was adopted and followed in the cases of Zeimer vs. Antisell (75 Cal. 509), and
Ayres vs. Thomas (116 Cal., 140).

The undertaking to procure a purchaser requires of the party so undertaking, not simply to name or introduce a person who
may be willing to make any sort of contract in reference to the property, but to produce a party capable, and who ultimately
becomes the purchaser. (Kimberly vs. Henderson and Lupton, 29 Md., 512, 515, citing: Keener vs. Harrod and Brooke, 2 Md.
63; McGavock vs. Woodlief, 20 How., 221. See also Richards, Executor, vs. Jackson, 31 Md., 250.)

The defendant sent a proposal to a broker in these words: If you send or cause to be sent to me, by advertisement or
otherwise, any party with whom I may see fit and proper to effect a sale or exchange of my real estate, above described I will
pay you the sum of $200. The broker found a person who proposed to purchase the property, but the sale was not
affected. Held: That the broker was not entitled to compensation. (Walker vs. Tirrel, 3 Am. Rep., 352.)

It is clear from the foregoing authorities that, although the present plaintiff could probably have effected the sale of the defendant's
factory had not the defendant sold it to someone else, he is not entitled to the commissions agreed upon because he had no
intervention whatever in, and much sale in question. It must be borne in mind that no definite period was fixed by the defendant within
which the plaintiff might effect the sale of its factory. Nor was the plaintiff given by the defendant the exclusive agency of such sale.
Therefore, the plaintiff cannot complaint of the defendant's conduct in selling the property through another agent before the plaintiff's
efforts were crowned with success. "One who has employed a broker can himself sell the property to a purchaser whom he has
procured, without any aid from the broker." (Hungerford vs. Hicks, 39 Conn., 259; Wylie vs. Marine National Bank, 61 N.Y., 415, 416.)

For the foregoing reasons the judgment appealed from is hereby revoked and the defendant is hereby absolved from all liability under
the plaintiff's complaint, with costs in both instances against the plaintiff. So ordered.

Araullo, Street, Avancea and Villamor, JJ., concur.

G.R. No. L-5180 August 31, 1953

CONSEJO INFANTE, petitioner,

vs.
JOSE CUNANAN, JUAN MIJARES and THE COURT OF APPEALS, SECOND DIVISION, respondents.

Yuseco, Abdon & Yuseco for petitioner.

Jose E. Erfe and Maria Luisa Gomez for respondents.

BAUTISTA ANGELO, J.:

This is a petition for review of a decision of the Court of appeals affirming the judgement of the court of origin which orders the
defendant to pay the plaintiffs the sum of P2,500 with legal interest thereon from February 2,1949 and the costs of action.

Consejo Infante, defendant herein, was the owner of two parcels of land, together with a house built thereon, situated in the City of
Manila and covered by Transfer Certificate of Title No. 61786. On or before November 30, 1948, she contracted the services of Jose
Cunanan and Juan Mijares, plaintiff herein, to sell the above-mentioned property for a price of P30,000 subject to the condition that the
purchaser would assume the mortgage existing thereon in the favor of the Rehabilitation Finance Corporation. She agreed to pay them
a commission of 5 per cent on the purchase price plus whatever overprice they may obtain for the property. Plaintiffs found one Pio S.
Noche who was willing to buy the property under the terms agreed upon with defendant, but when they introduced him to defendant,
the latter informed them that she was no longer interested in selling 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, on December 20, 1948, defendant dealt
directly with Pio S. Noche selling to him the property for P31,000. Upon learning this transaction, plaintiffs demanded from defendant
the payment of their commission, but she refused and so they brought the present action.

Defendant admitted having contracted the services of the plaintiffs to sell her property as set forth in the complaint, but stated that she
agreed to pay them a commission of P1,200 only on condition that they buy her a property somewhere in Taft Avenue to where she
might transfer after selling her property. Defendant avers that while plaintiffs took steps to sell her property as agreed upon, they sold
the property at Taft Avenue to another party and because of this failure it was agreed that the authority she had given them be
cancelled.

The lower court found that the preponderance of evidence was in favor of the plaintiffs and rendered judgement sentensing the
defendant to pay the plaintiff the sum of P2,500 with legal interest thereon from February 2,1949 plus the costs of action. This decision
was affirmed in toto by the Court of Appeals.

There is no dispute that respondents were authorized by petitioner to sell her property for the sum of P30,000 with the understanding
that they will be given a commission of 5 percent plus whatever overprice they may obtain for the property. Petitioner, however,
contends that authority has already been withdrawn on November 30, 1948 when, by the voluntary act of respondents, they executed a
document stating that said authority shall be considered cancelled and without any effect, so that when petitioner sold the property to
Pio S. Noche on December 20, 1948, she was already free from her commitment with respondents and, therefore, was not in duty
bound to pay them any commission for the transaction..

If the facts were as claimed by petitioner, there is in-deed no doubt that she would have no obligation to pay respondents the
commission which was promised them under the original authority because, under the old Civil Code, her right to withdraw such
authority is recognized. A principal may withdraw the authority given to an agent at will. (Article 1733.) But this fact is disputed. Thus,
respondents claim that while they agreed to cancel the written authority given to them, they did so merely upon the verbal assurance
given by petitioner that, should the property be sold to their own buyer, Pio S. Noche, they would be given the commission agreed
upon. True, this verbal assurance does not appear in the written cancellation, Exhibit 1, and, on the other hand, it is disputed by
petitioner, but respondents were allowed to present oral evidence to prove it, and this is now assigned as error in this petition for
review.

The plea that oral evidence should not have been allowed to prove the alleged verbal assurance is well taken it appearing that the
written authority given to respondents has been cancelled in a written statement. The rule on this matter is that "When the terms of an
agreement have been reduced to writing, it is to be considered as containing all those terms, and, therefore, there can be, between
parties and their successors in interest, no evidence of the terms of the agreement other than the contents of the writing." (Section 22,
Rule 123, Rules of Court.) The only exceptions to this rule are: "(a)Where a mistake or imperfection of the writing, or its failure to
express the true intent and agreement of the parties, or the validity of the agreement is put in issue by the pleadings"; and "(b) Where
there is an intrinsic ambiguity in the writing." (Ibid.) There is no doubt that the point raised does not come under any of the cases
excepted, for there is nothing therein that has been put in issue by respondents in their complaint. The terms of the document, Exhibit
1, seem to be clear and they do not contain any reservation which may in any way run counter to the clear intention of the parties.

But even disregarding the oral evidence adduced by respondents in contravention of the parole evidence rule, we are, however, of the
opinion that there is enough justification for the conclusion reached by the lower court as well as by the Court of Appeals to the effect
that respondents are entitled to the commission originally agreed upon. It is a fact found by the Court of Appeals that after petitioner
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 petitioner. But the latter, perhaps by way of strategem, advised respondents that she was no longer interested in the deal
and was able to prevail upon them to sign a document agreeing to the cancellation of the written authority.

That petitioner 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 off the transaction in deference to the request of the petitioner. But the
situation 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 unfair as would amount to bad faith. This act cannot be sanctioned without ac-cording to the party prejudiced
the reward which is due him. This is the situation in which respondents were placed by petitioner. Petitioner took advantage of the
services rendered by respondents, but believing that she could evade payment of their commission, she made use of a ruse by
inducing them to sign the deed of cancellation Exhibit 1. This act of subversion cannot be sanctioned and cannot serve as basis for
petitioner to escape payment of the commission agreed upon.

Wherefore, the decision appealed from is hereby affirmed, with costs against petitioner.

Paras, C.J., Pablo, Bengzon, Padilla, Tuason, Monte-mayor, Reyes, and Jugo, JJ., concur.
G.R. No. L-67889 October 10, 1985

PRIMITIVO SIASAT and MARCELINO SIASAT, petitioners,

vs.
INTERMEDIATE APPELLATE COURT and TERESITA NACIANCENO, respondents.

Payawal, Jimenez & Associates for petitioners.

Nelson A. Loyola for private respondent.

GUTIERREZ, JR., J.:

This is a petition for review of the decision of the Intermediate Appellate Court affirming in toto the judgment of the Court of First
Instance of Manila, Branch XXI, which ordered the petitioner to pay respondent the thirty percent (30%) commission on 15,666 pieces
of Philippine flags worth P936,960.00, moral damages, attorney's fees and the costs of the suit.

Sometime in 1974, respondent Teresita Nacianceno succeeded in convincing officials of the then Department of Education and Culture,
hereinafter called Department, to purchase without public bidding, one million pesos worth of national flags for the use of public schools
throughout the country. The respondent was able to expedite the approval of the purchase by hand-carrying the different indorsements
from one office to another, so that by the first week of September, 1974, all the legal requirements had been complied with, except the
release of the purchase orders. When Nacianceno was informed by the Chief of the Budget Division of the Department that the
purchase orders could not be released unless a formal offer to deliver the flags in accordance with the required specifications was first
submitted for approval, she contacted the owners of the United Flag Industry on September 17, 1974. The next day, after the
transaction was discussed, the following document (Exhibit A) was drawn up:

Mrs. Tessie Nacianceno,

This is to formalize our agreement for you to represent United Flag Industry to deal with any entity or organization,
private or government in connection with the marketing of our products-flags and all its accessories.

For your service, you will be entitled to a commission of thirty

(30%) percent.

Signed
Mr. Primitive Siasat
Owner and Gen. Manager

On October 16, 1974, the first delivery of 7,933 flags was made by the United Flag Industry. The next day, on October 17, 1974, the
respondent's authority to represent the United Flag Industry was revoked by petitioner Primitivo Siasat.

According to the findings of the courts below, Siasat, after receiving the payment of P469,980.00 on October 23, 1974 for the first
delivery, tendered the amount of P23,900.00 or five percent (5%) of the amount received, to the respondent as payment of her
commission. The latter allegedly protested. She refused to accept the said amount insisting on the 30% commission agreed upon. The
respondent was prevailed upon to accept the same, however, because of the assurance of the petitioners that they would pay the
commission in full after they delivered the other half of the order. The respondent states that she later on learned that petitioner Siasat
had already received payment for the second delivery of 7,833 flags. When she confronted the petitioners, they vehemently denied
receipt of the payment, at the same time claiming that the respondent had no participation whatsoever with regard to the second
delivery of flags and that the agency had already been revoked.

The respondent originally filed a complaint with the Complaints and Investigation Office in Malacaang but when nothing came of the
complaint, she filed an action in 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 court decided in favor of the respondent. The dispositive portion of the decision reads as follows:

WHEREFORE, judgment is hereby rendered sentencing Primitivo Siasat to pay to the plaintiff the sum of
P281,988.00, minus the sum P23,900.00, with legal interest from the date of this decision, and ordering the
 defendants to pay jointly and solidarily the sum of P25,000.00 as moral damages, and P25,000.00 as attorney's fees,
also with legal interest from the date of this decision, and the costs.

The decision was affirmed in toto by the Intermediate Appellate Court. After their motion for reconsideration was denied, the petitioners
went to this Court on a petition for review on August 6, 1984.

In assailing the appellate court's decision, the petition tenders the following arguments: first, the authorization making the respondent
the petitioner's representative merely states that she could deal with any entity in connection with the marketing of their products for a
commission of 30%. There was no specific authorization for the sale of 15,666 Philippine flags to the Department; second, there were
two transactions involved evidenced by the separate purchase orders and separate delivery receipts, Exhibit 6-C for the purchase and
deliver on October 16, 1974, and Exhibits 7 to 7-C, for the purchase and delivery on November 6, 1974. The revocation of agency
effected by the parties with mutual consent on October 17, 1974, therefore, forecloses the respondent's claim of 30% commission on
the second transaction; and last, there was no basis for the granting of attorney's fees and moral damages because there was no
showing of bad faith on the part of the petitioner. It was respondent who showed bad faith in denying having received her commission
on the first delivery. The petitioner's counterclaim, therefore, should have been granted.

This petition was initially dismissed for lack of merit in a minute resolution.On a motion for reconsideration, however,this Court give due
course to the petition on November 14, 1984.

After a careful review of the records, we are constrained to sustain with some modifications the decision of the appellate court.

We find respondent's argument regarding respondent's incapacity to represent them in the transaction with the Department untenable.
There are several kinds of agents. To quote a commentator on the matter:

An agent may be (1) universal: (2) general, or (3) special. A universal; 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. (Mec. Sec. 58).

A general agent is one authorized to do all acts pertaining to a business of a certain kind or at a particular place, or all
acts pertaining to a business of a particular class or series. He has usually authority either expressly conferred in
general terms or in effect made general by the usages, customs or nature of the business which he is authorized to
transact.

An agent, therefore, who is empowered to transact all the business of his principal of a particular kind or in a
particular place, would, for this reason, be ordinarily deemed a general agent. (Mec Sec. ,30).

A special agent is one authorized to do some particular act or to act upon some particular occasion. lie acts usually in
accordance with specific instructions or under limitations necessarily implied from the nature of the act to be done.
(Mec. Sec. 61) (Padilla, Civil Law The Civil Code Annotated, Vol. VI, 1969 Edition, p. 204).

One does not have to undertake a close scrutiny of the document embodying the agreement between the petitioners and the
respondent to deduce that the 'latter was instituted as a general agent. Indeed, it can easily be seen by the way general words were
employed in the agreement that no restrictions were intended as to the manner the agency was to be carried out or in the place where it
was to be executed. The power granted to the respondent was so broad that it practically covers the negotiations leading to, and the
execution of, a contract of sale of petitioners' merchandise with any entity or organization.

There is no merit in petitioners' allegations that the contract of agency between the parties was entered into under fraudulent
representation because respondent "would not disclose the agency with which she was supposed to transact and made the petitioner
believe that she would be dealing with The Visayas", and that "the petitioner had known of the transactions and/or project for the said
purchase of the Philippine flags by the Department of Education and Culture and precisely it was the one being followed up also by the
petitioner."

If the circumstances were as claimed by the petitioners, they would have exerted efforts to protect their interests by limiting the
respondent's authority. There was nothing to prevent the petitioners from stating in the contract of agency that the respondent could
represent them only in the Visayas. Or to state that the Department of Education and Culture and the Department of National Defense,
which alone would need a million pesos worth of flags, are outside the scope of the agency. As the trial court opined, it is incredible that
they could be so careless after being in the business for fifteen years.

A cardinal rule of evidence embodied in Section 7 Rule 130 of our Revised Rules of Court states that "when the terms of an agreement
have been reduced to writing, it is to be considered as containing all such terms, and, therefore, there can be between the parties and
their successors-in-interest, no evidence of the terms of the agreement other than the contents of the writing", except in cases
specifically mentioned in the same rule. Petitioners have failed to show that their agreement falls under any of these exceptions. The
respondent was given ample authority to transact with the Department in behalf of the petitioners. Equally without merit is the
petitioners' proposition that the transaction involved two separate contracts because there were two purchase orders and two
deliveries. The petitioners' evidence is overcome by other pieces of evidence proving that there was only one transaction.

The indorsement of then Assistant Executive Secretary Roberto Reyes to the Budget Commission on September 3, 1974 (Exhibit "C")
attests to the fact that out of the total budget of the Department for the fiscal year 1975, "P1,000,000.00 is for the purchase of national
flags." This is also reflected in the Financial and Work Plan Request for Allotment (Exhibit "F") submitted by Secretary Juan Manuel for
fiscal year 1975 which however, divided the allocation and release of the funds into three, corresponding to the second, third, and fourth
quarters of the said year. Later correspondence between the Department and the Budget Commission (Exhibits "D" and "E") show that
the first allotment of P500.000.00 was released during the second quarter. However, due to the necessity of furnishing all of the public
schools in the country with the Philippine flag, Secretary Manuel requested for the immediate release of the programmed allotments
intended for the third and fourth quarters. These circumstances explain why two purchase orders and two deliveries had to be made on
one transaction.

The petitioners' evidence does not necessarily prove that there were two separate transactions. Exhibit "6" is a general indorsement
made by Secretary Manuel for the purchase of the national flags for public schools. It contains no reference to the number of flags to be
ordered or the amount of funds to be released. Exhibit "7" is a letter request for a "similar authority" to purchase flags from the United
Flag Industry. This was, however, written by Dr. Narciso Albarracin who was appointed Acting Secretary of the Department after
Secretary Manuel's tenure, and who may not have known the real nature of the transaction.

If the contracts were separate and distinct from one another, the whole or at least a substantial part of the government's supply
procurement process would have been repeated. In this case, what were issued were mere indorsements for the release of funds and
authorization for the next purchase.

Since only one transaction was involved, we deny the petitioners' contention that respondent Nacianceno is not entitled to the stipulated
commission on the second delivery because of the revocation of the agency effected after the first delivery. The revocation of agency
could not prevent the respondent from earning her commission because as the trial court opined, it came too late, the contract of sale
having been already perfected and partly executed.

In Macondray & Co. v. Sellner (33 Phil. 370, 377), a case analogous to this one in principle, this Court held:

We do not mean to question the general doctrine as to the power of a principal to revoke the authority of his agent at
will, in the absence of a contract fixing the duration of the agency (subject, however, to some well defined
exceptions). Our ruling is that at the time fixed by the manager of the plaintiff company for the termination of the
negotiations, the defendant real estate agent had already earned the commissions agreed upon, and could not be
deprived thereof by the arbitrary action of the plaintiff company in declining to execute the contract of sale for some
reason personal to itself.

The principal cannot deprive his agent of the commission agreed upon by cancelling the agency and, thereafter, dealing directly with
the buyer. (Infante v. Cunanan, 93 Phil. 691).

The appellate courts citation of its previous ruling in Heimbrod et al. v. Ledesma (C.A. 49 O.G. 1507) is correct:

The appellee is entitled to recovery. No citation is necessary to show that the general law of contracts the equitable
principle of estoppel. and the expense of another, uphold payment of compensation for services rendered.

There is merit, however, in the petitioners' contention that the agent's commission on the first delivery was fully paid. The evidence
does not sustain the respondent's claim that the petitioners paid her only 5% and that their right to collect another 25% commission on
the first delivery must be upheld.

When respondent Nacianceno asked the Malacanang Complaints and Investigation Office to help her collect her commission, her
statement under oath referred exclusively to the 30% commission on the second delivery. The statement was emphatic that "now" her
demand was for the 30% commission on the (second) release of P469,980.00. The demand letter of the respondent's lawyer dated
November 13, 1984 asked petitioner Siasat only for the 30% commission due from the second delivery. The fact that the respondent
demanded only the commission on the second delivery without reference to the alleged unpaid balance which was only slightly less
than the amount claimed can only mean that the commission on the first delivery was already fully paid, Considering the sizeable sum
involved, such an omission is too glaringly remiss to be regarded as an oversight.

Moreover, the respondent's authorization letter (Exhibit "5") bears her signature with the handwritten words "Fully Paid", inscribed
above it.

The respondent contested her signature as a forgery, Handwriting experts from two government agencies testified on the matter. The
reason given by the trial court in ruling for the respondent is too flimsy to warrant a finding of forgery.
The court stated that in thirteen documents presented as exhibits, the private respondent signed her name as "Tessie Nacianceno"
while in this particular instance, she signed as "T. Nacianceno."

The stated basis is inadequate to sustain the respondent's allegation of forgery. A variance in the manner the respondent signed her
name can not be considered as conclusive proof that the questioned signature is a forgery. The mere fact that the respondent signed
thirteen documents using her full name does not rule out the possibility of her having signed the notation "Fully Paid", with her initial for
the given came and the surname written in full. What she was signing was a mere acknowledgment.

This leaves the expert testimony as the sole basis for the verdict of forgery.

In support of their allegation of full payment as evidenced by the signed authorization letter (Exhibit "5-A"), the petitioners presented as
witness Mr. Francisco Cruz. Jr., a senior document examiner of the Philippine Constabulary Crime laboratory. In rebuttal, the
respondent presented Mr. Arcadio Ramos, a junior document examiner of the National Bureau of Investigation.

While the experts testified in a civil case, the principles in criminal cases involving forgery are applicable. Forgery cannot be presumed.
It must be proved.

In Borromeo v. Court of Appeals (131 SCRA 318, 326) we held that:

xxx xxx xxx

... Where the evidence, as here, gives rise to two probabilities, one consistent with the defendant's innocence and
another indicative of his guilt, that which is favorable to the accused should be considered. The constitutional
presumption of innocence continues until overthrown by proof of guilt beyond reasonable doubt, which requires moral
certainty which convinces and satisfies the reason and conscience of those who are to act upon it. (People v. Clores,
et al., 125 SCRA 67; People v. Bautista, 81 Phil. 78).

We ruled in another case that where the supposed expert's testimony would constitute the sole ground for conviction and there is
equally convincing expert testimony to the contrary, the constitutional presumption of innocence must prevail. (Lorenzo Ga. Cesar v.
Hon. Sandiganbayan and People of the Philippines, 134 SCRA 105). In the present case, the circumstances earlier mentioned taken
with the testimony of the PC senior document examiner lead us to rule against forgery.

We also rule against the respondent's allegation that the petitioners acted in bad faith when they revoked the agency given to the
respondent.

Fraud and bad faith are matters not to be presumed but matters to be alleged with sufficient facts. To support a judgment for damages,
facts which justify the inference of a lack or absence of good faith must be alleged and proven. (Bacolod-Murcia Milling Co., Inc. vs.
First Farmers Milling Co., Inc., Etc., 103 SCRA 436).

There is no evidence on record from which to conclude that the revocation of the agency was deliberately effected by the petitioners to
avoid payment of the respondent's commission. What appears before us is only the petitioner's use in court of such a factual allegation
as a defense against the respondent's claim. This alone does not per se make the petitioners guilty of bad faith for that defense should
have been fully litigated.

Moral damages cannot be awarded in the absence of a wrongful act or omission or of fraud or bad faith. (R & B Surety & Insurance Co.,
Inc. vs. Intermediate Appellate Court, 129 SCRA 736).

We therefore, rule that the award of P25,000.00 as moral damages is without basis.

The additional award of P25,000.00 damages by way of attorney's fees, was given by the courts below on the basis of Article 2208,
Paragraph 2, of the Civil Code, which provides: "When the defendant's act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interests;" attorney's fees may be awarded as damages. (Pirovano et al. v. De la Rama
Steamship Co., 96 Phil. 335).

The underlying circumstances of this case lead us to rule out any award of attorney's fees. For one thing, the respondent did not come
to court with completely clean hands. For another, the petitioners apparently believed they could legally revoke the agency in the
manner they did and deal directly with education officials handling the purchase of Philippine flags. They had reason to sincerely
believe they did not have to pay a commission for the second delivery of flags.

We cannot close this case without commenting adversely on the inexplicably strange procurement policies of the Department of
Education and Culture in its purchase of Philippine flags. There is no reason why a shocking 30% of the taxpayers' money should go to
an agent or facilitator who had no flags to sell and whose only work was to secure and handcarry the indorsements of education and
budget officials. There are only a few manufacturers of flags in our country with the petitioners claiming to have supplied flags for our
public schools on earlier occasions. If public bidding was deemed unnecessary, the Department should have negotiated directly with
flag manufacturers. Considering the sad plight of underpaid and overworked classroom teachers whose pitiful salaries and allowances
cannot sometimes be paid on time, a P300,000.00 fee for a P1,000,000.00 purchase of flags is not only clearly unnecessary but a
scandalous waste of public funds as well.

WHEREFORE, the decision of the respondent court is hereby MODIFIED. The petitioners are ordered to pay the respondent the
amount of ONE HUNDRED FOURTY THOUSAND NINE HUNDRED AND NINETY FOUR PESOS (P140,994.00) as her commission
on the second delivery of flags with legal interest from the date of the trial court's decision. No pronouncement as to costs.

SO ORDERED.

G.R. No. L-439 November 11, 1901

GERMANN & CO., plaintiff-appellees,

vs.
DONALDSON, SIM & CO., defendants-appellants.

Fernando de la Cantera, for appellants.

Francisco Ortigas, for appellees.

LADD, J.:

This is an incident of want of personality of the plaintiff's attorney. The action is to recover a sum claimed to be due for freight under a
charter party. It was brought by virtue of a general power for suits, executed in Manila October 27, 1900, by Fernando Kammerzell, and
purporting to be a substitution in favor of several attorneys of powers conferred upon Kammerzell in an instrument executed in Berlin,
Germany, February 5, 1900, by Max Leonard Tornow, the sole owner of the business carried on in Berlin and Manila under the name of
Gemann & Co. The first-named instrument was authenticated by a notary with the formalities required by the domestic laws. The other
was not so authenticated. Both Tornow and Kammerzell are citizens of Germany. Tornow is a resident of Berlin and Kammerzell of
Manila.

The defendants claim that the original power is invalid under article 1280, No. 5, of the Civil Code, which provides that powers for suits
must be contained in a public instrument. No claim is made that the document was not executed with the formalities required by the
German law in the case of such an instrument. We see no reason why the general principle that the formal validity of contracts is to be
tested by the laws of the country where they are executed should not apply. (Civil Code, art. 11.)

The defendants also claim that the original power can not be construed as conferring upon Kammerzell authority to institute or defend
suits, from which contention, if correct, it would of course follow that the delegated power is invalid. In support of this contention reliance
is placed upon article 1713 of the Civil Code, by which it is provided that "an agency stated in general terms only includes acts of
administration," and that "in order to compromise, alienate, mortgage, or to execute any other act of strict ownership an express
commission is required."

It has been argued by counsel for the plaintiff that these provisions of the domestic law are not applicable to the case of an agency
conferred, as was that in question, by one foreigner upon another in an instrument executed in the country of which both were citizens.
We shall not pass upon this question, since we are clearly of opinion that the instrument contains an explicit grant of a power broad
enough to authorize the bringing of the present action, even assuming the applicability of the domestic law as claimed by the
defendants.lawphil.net

By this instrument Tornow constitutes Kammerzell his "true and lawful attorney with full power to enter the firm name 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 administer in the city of Manila for us and in our name a
branch of our general commercial business of important and exportation, for which purpose he may make contracts of lease and
employ suitable assistants, as well as sign every kind of documents, accounts, and obligations connected with the business which may
be necessary, take charge in general of the receipt and delivery of merchandise connected with the business, sign all receipts for sums
of money and collect them and exact 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 in the same manner as we could do ourselves if we were present in the
same place."

We should not be inclined to regard in institution of a suit like the present, which appears to be brought to collect a claim accruing 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 strict ownership." It seems rather to be something which is necessarily a part of the mere administration of such a business as that
described in the instrument in question and only incidentally, if at all, involving a power to dispose of the title to property.

But whether regarded as an act of strict ownership or not, it appears to be expressly and specially authorized by the clause conferring
the power to "exact the payment" of sums of money "by legal means." This must mean the power to exact the payment of debts due the
concern by means of the institution of suits for their recovery. If there could be any doubt as to the meaning of this language taken by
itself, it would be removed by a consideration of the general scope and purpose of the instrument in which it occurs. (See Civil Code,
art. 1286.) The main object of the instrument is clearly to make Kammerzell the manager of the Manila branch of the plaintiff's business,
with the same general authority with reference to its conduct which his principal would himself possess if he were personally directing it.
It can not be reasonably supposed, in the absence of very clear language to that effect, that it was the intention of the principal to
withhold from his agent a power so essential to the efficient management of the business entrusted to his control as that to sue for the
collection of debts.

Arellano, C.J., Torres, Cooper, Willard, and Mapa, JJ., concur.

G.R. No. L-32977 November 17, 1930

THE MUNICIPAL COUNCIL OF ILOILO, plaintiff-appellee,

vs.
JOSE EVANGELISTA, ET AL., defendants-appellees.
TAN ONG SZE VDA. DE TAN TOCO, appellant.

Trenas & Laserna for defendant-appellant.

Provincial Fiscal Blanco of Iloilo for plaintiff-appellees.
Felipe Ysmael for appellee Mauricio Cruz & Co.
No appearance for other appellees.

VILLA-REAL, J.:

This is an appeal taken by the defendant Tan Ong Sze Vda. de Tan Toco from the judgment of the Court of First Instance of Iloilo,
providing as follows:

Wherefore, judgment is hereby rendered, declaring valid and binding the deed of assignment of the credit executed by Tan
Toco's widow, through her attorney-in-fact Tan Buntiong, in favor of late Antero Soriano; likewise the assignment executed by
the latter during his lifetime in favor of the defendant Mauricio Cruz & Co., Inc., and the plaintiff is hereby ordered to pay the
said Mauricio Cruz & Co., Inc., the balance of P30,966.40; the plaintiff is also ordered to deposit said sum in a local bank
within the period of ninety days from the time this judgment shall become final, at the disposal of the aforesaid Mauricio Cruz &
Co. Inc., and in case that the plaintiff shall not make such deposit in the manner indicated, said amount shall bear the legal
interest of six percent per annum from the date when the plaintiff shall fail to make the deposit within the period herein set
forth, until fully paid.

Without special pronouncement of costs.

In support of its appeal, the appellant assigns the following alleged errors as committed by the trial court in its decision, to wit:

1. The lower court erred in rejecting as evidence Exhibit 4-A, Tan Toco, and Exhibit 4-B, Tan Toco.

2. The lower court erred in sustaining the validity of the deed of assignment of the credit, Exhibit 2-Cruz, instead of finding that
said assignment made by Tan Buntiong to Attorney Antero Soriano was null and void.

3. The lower court erred in upholding the assignment of that credit by Antero Soriano to Mauricio Cruz & Co., Inc., instead of
declaring it null and void.

4. The court below erred in holding that the balance of the credit against the municipality of Iloilo should be adjudicated to the
appellant herein, Tan Toco's widow.

5. The lower court erred in denying the motion for a new trial filed by the defendant-appellant.

The facts of the case are as follows:

On March 20, 1924, the Court of First Instance of Iloilo rendered judgment in civil case No. 3514 thereof, wherein the appellant herein,
Tan Ong Sze Vda. de Tan Toco was the plaintiff, and the municipality of Iloilo the defendant, and the former sought to recover of the
latter the value of a strip of land belonging to said plaintiff taken by the defendant to widen a public street; the judgment entitled the
plaintiff to recover P42,966.40, representing the value of said strip of land, from the defendant (Exhibit A). On appeal to this court (G. R.
No .22617) 1 the judgment was affirmed on November 28, 1924 (Exhibit B).

After the case was remanded to the court of origin, and the judgment rendered therein had become final and executory, Attorney Jose
Evangelista, in his own behalf and as counsel for the administratrix of Jose Ma .Arroyo's intestate estate, filed a claim in the same case
for professional services rendered by him, which the court, acting with the consent of the appellant widow, fixed at 15 per cent of the
amount of the judgment (Exhibit 22 Soriano).

At the hearing on said claim, the claimants appeared, as did also the Philippine National Bank, which prayed that the amount of the
judgment be turned over to it because the land taken over had been mortgaged to it. Antero Soriano also appeared claiming the
amount of the judgment as it had been assigned to him, and by him, in turn, assigned to Mauricio Cruz & Co., Inc.

After hearing all the adverse claims on the amount of the judgment the court ordered that the attorney's lien in the amount of 15 per
cent of the judgment, be recorded in favor of Attorney Jose Evangelista, in his own behalf and as counsel for the administratrix of the
deceased Jose Ma .Arroyo, and directed the municipality of Iloilo to file an action of interpleading against the adverse claimants, the
Philippine National Bank, Antero Soriano, Mauricio Cruz & Co., Jose Evangelista and Jose Arroyo, as was done, the case being filed in
the Court of First Instance of Iloilo as civil case No. 7702.

After due hearing, the court rendered the decision quoted from at the beginning.

On March 29, 1928, the municipal treasurer of Iloilo, with the approval of the auditor of the provincial treasurer of Iloilo and of the
Executive Bureau, paid the late Antero Soriano the amount of P6,000 in part payment of the judgment mentioned above, assigned to
him by Tan Boon Tiong, acting as attorney-in-fact of the appellant herein, Tan Ong Sze Vda. de Tan Toco.

On December 18, 1928, the municipal treasurer of Iloilo deposited with the clerk of the Court of First Instance of Iloilo the amount of
P6,000 on account of the judgment rendered in said civil case No. 3514. In pursuance of the resolution of the court below ordering that
the attorney's lien in the amount of 15 per cent of the judgment be recorded in favor of Attorney Jose Evangelista, in his own behalf and
as counsel for the late Jose Ma. Arroyo, the said clerk of court delivered on the same date to said Attorney Jose Evangelista the said
amount of P6,000. At the hearing of the instant case, the codefendants of Attorney Jose Evangelista agreed not to discuss the payment
made to the latter by the clerk of the Court of First Instance of Iloilo of the amount of P6,000 mentioned above in consideration of said
lawyer's waiver of the remainder of the 15 per cent of said judgment amounting to P444.69.

With these two payments of P6,000 each making a total of P12,000, the judgment for P42,966.44 against the municipality of Iloilo was
reduced to P30,966.40, which was adjudicated by said court to Mauricio Cruz & Co.

This appeal, then, is confined to the claim of Mauricio Cruz & Co. as alleged assignee of the rights of the late Attorney Antero Soriano
by virtue of the said judgment in payment of professional services rendered by him to the said widow and her coheirs.

The only question to be decided in this appeal is the legality of the assignment made by Tan Boon Tiong as attorney-in-fact of the
appellant Tan Ong Sze Viuda de Tan Toco, to Attorney Antero Soriano, of all the credits, rights and interests belonging to said
appellant Tan Ong Sze Viuda de Tan Toco by virtue of the judgment rendered in civil case No .3514 of the Court of First Instance of
Iloilo, entitled Viuda de Tan Toco vs. The Municipal Council of Iloilo, adjudicating to said widow the amount of P42,966.40, plus the
costs of court, against said municipal council of Iloilo, in consideration of the professional services rendered by said attorney to said
widow of Tan Toco and her coheirs, by virtue of the deed Exhibit 2.

The appellant contends, in the first place, that said assignments was not made in consideration of professional services by Attorney
Antero Soriano, for they had already been satisfied before the execution of said deed of assignment, but in order to facilitate the
collection of the amount of said judgment in favor of the appellant, for the reason that, being Chinese, she had encountered many
difficulties in trying to collect.lawphil.net

In support of her contention on this point, the appellant alleges that the payments admitted by the court in its judgment, as made by Tan
Toco's widow to Attorney Antero Soriano for professional services rendered to her and to her coheirs, amounting to P2,900, must be
added to the P700 evidenced by Exhibits 4-A, Tan Toco, and 4-B Tan Toco, respectively, which exhibits the court below rejected as
evidence, on the ground that they were considered as payments made for professional services rendered, not by Antero Soriano
personally, by the firm of Soriano & Arroyo.

A glance at these receipts shows that those amounts were received by Attorney Antero Soriano for the firm of Soriano & Arroyo, which
is borne out by the stamp on said receipts reading, "Befete Soriano & Arroyo," and the manner in which said attorney receipted for
them, "Soriano & Arroyo, by A. Soriano."
Therefore, the appellant's contention that the amounts of P200 and P500 evidence by said receipts should be considered as payments
made to Attorney Antero Soriano for professional services rendered by him personally to the interests of the widow of Tan Toco, is
untenable.

Besides, if at the time of the assignments to the late Antero Soriano his professional services to the appellant widow of Tan Toco had
already been paid for, no reason can be given why it was necessary to write him money in payment of professional services on March
14, 1928 (Exhibit 5-G Tan Toco) and December 15, of the same year (Exhibit 5-H Tan Toco) after the deed of assignment, (Exhibit 2-
Cruz) dated September 27, 1927, had been executed. In view of the fact that the amounts involved in the cases prosecuted by Attorney
Antero Soriano as counsel for Tan Toco's widow, some of which cases have been appealed to this court, run into the hundreds of
thousands of pesos, and considering that said attorney had won several of those cases for his clients, the sum of P10,000 to date paid
to him for professional services is wholly inadequate, and shows, even if indirectly, that the assignments of the appellant's rights and
interests made to the late Antero Soriano and determined in the judgment aforementioned, was made in consideration of the
professional services rendered by the latter to the aforesaid widow and her coheirs.

The defendant-appellant also contends that the deed of assignment Exhibit 2-Cruz was drawn up in contravention of the prohibition
contained in article 1459, case 5, of the Civil Code, which reads as follows:

ART. 1459. The following persons cannot take by purchase, even at a public or judicial auction, either in person or through the
mediation of another:

xxx xxx xxx

5. Justices, judges, members of the department of public prosecution, clerks of superior and inferior courts, and other officers
of such courts, the property and rights in litigation before the court within whose jurisdiction or territory they perform their
respective duties .This prohibition shall include the acquisition of such property by assignment.

Actions between co-heirs concerning the hereditary property, assignments in payment of debts, or to secure the property of
such persons, shall be excluded from this rule.

The prohibition contained in this paragraph shall include lawyers and solicitors with respect to any property or rights involved in
any litigation in which they may take part by virtue of their profession and office.

It does not appear that the Attorney Antero Soriano was counsel for the herein appellant in civil case No. 3514 of the Court of First
Instance of Iloilo, which she instituted against the municipality of Iloilo, Iloilo, for the recovery of the value of a strip of land expropriated
by said municipality for the widening of a certain public street. The only lawyers who appear to have represented her in that case were
Arroyo and Evangelista, who filed a claim for their professional fees .When the appellant's credit, right, and interests in that case were
assigned by her attorney-in-fact Tan Boon Tiong, to Attorney Antero Soriano in payment of professional services rendered by the latter
to the appellant and her coheirs in connection with other cases, that particular case had been decided, and the only thing left to do was
to collect the judgment. There was no relation of attorney and client, then, between Antero Soriano and the appellant, in the case where
that judgment was rendered; and therefore the assignment of her credit, right and interests to said lawyer did not violate the prohibition
cited above.

As to whether Tan Boon Tiong as attorney-in-fact of the appellant, was empowered by his principal to make as assignment of credits,
rights and interests, in payment of debts for professional services rendered by lawyers, in paragraph VI of the power of attorney, Exhibit
5-Cruz, Tan Boon Tiong is authorized to employ and contract for the services of lawyers upon such conditions as he may deem
convenient, to take charge of any actions necessary or expedient for the interests of his principal, and to defend suits brought against
her. This power necessarily implies the authority to pay for the professional services thus engaged. In the present case, the assignment
made by Tan Boon Tiong, as Attorney-in-fact for the appellant, in favor of Attorney Antero Soriano for professional services rendered in
other cases in the interests of the appellant and her coheirs, was that credit which she had against the municipality of Iloilo, and such
assignment was equivalent to the payment of the amount of said credit to Antero Soriano for professional services.

With regard to the failure of the other attorney-in-fact of the appellant, Tan Montano, authorized by Exhibit 1 Tan Toco, to consent to
the deed of assignment, the latter being also authorized to pay, in the name and behalf of the principal, all her debts and the liens and
encumbrances her property, the very fact that different letters of attorney were given to each of these two representatives shows that it
was not the principal's intention that they should act jointly in order to make their acts valid. Furthermore, the appellant was aware of
that assignment and she not only did not repudiate it, but she continued employing Attorney Antero Soriano to represent her in court.

For the foregoing considerations, the court is of opinion and so holds: (1) That an agent of attorney-in -fact 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; (2)
that 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; and (3) that the assignment of the amount of a judgment
made by a person to his attorney, who has not taken any part in the case wherein said judgment was rendered, made in payment of
professional services in other cases, does not contravene the prohibition of article 1459, case 5, of the Civil Code.
By virtue whereof, and finding no error in the judgment appealed from, the same is affirmed in its entirety, with costs against the
appellant. So ordered.

Avancea, C.J., Johnson, Street, Malcolm, Villamor, Ostrand, Johns and Romualdez, JJ., concur.

G.R. No. L-30181 July 12, 1929

THE DIRECTOR OF PUBLIC WORKS, plaintiff-appellee,

vs.
SING JUCO, ET AL., defendants.
SING JUCO, SING BENGCO and PHILIPPINE NATIONAL BANK, appellants.

Roman J. Lacson for appellant National Bank.

Soriano and Nepomuceno for appellants Sing Juco and Sing Bengco.
Attorney-General Jaranilla for appellee.

STREET, J.:

From Torrens certificate of title No. 1359 relating to land in the municipality of Iloilo, it appears that on September 28, 1920, the title of
the property described therein was owned, in undivided shares, by Mariano de la Rama, Gonzalo Mariano Tanboontien, Sing Juco and
Sing Bengco. The interest vested by said certificate in Mariano de la Rama was subsequently transferred to sale to Enrique Enchaus. It
further appears that on November 23, 1020, the owners of the property covered by the said certificate conveyed it by way of a
mortgage to the Philippine National Bank for the purpose of securing a credit in current account in a mount not in excess of P170,000,
with interest at a rate of 12 percent per annum. The indebtedness covered by this mortgage has not been satisfied, and upon the date
of the decision of the court below it amounted to the sum of P170,000, plus interest at 12 percent per annum from November 24, 1920.

The land above referred to contains an area of nearly 16 hectares, or to be exact, 158,589.44 square meters according to the
certificate. It is located on "Point Llorente" at the mouth of Iloilo river, near the City of Iloilo, and it is of so low a level that, prior to the
improvement to which reference is to be made, it was subject to frequent flooding. In 1921, the Government of the Philippine Islands
was planning extensive harbor improvements in this vicinity, requiring extensive dredging by the Bureau of Public Works in the mouth of
said river. The conduct of these dredging operations made it necessary for the Director of Public Works to find a place of deposit for the
dirt and mud taken from the place, or places, dredged. As the land already referred to was low and easily accessible to the spot where
dredging was to be conducted, it was obviously for the interest of the Government and the said owners of the land that the material
taken out by the dredges should be deposited on the said property. Accordingly, after preliminary negotiations to this effect have been
conducted, a contract was made between the Director of Public Works, representing the Government of the Philippine Islands, and the
four owners, M. de la Rama, Sing Juco, G. M. Tanboontien, and Seng Bengco, of which, as modified by some respects by subsequent
agreement, the following features are noteworthy.

(1) The Bureau of Public Works agreed to deposit the material to be dredged by it from the Iloilo River, in connection with the
contempted improvement, upon the lot of the land, already described as covered by certificate No. 1359, at a price to be determined at
the actual cost of the filling, with certain surcharges to be determined by the Director of Public Works. It was contemplated in the
original draft of the contract that the Bureau would be able to furnish some 250,000 cubic meters of dredged material for filling in the
land, was limited to the material which should be dredged from the river as a result of the proposed improvement. To this stipulation the
four owners of the property assented on March 14, 1921.

(2) With respect to the compensation it was agreed that the amount due should be determined by the Director of Public Works, under
certain conditions mentioned in the contract, of an amount of not less that 20 nor more than 75 centavos per cubic meter. It was further
agreed that, when the work should be finished, the cost thereof should be paid by the owners in 5 annual installments and that for
failure to pay such installment the whole of the amount thereafter to accrue should become at once due. This contract was noted in the
Torrens certificate of title on January 8, 1924.

In connection with the making of the contract abovementioned, the, Director of Public Works required a bond to be supplied by the
owners in the penal amount of P150,000, approximately twice the estimated cost of the filling, conditioned for the payment of the
amount due from the owners. This bond was executed contemporaneously with the main contract; and in connection therewith it should
be noted that one of the names appearing upon said contract was that of "Casa Viuda de Tan Toco," purporting to be signed by M. de
la Rama.

The dredging operation were conducted by the Bureau of Public Works in substantial accomplice, we find, with the terms of said
agreement; and after the account with the owners were liquidated and the amount due from them determined, demand was made upon
them for the payment of the first installment. No such payment was, however, made as a consequence this action was instituted by the
Director of Public Works on October 14, 1926, for the purpose of recovering the amount due to the Government under the contract from
the original owners of the property from the sureties whose names were signed to the contract of suretyship, and to enforce the
obligation as a real lien upon the property. In said action the Philippine National Bank was made a party defendant, as having an
interest under its prior mortgage upon the property, while Enrique Enchaus was made defendant as successor in interest of M. de la
Rama, and Tan Ong Sze widow of Tan Toco, was also made defendant by reason of her supposed liability derived from the act of De la
Rama in signing the firm "Casa Viuda de Tan Toco" as a surety on bond. It was noteworthy that in the complaint it was asked that, in
the enforcement of the government's lien, the property should be sold "subject to the first mortgage in favor of the Philippine National
Bank."

To this complaint different defenses were set up, as follows: On behalf of the owners of the property, it was contended that the
government has not complied with that contract, in that dredged material deposited on the land had not been sufficient in quantity to
raise the level of the land above high water, and that, as a consequence, the land had not been much benefited. It is therefore asserted
that the owners of the property are not obligated to pay the filling operation. These defendants sought to recover further damages by
way of cross-complaint for the same supposed breach of contract on the part of the Government. On the part of Viuda de Tan Toco the
defense was interposed that the name "Casa Viuda de Tan Toco" signed to the contract of suretyship by Mariano de la Rama was
signed without authority; while on the part of the Philippine National Bank was asserted that the mortgage credit pertaining to the bank
is superior to the Governments lien for improvement, and by way of counterclaim the bank asked that its mortgage be foreclosed for the
amount of its mortgage credit, and that the four mortgagors, Sing Juco, Sing Bengco, M. de la Rama and G.M. Tanboontien, be
required to pay the amount due to the bank, and that in case of their failure to do so the mortgaged property should be sold and the
proceeds paid preferentially to the bank upon its mortgage.

Upon hearing the cause the trial court, ignoring that part of the original complaint wherein the Government seeks to enforce its lien in
subordination to its first mortgage, made pronouncements:

(1) Declaring Sing Juco, Sing Bengco, M. de la Rama and G. M. Tanboontien indebted to the Government in the amount of
P70, 938, with interest from the date of the filing of the complaint, and requiring them to pay the said sum to the plaintiff;

(2) Declaring, in effect, that the lien of the Government for the filing improvement was superior to the mortgage of the
Philippine National Bank; and finally

(3) Declaring the defendant Tan Ong Sze, Viuda de Tan Toco, personally liable upon the contract of suretyship, in case the
four principal obligors should not satisfy their indebtedness to the Government, or if the land should not sell enough to satisfy
the same.

From this judgment various parties defendant appealed as follows: All of the defendants, except the Philippine National Bank, appealed
from so much of the decision as held that the defendant owners and signatories to the contract of suretyship has not been released by
non-performance of the contract on the part of the Bureau of Public Works, and from the refusal of the court to give to the defendant
owners damages for breach of contract on the part of the Government. On the part of Tan Ong Sze, Viuda de Tan Toco, error is
assigned to the action of the court in holding said defendant liable upon the contract of suretyship. Finally, the Philippine National Bank
appealed from so much of the decision as gave the lien of the Government for improvement priority over the mortgagee executed in
favor of the bank.

Dealing with these contentions in the order indicated, we find the contention of the appellants (except the Philippine National Bank), to
the effect that the Director of Public Works has failed to comply with the obligations imposed upon the government by the contract, is
wholly untenable. By said contract, the Government was not obligated to raise the land on which the dredged material was deposited to
any specified level. The Government only obligated itself upon said land the material should be dredged from the mouth of the Iloilo
River in the course of the improvement undertaken by the Government in and near that place. Under the original contract as originally
drafted, the Government agreed to furnish 250,000 cubic meters, more or less, of dredged material; but on Mar. 14, 1921, the owners
of the property indicated their acceptance of a modification of the contract effected by the Director of Public Works and the Secretary of
Commerce and Communications, in which it was made clear that the material to be supplied would be such only as should be dredged
from the river as a result of the proposed improvement. In the endorsement of the Director of Public Works, thus accepted by the
owners, it was made clear that the Bureau of Public Works did not undertake to furnish material to complete the filling of the land to any
specified level. Proof submitted on the part of the owners tends to show that parts of the filled land are still subject to inundation in rainy
weather; and it is contended, that the owners have, for this reason, been able to sell in lots the property to individual occupants. the
sum of P15,000, which is claimed upon this account, as damages by the owners, is the amount of interest alleged to have been
accrued upon their investment, owing to their inability to place the land advantageously upon the market. The claim is, as already
suggested, untenable. There has been no breach on the part of the Government in fulfilling the contract. In fact it appears that the
Government deposited in the period covered by the contract 236,460 cubic meters, and after the amount thus deposited had been
reduced by 21,840 cubic meters, owing to the natural process of drying, the Bureau of Public Works further deposited 53,000 cubic
meters on the same land. In this connection, the district engineer testified that the filling which has been charged to the owners at
P70,938 actually cost the Government the amount of P88,297.85. The charge made for the work was evidently computed on a very
moderate basis; and the owners of the property have no just ground of complaint whatever.

The contention of Tan Ong Sze, widow of Tan Toco, to the effect that she was not, and is not, bound by the contract of suretyship, is
our pinion, well-founded. It will be remembered that said contract purports to have been signed by Mariano de la Rama, acting for this
defendant under the power of attorney. But the Government has exhibited no power of attorney which would authorize the creation, by
the attorney-in-fact, of an obligation in the nature of suretyship binding upon this principal.
It is true that the Government introduced in evidence 2 documents exhibiting powers of attorney, conferred by these documents (Exhibit
K, identical with Exhibit 5) Mariano de la Rama was given the power which reads as follows:

. . . and also for me and in my name to sign, seal and execute, and as my act and deed deliver, any lease or any other deed
for the conveying any real or personal property or the other matter or thing wherein I am or may be personally interested or
concerned. And I do hereby further authorize and empower my said attorney to substitute and point any other attorney or
attorneys under him for the purposes aforesaid, and the same again and pleasure to revoke; and generally for me and in my
name to do, perform, and execute all and any other lawful and reasonable acts and things whatsoever as fully and effectually
as I, the said Tan Ong Sze might or could do if personally present.

In another document, (Exhibits L and M), executed in favor of the same Mariano de la Rama by his uncle Tan Lien Co, attorney-in-fact
of Tan Ong Sze, with power of substitution, there appears the following:

. . . and also for her and for her name to sign, seal and execute, and as her act and deed deliver, any lease, release, bargain,
sale, assignment, conveyance or assurance, any other deed for the conveying any real or personal property or other matter or
thing wherein she or may be personally interested or concerned.

Neither of these powers officially confers upon Mariano de la Rama the power to bind a principal by a contract of suretyship. The
clauses noted relate more specifically to the execution of contracts relating to property; and the more general words at the close of the
quoted clauses should be interpreted, under the general rule ejusdem generis, as referring to the contracts of like character. Power to
execute a contract so exceptional a nature as a contract of suretyship or guaranty cannot be inferred from the general words contained
in these powers.

In article 1827 of the Civil Code it is declared that guaranty shall not be presumed; it must be expressed and cannot be extended
beyond its specified limits. By analogy a power of attorney to execute a contract of guaranty should not be inferred from vague or
general words, especially when such words have their origin and explanation in particular powers of a wholly different nature. It results
that the trial court was in error in giving personal judgment against Tan Ong Sze upon the bond upon which she was sued in this case.

We now proceed to consider the last important disputed question involved in this case, which is, whether the indebtedness owing to the
Government under the contract for filling the parcel of land already mentioned is entitled to preference over the mortgage credit due to
the Philippine National Bank, as the trial judge held, or whether on the contrary, the latter claim is entitled to priority over the claim of
the Government Upon entering into the discussion of the feature of the case it is well to recall the fact that the bank's mortgage was
registered in the office of the Register of Deeds of the province of Iloilo on November 26, 1920, while the filing contract was registered
on January 8, 1924, that is to say, there is a priority of more than three years, in point of time, in the inscription of the mortgage credit
under the filling contract was made an express lien upon the property which was the subject of improvement.

In the brief submitted in behalf of the bank it appears to be assumed that the Government credit under the filling contract is a true
refectionary credit (credito refacionario) under subsection 2 of Article 1923 of the Civil Code. It may be observed, however, that in a
precise and technical sense, this credit is not exactly of the nature of the refectionary credit as known to the civil law. In the civil law the
refectionary credit is primarily an indebtedness incurred in the repair or reconstruction of something previously made, such repair or
reconstruction being made necessary by the deterioration or destruction as it formerly existed. The conception does not ordinarily
include an entirely new work, though Spanish jurisprudence appears to have sanctioned this broader conception in certain cases as
may be gathered from the decision in the Enciclopedia Juridica Espanola (vol. 26, pp. 888-890) s. v. Refaccionario. The question
whether the credit we are considering falls precisely under the conception of the refectionary credit in the civil law is in this case
academic rather than practical, for the reason that by the express terms of the filling contract the credit was constituted a lien upon the
improved property. But assuming, as might be tenable in the state of jurisprudence, that said credit is a refectionary credit enjoying
preference under subsection 3 or article 1923 of the Civil code , then the mortgage credit must be given priority under subsection 2 of
the article 1927 of the same code, for the reason that the mortgage was registered first.

Possibly the simpler view of the situation is to consider the Government's right under the stipulation expressly making the credit a lien
upon the property, for it was certainly lawful for the parties to the filling contract to declare the credit a lien upon the property to be
improved to the extent hereinafter define whether the credit precisely fulfills the conception of refectionary credit or not. In this
aspect we have before us a competition between the real lien created by the filling contract of the later registration. The true solution to
the problem is, in our opinion, not open to doubt; and again the result is that priority must be conceded to the mortgage. The mortgage
was created by the lawful owners at a time when no other competing interest existed in the property. The lien of the mortgage therefore
attached to the fee, or unlimited interest of the owners in the property. On the other hand, the lien created by the filling contract was
created after the mortgage had been made and registered, and therefore, after the owners of the property had parted with the interest
created by the mortgage. The Government's lien owes its origin to the contract, and derives its efficacy from the volition of the
contracting parties. But no party can by contract create a right in another intrinsically greater than that which he himself possess. The
owners, at the time this contract was made, were owners of the equity of redemption only and not of the entire interest in the property,
and the lien created by the contract could only operate upon the equity of redemption.

In this connection, we observed that, as the new material was deposited from the Government dredges upon the property in question, it
became an integral part of the soil and an irremovable fixture; and the deposit having been made under contract between the
Government and the owners of the equity of redemption, without the concurrence of the mortgage creditor in said contract the latter
could not be prejudiced thereby. The trial court, in declaring that the Government's lien should have preference over the mortgage,
seems to have proceeded upon the idea that, at the time the mortgage was created, the new soil had yet been deposited under the
filling contract and that as a consequence the mortgage lien should not been considered as attaching to the value added by deposit of
the additional material. This proposition, however, overlooks the fact that the deposited material became an irremovable fixture, by the
act and intention of the parties to the filling contract, and the lien of the mortgage undoubtedly attached to the increment thus spread
over and affixed to the mortgaged land. If the idea which prevailed in the trial court should be accepted as law upon this point, the result
would be that a mortgage creditor could, by the act of strangers, be entirely proved out of his property by making of improvements to
which he has not assented. This cannot be accepted as good law.

We may add that the case cannot, on this point, be resolved favorably to the contention of the Director of Public Works, upon the
authority of Unson vs. Urquijo, Zuluoaga and Escubi (50 Phil., 160), for the reason that upon the deposit of the dredged material on the
land such material lost its identity. In the case cited the machinery in respect to which the vendor's preference was upheld by this court
retained its separate existence and remained perfectly capable of identification at all times.

From what it has been said it results that the appealed judgment must be affirmed, and the same is hereby affirmed, in dismissing, in
effect, the cross-complaint filed by some of the defendants against the plaintiff, the Director of Public Works. Such judgment is further
affirmed in its findings, which are not dispute, with respect to the amount of the Government's claim under the filling contract and the
amount of mortgage credit of the bank, as it is also affirmed in respect to the joint and several judgment entered in favor of the plaintiff
against Sing Juco, Sing Bengco, Tanboontien and Mariano de la Rama Tanbunco (alias Mariano de la Rama) for the amount due to the
Government

Said judgment, however, must be reversed and the same is being reversed in so far as it holds that Tan Ong Sze, Viuda de Tan Toco,
is liable upon the contract of suretyship, and she is hereby absolved from the complaint. The judgment must also be reversed in so far
as it declares that the Government's lien under the filling contract is entitled to priority over the bank's mortgage. On the contrary it is
hereby declared that the bank's credit is entitled to priority out of the proceeds of the foreclosure sale, the residue, if any, to be applied
to the Government's lien created by the filling contract and otherwise in accordance with law. For further proceedings in conformity with
this opinion, the cause is hereby remanded to the cause of origin, without pronouncements as to costs. So ordered.

Johnson, Villamor, Johns, Romualdez, and Villa-Real, JJ., concur.

Malcolm and Ostrand, JJ., also voted as indicated in the dispositive part of their decision, but their names are not signed to opinion
owing to their absence of leave at the time of their promulgation.

G.R. No. L-39037 October 30, 1933

THE PHILIPPINE NATIONAL BANK, plaintiff-appellee,

vs.
PAZ AGUDELO Y GONZAGA, ET AL., defendants.
PAZ AGUDELO Y GONZAGA, appellant.

Hilado and Hilado and Norberto Romualdez for appellant.

Roman J. Lacson for appellee.

VILLA-REAL, J.:

The defendant Paz Agudelo y Gonzaga appeals to this court from the judgment rendered by the Court of First Instance of Occidental
Negros, the dispositive part of which reads as follows:

Wherefore, judgment is rendered herein absolving the defendant Mauro A. Garrucho from the complaint and ordering the
defendant Paz Agudelo y Gonzaga to pay to the plaintiff the sum of P31,091.55, Philippine currency, together with the interest
on the balance of P20,774.73 at 8 per cent per annum of P4.55 daily from July 16, 1929, until fully paid, plus the sum of
P1,500 as attorney's fees, and the costs of this suit.

It is hereby ordered that in case the above sums adjudged in favor of the defendant by virtue of this judgment are not paid to
the Philippine National Bank or deposited in the office of the clerk of this court, for delivery to the plaintiff, within three months
from the date of this decision, the provincial sheriff of Occidental Negros shall set at public auction the mortgaged properties
described in annex E of the second amended complaint, and apply the proceeds thereof to the payment of the sums in
question.

It is further ordered that in case the proceeds of the mortgaged properties are not sufficient to cover the amount of this
judgment, a writ of execution be issued against any other property belonging to the defendant Paz Agudelo y Gonzaga, not
otherwise exempt from execution, to cover the balance resulting therefrom.
In support of her appeal, the appellant assigns six alleged errors as committed by the trial court, which we shall discuss in the course of
this decision.

The following pertinent facts, which have been proven without dispute during the trial, are necessary for the decision of the questions
raised in the present appeal, to wit:

On November 9, 1920, the defendant-appellant Paz Agudelo y Gonzaga executed in favor of her nephew, Mauro A. Garrucho, the
document Exhibit K conferring upon him a special power of attorney sufficiently broad in scope to enable him to sell, alienate and
mortgage in the manner and form he might deem convenient, all her real estate situated in the municipalities of Murcia and Bacolod,
Occidental Negros, consisting in lots Nos. 61 and 207 of the cadastral survey of Bacolod, Occidental Negros, together with the
improvement thereon.

On December 22, 1920, Amparo A. Garrucho executed the document Exhibit H whereby she conferred upon her brother Mauro A
Garrucho a special power of attorney sufficiently broad in scope to enable him to sell, alienate, mortgage or otherwise encumber, in the
manner and form he might deem convenient, all her real estate situated in the municipalities of Murcia and Bago, Occidental Negros.

Nothing in the aforesaid powers of attorney expressly authorized Mauro A. Garrucho to contract any loan nor to constitute a mortgage
on the properties belonging to the respective principals, to secure his obligations.

On December 23, 1920, Mauro A. Garrucho executed in the favor of the plaintiff entity, the Philippine National bank, the document
Exhibit G, whereby he constituted a mortgage on lot No. 878 of the cadastral survey of Murcia, Occidental Negros, with all the
improvements thereon, described in transfer certificate of title No. 2415 issued in the name of Amparo A. Garrucho, to secure the
payment of credits, loans, commercial overdrafts, etc., not exceeding P6,000, together with interest thereon, which he might obtain from
the aforesaid plaintiff entity, issuing the corresponding promissory note to that effect.

During certain months of the year 1921 and 1922, Mauro A. Garrucho maintained a personal current account with the plaintiff bank in
the form of a commercial credit withdrawable through checks (Exhibits S, 1 and T).

On August 24, 1931, the said Mauro A. Garrucho executed in favor of the plaintiff entity, the Philippine National Bank, the document
Exhibit J whereby he constituted a mortgage on lots Nos. 61 and 207 of the cadastral survey of Bacolod together with the buildings and
improvements thereon, described in original certificates of title Nos. 2216 and 1148, respectively, issued in the name of Paz Agudelo y
Gonzaga, to secure the payment of credits, loans and commercial overdrafts which the said bank might furnish him to the amount of
P16,00, payable on August 24, 1922, executing the corresponding promissory note to that effect.

The mortgage deeds Exhibit G and J as well as the corresponding promissory notes for P6,000 and P16,000, respectively, were
executed in Mauro A. Garrucho's own name and signed by him in his personal capacity, authorizing the mortgage creditor, the
Philippine National Bank, to take possession of the mortgaged properties, by means of force if necessary, in case he failed to comply
with any of the conditions stipulated therein.

On January 4, 1922, the manager of the Iloilo branch of the Philippine National Bank notified Mauro A. Garrucho that his promissory
note for P6,000 of 10 days within which to make payment thereof (Exhibit O).1awphil.net

On May 9, 1922, the said manager notified Mauro A. Garrucho that his commercial credit was closed from that date (Exhibit S).

Inasmuch as Mauro A. Garrucho had overdrawn his credit with the plaintiff-appellee, the said manager thereof, in a letter dated June
27, 1922 (Exhibit T), requested him to liquidate his account amounting to P15,148.15, at the same time notifying him that his
promissory note for P16,000 giving as security for the commercial overdraft in question, had fallen due some time since.

On July 15, 1922, Mauro A. Garrucho, executed in favor of the plaintiff entity the deed Exhibit C whereby he constituted a mortgage on
lots Nos. 61 and 207 of the cadastral survey of Bacolod, together with the improvements thereon, described in transfer certificates of
title Nos. 2216 and 1148, respectively, issued in the name of Paz Agudelo y Gonzaga, and on lot No. 878 of the cadastral survey of
Murcia, described in transfer certificate of title No. 2415, issued in the name of Amparo A. Garrucho.

In connection of the credits, loans, and commercial overdrafts amounting to P21,000 which had been granted him, Mauro A. Garrucho,
on the said date July 15, 1922, executed the promissory note, Exhibit B, for P21,000 as a novation of the former promissory notes for
P6,000 and P16,000, respectively.

In view of the aforesaid consolidated mortgage, Exhibit C, the Philippine National Bank, on the said date of July 15, 1922, cancelled the
mortgages constituted on lots Nos. 61, 207 and 878 described in Torrens titles Nos. 2216, 1148 and 2415, respectively.

On November 25, 1925, Amparo A. Garrucho sold lot No. 878 described in certificate of title No. 2415, to Paz Agudelo y Gonzaga
(Exhibit M).
On January 15, 1926, in the City of Manila, Paz Agudelo y Gonzaga signed the affidavit, Exhibit N, which reads as follows:

Know all men by these presents: That I, Paz Agudelo y Gonzaga, single, of age, and resident of the City of Manila, P. I., by
these present do hereby agree and consent to the transfer in my favor of lot No. 878 of the Cadastre of Murcia, Occidental
Negros, P. I., by Miss Amparo A. Garrucho, as evidenced by the public instrument dated November 25, 1925, executed before
the notary public Mr. Genaro B. Benedicto, and do hereby further agree to the amount of the lien thereon stated in the
mortgage deed executed by Miss Amparo A. Garrucho in favor of the Philippine National Bank.

In testimony whereof, I hereunto affix my signature in the City of Manila, P.I., this 15th of January, 1926.

(Sgd.) PAZ AGUDELO Y GONZAGA.

Pursuant to the sale made by Amparo A. Garrucho in favor of Paz Agudelo y Gonzaga, of lot No. 878 of the cadastral survey of Murcia,
described in certificate of title No. 2145 issued in the name of said Amparo A. Garrucho, and to the affidavit, Exhibit N, transfer
certificate of title No. 5369 was issued in the name of Paz Agudelo y Gonzaga.

Without discussing and passing upon whether or not the powers of attorney issued in favor of Mauro A. Garrucho by his sister, Amparo
A. Garrucho, and by his aunt, Paz Agudelo y Gonzaga, respectively, to mortgage their respective real estate, authorized him to obtain
loans secured by mortgage in the properties in question, we shall consider the question of whether or not Paz Agudelo y Gonzaga is
liable for the payment of the loans obtained by Mauro A. Garrucho from the Philippine National Bank for the security of which he
constituted a mortgage on the aforesaid real estate belonging to the defendant-appellant Paz Agudelo y Gonzaga.

Article 1709 of the Civil Code provides the following:

ART. 1709. By the contract of agency, one person binds himself to render some service, or to do something for the account or
at the request of another.

And article 1717 of the same Code provides as follows:

ART. 1717. When an agent acts in his own name, the principal shall have no right of action against the persons with whom the
agent has contracted, or such persons against the principal.

In such case, the agent is directly liable to the person with whom he has contracted, as if the transaction were his own. Cases
involving things belonging to the principal are excepted.

The provisions of this article shall be understood to be without prejudice to actions between principal and agent.

Aside from the phrases "attorney in fact of his sister, Amparo A. Garrucho, as evidenced by the power of attorney attached hereto" and
"attorney in fact of Paz Agudelo y Gonzaga" written after the name of Mauro A. Garrucho in the mortgage deeds, Exhibits G. and J,
respectively, there is nothing in the said mortgage deeds to show that Mauro A. Garrucho is attorney in fact of Amparo A. Garrucho and
of Paz Agudelo y Gonzaga, and that he obtained the loans mentioned in the aforesaid mortgage deeds and constituted said mortgages
as security for the payment of said loans, for the account and at the request of said Amparo A. Garrucho and Paz Agudelo y Gonzaga.
The above-quoted phrases which simply described his legal personality, did not mean that Mauro A. Garrucho obtained the said loans
and constituted the mortgages in question for the account, and at the request, of his principals. From the titles as well as from the
signatures therein, Mauro A. Garrucho, appears to have acted in his personal capacity. In the aforesaid mortgage deeds, Mauro A.
Garrucho, in his capacity as mortgage debtor, appointed the mortgage creditor Philippine National Bank as his attorney in fact so that it
might take actual and full possession of the mortgaged properties by means of force in case of violation of any of the conditions
stipulated in the respective mortgage contracts. If Mauro A. Garrucho acted in his capacity as mere attorney in fact of Amparo A.
Garrucho and of Paz Agudelo y Gonzaga, he could not delegate his power, in view of the legal principle of "delegata potestas delegare
non potest" (a delegated power cannot be delegated), inasmuch as there is nothing in the records to show that he has been expressly
authorized to do so.

He executed the promissory notes evidencing the aforesaid loans, under his own signature, without authority from his principal and,
therefore, were not binding upon the latter (2 Corpus Juris, pp. 630-637, par. 280). Neither is there anything to show that he executed
the promissory notes in question for the account, and at the request, of his respective principals (8 Corpus Juris, pp. 157-158).

Furthermore, it is noted that the mortgage deeds, Exhibits C and J, were cancelled by the documents, Exhibits I and L, on July 15,
1922, and in their stead the mortgage deed, Exhibit C, was executed, in which there is absolutely no mention of Mauro A. Garrucho
being attorney in fact of anybody, and which shows that he obtained such credit fro himself in his personal capacity and secured the
payment thereof by mortgage constituted by him in his personal capacity, although on properties belonging to his principal Paz Agudelo
y Gonzaga.
Furthermore, the promissory notes executed by Mauro A. Garrucho in favor of the Philippine National Bank, evidencing loans of P6,000
and P16,000 have been novated by the promissory notes for P21,000 (Exhibit B) executed by Mauro A. Garrucho, not only without
express authority from his principal Paz Agudelo y Gonzaga but also under his own signature.

In the case of National Bank vs. Palma Gil (55 Phil., 639), this court laid down the following doctrine:

A promissory note and two mortgages executed by the agent for and on behalf of his principal, in accordance with a power of
attorney executed by the principal in favor of the agent, are valid, and as provided by article 1727 of contracted by the agent;
but a mortgage on real property of the principal not made and signed in the name of the principal is not valid as to the
principal.

It has been intimated, and the trial judge so stated. that it was the intention of the parties that Mauro A. Garrucho would execute the
promissory note, Exhibit B, and the mortgage deed, Exhibit C, in his capacity as attorney in facts of Paz Agudelo y Gonzaga, and that
although the terms of the aforesaid documents appear to be contrary to the intention of the parties, such intention should prevail in
accordance with article 1281 of the Civil Code.

Commenting on article 1281 of the Civil Code, Manresa, in his Commentaries to the Civil Code, says the following:

IV. Intention of the contracting parties; its appreciation. In order that the intention may prevail, it is necessary that the
question of interpretation be raised, either because the words used appear to be contrary thereto, or by the existence of overt
acts opposed to such words, in which the intention of the contracting parties is made manifest. Furthermore, in order that it
may prevail against the terms of the contract, it must be clear or, in other words, besides the fact that such intention should be
proven by admissible evidence, the latter must be of such charter as to carry in the mind of the judge an unequivocal
conviction. This requisite as to the kind of evidence is laid down in the decision relative to the Mortgage Law of September 30,
1891, declaring that article 1281 of the Civil Code gives preference to intention only when it is clear. When the aforesaid
circumstances is not present in a document, the only thing left for the register of deeds to do is to suspend the registration
thereof, leaving the solution of the problem to the free will of the parties or to the decision of the courts.

However, the evident intention which prevails against the defective wording thereof is not that of one of the parties, but the
general intent, which, being so, is to a certain extent equivalent to mutual consent, inasmuch as it was the result desired and
intended by the contracting parties. (8 Manresa, 3d edition, pp. 726 and 727.)

Furthermore, the records do not show that the loan obtained by Mauro A. Garrucho, evidenced by the promissory note, Exhibit B, was
for his principal Paz Agudelo y Gonzaga. The special power of attorney, Exhibit K, does not authorize Mauro A. Garrucho to constitute
a mortgage on the real estate of his principal to secure his personal obligations. Therefore, in doing so by virtue of the document,
Exhibit C, he exceeded the scope if his authority and his principal is not liable for his acts. (2 Corpus Juris, p. 651; article 1714, Civil
Code.)

It is further claimed that inasmuch as the properties mortgaged by Mauro A. Garrucho belong to Paz Agudelo y Gonzaga, the latter is
responsible for the acts of the former although he acted in his own name, in accordance with the exception contained in article 1717 of
the Civil Code. It would be an exception with the properties of his own name in connection with the properties of his principal, does so
within the scope of his authority. It is noted that Mauro A. Garrucho was not authorized to execute promissory notes even in the name
of his principal Paz Agudelo y Gonzaga, nor to constitute a mortgage on her real properties to secure such promissory notes. The
plaintiff Philippine National Bank should know this inasmuch as it is in duty bound to ascertain the extent of the agent's authority before
dealing with him. Therefore, Mauro A. Garrucho and not Paz Agudelo y Gonzaga is personally liable for the amount of the promissory
note Exhibit B. (2 Corpus Juris, pp. 563-564.)

However, Paz Agudelo y Gonzaga in an affidavit dated January 15, 1926 (Exhibit AA), and in a letter dated January 16, 1926 (Exhibit
Z), gave her consent to the lien on lot No. 878 of the cadastre of Murcia, Occidental Negros, described in Torrens title No. 5369, the
ownership of which was transferred to her by her niece Amparo A. Garrucho. This acknowledgment, however, does not extend to lots
Nos. 207 and 61 of the cadastral survey of Bacolod, described in transfer certificates of title Nos. 1148 and 2216, respectively,
inasmuch as, although it is true that a mortgage is indivisible as to the contracting parties and as top their successors in interest (article
1860, Civil Code), it is not so with respect to a third person who did not take part in the constitution thereof either personally or through
an agent, inasmuch as he can make the acknowledgment thereof in the form and to the extent he may deem convenient, on the ground
that he is not in duty bound to acknowledge the said mortgage. Therefore, the only liability of the defendant-appellant Paz Agudelo y
Gonzaga is that which arises from the aforesaid acknowledgment, but only with respect to the lien and not to the principal obligation
secured by the mortgage acknowledged by her to have been constituted on said lot No. 878 of the cadastral survey of Murcia,
Occidental Negros. Such liability is not direct but a subsidiary one.

Having reach this contention, it is unnecessary to pass upon the other questions of law raised by the defendant- appellant in her brief
and upon the law cited therein.

In view of the foregoing consideration, we are of the opinion and so hold that when an agent negotiates a loan in his personal capacity
and executes a promissory note under his own signature, without express authority from his principal, giving as security therefor real
estate belonging to the letter, also in his own name and not in the name and representation of the said principal, the obligation do
constructed by him is personal and does not bind his aforesaid principal.

Wherefore, it is hereby held that the liability constructed by the aforesaid defendant-appellant Paz Agudelo y Gonzaga is merely
subsidiary to that of Mauro A. Garrucho, limited lot No. 878 of the cadastral survey of Murcia, Occidental Negros, described in Torrens
title No. 2415. However, inasmuch as the principal obligator, Mauro A. Garrucho, has been absolved from the complaint and the
plaintiff- appellee has not appealed from the judgment absolving him, the law does not afford any remedy whereby Paz Agudelo y
Gonzaga may be required to comply with the said subsidiary obligation in view of the legal maxim that the accessory follows the
principal. Wherefore, the defendant herein should also be absolved from the complaint which is hereby dismissed, with the costs
against the appellee. So ordered.

Avancea, C.J., Malcolm, Hull, and Imperial, JJ., concur.

G.R. No. L-13471 January 12, 1920

VICENTE SY-JUCO and CIPRIANA VIARDO, plaintiffs-appellants,

vs.
SANTIAGO V. SY-JUCO, defendant-appellant.

Sumulong and Estrada for plaintiffs and appellants.

Delgado and Delgado for defendant and appellant.

AVANCEA, J.:

In 1902 the defendant was appointed by the plaintiffs administrator of their property and acted as such until June 30, 1916, when his
authority was cancelled. The plaintiffs are defendant's father and mother who allege that during his administration the defendant
acquired the property claimed in the complaint in his capacity as plaintiffs' administrator with their money and for their benefit. After
hearing the case the trial court rendered his decision, the dispositive part of which is the following:

Wherefore, the court give judgment for the plaintiffs and orders:

1. That the defendant return to the plaintiffs the launch Malabon, in question, and execute all the necessary documents and
instruments for such delivery and the registration in the records of the Custom House of said launch as plaintiffs' property;

2. That the defendant return to the plaintiffs the casco No. 2584, or pay to them the value thereof which has been fixed at the
sum of P3,000, and should the return of said casco be made, execute all the necessary instruments and documents for its
registration in plaintiffs' name at the Custom House; and

3. That the defendant return to the plaintiffs the automobile No. 2060 and execute the necessary instruments and documents
for its registration at the Bureau of Public Works. And judgment is hereby given for the defendant absolving him from the
complaint so far concerns:

1. The rendition of accounts of his administration of plaintiffs property;

2. The return of the casco No. 2545;

3. The return of the typewriting machine;

4. The return of the house occupied by the defendant; and

5. The return of the price of the piano in question.

Both parties appealed from this judgment.

In this instance defendant assigns three errors alleged to have been committed by the lower court in connection with the three items of
the dispositive part of the judgment unfavorable to him. We are of the opinion that the evidence sufficiently justifies the judgment
against the defendant.

Regarding the launch Malabon, it appears that in July, 1914, the defendant bought it in his own name from the Pacific Commercial Co.,
and afterwards registered it at the Custom House. But his does not necessarily show that the defendant bought it for himself and with
his own money, as he claims. This transaction was within the agency which he had received from the plaintiffs. The fact that he has
acted in his own name may be only, as we believe it was, a violation of the agency on his part. As the plaintiffs' counsel truly say, the
question is not in whose favor the document of sale of the launch is executed nor in whose name same was registered, but with whose
money was said launch bought. The plaintiffs' testimony that it was bought with their money and for them is supported by the fact that,
immediately after its purchase, the launch had to be repaired at their expense, although said expense was collected from the
defendant. I the launch was not bought for the plaintiffs and with their money, it is not explained why they had to pay for its repairs.

The defendant invokes the decision of this Court in the case of Martinez vs. Martinez (1 Phil. Rep., 647), which we do not believe is
applicable to the present case. In said case, Martinez, Jr., bought a vessel in his own name and in his name registered it at the Custom
House. This court then said that although the funds with which the vessel was bought belonged to Martinez Sr., Martinez Jr. is its sole
and exclusive owner. But in said case the relation of principal and agent, which exists between the plaintiffs and the defendant in the
present case, did not exist between Martinez, Sr., and Martinez, Jr. By this agency the plaintiffs herein clothed the defendant with their
representation in order to purchase the launch in question. However, the defendant acted without this representation and bought the
launch in his own name thereby violating the agency. If the result of this transaction should be that the defendant has acquired for
himself the ownership of the launch, it would be equivalent to sanctioning this violation and accepting its consequences. But not only
must the consequences of the violation of this agency not be accepted, but the effects of the agency itself must be sought. If the
defendant contracted the obligation to but the launch for the plaintiffs and in their representation, but virtue of the agency,
notwithstanding the fact that he bought it in his own name, he is obliged to transfer to the plaintiffs the rights he received from the
vendor, and the plaintiffs are entitled to be subrogated in these rights.

There is another point of view leading us to the same conclusion. From the rule established in article 1717 of the Civil Code that, when
an agency acts in his own name, the principal shall have no right of action against the person with whom the agent has contracted,
cases involving things belonging to the principal are excepted. According to this exception (when things belonging to the principal are
dealt with) the agent is bound to the principal although he does not assume the character of such agent and appears acting in his own
name (Decision of the Supreme Court of Spain, May 1, 1900). This means that in the case of this exception the agent's apparent
representation yields to the principal's true representation and that, in reality and in effect, the contract must be considered as entered
into between the principal and the third person; and, consequently, if the obligations belong to the former, to him alone must also
belong the rights arising from the contract. The money with which the launch was bough having come from the plaintiff, the exception
established in article 1717 is applicable to the instant case.

Concerning the casco No. 2584, the defendant admits it was constructed by the plaintiff himself in the latter's ship-yard. Defendant's
allegation that it was constructed at his instance and with his money is not supported by the evidence. In fact the only proof presented
to support this allegation is his own testimony contradicted, on the on hand, by the plaintiffs' testimony and, on the other hand, rebutted
by the fact that, on the date this casco was constructed, he did not have sufficient money with which to pay the expense of this
construction.

As to the automobile No. 2060, there is sufficient evidence to show that its prices was paid with plaintiffs' money. Defendant's adverse
allegation that it was paid with his own money is not supported by the evidence. The circumstances under which, he says, this payment
has been made, in order to show that it was made with his own money, rather indicate the contrary. He presented in evidence his
check-book wherein it appears that on March 24, 1916, he issued a check for P300 and on the 27th of same month another for P400
and he says that the first installment was paid with said checks. But it results that, in order to issue the check for P300 on March 24 of
that year, he had to deposit P310 on that same day; and in order to issue the other check for P400 on the 27th of the same month, he
deposited P390 on that same day. It was necessary for the defendant to make these deposits for on those dates he had not sufficient
money in the bank for which he could issue those checks. But, in order to pay for the price of the automobile, he could have made
these payments directly with the money he deposited without the necessity of depositing and withdrawing it on the same day. If this
action shows something, it shows defendant's preconceived purpose of making it appear that he made the payment with his own funds
deposited in the bank.

The plaintiffs, in turn, assign in this instance the following three errors alleged to have been committed by the lower court:

1. The court erred in not declaring that the plaintiffs did not sell to the defendant the casco No. 2545 and that they were its
owners until it was sunk in June, 1916.

2. The court erred in absolving the defendant from his obligation to render an account of his administration to the plaintiffs, and
to pay to the latter the amount of the balance due in their favor.

3. The court erred in not condemning the defendant to pay to the plaintiffs the value of the woods, windows and doors taken
from their lumber-year by the defendant and used in the construction of the house on calle Real of the barrio of La
Concepcion, municipality of Malabon, Rizal.

Concerning the casco No. 2545, the lower court refrained from making any declaration about its ownership in view of the fact that
this casco had been leased and was sunk while in the lessee's hands before the complaint in this case was filed. The lower court,
therefore, considered it unnecessary to pass upon this point. We agree with the plaintiffs that the trial court should have made a
pronouncement upon this casco. The lessee may be responsible in damages for its loss, and it is of interest to the litigants in this case
that it be determined who is the owner of said casco that may enforce this responsibility of the lessee.

Upon an examination of the evidence relative to this casco, we find that it belonged to the plaintiffs and that the latter sold it afterwards
to the defendant by means of a public instrument. Notwithstanding plaintiffs' allegation that when they signed this instrument they were
deceived, believing it not to be an instrument of sale in favor of the defendant, nevertheless, they have not adduced sufficient proof of
such deceit which would destroy the presumption of truth which a public document carries with it. Attorney Sevilla, who acted as the
notary in the execution of this instrument, testifying as a witness in the case, said that he never verified any document without first
inquiring whether the parties knew its content. Our conclusion is that this casco was lawfully sold to the defendant by the plaintiffs.

Concerning the wood, windows and doors given by the plaintiffs to the defendant and used in the construction of the latter's house on
calle Real of the barrio of La Concepcion of the municipality of Malabon, Rizal, we find correct the trial Court's decision that they were
given to the defendant as his and his wife's property.

Concerning the rendition of accounts which the plaintiffs require of the defendant, we likewise find correct the trial court's decision
absolving the latter from this petition, for it appears, from the plaintiffs' own evidence, that the defendant used to render accounts of his
agency after each transactions, to the plaintiffs' satisfaction.

From the foregoing considerations, we affirm the judgment appealed from in all its parts except in so far as the casco No. 2545 is
concerned, and as to this we declare that, it having been sold by the plaintiffs to the defendant, the latter is absolved. No special
findings as to costs. So ordered.

Arellano, C.J., Torres, Johnson, Araullo, Street and Malcolm, JJ., concur.