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BORDADOR VS LUZ 283 SCRA 374

FACTS:
Petitioners Bordador spouses were engaged in the business of purchase and sale of
jewelry, while respondent Brigida Luz was their regular�customer. Respondent
Narciso Deganos, Luz's brother, received several pieces of jewelry from the
Bordadors amounting to P382,816.00, which items were indicated in 17 receipts
covering the same--11 of the receipts stated that they were received by Deganos for
a certain Evelyn Aquino, while the remaining 6 indicated that they were received by
Deganos for Luz.

Deganos was supposed to sell the items at a profit and remit the proceeds and
return the unsold items to the Bordadors. Deganos remitted only P53,207.00. He
neither�paid the balance of the sales proceeds, nor did he return any unsold item
to the Bordadors, which led them to file an action for recovery of a sum of money
and damages against Deganos and Luz with the RTC. The Bordadors claimed that
Deganos acted as the agent of Luz when he received the items of jewelry, and
because he failed to pay for the same, Luz, as principal, became solidarily liable
with him.

Deganos asserted that it was he alone who was involved in the transaction with the
Bordadors; that he neither acted as agent for nor was he authorized to act as an
agent by Luz, notwithstanding the fact that 6 of the receipts indicated that the
items were received by him for Luz. He added that he never delivered any of the
items to Luz. Luz corroborated the claims of Deganos.

The RTC found that only Deganos was liable to the Bordados. It further found that
it was petitioner Lydia Bordador who indicated in the receipts that the items were
received by Deganos for Evelyn Aquino and for� Luz. It said that it was "persuaded
that Brigida D. Luz was behind Deganos," but because there was no memorandum to
this effect, the agreement between the parties was unenforceable under the Statute
of Frauds. Absent the required memorandum or any written document connecting Luz
with the subject receipts or authorizing Deganos to act on her behalf, the alleged
agreement between the Bordadors and Luz was unenforceable. The Bordadors elevated
the case to the CA which affirmed said judgment, hence the instant petition.

ISSUE:
Whether Luz is liable to the Bordadors for the latter's claim for money and damages
despite the fact that Luz did not sign any of the subject receipts or authorized
Deganos to receive the items of jewelry on her behalf

HELD: No, Luz is not liable to the Bordadors.


RATIO:
THE BASIS FOR AGENCY IS REPRESENTATION. The basis for agency is representation.
Here, there is no showing that Luz consented to the acts of Deganos or authorized
him to act on her behalf, much less with respect to the particular transactions
involved. The Bordadors' attempt to foist liability on Luz through the supposed
agency relation with Deganos is groundless and ill-advised.
�A PERSON DEALING WITH AN AGENT IS PUT UPON INQUIRY AND MUST�DISCOVER UPON HIS
PERIL THE AUTHORITY OF THE AGENT. Besides, it was grossly and inexcusably negligent
of the Bordadors to entrust to Deganos, not once or twice but on at least 6
occasions as evidenced by 6 receipts, several pieces of jewelry of substantial
value without requiring a written authorization from his alleged principal. A
person dealing with an agent is put upon inquiry and must discover upon his peril
the authority of the agent.

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SANTOS VS BUENCONSEJO 14 SCRA 407
FACTS:
1. Petitioner Jose A. Santos y Diaz seeks the reversal of an order of the Court of
First Instance of Albay, denying his petition --- Cancellation of original
certificate of title No. RO-3848 (25322), issued in the name of Anatolio
Buenconsejo, Lorenzo Bon and Santiago Bon, and covering Lot No. 1917 of the
Cadastral Survey of Tabaco, Albay, and Issuance in lieu thereof, of a separate
transfer certificate of title in his name.

2. Lot No. 1917 covered by Original Certificate of Title No. RO-3848 (25322) was
originally owned in common by Anatolio Buenconsejo to the extent of � undivided
portion and Lorenzo Bon and Santiago Bon to the extent of the other � (Exh. B)

3. Anatolio Buenconsejo's�rights, interests and participation over the portion


abovementioned were by a Certificate of Sale executed by the Provincial Sheriff of
Albay, transferred and conveyed to Atty. Tecla San Andres Ziga, awardee in the
corresponding auction sale conducted by said Sheriff

4.By a certificate of redemption�issued by the Provincial Sheriff of Albay, the


rights, interest, claim and/or or participation which Atty. Tecla San Andres Ziga
may have acquired over the property in question by reason of the aforementioned
auction sale award, were transferred and conveyed to the herein petitioner in his
capacity as Attorney-in-fact of the children of Anatolio Buenconsejo, namely,
Anastacio Buenconsejo, Elena Buenconsejo and Azucena Buenconsejo (Exh. C).

5. Petitioner Santos had redeemed the aforementioned share of Anatolio Buenconsejo,


upon the authority of a special power of attorney executed in his favor by the
children of Anatolio Buenconsejo.

6.Relying upon this power of attorney and redemption made by him, Santos now claims
to have acquired the share of Anatolio Buenconsejo in the aforementioned Lot No.
1917

7. As the alleged present owner of said share, Santos caused a subdivision plan of
said Lot No. 1917 to be made, in which the portion he claims as his share thereof
has been marked as Lot No. 1917-A; and that he wants said subdivision at No. 1917-A
to be segregated from Lot No. 1917 and a certificate of title issued in his name
exclusively for said subdivision Lot No. 1917-A.

8.Lower court: ruled in favor of the respondents.

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

RULING: No! SC affirmed the lower court�s decision that petitioner's claim is
clearly untenable, for three reasons:
a. Said special power of attorney authorized him to act on behalf of the children
of Anatolio Buenconsejo, and, hence, it could not have possibly vested in him any
property right in his own�name;
b. The children of Anatolio Buenconsejo had no authority to execute said power of
attorney, because their father is still alive and, in fact, he and his wife opposed
the petition of Santos;
c. In consequence of said power of attorney (if valid) and redemption, Santos could
have acquired no more than the share�pro indiviso�of Anatolio Buenconsejo in Lot
No. 1917, so that petitioner cannot without the conformity of the other co-owners
(Lorenzo and Santiago Bon), or a judicial decree of partition issued pursuant to
the provisions of Rule 69 of the new Rules of Court (Rule 71 of the old Rules of
Court) which
have not been followed By Santos adjudicate to himself in fee simple a determinate
portion of said Lot No. 1917, as his share therein, to the exclusion of the other
co-owners. Inasmuch as the appeal is patently devoid of merit, the order appealed
from is hereby affirmed,�with treble cost against petitioner-appellant Jose A.
Santos y Diaz.�It is so ordered.

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NIELSON VS CO V LEPANTO 26 SCRA 540
FACTS:
Nielson & Company, Inc. and Lepanto Consolidated Mining Company entered into a
management contract. Nielson had agreed, for a period of five years, with the
right to renew for a like period, to explore, develop and operate the mining claims
of Lepanto, and to mine, or mine and mill, such pay ore as may be found and to
market the metallic products recovered therefrom which may prove to be marketable,
as well as to render for Lepanto other services specified in the contract. Nielson
was to take complete charge, subject at all times to the general control of the
Board of Directors of Lepanto, of the exploration and development of the mining
claims, of the hiring of a sufficient and competent staff and of sufficient and
capable laborers, of the prospecting and development of the mine, of
the erection and operation of the mill, and of the benefication and marketing of
the minerals found on the mining properties. Nielson was also to act as purchasing
agent of supplies, equipment and other necessary purchases by Lepanto, but no
purchase shall be made without the prior approval of Lepanto and no commission
shall be claimed or retained by Nielson on such purchase. The principal and
paramount undertaking of Nielson under the management contract was the operation
and development of the mine and the operation of the mill. All the other
undertakings mentioned in the contract are necessary or incidental to the
principal. In the performance of this principal undertaking, Nielson was not in any
way executing juridical acts for Lepanto. Lepanto terminated the contract in 1945,
2 years before its expiration, when it took over and assumed exclusive management
of the work previously entrusted to Nielson under the contract. Lepanto finally
maintains that Nielson as an agent is not entitled to damages since the law gives
to the principal the right to terminate the agency at will.

ISSUE:
Was the management contract entered into by and between Nielson and Lepanto a
contract of agency such that it has the right to revoke and terminate the contract
at will, or a contract of lease of services?

RULING: Contract of Lease of Services


The management contract was one of contract of lease of services and not a contract
of agency. In both agency and lease of services, one of the parties binds himself
to render some service to the other party.
Agency, however is distinguished from lease of work or services in that: The basis
of agency is representation, while in the lease of work or services the basis is
employment.

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AFRICA VS CALTEX 16 SCRA 448
Facts:�In the afternoon of March 18, 1948, a fire broke out at the Caltex service
station at the corner of Antipolo St. and Rizal Avenue, Manila. It started while
gasoline was being hosed from a tank truck into the underground storage, right at
the opening of the receiving tank where the nozzle of the hose was inserted. The
fire spread to and burned several houses. The owners, among them petitioner spouses
Africa and heirs of Ong, sued respondents Caltex Phil., Inc., the alleged owner of
the station, and Mateo Boquiren, the agent in charge of its operation, for damages.
The CFI and CA found that the petitioners failed to prove negligence of the
respondents, and that there was due care in the premises and with respect to the
supervision of their employees.

Issue:
Whether Caltex should be held liable for the damages caused to appellants.

Held:�
This question depends on whether the operator of the gasoline station was an
independent contractor or an agent of Caltex. Under the license agreement the
operator would pay Caltex the purely nominal sum
of P1.00 for the use of the premises and all equipment therein. The operator could
sell only Caltex products. Maintenance of the station and its equipment was subject
to the approval, in other words control, of Caltex. The operator could not assign
or transfer his rights as licensee without the consent of Caltex. Termination of
the contract was a right granted only to Caltex but not to the operator. These
provisions
of the contract showthat the operator was virtually an employee of the Caltex, not
an independent contractor. Hence, Caltex should be liable for damages caused to
appellants

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SEVILLA VS CA 160 SCRA 171
FACTS:
1.Mrs. Segundina Noguera leased her premises located at Ermita, Manila to Tourist
World Service, Inc. (TWSI), represented by Eliseo Canilao, for the latter�s use as
branch office.

2.In the said contract Mrs. Lina Sevilla held herself solidarily liable with TWSI
for the prompt payment of the monthly rental agreed on.

3.When the branch office was opened, the same was run by petitioner Mrs. Sevilla,
who was designated as branch manager by TWSI. For any fare bought in on the efforts
of Mrs. Sevilla,, 4% was to go her and 3% was to be withheld by TWSI

4. In November 1961, TWSI was allegedly informed that Mrs. Sevilla was connected
with a rival travel firm. Since the branch office was losing, TWSI considered
closing it down. The firm�s board of directors issued two resolutions; the first
abolishing the office of manager of the Ermita Branch Office and the second,
authorizing the corporate secretary to receive the property of TWSI in said branch

5. In January 1962, the lease contract to use the premises as branch office was
terminated. In June 1962, the Corporate Secretary went over to the office to comply
with the mandate of the resolutions. Finding the premises locked and unable to
contact Mrs. Sevilla, he padlocked the premises to protect the interests of TWSI

6. As such, petitioners Spouses Sevilla filed a complaint against respondents TWSI,


Canilao and Noguera, praying for mandatory preliminary injunction. Petitioners
claim that Mrs. Sevilla�s relationship with TWSI was one of joint business venture
and notone of employment.

7. In its answer, TWSI contend that Mrs. Sevilla was its employee and as such was
designated manager.

8.The trial court held for the private respondents. It ruled that TWSI, being the
true lessee, has the privilege to terminate the lease and padlock the premises. It
also held that Mrs. Sevilla was a mere employee of TWSI and that she was bound by
the act of her employer.

9.The Court of Appeals affirmed said decision, Hence, the instant petition.

ISSUE: WON there is a contract of agency between respondent-principal TWSI and


petitioner Sevilla? If yes, should principal TWSI be liable for damages for its
unwarranted revocation of the contract of agency?
YES for both.

Decision: Decision of CA is REVERSED and SET ASIDE. Costs against respondent TWSI

RULING:
1. This case involves a contract of Agency. There is neither joint venture between
nor partnership TWSI and Mrs. Sevilla. The relationship of said parties is one that
of a principal and an agent.

Case at bar:
Petitioner Sevilla agreed to man the Ermita office of respondent TWSI based on a
contract of agency. It is the essence of this contract that the agent renders
services in �representation�or on behalf of another�
Sevilla solicited airline fares but she did so for and on behalf of her principal
TWSI. As compensation, she received 4% of the proceeds in the concept of
commissions. Sevilla pre-assumed her principal�s authority as owner of the business
undertaking. Considering the facts, this case involves a principal-agent
relationship rather than a joint management or partnership. But unlike simple
grants of a power of attorney, the agency that the Court here by declares to be
compatible with the intent of the parties cannot be revoked at will. The reason is
that it is an agency coupled with an interest, the agency having been created for
mutual interest of the agent and the principal.

In this case, the agency cannot be revoked at the pleasure of the principal. This
unwarranted revocation of the contract of agency entitles petitioner Sevilla to
damages. Respondent TWIS is liable for P 25,000 moral damages, P 10,000 exemplary
damages, P 5,000 nominal damages and/or temperate damages.

Other issues:
2. No Employer-Employee Relationship between TWSI and Mrs. Sevilla. There has been
no uniform test to determine the existence of an employer-employee relation. In
general, The Court has relied in the so-called control test, �where the person for
whom the services are performed reserves a right to control not only the end to be
achieve but also the means to be used in reaching such end.��

Case at bar:
The records will show that the petitioner, Lina Sevilla, was not subject to control
by the private respondent Tourist World Service, Inc., either as to the result to
the means used in connection therewith. In the first place, under the contract of
lease covering the Tourist Worlds Ermita office, she had bound herself in solidum
as and for rental payments. Also, when the branch office was opened, the same was
run by Mrs. Sevilla payable to TWSI. It cannot be said that she was under the
control of TWSI �as to the means used�. She obviously relied on �her own
capabilities. Sevilla was also not in the company�s payroll. She retained
commissions based on her booking successes and it�s not based on�a fixed salary . A
true employee cannot be made to part with his own money in pursuance of his
employer�s business, or otherwise, assume any liability thereof. In that event, the
parties must be bound by some other relation, but certainly not employment.

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