83. Harry E. Keeler Electric Co. vs. Rodriguez November 11,1922, Johns, J.

***This case involves an action for the payment of purchase price by plaintiff Keeler Electric against defendant Rodriguez Legal Doctrine: Persons dealing with an assumed agent, whether the assumed agency be a general or special one, are bound at their peril, if they would hold the principal, to ascertain not only the fact of the agency but the nature and extent of the authority, and in case either is controverted, the burden of proof is upon them to establish it. Facts:

Plaintiff is Harry E. Keeler Electric Co., a domestic corporation based in Manila engaged in the electrical business, and among other things in the sale of what is known as the "Matthews" electric plant. Defendant is Domingo Rodriguez a resident of Talisay, Occidental Negros Montelibano, a resident of Iloilo, went to Keeler Electric and made arrangement with the latter wherein: o He claimed that he could find purchaser for the "Matthews" plant o Keeler Electric told Montelibano that for any plant that he could sell or any customer that he could find he would be paid a commission of 10% for his services, if the sale was consummated. Through Montelibanos efforts, Keeler was able to sell to Rodriguez one of the "Matthews" plants Rodriguez paid Montelibano (the purchase price of P2,513.55), after the installation of the plant and without the knowledge of Keeler Electric, Keeler Electric filed an action against Rodriguez for the payment of the purchase price. Rodriguez: Claimed that he already paid the price of the plant. In addition, he alleged that: o Montelibano sold and delivered the plant to him, and "was the one who ordered the installation of that electrical plant" o There were evidences: a statement and receipt which Montelibano signed to whom he paid the money. o He paid Montelibano because the latter was the one who sold, delivered, and installed the electrical plant, and he presented to him the account, and assured him that he was duly authorized to collect the value of the electrical plant o The receipt had the following contents: STATEMENT Folio No. 2494 Mr. DOMINGO RODRIGUEZ, Iloilo, Iloilo, P.I. In account with HARRY E. KEELER ELECTRIC COMPANY, INC. 221 Calle Echaque, Quiapo, Manila, P.I. MANILA, P.I., August 18, 1920. The answer alleges and the receipt shows upon its face that the plaintiff sold the plant to the defendant, and that he bought it from the plaintiff. The receipt is signed as follows: Received payment HARRY E. KEELER ELECTRIC CO. Inc., Recibi (Sgd.) A. C. MONTELIBANO. Witness (Juan Cenar): o Cenar was sent by Keeler Electric to install the plant in Rodriguezs premises in Iloilo o He brought with him a statement of account for Rodriguez but the latter said that he would pay in Manila. ***Lower Court: In favor of Rodriguez. It held that: o Keeler Electric had held out Montelibano to Rodriguez as an agent authorized to collect o Payment to Montelibano would discharge the debt of Rodriguez o The bill was given to Montelibano for collection purposes Keeler Electric appealed. It alleged that: o Montelibano had no authority to receive the money. o His services were confined to the finding of purchasers for the "Matthews" plant o Montelibano was not an electrician, could not install the plant and did not know anything about its mechanism.

Issues: 1. WON Keeler Electric authorized Montelibano to receive or receipt for money in its behalf 2. WON Rodriguez had a right to assume by any act or deed of Keeler Electric that Montelibano was authorized to receive the money

Held/Ratio: 1. NO, Montelibano was not authorized. The plant was sold by Keeler Electric to Rodriguez and was consigned to Iloilo where it was installed by Cenar, acting for, and representing, Keeler Electric, whose expense for the trip is included in, and made a part of, the bill which was receipted by Montelibano. a.
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Montelibano was not an agent of Keeler Electric

o o o

There is nothing on the face of this receipt to show that Montelibano was the agent of, or that he was acting for, Keeler Electric. It is his own personal receipt and his own personal signature. Outside of the fact that Montelibano received the money and signed this receipt, there is no evidence that he had any authority, real or apparent, to receive or receipt for the money. Neither is there any evidence that Keeler Electric ever delivered the statement to Montelibano. (It is very apparent that the statement is the one which was delivered by Keeler Electric to Cenar, and is the one which Cenar delivered to Rodriguez)

b.

It was Juan Cenar, and not Montelibano who sold the plant to Rodiguez o o o o The evidence is in direct conflict with Rodriguezs own pleadings and the receipt statement which he offered in evidence. This statement also shows upon its face that P81.60 of the bill is round trip fare and machines transportation costs. This claim must be for the expenses of Cenar in going to Iloilo from Manila and return, to install the plant, and is strong evidence that it was Cenar and not Montelibano who installed the plant. If Montelibano installed the plant, there would not have been any necessity for Cenar to make this trip at the expense of Rodriguez. After Cenar's return to Manila, Keeler Electric wrote a letter to Rodriguez requesting the payment of its account, to which Rodriguez answered that he already paid to Montelibano. This is in direct conflict with the receipted statement, which Rodriguez offered in evidence, signed by Montelibano. o It will be noted that the receipt which Montelibano signed is not dated, and it does not show when the money was paid.

2.

NO.

a.

Relevant laws: Article 1162 CC: Payment must be made to the persons in whose favor the obligation is constituted, or to another authorized to receive it in his name. Article 1727 CC: The principal shall be liable as to matters with respect to which the agent has exceeded his authority only when he ratifies the same expressly or by implication. Ormachea Tin-Conco vs. Trillana: The repayment of a debt must be made to the person in whose favor the obligation is constituted, or to another expressly authorized to receive the payment in his name.

b.

On whether an assumed authority exist Certain principles must be considered: (Mechem on Agency, volume I, section 743) (1) that the law indulges in no bare presumptions that an agency exists: it must be proved or presumed from facts; (2) that the agent cannot establish his own authority, either by his representations or by assuming to exercise it; (3) that an authority cannot be established by mere rumor or general reputation; (4)that even a general authority is not an unlimited one; and (5) that every authority must find its ultimate source in some act or omission of the principal. Applying the above rules: o Persons dealing with an assumed agent, whether the assumed agency be a general or special one, are bound at their peril, if they would hold the principal, to ascertain not only the fact of the agency but the nature and extent of the authority, and in case either is controverted, the burden of proof is upon them to establish it. o The person dealing with the agent must act with ordinary prudence and reasonable diligence. Obviously, if he knows or has good reason to believe that the agent is exceeding his authority, he cannot claim protection. So if the suggestions of probable limitations be of such a clear and reasonable quality, or if the character assumed by the agent is of such a suspicious or unreasonable nature, or if the authority which he seeks to exercise is of such an unusual or improbable character, the party dealing with him may not shut his eyes to the real state of the case, but should either refuse to deal with the agent at all, or should ascertain from the principal the true condition of affairs.

Judgment of the lower court is REVERSED. Rodriguez should pay Keeler Electric the purchase price of the plant.

84. Rallos vs. Yangco September 27, 1911, Moreland, J. ***This is an action to recover a sum of money by the consignor against the consignee Legal Doctrine: The principal, having advertised the fact of appointment of an agent and having given the plaintiffs a special invitation to deal with such agent, has the duty on the termination of the relationship of principal and agent to give due and timely notice
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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. Facts: Nov.1907, defendant Teodoro Yangco sent to plaintiff Florentino Rallos, among others, a letter proposing a consignment arrangement with the latter. Rallos is engaged in the business of selling leaf tobacco and native products. In his letter, Yangco wants to be the consignee of Rallos on a commission basis. Yangco communicated to Rallos that in all with his business dealings with the latter, Yangco will act through an agent Mr. Florentino Collantes. Yangco granted a public power of attorney to Collantes to carry out, in Yangcos name, acts necessary for carrying out the business. Rallos accepted the invitation and proceeded to do business with Yangco Collantes dealt with Rallos as agent of Yangco with regard to the produce to be sold on commission. Feb 1909, Rallos sent to Collantes, as agent for Yangco, 218 bundles of tobacco in the leaf to be sold on commission Collantes received said tobacco and sold for P1,744. The charges for such sale were P206.96, thus netting P1,537.08 belonging to Yangco. This sum was, apparently, converted to his own use by said agent. Prior to the sending of said tobacco, Yangco had severed his relations with Collantes and that the latter was no longer acting as his factor. This fact was not known to the Rallos. No notice of any kind was given by Yangco to Rallos of the termination of the relations between Yangco and his agent. Yangco refused to pay the said sum upon demand of Rallos, on 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.

Issue: WON Rallos can recover from Yangco Held/Ratio: YES, Yangco 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 Yangco 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. Judgment appealed from is CONFIRMED.

85. Macke vs. Camps, 7 Phil. 553 February 27, 1907, Carson, J. *** This is an action to recover payment from purchaser (acting through an agent) filed by the seller Legal Doctrine: "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 cannot, in any litigation arising out such declaration, act, or omission, be permitted to falsify it"; 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. Facts:

Plaintiffs B. H. Macke and W. H. Chandler are partners doing business under the firm name of Macke, Chandler & Company Plaintiffs allege that: o During Feb and March, 1905, they sold to defendant Jose Camps various bills of goods amounting to P351.50; o Defendant has only paid on account of said accounts the sum of P174; o They made demand for the payment thereof but defendant had failed and refused to pay the said balance B. H. Macke (one of the plaintiffs) testified that: o On the order of one Ricardo Flores (who represented himself to be agent of defendant), he shipped the said goods to the defendants at the Washington Cafe; o Flores later acknowledged the receipt of said goods and made various payments thereon amounting in all to P174; o The goods were shipped by the plaintiffs after inquiry to satisfy them as to the credit of the defendant and as to the authority of Flores to act as his agent; o Macke always believed and still believes that Flores was the agent of the defendant; o When he went to the Washington Caf to collect, he found Flores, apparently in charge of the business and claiming to be the business manager of the defendant (hotel with a bar and restaurant) A written contract was introduced in evidence, from which it appears that: o One Galmes, the former owner of the business now known as the "Washington Cafe," subrented the building to the defendant for a period of 1 year o This contract was signed by the defendant and the name of Ricardo Flores appears thereon as a witness, and attached is an inventory of the furniture and fittings which also is signed by the defendant with the word "sublessee" below the name, and at the foot of this inventory the word "received" followed by the name "Ricardo Flores," with the words "managing agent" immediately following his name.

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***Trial Court: Against the defendant Camps.

Issue: WON Flores was the agent of the defendant in the management of the bar of the Washington Cafe with authority Held/Ratio: YES, Flores was the agent of his principal and he acted within the scope of his authority, thus it is binding to the principal The contract introduced in evidence 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, Flores was apparently in charge of the business, performing the duties usually entrusted to managing agent One who clothes another apparent authority as his agent, and holds him out to the public as such, cannot 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: "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 cannot, in any litigation arising out such declaration, act, or omission, be permitted to falsify it"; 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. 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.

86. Jimenez vs. Rabot July 27, 1918, Street, J. *** This action was instituted by the plaintiff, Gregorio Jimenez, to recover from the defendant, Pedro Rabot, a parcel of land in Alaminos, Pangasinan Legal Doctrine: 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. Facts:

Subject land has an area of 3 ha. in Alaminos, Pangasinan, which was acquired by Gregorio Jimenez and his siblings in the division of the estate of their father. The land in question, together with 2 other parcels originally belonged to the heirs in the division of the estate of Gregorios father. While Gregorio was staying at Vigan, his property in Alaminos was confided by him to the care of his elder sister Nicolasa. When Gregorio was pressed for money, he wrote a letter to his sister and requested her to sell one of his parcels of land in order that he might pay his debts. The letter contains no description of the land to be sold other than the word "one of my parcels of land" Nicolasa sold the subject land to Rabot for P500. P250 was paid at once and the balance to be paid after the execution of deed of conveyance. 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. 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. Nicolasa refused Gregorio, in conjunction with others of his brothers and sisters, whose properties were also in the hands of Nicolasa, filed an action in CFI to recover land under Nicolasas control Gregorio and other siblings won the said case and no appeal was taken Meanwhile, Nicolasa executed and delivered to Rabot a deed purporting to convey to him the parcel of land which is the subject of this controversy. Rabot began to possess the property. (Rabot acquired possession under the deed from Nicolasa during the pendency of the litigation, thus, it appeara that he was at the time cognizant of that circumstance)

Issue: WON the authority conferred on Nicolasa by the letter from Gregorio was sufficient to enable her to bind her brother.

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Held/Ratio: YES, the authority expressed in the letter is a sufficient compliance with the requirements of the law (Art 1713 CC and Subsection 5 of Section 335 of the Code of Civil Procedure)

Applicable laws: o Art 1713 CC requires that the authority to alienate land shall be contained in an express mandate; o 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. There is no requirement that in order for the authority to be sufficient, it must contain a particular description of the property which the agent is to be permitted to sell. 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. Nicolasa act within the scope of the authority which had been conferred upon her o 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. Jurisprudence o 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. o 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. o Linton vs. Moorhead: 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. o Lyon vs. Pollock: The owner in effect authorized an agent to sell everything he had in San Antonio Texas. The authority was held sufficient. o Linan vs. Puno, 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. Observation: o As a matter of formality, a power of attorney to convey real property ought to appear in a public document (Art. 1280, CC) 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, 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, 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.)

Judgment is REVERSED.

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