Agency Cases
Agency Cases
Agency Cases
Art. 1868. By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. 1. 2. Definition Nature
Rallos v. Felix Go Chan (MAI) January 31, 1978 Muoz Palma, J. FACTS: Concepcion and Gerundia Rallos were sisters and registered co-owners of a parcel of land known as Lot No. 5983. In 1954, they executed a special power of attorney in favor of their brother, Simeon Rallos, authorizing him to sell for and in their behalf the aforementioned parcel of land. On March 1955, Concepcion Rallos died. On September 1955, Simeon Rallos sold the undivided shares of his sisters in lot 5983 to Felix Go Chan and Sons Realty Corporation. The deed of sale was registered and the previous TCT was cancelled. On May 1956, Ramos Rallos, as administrator of the Intestate Estate of Concepcion Rallos, filed a complaint with the CFI of Cebu, praying (1) that the sale of the undivided share of the deceased Concepcion Rallos be declared unenforceable, and said share be reconveyed to her estate; (2) that the TCT issued in the name of Felix Go Chan and Sons Realty Corporation be cancelled; and (3) that the plaintiff be indemnified by way of attorneys fees and payment of costs of suit. The trial court rendered judgment declaring the deed of sale null and void, insofar as the one-half pro-indiviso share of Concepcion Rallos in the property in question, and sentencing Juan Borromeo, the administrator of the estate of Simeon Rallos, to pay Felix Go Chan and Sons Realty Corporation the sum representing the price of onehalf of the lot. The appellate court reversed the decision and sustained the sale. ISSUE: Whether or not the sale of the agent of the principals property after the latters death is valid HELD: NO. The general rule in Article 1919 of the NCC is that death is one of the causes for the extinguishment of agency. There being an integration of the personality of the principal into that of the agent, it is not possible for the representation to continue once the death of either is established. There are certain exceptions, however, Article 1931 being one of them. Under this provision, an act done by the agent after the death of the principal is valid and effective if two conditions concur: (1) the agent acted without knowledge of the death of the principal; and (2) that the third person who contracted with the agent acted in good faith. But because it was established that Simeon Rallos had knowledge of the death of his principal when he made the sale, Article 1931 will not apply. The general rule shall apply then that any act of an agent after the
Orient Air Services & Hotel Rep. v CA (GEN) May 29, 1991 Padilla, J. FACTS: American Airlines Inc. (AAI) and Orient Air Services and Hotel Representatives (Orient Air) entered into a General Sales Agency Agreement authorizing the latter to act as its exclusive general sales agent within the Philippines for the sale of air passenger transportation. Due to the alleged failure of Orient Air to promptly remit the net proceeds of sales for 6 months, AAI undertook the collection of the proceeds of tickets sold originally by Orient Air and terminated the agency agreement. AAI then instituted suit against Orient Air with CFI of Manila for Accounting with Preliminary Attachment or Garnishment, Mandatory Injunction and Restraining Order. The CFI of Manila ruled in favor of Orient Air and dismissed the complaint. It then ordered AAI to reinstated Orient Air as its general sales agent for passenger transportation in the Philippines. The IAC affirmed with modifications the findings of CFI of Manila. ISSUE: WON the lower court may compel AAI to extend its personality to Orient Air? HELD: NO. It would be violative of the principles and essence of agency, defined by law as a contract whereby a person binds himself to another to render some service or to do something in representation or on behalf of another WITH THE CONSENT OR AUTHORITY OF THE LATTER. In an agent-principal relationship, the personality of the principal is extended through the facility of the agent. In so doing, the agent, by legal fiction, becomes the principal, authorized to perform all acts which the latter would have him do. Such a relationship can only be effected with the consent of the principal, which must not, in any way, be compelled by law or by any court.
Effect: as if no there was no registration at all Air France v CA, Jose Gana (ABBY) Dec. 29, 1983 Melencio Herrera FACTS: The Ganas purchased from Air France through Imperial Travels, a duly authorized agent, 9 open dated tickets for a Manila/Osaka/Tokyo/Manila. The expiry date was May 8, 1970. Jose Gana sought the assistance of Teresita Manucdoc, a secretary of the company where Jose Gana worked, to procure the extension of the validity of their tickets. Manucdoc talked with Lee Ella, Manager of the Philippine Travel Bureau. She was told that they would have to pay fare differentials and that the extension is impossible. The GANAS scheduled their departure for May 7 and on May 6, Teresita again asked for Lee Ellas help in
Smith vs. Lopez (EARLA) September 30, 1905 Torres, J. FACTS: Nicasio Lopez, as administrator of the house owned by his two daughters, contracted the services of Philippine Gas Light Company for the installation of a water system, urinals, closets, shower baths, and drain pipes in the house at 142 Calle Dulumbayan, Santa Cruz Manila. This was done pursuant to the order of the Board of Health. The Company, with Smith and Reyes as proprietors, incurred a total of P4020 Mexican currency; P750 of which was already paid, leaving a balance of P3270. Failing to pay, Smith and Reyes instituted an action to recover the P3270 plus interest, from the sisters, Jacinta and Ignacia Lopez de Pineda. As a defense, the sisters claimed, among others, that they are not liable for the sum demanded since the works done by Smith were done without the authority or consent of the sisters. The CFI ruled in favor of Smith and ordered the Lopez sisters to pay P2717.40 local currency. ISSUE: WON Nicasio Lopez is the agent of his two daughters? Yes. HELD: Nicasio is the administrator of the property of the defendant. Pursuant to the order of the Board of Health, he contracted the services of the Phil. Gas Light Company for the installation of certain fixtures. Accordingly, he did all these voluntarily. Thus, although there was no express consent given by the sisters, through a valid power of attorney, there was an IMPLIED power, because the sisters did not object to the work being done on the house, which benefited them in the end. There was a quasi-contract which created certain reciprocal obligations between them and the plaintiffs. Moreover, it is presumed from their failure to object to the work being done that they were approving it, thereby ratifying the act of their father, as though he acted under an express power from them.
Sevilla v. CA (REG) 1998 FACTS: Tourist World Service, Inc. (TWS) leased the premises belonging to Noguera for the formers use as a branch office. Petitioner Sevilla held herself solidarily liable with the party of the part for the prompt payment of the monthly rental. When the branch office was opened, it was run by Sevilla payable to TWS by any airline. For any fare brought in on the efforts of Sevilla, 4% was to go to Lina Sevilla and 3% was to be withheld by the TWS. Sevilla was
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Art. 1821. Notice to any partner of any matter relating to partnership affairs, and the knowledge of the partner acting in the particular matter, acquired while a partner or then present to his mind, and the knowledge of any other partner who reasonably could and should have communicated it to the acting partner, operate as notice to or knowledge of the partnership, except in the case of fraud on the partnership, committed by or with the consent of that partner. B. Article 1869
Art. 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. 1. 2. Oral, express Implied a. acts or conduct of principal
Gutierrez Hermanos vs. Orense (EARLA) December 4, 1914 Torres, J. FACTS: Engracio Orense is the original owner of a parcel of land in Guinobatan, Albay. On February 14, 1907, Jose Duran, the nephew of Orense, sold the land for P1500 to Gutierrez Hermanos, with Orenses knowledge and consent. The sale was embodied in a public instrument, and contained a provision giving Duran a right to repurchase within a period of 4 years. Thereafter, by a contract of lease executed between Gutierrez and Duran, Orense continued occupying the land.
Defendant Camps meanwhile alleges that he did not receive the goods and so will not pay the balance. ISSUE: WON Camps is liable for the balance? HELD: YES. In the absence of proof, SC found that Flores in the agent of Camps; he even signed as managing agent. One who clothes another with 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 persons. The authority of the agent must be presumed to include all the necessary and usual means of carrying his agency into effect. Moreover, there is sufficient proof that Flores did receive the goods, thereby making Camps liable. Linan v. Puno (ALAIN) Dominion Insurance Corp. v CA (GEN) Feb. 6, 2002 Pardo, J. FACTS: Rodolfo Guevarra claimed to have advanced P156, 473.90 in his capacity as a manager of Dominion Insurance Corp. to satisfy certain claims filed by the petitioners clients. He then instituted a complaint for sum of money against the petitioner. The petitioner denied any liability to plaintiff and asserted a counterclaim of P249,672.53, representing premium that Guevarra failed to pay. The RTC ruled in favor of Guevarra and ordered the petitioner to pay him the sum he claims. The CA affirmed the decision of the RTC. ISSUE: WON Guevarra acted within his authority as agent for petitioner? HELD: NO. The Special Power of Attorney entered into by petitioner and Guevarra would show that they intended to enter into a principal-agent relationship. Despite the word special in the document, the contents reveal that what was constituted was actually a general agency. The agency comprises all the business of the principal but couched in general terms; hence it is limited only to acts of administration. Thus, the general agency constituted does not warrant the payment or settlement of claims as they specifically require a Special Power of Attorney as provided by Art. 1878 of the Civil Code. But as provided by the Memorandum of Management Agreement, Guevarra was authorized to pay the claim but the payment shall come from the revolving fund or collection in his possession.
Having deviated from the instructions of the principal, the expenses that Guevarra incurred in the settlement of the claims of the insured may not be reimbursed from Dominion in accordance with Art. 1918 of the Civil Code. Nevertheless, under Art. 1236, to the extent that the obligation of the petitioner has been extinguished, Guevarra may demand for reimbursement from his principal. b. silence or lack of action
Conde v. CA (MAI) December 5, 1982 Melencio Herrera, J. FACTS: 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 to Casimira Pasagui, married to Pio for P165.00. "Pacto de Retro Sale" provided that after 10 yrs. If 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). Three years after Cadastral Court adjudicated land 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 Neither of the vendees-a-retro, Pio Altera nor Casimira Pasagui, was a signatory to the deed. Conde 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. Conde further states that she redeemed the property with her own money as her co-heirs were bereft of funds for the purpose. 30 June 1965 Pio Altera sold lot to the Sps Ramon Conde and Catalina T. Conde (private respondents). Dominga contends that land was repurchased in 1945 and filed a case 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. Domingas Evidence: 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
Dela Rosa v. Hidalgo (ROG) Naguiat v. CA (TOFF) 2003 Tinga, J. FACTS: Queano applied with Naguiat a loan of P200,000 which was eventually granted. Naguiat indorsed two checks to Queano amounting to P95,000 each. To secure the loan, Queano executed a Deed of Real Estate Mortgage and surrendered to Naguiat her duplicates of titles covering the mortgage. The mortgage was notarized and a promissory note for P200,000 with interest of 12% per annum was given by Queano. She also issued a Security Bank check payable to Naguiat. Upon presentment of the check, the Security Bank check was dishonored for insufficiency of funds. A month after, Queano received a letter from Naguiat demanding settlement of the loan. Queano and a certain Reubenfeldt (who was alleged to be Naguiats agent) met with Naguiat to manifest that Queano did not receive the proceeds of the loan as the checks were retained by Reubenfeldt. Naguiat applied for extrajudicial foreclosure of the mortgage but the same was declared null and void. On appeal, the CA affirmed the decision of the trial court. Among the issues raised by Naguiat is the admissibility of the representations of Reubendfeldt insisting that she was not her agent. ISSUE: WON Reubenfeldt was Naguiats agent. HELD: YES. Evidence showed that Naguiat instructed Reubenfeldt to withhold the checks pending the delivery of additional collateral by Queano. He served as agent of Naguiat on the loan application of Queanos friend as to whom Queano came to know of Naguiat. Furthermore, she also drew a check for the sum of P220,000 payable to Naguiat to cover for Queanos liability. As a consequence of the interaction between Naguiat and Reubenfeldt, Queano was impressed that she was Nagiats agent and Naguiat did not do anything to correct that. The rule states that one who clothes another with apparent
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Art. 1875. Agency is presumed to be for a compensation, unless there is proof to the contrary. c. Onerous
Art. 1803. When the manner of management has not been agreed upon, the following rules shall be observed: (1) All the partners shall be considered agents and whatever any one of them may do alone shall bind the partnership, without prejudice to the provisions of Article 1801. (2) None of the partners may, without the consent of the others, make any important alteration in the immovable property of the partnership, even if it may be useful to the partnership. But if the refusal of consent by the other partners is manifestly prejudicial to the interest of the partnership, the court's intervention may be sought. Art. 1884. The agent is bound by his acceptance to carry out the agency, and is liable for the damages which, through his non-performance, the principal may suffer. Art. 1885. In case a person declines an agency, he is bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner until the latter should appoint an agent or take charge of the goods. Art. 1929. The agent, even if he should withdraw from the agency for a valid reason, must continue to act until the principal has had reasonable opportunity to take the necessary steps to meet the situation. Art. 1931. Anything done by the agent, without knowledge of the death of the principal or of any other cause which extinguishes the agency, is valid and shall be fully effective with respect to third persons who may have contracted with him in good faith.
Art. 1877. An agency couched in general terms comprises only acts of administration, even if the principal should state that he withholds no power or that the agent may execute such acts as he may consider appropriate, or even though the agency should authorize a general and unlimited management. Specific terms
Art. 1878. Special powers of attorney are necessary in the following cases: (1) To make such payments as are not usually considered as acts of administration; (2) To effect novations which put an end to obligations already in existence at the time the agency was constituted; (3) To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action or to abandon a prescription already acquired; (4) To waive any obligation gratuitously; (5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration;
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Art. 381. When a person disappears from his domicile, his whereabouts being unknown, and without leaving an agent to administer his property, the judge, at the instance of an interested party, a relative, or a friend, may appoint a person to represent him in all that may be necessary. b. Articles (see below)
Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. Art. 1357. If the law requires a document or other special form, as in the acts and contracts enumerated in the following article, the contracting parties may compel each other to observe that form, once the contract has been perfected. This right may be exercised simultaneously with the action upon the contract.
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Harry Keeler Electric Co. vs. Rodriguez (EARLA) November 11, 1922 Johns, J. FACTS: Harry Keeler is engaged in the electrical business and is selling the Matthews plant in the Philippine Islands. One day, A.C Montelibano went to the office of Harry Keeler and told him that he could find purchasers of the Matthews plant. Keeler agreed with the understanding that for every customer that he could find or any plant that he could sell, he would be given a 10% commission if the sale was consummated. Pursuant to this agreement, Montelibano was able to negotiate the sale of the the Matthews plant between Keeler and Rodriguez. After the machine had been installed, Rodriguez paid the purchase price of P2513.55 to Montelibano, without the knowledge of Keeler. Keeler alleged that it was his employee Cenar who installed the equipment in defendants premises. Moreover, Keeler also claimed that it was Cenar who gave him the statement of account totaling P2563.95. Cenar did not make any effort to collect the money since he was assured by Rodriguez that he will pay it in Manila. On the other hand, Rodriguez alleged that he paid the purchase price to Montelibano, since he was the one who sold, delivered and installed the electrical plant; that he was the one who presented the account; that he was assured by Montelibano that he was authorized to collect the value of the plant. The lower court decided in favor of Rodriguez, holding that Montelibano was an agent authorized to collect the purchase price. ISSUE: WON Montelibano was the agent of Harry Keeler. HELD: No. According to the Court, there is nothing in the receipt issued by Montelibano that would indicate that he was authorized by Keeler to collect the money. Accordingly, what was contained therein were his personal receipt and personal signature. There were no more indications of his authority. Moreover, the Court also ruled that the receipt presented in evidence by Rodriguez actually shows that it was Cenar
Art. 1803. When the manner of management has not been agreed upon, the following rules shall be observed: (1) All the partners shall be considered agents and whatever any one of them may do alone shall bind the partnership, without prejudice to the provisions of Article 1801. (2) None of the partners may, without the consent of the others, make any important alteration in the immovable property of the partnership, even if it may be useful to the partnership. But if the refusal of consent by the other partners is manifestly prejudicial to the interest of the partnership, the court's intervention may be sought Compana Maritima v. Limson (JANCES)
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Sec. 21. Authority of attorney to appear. - An attorney is presumed to be properly authorized to represent any cause in which he appears, and no written power of attorney is required to authorize him to appear in court for his client, but the presiding judge may, on motion of either party and on reasonable grounds therefor being shown, require any attorney who assumes the right to appear in a case to produce or prove the authority under which he appears, and to disclose, whenever pertinent to any issue, the name of the person who employed him, and may thereupon make such order as justice requires. An attorney wilfully appearing in court for a person without being employed, unless by leave of the court, may be punished for contempt as an officer of the court who has misbehaved in his official transactions.chan robles virtual law library Sec. 22. Attorney who appears in lower court presumed to represent client on appeal. - An attorney who appears de parte in a case before a lower court shall be presumed to continue representing his client on appeal, unless he files a formal petition withdrawing his appearance in the appellate court. Sec. 23. Authority of attorneys to bind clients. - Attorneys have authority to bind their clients in any case by any agreement in relation thereto made in writing, and in taking appeals, and in all matters of ordinary judicial procedure. But they cannot, without special authority, compromise their client's litigation, or receive anything in discharge of a client's claim but the full amount in cash. Air Phil Corp. v. International Business (ALAIN) Panganiban J. Facts:
Issue: W/N the Motion for New Trial should be granted since Attorney. Manalo who was supposed to defend APC effectively denied said petitioner of its day in court. NO! Held:
APC was in need of the services of a business establishment to ferry its B-737 airplane. It engaged the services of IBAPSI as its agent to look for and engage, for APC, a business enterprise to ferry the airplane. IBASPI did engage the services of Universal Weather & Aviation, Inc. (UWAI). UWAI sent its Billings to APC, through IBASPI, in the total amount of US$65,131.55 for its services for the ferry of the airplane. But APC repeatedly failed to pay its account. Exasperated, UWAI blamed IBASPI. IBASPI was impelled to pay UWAI. IBASPI demanded refund of the amount advanced to UWAI. But still, no payment was effected by API.
Axiomatic is the rule that "negligence of counsel binds the client." The basis is the tenet that an act performed by counsel within the scope of a "general or implied authority" is regarded as an act of the client. While the application of this general rule certainly depends upon the surrounding circumstances of a given case, there are exceptions recognized by this Court: "(1) where reckless or gross negligence of counsel deprives the client of due process of law; (2) when its application will result in outright deprivation of the clients liberty or property; or (3) where the interests of justice so require." Woefully none of these exceptions apply herein. Thus, the Court cannot "step in and accord relief" to petitioner, even if it may have suffered by reason of its own arrant fatuity. The negligence of petitioner and that of its counsel are concurrent. Attorney. Manalo is an employee, not an outsider hired by petitioner on a retainer basis. In fact, he is the officer-in-charge of its Legal Department. There is no showing that
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PETITION DENIED. Pittsburgh Plate v. Director of Patents (GEN) March 29, 1974 Castro, J. FACTS: On Nov. 5, 1962, the law firm of Lichauco, Picazo and Agcaoili filed with the Philippine Patent Office a petition for extension of 30 days within which to file in behalf of the petitioner a notice of opposition to the respondent's application for registration of "Solex Bluepane" as trademark for its glass products. The plea was made pursuant to a cablegram from Langner, Parry, Card and Langner International Patent and Trademark Agents, USA, asking that the respondent's application be opposed. The extension was granted.
Art. 1870. Acceptance by the agent may also be express, or implied from his acts which carry out the agency, or from his silence or inaction according to the circumstances.
Etymology: French, literally, horse from Friesland 1 : a defense consisting typically of a timber or an iron barrel covered with projecting spikes and often strung with barbed wire 2 : a protecting line (as of spikes) on top of a wall usually used in plural
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Art. 1871. Between persons who are present, the acceptance of the agency may also be implied if the principal delivers his power of attorney to the agent and the latter receives it without any objection. Art. 1872. Between persons who are absent, the acceptance of the agency cannot be implied from the silence of the agent, except: (1) When the principal transmits his power of attorney to the agent, who receives it without any objection; (2) When the principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is habitually engaged as an agent, and he did not reply to the letter or telegram. 1. Acceptance, not compulsory a. Express b. Implied i. ii. from the acts of the agent which carry out the agency; from his silence or inaction where the persons are present
Art. 1871. Between persons who are present, the acceptance of the agency may also be implied if the principal delivers his power of attorney to the agent and the latter receives it without any objection. where the persons are absent
Art. 1872. Between persons who are absent, the acceptance of the agency cannot be implied from the silence of the agent, except: (1) When the principal transmits his power of attorney to the agent, who receives it without any objection; (2) When the principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is habitually engaged as an agent, and he did not reply to the letter or telegram. 2. Power of attorney; definition, purpose Notarization needed
Strong v. Gutierrez Repide (MAI) February 21, 1912 Moreland, J. FACTS: Prior to October 10, 1903, the plaintiff, Eleanor Erica Strong, was the owner of 800 shares of the capital
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HELD: 1) Power of attorney need not be written but authority must be duly established by evidence. Art. 1878 NCC: a special power of attorney is necessary to compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action or to abandon a prescription already acquired. Section 23 of Rule 138 on Attorneys and Admission to the Bar governs the authority of attorneys to bind their clients and provides that "Attorneys have authority to bind their clients in any case by any agreement in relation thereto made in writing, and in taking appeal, and in an matters of ordinary Judicial Procedure, but they cannot, without special authority, compromise their clients' litigation or receive anything in discharge of their clients' claims but the full amount in cash." The requirements of a special power of attorney in Article 1878 of the Civil Code and of a special authority in Rule 138 of the Rules of Court refer to the nature of the authorization and not its form. The requirements are met if there is a clear mandate from the principal specifically authorizing the performance of the act. Mandate may be oral or written BUT vital that it must be express. If the special authority is not written it must be duly established by evidence other than mere assertion of counsel. 2) Judge considered evidence before allowing son to execute agreement on mom's behalf. Here, it was shown that Judge took necessary precautionary measures and acted on the basis of satisfactory evidence when he allowed the compromise agreement to be executed by George Hung the petitioner's son. Prior to hearing, Lim Pin had repeatedly asked court to approve her proposal for monthly increase of 500php + that increases be pegged at that rate till monthly rental reaches 5k. on Dec 1977. But at the time, Tan not amenable to it, but Tan later changed her mind so court later asked George to execute agreement. There were other reasons which led the lower court to a finding that George Hung had the full authority to enter into the compromise. The court itself observed during the earlier hearings and it is not disputed that ... defendant Lim Pin could not decide on anything without first consulting
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Spouses Conchita Liao Tan and Tan Cho Hua alleged in their complaint for unlawful detainer that the plaintiff Conchita Liao Tan, as owner of a parcel of registered land with improvements located at Francisco Street, Caloocan City, had leased a portion of it, more particularly known as 91 Francisco Street, Caloocan City to defendant Lim Pin on a month to month basis but that the latter starting April, 1977 had not paid the agreed rental stipulated for such month and the succeeding months thereafter. And that despite demand, the defendant refused to vacate the leased premises. Defendant Lim Pin, filed her Answer denying the material allegations of the complaint and protesting the alleged highly "unconscionable and unreasonable" increase of rental demanded by plaintiffs. On the scheduled October 19, 1977 hearing, defendant Lim Pin was absent. Her son George Hung who attended with his mother all the previous hearings was present together with the defendant's counsel. Plaintiff Conchita Liao Tan together with her counsel was also present. Through the initiative of the court a quo, the subject compromise agreement was formulated and executed and it finally became the basis of the October 19, 1977 judgment. The aforesaid judgment was the subject of a motion for reconsideration filed on October 28,
Issue: Whether the respondent Judge committed grave abuse of discretion in allowing the October 19, 1977 compromise agreement in the absence of the petitioner. NO. HELD: Article 1878 is found in Title X of the Civil Code on Agency. It states that a special power of attorney is necessary to compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action or to abandon a prescription already acquired. Section 23 of Rule 138 on Attorneys and Admission to the Bar governs the authority of attorneys to bind their clients and provides that "Attorneys have authority to bind their clients in any case by any agreement in relation thereto made in writing, and in taking appeal, and in an matters of ordinary Judicial Procedure, but they cannot, without special authority, compromise their clients' litigation or receive anything in discharge of their clients' claims but the full amount in cash." The requirements of a special power of attorney in Article 1878 of the Civil Code and of a special authority in Rule 138 of the Rules of Court refer to the nature of the authorization and not its form. The requirements are met if there is a clear mandate from the principal specifically authorizing the performance of the act. As early as 1906, this Court in Strong v. Gutierrez-Repide (6 Phil. 680) stated that such a mandate may be either oral or written, the one vital thing being that it shall be express. And more
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Art. 1872. Between persons who are absent, the acceptance of the agency cannot be implied from the silence of the agent, except: (1) When the principal transmits his power of attorney to the agent, who receives it without any objection; (2) When the principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is habitually engaged as an agent, and he did not reply to the letter or telegram. 5. Cases
Calibo v. CA (TOFF) J. Quisumbing FACTS: Mike Abuella, private respondents son leased the house of Calibo for residential purposes. Pablo Abuella left the tractor with his son for safekeeping. Rent and other expenses were initially paid but subsequently defaulted in payment thereof. When confronted by Calibo, Mike Abuella manifested that hell only stay in the house until end of the year 1986 and offered the tractor as security. In order for him to pay his obligations sooner, he asked Calibo to help him look for buyers. In January 1987, a new tenant occupied the house and Calibo moved the tractor to his fathers garage also in the same city. Even after demands, Mike failed to pay his arrears; he only assured Calibo that the tractor would stand as guarantee to his payment. When Pablo Abuella tried to get the tractor from Calibo, he tried to negotiate with him and offered to write a check in payment of the rentals and postdated checks to cover the other expenses but still had to verify with Mike. Calibo would only accept the latter if Pablo would execute a promissory note in his favor to cover the remaining expenses. The two did not agree. Pablo Abuella instituted an action for replevin, claiming ownership of the tractor and seeking to recover possession thereof from petitioner Both the trial court and the CA ruled in favor of Abuella. Mike Abuella could not have validly pledged the subject tractor to petitioner since he was not the owner thereof, nor was he authorized by its owner to pledge the tractor. ISSUE: WON there was an implied principal-agent relationship between Pablo and Mike HELD: No. Pablo Abuella categorically stated that the tractor was only left to Mike for safekeeping; not to be pledged or alienated. Mike acted without authority or consent from Pablo. Article 1869 states that there would only be implied agency is the person is acting within the authority granted to him by the principal.
Art. 1872. Between persons who are absent, the acceptance of the agency cannot be implied from the silence of the agent, except: (1) When the principal transmits his power of attorney to the agent, who receives it without any objection; (2) When the principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is habitually engaged as an agent, and he did not reply to the letter or telegram. 4. Differentiate Art. 1871 to Art. 1872
Art. 1871. Between persons who are present, the acceptance of the agency may also be implied if the principal delivers his power of attorney to the agent and the latter receives it without any objection.
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Macke v. Camps (ABBY) Feb 12, 1907 Carson, J. FACTS: B.H. Macke and W.H. Chandler are partners and sold to Jose Camps of the Washington Caf various bills of goods amounting to P351.50 but he only received P174. Macke made a demand but Camps failed to pay. Macke said that Ricardo Flores the business manager of the hotel bar restaurant signed the receipt and that Flores was also the one who made the previous payments. A witness, one Galmes, the lessor of the building said that Flores also signed as a witness on the sublease contract as managing agent, which Jose Camps also signed. Camps now says that the foregoing facts are not sufficient to establish the fact that he received the goods for which payment is demanded. ISSUE: WoN Camps is estopped from proclaiming that Ricardo Flores was not his agent HELD: Yes. 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, 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 presumptions 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
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Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. 1. Applicability; relate to Art. 1403 (2e)
Art. 1403. The following contracts are unenforceable, unless they are ratified: 2(e): An agreement of the leasing for a longer period than one year, or for the sale of real property or of an interest therein; 2. 3. Repurchase Cases:
Lim v. CA (ALAIN) Cosmic Lumber v. CA (GEN) Nov. 29, 1996 Bellosillo, J. FACTS: Cosmic, through its General Manager, executed a Special Power of Attorney appointing Paz G. VillamilEstrada as attorney-in-fact: x x x to initiate, institute and file any court action for the ejectment of third persons and/or squatters of the entire lot 9127 and 443 and covered by TCT Nos. 37648 and 37649, for the said squatters to remove their houses and vacate the premises in order that the corporation may take material possession of the entire lot, and for this purpose, to appear at the pre-trial conference and enter into any stipulation of facts and/or compromise agreement so far as it shall protect the rights and interest of the corporation in the aforementioned lots. Estrada, by virtue of her power of attorney, instituted an action for the ejectment of private respondent Isidro Perez and recover the possession of a portion of Lot No. 443 before the RTC of Dagupan. Later, Estrada entered into a Compromise Agreement with Perez, wherein the latter agreed to pay the portion being occupied by him and to deliver the sum of P26,640. The RTC approved the Compromise Agreement. However, it was not executed within the 5-year period from date of the finality of the judgment allegedly due to the failure of petitioner to produce the owners duplicate copy of the
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Medrano v Court of Appeals (GEN) Feb. 18, 2005 Callejo, Sr., J. FACTS: Bienvenido Medrano, the Vice-Chairman of Ibaan of Rural Bank owned by the Medrano family, asked Estela Flor, a cousin-in-law, to look for a buyer of a foreclosed asset of the bank. The property was a 17-ha mango plantation (P2.2M) located in Ibaan, Batangas. Flor advised Pacita Borbon, a licensed real estate broker, that Medrano owned a mango plantation which was up for sale. Borbon told Flor to confer with Medrano and to give them a written authority to negotiate the sale of property to Dominador Lee, a client of Borbon. In the authority given by Medrano to Borbon it stated that: For your labor and effort in finding a purchaser thereof, I hereby bind myself to pay you a commission of 5% of the total purchase price to be agreed upon by the buyer and seller. Respondents Flor, Borbon and Josefina Antonio arranged for an ocular inspection of the property together with Lee which never materialized. Instead, Lee was instructed to get in touch with Medranos daughter, Teresa Ganzon, regarding the property. Antonio called Lee to make a follow-up of the latters visit to the property. Lee informed her that he already purchased the property and had made a down payment of P1M. The remaining balance was to be paid upon approval of the incorporation papers. Lee further was surprised that the respondents had not yet received their commission. A deed of sale was executed. Since its consummation, respondents asked from the petitioners for their commission or 5% of the purchase price. The petitioners refused to pay and offered a measly sum of P5,000 each. Hence, the respondents filed an action against petitioners. The trial court ruled in favor of the respondents. The petitioners were ordered to pay jointly and severally the 5% brokers commission to the respondents. It ruled that the sale of the property could not have been possible
Art. 1875. Agency is presumed to be for a compensation, unless there is proof to the contrary. 1. Exceptions
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HELD: The spouses Castillo were conspirators. Mercedita was the one who referred Malapayon to the victim. However, Malapayon never mentioned that he was referred by the Castillos, which is suspicious as it is common practice for a buyer to inform the seller who referred him. Also, the Castillos being agents working on commission, should have also informed their principal of the referral, them having to gain upon such referral should the buyer proceed with the acquisition. Lastly, both Castillos were able to freely enter and exit the safe house. With regard to Abello, his explanation that he was there to do a painting job is tenable. Malapayon confirmed this by stating that at that time he hired helpers to paint the apartment. This defense was also not rebutted by the prosecution. Concerning Gonzales, his defense that he too was hired to do a painting job cannot give way to his acquittal. He was the one who guarded the victim. By doing so, he concurred with the criminal design of the principals and performed an act indispensable to the crimes commission. Disposition: appeals of spouses Castillo and Gonzales denied. Abello acquitted.
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Sibbald vs Betlehem Iron Co o 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. o 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. 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. o The rule 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. This limitation is not 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 afterfault of the seller. o NO STIPULATED PERIOD. Where no time for the continuance of the contract is fixed by its terms either party is at liberty to terminate it
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Fiege and Brown v Smith, Bell & Co and Cowper (GEN) March 7, 1992 Johns, J. FACTS: Cowper was an employee of Smith, Bell & Co. which was engaged in the sale of machinery and equipment for the use of manufacturers of coconut oil. Under the terms of the Harden Contract, Cowper and plaintiff Fiege were entitled to receive half of the profits received from the sale of machinery to Mr. Schmidt. Later, the plaintiffs were associated with Cowper, and they entered into a contract with the Company. They were to seek to buyers for the machinery which were acceptable to the Company and that the prices were to be fixed by the plaintiffs, as brokers. In the contract, it was stipulated that the plaintiffs as brokers were to receive one-half of the difference between the cost of the machinery and equipment laid down in Manila and the prices at which they were sold to buyers secured by the brokers. The plaintiffs were able to secure orders for machinery and equipment, which were delivered to and accepted by the
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ISSUES WON Saligumba is entitled to the 5% agents commission. YES. RATIONALE In Prats vs CA, the SC awarded a sum of money to agent-claimant in view of his assistance and efforts in the transaction, although he was not the efficient procuring cause in bringing about the sale and notwithsatnding the expiration of his authority. In the case at bar, respondent Saligumba is the efficient procuring cause for without his efforts the municipality would not have anything to pass and the Mayor would not have anything to approve. It is clear therefore from the foregoing authority that respondent is entitled to the commission. Distinguished from Danon vs Brimo: The case of Danon is not in point. In that case, claimant-agent fully comprehended the possibility that he may not realize the agents commission as he was informed that another agent was also negotiating the sale and thus, compensation will pertain to the one who finds a purchaser and eventually effects the sale. LG Marquez v. Valera (REG) J. Labrador 1952 FACTS: Lora was authorized by defendants Varela to negotiate the sale of their share or interest in a parcel of land on Plaza Goiti, Manila. He and real estate broker Marquez agreed to work together for the sale of the property. They found a ready, willing, and able buyer, which accepted defendants' price and terms, but that thereafter defendants, without any justifiable reason, refused to carry out the sale and execute the necessary deed. As a consequence, petitioners failed to receive the commission which they were entitled to receive. Defendants argued that petitioner Marquez had no cause of action because they never dealt with Marquez, directly or indirectly. ISSUE: WON Marquez is entitled to be paid his commission. YES. RULING: Lora and Marquez acted jointly in rendering services to defendants under Lora's contract (of agency), and the same questions of law and fact govern their claims. The Rules of Court do not require the existence of
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Issue: WoN Infante was liable to pay Cunanan and Mijares commission despite the written cancellation of authority signed by the respondents. Held: Yes. Petition denied 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 according 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. Goduco vs. CA and Maria Castro (EARLA) Feb 28, 1964 Paredes, J. Facts: Herminia Goduco instituted a complaint against Maria Castro for recovery of sums of money as commission due her for the sale of a land in Paranaque. She alleged that the buyer indicated in the deed of sale, Sostenes Campillo, was a mere dummy, and that Castro was the real buyer of the property. She further claimed that when the purchase price of P150k was paid to the seller, the amount of P7500 as her commission was
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Art. 1876. An agency is either general or special. The former comprises all the business of the principal. The latter, one or more specific transactions. Art. 1877. An agency couched in general terms comprises only acts of administration, even if the principal should state that he withholds no power or that the agent may execute such acts as he may consider appropriate, or even though the agency should authorize a general and unlimited management. 1. Classes of Agency: General, Special, Universal
Siasat v. IAC (MARK) Oct. 10, 1985 J. Gutierrez, Jr. FACTS Sometime in 1974, respondent Teresita Nacianceno succeeded in convincing officials of the then Department of Education and Culture 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 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. The next day, after the transaction was discussed, a document was drawn up authorizing Nacianceno to represent United Flag Industry to deal with any entity or organization, private or government, in connection with the marketing of Uniteds products-flags and its accessories, subject to 30% commission. On October 16, 1974, the first delivery of 7,933 flags was made by the United Flag Industry. The following day the respondent's authority to represent the
ISSUES WON Nacianceno is entitled to the commission despite the absence of specific authorization for the sale of 15,666 Philippine flags to DECS. HELD Yes. Nacianceno is a general agent. RATIONALE 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.
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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. 2. Couched in administration general terms; acts of
Veloso v CA (GEN) Aug. 21, 1996 Torres, Jr., J. FACTS: Francisco Veloso owned a parcel of land in Tondo, Manila. A TCT was issued in his name but later on it was cancelled and another one was issued in the name of the private respondents. Petitioner alleged that he was the absolute owner of the property and that he never authorized anybody, not even his wife, to sell it. He alleged that he was in possession of the title but when his wife, Irma, left for abroad, he found out that his copy was missing. After verifying with the Register of Deeds, he found that the transfer of property was supported by a General Power of Attorney. Petitioner denied executing the power of attorney and alleged that his signature was falsified. He contends that the sale and transfer of the property was null and void. Private respondent, Aglaloma Escario, on the other hand alleged that she was a buyer in good faith and denied any
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NO evidence to show that notice ever brought to attention of officers of corp. Tropical Homes v. Villaluz (TOFF) Insular Drug v. PNB (REG) J. Malcolm 1933 FACTS: U.E. Foerster, a salesman and collector of Insular Drug for the Islands of Panay and Negros. was instructed to take the checks for the drug company to the Iloilo branch of the Chartered Bank of India, Australia and China and deposit the amounts to the credit of the drug company. Instead, Foerster deposited the checks, including those of four people, with the Iloilo branch of the PNB, in his personal account. The amount of the checks were subsequently withdrawn by U. E., Foerster and Carmen E. de Foerster (the formers wife). The drug company investigated the transactions of Foerster. Upon the discovery of anomalies, Foerster committed suicide. The bank argued that the fraud was not proved, and that Foerster had implied authority to indorse all checks made out in the name of the Insular Drug Co. ISSUE: WON PNB is liable. YES. RULING: As to the first argument, no such special defense was relied upon by the bank in the trial court. As to the second, a salesman with authority to collect money belonging to his principal does not have the implied authority to indorse checks received in payment. Any person taking checks made payable to a corporation, which can act only by agent does so at his peril, and must same by the consequences if the agent who indorses the same is without authority. That the bank acted in good faith does not relieve it from responsibility. Even so, the Bank was not even in good faith. The bank could tell by the checks themselves that the money belonged to the Insular Drug Co., Inc., and not to Foerster or his wife or his clerk. When the bank credited those checks to the personal account of Foerster and permitted Foerster and his wife to make withdrawals without there being made authority from the drug company to do so, the bank made itself responsible to the drug company for the amounts represented by the checks.
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Antonio Goquilay vs. Washington Sycip (Earla) July 26, 1960 Reyes, JBL Facts: Antonio Goquilay and Tan Sin An entered into a general commercial partnership under the partnership name Tan Sin An and Antonio C. Goquilay for the purpose of dealing in real estate. Embodied in their agreement is the stipulation that Tan has the exclusive management of the partnership, while Goquilays role is limited to examining the book of accounts of the partnership. It was further stipulated that the partnership shall have a life of 10 years, and the death of either one of the partners will not result to the dissolution of the partnership, but both parties, by mutual agreement, can decide to terminate the partnership before the expiration of the period. Thereafter, Goquilay executed in favor of Tan a general power of attorney stipulating that Tan shall act as his Manager in the partnership for the whole period of the partnership. The partnership eventually bought 3
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Home Insurance v. US Lines (JANCES) Veloso v. CA, supra Cosmic Lumber v. CA (MARK) Nov. 29, 1996 Bellosillo, J. FACTS COSMIC LUMBER CORPORATION through its General Manager executed on 28 January 1985 a Special Power of Attorney appointing Paz G. Villamil-Estrada as attorney-in-fact x x x to initiate, institute and file any court action for the ejectment of third persons and/or squatters of the entire lot 9127 and 443 and covered by TCT Nos. 37648 and 37649, for the said squatters to remove their houses and vacate the premises in order that the corporation may take material possession of the entire lot, and for this purpose, to appear at the pretrial conference and enter into any stipulation of facts and/or compromise agreement so far as it shall protect the rights and interest of the corporation in the aforementioned lots. Villamil-Estrada, by virtue of her power of attorney, instituted an action for the ejectment of private respondent Isidro Perez and recover the possession of a portion of Lot No. 443 before the Regional Trial Court of Dagupan. On 25 November 1985, she entered into a Compromise Agreement with respondent Perez, the one of the terms of which follows: 2. That to buy peace said defendant pays unto the plaintiff through herein attorney-in-fact the sum of P26,640.00 computed at P80.00/square meter; On 27 November 1985 the Compromise Agreement was approved by the trial court and judgment was rendered in accordance therewith.
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ISSUE WON Villamil-Estrada has the authority to sell the property of Cosmic. NO. RATIONALE The authority granted Villamil-Estrada under the special power of attorney was explicit and exclusionary: for her to institute any action in court to eject all persons found on Lots Nos. 9127 and 443 so that petitioner could take material possession thereof, and for this purpose, to appear at the pre-trial and enter into any stipulation of facts and/or compromise agreement but only insofar as this was protective of the rights and interests of petitioner in the property. Nowhere in this authorization was Villamil-Estrada granted expressly or impliedly any power to sell the subject property nor a portion thereof. Neither can a conferment of the power to sell be validly inferred from the specific authority to enter into a compromise agreement because of the explicit limitation fixed by the grantor that the compromise entered into shall only be so far as it shall protect the rights and interest of the corporation in the aforementioned lots. In the context of the specific investiture of powers to Villamil-Estrada, alienation by sale of an immovable certainly cannot be deemed protective of the right of petitioner to physically possess the same, more so when the land was being sold for a price of P80.00 per square meter, very much less than its assessed value of P250.00 per square meter, and considering further that petitioner never received the proceeds of the sale. When the sale of a piece of land or any interest thereon is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. Thus the authority of an agent to execute a contract for the sale of real estate must be conferred in writing
Vicente v Geraldez (GEN) July 31, 1973 Antonio, J. FACTS: Hi Cement Corporation acquired a Placer Lease Contract from Banahaw Shale Mining Association. The lease contract covered two mining claims over 51 ha of land. Included in the mining claims were the three parcels of land owned by the petitioners. On several occasions, the Corporation informed the petitioners, thru its representatives, of the its acquisition of the placer mining claims. The Corporation requested the petitioners to allow its workers to enter their lands to explore and develop the claims, with the promise to pay the petitioners reasonable amounts. However, the petitioners refused and threatened the workers with bodily harm. Hence, the Corporation filed with the CFI of Bulacan a complaint for injunction and damages against the petitioners. The trial court directed the issuance of a writ of injunction and suggested the relocation of the boundaries of the Corporations claims in relation to the properties of the petitioners. It named a Commissioner to conduct a survey plan on relocation and to submit a report to the court. The trial court also directed the parties to send their representatives to the place of the survey. The Commissioners report was approved by the trial court. In a subsequent amendment of the complaint of the Corporation, it alleged that the petitioners were willing to sell their properties for P10/sq.m. but when it offered to pay only P0.90/sq.m., the petitioners stated that they were wiling to go to trial on the issue of what would be the reasonable price.
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Art. 1879. A special power to sell excludes the power to mortgage; and a special power to mortgage does not include the power to sell. Art. 1880. A special power to compromise does not authorize submission to arbitration. 1. cases
National Bank v Tan Ong Sze (GEN) Sept. 2, 1929 Johns, J. FACTS: Tan Ong Sze vested Tan Buco, her attorney-in-fact, the power for me and in my name to sign, seal and execute, and as my act and deed, deliver any lease, any other deed for conveying (of) any real or personal property. Tan Buco loaned P300,000 from the National Bank. He then executed a promissory note and a real estate mortgage over a property in Iloilo owned by the defendant to secure the loan. When no part of the defendant has been paid, the Bank filed a complaint and prayed that the property be foreclosed and that the proceeds be applied to the satisfaction of the debt. The lower court rendered judgment in favor of the Bank. Upon appeal, the defendant alleged that Tan Buco had no authority to borrow money and mortgage her properties. ISSUE: WON Tan Buco had the authority to borrow money and execute the promissory note and mortgage defendants real property HELD: NO. Under the American Jurisprudence: 1. Cyclopedia of Law and Procedure: - that the authority to borrow money, conferred on an agent, must be created by express terms or necessarily
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Art. 1881. The agent must act within the scope of his authority. He may do such acts as may be conducive to the accomplishment of the purpose of the agency. Art. 1882. The limits of the agent's authority shall not be considered exceeded should it have been performed in a manner more advantageous to the principal than that specified by him. 1. 2. 3. distinguish between authority and power kinds of authority cases
Tan Tiong Teck v. SEC (REG) Avancea 1939 FACTS: Tan Tiong Gong purchased and sold shares of stock through respondent Cua Oh & Co. as his broker. It was alleged that the respondent purchased shares of stock for P3,649.86 and sold others for P2,385, without the consent or authority of the petitioner ISSUE: WON transactions effected by the respondent are null and void with respect to the petitioner because they were not consented or authorized by the latter. RULING: NO. The Securities and Exchange Commission, after going into evidence, reached the conclusion that the petitioner failed to establish his contention. The appeal from the resolution of the Commission is based upon a pure question of fact, and the factual findings of the commission is final under section 35 of Commonwealth Act No. 83. Bay View Hotel v. Ker & Co., and Phoneix Assurance Co. Ltd. (ABBY) Facts: Bay View Hotel secured a fidelity guarantee bond from Ker & Co., Ltd., for its accountable employees against acts of fraud and dishonesty whose principal is Phoenix Assurance. One of the EES, Tomas E. Ablaza, while acting in his capacity as cashier, was discovered by plaintiffappellant to have had a cash shortage and unremitted collections in the total amount of P42,490.95, it filed claims for payments on the said fidelity guarantee bond but Ker & Co. denied and refused indemnification and payment. To enforce its claims, Bay View instituted its complaint at the TC
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Issue: WoN the TC was right to dismiss the case against both Ker & Co., and Phoenix Assurance Held: Dismissed against Ker & Co. Remanded as to Phoenix Assurance
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Art. 1883. If an agent acts in his own name, the principal has no right of action against the persons with whom the agent has contracted; neither have such persons against the principal. In such case the agent is the one directly bound in favor of the person with whom he has contracted, as if the transaction were his own, except when the contract involves things belonging to the principal.
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Under general rules and principles of law the mismanagement of the business of a party by his agents does not relieve said party from the responsibility that he had contracted to third persons, especially in the case at bar where the written agreement contains no limitation to defendants-appellants' liability.
Commercial Bank v. Republic Armored Car Services Corp. al (MARK) FACTS Defendants were given credit accommodation by Commercial Bank in the form of an overdraft line to which they drew regularly certain amounts. Demands were made for the payment of the drawings but defendants have failed to pay the amounts demanded. Commercial Bank thus filed complaints against them. Defendants in their answer admit the opening of the credit line in their favor and that demands for the indebtedness were made upon them, but allege as special defenses that the directors and officers of the defendant corporation deliberately defrauded and mismanaged the said corporation breach of trust in order to deprive Damaso Perez of his control and majority interest in the defendant corporation, as a result of which fraud, mismanagement and breach of trust the defendants suffered tremendous losses; that the amounts drawn by defendant corporation upon the credit line were received and used by the former directors and officers and same constitute part of the funds of the defendant corporation misapplied and mismanaged by said former officers and directors of said corporation. ISSUES WON the obligation of the defendants-appellants to pay for the amount due under the overdraft line ceases due to the misappropriations on mismanagement of the funds of the corporation by the directors and employees thereof. NO. RATIONALE The obligation of the defendants-appellants to pay for the amount due under the overdraft line is not in any way qualified; there is no statement that the responsibility of the defendants-appellants for the amount taken on overdraft would cease or be defeated or reduced upon misappropriations on mismanagement of the funds of the corporation by the directors and employees thereof. The special defense is, therefore, a sham defense.
Ortega v Bauang Farmers Cooperative (GEN) Dec. 29, 1959 Montemayor, J. FACTS: Ortega sold and delivered to defendant 2,643 kilos of flue-cured Virginia leaf tobacco at P7,136.10. The defendant paid Ortega 2 installments leaving a balance of P3,136.10. In spite of repeated demands made, the defendant has failed and refused to pay. Ortega filed an action against the defendant to collect payment. The defendant admitted the allegations of the complaint but set up the affirmative defense: That the tobacco leaf it bought was shipped and delivered to and received by the ACCFA (Agricultural Credit and Cooperative Financing Administration), in accordance with an agency contract entered into between ACCFA as principal, and the defendant Bauang FACOMA, as agent, for the purchase of local Virginia leaf tobacco; and That final liquidation had not been made between principal and agent. Shortly after filing its answer, defendant filed a "Motion to Bring in Third Party Defendant," attaching thereto its "Third Party Complaint" against the ACCFA praying that judgment be rendered against it for all sums that may be adjudged against defendant in favor of the plaintiff. The trial court, finding the ACCFA to be a necessary party in the case, granted the motion to bring it as a third-party defendant. However, it later ordered that the third-party complaint be stricken out because it was filed without leave of court. The CFI of La Union ordered the defendant to pay Ortega the sum of P3,136.10, with legal interest from the date of the filing of the complaint, plus costs. ISSUE: WON the defendant acted in behalf of ACCFA? HELD: YES. Although at the time of the purchase of the tobacco in question, the attention of the plaintiff was not called to the existence of the agency agreement between the ACCFA and the Bauang FACOMA, there is reason to believe that he actually knew that agency and that the
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*Mark, promise hindi ito assigned sayo dun sa email ko. Sorry! FACTS Early in the month of September, 1924, the plaintiff, doing business in the Philippine Islands under the name of E. Awad & Co., delivered certain merchandise of the invoice value of P11,140 to Chua Lioc, a merchant operating under the name of Hang Chua Co. in Manila, said merchandise to be sold on commission by Chua Lioc. Representing himself as being the owner of the merchandise, Chua Lioc sold it to the defendant Filma Mercantile. The merchandise so purchased was delivered to the defendant, who immediately offered it for sale. D. J. Awad, in behalf of E. Awad & Co., wrote a letter to the defendant corporation advising it that, inasmuch as the merchandise belonged to E. Awad & Co., the purchase price should be paid to them. Filma in its answer stated that they received the goods from Chua Lioc hence payment is due to Chua Lioc. The complaint in the present action was filed on November 26, 1924, the plaintiff demanding payment of the same sum of P11,140 for which action had already been brought against Chua Lioc. The defendant, its answer, set up as special defense that it brought the merchandise in good faith and without any knowledge whether of the person from whom or the condition under which the said merchandise had been acquired by Chua Lioc or Hang Chuan Co.; that the defendant therefore had acquired title to the merchandise purchased; that the balance of P6,657.52, now in the hands of the defendant had been attached in the two actions brought on September 18, and October 7, respectively, and garnishment served upon the defendant, who therefore, holds the money subject to the orders of the court in the cases abovementioned, but which sum the defendant is able and willing to pay at any time when the court decides to whom the money lawfully pertains. ISSUES WON Awad can recover from Filma Mercantile. NO. RATIONALE Article 246 of the Code of Commerce reads as follows: When the agent transacts business in his own name, it shall not be necessary for him to state who is the principal and he shall be directly liable, as if the business were for his own account, to the persons with whom he transacts the same, said persons not
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As the bags were in good order when received in the vessel, the presumption is that they were damaged or lost during the voyage as a result of their negligent improper stowage. FOR THIS THE SHIP OWNER SHOULD BE LIABLE (so its agent, Macondray is liable, but action has prescribed). Secondary ISSUE (for our purposes): W/N the charterers agent is liable considering the finding of the court that the other goods were damaged or lost during the unloading, and unloading was the principal duty of the charterer according to the Uniform General Charter? NO. Ratio: The charterer assumed this activity under the charter party. However, the liability imposable against Transcontinental cannot be borned by Maritime, which as a mere agent, is not answerable for injury caused by its principal. It is a well-settled principle that the agent shall be liable for the act or omission of the principal only if the latter is undisclosed. The agent may be held liable if it represented the vessel when it took charge of the unloading of the cargo and issued cargo receipts in its own name. It should have also received and processed claims against the vessel for the losses/damages sustained by the cargo. If this is the case, the charterers agent is also considered a ship agent and so should be held to be solidarily liable with its principal. The charterer in this case did not represent itself as a carrier and indeed assumed responsibility only for the unloading of the cargo, i.e. after the goods were already outside the custody of the vessel. In supervising the unloading of the cargo and issuing Daily Operations Report and Statement of Facts indicating and describing the day-to-day discharge of the cargo, Maritime acted in representation of the charterer and not of the vessel. It thus cannot be considered a ship agent. As a mere charterers agent, it cannot be held solidarily liable with the Transcontinental for the losses/damages to the cargo outside the custody of the vessel. Notably, Transcontinental was disclosed as the charterers principal and there is no question that Maritime acted within the scope of its authority. II. Obligations of the Agent A. Article 1884: General and specific obligations (GEN)
He must also finish the business already begun on the death of the principal, should delay entail any danger. 1. Effects of acceptance of agency
PNB v. Manila Surety (ROG) 1965 Facts: PNB had opened a letter of credit and advanced thereon $120k to Edgington Oil for 8k tons of hot asphalt. Of this amount, 2k tons worth $279k were released and delivered to Adams & Taguba Corp (ATACO) under a trust receipt guaranteed by Manila Surety up to amount of P75k. To pay for the asphalt, ATACO constituted the Bank its assignee and attorney-in-fact to receive and collect from the Bureau of Public Works the amount out of funds payable to the assignor under Purchase Order No. 71947. Ataco delivered to the Bureau of Public Works and the latter accepted asphalt worth P431k. Of this amount the Bank regularly collected but the bank subsequently ceased to collect for unexplained reasons, until its investigators found that more moneys were payable to ATACO from the Public Works office, because latter had allowed another creditor to collect funds due to ATACO under the same purchase order, to a total of P311k. Its demands on the principal debtor and the Surety having been refused, the bank sued both in CFI to recover balance of P158k plus interest and costs. CFI: ruled for PNB. Only Surety Co perfected its appeal. Central Bank did not appeal while ATACO failed to perfect its appeal. CA: ruled against Bank and modified judgment as to surety's liability hence this appeal by bank to SC. CA found Bank negligent in having stopped collecting from Bureau the moneys falling due in favor of principal debtor ATACO before the debt was fully collected, thereby allowing such funds to be taken and exhausted by other creditors to the prejudice of the surety, and held that Bank's negligence resulted in exoneration of Manila Surety. PNB: Power of attorney obtained from ATACO was merely an additional security in its favor and it was the duty of surety, and not that of the creditor, to see to it that obligor fulfills his obligation, and that the creditor owed the surety no duty of active diligence to collect any sum from the principal debtor. Issue: WON PNB exercised due diligence in collecting from Bureau of Public Works? NO
Art. 1884. The agent is bound by his acceptance to carry out the agency, and is liable for the damages which, through his non-performance, the principal may suffer.
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British Airways vs. Court of Appeals (Mai) January 29, 1998 Romero, J. Facts: On April 16, 1989, Mahtani decided to visit his relatives in Bombay, India. In anticipation of his visit, he obtained the services of a certain Mr. Gumar to prepare his travel plans. The latter, in turn, purchased a ticket from British Airways. Since British Airways had no direct flights from Manila to Bombay, Mahtani had to take a flight to Hongkong via PAL, and upon arrival in Hongkong he had to take a connecting flight to Bombay on board British Airways. Prior to his departure, Mahtani checked in at the PAL counter in Manila his two pieces of luggage containing his clothing and personal effects, confident that upon
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Art. 1885. In case a person declines an agency, he is bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner until the latter should appoint an agent or take charge of the goods. Obligation: Bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner. Owner must as far as practicable: 1. appoint an agent 2. take charge of the goods C. Article 1886: Exception to the general rule that the principal must advance to the agent the sums necessary for the execution of the agency (EARLA)
Art. 1886. Should there be a stipulation that the agent shall advance the necessary funds, he shall be bound to do so except when the principal is insolvent. Exception to the exception
D. Article 1887 (JANCES) Art. 1887. In the execution of the agency, the agent shall act in accordance with the instructions of the principal. In default thereof, he shall do all that a good father of a family would do, as required by the nature of the business. 1. 2. 3. 4. 5. Effect of violation of principals instructions Instructions v. authority Rule in absence of instructions When departure is justified Cases
Gutierrez Hermanos v. Oria Hermanos (ALAIN) March 30, 1915 Torres, J.: FACTS: ALLEGATIONS by defendant ORIA HERMANOS & CO.: By reason of mercantile relations and the opening of a mutual current account from May 1, 1900, the plaintiff (Gutierrez Hermanos) had obligated itself periodically to
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Art. 1888. An agent shall not carry out an agency if its execution would manifestly result in loss or damage to the principal. (n) The agent should not carry out the agency if its execution will manifestly result in a loss or damage to the principal. The reason is that the agent is a mere extension of the personality of the principal. His duty is to render service FOR THE BENEFIT of the principal and not to act to his detriment. Moreover, agent must exercise due diligence in carrying out the agency. F. Article 1889 (JILL)
Art. 1889. The agent shall be liable for damages if, there being a conflict between his interests and those of the principal, he should prefer his own 1. Rule on conflict of interest
The rule is that the agent is not permitted, without the knowledge and consent of the principal, to assume two distinct characters in the same transaction for himself and pretending to act for the principal. The agent will be liable for damages if, there being a conflict, he chooses his own than those of the principal. However, if the principal chooses to waive the benefit and he does so with knowledge of facts, the rule will not apply. The rule will not also apply if the agents interests are superior (e.g. he has a security interest in the goods; he will be exposed to great physical risks). The rule does not distinguish whether the agency is onerous or gratuitous. The basis for the rule is the fiduciary relationship between the principal and agent, with the latter expected to observe utmost good faith and loyalty towards his principal. The rule should also preclude an agent from temptations (to engage in self-dealing). This rule is preventive, not remedial justice.
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Aboitiz v. De Silva (MARK) Facts: Aboitiz sold his shares in G. & R. Aboitiz and Viuda e Hijos de P. Aboitiz, partnership to the De Silvas. There was an unpaid balance of 159,000. Aboitiz filed a complaint to recover said amount. Defendants maintains that their liability under the "Hipoteca-Venta" had, with the plaintiff's implied consent, been transferred to Aboitiz & Co. ISSUE: WON defendants liability under the "HipotecaVenta" had, with the plaintiff's implied consent, been transferred to Aboitiz & Co. Held: No There is nothing in this contention. It is true that the three defendants transferred all the assets and liabilities of G. & R. Aboitiz to the corporation Aboitiz & Co., and that at the time at least two of the defendants, Guillermo and Vidal Aboitiz, held a general power of attorney from the plaintiff. But, in the first place, the defendants appear to have acted for themselves only and none of them pretended to act on behalf of Ramon Aboitiz; in the second place, the defendant's liability under the "Hipoteca-Venta" was a personal and individual liability, while the transfer in question related to the business of the partnership of G. & R. Aboitiz; and, in the third place, the defendants who held powers of attorney could not represent both themselves and their principal in a transaction involving the shifting of the liability from themselves to another party. Neither does the fact that the plaintiff subsequently accepted payments on the "Hipoteca-Venta Account" from Aboitiz & Co. work a novation. Novation is never presumed. Unless it is clearly shown either by express agreement of the parties or by acts of equivalent import, this defense will never be allowed. Severino v. Severino, supra Barton vs. Leyte Asphalt & Mineral Oil Co. (ANJ S.) (Note: The case has too many facts irrelevant to our topic. I decided not to include in the digest the facts that are irrelevant so as not to confuse us. Thanks.) Facts: James D. Barton, an American citizen residing in the City of Manila, was given by Leyte Asphalt & Mineral Oil Co. the sole and exclusive sales agency for the sale of their bituminous limestone and other asphalt products in the countries of Australia, New Zealand, Tasmania, Saigon,
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Art. 1890. If the agent has been empowered to borrow money, he may himself be the lender at the current rate of interest. If he has been authorized to lend money at interest, he cannot borrow it without the consent of the principal. 1. Reason for allowing agent to be the lender
The agent cannot, without special power of attorney, loan or borrow money (See Art 1878[7]). If the agent is expressly empowered to borrow money, he may himself be the lender at the current rate of interest o REASON: There is no danger of the principal suffering any damage since the current rate of interest would have to be paid in any case if the loan were obtained from a third person If the agent is authorized to lend money at interest, he cannot be the borrower without the consent of the principal o REASONS: the agent may prove to be a bad debtor; possible conflict of interest; prejudicial to the principal
H. Article 1891 (BAMBI) Art. 1891. Every agent is bound to render an account of his transactions and to deliver to the principal whatever he
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Obligation to turn over proceeds Obligation to render an accounting and report of collections presupposes the duty of simultaneously turning over collections. Nature of agents possession of goods/proceeds received in agency Agent has physical and juridical possession o Unlike a servant or messenger who only has physical possession Agent has autonomous right to retain possession of goods/proceeds (i.e., when principal fails to reimburse him for advances or indemnify him for damages suffered without his fault) o Unlike a bank teller who, as mere a custodian/keeper of funds received, has no independent right to retain. Other notes Any stipulation exempting the agent from his obligation to render accounts (par. 1 of 1891) is void. (par 2. of 1891). Rationale for rule: Stipulation contrary to par. 1 encourages fraud and is contrary to public policy. It is in the nature of a waiver of an action for future fraud, thus void. If agent fails to deliver and instead converts for his own use the money of property belonging to the principal, the agent is liable for estafa. Agent also cannot subtract from his collections the commission due him.
Two obligations of an agent under Art. 1981 Obligation to render accounts Agent must disclose to the principal the following: 1. Source of profits of agency All profits of the agency belong to the principal, regardless of whether profit is the result of the performance or violation of the agency. o Rationale for rule: It is the principal who assumes responsibility for the transaction. Also, the agent cannot be permitted to derive advantage from his own default 2. Secret profit agent may have received An agent who takes secret profit is guilty of breach of his loyalty to the principal and forfeits his right to collect commission. o Regardless of benefit/injury to the principal, usage/custom, or gratuitous nature of the agency.
Exemptions to obligation to account: If agent acted only as a middleman with the task of merely bringing together the vendor and vendee, who themselves thereafter will negotiate the terms and conditions of the transaction. If agent informed principal of gift/bonus/profit he received from vendee and principal did not object thereto. When right of lien exists in favor of agent (i.e. Article 2 3 1914 ; Sec. 37, Rule 138, ROC )
Domingo v. Domingo (REX) FACTS On June 2, 1956 Vicente Domingo granted Gregorio Domingo, a real estate broker, the exclusive
Art. 1914. The agent may retain in pledge the things which are the object of the agency until the principal effects the reimbursement and pays the indemnity set forth in the two preceding articles. (1730)
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Sec. 37. Attorneys' liens. - An attorney shall have a lien upon the funds, documents and papers of his client which have lawfully
come into his possession and may retain the same until his lawful fees and disbursements have been paid, and may apply such funds to the satisfaction thereof. He shall also have a lien to the same extent upon all judgments for the payment of money, and executions issued in pursuance of such judgments, which he has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his just fees and disbursements.
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Guzman v Court of Appeals (GEN) July 31, 1956 Reyes, J.B.L., J FACTS: Jonathan Guzman was a traveling sales agent of New Life Commercial, selling various La Tondena wine in a truck together with a driver and a helper. He made cash sales amounting to P4,873.62 in Aparri, Cagayan. He informed the driver that P2,840.50 was stolen and reported the matter to the police. Meanwhile, on their way home, they were stopped by authorities requesting Guzman to execute an affidavit regarding the alleged theft. Guzman instructed the driver to deliver P1,630 in cash and P403.12 in check to the manager, Enrique Go. Go reported the matter to the police and Guzman was subsequently questioned. The latter requested that Go defer the filing of the complaint and that he promised to refund the amount lost. However, Guzman was still prosecuted for theft for the unreturned amount of P804.70. ISSUE: WON Guzman was liable for theft
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Macias & Co. v. Warner Bros. (REG) J. Johns 1922 FACTS: Respondent was the resident agent of insurance companies The China fire Insurance Company, Ltd., The Yang-Tsze Insurance Association, Ltd., and The State Assurance Co., Ltd. which are all foreign companies. Respondent served as the agent of petitioner for the acquisition of several insurance policies. Fire occurred sometime in 1919, in the building in which the goods covered by the insurance policies were stored. Petitioner made a claim for damages under its policies against respondent. ISSUE: WON respondent was a mere agent and thus not liable for the loss. RULING: YES. Warner, Barnes & Co., was just an agent of the insurance companies. It did not make any contract with the petitioner, and is not liable to the plaintiff on any contract, either as principal or agent. For such reason, petitioner is not entitled to recover its losses from Warner, Barnes & Co., either as principal or agent. There is no breach of any contract with the plaintiff by Warners, Barnes & Co., either as agent or principal, for the simple reason that Warner as agent or principal, never made any contract, oral or written, with the plaintiff. Serona v. CA (ABBY) 2002 J. Ynares-Santiago Facts: Leonida Quilatan delivered pieces of jewelry to petitioner Virgie Serona to be sold on commission basis. By oral agreement of the parties, Serona shall remit payment or
Sub-agent defined: a person to whom agent delegates as his agent, the performance of an act for the principal which the agent has been empowered to perform through his representative. Power of agent to appoint sub-agent or substitute allowed. Agent here is a principal with respect to the substitute. Law allows such substitution for reasons of convenience and practical utility. Principal need not fear prejudice as he has right of action not only against agent but also against substitute with respect to obligation which latter has contracted under the substitution. This right of action against substitute is an exception to general rule that contracts are binding only between the contracting parties. Relation among principal, agent and sub-agent: 1. Sub-agent appointed by agent on latter's sole account- sub agent a stranger to principal who originally gave life to agency. 2. Sub-agent appointed by agent with authority from principal- where agent authorized to appoint subagent, relation of principal and agent, exists between principal and sub-agent. 3. Effect of death of principal/agent - if authority of sub-agent proceeds from principal, death of agent who appointed him does not affect his authority.
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Art. 1894. The responsibility of two or more agents, even though they have been appointed simultaneously, is not solidary, if solidarity has not been expressly stipulated. (1723) Art. 1895. If solidarity has been agreed upon, each of the agents is responsible for the non-fulfillment of agency, and for the fault or negligence of his fellows agents, except in the latter case when the fellow agents acted beyond the scope of their authority. 1. Rule when 2 independently agents appointed
Municipal Council of Iloilo vs. Evangelista (ANJ S.) Facts: Tan Ong Sze Vda. De Tan Toco was awarded by the CFI of Iloilo 42,966.40php for the strip of land belonging to her that was taken by the Municipal Council to widen a public street.
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Art. 1896. The agent owes interest on the sums he has applied to his own use from the day on which he did so, and on those which he still owes after the extinguishment of the agency. Two distinct cases contemplated here:
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Mendezona v. C. Viuda de Goitia (BAMBI) March 11, 1930 Villamor, J. Facts: Benigno Goitia was representative and attorney-infact of plaintiffs Leonor Mendezona and Valentina Izaguirre Y Nazabal in the joint-account partnership known as the "Tren de Aguadas." As he was also manager of the partnership at that time and because plaintiffs lived in Spain, Goitia collected the dividends due plaintiffs. Prior to 1915, Benigno Goitia remitted to plaintiffs their dividends every year. However, from 1915 until his death in 1926, he failed to remit any dividends to plaintiffs. When Goitia died, counsel for both plaintiffs filed their claims with the committee of claims and appraisal of Goitias estate. COMMITTEE disapproved plaintiffsclaims. Plaintiffs appealed to trial court. During trial, it was found that from 1915 to 1926, Benigno Goitia indeed failed to remit and account for the dividends he received in behalf of plaintiffs. Thus, trial court directed respondent Encarnacion C. Vda, de Goitia, who was judicial administratrix of her husbands estate, to render a judicial account of: 1. The intestate estate of the deceased Benigno Goitia and
Issues /Held: 1. WON trial court had jurisdiction to admit the amended complaints, which claimed a greater 5 amount than was claimed before the committee. YES. Section 776 of the Code of Civil Procedure provides that upon the lodging of such appeal with the clerk, the disputed claim shall stand for trial in the same manner as any other action in the Court of First Instance, the creditor being deemed to be the plaintiff, and the estate the defendant, and pleading as in other actions shall be filed. Considering the distance that separated the plaintiffs from their attorney-in-fact and that the latter failed to supply them with data from 1915 to 1926, it is natural that they had to resort to calculating the amounts due them from their stocks in "Tren de Aguadas." To deny them the right to amend their complaint in accordance with section 776, when they had secured more definite information as to the amounts due them, would be an injustice, especially since this action arises from trust relations between the plaintiffs and the deceased Goitia.
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Excludes Evidence-related issues. Plaintiffs only asked for annual dividends before the committee whereas the amended complaint in the trial court asked for ordinary and extraordinary dividends.
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Art. 1897. The agent who acts as such is not personally liable to the party with whom he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers. 1. General rule; exception
Duties and liabilities of agent to third persons The rule is that the principal is responsible for the acts of the agent done within the scope of his authority and should bear any damage caused to third persons (Art 1910) 1. In general The duties of an agent to third persons and his corresponding liabilities must be considered with reference to the character of his act as to whether it is authorized or unauthorized, and also with reference to
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5.
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Philippine Products v Primateria Societe Anonyme Pour Le Commerce (GEN) Nov. 29, 1965 Bengzon, C.J. FACTS: Primateria Zurich (respondent), through Alexander Baylin, entered into an agreement with Philippine Products Company (PPC) whereby the latter undertook to buy Copra in the Philippines for the account of Primateria Zurich. PPC shipped copra to foreign countries pursuant to the instructions of Primateria Zurich, through Primateria Phils, with Baylin and Jose Crame as officers. The total amount due to petitioner was P31,009.71. PPC filed a complaint against Primateria Zurich, Primateria Phils, Baylin and Crame to recover the amount due. The trial court rendered a judgment holding Zurich liable but absolved Baylin and Crame. PPC appealed the decision as regards the dismissal of the three defendants. PPC alleges that Zurich is a foreign corporation under Sec. 68 of the Corporation Law; and since it has transacted business in the Philippines without the necessary license, its agents here are personally liable under Art. 1897 for contracts made in behalf. ISSUE: WON Primateria Phils, Baylin and Crame may be held personally liable HELD: NO. There is no proof that as agents they exceeded the limits of their authority. The principal, who should be the one to raise the point, never raised it, denied its
(Latin) as a favor
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The liability of an agent who exceeds the scope of his authority depends upon WON the third person is aware of the limits of the agents power. The agent is not bound or liable for damages in case he gave notice of his powers to the third person, nor in a case where the third person is aware of the limits of the powers granted by the principal. If the agent promised or undertook to secure the principals ratification and failed, he is personally liable. If ratification is obtained, then the principal becomes liable. 5. Cases
M. Article 1898 (ANJ) Lorca v. Dineros, supra Article 1898. If the agent contracts in the name of the principal, exceeding the scope f his authority, and the principal does not ratify the contract, it shall be void if the party with whom the agent contracted is aware of the limits of the powers granted by the principal. In this case, however, the agent is liable if he undertook to secure the principals ratification. 1. Reason why agent is liable Salonga v. Warner (JESSA) January 31, 1951 Bautista Angelo, J. Facts: On August 28, 1946, Westchester Fire Insurance Company of New York entered into a contract with Gamboa whereby said company insured one case of rayon yardage which said Gamboa shipped from San Francisco, California, on steamer Clovis Victory, to Manila and consigned to Salonga. According to the contract of insurance, the insurance company undertook to pay to the sender or her consignee the damages that may be caused to the goods shipped subject to the condition that the liability of the company will be limited to the actual loss which the insured may suffer not to the exceed the sum of P2,000 The ship arrived in Manila on September 10, 1946. On October 7, the shipment was examined by C. B. Nelson and Co., marine surveyors, at the request of the plaintiff, and in their examination the surveyors found a shortage in the shipment in the amount of P1,723,12. On October 9, plaintiff filed a claim for damages in the amount of P1,723.12 against the American President Lines, agents of the ship Clovis Victory, demanding settlement When apparently no action was taken on this claim, plaintiff demanded payment thereof from Warner,
Article 1910, par.2 states that if the agent acts in excess of his authority, even if he contracts in the name of the principal, the agent is the one personally liable unless there is subsequent ratification by the principal. 2. Status of contracts entered into by an agent in excess of his authority
The rule that a contract entered into by one who has acted beyond his powers shall be unenforceable (Arts.1317, par 2; 1403 [1]), refers to the unenforceability of the contract against the principal, and does not apply where the action is against the agent himself, for contracting in excess of the limits of his authority. The contract, which is unenforceable as against the principal, is void as between the agent and the third person, and consequently, not legally binding. 3. Effect of ratification
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Issue: Main issue: WON the trial court erred in holding that Warner, as agent of Westchester Fire Insurance Company of New York, United States of America, is responsible upon the insurance claim subject to the suit Sub-issues: (1) WON Warner has no contractual relation with either the plaintiff or his consignor (2) WON Warner is not the real party in interest against whom the suit should be brought (3) WON a judgment for or against an agent in no way binds the real party in interest. Held: YES (the main issue is answered by answering the sub-issues) 1. YES. It is a well known rule that a contractual obligation or liability, or an action ex-contractu, must be founded upon a contract, oral or written, either express or implied. If there is no contract, there is no corresponding liability, and no cause of action may arise therefrom. This is what is provided for in article 1257 of the Civil Code. This article provides that contracts are binding upon the parties who make them and their heirs, excepting, with respect to the latter, where the rights and obligations are not transmissible, and when the contract contains a stipulation in favor of a third person, he may demand its fulfillment if he gives notice of his acceptance before it is revoked. Warner has not taken part, directly or indirectly, in the contract in question. The evidence shows that Warner did not enter into any contract either with the plaintiff or his consignor Gamboa. The contract of marine insurance was made and executed only by and between the Westchester Fire Insurance Company of New York and Gamboa. The contract was entered in New York. There is nothing therein
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Issues and Held: 1. WON defendants violated banks instructions in extending new special crop loans after receiving PNBs telegram of November 26, 1946. YES. It may be that there was no such express instruction directly ordering the defendants to stop granting new special crop loans. However, defendants should have gathered that idea from the central offices letters. That defendant understood this clearly was evidenced by the fact that Bagamaspad, in one of his letters to the central office, asked still entertain new applicants on Special Crop Loans. 2. WON defendants acted with extreme laxity, negligence, and carelessness in granting said new special crop loans. YES. SC agrees with the trial court that ll precautions to protect the interest of the Philippine National Bank as the principal of the defendants were thrown overboard. This is evidenced by the following facts: Defendants released large loans to 103 borrowers who were neither landowners or tenants but were merely applicants for the purchase of public lands.
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WON PNB, in suing the defaulting borrowers, ratified defendants acts. NO. Ordinarily, a principal who collects either judicially or extrajudicially a loan made by an agent without authority, thereby ratifies the said act of the agent. In the present case, however, in filing suits against some of the borrowers to collect at least part of the unauthorized loans, there was no intention on the part of PNB to ratify the acts of appellants. Such act of the banks will even benefit defendants because their financial liability will be decreased if the bank can recover from the defaulting borrowers.
4.
WON the action was premature because there is no showing that the defaulting borrowers are insolvent. NO. It is not necessary for the plaintiff Bank to first go against the individual borrowers, exhaust all remedies against them and then hold the defendants liable only for the balance which cannot be collected.
Air France v. CA, supra Cervantes v. CA (TOFF) DBP v. CA, supra N. Article 1899 (REX) Article 1899. If a duly authorized agent acts in accordance with the orders of the principal, the latter cannot set up the ignorance of the agent as to circumstances whereof he himself was, or ought to have been, aware. Nepomuceno v. Heredia (TOFF) O. Article 1900 (TOPE) Art. 1900. So far as third persons are concerned, an act is deemed to have been performed within the scope of the agent's authority, if such act is within the terms of the power of attorney, as written, even if the agent has in fact exceeded the limits of his authority according to an understanding between the principal and the agent. Scope of agents authority as to third persons
Methods of broadening and restricting agents authority A principal may assume rights and incur liabilities in respect of his agents acts or transactions other than those for which express authorization has been given and an agents authority may be enlarged or restricted in a number of ways: o By implication Authority extends to acts and transactions incidental to what have been expressly authorized. o By usage and custom (may enlarge as well as restrict) Agents authorization may not, however, be enlarged through usage and custom in the following four classes of cases: Where it is sought to vary the terms of an express authorization, as where the agent appointed to sell for credit; Where it is sought thereby to dispense with a legal requirement enacted for the principals benefit; Where it is sought thereby to change a rule of law or to dispense with a
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Responsibility of principal where agent acted with improper motives. General rule The motive of the agent in entering into a contract with a third person is immaterial. Where a written authority given to an agent covers the thing done by him on behalf of the principal, it is not competent to the court to look into the mind of the agent, and if he had applied his authority for his own ends, to hold that the principal is not bound. Exceptions Where the third person knew that the agent was acting for his private benefit (that the principal is not liable) Where the owner is seeking recovery of personal property which he has been unlawfully deprived. Principals responsibility for agents misrepresentation. Within the scope of agents authority.o A principal is subject to liability for loss caused to another by the others reliance upon a deceitful representation of an agent in the course of his employment if the representation is authorized, or within the implied authority of the agent to make for the principal, or apparently authorized by him or not to make the representation Beyond the scope of agents authority.o Principal not bound by the misrepresentation of the agent. For the agents own benefit.o As to this aspect, the weight of authority says YES, principal is liable, if the agent acted for
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Ch. Veloso and Rosales v La Urbana and Del Mar (GEN) Nov. 3, 1933 Imperial, J. FACTS: Petitioner Corazon Ch. Veloso owned undivided portions of 5 parcels of land in Manila. Defendant Del Mar forged 2 powers of attorney purporting to have been executed by the petitioner spouses conferring upon him authority to mortgage the petitioners participation in the properties. These powers of attorney were duly registered in the office of the Register of Deeds. Del Mar proceeded in mortgaging the petitioners participations to La Previsora Filipina. Subsequently, he cancelled the mortgage and transferred it to La Urbana which granted him a loan of P13,475. He delivered the owners duplicates of the certificates of title to La Urbana. However, Del Mar violated the conditions of the mortgage which prompted La Urbana to foreclose the mortgages. Petitioners filed a criminal action against Del Mar for the fraudulent transactions which resulted into his eventual conviction. The trial court also held that pursuant to Art. 1714 (Old Civil Code) and Torrens Act, the forged powers of attorney were null and void and could not prejudice the rights of the petitioners. ISSUE: WON La Urbana should be liable for damages HELD: YES. Inasmuch as Del Mar is not the registered owner of the mortgaged properties and inasmuch as the appellant was fully aware of the fact that it was dealing with him on the strength of the alleged powers of attorney purporting to have been conferred upon him by the plaintiff, it was his duty to ascertain the genuineness of the instruments and not rely absolutely and exclusively upon
Prior to the instant case, Alfredo filed an illegal dismissal case against Pepsi which was decided in his favor.
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ISSUE: WON Savellon was duly authorized by the petitioners to enter into the Trip Charter Party.
RULING: NO. The broadest scope of Savellon's authority is limited to the use of the coal operating contract and the clause cannot contemplate any other power not included in the enumeration or which are unrelated either to the power to use the coal operating contract or to those already enumerated. In short, while the clause allows some room for flexibility, it can comprehend only additional prerogatives falling within the primary power and within the same class as those enumerated. There is no evidence at all that Bacaltos Coal Mines as a coal mining company owns and operates vessels, and even if it owned any such vessels, that it was allowed to charter or lease them. Also, the Authorization is not a general power of attorney. It is a special power of attorney for it refers to a clear mandate specifically authorizing the performance of a specific power and of express acts subsumed therein. Furthermore, had SMC exercised due diligence and prudence, it should have known in no time that there is absolutely nothing on the face of the Authorization that confers upon Savellon the authority to enter into any Trip Charter Party.
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Art. 1901. A third person cannot set up the fact that the agent has exceeded his powers, if the principal has ratified, or has signified his willingness to ratify the agent's acts. 1. Effects of ratification and expression of willingness to ratify
If the principal does not ratify the acts of the agent it is unenforceable and he is not bound by it. If the principal ratifies the acts of the agent, i.e. authorizes, receives benefits, the THIRD PERSON cannot set up the fact that the agent has exceeded his authority. The THRID PERSON may be compelled to abide by his contract. The ratification shall have a retroactive effect. It is only the PRINCIPAL NOT THE AGENT who may stamp the imprimatur of ratification. Before ratification by the principal or expression of willingness on his part to ratify, the third person may repudiate the acts of the agent. 2. Implied ratification
Where a person acts for another who accepts or retains the benefits or proceeds of his effort with knowledge of the material facts surrounding the transaction, the latter mus be DEEMED to have ratified the methods employed. Principle of Principal may not accept the benefits of the transaction and repudiate the burdens. 3. Cases
Dizon v CA (JESSA) January 28, 2003 Ynares-Santiago, J. Facts: These involve two consolidated petitions seeking to set aside and annul the decisions and resolutions of respondent Court of Appeals essentially, the facts are: Overland Express Lines, Inc. (lessee) entered into a Contract of Lease with Option to Buy with petitioners (lessors) involving a 1,755.80 square meter parcel of land term of the lease was for one (1) year commencing from May 16, 1974 up to May 15, 1975. During this period, private respondent was granted an option to purchase for the amount of P3,000.00 per square meter. the lease shall be on a per month basis with a monthly rental of P3,000.00 For failure of private respondent to pay the increased rental of P8,000.00 per month effective, petitioners filed an action for ejectment MTC: private respondent to vacate the leased premises and to pay the sum of P624,000.00
Commission on Public Highways v San Diego (EARLA) Rafferty v. Province of Cebu (JANCES) December 29, 1928 Johns Facts: An instrument was executed by plaintiff, by and through his agent and attorney-in-fact, in which the said agent undertook to convey title of the plaintiff to 6700 sq. meters of a lot for a consideration of P226. The part of the lot was to be expropriated within the provincial park. Plaintiff received and accepted the P226 consideration. Plaintiff, however, contends that the agent had no authority to execute the instrument in question. Ruling: CFI dismissed plaintiffs complaint; judgment for defendants cross-complaint. Issue: WON the instrument executed is valid [YES]
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Issue and Held: 1. WON there was a perfected contract of sale. NO. Article 1475 of the Civil Code specifically provides that the contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. The Agreement is not a contract of sale because it imposed no obligation on the part of Toyota to
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On October 15, 1978, Santos entered into a deed of agreement with Conrado de Guzman. In this deed, it expressly stated that Santos was representing Siredy, while De Guzman was referred to as the contractor and Siredy was the principal. For almost 12 years, until April 1990, De Guzman constructed 26 residential units in Ysmael Village. 13 were fully paid, but the other 13 remained unpaid. The total price exceeded 400k, verified correct and signed by Santos. De Guzman then tried to collect this from Siredy, but failed. Thus he instituted an action for specific performance against Siredy, Yanga, and Santos, who all denied liability. During the trial, Santos disappeared. Siredy in its defense presented testimonial evidence that Siredy had no contract with De Guzman and had not authorized Santos to enter into a contract with anyone to build houses in the said village. The TC ruled in favor of Siredy, saying that the deed of agreement was between De Guzman and Santos only, and held that Siredy and Yanga cannot be held liable. Santos was ordered to pay the amount and the case against Siredy and Yanga was dismissed. Upon appeal, the CA reversed, saying that the Letter of Authority clearly constituted Santos as Siredys agent. Consequently Siredy cannot deny liability for the contract between Santos and De Guzman, and there was no need for Yanga himself to be a signatory to it, in order to be bound. Siredy now appeals to the SC, the relevant argument in this case that Santos instructions were only to SELL the lots and not build houses. ISSUE: WON there was an agency (YES) WON assuming Santos was an agent, Siredy is liable under the Deed of Agreement (YES) HELD/RATIO A reading of the Letter of Agreement between Yanga and Santos undoubtedly constitutes Santos as an agent. There are express stipulations contained therein, and it was on the authority of this document that De Guzman transacted business with Santos in the first place. As to Siredys defense that it was only interested in selling the lots, it does not matter. First of all, its Articles of Incorporation show that it undertakes construction of buildings and houses. Such Articles, coupled with the Letter of Authority, is sufficient to have given De Guzman
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Liability of commission agent as to goods received If the commission agent received goods consigned to him, he is responsible for any damage or deterioration suffered by the same in the terms and conditions and as described in the consignment. The phrase in the terms and conditions and as described in the consignment refers to the quantity, quality, and physical condition of the goods. To avoid liability, the commission agent should make a written statement of the damage or deterioration if the goods received by him do not agree with the description in the consignment.
S.
Art. 1904. The commission agent who handles goods of the same kind and mark, which belong to different owners, shall distinguish them by countermarks, and designate the merchandise respectively belonging to each principal. Santos v. Bernabe (MAI) November 6, 1929 Villareal, J. Facts: Urbano Santos deposited in Jose Bernabes warehouse 778 cavans and 38 kilos of palay while Pablo Tiongson deposited in the same warehouse 1,026 cavans and 9 kilos of the same grain. On March 20, 1928, Pablo Tiongson filed with the Court of First Instance of Bulacan a complaint against Jose C. Bernabe, to recover from the latter the 1,026 cavans and 9 kilos of palay deposited in the defendant's warehouse. At the same time, the application of Pablo Tiongson for a writ of attachment was granted, and the attachable property of Jose C. Bernabe, including 924 cavans and 31 1/2 kilos of palay found by the sheriff in his warehouse, were attached, sold at public auction, and the proceeds thereof delivered to said defendant Pablo Tiongson, who obtained judgment in said case. It does not appear that the sacks of palay of Urbano Santos and those of Pablo Tiongson, deposited in Jose C. Bernabe's warehouse, bore any marks or signs, nor were they separated one from the other. Urbano Santos contends that Pablo Tiongson cannot claim the 924 cavans and 31 kilos of palay attached by the defendant sheriff as part of those deposited by him in Jose C. Bernabe's warehouse, because, in asking for the attachment thereof, he impliedly acknowledged that the same belonged to Jose C. Bernabe and not to him.
Art. 1903. The commission agent shall be responsible for the goods received by him in the terms and conditions and as described in the consignment, unless upon receiving them he should make a written statement of the damage and deterioration suffered by the same. Definition Factor or commission agent One whose business is to receive and sell goods for a commission Entrusted by the principal with the possession of goods to be sold, and usually selling in his own name. May act on his own name or in that of the principal
Ordinary agent Need not have the possession of the goods of his principal, while the commission agent must be in possession
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Issue: Whether or not Pablo Tiongson can claim the entire 924 cavans and 31 kilos of palay Held: NO. The 778 cavans and 38 kilos of palay belonging to the plaintiff Urbano Santos, having been mixed with the 1,026 cavans and 9 kilos of palay belonging to the defendant Pablo Tiongson in Jose C. Bernabe's warehouse; the sheriff having found only 924 cavans and 31 1/2 kilos of palay in said warehouse at the time of the attachment thereof; and there being no means of separating form said 924 cavans and 31 1/2 of palay belonging to Urbano Santos and those belonging to Pablo Tiongson, the following rule prescribed in article 381 of the Civil Code for cases of this nature, is applicable: Art. 381. If, by the will of their owners, two things of identical or dissimilar nature are mixed, or if the mixture occurs accidentally, if in the latter case the things cannot be separated without injury, each owner shall acquire a right in the mixture proportionate to the part belonging to him, according to the value of the things mixed or commingled. The number of kilos in a cavan not having been determined, we will take the proportion only of the 924 cavans of palay which were attached and sold, thereby giving Urbano Santos, who deposited 778 cavans, 398.49 thereof, and Pablo Tiongson, who deposited 1,026 cavans, 525.51, or the value thereof at the rate of P3 per cavan. Montelibano v. Bacolod-Murcia Milling (ROG) 1954 Facts: Montelibano et al are sugar planter, member of Bacolod Murcia or assignees of sugar planter. They have contracts with Bacolod (Central) for the delivery of their sugar cane to the sugar mill of Central for milling and processing into sugar. Sugar cane delivered by each planter was to be divided between planter and Central this way: 60% for planter, 40% for Central. Central was to provide planter from time to time as the milling progressed with info as to share of sugar that planter was entitled to receive, give planter quedans or warehouse receipts therefor. After the milling, and for period of 90days, Central was to keep sugar in its warehouse free of charge, and planter to pay 5centavos per picul /month for storage aside. At time of Japanese occupation of Negros Occidental on May 1942 there were on deposit at Central's warehouse 664k piculs of sugar, of which 128k belonged to Montelibano et al, 284k to Central and the balance to
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Green Valley Poultry v. IAC & Squibb (ABBY) 1984 J. Abad Santos Facts: Green Valley was appointed as the noexclusive distributor of verinary products of Squibb in northern Luzon. Squibb filed a suit to collect on goods delivered but unpaid. Green Valley claimed that the contract with Squibb was a mere agency to sell; that it never purchased goods from Squibb; that the goods received were on consignment only with the obligation to turn over the proceeds, less its commission, or to return the goods ff not sold, and since it had sold the goods but had not been able to collect from the purchasers thereof, the action was premature. Upon the other hand, Squibb claimed that the contract was one of sale so that Green Valley was obligated to pay for the goods received upon the expiration of the 60-day credit period. Green Valley was ordered by the CA to pay the sum of P48,374.74 plus P96.00 with interest at 6% per annum from the filing of this action; plus attorney's fees in the amount of P5,000.00 and to pay the costs to Squibb. Issue: 1.WoN it is a contract of sale or a contract to sell. 2. WoN Green Valley is liable to pay the unsold products Held: According to the SC: We do not have to categorize the contract. Whether viewed as an agency to sell or as a contract of sale, the liability of Green Valley is indubitable. Adopting Green Valley's theory that the contract is an agency to sell, it is liable because it sold on credit without authority from its principal. The Civil Code has a provision exactly in point. It reads: Art. 1905. The commission agent cannot, without the express or implied consent of the principal, sell on credit. Should he do so, the principal may demand from him payment in cash, but the commission agent
T.
Art. 1905. The commission agent cannot, without the express or implied consent of the principal, sell on credit. Should he do so, the principal may demand from him payment in cash, but the commission agent shall be entitled to any interest or benefit, which may result from such sale.
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Art. 1906. Should the commission agent, with authority of the principal, sell on credit, he shall so inform the principal, with a statement of the names of the buyers. Should he fail to do so, the sale shall be deemed to have been made for cash insofar as the principal is concerned. (n) Art. 1907. Should the commission agent receive on a sale, in addition to the ordinary commission, another called a guarantee commission, he shall bear the risk of collection and shall pay the principal the proceeds of the sale on the same terms agreed upon with the purchaser. (n) Art. 1908. The commission agent who does not collect the credits of his principal at the time when they become due and demandable shall be liable for damages, unless he proves that he exercised due diligence for that purpose.
More than two weeks after the deposits, Gloria Castillo went to the Calapan branch several times to ask whether the warrants had been cleared. She was told to wait. Accordingly, Gomez was meanwhile not allowed to withdraw from his account. Later, however, "exasperated" over Gloria's repeated inquiries and also as an accommodation for a "valued client," the petitioner says it finally decided to allow Golden Savings to withdraw from the proceeds of the warrants. Withdrawals were made on July 9, 1979, July 13, 1979, and July 16, 1979. In turn, Golden Savings subsequently allowed Gomez to make withdrawals from his own account, eventually collecting the total amount of P1,167,500.00 from the proceeds of the apparently cleared warrants. On July 21, 1979, Metrobank informed Golden Savings that 32 of the warrants had been dishonored by the Bureau of Treasury on July 19, 1979, and demanded the refund by Golden Savings of the amount it had previously withdrawn, to make up the deficit in its account. The demand was rejected. Metrobank then sued Golden Savings in the Regional Trial Court of Mindoro. ISSUE: W/N until such time as Metrobank is actually paid, its obligation is that of a mere collecting agent which cannot be held liable for its failure to collect on the warrants. HELD: Metrobank exhibited extraordinary carelessness. The amount involved was not trifling more than one and a half million pesos (and this was 1979). There was no reason why it should not have waited until the treasury warrants had been cleared; it would not have lost a single centavo by waiting. Yet, despite the lack of such clearance and notwithstanding that it had not received a single centavo from the proceeds of the treasury warrants, as it now repeatedly stresses it allowed Golden Savings to withdraw not once, not twice, but thrice from the uncleared treasury warrants in the total amount of P968,000.00. Its reason? It was "exasperated" over the persistent inquiries of Gloria Castillo about the clearance and it also wanted to "accommodate" a valued client. It "presumed" that the warrants had been cleared simply because of "the lapse of one week." To gloss over its carelessness, Metrobank would invoke the conditions printed on the dorsal side of the deposit slips through which the treasury warrants were deposited by Golden Savings with its Calapan branch. The conditions read as follows:
V.
Art. 1909. The agent is responsible not only for fraud, but also for negligence, which shall be judged with more or less rigor by the courts, according to whether the agency was or was not for a compensation. MBTC vs. CA (ALAIN) Feb 18, 1991 Cruz, J. FACTS: In January 1979, a certain Eduardo Gomez opened an account with Golden Savings and deposited over a period of two months 38 treasury warrants with a total value of P1,755,228.37. They were all drawn by the Philippine Fish Marketing Authority and purportedly signed by its General Manager and countersigned by its Auditor. Six of these were directly payable to Gomez while the others appeared to have been indorsed by their respective payees, followed by Gomez as second indorser. On various dates between June 25 and July 16, 1979, all these warrants were subsequently indorsed by Gloria Castillo as Cashier of Golden Savings and deposited to its Savings Account No. 2498 in the Metrobank branch in Calapan, Mindoro. They were then sent for clearing by the branch office to the principal office of Metrobank, which forwarded them to the Bureau of Treasury for special clearing.
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Article 1910. The principal may revoke the agency at will, and compel the agent to return the document evidencing the agency. Such revocation may be express or implied. GENERAL OBLIGATIONS: 1. Contractual obligations duties and liabilities of the principal are primarily based upon the contract and the validity of the contract between them. 2. To deal with the agent fairly and in good faith. SPECIFIC OBLIGATIONS: 1. To comply with the obligations which the agent may have contracted within the scope of his authority and in the name of the principal; 2. To advance to the agent, should the latter so request, the sums necessary for the execution of the agency; 3. To reimburse the agent of all the advances made by him, provided the agent is free from fault; 4. To indemnify the agent for all the damages which the execution of the agency may have caused the latter without the fault or negligence on his part; and 5. To pay the agent the compensation agreed upon, or if no compensation was specified, the reasonable value of the agents services. Note: Even if the agent has exceeded his authority, the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers [Estoppel]. LIABILITY OF THE PRINCIPAL TO THIRD PERSONS General Rule: Where the relation of agency legally exists, the principal will be liable to third persons for ALL the acts committed by the agent in his behalf in the course and within the actual or apparent scope of his authority, and this is not altered by the fact that the agent also may be liable, nor by the fact that some of the acts are to the principals advantage while the others to his disadvantage. Reason for the Rule o For express and implied agency the act of agent is the act of principal o For apparent authority and agency by estoppel to prevent fraud upon innocent third parties LIABILITY OF THIRD PERSONS TO PRINCIPAL An agent is the instrumentality of the principal whose primary design is to obtain rights against third parties. The principals rights are the third parties liabilities. 1. In contract. A third person is liable to the principal upon contracts entered into by his agent, in the same
III.
Obligations of Principal
Art. 1174. Except in cases expressly specified by law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable. 9 Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages.
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3.
Exception: bona fide holders of negotiable instruments. LIABILITY OF PRINCIPAL FOR TORT OF AGENT General Rule: The principal is civilly liable to third persons for torts of an committed at the principals direction or in the course of within the scope of the agents employment. Reason for liability: based on the principle that he who acts through another does it himself. Note: Agent is also liable he is SOLIDARILY liable with the principla to third persons and so such third persons may sue both. TEST of liability (Motivation-deviation test) The bounds of the agents authority are not the limits of the principals tort liability, but rather the scope of employment which may or may not be within the bound of authority; hence, wider in scope. But an act is not necessarily done within the scope of employment by reason merely of the fact that it is done during the employment. Two factors must concur for liability to be imposed: 1. satisfactory evidence that the employee in doing the act, in doing of which the tort was committed, was motivated in part, at least, by desire to serve his employer; AND 2. satisfactory evidence that the act, in doing of which the tort is committed, was not an extreme deviation from the normal conduct of the employee.
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Limketkai & Sons Milling v. CA (REX) Rural Bank of Milaor v. Ocfemia, 325 SCRA 99 (JESSA) Facts: On April 10, 1996, Rural Bank was declared in default on motion of the respondents for failure to file an answer within the reglementary-period after it was duly served with summons On April 26, 1996, bank filed a motion to set aside the order of default with objection thereto filed by respondents On June 17, 1996, an order was issued denying bank's motion to set aside the order of default On July 31, 1996, respondents filed a motion to set case for hearing. The bank did not file any opposition and so respondents were allowed to present their evidence ex-parte. A certiorari case was filed by the bank with the Court of Appeals but the petition was denied in a decision and the same is now final. The evidence presented by the respondents through the testimony of Nio, one of the respondents in this case, shows that:
Issues and Held: 1. WON the sale in favor of the Robleses was valid. YES. A notarized instrument enjoys a prima facie presumption of authenticity and due execution. To overcome that presumption, clear and convincing evidence must be presented. Forgery cannot be
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Issue: WON the bank manager was authorized by the bank to sign on its behalf Held: YES. In failing to file its answer specifically denying under oath the Deed of Sale, the bank admitted the due execution of the said contract. Such admission means that it acknowledged that the manager was authorized to sign the Deed of Sale on its behalf. The bank acknowledged, by its own acts or failure to act, the authority of the manager to enter into binding contracts. After the execution of the Deed of Sale, respondents occupied the properties in dispute and paid the real estate taxes due thereon. If the bank management believed that it had title to the property, it should have taken some measures to prevent the infringement or invasion of its title thereto and possession thereof. Likewise, the manager had previously transacted business on behalf of the bank, and the latter had acknowledged her authority. A bank is liable to innocent third persons where representation is made in the course of its normal business by an agent like the manager, even though such agent is abusing her authority. Clearly, persons dealing with her could not be blamed for believing that she was authorized to transact business for and on behalf of the bank. Board of Liquidators v. Kalaw: Settled jurisprudence has it that where similar acts have been approved by the directors as a matter of general practice, custom, and policy, the general manager may bind the company without formal authorization of the board of directors. In varying language, existence of such authority is
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ISSUE: WON CAL is liable. Held: Yes. It is significant to note that the contract of air transportation was between petitioner and respondent, with the former endorsing to PAL the Hong Kong-to-Manila segment of the journey. Such contract of carriage has always been treated in this jurisdiction as a single operation. This jurisprudential rule is supported by the Warsaw Convention, to which the Philippines is a party, and by the existing practices of the International Air Transport Association. In American Airlines v. Court of Appeals, the court have noted that under a general pool partnership agreement, the ticket-issuing airline is the principal in a contract of carriage, while the endorsee-airline is the agent. In the instant case, following the jurisprudence cited above, PAL acted as the carrying agent of CAL. In the
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Woodchild Holdings v. Roxas Electric (MARK) Facts: The respondent Roxas Electric and Construction Company, Inc. (RECCI), formerly the Roxas Electric and Construction Company, was the owner of two parcels of land. On May 17, 1991, the respondents Board of Directors approved a resolution authorizing the corporation, through its president, Roberto B. Roxas, to sell the lots at a price, and under such terms and conditions, which he deemed most reasonable and advantageous to the corporation. He was likewise authorized to execute, sign, and deliver the pertinent sales documents and receive the proceeds of the sale for and on behalf of the company. Petitioner WHI bought one of the lots and a portion of the other. It was stipulated in the Deed of Sale that the vendor agrees, in the event that the right of way is insufficient for the vendees use (ex entry of a 45-foot container), to sell additional square meters from its current adjacent property. WHI constructed a warehouse. Said warehouse was leased by Ponderosa Leather Goods Company subject to a monthly rental of 300,000 php. In the meantime, WHI complained to Roberto Roxas that the vehicles of RECCI were parked on a portion of the property over which WHI had been granted a right of way. Roxas promised to look into the matter. Dy and Roxas discussed the need of WHI to buy a 500-square-meter portion of the other but Roxas died soon thereafter.
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ISSUE: WON Roxas Electric is bound by the provisions of the deed of absolute sale granting to the WHI beneficial use and a right of way over a portion of the other lot. Held: No. Generally, the acts of the corporate officers within the scope of their authority are binding on the 10 corporation. However, under Article 1910 of the New Civil Code, acts done by such officers beyond the scope of their authority cannot bind the corporation unless it has ratified such acts expressly or tacitly, or is estopped from denying them. Evidently, Roxas was not specifically authorized under the said resolution to grant a right of way agree to sell to the petitioner a portion thereof. Neither may such authority be implied from the authority granted to Roxas to sell on such terms and conditions which he deems most reasonable and advantageous. Under paragraph 12, Article 1878 of the New Civil Code, a special power of attorney is required to convey real rights over immovable property. Article 1358 of the New Civil Code requires that contracts which have for their object the creation of real rights over immovable property must appear in a public document. The petitioner cannot feign ignorance of the need for Roxas to have been specifically authorized in writing by the Board of Directors to be able to validly grant a right of way and agree to sell a portion of the adjacent lot. The rule is that if the act of the agent is one which requires authority in writing, those dealing with him are charged with notice of that fact. For the principle of apparent authority to apply, the petitioner was burdened to prove the following: (a) the acts of the respondent justifying belief in the agency by the petitioner; (b) knowledge thereof by the respondent which is sought to be held; and, (c) reliance thereon by the petitioner consistent with ordinary care and prudence. In this case, there is no
10
Art. 1910. The principal must comply with all the obligations which the agent may have contracted within the scope of his authority. As for any obligation wherein the agent has exceeded his power, the principal is not bound except when he ratifies it expressly or tacitly.
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ISSUE:
HELD: NO First, the lawyers who entered the Compromise Agreement have no SPA in violation of Art. 1878 CC and Rule 138, Sec. 23 ROC. Contrary to the petitioners contention, Atty. Cardenas, as administrative manager of the Corporation, did not tacitly ratify the agreement entered into by the parties as he has no authority to do so. To ratify the unauthorized acts of an agent and make it binding on the corporation, it must be shown that the governing body or officer authorized to ratify had full and complete knowledge of all the material facts connected to the transaction. The petitioner failed to do this. Ratification by a corporation cannot be made by the same person who wrongfully assumed the power to make the contract.
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The Offer to Purchase duly signed by Atty. Linsangan, and accepted and validated by MMPCI showed a total list price of P132,250.00. Likewise, it was clearly stated therein that "Purchaser agrees that he has read or has had read to him this agreement, that he understands its terms and conditions, and that there are no covenants, conditions, warranties or representations other than those contained herein." By signing the Offer to Purchase, Atty. Linsangan signified that he understood its contents. That he and Baluyot had an agreement different from that contained in the Offer to Purchase is of no moment, and should not affect MMPCI, as it was obviously made outside Baluyot's authority. To repeat, Baluyot's authority was limited only to soliciting purchasers. She had no authority to alter the terms of the written contract provided by MMPCI. The document/letter "confirming" the agreement that Atty. Linsangan would have to pay the old price was executed by Baluyot alone. Nowhere is there any indication that the same came from MMPCI or any of its officers. It is a settled rule that persons dealing with an agent are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it. The basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. If he does not make such an inquiry, he is chargeable with knowledge of the agent's authority and his ignorance of that authority will not be any excuse. The ignorance of a person dealing with an agent as to the scope of the latter's authority is no excuse to such person and the fault cannot be thrown upon the principal. A person dealing with an agent assumes the risk of lack of authority in the agent. He cannot charge the principal by relying upon the agent's assumption of authority that proves to be unfounded. The principal, on the other hand, may act on the presumption that third persons dealing with his agent will not be negligent in failing to ascertain the extent of his authority as well as the existence of his agency. In the instant case, it has not been established that Atty. Linsangan even bothered to inquire whether Baluyot was authorized to agree to terms contrary to those indicated in the written contract, much less bind MMPCI by her commitment with respect to such agreements. Even if Baluyot was Atty. Linsangan's friend and known to be an agent of MMPCI, her declarations and actions alone are not sufficient to establish the fact or extent of her
Issue: 1. WON MMCI is liable 2. WON there is ratification 3. WON the contract was validly entered into by MMCI and Atty Linsangan Held: 1. NO. By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. Thus, the elements of agency are (i) consent, express or implied, of the parties to establish the relationship; (ii) the object is the execution of a juridical act in relation to a third person; (iii) the agent acts as a representative and not for himself; and (iv) the agent acts within the scope of his authority. As properly found both by the trial court and the Court of Appeals, Baluyot was an agent of MMPCI, having represented the interest of the latter, and having been allowed by MMPCI to represent it in her dealings with its clients/prospective buyers. Nevertheless, contrary to the findings of the Court of Appeals, MMPCI cannot be bound by the contract procured by Atty. Linsangan and solicited by Baluyot. Baluyot was authorized to solicit and remit to MMPCI offers to purchase interment spaces obtained on forms provided by MMPCI. The terms of the offer to purchase, therefore, are contained in such forms and, when signed by the buyer and an authorized officer of MMPCI, becomes binding on both parties.
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Issues: A. WON the Deed of Definite Sale is in reality an equitable mortgage B. WON petitioner's property is liable to PNB for the loans contracted by Parangan by virtue of the special power of attorney Held: 1. YES. A contract is perfected by mere consent. More particularly, a contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. This meeting of the minds speaks of the intent of the parties in entering into the contract respecting the subject matter and the consideration thereof. If the words of the contract appear to be contrary to the evident intention of the parties, the latter shall prevail over the former. In the case at bench, the evidence is sufficient to warrant a finding that petitioner and Parangan merely intended to consolidate the former's indebtedness to the latter in a single instrument and to secure the same with the subject property. Even when a document appears on its face to be a sale, the owner of the property may prove that the contract is really a loan with mortgage by raising as an issue the fact that the document does not express the true intent of the parties. In this case, parol evidence then becomes competent and admissible to prove that the instrument was in truth and in fact given merely as a security for the repayment of a loan. Art. 1602, (6), in relation to Art 1604 provides that a contract of sale is presumed to be an equitable
Article 1911. Even when the agent has exceeded his authority, the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers. Lustan v. CA, 266 SCRA 663 (JESSA) Facts: Lustan is the registered owner of a parcel of land petitioner leased the property to Parangan for a term of 10 years and an annual rent of P1,000.00 During the period of lease, Parangan was regularly extending loans in small amounts to petitioner to defray her daily expenses and to finance her daughter's education petitioner executed an SPA in favor of Parangan to secure an agricultural loan from PNB with the aforesaid lot as collateral a second SPA was executed by petitioner, by virtue of which, Parangan was able to secure 4 additional loans the last three loans were without the knowledge of herein petitioner and all the proceeds therefrom were used by Parangan for his own benefit (but these encumbrances were duly annotated on the certificate of title) petitioner signed a Deed of Pacto de Retro Sale in favor of Parangan which was superseded by the Deed
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Art. 1912. The principal must advance to the agent, should the latter so request, the sums necessary for the execution of the agency. Should the agent have advanced them, the principal must reimburse him therefor, even if the business or undertaking was not successful, provided the agent is free from all fault.
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Right of agent to retain in pledge object of agency an example of a legal pledge (i.e. imposed by law, as opposed to contractual pledges). NATURE of agents right of lien: (1) Right limited to the subject matter of the agency it is a specific, not a general lien. (2) Right requires the possession, custody, control or disposing power of the agent of the subject matter. (3) Right generally only in favor of agent (not to be extended to a sub-agent in the absence of ratification by the principal of sub-agents acts). Albaladejo v. Phil. Refining, 48 Phil 556 (TOPE) FACTS: Albaladejo y Cia. was engaged in the buying and selling of copra. Visayan Refining Co was engaged in manufacture coconut oil. On August 28, 1918, the plaintiff made a contract with the Visayan wherein the former bind itself to sell to the latter (Visayan) all the Copra it will buy in Albay. Pursuant to this agreement the plaintiff, during the year therein contemplated, bought copra extensively for the Visayan Refining Co. At the end of said year both parties found themselves satisfied with the existing arrangement, and they therefore continued by tacit consent to govern their future relations by the same agreement. This situation affairs remained until July 9, 1920, when the Visayan Refining Co. closed down its factory at Opon, Cebu and withdrew from the copra market. When the contract was originally made, Albaladejo y Cia. apparently had only one commercial establishment, i.e., that at Legaspi; but the large requirements of the Visayan Refining Co. for copra appeared so far to justify the extension of the plaintiff's business that during the course of the next two or three years it established some 20 agencies, or subagencies, in various ports and places of the Province of Albay and neighboring provinces. After the Visayan Refining Co. had ceased to buy copra, as above stated, of which fact the plaintiff was duly notified, the supplies of copra already purchased by the plaintiff were gradually shipped out and accepted by the Visayan Refining Co. In the course of the next 8 or 10 months the accounts between the two parties were liquidated. The last account rendered by the Visayan Refining Co. to the plaintiff was for the month of April, 1921, and it showed a balance of P288 in favor of the defendant. Under date of June 25, 1921, the plaintiff company
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Art. 1914. The agent may retain in pledge the things which are the object of the agency until the principal effects the reimbursement and pays the indemnity set forth in the two preceding articles.
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Art. 1915. If two or more persons have appointed an agent for a common transaction or undertaking, they shall be solidarily liable to the agent for all the consequences of the agency. (1731) Art. 1916. When two persons contract with regard to the same thing, one of them with the agent and the other with the principal, and the two contracts are incompatible with each other, that of prior date shall be preferred, without prejudice to the provisions of Article 1544. (n) Art. 1917. In the case referred to in the preceding article, if the agent has acted in good faith, the principal shall be liable in damages to the third person whose contract must be rejected. If the agent acted in bad faith, he alone shall be responsible. (n) Art. 1918. The principal is not liable for the expenses incurred by the agent in the following cases: (1) If the agent acted in contravention of the principal's instructions, unless the latter should wish to avail himself of the benefits derived from the contract; (2) When the expenses were due to the fault of the agent;
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Art. 1919. Agency is extinguished: (1) By its revocation; (2) By the withdrawal of the agent; (3) By the death, civil interdiction, insanity or insolvency of the principal or of the agent; (4) By the dissolution of the firm or corporation which entrusted or accepted the agency; (5) By the accomplishment of the object or purpose of the agency; (6) By the expiration of the period for which the agency was constituted. (1732a) Art. 1920. The principal may revoke the agency at will, and compel the agent to return the document evidencing the agency. Such revocation may be express or implied. Perez v. PNB, 17 SCRA 833 (IVY) Bicol Savings and Loan Assoc. v CA (GEN) March 31, 1989 Melencio-Herrera, J. FACTS: Juan de Jesus was the owner of a parcel of land in Naga City. He executed a Special Power of Attorney in favor of his son, Jose de Jesus: "To negotiate, mortgage my real property in any bank either private or public entity preferably in the Bicol Savings Bank, Naga City, in any amount that may be agreed upon between the bank and my attorney-in-fact." Jose de Jesus obtained a loan of P20,000 from petitioner bank. To secure payment, he executed a deed of mortgage on the real property referred to in the Special Power of Attorney. Then, Juan de Jesus died. Jose failed to pay the loan. Hence the bank extrajudicially foreclosed the mortgage. In the subsequent public auction, the mortgaged property was sold to the bank as
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Art. 1921. If the agency has been entrusted for the purpose of contracting with specified persons, its revocation shall not prejudice the latter if they were not given notice thereof. (1734) Art. 1922. If the agent had general powers, revocation of the agency does not prejudice third persons who acted in good faith and without knowledge of the revocation. Notice of the revocation in a newspaper of general circulation is a sufficient warning to third persons. (n) Art. 1923. The appointment of a new agent for the same business or transaction revokes the previous agency from the day on which notice thereof was given to the former agent, without prejudice to the provisions of the two preceding articles. Effect of revocation in relation to third persons: 1. Agent authorized to contract with specified persons (1921) The reason for the law is obvious. Since the third persons have been made to believe by the principal that the agent is authorized to deal with them, they have a right to presume that the representation continues to exist in the absence of notification by the principal. Of course, notice is not required if the third persons already know of the revocation.
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Under Article 1921, the notice of revocation must be personal; under Article 1922, it may be personal. Revocation by appointment of new agent: 1. Implied revocation of previous agency. There is implied revocation of the previous agency when the principal appoints a new agent for the same business or transaction provided there is no incompatibility. But the revocation does not become effective as between the principal and the agent until it is in some way communicated to the latter. There is no implied revocation where the appointment of another agent is not incompatible with the continuation of a like authority in the first agent, or the first agent is not given notice of the appointment of the new agent. 2. Substitution of counsel of record. No substitution of counsel of record is allowed unless the following essential requisites of a valid substitution of counsel concur: a. There must be a written request for substitution; b. It must be filed with the written consent of the client; c. It must be with the written consent of the attorney to be substituted; and d. In case, the consent of the attorney to be substituted cannot be obtained, there must be at least a proof of notice,that the motion for substitution was served on him in the manner prescribed by the Rules of Court.
Lustan v. CA, 266 SCRA 683, supra Rammani v. CA, 196 SCRA 731 ALAIN Central Surety vs Hodges (JESSA) Facts: Prior to January 15, 1954, lots had been sold by C. N. Hodges to Vicente M. Layson, for the sum of P43,000.90, payable on installments.
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2. YES Indeed, Article 1922 of our Civil Code provides: If the agent had general powers, revocation of the agency does not prejudice third persons who acted in good faith and without knowledge of the revocation. Notice of the revocation in a newspaper of general circulation is a sufficient warning to third persons. It is not disputed that petitioner has not caused to be published any notice of the revocation of Mrs. Mesa's authority to issue surety bonds on its behalf, notwithstanding the fact that the powers of Mrs. Mesa, as its branch manager in Iloilo, were of a general nature, for she had exclusive authority, to represent petitioner herein, not with a particular person, but with the public in general, "in all the negotiations, transactions, and business in wherein the Company may lawfully transact or engage on subject only to the restrictions specified in their agreement, copy of which was attached to petitioner's answer. Contrary to petitioner's claim, Article 1922 applies whenever an agent has general powers, not merely when the principal has published the same, apart from the fact that the opening of petitioner's branch office amounted to a publication of the grant of powers to the manager of said office. Then, again, by honoring several surety bonds issued in its behalf by Mrs. Mesa, petitioner induced the public to believe that she had authority to issue such bonds. As a consequence, petitioner is now estopped from pleading, particularly against a regular customer thereof, like Hodges, the absence of said authority. Dy Buncio & Co., Inc. v Ong Guan Can (JESSA) FACTS Ong Guan Can JR. as agent of Ong Guan Can sells the rice mill and camarin for p13,000 and gives as power of attorney dated May 23, 1928. A copy of this public instrument is attached to the deed and recorded with the deed in the office of the Registry of Deeds in Capiz Dy Buncio (as creditor) claims that that the property belongs to its judgment creditor, Ong Guan Can, thus can be subject to execution. Defendants Juan Tong and Puan Giok Eng claim as owner and lessee of the owner by virtue of a deed dated July 31, 1931, by Ong Guan Can, Jr. CFI Capiz held that the deed was invalid and that the property was subject to the execution which has been levied on said properties by the judgment creditor of the owner. Juan Tong and Pua Giok appealed.
Issues: 1. WON the surety bond issued by Mesa is valid 2. WON Article 1922 is applicable Held: 1. YES Said surety bond is valid. In the first place, there appears to be no showing that the revocation of authority was made known to the public in general by publication, nor was Hodges notified of such revocation despite the fact that he was a regular client of the firm. Secondly, some surety bonds issued by Mrs. Mesa in favor of Hodges after her authority had allegedly been curtailed, were honored by the Central Surety despite the fact that these were not reported to the main office at the time of their issuance. These accounts were paid and by these acts, Central Surety ratified Mrs. Mesa's unauthorized acts and as such it is now estopped from setting forth Mrs. Mesa's lack of authority to issue surety bonds. It has been held that although the agent may have acted beyond the scope of his authority, or may have acted without authority at all, the principal may yet subsequently see fit to recognize and adopt the act as his own. Ratification being a matter of assent to and approval of the act as done on account of the person ratifying any words or acts which show such assent and approval are ordinarily sufficient. Moreover, the relocation of agency does not prejudice third persons who acted in good faith without knowledge of the revocation.
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Issues: 1. WON Atty Mora may be substituted by Atty. Julian S. Yap merely from the filing of a formal appearance by the latter 2. WON CA erred in granting the motion for reconsideration of Atty Mora Held: 1. The private respondents filed with the CA 2 separate motions for reconsideration through 2 counsels, namely, Atty. Raul A. Mora and Atty. Julian S. Yap. The motion for reconsideration filed by Atty. Yap stated, among others, that due to acts inimical to their interests, the private respondents had revoked the authority of Attorney-in-Fact Patrocinia Juanson-Cuizon to represent them and through their newly designated Attorneys-in-Fact decided to take over from her the conduct of the instant case and to retain Atty. Julian S. Yap as their counsel considering that Atty. Raul A. Mora was the personal counsel of Patrocinia Juanson-Cuizon.CA stated that "there is no showing that all the private respondents have revoked the authority granted to Patrocinia Juanson-Cuizon." Be that as it may, a revocation of authority of Patrocinia Juanson-Cuizon as Attorney-in-Fact of private respondents heirs of Valeriana Marilao, who are recognized as the real parties in interest in this case, should not affect Atty. Raul A. Mora, who remains counsel of record of private respondents absent a valid substitution of counsel. Atty. Raul A. Mora may not be presumed substituted by Atty. Julian S. Yap merely from the filing of a formal appearance by the latter. No substitution of counsel of record is allowed unless the following essential requisites of a valid substitution of counsel concur: (1) there must be a written request for substitution; (2) it must be filed with the written consent of the client; (3) it must be with the written consent of the attorney to be
Art. 1924. The agency is revoked if the principal directly manages the business entrusted to the agent, dealing directly with third persons. (n) Art. 1925. When two or more principals have granted a power of attorney for a common transaction, any one of them may revoke the same without the consent of the others CMS Logging v. CA (TOPE) 1992 J. Nocon
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Art. 1926. A general power of attorney is revoked by a special one granted to another agent, as regards the special matter involved in the latter. Dy Buncio & Co., Inc. v Ong Guan Can (GEN) Oct. 2, 1934 Hull, J. FACTS: Ong Guan Can, Jr. executed on behalf of the Ong Guan Can, the deed covering the sale of a rice-mill and camarin, in favor of buyers who relied upon a 1928 power of attorney attached to the deed, but which turned out was not a general power of attorney but a limited one and [did] not give the express power to alienate the properties in question. The creditors of Ong Guan Can sought to have the sale declared void. But the buyers, defendants Juan Tong and Pua Giok Eng claimed that they were the owners and lessees of the property.
The principal may revoke a contract of agency at will, and such revocation may be express, or implied, and may be availed of even if the period fixed in the contract of agency
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Issue: 1. WoN Power of Attorney created an agency coupled with an interest 2. WoN the land was sold validly Held: No. The power of attorney executed by the homesteader in favor of Abad did not create an agency nor did it clothe the agency with irrevocable character. A mere statement in the power of attorney that it is coupled with an interest is not enough. In what does such interest consist must be stated in the power of attorney. The mortgage has nothing to do with the power of attorney and may be foreclosed by the mortgagee upon the failure of the mortgagor to comply with his obligation. As the agency was not coupled with an interest, it was terminated upon the death of the principal, and the agent could no longer validly convey the land. Hence, the sale was null and void.
Art. 1927. An agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation already contracted, or if a partner is appointed manager of a partnership in the contract of partnership and his removal from the management is unjustifiable. New Manila Lumber Co. v. Republic - TOFF Bacaling v. Muya, 380 SCRA 714 - REG National Sugar Trading v. PNB, 396 SCRA 528 - EARLA Sevilla, supra Del Rosario v. Abad, 104 Phil 648 - ABBY 1958; Padilla Facts: Plaintiffs are the children and heirs of Tiburcio del Rosario. Del Rosario was a grantee of a homestead patent in Nueva Ecija. The Certificate was issue Feb 11, 1937. He obtained a loan from Primitivo Abad Feb 24, 1937 (remember the 5 yr prohibition from encumbrance rule) for P2000 at 12% pa payable Dec 1941. The security for the payment was the improvement on the parcel of land. An irrevocable special power of
Art. 1928. The agent may withdraw from the agency by giving due notice to the principal. If the latter should suffer any damage by reason of the withdrawal, the agent must indemnify him therefor, unless the agent should base his withdrawal upon the impossibility of continuing the performance of the agency without grave detriment to himself. (1736a) Art. 1929. The agent, even if he should withdraw from the agency for a valid reason, must continue to act until the principal has had reasonable opportunity to take the necessary steps to meet the situation. Right of the agent to withdraw: Just as the principal may revoke generally the agency at will, the agent may likewise renounce or withdraw from the agency at any time, without the consent of the
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Obligation of agent to continue to act after withdrawal: ISSUE: WON there was valid renunciation of the agency. The purpose of the law is to prevent damage or prejudice to the principal. The law reconciles the interests of the agent with those of the principal, and if permits the withdrawal of the agent, it is on the condition that no damage results to the principal, and if the agent desires to be relieved of the obligation of making reparation when he withdraws for a just cause, he must continue to act so that no injury may be caused to the principal. F2. Articles 1930, 1931, 1932 EVA HELD: YES. Under the circumstances of the case, it is reasonable to conclude that the agency was duly terminated. Although Federico did not use the words renouncing the agency, such words were undoubtedly understood and accepted by the principal because if the lapse of nearly 9 years up to time of principals death, he never interrogated the renouncing agent and disapproved what he had done nor the power conferred to the substituting agent. The agent who was obliged to leave his charge for a legitimate cause and who duly informed his principal, is released and freed from the results and the consequences of the substitute agent it was with the consent, even tacit of the principal. The agent is not required to sacrifice his health, life, and his own interests, if it is shown that it was impossible for him to continue the discharge of his duties. Rallos v. Felix Go Chan, supra Blondeau v. Nano (BAMBI) Facts: An action was brought in the Court of First Instance of Manila to foreclose a mortgage alleged to have been made by the defendants Agustin Nano and Jose Vallejo to the plaintiff Angela Blondeau, bearing date November 5, 1931, to secure the payment of the sum of P12,000, and covering property situated on Calle Georgia, Manila. Nano, purporting to represent both defendants, after filing an answer, was found in contempt of court. The other defendant Vallejos defense was that his signature to the mortgage was a forgery. Following the trial, judgment was rendered against Nano but not against Vallejo. Hence, this appeal.
Dela Pena v. Hidalgo (ANGELA) (This case is supra and rather complicated so Ill just include the relevant details) The CASE was instituted by the heirs of Jose Gomiz y Dela Pea to recover sums of money from Federico Hidalgo which he allegedly owes the estate of Jose representing unremitted accounts during the administration of Federico of the properties of Jose Gomiz y Dela Pea. FACTS In 1887, Federico Hidalgo took charge of administration of Jose Gomiz y Dela Peas properties by virtue of a power of attorney executed by the latter in favor of 4 agents (Federico included) before he embarked for Spain. After several years of agency, Federico Hidalgo wrote to Jose Gomiz requesting him to designate a person to substitute him in the position because one of those appointed in the power of attorney had died and the others did not wish to take charge of the administration of Gomiz properties. Gomiz did not answer Federicos letters nor did he approve or object to Federicos accounts nor did he appoint or designate another person to substitute Federico.
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Issue: WoN there was a valid mortgage contract executed in favor of Blondeau. YES. The purported signature of the defendant Vallejo to the mortgage was not a forgery. It needs to be recalled that the mortgage was executed in the home of the plaintiffs, and that of those present, the principal plaintiff Angela Blondeau and her husband Fernando de la Cantera, together with the instrumental witness Pedro Jimenez Zoboli, identified Vallejo as the person who signed the document. Upon its face, the mortgage appears to be regular and to have been duly executed and accepted by Vallejo on November 5, 1931. Moreover, Agustin Nano had possession of Jose Vallejo's title papers. Without those title papers handed over to Nano with the acquiescence of Vallejo, a fraud could not have been perpetrated. When Fernando de la Cantera, a lawyer and the husband of Blondeau, the principal plaintiff, searched the registration records, he found them in due form, including the power of attorney of Vallejo, in favor of Nano. If this had not been so and if thereafter the proper notation of the encumbrance could not have been made, Angela Blondeau would not have lent P12,000 to the defendant Vallejo. The Torrens system is intended for the registration of title, rather than the muniments of title. It represents a departure from the orthodox principles of property law. Under the common law, if the pretended signature of the mortgagor is a forgery, the instrument is invalid for every purpose and will pass on the title or rights to anyone, unless the spurious document is ratified and accepted by the mortgagor. The Torrens Act on the contrary permits a forged transfer, when duly entered in the registry, to become the root of a valid title in a bona fide purchaser. The act erects a safeguard against a forged transfer being registered, by the requirement that no transfer shall be registered unless the owner's certificate was produced along with the instrument of transfer. An executed transfer of registered lands placed by the registered owner thereof in the hands of another operates as a representation to a third party that the holder of the transfer is authorized to deal with the lands. With respect to the conclusiveness of the Torrens title and the binding force and effect of annotations thereon even when through a forged deed the land passes into the possession of an innocent purchaser for value, the basic rule is found in the opinion delivered by Mr. Chief Justice Arellano in De la Cruz
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