Professional Documents
Culture Documents
Philpotts vs. Philippine Manufacturing Co. and Berry W.G. Philpotts (Petitioner) , a stockholder in Philippine Manufacturing Company sought to compel respondents to permit plaintiff, a person or by some authorized agent or attorney to inspect and examine the records of the business transacted by said company since January 1, 1918. Respondent corporation or any of its officials has refused to allow the petitioner himself to examine anything relating to the affairs of the company, and the petitioner prays for an order commanding respondents to place records of all business transactions of the company, during a specific period, at the disposal of the plaintiff or his duly authorized agent or attorney. Petitioner desires to exercise said right through agent or attorney. Petition is filed originally in the Supreme Court under authority of Section 515 of Code of Civil Procedure, which gives SC concurrent jurisdiction with then Court of First Instance in cases where any corporation or person unlawfully excludes the plaintiff from use and enjoyment and some right he is entitled. ISSUE: Whether the right which the law concedes to a stockholder to inspect the records can be exercised by a proper agent or attorney of the stockholder as well as by stockholder in person HELD: Yes. Right of inspection of records can be exercised by proper agent or attorney of the stockholder as well as by stockholder in person. The right of inspection / examination into corporate affairs given to a stockholder in section 51 of the Corporation Law which states: The records of all business transactions of the corporation and the minutes of any meeting shall HELD: NO, Parsons was not an agent. In order to classify a contract, due regard must be given to the essential clauses. In this case, there was an obligation on Quirogas part to supply beds while an obligations on Parsons part to pay the price. These are essential features of a contract of purchase and sale. None of the clauses conveys the idea of an agency where an agent received the thing to sell it and be open to the inspection of any director, member, or stockholder of the corporation at reasonable hour can be exercised either by himself or by any duly authorized representative or attorney in fact, and either with or without the attendance of the stockholder. This is in conformity with the general rule that what a man may do in person he may do through another. Quiroga v. Parsons FACTS: Quiroga and Parsons entered into a contract for the exclusive sale of Quiroga beds in the Visayan Islands. They agreed on the following terms: a) Quiroga shall furnish the beds and shall give a 25% discount on the invoiced prices as commission sales and Parsons shall order by the dozen; b) Payment shall be made within 60 days from date of shipment; c) Transportation and shipment expenses shall be borne by Quiroga while freight, insurance, and cost of unloading by Parsons; d) If before an invoice falls due, Quiroga should request payment, payment made shall be prompt payment and a deduction of 2% shall be given; same discount if payment is in cash; e) Notice from Quiroga shall be given at least 15 days before any change in price; f) Parsons binds himself not to sell any other kind of bed; and g) Contract is for an unlimited period. Parsons violated some of the conditions such as not to sell the beds at higher prices, pay for the advertisement expenses, and to order beds by the dozen. Quiroga alleged that Parsons was his agent and that the obligations are implied in a commercial agency contract. ISSUE: w/n Parsons, by reason of the contract, was a purchaser or an agent of Quiroga for the sale of the latters beds.
Dela Cruz v Northern Theatrical Enterprises, Inc., et al Northern Theatrical Enterprises Inc. operated a movie house in Laoag, Ilocos Norte. Domingo Dela Cruz was one of their security guards. He carried a revolver. One day, a Benjamin Martin wanted to enter without a ticket but dela Cruz refused him entrance. Infuriated, Martin attacked him with a bolo and in order to save his life, dela Cruz shot and killed Martin. Martin, thereafter, was charged with homicide which, after re-investigation, was dismissed. A few years later, dela Cruz again figured in a homicide case related to his work as security guard for the theater. He was acquitted for the second charge. In both instances, dela Cruz employed a lawyer. He thereafter demanded reimbursement for his litigation expenses but was refused by the theater. After which, he filed an action for reimbursement plus damages.
BORDADOR vs. LUZ FACTS:Petitioners Bordador spouses were engaged in the business of purchase and sale of jewelry, while respondent Brigida Luz was their regular customer. Respondent Narciso Deganos, Luz's brother, received several pieces of jewelry from the Bordadors amounting to P382,816.00, which items were indicated in 17 receipts covering the same--11 of the receipts stated that they were received by Deganos for a certain Evelyn Aquino, while the remaining 6 indicated that they were received by Deganos for Luz.Deganos was supposed to sell the items at a profit and remit the proceeds and return the unsold items to the Bordadors. Deganos remitted only P53,207.00. He neither paid the balance of the sales proceeds, nor did he return any unsold item to the Bordadors, which led them to file an action for recovery of a sum of money and damages against Deganos and Luz with the RTC. The Bordadors claimed that Deganos acted as the agent of Luz when he received the items of jewelry, and because he failed to pay for the same, Luz, as principal, became solidarily liable with him.Deganos asserted that it was he alone who was involved in the transaction with the Bordadors; that he neither acted as agent for nor was he authorized to act as an agent by Luz, notwithstanding the fact that 6 of the receipts indicated that the items were received by him for Luz. He added that he never delivered any of the items to Luz. Luz corroborated the claims of Deganos.The RTC found that only Deganos was liable to the Bordados. It further found that it was petitioner Lydia Bordador who indicated in the receipts that the items were received by Deganos for Evelyn Aquino and for Luz. It said that it was "persuaded that Brigida D. Luz was behind Deganos," but because there was no memorandum to this effect, the agreement
Ratio The phrase "doing business" includes "appointing representatives or distributors in the Philippines". (Foreign Investments Act of 1991) The question is whether petitioner Alfred Hahn is the agent or distributor in the Philippines of private respondent BMW. If he is, BMW may be considered doing business in the Philippines and the trial court acquired jurisdiction over it by virtue of the service of summons on the Department of Trade and Industry. Before DE LA PENA went to Spain, he executed a power of attorney in favor of FEDERICO and 3 other people. Their task is to represent him and administer various properties he owned in Manila. FEDERICO took charge in Nov. 1887. After a few years, FEDERICO wrote a letter to DE LA PENA. It contains a request that DE LA PENA assign a person who might substitute FEDERICO in the event that he leaves the Philippines because one of the agents died and the other 2 are unwilling to take charge. DE LA PENA did not answer the letter
Petition for review on certiorari of Court of Appeals decision (CA decision: dismissed the case, against Cosmic Lumber)
FACTS: Cosmic Lumber Corporation executed a SPA to Villamil-Estrada as attorney in fact, to wit: (1) to initiate, institute and file an ejectment
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HELD: petition granted; CA decision is nullified; Compromise agreement is void; without prejudice to the right of Cosmic Lumber to pursue a complaint against Perez for the recovery of the lot
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RAET v. CA Facts In 1984 Spouses Raet and Spouses Mitra negotiated with Amparu Gatus concerning the possibility of buying his rights to certain units at the Las Villas de Sto. Nio Subdivision, Bulacan, which was developed by Phil-Ville Development and Housing Corporation (PVDHC) primarily for parties qualified to obtain loans from the Government Service Insurance System (GSIS). They paid Gatus P40,000 (Raet) and 35,000 (Mitra), and which Gatus issued receipts in her own name. In 1985, the spouses applied directly with PVDHC, with the condition that their application would be processed upon the approval of the GSIS Loans using policy names of Casidsid (for Raet) and Lim (for Mitra), since the spouses are not GSIS members. They paid P32,653 (Raet) and P27,000 (Mitra) to PVDHC, which would be credited to purchase units upon the loans approval. In the meantime, PVDHC had allowed them to occupy certain units. However, the GSIS loans were disapproved, therefore PVDHC told them to seek other sources of financing, while allowing them to stay in the units. Elvira Raet filed an estafa case against Gatus, where the RTC acquitted her. Later in an ejectment case by the PVDHC, the spouses were ordered to surrender possession of the units. Therefore the spouses filed a complaint for specific performances and damages against Gatus and PVDHC. The Housing and Land Use Arbiter ruled in favor of spouses, which the Board of Commissioners of Housing and Land Use Regulatory Board (HLURB) reversed.
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The CFI of Iloilo rendered judgment in a case awarding Tan Toco the recovery of the value of a strip of land taken by the municipality of Iloilo from her. After the case was remanded to the court of origin, Atty. Evangelista, in his behalf and as counsel for the administratrix of Jose Ma. Arroyos intestate estate, filed a claim in the same case for professional services rendered by him, which the court, acting with the consent of the appellant widow, fixed at 15 per cent of the amount of the judgment. At the hearing on said claim, the claimants appeared, as did also the Philippine National Bank, which prayed that the amount of the judgment be turned over to it because the land taken over had been mortgaged to it. Antero Soriano
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Iloilo paid Atty. S the 6K The Court also delivered 6K to Atty. E, but Atty. E waived the remaining amount that should be given to him So from the 42K 12K, the 30K was awarded to Mauricio Cruz and Co. Inc. So Mauricio claimed the remaining amount since he is the assignee of the rights of Atty. S
CFI awarded to Tan Toco 42K++ for the value of a strip of land taken by the municipality to widen a public street
ISSUE: Whether the assignment made by Tan BoonTiong to Atty. S of all the credits and rights of belonging to Tan Toco (from the strip of land case) is valid as payment for the professional services rendered by Atty. S to Tan Toco HELD:
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ISSUE W/N the lease contract entered into by Chua and Reynes is valid. RULING NO. In order for a contract of lease executed by an agent to be valid, the law requires the agent to be armed with a special power of attorney to lease the premises. According to Art. 1878 of the NCC, Special Powers of Attorney are necessary to lease any real property to a person for more than 1 year. Therefore, the contract entered into by Reynes and Chua was invalid because Reynes did not have a Special power of Attorney to enter into the contract. It is true that respondent Herrera allowed petitioners to occupy the leased premises after the expiration of the lease contract. This is a tacit renewal of the lease. A tacit renewal is limited only to the terms of the contract w/c are germane to the lessees right of continued enjoyment of the property and does not extend to alien matters like the option to buy the lease premises. Veloso v CA Applicable Provision: Art. 1878 Facts: Petitioner Francisco Veloso was the sole owner of a registered parcel of land in Tondo, Manila, which he acquired in 1957. His wife Irma, armed with a general power of attorney, sold said lot to the respondent spouses Escario in 1987. Petitioner filed an action for annulment of the deed of sale and reconveyance of property Issue:
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Due to failure to pay said loans, PNB filed a case on collection of money. The trial court rendered judgment in favor of PNB requiring Maximo and his six brothers and sisters together with the surety, to be liable jointly and severally. Maximo and his surety did not appeal the judgment, however, his six brothers and sisters appeal the decision to the Supreme Court. Issue: Whether Maximo and his six brothers and sisters and surety are liable to PNB? Held: No. Only Maximo and his sister Valeriana are jointly liable to PNB. The other five brothers and sisters are not liable. The authority granted by Maximos brothers and sisters (except Valeriana) unto their brother, Maximo, was merely to mortgage the property jointly owned by them. They did not grant Maximo any authority to contract for any loans in their names and behalf. Maximo alone, together with Valeriana who authorized him to borrow money, must answer for said loans and the other defendants-appellants' only liability is that the real estate authorized by them to be mortgaged would be subject to foreclosure and sale to respond for the obligations contracted by Maximo. But they cannot be held personally liable for the payment of such obligations. Moreover, the brothers and sisters did
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Article 1883 of the Civil Code provides that when an agent acts in his own name, the principal shall have no right of action against the person with whom the agent has contracted, cases involving things belonging to the principal are excepted. According to this exception (when things belonging to the principal are dealt with) the agent is bound to the principal although he does not assume the character of such agent and appears acting in his own name. This means that in the case of this exception the agent's apparent representation yields to the principal's true representation and that, in reality and in effect, the contract must be considered as entered into between the principal and the third person; and, consequently, if the obligations belong to the former, to him alone must also belong the rights arising from the contract. The money with which the launch was bought having come the parents, the exception established in article 1883 is applicable to the instant case. National Food Authority (NFA) v. IAC Facts: Medalla, as a commission agent of plaintiff Superior Shipping Corporation, entered into a contract for hire of ship (MV Sea Runner) with defendant NFA. The contract obligated Medalla to transport on the MV Sea Runner 8,550 sacks of rice belonging to NFA from Occidental Mindoro to Malabon, Metro Manila. Upon completion of the delivery, plaintiff wrote a letter around October 1979, requesting NFA that it be allowed to collect the amount for freightage and other charges. Plaintiff wrote again around November 1979, this time
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Facts: Melecio Severino owned some 428 hectares of land recorded in his name. During his lifetime, he appointed defendant Guillermo Severino, his brother, as his administrator for the said land. This defendant continued to administer and occupy the land even after the death of Melecio. Subsequently, Guillermo filed for the registration of the land in his name and consequently, the court decreed the title in his favor. At that time (when the cadastral proceedings were instituted), petitioner Fabiola Severino, who is the alleged natural daughter and sole heir of Melecio, was a minor. However, after the incapacity ceased, the petitioner filed a complaint for recovery of the litigated land on the ground of fraud and that the property has been wrongfully registered in the name of defendant. The defendant merely denied said allegations. The trial court decided in favor of petitioner as the acknowledged natural child of Melecio and ordered the defendant to convey said property to petitioner. Issue: Whether the lower court erred in its decision Decision: No. Reason: Although defendant denied the accusation of fraud and even offered evidence to rebut such accusation, such attempt is immaterial. It is to be noted that the case is an action in personam against an agent to compel him to return, or retransfer, to the heirs or the estate of its principal, the property committed to his custody as such agent, to execute the necessary documents thereof, to pay damages. That the defendant came into the possession of the property here in question as the agent of the deceased Melecio Severino in the administration of the
- principal of HEREDIA -proposed to MARCIANA CANON an investment on the land discussing it with HEREDIA and - made a joint investment on directed him to make the Deed of Conditional Leaos land with Sale. NEPOMUCENO The Deed of Conditional Sale was executed on Sept. 24, 1904 with a right to
repurchase at the end of 1yr and obligating himself to make monthly payments in considerations of the right to retain the land in possession in sufficient amount to bring 17% interest per annum on Nepomuceno and Canons investments (proponents opinion is that this could effectively be called rent). Canon and Nepomuceno indeed paid the P1,500 price evidenced by a notarized memorandum. The title was placed in the name of Heredia. Leao continued to pay for more than a year to plaintiffs. There was recovery of possession instituted by 3rd parties prompting herein plaintiffs to seek recovery of the whole amount of the money invested from Heredia and alleging that the purchase of the land was not made in accordance with their instructions. The RTC ruled in favor of Nepomuceno and Canon. On appeal, the plaintiffs wanted modification of the RTCs judgment on the grounds that Heredia invested their money under his name and account and not as their agent. The Court reverses the lower courts decision finding that Heredia was acting as mere agent and plaintiffs had full knowledge of the agents actions and ratified it. Furthermore, nothing in the record which would indicate that the defendant failed to exercise reasonable care and diligence in the performance of his duty as an agent, or that he undertook to guarantee the vendors title to the land purchased by direction of the plaintiffs.
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Facts: "[P]laintiffs Teofila del Rosario de Costa and her husband, Bernardino Costa, brought this action to recover from the defendant corporation the sum of 1,795.25 [pesos] a balance alleged to be due Teofila del Rosario de Costa as the agent of the defendant corporation for services rendered and expenses incurred in the sale of its products. The defendant denied the claim and set up counterclaim for 55.43 [pesos]. Judgment having been rendered in favor of the defendant, the record is now before us on plaintiffs' bill of exceptions."
Eventually Aragon made a settlement of accounts with the plaintiff. "In this statement goods received by the Legaspi agency from the factory in Manila are charged against Teofila del Rosario Costa, while credits are given on various items, such as, withdrawals of goods from the depository at Legaspi shipped to other towns, remittances made to the head office in Manila, money paid over to the general agent, advertising expenses, commissions on sales, salaries of employees [other people hired by Aragon], and other expenses incident to the conduct of business. x x x The defendant corporation however, refused to pay over to the plaintiffs the balance of 1,795.25 [pesos], claiming that plaintiffs had been improperly allowed a credit of 1,850 [pesos] which represented unpaid accounts due the business in Legaspi for cigars and cigarettes sold by it. If these uncollected items are charged to the defendant corporation a balance is left in favor of plaintiffs amounting to 1,795.25 [pesos]; and if charged to plaintiffs there remains a balance in favor of the defendant corporation amounting to 55.43 [pesos]."
Defendant La Badenia, with head office in Manila, makes and sells tobacco products. To introduce its products to the retail trade, defendant started a selling campaign. One of the locations chosen for the campaign was Albay, Sorsogon. Celestino Aragon, a general agent of the corporation, went to
Defendant claims that plaintiffs are just merchants who purchased the goods and were never employed as agents. Plaintiffs claim that they were the agents of the defendant; "that they received commissions on the sales made by the agency; and that they were authorized to extend a reasonable credit under the supervision of the general agent."
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Held: Plaintiffs are sub-agents for the defendant corporation. Plaintiffs won.
Ratio: "It is not denied however, that Aragon was acting as the general agent of the defendant corporation and that as such he was invested with the authority to inaugurate and carry out a selling campaign with a view of interesting the sale of the defendant's products in the territory assigned to him. The record does not show what limitations, if any, were placed upon his powers to act for the corporation. x x x It appears further that the head office in Manila was fully informed of plaintiffs' relations with the general agent in extending the sales of its products. Plaintiffs made direct remittances to the head office in Manila and these remittances were credited to the account of the agency at Legaspi, and acknowledgment was made directly to the plaintiffs. Neither the head office nor Aragon appear to have made any distinction between the business done by Aragon and that done by the plaintiffs. x x x The fact that the defendant corporation carried the Legaspi account in the name of the general agent, Aragon, and carried no account with the plaintiffs, would seem to negative the contention that plaintiffs were simply merchants purchasing their good in Manila at wholesale and selling them locally on their own account."
Lyons v. Rosenstock
Facts:
The parties in this case are Lyons and Rosenstock, as executor of the estate of Elser.
The pieces of evidence of note were the two letters (sent by defendant to plaintiff) presented by plaintiffs which the Court deemed "sufficient to show that the defendant was fully aware of plaintiffs' connection with the agency at Legaspi, and recognized them as agents of the company, and clearly did not consider them as independent merchants buying solely on their own account, but rather as subagents working under the supervision of the general agent, Aragon."
Lyons filed an action for recovery of 446 and 2/3 shares of the stock of J. K Pickering & Co. Together with a certain sum of money which accrued on the Companys stock with lawful interest. Trial court absolved Rosenstock (Elser) in this complaint.
Lyons and Elser had been jointly associated in various real estate deals. In April 1919, Lyons, left for US bu before leaning, Elser made a written statement
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While Lyons was away, Elser was able to sell two of the three properties they jointly own thus, leaving a single piece of property known as the Carriedo property.
Lyons, who arrived in Manila in September 1920, he accepted these shares and sold them for his own benefit thus also gave his consent for the mortgage of the Carriedo property to remain until it was paid off.
Also, while Lyons was away, ELser bought a valuable piece of property known as San Juan Estate. Elser aimed to promote and develop this San Juan Estate as a suburban improvement. For this purpose, Elser and three associates organized a partnership under the name, J. K Pickering & CO. Elser expected that Lyons would join him in this deal and contribute some capital to purchase and develop the property and to do so, Elser borrowed money from a Chinese merchant who required that a personal note be signed by ELser and the surety company. This surety company insisted upon having a security for the liability assumed by it. Thus, Elser mortgaged the Carriedo property owned by them jointly in favour of the surety company. Elsers act of mortgaging the property was executed under a sufficient power of attorney. However, Lyons communicated to Elser though a letter that he declines the invitation to join the venture.
Lyons contention:
When Elser placed a mortgage upon the Carriedo property, Lyons as half owner of the said property, became, as it were, involuntarily the owner of an undivided interest in the property acquired partly by that money; and it insisted that he is entitled to the 445 and 2/3 shares of the earnings of J.K. Pickerind & Company.
Issue:
Because of Lyons refusal to join the venture, Elser began to look for other sources so he may relive the CArreido property from being mortgaged. He was successful in doing so by substituting another property owned by him.
Whether Elser, as an agent, is liable for the interest on funds belonging to Lyons, as principal, which have been applied by Elser to purchase the San Juan Estate? (Whether Article 1724 of the Old Civil Code (or 1986 of NCC)is applicable?)
Held:
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Article 1896 of CC: 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 (1724a)
SMITH BELL vs CA
Facts: Joseph Bengzon Chua doing business under the name of Tic Hin Chiong Importer, bought and imported to the Philippines from the firm Chin Gact Co., Ltd. of Taipei; Taiwan, 50 metric tons of Dicalcium Phosphate valued at US$13,000. These were contained in 1,250 bags and shipped from the Taiwan to Manila. This shipment was insured by First Insurance Co. under a Marine Policy for US$19,500 "against all risks" at port of departure and with Smith, Bell, and Co stamped at the lower left side of the policy as "Claim Agent." The cargo arrived at the Port of Manila on September 1982 and thereafter the entire cargo was discharged to the local arrastre contractor, Metroport Services Inc. with a number of the cargo in apparent bad order condition. Chua secured the services of a cargo surveyor to conduct a survey of the damaged cargo which were delivered to Chuas house. The surveyor's report showed that of the 1,250 bags of the imported material, 600 were damaged. Upon weighing, the contents of the damaged bags were found to be 18,546.0 kg short. Chua then filed with Smith Bell a formal statement of claim re the value of losses amounting to $7.3k. Smith Bell informed Chua that its principal offered only 50% of the claim as redress on the ground of discrepancy of the items damaged between the record of Metroport and Chuas surveyor. Dissatisfied, Chua wrote a letter to Smith Bell refusing the redress contending that the discrepancy was a result of the loss from the vessel to arrastre to the
Article 1724 of Old CC: An agent is liable for the interest on funds belonging to his principal which have been applied by the agent to unauthorized uses.
If Elser had used the money actually belonging to Lyons in the deal, he would be obligated to pay interest upon the money he applied to his own use under Article 1724 (1896 of the New Civil Code) of the Civil Code.
No money from the mortgage of the Carreido property was ever applied to the purchase of the San Juan Estate. What really happened was that Elser merely subjected the property to a contingent liability, and no actual liability ever resulted therefrom. The financing of the purchase of the San Juan Estate, apart from the modest participation of his associates in the San Juan deal, was the work accomplished entirely upon his own account.
Article1724 (or 1896 of NCC) is not applicable in the case because there was no use of the principals funds by the agents personal dealings.
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Issue: Whether a local settling agent is personally and/or solidarily liable upon a marine insurance policy issued by its disclosed foreign principal
Held: No
Development Bank of the Philippines vs. Court of Appeals G.R. No. 110274
Ratio: A settling agent acting within the scope of its authority cannot be held personally liable and/or solidarily liable for the obligations of its disclosed principal. An adjustment and settlement agent is no different from any other agent from the point of view of his responsibility, for he also acts in a representative capacity. Whenever he adjusts or settles a claim, he does it in behalf of his principal, and his action is binding not upon himself but upon his principal.
Facts
The scope and extent of the functions of an adjustment and settlement agent do not include personal liability. His functions are merely to settle and adjusts claims in behalf of his principal if those claims are proven and undisputed, and if the claim is disputed or is disapproved by the principal, the agent does not assume any personal liability. The recourse of the insured is to press his claim against the principal.
Juan Dans (Dans) and his family applied for a loan of 500,000 Pesos with the Development Bank of the Philippines (DBP). He was already 76 years old when they applied for the loan. DBP then advised Dans to apply for a Mortgage Redemption Insurance (MRI) with the Mortgage Redemption Insurance Pool (DBP MRI Pool). DBP then proceeded with deducting ten percent from the approved loan as payment for the MRI Premium.
Dans died of cardiac arrest a few weeks later. DBP MRI Pool later notified Dans family that he was never eligible for insurance since he was well above the ceiling age (60 years old) when they applied for the insurance policy. Candida
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The lower court ruled in favour of the Dans Estate. Hence this petition.
Issue
Under the aforequoted provision, it is strikingly obvious that DBP acted beyond its capacity when it compelled Dans to secure an MRI coverage knowing full well that Dans was never going to be eligible for the insurance policy. There was no showing that Dans was aware of such limitations when he applied for the policy. What DBP led them to believe is that since they already paid for a premium, the inevitability of approval is apparent.
Whether DBP exceeded its powers as an agent. The DBP is not authorized to accept applications for MRI when its clients are more than 60 years of age. Knowing all the while that Dans was ineligible for MRI coverage because of his advanced age, DBP exceeded the scope of its authority when it accepted Dans application and deducted the necessary fees. This appalling act of deception is therefore a basis for damages for Dans aggrieved family.
Held
Yes!
Ratio
If the third person dealing with an agent is unaware of the limits of the authority conferred by the principal on the agent and such third person is deceived by the non-disclosure of the agent, then the latter is liable for damages to him.
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Authority given to an officer to approve loans does not include the power to issue guarantees to 3rd persons in principals name.
BA FINANCE CORPORATION v. COURT OF APPEALS BA Finance Corporation, petitioner Hon. Court of Appeals and Traders Royal Bank, respondents
ISSUES (1) Whether Philip Wong had authority to issue guaranties (2) Whether BA Finance is estopped from questioning the guaranty
FACTS Traders Royal Bank (TRB), respondent, granted a loan worth P60,000 in favor of Renato Gaytano (who is doing business under the name Gebbs International). To secure the loan, the Gaytano spouses executed a deed of suretyship where they agreed to pay the loan, including interests, penalty and other bank charges. Philip Wong, credit administrator of petitioner BA Finance Corporation (BA Finance), undertook to guaranty the loan. Partial payments were made by Gaytano, but a balance of P85,807.25 remained unpaid, which prompted TRB to file with the trial court a complaint for sum of money against the spouses and BA Finance. BA Finance raised the
HELD (1) NO. The phrase contingent commitment cannot be interpreted as referring to guaranties. Although Wong was clearly authorized to approve loans, nothing in the memorandum expressly vested him the power to issue guaranties. Authority given to an officer to approve loans does not include power to issue guaranties to third persons in principals name. A power of attorney or authority of an agent should not be inferred from the use of vague or general words. Furthermore, guaranty is not presumed; it must be expressed and cannot be extended beyond its specified limits.
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NATIONAL POWER CORP VS. NATIONAL MERCHANDISING CORP. FACTS: 1. October 17, 1956: National Power Corp (NPC) and National Merchandising Corp. (NAMERCO), as the representative of the International Commodities Corporation of New York (New York Company Principal) executed a contract for the purchase of 4,000 long tons of crude sulfur worth P450, 716 for NPCs Fertilizer plant in Iligan City. 2. A performance bond was executed by the Domestic Insurance Company, in favor of NPC to guarantee NAMERCOs obligation. 3. In the sale contract, it was stipulated that NAMERCO would deliver the sulfur at Iligan City within 60 days from notice of the establishment in its favor of a letter of credit and failure to deliver would subject NAMERCO and Domestic Insurance to the payment of damages. 4. LC was opened in Nov 12, 1956. Deadline for delivery was Jan. 15, 1957. NEW YORK CO. WAS UNABLE TO DELIVER due to its inability to secure shipping space. NPC had no sulfur so their fertilizer plant had to shutdown. 5. NPC advised NAMERCO that non-availability of a bottom/vessel was not a fortuitous event that would excuse nonperformance and that NPC would resort to legal remedies.
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Facts:
On March 27, 1989, Philippine Airlines (PAL) issued to Nicholas Cervantes a round trip plane ticket for Manila-Honolulu-Los Angeles-Honolulu-Manila, which ticket expressly provided an expiry of date of one year from issuance, i.e., until March 27, 1990. The issuance of the said plane ticket was in compliance with a Compromise Agreement entered into between the contending parties in two previous suits (Civil Case 3392 and 3451 before the RTC in Surigao City). On March 23, 1990, 4 days before the expiry date of subject ticket, Cervantes used it. Upon his arrival in Los Angeles on the same day, he immediately booked his Los Angeles-Manila return ticket with the PAL office, and it was confirmed for the April 2, 1990 flight.
Upon learning that the same PAL plane would make a stop-over in San Francisco, and considering that he would be there on 2 April 1990, Cervantes
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Aggrieved, Cervantes filed a Complaint for Damages, for breach of contract of carriage before the RTC of Surigao del Norte in Surigao City (Branch 32, Civil Case 3807), but the said complaint was dismissed for lack of merit.
On 20 September 1993, Cervantes interposed an appeal to the Court of Appeals, which came out with a Decision, on 25 July 1995, upholding the dismissal of the case. On 22 May 1996, Cervantes came to the Suprame Court via the Petition for Review.
The confirmation by the PALs agents in Los Angeles and San Francisco of Cervantes flights did not extend the validity or lifetime of the ticket, as both had no authority to do so. Cervantes knew this from the very start when he called up the Legal Department of appellee in the Philippines before he left for the USA. He had first hand knowledge that the ticket in question would expire on March 27, 1990 and that to secure an extension, he would have to file a written request for extension at the PALs office in the Philippines. Despite this knowledge, Cervantes persisted to use the ticket in question. Since the PAL agents are not privy to the said Agreement and Cervantes knew that a written request to the legal counsel of PAL was necessary, he cannot use what the PAL agents did to his advantage. The said agents acted without authority when they confirmed the flights of Cervantes. Thus, where a passenger is fully aware of the need to send a letter to a particular office of an airline for the extension of the period of validity of his ticket, he cannot subsequently use what was done by airline agents, who acted without authority, in confirming his flights.
The Supreme Court denied the petition, and affirmed in toto the decision of the Court of Appeals dated 25 July 1995; without pronouncement as to costs.
Article 1898; Acts of agent beyond scope of authority does not bind principal Under Article 1898 of the New Civil Code, the acts of an agent beyond the scope of his authority do not bind the principal, unless the latter ratifies the same expressly or impliedly. Furthermore, when the third person knows that the agent was acting beyond his power or authority, the principal cannot be held liable for the acts of the agent. If the said third person is aware of such limits of authority, he is to blame, and is not entitled to recover damages from the agent, unless the latter undertook to secure the principals ratification.
Issue:
Whether the act of the PAL agents in confirming subject ticket extended the period of validity of petitioners ticket. Carson v. Rickards and Smith Bell
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EUGINIO VS. COURT OF APPEALS Petitioner EUGENIO is a dealer of the soft drinks of Private respondent (PEPSI). PEPSI claimed that petitioner EUGNEIO has outstanding debts in the company. Petitioner EUGENIO in defense presented four Trade Provisional Receipts (TPR) issued by and received by them from Route Manager ESTRADA of Malate Warehouse. They claim that the TPR are to be credited in their favour. Trial Court: ordered petitioner to pay private respondent (PEPSI- COLA BOTTLING COMPANY OF THE PHIL.) their overdue accounts. Court of Appeals: declared said decision to be a nullity because the requirements of Section14, Article VIII of the 1987 Constitution (basis of decision should clearly state facts and law on which they are based) are not met. Trial Court: Petitioners ordered to pay the amount plus legal interest. Court of Appeals/ Motion for Reconsideration: Affirmed the judgement/ motion denied
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Commissioner of Public Highways and the Auditor General V. San Diego (Presiding Judge, CFI Rizal), Testate Estate of N.T. Hashim, et. al. FACTS:
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YES. The Bank (PNB) is the agent of the Bureau of Public Highways as such that it was entrusted with the latters funds, which is of its nature, is public or government funds.
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