Professional Documents
Culture Documents
3.
Basis
A.
ARTICLE 1868
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.
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 one-half 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 death of his principal is void ab initio. Simeon Rallos act
1. 2.
Definition Nature
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.
2.
When Leaning Mansaca narrated to Attorney. Aportadera the circumstances under which his property had been sold to Laureta, he must have included in the narration the sale of the land of Mata, for the two properties had been sold on the same occassion and under the same circumstances. Irespe, who was the witness in most of the cases filed by Attorney. Aportadera in his capacity as Provincial Fiscal of Davao against Laureta, must have known of the purchases of lands made by Laureta. Even if Irespe and Aportadera did not have actual knowledge of the first sale, still their actions have not satisfied the requirement of good faith. Bad faith is not based solely on the fact that a vendee had knowledge of the defect or lack of title of his vendor. Irespe and Aportadera had knowledge of circumstances which ought to have put them an inquiry. Both of them knew that Mata's certificate of title together with other papers pertaining to the land was taken by soldiers under the command of Col. Laureta. Also, at the time of the second sale, Laureta was already in possession of the land. Irespe and Aportadera should have investigated the nature of Laureta's possession. Caveat emptor.
3.
Applying the principle of agency, Caram as principal, should also be deemed to have acted in bad faith.
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 the revalidation. She was told that it would only be valid until May 8 and no longer valid for the rest of the trip after that. However, Ella attached revalidation stickers on the
5.
6.
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. It cannot also be denied that they have benefited from the work done by Smith, et al: The house was not improved by said work. Likewise, If it were not undertaken by the plaintiffs, the Board of Health would have undertaken the same work at the
4.
Purpose
7.
Parties/Capacity
Mendoza v. De Guzman*
8.
Distinguished relations
from
other
juridical
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 paid no salaries. She even shared in the expenses of maintaining the office, paid for the salary of an office secretary and other sundry expenses. Later Tourist World considered closing down its office because of business losses and news that Sevilla was then connected with a rival firm. Thus, an employee of TWS went to the branch and padlocked its premises. Sevilla filed a complaint claiming damages brought about by TWSs revocation of their relationship.
Under the contract of lease covering the Tourist Worlds Ermita office, she had bound herself in solidum as and for rental payments. A true employee cannot be made to part with his own money in pursuance of his employer's business, or otherwise, assume any liability thereof. Sevilla was not under the control of TWS "as to the means used." Sevilla in pursuing the business, obviously relied on her own gifts and capabilities. She was not in the company's payroll. For her efforts, she retained 4% in commissions from airline bookings, the remaining 3% going to Tourist World. Unlike an employee then, who earns a fixed salary usually, she earned compensation in fluctuating amounts depending on her booking successes. 2. Sevilla solicited airline fares, but she did so for and on behalf of her principal, Tourist World Service, Inc. As compensation, she received 4% of the proceeds in the concept of commissions.
An agency that has been created for mutual interest, of the agent and the principal cannot be revoked at will. Sevilla is a bona fide travel agent herself, and as such, she had acquired an interest in the business entrusted to her. Moreover, she had assumed a personal obligation for the operation thereof, holding herself solidarily liable for the payment of rentals. She continued the business, using her own name, after Tourist World had stopped further operations. Her interest, obviously, is not to the commissions she earned as a result of her business transactions, but one that extends to the very subject matter of the power of management delegated to her.
9.
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. Oral, express 2. 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. After the lapse of 4 years stipulated for the redemption of the property, Gutierrez asked that Orense deliver the property to the company and pay rentals for the use of the property. Orense however, refused to do so. Orense claimed that the sale was void for having been done without his authority, either written or verbal. He further alleged that he did not intentionally and deliberately performed acts as would lead Gutierrez Hermanos that he authorized his nephew to enter into the contract of sale.
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 attorney are
Art. 1875. Agency is presumed to be for a compensation, unless there is proof to the contrary. c. Onerous
(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; (6) To make gifts, except customary ones for charity or those made to employees in the business managed by the agent; (7) To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration; (8) To lease any real property to another person for more than one year; (9) To bind the principal to render some service without compensation; (10) To bind the principal in a contract of partnership; (11) To obligate the principal as a guarantor or surety; (12) To create or convey real rights over immovable property; (13) To accept or repudiate an inheritance; (14) To ratify or recognize obligations contracted before the agency; (15) Any other act of strict dominion. e. As to manner of appointment Direct Indirect, appointment through another f. As to nature and effects
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4. Forms of Agency a. Contract 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.
(1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers; (2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum, thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents: (a) An agreement that by its terms is not to be performed within a year from the making thereof; (b) A special promise to answer for the debt, default, or miscarriage of another; (c) An agreement made in consideration of marriage, other than a mutual promise to marry; (d) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them, of such things in action or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum; (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; (f) A representation as to the credit of a third person. (3) Those where both parties are incapable of giving consent to a contract. 5. Presumption of Agency a. General rule Harry Keeler Electric (EARLA) November 11, 1922 Johns, J. Co. vs. Rodriguez
Art. 1358. The following must appear in a public document: (1) Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest therein a governed by Articles 1403, No. 2, and 1405; (2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains; (3) The power to administer property, or any other power which has for its object an act appearing or which should appear in a public document, or should prejudice a third person; (4) The cession of actions or rights proceeding from an act appearing in a public document. All other contracts where the amount involved exceeds five hundred pesos must appear in writing, even a private one. But sales of goods, chattels or things in action are governed by Articles, 1403, No. 2 and 1405 Art. 1403. The following contracts unenforceable, unless they are ratified: are
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
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6. Authority presumed
of
attorney
to
appear
is
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.
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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. (ALAIN) Panganiban J. Facts: v. International Business
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. IBASPI demanded the payment of said amount plus 10% commission. APC finally made its first partial payment of P200,000.00 to IBASPI with a simultaneous Receipt/Agreement executed by IBASPI and APC, the latter, through Attorney. Manolito A. Manalo, Officer-in-Charge of the Legal Department of APC. After this partial payment, no other payments were executed by APC. APC refused to pay its balance with IBASPI. IBASPI sued APC in court. However, the counsel of APC filed at least three motions to extend filing of petitioners Answer; did not appear during the scheduled pretrials; and failed to file petitioners pretrial Brief. Court ordered IBASPI to pay the balance, the 10% commission and attorneys fees. APC submits that CA erred in upholding the ruling of the RTC despite the fact that the gross negligence, incompetence and dishonesty of APCs former counsel, Attorney. Manolito A. Manolo, have effectively denied APC of its day in court. APC further contended that Attorney. Manalo was not authorized to execute the Receipt/Agreement in behalf of petitioner APC. Thus APC asked for Motion for New Trial.
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Acceptance,
not
from the acts of the agent which carry out the agency;
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. where absent the persons are
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 stock of the Philippine Sugar Estates Development Company, Limited, of the par value of P100 each. On October 10, 1903, the defendant, Francisco Gutierrez Repide, by means subsequently found and adjudged to have been fraudulent, obtained possession of said shares and thereafter alleged to be the owner thereof. The CFI of Manila subsequently held that the sale of these shares was made without the authority of Mrs. Strong, that she never ratified the sale but repudiated it as soon as she learned of it, that this sale was induced by fraud on the part of the defendant, and therefore was a fraudulent sale. This judgment was, on appeal to the Supreme Court of the Philippine Islands, reversed, and plaintiff's complaint dismissed on the merits. Thereupon, plaintiff prosecuted an appeal to the Supreme Court of the United States, which court, on the 3rd of May, 1909, rendered its judgment, reversing the decision of the Supreme Court of the Philippine Islands and affirming the judgment of the trial court.
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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 recently, We stated that, if the special authority is not written, then it must be duly established by evidence: ... the Rules require, for attorneys to compromise the litigation of their clients, a special authority. And while the same does not state that the special authority be in writing the Court has every reason to expect that, if not in writing, the same be duly established by evidence other than the selfserving assertion of counsel himself that such authority was verbally given him. Whereupon the following took place: (1) The court asked George Hung whether he was willing to enter into the compromise agreement and whether he had the authority of his mother to enter into such a compromise agreement; (2) The defendant's counsel confirmed in open court the assurance of George Hung that he had the full authority of his mother to enter into a compromise agreement: (3)
Issue: Whether the respondent Judge committed grave abuse of discretion in allowing the October
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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. 4. to Art. 1872 Differentiate Art. 1871
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. 5. 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 Cases
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D. Article 1873 Art. 1873. If a person specially informs another or states by public advertisement that he has given a power of attorney to a third person, the latter thereby becomes a duly authorized agent, in the former case with respect to the person who received the special information, and in the latter case with regard to any person. The power shall continue to be in full force until the notice is rescinded in the same manner in which it was given. 1. Effects of special information
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
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E. Article 1874: Exception to the general rule that agents authority may be oral or written 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 unenforceable, unless they are ratified: are
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. Repurchase 3. Cases: Lim v. CA (ALAIN) Cosmic Lumber v. CA (GEN) Nov. 29, 1996 Bellosillo, J.
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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. By selling to Perez a portion of petitioners land through a compromise agreement, Estrada acted without or in obvious authority. The sale ipso jure is consequently void. So is the compromise agreement. *Other issue on agency: It may be argued that petitioner knew of the compromise agreement since the principal is chargeable with and bound by the knowledge of or notice to his agent received while the agent was acting as such. But the general rule is intended to protect those who exercise good faith and not as a shield for unfair dealing. Hence there is a wellestablished exception to the general rule as where the conduct and dealings of the agent are such as to raise a clear presumption that he will not communicate to the principal the facts in controversy. The logical reason for this exception is that where the agent is committing a fraud, it would be contrary to common sense to presume or to expect that he would communicate the facts to the principal. Rodriguez vs. Court of Appeals (MAI) August 29, 1969 Castro, J. FACTS: On December 31, 1958, by virtue of a document denominated "Kasunduan" written in the vernacular and ratified before Notary Public Lazaro C. Ison of that locality, Nieves Cruz, authorized the spouses Atanacio Valenzuela, and Maximina Victorio and Liberate Santos to sell a certain parcel of land of about 44,634 square meters belonging to her. Nieves Cruz and her children, however, collected from the agents, either thru Maximina Victorio or thru Salud G. de Leon, daughter of Liberate Santos, various sums of money during the period from July 3, 1959 up to September 3, 1961, all of which were duly receipted for by Nieves Cruz and/or her children and in which receipts it is expressly stated that said amounts were "bilang karagdagan sa ipinagbili naming lupa sa kanila (additional payments for the land we sold to them). Nieves Cruz then sold the property in question to Barbara Lombos Rodriguez, her "balae" because
HELD: YES. The fact that Atanacio Valenzuela, et al. were agents of Nieves Cruz under the agency agreement of December 31, 1958 is not material, for if it is true that Nieves Cruz did agree to sell to her agents the real estate subject of the agency, her consent to the agreement took the transaction out of the prohibition contained in article 1491(2) of the Civil Code. Neither are articles 1874 and 1878(5) and (12) of the Civil Code relevant, for they refer to sales made by an agent for a principal and not to sales made by the owner personally to another, whether that other be acting personally or through a representative. Thus, the agreement is valid. The parties to the agency agreement subsequently entered into a new and different contract by which the landowner, Nieves Cruz, verbally agreed to sell her interest in the litigated real estate to Atanacio Valenzuela, et al. and this was established by certain facts, such as: [1] Salud de Leon testified that it was she who had the oral agreement with Nieves Cruz for the purchase by Atanacio Valenzuela, et al. of the litigated property and, as found by the respondent Court, Salud de Leon was the representative of Atanacio Valenzuela, et al., not of Nieves Cruz; [2] Cruzs acceptance of the sums of money given by the private respondents and her subsequent issuance of receipts for these sums; [3] the sale was established and recognized in the land registration proceedings where the certificates of title bear the annotation of the aforesaid right of Atanacio Valenzuela, et al. Pertinent provisions: Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another: xxx (2) Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given; 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. Katigbak v. Tai Hing (ROG) 1928
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ISSUE: W/N Pascuals allegation takes his case out of the operation of the statute of frauds. (If yes then Realty is compelled to execute the deed of sale)
HELD: No, this is not one of the exceptions. While it is alleged that plaintiff has occupied the land since 1912, there is nothing alleged therein to the effect that he has taken possession thereof in view of a supposed verbal contract he had with the defendant to purchase it, nor is there any allegation that he has made improvements thereon because and as a consequence of said supposed contract to sell. This case having been dismissed on a mere motion to dismiss, the merits of the order of the court can only be gauged upon a consideration of the allegations appearing in the complaint, and upon no other.
FACTS: Ramon Pascual filed an action to compel Realty Investment to sell to him the land that he is occupying. He alleges that he has been occupying the 450 sq.m. of land since 1912 while it was still under Angela Tuasons administration. When it was sold to Realty in 1941, he said that he offered to buy it at P15/sqm. He failed to perfect the sale because Realty increased the price to P25 hence this action. Realty filed a motion to dismiss and was granted.
CFI basis: An agreement to sell real property should be made in writing, or at least it should appear in a note or a memorandum, in order that a suit based thereon may be enforceable, the present action cannot be maintained and should be dismissed. For our purposes apply 1403 also. The point is W/N the sale to be enforceable, must be in writingYES!
Where a parol contract of sale is adduced not for the purpose of enforcing it, but as a basis of the possession of the person claiming to be the owner of the land, the statute of frauds is not applicable (Almirol et al., vs. Monserrat, 48 Phil., 67), in the same way that it does not apply to contracts which are either totally or partially performed upon the theory that there is a wide field for the commission of frauds in executory contracts which only prevented by requiring them to be in writing, a fact which is reduced to a minimum in executed contracts because the intention of the parties become apparent by their execution). Pascuals situation does not here obtain for the reason that the complaint does not contain the requisite allegations. On the contrary, it alleges that plaintiff occupied the land as a tenant since 1912. Raet vs. CA (EARLA) September 17, 1998 Mendoza, J.
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Art. 1875. Agency is presumed to be for a compensation, unless there is proof to the contrary. 1. Exceptions 2. When is an agent entitled to compensation: General rule 3. Measure of compensation: General Rule 4. Double Agency: General Rule 5. Cases 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
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Macondray v. Sellner (ROG) Feb. 2, 1916 J. Carson Facts: Sellner, a real estate broker, sold land to Macondray. Formal deed of sale not executed until delivery of a Torrens title. In the meantime, land was flooded by high tides and Macondray became highly dissatisfied with its purchase. When final transfer was made company informed Sellner that land as wholly unsuited for use as a coal-yard, for which it had been bought and requested him to find another purchaser. Both parties had an understanding that Sellner was to have as commission for getting a purchaser anything over amount which he could get. Sellner found another buyer Barretto. A formal deed of sale was executed together with Torrens which was delivered to Sellner by Company. Barretto agreed to accept land if upon examination, title and deed be satisfactory. Sellner retained the Torrents title but left deed of sale with Barretto with understanding that if both were satisfactory, latter would just issued check to former. A few days later Barretto was detained by typhoon on his way to Tayabas so his return was delayed. During his absence, company advised Sellner that latter must consummate sale and collect money without delay upon Barretto's return. All the while company kept asking Sellner to speed up in closing the deal but Barretto could not immediately do so coz he was indisposed from his trip. Barretto arrived Saturday and promised he'd
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Inland Realty Investment v. CA (ALAIN) June 9, 1997 Hermosisisima, Jr., J.: FACTS: On September 16, 1975, defendant corporation (Araneta, Inc.) thru its co-defendant Asst. Gen. Mgr. Eduque, granted to Inland Realty Investment Service, Inc. (Inland) represented by one Roman de los Reyes (entitled to of the claim asserted which is 5% brokers commission) a 30day authority to sell its shares stock in another corporation. Inland was able to find a prospective buyer, the Stanford Microsystems, Inc., but the offer of said buyer was rejected by Araneta, Inc. Thus, Inland looked for other buyers and found two more prospective ones. The authority was extended several times: first on Oct. 2, 1975, for 30 days from the said date, the second on Oct. 28, 1975 for 30 days from said date, and on Dec. 2, 1975 for 30 days from the said date. On July 8, 1977 or 1 year and 5 months after the last extension granted to Inland, the shares of stock were finally sold to Standford Microsystems, Inc.
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ISSUES WON Danon is entitled to the commission agreed upon. NO. RATIONALE Plaintiff is not entitled to the commission.The most that can be said as to what the plaintiff had accomplished is, that he had found a person who might have bought the defendant's factory if the defendant had not sold it to someone else. The evidence does not show that the Santa Ana Oil Mill had definitely decided to buy the property in question at the fixed price of P1,200,000. The board of directors of said corporation had not resolved to purchase said property; and even if its president could legally make the purchase without previous formal authorization of the board of directors, yet said president does not pretend that he had definitely and formally agreed to buy the factory in question on behalf of his corporation at the price stated. It is undisputed that plaintiffs services did not any way contribute towards bringing about the sale of the factory in question. He was not "the efficient agent or the procuring cause of the sale."
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
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Pratts v. CA (ROG) 1978 Facts: This complaint for sum of money filed by Prats, doing business under name of Philippine Real Estate Exchange, against Doronila and PNB. Doronila was registered owner of 300hectares of land. He wrote to SSS Chair offering his property to SSS at P4 per square meter (per sqm). There were several counter offers made as to the price. Doronilla requested certification from Board of Realtor regarding the actual prices of his real estate raw-land properties. The Board replied that the fair market value of raw land is P3-P3.50 per sqm. Current prices before reaching Doronilla's property range from 6-7 per sqm. Doronilla granted an exclusive option and authority to Prats to sell former's property. Commission will be 10% based on P2.10 per sqm or at any price finally agreed upon. Doronilla asked SSS to return all papers related to his property in view of the exclusive option granted to Prats. SSS asked for a meeting with Doronilla but latter asked that SSS meet with Philippine Real Estate Exchange instead because Doronilla had given exclusive option to it. Prats gave notice to Doronilla that SSS had agreed to purchase the land. The
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Distinguished from Danon vs Brimo: The case of Danon is not in point. In that case, claimantagent 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.
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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
34
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
35
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 United Flag Industry was revoked by petitioner Primitivo Siasat. After receiving the payment for the first delivery, tendered the amount of P23,900.00 or five percent (5%) of the amount received to the respondent as payment of her commission. The latter refused to accept the said amount insisting on the 30% commission agreed upon. The respondent, however, was prevailed upon to accept the same because of the assurance of the petitioners that they would pay the commission in full after they delivered the other half of the order. Respondent Nacianceno later on learned that petitioner Siasat had already received payment for the second delivery of 7,833 flags. When she confronted the petitioners, they vehemently denied receipt of the payment, at the same time claiming that the respondent had no participation whatsoever with regard to the second delivery of flags and that the agency had already been revoked. The respondent originally filed a complaint with the Complaints and Investigation Office in Malacaang but when nothing came of the complaint, she filed an action in the Court of First Instance of Manila to recover the following commissions: 25%, as balance on the first delivery and 30%, on the second delivery. CFI ruled in favor of respondent. CA affirmed.
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 general terms; acts of administration
ISSUES WON Nacianceno is entitled to the commission despite the absence of specific authorization for the sale of 15,666 Philippine flags to DECS.
Veloso v CA (GEN)
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(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
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summons for the revival of judgment was served upon it that it came to know of the compromise agreement entered into between Paz G. Villamil-Estrada and respondent Isidro Perez. Forthwith, upon learning of the fraudulent transaction, petitioner sought annulment of the decision of the trial court before respondent Court of Appeals.
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.
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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
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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, attorney-in-fact, the power for me and in name to sign, seal and execute, and as my act deed, deliver any lease, any other deed conveying (of) any real or personal property. her my and for
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
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PNB v. Paz Agudelo y Gonzaga, et al. (MAI) Villareal, J. Facts: On November 9, 1920, Paz Agudelo y Gonzaga executed in favor of her nephew, Mauro A. Garrucho, a document conferring upon him a special power of attorney sufficiently broad in scope to enable him to sell, alienate and mortgage in the manner and form he might deem convenient, all her real estate situated in the municipalities of Murcia and Bacolod, Occidental
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J.
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. distinguish between power 2. kinds of authority 3. 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 plaintiff-appellant to have had a cash shortage and unremitted collections in the total amount authority and
Issue: WoN the TC was right to dismiss the case against both Ker & Co., and Phoenix Assurance
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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.
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.
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. The provisions of this article shall be understood to be without prejudice to the actions between the principal and agent.
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Under general rules and principles of law the mismanagement of the business of a
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Uy & Roxas v. CA, Hon. Robert Balao, NHA (ABBY) Facts: William Uy and Rodel Roxas are agents authorized to sell eight parcels of land by the owners thereof. By virtue of such authority, petitioners offered to sell the lands, located in Tuba, Tadiangan, Benguet to respondent National Housing Authority (NHA) to be utilized and developed as a housing project. The NHA paid for the 5 parcels but after a test was done, the remaining 3 parcels were found to be unsuitable for housing or any civil structures. The NHA cancelled the contract and offered P1.225M to the landowners. Uy and Roxas found a complaint for damages and the RTC said the cancellation of the contract was justified but still awarded the P1.225M damages. The CA reversed the RTC since there was "sufficient justifiable basis" in cancelling the sale, "it saw no reason" for the award of damages. The CA also noted that petitioners were mere attorneys-in-fact and, therefore, not the real parties-in-interest in the action before the trial court. The damages prayed for were intended not for the benefit of their principals but to indemnify petitioners for the losses they themselves allegedly incurred as a result of such termination. These damages consist mainly of "unearned income" and advances. They brought the action in their own name and in their own behalf.
Issue: WoN the agents have a cause of action against the NHA suing in their own name.
Held: No. Petition dismissed. Petitioners are not parties to the contract of sale between their principals and NHA. They are mere agents of the owners of the land subject of the sale. As agents, they only render some service or do something in representation or on behalf of their principals.
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Awadv. Filma Mercantile (EARLA) Dec 24, 1926 Ostrand, J. Facts: E. Awad & Co. delivered to Chua Lioc (operating under the name of Hang Chuan Co.) certain merchandise in the amount of P11,140. Chua Lioc, representing himself as the owner of the merchandise sold them to Filma Mercantile for a total of P12,155.60. After deducting Chua Lioc debts to Filma and to the Phil. Manufacturing Co. (which Filma agreed to pay), Filma is still indebted to Chua Lioc in the amount of P6,657.52. Thereafter, E. Awad obtained authorization from Chua Lioc to collect the P11,140 due it. Filma however refused to directly pay to E. Awad the purchase price. Subsequently, the Phil. Trust Company brought an action against Chua Lioc for the payment of P1,036.36. As a result, the balance due from Filma was attached in that action. This balance was further attached in another action instituted by E. Awad for the payment of P11,140. E. Awad then filed a separate action against Filma, for the payment of the purchase price. Filma however averred that it was a buyer in good faith. It further alleged that it was holding the balance of P6657.52 (having been attached in two separate cases) subject to the orders of the court. The trial court dismissed the complaint on the ground that the plaintiff was only entitled to payment of the sum of P6,657.52, but which sum the defendant had the right to retain subject to the orders of the court in the two separate cases. ISSUE: WON E. Awad can collect from Filma. HELD: No. According to the Court, the law applicable to the case is well settled. 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 having any right of action against the principal, not the latter against the former, the liabilities of the principal and of the agent to each other always
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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 having any right of action against the principal, nor the latter against the former, the liabilities of the principal and of the agent to each other always being reserved. Smith Bell & Co. v Sotelo Matti (JANCES) Facts: In August 1918, Smith, Bell & Co and Sotelo Matti entered into contracts whereby the former obligated itself to sell and deliver 2 steel tanks, 2 expellers and 2 electric motors. The tanks were to be delivered within 3-4 months, the expellers Sept 18 or as soon as possible, and the motors within 90 days (but not guaranteed). In all the contracts, it was stated that the seller was not responsible for delays caused by fires, riots on land or on sea, strikes or other causes known as force majeure. Note also that the contracts were executed at the time of the world war.
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ISSUES WON the intervenor has a cause of action against plaintiff due to the alleged delay in the delivery of the machineries. NO. RATIONALE When an agent acts in his own name, the principal has no right of action against the persons with whom the agent has contracted, or such persons against the principal. In such case, the agent is directly liable to the person with whom he has contracted, as if the transaction were his own (Art. 1717, Civil Code).
Maritime Agencies & Services v. CA (ALAIN) July 12, 1990 J. Cruz FACTS: Transaction: shipment of bagged urea from USSR to the Philippines, so need to charter a motor vessel Motor vessel: named Hongkong Island Owner of vessel: Hongkong Island Shipping Co. Charterer: Transcontinental Fertilizer Company of London Consignee in the Philippines: Atlas Fertilizer Company (Manila and Cebu) Insurer of goods: Union Insurance Society of Canton, Ltd (against all risks) Charterers agent: Maritime Agencies & Services, Inc. Owners agent: Macondray Company, Inc. The parties signed for this purpose a Uniform General Charter. But problem occurred in the transaction. Trial court found out that upon receipt of goods, 1,383 bags were damaged or lost on board the vessel before unloading of the shipment. There were also goods that were damaged or lost during unloading. Consignee filed a formal claim, and after its claims rejected, went to Insurer Union, which on demand paid the total indemnity pursuant to the insurance contract. Thus, as subrogee of the consignee, Union filed complaint for reimbursement against
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A.
and
specific
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. 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.
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Also, it is worth mentioning that both British Airways and PAL are members of the International Air Transport Association (IATA), wherein member airlines are regarded as agents of each other in the issuance of the tickets and other matters pertaining to their relationship. Therefore, in the instant case, the contractual relationship between British Airways and PAL is one of agency, the former being the principal, since it was the one which issued the confirmed ticket, and the latter the agent. A carrier like PAL, acting as an agent of another carrier, is also liable for its own negligent acts or omission in the performance of its duties. Accordingly, to deny British Airways the procedural remedy of filing a third-party complaint against PAL for the purpose of ultimately determining who was primarily at fault as between them, is without legal basis.
Unfortunately, when Mahtani arrived in Bombay he discovered that his luggage was missing and that upon inquiry from the British Airways representatives, he was told that the same might have been diverted to London. After patiently waiting for his luggage for one week, British Airways finally advised him to file a claim by accomplishing the Property Irregularity Report.
B.
Mahtani subsequently filed a complaint for damages and attorneys fees against British Airways and Mr. Gumar. British Airways, in turn, filed a third-party complaint against PAL. The trial court ruled in favor of Mahtani and dismissed the third-party complaint against PAL. The Court of Appeals affirmed the decision, stating that British Airways had no cause of action against PAL. Issue: Whether or not the dismissal of the thirdparty complaint against PAL was valid Held: NO. The contract of air transportation was exclusively between Mahtani and British Airways, the latter merely endorsing the Manila to Hongkong leg of the formers journey to PAL, as its subcontractor or agent. In fact, the fourth paragraph of the Conditions of Contracts of the ticket issued by British Airways to Mahtani confirms
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)
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D.
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. Effect of violation of principals instructions 2. Instructions v. authority 3. Rule in absence of instructions 4. When departure is justified 5. 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 send to the defendant firm a memorandum or statement of the current account, and further obligated itself, in case the said mercantile relations should be finally terminated, to present a general and complete account, duly supported by vouchers and other proofs; that plaintiff, Gutierrez Hermanos, had contended itself by sending to Oria Hermanos and Co. some memoranda or abstracts of account, accepted by defendant as such "abstract of account," without the latter's having waived its right to demand the presentation, as agreed upon, of the vouchers and other proofs upon the closing of the current account, a stipulation which Gutierrez Hermanos had failed to comply with. Defendant therefore prayed that the plaintiff, Gutierrez Hermanos, be sentenced to render and present the said final account, duly accompanied by vouchers, in conformity with the agreement made. PLAINTIFFS ALLEGATIONS: Gutierrez Hermanos denied in its answer the allegations made by Oria Hermanos & Co. in its crosscomplaint, and set forth that, in consequence of the mutual current account opened between the
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F.
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 selfdealing). This rule is preventive, not remedial justice. 2. Cases 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 "Hipoteca-Venta" 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
E.
Article 1888: When agent shall not carry out agency (JILL)
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.
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Meanwhile,
Barton embarked for San Francisco and upon arriving at that port, he entered into an agreement with Ludvigsen & McCurdy, whereby the said firm was constituted a subagent and given the sole selling rights for the bituminous limestone products of the company for a period of 1 year. an earlier voyage during the same year to Australia, Barton had already made an agreement with Frank B. Smith of Sydney, whereby the latter was to act as the plaintiffs sales agent for limestone products of the company. Later, the same agreement was extended for a period of one year.
Upon
In
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, India, Sumatra, Java, China and Hong Kong until May 1, 1922, and until May 1, 1921 in Siam and the Straits Settlements of US. It was also stipulated in the letter of authority that should the sales of Barton in the US reach 5,000 tons on or before May 1, 1921, he would be awarded the sole rights for the said territory for an additional 1 year and should his sales in the second year reach or exceed 10,000 tons, he would be given the option to renew the agreement for the said territory on the same terms for an additional 2 years. Further, it was stated that should his sales equal or exceed 10,000 in the year ending October 1, 1921, or 20,000 tons by May 1,1922, then the contract will automatically be continued for an additional of 3 years. Very soon after the contract became effective, Barton requested the company to give him a similar selling agency for Japan. To this request, the company through its president, Anderson, replied that at that moment, they do not feel like giving him the same authority until he can make some large sized sales there, because some
Tokio, Japan, Barton came in contact with H. Hiwatari. In a letter, Hiwatari speaks of himself as if he had been appointed exclusive sales agent for Barton in Japan, but no document expressly appointing him such is in evidence. Barton then received a letter from Ludvigsen & McCurdy that it might enter an order for 6,000 tons of bituminous limestone. In turn, Barton informed the company to be prepared to ship the products. Anderson, however, informed him that the company, with its current facilities, wouldnt be able to handle big contracts. Barton expressed surprise at this and told Anderson that he had not only that particular order from San Francisco but other orders for large quantities to be shipped to Australia and Shanghai. Subsequently, Barton informed the company at different dates to prepare shipments to US and Australia, and later on, to Japan.
(totaling to 4) sent by Barton to the company informing the latter to prepare shipments, no mention was made of the names of the persons, or firms, for whom the shipments were really intended. The obvious explanation that occurs in connection with this is that the plaintiff did not care to reveal the fact that the orders originated from his own subagents in San Francisco and Sydney. The company, in its reply to one of Bartons letter, stated that no orders can be entertained unless cash has been actually deposited with either the International Banking Corporation or the Chartered Bank of India, Australia, and China, at Cebu. To this, Barton, in turn, replied questioning the right of the company to insist upon cash deposit in Cebu prior to the filling of the orders. In conclusion, Barton gave some more orders for shipment to Australia in the quantities of 5,000
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G.
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 original contract by which the plaintiff was appointed sales agent for a limited period of time in Australia and the US contemplated that he should find reliable and solvent buyers who should be prepared to obligate themselves to take the quantity of bituminous limestone contracted for upon terms consistent with the contract. These conditions were not met by the taking of these orders from Bartons own subagents, which was as if the plaintiff had bought for himself the commodity which he was authorized to sell to others.
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 267 of the Code of Commerce declares that no agent shall purchase for himself or for another that which he has ordered to sell. The law has placed its ban upon a brokers purchasing from his principal unless the latter with full knowledge of all the facts and circumstances acquiesces in such course; and even then the brokers action must be characterized by utmost good faith. A sale made by a broker to himself without the consent of the principal is ineffectual whether the broker has been guilty of fraudulent conduct or not. Dispositive: Judgment Reversed. Malcolm, J., dissenting: Nowhere in the contract was the plaintiff prohibited to secure subagents. The majority decision misses out on the point that the only objection of the company when the orders were communicated was related to the manner of payment.
Art. 1891. Every agent is bound to render an account of his transactions and to deliver to the principal whatever he may have received by virtue of the agency, even though it may not be owing to the principal. Every stipulation exempting the agent from the obligation to render an account shall be void. (1720a) RULE: It is the duty of the agent to ACCOUNT FOR and to DELIVER to the principal ALL money and property which may have come into his hands or of a sub-agent appointed by him BY VIRTUE OF or AS A RESULT of the agency. 1. Duty to render account 2. Criminal liability of agent Two obligations of an agent under Art. 1981 Obligation to render accounts Agent must disclose to the principal the following:
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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.
2.
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.
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 19142; Sec. 37, Rule 138, ROC3) 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 goods/proceeds received in agency of
Domingo v. Domingo (REX) FACTS On June 2, 1956 Vicente Domingo granted Gregorio Domingo, a real estate broker, the exclusive agency to sell a lot with an area of about 88k square meters at the rate of 2 pesos per sqm, with a 5% commission of the total price if sold by Vicente or anyone else during the 30 day duration of the agency or if the property is sold by Vicente within three months from the agencys termination to a buyer submitted by Gregorio during the continuance of the agency with notice to Vicente. This contract was in triplicate, 1 copy given to Vicente, the original and another copy with Gregorio. The next day, Gregorio authorized one Teofilo Purisima to look for a buyer, promising him half of the 5% commission. Purisima later then introduced Oscar de Leon to Gregorio as a prospective buyer. De Leon submitted a written offer much lower than 2 pesos per sqm, at 1.2 pesos per sqm. Vicente directed Gregorio to ask De Leon to raise his offer. After several conferences between Gregorio and De Leon, the latter raised his offer to 109k, to which Vicente agreed by signing on it. Upon demand of Vicente, Oscar issued a 1k check as earnest money, after which Vicente gave 300 pesos to Gregorio.
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)
3
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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On account of his employers, China Mutual Life Insurance Company, P1,539.20, was paid to him, which he failed and refused to turn over to them.
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Hence, he was convicted of the crime of estafa in the CFI which sentenced him to be imprisoned in Bilibid. During the trial, accused offered no evidence on his own behalf and rest his appeal substantially upon the alleged failure of the prosecution to establish the existence of a duty or obligation imposed on the defendant to turn over his principal the funds which he is charged with appropriating to his own use. Defendant contends that the trial court erroneously admitted in evidence a certain document purporting to be a contract of agency signed by the defendant. The name of the accused is attached to this document, and one of the witnesses, the district agent of the Insurance Company, stated that it was the contract of agency it purported to be, but failed to state specifically that the signature attached thereto was the signature of the defendant, though he declared that he knew his signature and had seen him write it on various occasions.
no error in the proceedings the real rights of the accused, unnecessary to discuss the of error based on these
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 HELD: NO. An agent, unlike a servant or messenger, has both the physical and juridical possession of the goods received in agency, or the proceeds thereof, which takes the place of the goods after their sale by the agent. His duty to turn over the proceeds of the agency depends upon his discharge, as well as the result of the accounting between him and the principal; and he may set up his right of possession as against that of the principal until the agency is terminated. As the accused converted to his own use proceeds of sales of merchandise delivered to him as agent, which he received in trust for and under obligation to deliver and turn over to his principal, he is guilty of the crime of estafa. This has been the consistent ruling of the Court in cases where a sales agent misappropriates or fails to turn over to his principal proceeds of things or goods he was commissioned or authorized to sell for the latter. The information failed to allege the essential element of misappropriation or conversion to the prejudice of another; hence the accused must be acquitted of the crime of theft. Chua-Burce vs. Court of Appeals (MAI) April 27, 2000 Quisumbing, J.
ISSUE: WoN defendant is obliged to return the amount in question to his principal. HELD: YES.
Court: its not anymore necessary to review the action of the court in admitting the alleged document in evidence, because the obligation of the defendant to deliver the funds in question to his employers is determined by the provision of article 1720 of the Civil Code: "Every agent is bound to give an account of his transactions and to pay to the principal all that he may have received by virtue of the agency, even though what has been received is not owed to the principal." Since nothing to the contrary appears in the record, and the existence of the agency and the collection of the funds on account of the principal having been established, the obligation to deliver these funds to the principal must be held to have been imposed upon the agent by virtue of the contract of agency. Appellant, however, contented that the court erred in admitting in evidence a certain letter written by the defendant wherein he admitted the collection of certain funds on account of his principal. Court said that the execution of this letter was conclusively established, and that it was properly admitted, being pertinent and material to the issue in the case. There were other objections to the admission of certain testimony at the trial of the case, but
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I.
Art. 1892. The agent may appoint a substitute if the principal has not prohibited him from doing so; but he shall be responsible for the acts of the substitute: (1) When he was not given the power to appoint one; (2) When he was given such power, but without designating the person, and the person appointed was notoriously incompetent or insolvent. All acts of the substitute appointed against the prohibition of the principal shall be void. (1721) Art. 1893. In the cases mentioned in Nos. 1 and 2 of the preceding article, the principal may furthermore bring an action against the substitute with respect to the obligations which the latter has contracted under the substitution. 1. Relation among principal, agent, and sub-agent 2. General rule: Agent may appoint substitute 3. Consequence of lack of prohibition 4. Effects of substitution 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.
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68
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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.
After
the case was remanded to the court of origin, and the judgment rendered therein had become final and executory, Attorney. Jose Evangelista (Tan Ong Szes counsel in the expropriation case), in his own behalf and as counsel for the administratrix of Attorney. Jose Ma. Arroyos intestate estate (who was the previous counsel of Tan Ong Sze in this case), filed a claim in the same case for professional services rendered by them, which the court, acting with the consent of Tan Ong Sze, fixed at 15% of the amount of the judgment. At the hearing of the said claim, Philippine National Bank (PNB) and a representative of the late Antero Soriano appeared. PNB prayed that the amount of the judgment be turned over to it because the land taken over had been mortgaged to the bank. The representative of the late Antero (previous counsel of Tan Ong in other cases concerning her other properties), on the other hand, claimed the amount of the judgment as it had been assigned to Antero by the attorney-in-fact of Tan Ong Sze, Tan Boon Tiong. Antero, in turn, assigned the said credit to Maurico Cruz & Co., Inc.
After
J.
hearing all the adverse claims on the amount of the judgment, the court ordered that the attorneys lien in the amount of 15% of the judgment, be recorded in favor of Attorney Jose Evangelista, in his behalf and as counsel for the administratrix of Attorney. Jose Ma. Arroyo, and directed the Municipality of Iloilo to file an action of interpleading against the adverse claimants, PNB, Antero Soriano, Mauricio Cruz & Co., Jose Evangelista and Jose Arroyo at the CFI of Iloilo. Iloilo: declared the deed of assignment of credit executed by Tan Ong Sze, through her attorney-in-fact Tan Boon Tiong, in favor of the late Antero Soriano was valid; likewise, the assignment executed by Antero Soriano in favor of Mauricio Cruz & Co was declared valid. Tan Ong Sze was also ordered to deposit said sum in a local bank within the period of 90 days from the time the judgment shall become final, at the disposal of Mauricio Cruz & Co., and in case that Tan Ong shall not make such deposit in the
CFI
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
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1.
WON Tan Boon Tiong, as attorney-in-fact of Tan Ong, was empowered by his principal to make an assignment of credits, rights, and interests, in payment of debts for professional services rendered by lawyers for Tan Ong. 2. WON the failure of the other attorney-in-fact of Tan Ong, Tan Montano, to consent to the deed of assignment, the latter being also authorized to pay in the name and behalf of the principal, all her debts and the liens and encumbrances on her property, invalidates the assignment of credits by Tan Boon Tiong to the late Antero. Held / Ratio: 1.Yes, he was empowered. In Paragraph VI of the power of attorney executed by Tan Ong in favor of Tan Boon Tiong, Tan Boon Tiong is authorized to employ and contract the services of lawyers upon such conditions as he may deem convenient, to take charge of any actions necessary or expedient for the interests of his principal, and to defend suits brought against her. This power necessarily implies the authority to pay for the professional services thus engaged. In the present case, the assignment made by Tan Boon Tiong in favor of Attorney Antero for professional services rendered in other cases in the interest of Tan Ong and her coheirs, was that credit which she had against the municipality of Iloilo, and such assignment was equivalent to the payment of the amount of said credit to Antero for professional services.
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: 1) sums belonging to the principal which the agent applied to his own use agent is liable for interest by way of compensation or indemnity (not to be confused with interest for delay) interest shall be computed from the day on which the agent did so (applied to own use) agents liability is without prejudice to a criminal action that may be brought against him because of conversion 2) sums which the agent still owes the principal after the expiration of the agency general rule: there is no liability for interest on sums which have not been converted for agents use exception: the agent who is found to owe the principal sums after the extinguishment of the agency is liable for interest interest shall be computed from the date the agency is distinguished Mendezona v. C. Viuda de Goitia (BAMBI) March 11, 1930 Villamor, J. Facts: Benigno Goitia was representative and attorney-in-fact of plaintiffs Leonor Mendezona and Valentina Izaguirre Y Nazabal in the jointaccount 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.
2.
With regard to the failure of the other attorney-in-fact of Tan Ong, Tan Montano, to consent to the deed of assignment, the latter being also authorized to pay, in the name and behalf of the principal, all her debts and the liens and encumbrances on her property, the very fact that different letters of attorney were given to each of these two representatives shows that it was not the principals intention that they should act jointly in order to make their acts valid. Furthermore, the appellant was aware of that assignment and she not only did not repudiate it, but she continued employing Attorney. Antero Soriano to represent her in court. The Court is of the opinion and so holds that when a person appoints two attorneys-in-fact
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arises from trust relations between plaintiffs and the deceased Goitia.
the
FACTS: In February 1926, A.L. Ammen Transportation Company applied for a certificate of public convenience with the Public Service Commission (PSC) to operate an autotruck service between all principal points of Albay, Camarines, and Sorsogon. At the time of the decision, Ammen was already plying a route between Legaspi and Banquerohan. Later, the PSC granted a similar certificate to Felipe Lotivio to operate an autotruck service between Legaspi and Manito, a farther destination. This was approved, although the road was not constructed yet. For value and consent and approval of the PSC, Ammen purchased and acquired the rights which had been granted to Lotivio for the said service. A month before Lotivio applied for his certificate, Maria de Margallo (De Margallo) applied for the same certificate to operate an autobus line
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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L.
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
4.
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DBP apprised Candida Dans of the disapproval of her late husband's MRI application. The DBP offered to refund the premium of P1,476.00 which the deceased had paid, but Candida Dans refused to accept the same, demanding payment of the face value of the MRI or an amount equivalent to the loan. She, likewise, refused to accept an ex gratia6 settlement of P30K, which the DBP later offered. Respondent Estate, through Candida Dans as administratrix, filed a complaint for Collection of Sum of Money with Damages against DBP and DBP MRI Pool TC rendered a decision in favor of the Estate and against DBP. The DBP MRI Pool, however, was absolved from liability, after the trial court found no privity of contract between it and the deceased. The trial court declared DBP in
(Latin) as a favor
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ISSUE: WON DBP should be held liable? HELD. YES, but for a reduced amount. In dealing with Dans, DBP was wearing two legal hats: the first as a lender, and the second as an insurance agent. As an insurance agent, 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 Dan's application for MRI by collecting the insurance premium, and deducting its agent's commission and service fee. Art. 1897 applies. The liability of an agent who exceeds the scope of his authority depends upon whether the third person is aware of the limits of the agent's powers. There is no showing that Dans knew of the limitation on DBP's authority to solicit applications for MRI. If the third person dealing with an agent is unaware of the limits of the authority conferred by the principal on the agent and he (third person) has been deceived by the nondisclosure thereof by the agent, then the latter is liable for damages to him. Philippine Products v Primateria Anonyme Pour Le Commerce (GEN) Nov. 29, 1965 Bengzon, C.J. Societe
Facts: Benguet Consolidated, Inc., is a domestic corporation engaged in the mining industry with respondents Stanley Willimont, Eugene Kneebone, C.W. Herold, G.N. Wright, O.M. Westerfield, A.P. Davidson and William Johnson as its officers. Respondent BCI Employees and Workers Union (PAFLU) is a legitimate labor union while respondent Donaciano Andrada is a member thereof. On August 28, 1954, Andrada and several others petitioned the respondent company that they be given the rates of pay as prescribed in the collective bargaining contrac, and petitioner company, in compliance thereto made the necessary salary adjustment with the exception of complainant Andrada who, although he was reclassified from clerk second class to clerk first class, did not receive any corresponding increase in his pay. Andrada also declared that on or about August 26, 1967, on the occasion of a grievance meeting concerning the adjustment of his wages, Eugene Kneebone, one of the respondent herein, said to him, "am spending much of my time for your complaint. My time is precious. I tell you that as long as I am still connected with Benguet Consolidated, Inc., this office cannot give you any change of classification whatsoever"; That Mr. Kneebone further said, "By representing your grievance to the union, you are cutting your neck entirely, and I tell you to think it over or retract your complaint"; that complaint again met Mr. Kneebone who said to him, "The question with you is, you are too vocal of your union activities. Had you shut your mouth, your case should not have happened like that." The lower court ordered the petitioners to implement the salary scale with respect to the
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
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Sycip, Namerco's president replied that he had no choice but to finalize the contract of sale because the NPC would forfeit Namerco's bidder's bond of P45k posted by Domestic Insurance if the contract was not formalized. Three days later the New York firm cabled Namerco that it did not consider itself bound by contract that Namerco signed on its own responsibility. It informed Namerco in its letters that since latter acted contrary to its instructions, former disclaimed responbility for the contract and that responsibility for the sale rested on Namerco. 3. Rule that every person dealing with an agent is put upon inquiry and must discover upon his peril the authority of agent would apply if principal is sought to be held liable on the contract entered into by the agent BUT It is not so in this case. Here it is the agent that is sought to be held liable on a contract of sale which was expressly repudiated by the principal because the agent took chances, it exceeded its authority and in effect, it acted in its own name. Agent who exceeds limits of his authority is personally liable and the third person who contracts with the agent in such a case would be defrauded if he would not be allowed to sue the agent 3. Stipulation for liquidated damages is enforceable even if executed by agent in excess of his authority. Art. 1403 "contract entered into in name of another person by one who has acted beyond his powers is unenforceable" refers to unenforceability against the principal. HERE, the contract containing stipulation not being enforced against principal but against agent and its surety. Namerco never disclosed to NPC the cabled instructions of its principal. For that reason and because Namerco exceeded its authority, it virtually acted in its own name and not as agent and is therefore bound by contract of sale which however is not enforceable against principal. If Namerco is bound under contract of sale, then it follows it is bound by stipulation for liquidated damages. National Bank v. Welch (REG) J. Street 1923
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Dy Peh v. CIR (EARLA) PNB v. Ritratto Group (JANCES) July 31, 2001 J. Kapunan Facts: PNB-IFL, subsidiary of PNB extended a letter of credit in favor of Ritratto Inc. to secured real estate mortgages constituted over 4 parcels of land in Makati. Ritratto was not able to pay, thus PNB-IFL moved to foreclose the mortgages. Ritratto filed complaint for injunction with prayer for issuance of writ of preliminary injunction. Petitioner filed a motion to dismiss complaint for injunction on grounds of failure to state a cause of action and absence of any privity between the petitioner and respondents. Ruling: RTC issued writ of preliminary injunction; denied motion to dismiss. PNB-IFL is a wholly owned subsidiary of defendant Philippine National Bank, the suit against the defendant PNB is a suit against PNB-IFL. CA affirmed Issue: WON PNB is the real party-in-interest [NO] HELD: PNB was sued because it acted as an attorney-in-fact of PNB-IFL in initiating the foreclosure proceedings. A suit against an agent cannot without compelling reasons be considered a suit against the principal. Respondents committed the mistake of filing the case against the wrong party. They do not have a cause of action against the petitioner as the latter is not privy to the contract the provisions of which respondents seek to declare void. Disposition: petition granted. Macias & Co. v. Warner Bros., supra Salvatierra v. Garlitos (ALAIN) Facts: Salvatierra owned a parcel of land in Leyte. She entered into a contract of lease with Philippine Fibers Producers Co., Inc. allegedly a corporation duly organized and existing under the Philippine laws, as represented by its President Rufuerzo. The land will be leased for ten years and the lessor
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M.
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 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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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 becomes liable. obtained, then the principal
5. Cases Lorca v. Dineros, supra 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
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 answering the sub-issues) is answered by
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In compliance, PNB passed a resolution authorizing the granting of special crop loans to bona fide food producers, landowners or their tenants, under special conditions. Thereafter, rules and regulations in the granting of said loans were issued. Two circulars about the rules were distributed and a conference was held for the banks employees, which included defendants Bernardo Bamaspad and Bienvenido Ferrer. Bagamspad and Ferrer were then Agent and Assistant Agent, respectively, of PNBs Cotabato Agency. Ferrer personally received the circulars and attended the conference. From July 1946 to March 1947, the Cotabato Agency, under the management of defendants, granted loans to 5,000 borrowers in the total amount of P8.5 million.
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3. 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
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.
N.
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.
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 persons agents authority as to third
83
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
84
Eugenio v CA and Pepsi Cola Bottling Co. (EVA) 1994 Regalado, J. FACTS
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.
Nora Eugenio was a dealer of the softdrinks product of respondent company while her husband Alfredo used to be a route manager of Pepsi7. Pepsi filed a complaint for a collection of sum of money against the Eugenio spouses alleging an outstanding account of P94,651 representing balances both from the Quezon City and Muntinlupa plants where Nora maintains a regular charge account with them. During trial, the Eugenio spouses presented four Trade Provisional Receipts (TPRs) allegedly issued and received by them from Pepsis current route manager Jovencio Estrada of its Malate Warehouse showing payments in the total amount of P80,500. The Eugenios contend that had the amounts in the TPRs been credited on their favor, they would not be indebted to Pepsi but it is the latter who would be indebted to them in the sum of P3,546 representing overpayment. TC ruled for Pepsi. CA affirmed. ISSUE: WON the TPRs are sufficient evidence to prove Sps Eugenios payment of their accountabilities to Pepsi? HELD: YES. CA judgment annulled and set aside; Pepsi ordered to pay back petitioners overpayment. RATIO
The TPRs presented in evidence are disputably presumed as evidence of payments made on the accounts of the Eugenios. There are presumptions juris tantum in law that private transactions have been fair and regular and that the ordinary course of business has been followed. In this case, Pepsi failed to rebut the aforestated presumptions. (Pepsi failed to present Estrada as witness; it also submitted in evidence falsified documents).
Even assuming arguendo that Pepsis cashier never received the amounts reflected
Prior to the instant case, Alfredo filed an illegal dismissal case against Pepsi which was decided in his favor.
85
86
87
88
P.
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.
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Q.
Art. 1902. A third person with whom the agent wishes to contract on behalf of the principal may require the presentation of the power of attorney, or the instructions as regards the agency. Private or secret orders and instructions of the principal do not prejudice third persons who have relied upon the power of attorney or instructions shown them. 1. Effects of private or secret instructions upon third persons 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 representing rentals in arrears and/or as damages in the form of reasonable compensation for the use and occupation of the premises during the period of illegal detainer
Issue (relevant): WON there was a perfected contract of sale Held: NONE. There was no perfected contract of sale between petitioners and private respondent. Private respondent argued that it delivered the
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Bernardo then signed a document entitled Agreement Between Mr. Sosa & Popong Bernardo of Toyota Shaw, Inc, stipulating that: o All necessary documents will be submitted to Toyota Shaw (Popong Bernardo) upon arrival of Mr. Sosa from Marinduque. o The downpayment of P100,000.00 will be paid by Mr. Sosa on June 15. o The vehicle will be released for pick-up on June 17. o It was also agreed upon by the parties that the balance of the purchase price would be paid by credit financing through B.A. Finance. On June 15, Sosa and Gilbert went to Toyota to deliver the downpayment of P100,000.00.
They met Bernardo who then accomplished a printed Vehicle Sales Proposal (VSP) 928, on which Gilbert signed under the subheading conforme. In this document, the spaces provided for delivery terms were not filledup. Rodrigo Quirante, the Sales Supervisor of Bernardo, checked and approved said VSP. On June 17, Bernardo called Gilbert to inform him that the vehicle would not be ready for pick up at 10:00 a.m. but instead at 2:00 p.m. that same day.
At 2:00 p.m., Sosa and Gilbert met Bernardo at the latters office. After waiting for about an hour, Bernardo told them that the car
91
92
R.
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
93
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.
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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. If sale is made without authority, the principal is given two alternatives: 1. require payment in cash; but the interest or benefit from the sale on credit shall belong to the agent since
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2.
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 shall be entitled to any interest or benefit, which may result from such sale.
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. 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
U.
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97
It
must be noted that in Article 11748, the emphasis of the provision is on the event, not on the factors responsible for them. To avail of the exemption granted in law, it is not necessary that the persons responsible for the occurrence should be found or punished; it would only be sufficient to establish that the unforeseeable event, the robbery in this case, did take place without any concurrent fault on the debtors part, and this can be done by preponderant evidence. To require in the present action for the prior conviction of the culprits in the criminal case in order to establish the robbery as a fact, would be to demand proof beyond reasonable doubt.
Abads to jointly and severally pay the sum of 4,500, with legal interests, plus 450 for attorneys fees, and costs. It was held that the Abads failed to prove the fact of the robbery, or, if indeed it was committed, that Maria Abad was guilty of negligence when she went home without any companion, given that it was already getting dark and she was carrying a large amount of cash and valuables on the day in question, and such negligence did not free her from liability for damages. Abads appealed to the Court of Appeals, which rendered a decision in favor of the defendants, ruling that the facts of the robbery and Maria Abads possession of the pendant on that day had been duly established. The CA declared the Abads were not responsible for the loss of the jewelry on account of a fortuitous event, and relieved them from liability for damages.
As stated
in Article 11709, in order to completely exonerate the obligor from liabilities, such obligor must be free of any concurrent or contributory fault or negligence. 1961, when the robbery in question did take place, criminality had not by far reached the level attained in the present day (1971). Given this, Maria Abad could not be held negligent. Should the incident had happen at present time, where there is high incidence of crimes against persons and property, that renders travel after nightfall a matter to be sedulously avoided without suitable precaution and protection, the conduct of Maria, carrying jewelry of considerable value, would be negligent per se and would not exempt her from responsibility in the case of a robbery.
In
The
Issues: 1.WON the alleged robbery falls under the category of fortuitous event and relieved the obligor from his obligation under the contract of agency (consignment of goods for sale), pursuant to Article 1174 of the Civil Code, even though there has been no final judgment of conviction in the robbery case. 2.WON Abad, as an agent, is guilty of concurrent or contributory fault or negligence, making her liable for damages. Held/Ratio: 1. Yes, the robbery was a fortuitous event that relieved the Abads from liability. To constitute a fortuitous event that would exempt a person from responsibility, it is necessary that (1) the event must be independent of the human will (or rather, of the debtors or obligors); (2) the occurrence must render it impossible for the obligor to fulfill the obligation in a normal manner; and that (3) the
Dispositive: Petition for review DISMISSED. III. A. Obligations of Principal Article 1910 (EVA)
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.
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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2.
3.
In tort. The third persons tort liability to the principal, insofar as the agent is involved in tort, arises in three factual situations: (a) Where the third person damages or injures property or interest of the principal in the possession of the agent; (b) Where the third person colludes with the agent to injure or defraud the principal; and (c) Where the third person induces the agent to violate the contract with the principal to betray the trust reposed b him by the principal.; In respect to property received. An agent does not have legal title to property entrusted to his possession by the principal. In the absence of law or the possession of the agent of apparent authority or circumstances working on estoppels against the principal, the latter may recover property from the agents transferee. fide holders of negotiable
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. Article 1910, par. 1: When agent acts in a representative capacity, the principal is evidently liable
1.
In contract. A third person is liable to the principal upon contracts entered into by his agent, in the same manners as though the contract were entered into by the principal himself. This proposition results from the representative nature of agency.
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100
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: she is the daughter of Francisca Ocfemia, a co-respondent in this case, and the late Renato Ocfemia (deceased) the parents of her father, Renato Ocfemia, were Juanita Arellano Ocfemia and Felicisimo Ocfemia her other co-respondents Rowena O. Barrogo, Felicisimo Ocfemia, Renato Ocfemia, Jr. and Winston Ocfemia are her brothers and sisters Nio knows the five (5) parcels of land which are located in Bombon, Camarines Sur and that they are the ones possessing them which were originally owned by her grandparents, Juanita Arellano Ocfemia and Felicisimo Ocfemia. During the lifetime of her grandparents, respondents mortgaged the said five (5) parcels of land and two (2) others to the bank as shown by the Deed of Real Estate Mortgage and the Promissory Note The spouses Felicisimo Ocfemia and Juanita Arellano Ocfemia were not able to redeem the mortgaged properties consisting of seven (7) parcels of land and so the mortgage was foreclosed and thereafter ownership thereof was transferred to the bank. Out of the seven (7) parcels that were foreclosed, five (5) of them are in the possession of the respondents because these five (5) parcels of land were sold by the bank to the parents of Nio as evidenced by a Deed of Sale executed in January 1988 The aforementioned five (5) parcels of land subject of the deed of sale, have not been, however transferred in the name of the parents of Nio after they were sold to her parents by the bank because according to the Assessor's Office the five (5) parcels of land, subject of the sale, cannot be transferred in the name of the buyers as there is a need to have the document of sale registered with the Register of Deeds of Camarines Sur. Nio went to the Register of Deeds of Camarines Sur with the Deed of Sale in order to have the same registered. The Register of Deeds, however, informed her that the document of sale cannot be registered without a board resolution of bank. Nio then went to the bank, showed to if the Deed of Sale, the tax declaration and receipt of tax payments and requested the
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On January 15, 1996 the bank answered respondents' lawyer's letter informing the latter that the request for board resolution had already been referred to the board of directors of the bank with another request that the latter should be furnished with a certified machine copy of the receipt of payment covering the sale between the respondents and the bank This request of the bank was already complied with by Nio even before she brought the matter to her lawyer. On January 23, 1996 respondents lawyer wrote back the branch manager of the bank informing the latter that they were already furnished the receipts the bank was asking for and that the respondents wanted already to know the stand of the bank whether the board would issue the required board resolution as the deed of sale itself already showed that the respondents were clearly entitled to the land subject of the sale The manager of the bank received the letter which was served personally to him and the latter told Nio that since he was the one himself who received the letter he would not sign anymore a copy showing him as having already received said letter
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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
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Cuison v. CA, 227 SCRA 391 (TOPE) Facts: Petitioner Kue Cuison is a sole proprietorship engaged in the purchase and sale of newsprint, bond paper and scrap while Private respondent Valiant Investment Associates, on the other hand, is a partnership duly organized and existing under the laws. From December 4, 1979 to February 15, 1980, respondent delivered various kinds of paper products amounting to P297,487.30 to a certain Lilian Tan of LT Trading. The deliveries were made by respondent pursuant to orders allegedly placed by Tiu Huy Tiac who was then employed in the Binondo office of petitioner. It was likewise pursuant to Tiac's instructions that the merchandise was delivered to Lilian Tan. Upon delivery, Lilian Tan paid for the merchandise by issuing several checks payable to cash at the specific request of Tiu Huy Tiac. In turn, Tiac issued 9 postdated checks to private respondent as payment for the paper products. Unfortunately, sad checks were later dishonored by the drawee bank. Respondent made several demands upon petitioner to pay for the merchandise in question, claiming that Tiu Huy Tiac was duly authorized by petitioner as the manager of his Binondo office, to enter into the questioned transactions with private respondent and Lilian Tan. Respondent filed an action against petitioner for the collection of P297,487.30 representing the price of the merchandise. Trial court dismissed. Court of Appeals reversed. Issue: Whether or not Tiu Huy Tiac possessed the required authority from petitioner sufficient to hold the latter liable for the disputed transaction. Held: YES.
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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 corporation. However, under Article 1910 10of 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
10
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.
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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PNB v. Bagamaspad, 89 Phil 365 (IVY) Vicente v. Geraldez, 52 SCRA 210 (EVA) 1973 Antonio, J. Relate ruling to: Liability of principal to thirdpersons/principal ratified the unauthorized acts of his agent/full and complete knowledge by ratifier of material facts essential FACTS: HI Cement Corporation acquired from Banahaw Shale Mining Association a Placer Lease Contract covering 2 mining claims; this included three parcels of land owned by Petitioners Vicente, Bernabe and Angeles. The Corporation, several occasions, informed the petitioners, of its acquisition aforesaid placer mining claims which included the areas occupied by them. It also requested them to allow its workers to enter the area in question for exploration, development and extraction of minerals therefrom, promising to pay them reasonable amounts as damages, but they refused to allow entry of the Corporations representatives. Hence, the Corporation filed a complaint for injunction and damages against petitioners. TC issued a writ of injuction and named Commissioners to conduct a survey and plan on the suggested relocation of the boundaries of the Corporations claim. Subsequently, the respective counsels conferred among themselves the possibility of terminating the case by compromise. For this purpose, they executed and submitted for court approval a Compromise Agreement which contains: 1. That the plaintiff is willing to buy the properties subject of litigation, and the
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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.
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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
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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:
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
loan may secure the latter by pledging or mortgaging their own property. So long as valid consent was given, the fact that the loans were solely for the benefit of Parangan would not
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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. The reimbursement shall include interest on the sums advanced, from the day on which the advance was made. Obligations of principal to the agent under this Article:
1.
Obligation to advance funds. The agent is bound by his acceptance to carry out the agency; on the other hand, the principal is under obligation to provide the means with which it execute the agency. In the absence of stipulation that the agent shall advance the necessary funds, the principal must advance to the agent the sums necessary for the execution of the agency; otherwise, he cannot held the liable for damages which he may incurred by the latters non-performance.
2.
Obligation to reimburse agent for funds advance by latter. An agency is for the principals benefit. In case the agent advanced the sums necessary for the execution of the agency, whether in his own initiative or by stipulation, the said advances must be reimbursed by the principal with INTEREST from the day the advance was made. Demand is not necessary in order that delay on part of the principal shall exist. Such obligation is founded on the implied promise to repay since the proper execution of the agency involves an implied request on part of the principal to incur the necessary expenses.
Moreover, the obligation is NOT affected even if the undertaking turns out to be unsuccessful. Art. 1913. The principal must also indemnify the agent for all the damages which the execution of the agency may have caused the latter, without fault or negligence on his part. (1729)
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A. C. D.
Where damages caused by the execution of the agency principal is liable. Where damages is caused by wrongful acts of third persons principal not liable if he is not responsible for such third persons. Where agent acted upon his own account no obligation to indemnify since no agency exists in the legal sense.
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. 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 subagents 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 addressed a letter from Legaspi to the Philippine Refining Co. (which had now succeeded to the rights and liabilities of the Visayan Refining Co.), expressing its approval of said account. In this letter no dissatisfaction was expressed by the plaintiff as to the state of affairs between the parties; but about six weeks thereafter the present action was begun. The cause of action was hinged from the clause in the contract which says that Visayan was obligated to provide transportation for the copra collected by the plaintiff and deposited for shipment at various places. To quote the allegation: That, from the month of September, 1918, until the month of June, 1920, the plaintiff opportunely advised the Visayan of the stocks that the former had for shipment, and, from time to time, requested the Visayan to send vessels to take up said stocks; but that the Visayan culpably and negligently allowed a great number of days to elapse before sending the boats for the transportation of the copra to Opon, Cebu TC said theres no negligence on part of Visayan in providing for the transportation, hence they did not cause the shrinkage of the copra. Court said Visayan was still liable and the fact that it paid an amount of P15,610.41 does not mean it already paid its liability for the amount was for another claim. Plaintiff then claimed that its expense in maintaining and extending its organization for the purchase of copra in the period between July, 1920, to July, 1921, were incurred at the instance and request of the defendant, or upon
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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; (3) When the agent incurred them with knowledge that an unfavorable result would ensue, if the principal was not aware thereof; (4) When it was stipulated that the expenses would be borne by the agent, or that the latter would be allowed only a certain sum. De Castro v. CA, 384 SCRA 607 (IVY) Sta. Romana v. Imperio, 15 SCRA 625 (IVY) IV. A. Modes of Extinguishment Articles 1919, 1920 (IVY)
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)
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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. Agent authorized to contract with public in general In case the agent has general powers (as when the agent has been appointed to manage a business), innocent third persons dealing with the agent will not be prejudiced b the revocation before they had knowledge thereof. In this case, however, the fact that the revocation was advertised in a newspaper of general circulation would be sufficient warning to third persons.
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.
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
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
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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
RTC: rendered a partial decision against Layson (petitioner having, in the meantime, filed a motion to set aside the order of default, which motion was still pending resolution)
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ISSUE: WON the deed of July 31, 1931 is valid. HELD: NO. The 1928 power of attorney is not a general power of attorney but a limited one and does not give the express power to alienate the properties in question. Petioners claim that the that this defect is cured by Exh.1, which purports to be a general power of attoney given to the same agent in 1920. The making and accepting of a new power of attorney, whether it enlarges or decreases the power an agent under a prior power of attorney, must be held to supplant and revoke the latter provided there is INCONSISTENCY or incompatibility. If the new appointment with the limited powers does not revoke the general power of attorney, the execution of the second power of attorney would be a mere futile gesture. The title of Ong Guan Can not having been divested by the so-called deed of July 31, 1931, his properties are subject to attachment and execution. Garcia v. de Manzano, 39 Phil 577 ANGELA 1919 Moir, J. FACTS Narciso gave a general power of attorney to his son, Angel L. Manzano on the 9th of February, 1910, and on the 25th of March a second general power-of-attorney to his wife, Josefa Samson.
Angel, acting under his GPA sold Narcisos half interest to the steamer San Nicolas, and mortgaged 3 parcels of land in Antimonan to Juan Garcia. Upon Narcisos death, Josefa was named administratrix to Narcisos properties.
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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
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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 Facts: Petitioner CMS is a forest concessionaire engaged in the logging business, while private respondent DRACOR is engaged in the business of exporting and selling logs and lumber. On August 28, 1957, CMS and DRACOR entered into a contract of agency whereby the former appointed the latter as its exclusive export and sales agent for all logs that the former may produce, for a period of five (5) years. One of the provisions indicated that DRACOR was to handle all negotiations. 6 months before the CoAgency was about to expire CMS president went to Tokyo and found out that DRACOR sold CMS logs through Shinko Trading and earned a commission of $1 per 1000 bd. Ft. of logs. CMS claimed that this commission paid to Shinko was in violation of the agreement and that it (CMS) is entitled to this amount as part of the proceeds of the sale of the logs. CMS contended that since DRACOR had been paid the 5% commission under the agreement, it is no longer entitled to the additional commission paid to Shinko as this tantamount to DRACOR receiving double compensation for the services it rendered. CMS later shipped and sold directly to Japanes buyers without the help of DRACOR. DRACOR counterclaims for the commissions on these transactions. CA found no evidence that Shinko collected the commissions Issue: 1. WoN Shinko received the commissions 2. WoN DRACOR is entitled to the commissions on the Direct Sales of CMS to Japanese buyers Held:
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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:
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.
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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. Granting that the PoA in question was valid it would subject the land to an encumbrance. (executed within 5 yrs after issuance of the patent, the same is null and void.) Macondray, supra Coleongco v. Claparols, 10 SCRA 577 - JANCES F1. Articles 1928, 1929 ALAIN
Without just cause The reason for the indemnity imposed by law is that the agent fails in his obligation and as such, he answers for losses and damages occasioned by the nonfulfillment. With just cause If the agent withdraws from the agency for a valid reason, as when the withdrawal is based on the impossibility of continuing with the agency without grave detriment to himself, or is due to a fortuitous event, the agent cannot be held liable.
Obligation of agent to continue to act after withdrawal: 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
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
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
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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
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