Regina Dizon et al v. CA and Overland Express Lines, Inc.

act that gave rise to a perfected contract of sale, and that for failureof
G.R. No. 122544 January 28, 1999Martinez, J.
FACTS:
Overland Express Lines, Inc. entered into a Contract of Lease with Option to
Buy with petitionersinvolving a 1,755.80 square meter parcel of land situated
at corner MacArthur Highway and SouthH Street, Diliman, Quezon City.
The term of the lease was for 1 year commencing from May 16,1974 up to
May 15, 1975. During this period, Overland Express Lines was granted an
option topurchase for the amount of P3,000.00 per
square meter. Thereafter, the lease shall be on a permonth basis with a
monthly rental of P3,000.00.
For failure of Overland Express Lines to pay the increased rental of
P8,000.00 per month effective June 1976, petitioners filed an action for
ejectment against it. The lower court rendered judgmentordering Overland
Express Lines to vacate the leased premises and to pay the sum of
P624,000.00representing rentals in arrears and/or as damages in the form of
reasonable compensation for theuse and occupation of the premises during
the period of illegal detainer from June 1976 to November1982 at the
monthly rental of P8,000.00, less payments made, plus 12% interest per
annum fromNovember 18, 1976, the date of filing of the complaint, until fully
paid, the sum of P8,000.00 amonth starting December 1982, until Overland
Express Lines fully vacates the premises, and to payP20,000.00 as and by
way of attorneys fees.
ISSUE:
WON Overland Express Lines actually paid the alleged P300,000.00 to Fidel
a Dizon, asrepresentative (agent) of petitioners in consideration of the option
HELD:
No.
CA opined that the payment by Overland Express Lines of P300,000.00 as
partial payment for theleased property, which petitioners accepted (through
Alice A. Dizon) and for which an official receiptwas issued, was the operative
petitioners to deny receipt thereof, Overland Express Lines can therefore
assume that Alice A.Dizon, acting as agent of petitioners, was authorized by
them to receive the money in their behalf.CA went further by stating that in
fact, what was entered into was a conditional contract of salewherein
ownership over the leased property shall not pass to the Overland Express
Lines until it hasfully paid the purchase price. Since Overland Express Lines
did not consign to the court the balanceof the purchase price and continued
to occupy the subject premises, it had the obligation to pay theamount of
P1,700.00 in monthly rentals until full payment of the purchase price.
In an attempt to resurrect the lapsed option, Overland Express Lines gave
P300,000.00 to petitioners(thru Alice A. Dizon) on the erroneous
presumption that the said amount tendered would constitute aperfected
contract of sale pursuant to the contract of lease with option to buy. There
was no validconsent by the petitioners (as co-owners of the leased
premises) on the supposed sale entered intoby Alice A. Dizon, as petitioners
alleged agent, and Overland Express Lines. The basis for agency
isrepresentation and a person dealing with an agent is put upon inquiry and
must discover upon hisperil the authority of the agent. As provided in Article
1868 of the New Civil Code, there was noshowing that petitioners consented
to the act of Alice A. Dizon nor authorized her to act on theirbehalf with
regard to her transaction with private respondent. The most prudent
thing privaterespondent should have done was to ascertain the extent of the
authority of Alice A. Dizon. Beingnegligent in this regard, private respondent
cannot seek relief on the basis of a supposed agency.
Every person dealing with an agent is put upon inquiry
and must discover upon his peril theauthority of the agent. If he does not
make such inquiry, he is chargeable with knowledge of theagents authority,
and his ignorance of that authority will not be any excuse. Persons dealing
with anassumed agency, whether the assumed agency be a general or
special one, are bound at their peril,if they would hold the principal, to
ascertain not only the fact of the agency but also the nature andextent of the
authority, and in case either is controverted, the burden of proof is upon
them toestablish it.
MANILA MEMORIAL PARK CEMETERY, INC., petitioner, vs. PEDRO L.
LINSANGAN, respondent. G.R. No. 151319 November 22, 2004
FACTS:
Florencia Baluyot offered Atty. Pedro L. Linsangan a lot called Garden State
at the Holy Cross Memorial Park owned by petitioner (MMPCI). According to
Baluyot, a former owner of a memorial lot under Contract No. 25012 was no
longer interested in acquiring the lot and had opted to sell his rights subject
to reimbursement of the amounts he already paid. The contract was for
P95,000.00. Baluyot reassured Atty. Linsangan that once reimbursement is
made to the former buyer, the contract would be transferred to him. Atty.
Linsangan agreed and gave Baluyot P35,295.00 representing the amount to
be reimbursed to the original buyer and to complete the down payment to
MMPCI. Baluyot issued handwritten and typewritten receipts for these
payments. Baluyot verbally advised Atty. Linsangan that Contract No. 28660
was cancelled for reasons the latter could not explain, and presented to him
another proposal for the purchase of an equivalent property. He refused the
new proposal and insisted that Baluyot and MMPCI honor their undertaking.
For the alleged failure of MMPCI and Baluyot to conform to their agreement,
Atty. Linsangan filed a Complaint for Breach of Contract and Damages
against the former. For its part, MMPCI alleged that Contract No. 28660 was
cancelled conformably with the terms of the contract because of non-
payment of arrearages. MMPCI stated that Baluyot was not an agent but an
independent contractor, and as such was not authorized to represent
MMPCI or to use its name except as to the extent expressly stated in the
Agency Manager Agreement.
ISSUE: Whether or not a contract of agency exists between Baluyot and
MMPCI.
RULING: NO. The acts of an agent beyond the scope of his authority do not
bind the principal, unless he ratifies them, expressly or impliedly. Only the
principal can ratify; the agent cannot ratify his own unauthorized acts.
Moreover, the principal must have knowledge of the acts he is to ratify. No
ratification can be implied in the instant case. Atty. Linsangan failed to show
that MMPCI had knowledge of the arrangement. As far as MMPCI is
concerned, the contract price was P132,250.00, as stated in the Offer to
Purchase signed by Atty. Linsangan and MMPCI's authorized officer.
Likewise, this Court does not find favor in the Court of Appeals' findings that
"the authority of defendant Baluyot may not have been expressly conferred
upon her; however, the same may have been derived impliedly by habit or
custom which may have been an accepted practice in their company in a
long period of time." A perusal of the records of the case fails to show any
indication that there was such a habit or custom in MMPCI that allows its
agents to enter into agreements for lower prices of its interment spaces, nor
to assume a portion of the purchase price of the interment spaces sold at
such lower price. No evidence was ever presented to this effect.
REPUBLIC OF THE PHILIPPINES, et al. vs. HON. VICTORINO
EVANGELISTA, et al.
G.R. No. 156015. August 11, 2005.
Nature: PETITION for review on certiorari
Ponente: PUNO, J.
Facts:
Private respondent Legaspiis the owner of a land located
inBulacan.
Petitioner Calimlim (Lt. General),enteredinto a MOA with one
CiriacoReyes. The MOA granted Reyes a permit to hunt for
treasure in a land in Bulacan.Reyes, with petitioners, started,
digging, tunneling and blasting works on the said land of Legaspi. It
was also alleged that Calimlim assigned about 80 military
personnel to guard the area and intimidate Legaspi and other
occupants of the area from going near the subject land.
Legaspi executed anSPA appointing his nephew, private
respondent Gutierrez, as his attorney-in-fact. Gutierrez was given
the power to deal with the treasure hunting activities on Legaspis
land and to file charges against those who may enter it without the
latters authority. Legaspi agreed to give Gutierrez 40% of the
treasure that may be found in the land.
Gutierrez filed a case against petitioners for illegally entering
Legaspis land. He hired the legal services of Atty.Adaza(as
legalfees, Atty. Adaza shall be entitled to 30% of Legaspis sharein
whatever treasure may be found in the land). Upon the filing of the
complaint, a 72-hour TROwas issued against petitioners.The case
was then raffled to the court of Judge Evangelista, who then
granted an extension to the TRO.
Petitioners filed a Motion toDismiss contending. One issue that they
raised was that there is no real party-in-interest as the SPA of
Gutierrez to bring the suit was already revoked by Legaspi as
evidenced by aDeed of Revocation.
RTC ruled in favor of the private respondents. CA affirmed the
decision.
Issue: Whether the contract of agency between Legaspi and Gutierrez has
been effectively revoked by Legaspi.
Held: NO. CA decision is Affirmed.
Ratio:
A contract of agency is generally revocable as it is a personal
contract of representation based on trust and confidence reposed by the
principal on his agent.
An exception to the revocability of a contract of agency is when it is
coupled with interest, i.e., if a bilateral contract depends upon the agency.
The reason for its irrevocability is because the agency becomes part of
another obligation or agreement. It is not solely the rights of the principal but
also that of the agent and third persons which are affected. Hence, the law
provides that in such cases, the agency cannot be revoked at the sole will of
the principal.
In the case at bar, we agree with the finding of the trial and
appellate courts that the agency granted by Legaspi to Gutierrez is coupled
with interest as a bilateral contract depends on it. It is clear from the records
that Gutierrez was given by Legaspi, inter alia, the power to manage the
treasure hunting activities in the subject land. It was likewise agreed upon
that Gutierrez shall be entitled to 40% of whatever treasure may be found in
the land. When an agency is constituted as a clause in a bilateral contract,
that is, when the agency is inserted in another agreement, the agency
ceases to be revocable at the pleasure of the principal as the agency shall
now follow the condition of the bilateral agreement. Consequently, the Deed
of Revocation executed by Legaspi has no effect. The authority of Gutierrez
to file and continue with the prosecution of the case at bar is unaffected.
RALLOS v FELIX GO CHAN & REALTY COPR., Munoz-Palma
Plaintiff: Ramon Rallos
Defendant: Felix Go Chan & Sons Realty Corporation
Facts:
Concepcion and Gerundia Rallos were sisters and registered co-
owners of a parcel of land known as Lot No. 5983 of the Cadastral
Survey of Cebu covered by Transfer Certificate of Title No. 11116 of
the Registry of Cebu.
They executed a special power of attorney in favor of their brother,
Simeon Rallos, authorizing him to sell such land for and in their
behalf.
After Concepcion died, Simeon Rallos sold the undivided shares of
his sisters Concepcion and Gerundia to Felix Go Chan & Sons
Realty Corporation for the sum of P10,686.90. New TCTs were
issued to the latter.
Petitioner Ramon Rallos, administrator of the Intestate Estate of
Concepcion filed a complaint praying (1) that the sale of the
undivided share of the deceased Concepcion Rallos in lot 5983 be
unenforceable, and said share be reconveyed to her estate; (2) that
the Certificate of 'title issued in the name of Felix Go Chan & Sons
Realty Corporation be cancelled and another title be issued in the
names of the corporation and the "Intestate estate of Concepcion
Rallos" in equal undivided and (3) that plaintiff be indemnified by
way of attorney's fees and payment of costs of suit.
CFI: [Plaintiffs Complaint]
Sale of land was null and void insofar as the one-half pro-indiviso
share of Concepcion Rallos
Ordered the issuance of new TCTs to respondent corporation and
the estate of Concepcion in the proportion of share each pro-
indiviso and the payment of attorneys fees and cost of litigation
[Respondent filed cross claim against Simon Rallos(*Simon and Gerundia
died during pendency of case)]
Juan T. Borromeo, administrator of the Estate of Simeon Rallos
was ordered to pay defendant the price of the share of the land
(P5,343.45) plus attorneys fees
[Borromeo filed a third party complaint against Josefina Rallos, special
administratrix of the Estate of Gerundia]
Dismissed without prejudice to filing either a complaint against the
regular administrator of the Estate of Gerundia Rallos or a claim in
the Intestate-Estate of Cerundia Rallos, covering the same subject-
matter
CA: CFI Decision reversed, upheld the sale of Concepcions share.
MR: denied.
Issues:
 1) WON sale was valid although it was executed after the death of the
principal, Concepcion.
2) WON sale fell within the exception to the general rule that death
extinguishes the authority of the agent
3) WON agents knowledge of the principals death is a material factor.
4) WON petitioner must suffer the consequence of failing to annotate
a notice of death in the title (thus there was good faith on the part of
the Respondent vendee)
5) WON good faith on the part of the respondent in this case should
be treated parallel to that of an innocent purchaser for a value of a
land.
Held/Ratio:
(Court discussed relevant principles first)
Relationship of Agency (concept arising from principles under Art 13171 and
14032)- one party, caged the principal (mandante), authorizes another, called
the agent (mandatario), to act for and in his behalf in transactions with third
persons.
-derivative in nature, power emanating from principal
-agents acts are acts of the principal
Essential Elements:
(1) there is consent, express or implied of the parties to establish the
relationship;
(2) the object is the execution of a juridical act in relation to a third
person;
(3) the agents acts as a representative and not for himself, and
(4) the agent acts within the scope of his authority.
Extinguishment
o Generally: among others3, By the death, civil interdiction,
insanity or insolvency of the principal or of the agent
1 no one may contract in the name of another without being authorized by the
latter, or unless he has by law a right to represent him. A contract entered into in
the name of another by one who has no authority or the legal representation or
who has acted beyond his powers, shall be unenforceable, unless it is ratified,
expressly or impliedly, by the person on whose behalf it has been executed, before
it is revoked by the other contracting party.
2The following contracts are unenforceable, unless they are justified: (1) Those
entered into in the name of another person by one who hi - been given no
authority or legal representation or who has acted beyond his powers; ...
3 See Art. 1919
- death of the principal effects instantaneous and
absolute revocation of the authority of the agent
o Exceptions:
(Art. 1930) if it has been constituted in the
common interest of the latter and of the agent, or
in the interest of a third person who has accepted
the stipulation in his favor.
(Art. 1931) agent acted without knowledge of
the pricipals death and that the third person was
in good faith (both these reqs should be present)
IN THE CASE AT BAR:
1) Sale was void.
No one may contract in the name of another without being
authorized by the latter, or unless he has by law a right to represent
him (Art. 1317 of the Civil Code).
Simons authority as agent was extinguished upon Concolacions
death
2) The sale did not fall under the exceptions to the general rule that
death ipso jure extinguishes the authority of the agent
o Art. 1930 inapplicable: SPA in favor of Simon Rallos was
not coupled with interest
o Art. 1931 inapplicable:
Simon Rallos knew (as can be inferred from his
pleadings) of principal Concepcions death
For Art 1931 to apply, both requirements must be
present
3) Yes, agents knowledge of principals death is material.
Respondent asserts that: there is no provision in the Code which
provides that whatever is done by an agent having knowledge of
the death of his principal is void even with respect to third persons
who may have contracted with him in good faith and without
knowledge of the death of the principal
Court says: this contention ignored the ignores the existence of the
general rule enunciated in Article 1919 that the death of the
principal extinguishes the agency. Article 1931, being an exception
to the general rule, is to be strictly construed.
4) NO, the Civil Code does not impose a duty upon the heirs to notify
the agent or others of the death of the principal.
 If revocation was by the act of the principal: a general power
which does not specify the persons to whom represents' on
should be made, it is the general opinion that all acts, executed
with third persons who contracted in good faith, Without
knowledge of the revocation, are valid.
BUT, if revocation was due to death of the principal:
extinguishment, by operation of law, is instantaneous without
the need for notification to the parties concerned.
5) No.
Laws on agency, the terms of which are clear and
unmistakable leaving no room for an interpretation contrary to
its tenor, should apply, the law provides that death of the
principal ipso jure extinguishes the authority of the agent to sell
rendering the sale to a third person in good faith unenforceable
unless at the agent had no knowledge of the principals death
at that time (exception under Art. 1931)
Dispositive: CA Decision reversed, CFI decision affirmed. Sale was null and
void.
Caram vs. LauretaG . R . N o . L -
2 8 7 4 0 F e b r u a r y 2 4 , 1 9 8 1 FERNANDEZ,
J.:
FACTS:
On June 10, 1945, Marcos Mata conveyed
a l a r g e t r a c t o f agricult ural land covered by OCT No.
3019 in favor of Claro Lauret a, plaint iff , the respondent herein.
T he deed of absolute sale in f avor
of t h e p l a i n t i f f w a s n o t r e g i s t e r e d b e c a u s e i t w a s n o t a
c k n o w l e d g e d bef ore a not ary public or any other authorized
off icer. S ince June 10, 1945, the plaintiff Laureta had been and is in
continuous, adverse andnotorious occupation of said land, without being
molested, disturbed ors t o p p e d b y a n y o f t h e d e f e n d a n t s o r
t h e i r r e p r e s e n t a t i v e s . I n f a c t , Laureta had been paying realty
taxes due thereon and had introducedimprovements worth not less than
P20,000.00 at the time of the filingof t he complaint. On May 5, 1947,
t he same land covered by OCT No. 3 0 1 9 w a s s o l d b y
Marcos Mata to defendant Fermin Z. Caram,
J r. , p e t i t i o n e r h e r e i n . T h e d e e d o f
s a l e i n f a v o r o f C a r a m w a s acknowl
e d g e d b e f o r e A t t y. A b e l a r d o A p o r t a d e r a . O n D e c e m b e r
9 , 1947, the second sale between Marcos Mata and Fermin Caram, Jr.
wasr e g i s t e r e d w i t h t h e R e g i s t e r o f D e e d s . O n t h e s a m e
d a t e , T r a n s f e r Certificate of Title No. 140 was issued in favor of Fermin
Caram Jr.Thed e f e n d a n t F e r m i n C a r a m J r .
claimed that he has no knowledge ori n f o r m a t i o n a b o
ut the previous encumbrances, transactions, an
d alienations in favor of plaintiff until the filing of the complaints.
ISSUE:
W h e t h e r o r n o t t h e k n o w l e d g e p e t i t
i o n e r o f a p r i o r unregistered sale of a titled p
r o p e r t y a t t r i b u t a b l e t o p e t i t i o n e r a n d equivalent in law of
registration of sale.
HELD:
Yes. There is no doubt then that Irespe and Aportadera,
actinga s a g e n t s o f C a r a m , p u r c h a s e d t h e p r o p e r t y
o f M a t a i n b a d f a i t h . Applying the principle of agency,
Caram as principal, should also be deemed to have acted in bad
faith.Since Caram was a registrant in badfaith, the situation is as if
there was no registration at all. A possessor i n g o o d f a i t h i s
one who is not aware that there exists in his title
o r mode of acquisition any flaw which invalidates it. Laureta
was first inpossession of the property. He is also a possessor
in good faith. It is true that Mata had alleged that the deed of sale in favor
of Laureta wasprocured by force. Such defect, however, was
cured when, after the
Jerome C. Aviso
lapse of four years from the time the intimidation ceased, Marcos Matalost
both his rights to file an action for annulment or to set up nullity of the
contract as a defense in an action to enforce the same.
Jerome C. Aviso