Part 2 Case Digest June 14, 2014

8/11/2019 Part 2 Case Digest June 14, 2014

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price it offered for the corn. Damerco was to open adomestic letter of credit, which shall be available to theNARIC drawing therefrom through sight draft withoutrecourse. The availability of said letter or letters of credit tothe NARIC was dependent upon the issuance of the exportpermit. The payment therefor depended on the importationof the collateral goods, that is after its arrival.

The first half of the collateral goods were successfullyimported. Due to the inferior quality of the corn, it had to bereplaced with more acceptable stock. This caused suchdelay that the letters of credit expired without the NARICbeing able to draw the full amount therefrom. Checks andPN were issued by DAMERCO for the purpose of securingthe unpaid part of the price of the corn and as guaranty thatDAMERCO will purchase the corresponding collateralgoods.

But because of the change of administration in thegovernment, barter transactions were suspended. Hence,DAMERCO was not able to import the remaining collateralgoods.

NARIC instituted in the CFI of Manila against DAMERCOand Fieldmen s Insurance Co. Inc. an action for recovery ofa sum of money representing the balance of the value ofcorn and rice exported by DAMERCO.

The trial court rendered in favor of NARIC orderingDAMERCO and Fieldmen s Insurance Co. Inc., to pay, jointlyand severally. CA reversed the trial court s decision andrendered a new judgement dismissing the complaint aspremature and for lack of cause of action. Hence this petitionfor certiorari.

ISSUE: Whether DAMERCO only acted as an agent ofNARIC or is a buyer

HELD: the petition for review is denied and the resolution ofthe CA appealed from is hereby affirmed.

AGENT

Clearly from the contract between NARIC and DAMERCO:bids were previously called for by the NARIC for thepurchase of corn and rice to be exported as well as of theimported commodities that will be brought in, but saidbiddings did not succeed in attracting good offers.Subsequently, Damerco made an offer. Now, to be sure, thecontract designates the Naric as the seller and the Damercoas the buyer. These designations, however, are merelynominal, since the contract thereafter sets forth the role ofthe buyer (Damerco) as agent of the seller in exportingthe quantity and kind of corn and rice as well as in importingthe collateral goods thru barter and to pay theaforementioned collateral goods.

The contract between the NARIC and the DAMERCO is

bilateral and gives rise to a reciprocal obligation. The saidcontract consists of two parts: (1) the exportation by theDAMERCO as agent for the NARIC of the rice and corn; and(2) the importation of collateral goods by barter on a back toback letter of credit or no-dollar remittance basis. It is evidentthat the DAMERCO would not have entered into theagreement were it not for the stipulation as to the importationof the collateral goods which it could purchase.

It appears that we were also misled to believe that theDamerco was buying the corn. A closer look at the pertinentprovisions of the contract, however, reveals that the price as

stated in the contract was given tentatively for the purpose offixing the price in barter. It should likewise be stressed thatthe aforesaid exportation and importation was on a no -dollarremittance basis. In other words, the agent, hereindefendant Damerco, was not to be paid by its foreign buyerin dollars but in commodities. Damerco could not get paidunless the commodities were imported, and Damerco wasnot exporting and importing on its own but as agent of the

plaintiff, because it is the latter alone which could export andimport on barter basis according to its charter. Thus, unlessDamerco was made an agent of the plaintiff, the formercould not export the corn and rice nor import at the sametime the collateral goods. This was precisely the intention ofthe parties.

He is not to be considered a buyer, who should be liable forthe sum sought by NARIC because the contract itself clearlyprovides the Damerco was to export the rice and corn, ANDTO BUY THE collateral goods. There is nothing in thecontract providing unconditionally that Damerco was buyingthe rice and corn. To be more specific, if the agreement was

just a sale of corn to Damerco, the contract need not specifythat Damerco was to buy the collateral goods.

ALFRED HAHN, petitioner, vs. COURT OF APPEALS andBAYERISCHE MOTORENWERKEAKTIENGESELLSCHAFT (BMW), respondents.January 22, 1997

Facts:1 .Alfred Hahn is a Filipino citizen doing business under thename and style "Hahn-Manila."2. Bayerische Motoren Werke Aktiengesellschaft (BMW) is anonresident foreign corporation existing under the laws ofthe former Federal Republic of Germany, with principal officeat Munich, Germany.3. In 1963, Hahn executed in favor of BMW a Deed of

Assignment with Special Power of Attorney whichessentially, makes Hahn as the exclusive dealer of BMW inthe Philippines. Moreover, it stated there that Hahn andBMW shall contin ue business relations as has been usual inthe past without a formal contract."4. In 1993, BMW and Columbia Motors Corp (CMC) had ameeting which would grant CMC exclusive dealership ofBMW cars.5. Hahn was informed later that BMW was dissatisfied withhow it carrying its business. However, BMW expressedwillingness to continue business relations with the petitioneron the basis of a "standard BMW importer" contract,otherwise, it said, if this was not acceptable to petitioner,BMW would have no alternative but to terminate petitioner sexclusive dealership effective June 30, 1993.6. Hahn protested alleging that such termination is a breachof the Deed of Assignment. Hahn insisted that as long as theassignment of its trademark and device subsisted, heremained BMW's exclusive dealer in the Philippines becausethe assignment was made inconsideration of the exclusivedealership.

7. BMW, however, went on to terminate its dealership withHahn.8. Hahn filed a complaint for specific performance anddamages in the RTC. RTC issued a writ preliminaryinjunction.9. BMW appealed to the CA. CA reversed on the ground thatHahn is not an agent of BMW and that BMW is not doingbusiness in the Phils. By virtue of the latter, the writ ofpreliminary injunction should not have been issued sinceRTC did not have jurisdiction over it.

Issues


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FACTS:1887-1893 (1 st period) 1893-1902 (2 nd period)

FEDERICO ANTONIO1902-1904 (3 rd period)

FRANCISCOBefore DE LA PENA went to Spain, he executed a

power of attorney in favor of FEDERICO and 3 other people.Their task is to represent him and administer various

properties he owned in Manila. FEDERICO took charge inNov. 1887.After a few years, FEDERICO wrote a letter to DELA PENA. It contains a request that DE LA PENA assign aperson who might substitute FEDERICO in the event that heleaves the Philippines because one of the agents died andthe other 2 are unwilling to take charge. DE LA PENA did notanswer the letter there was neither approval nor objectionon the accounts and no appointment of another person whomight substitute FEDERICO. Because of health reasons,FEDERICO went to Spain. Before he departed, he sentanother letter to DE LAPENA a summary of accounts andinforming that he will be leaving the Philippines and that heturned over the administration to ANTONIO (thoughFEDERICO stated that if DE LA PENA is not happy with this,DE LA PENA must send ANTONIO a new power ofattorney).

DE LA PENA files in court for the collection ofrevenue from his accounts which was handled byFEDERICO. DE LA PENA alleges that FEDERICO has onlyremitted 1.2k and still owes him roughly 72k. Furthermore,DE LA PENA seeks to hold FEDERICO liable for theadministration from the period of 1887 until 1904.FEDERICOasserts that he cannot be liable for the period after herenounced his agency. Furthermore FEDERICO argues thathis renunciation and appointment of a substitute was legalfor there was no objection on the part of DE LA PENA.

ISSUE:Whether there was a valid agency in the case of ANTONIO(2nd period)

HELD:There was an implied agency in the case of

ANTONIO. DE LA PENA created an implied agency in favorof ANTONIO because of his silence on the matter for anumber of years.

There was a valid renunciation in the case ofFEDERICO. His reason for leaving the country is legitimate.Furthermore, he gave notice to DE LA PENA about hissituation in which the latter failed to give his objection.

Being a valid agency on the part of ANTONIO anda valid renunciation on the party of FEDERICO, it mustfollow that the liability of FEDERICO only extends up to thepoint before his renunciation of the agency (1 st period).

DOCTRINE:The implied agency is founded on the lack of

contradiction or opposition, which constitutes simultaneousagreement on the part of the presumed principal to theexecution of the contract.

The agent and administrator who was obliged toleave his charge for a legitimate cause and who dulyinformed his principal, is thenceforward released and freedfrom the results and consequences of the management ofthe person who substituted him with the consent, even tacitthough it be, ofhis principal.

SIDE NOTE ON POWER OF ATTORNEY:It was also argued by DE LA PENA that there was noauthority on the part of FEDERICO to appoint a substitute.The COURT ruled that the power of attorney given by DE LAPENA to FEDERICO did not include a power to appoint a

substitute. Nevertheless, it was pointed out that theappointment made by FEDERICO was not based on thepower of attorney of DE LA PENA. The appointment wasgrounded on a new power of attorney FEDERICO himselfexecuted in favor of ANTONIO. Thus, there was no violationincurred by FEDERICO. And as stated in the case, DE LAPENA was duly informed of this but nevertheless kept hissilence on the matter.

CONDE vs. CAG.R. No. L-40242 December 15, 1982

FACTS:1. Margarita Conde, Bernardo Conde and the petitionerDominga Conde, as heirs of Santiago Conde, sold with rightof repurchase, within ten (10) years, a parcel of agriculturalland with to Casimira Pasagui, married to Pio Altera), forP165.00.2. On 17 April 1941, the Cadastral Court of Leyteadjudicated Lot No. 840 to the Alteras" subject to the right ofredemption by Dominga Conde.3. Original Certificate of Title No. N-534 in the name of thespouses Pio Altera and Casimira Pasagui was thentranscribed in the "Registration Book" of the Registry ofDeeds of Leyte.4. On 28 November 1945,private respondent Paciente Cordero, son-in-law oftheAlteras, signed a document in the Visayan dialect.Neither of the vendees-a-retro, Pio Altera nor CasimiraPasagui, was a signatory to the deed.5. Petitioner maintains that because Pio Altera was very ill

at the time, Paciente Cordero executed the deed of resalefor and on behalf of his father-in-law. Petitioner further statesthat she redeemed the property with her own money as herco-heirs were bereft of funds for the purpose6. After which, Pio Altera sold the disputed lot to the spousesRamon Conde and CatalinaT. Conde (not related topetitioner).7. Contending that she had validly repurchased the lot inquestion in 1945, Dominga Conde filed, a Complaint againstthe respondents for quieting of title to real property anddeclaration of ownership.

ISSUE:WON there was an implied agency when Cordero signed therepurchase document

HELD:YES.

If petitioner had done nothing to formalize herrepurchase, by the same token, neither have the vendees-a-retro done anything to clear their title of the encumbrancetherein regarding petitioner s right to repurchase. No newagreement was entered into by the parties as stipulated inthe deed of pacto de retro, if the vendors a retro failed toexercise their right of redemption after ten years. If,petitioner exerted no effort to procure the signature of Pio

Altera after he had recovered from his illness, neither did the

Alteras repudiate the deed that their son-in-law had signed.Thus, an implied agency must be held to have been createdfrom their silence or lack of action, or their failure torepudiate the agency.

Possession of the lot in dispute having beenadversely and uninterruptedly with petitioner from1945 whenthe document of repurchase was executed, to 1969, whenshe instituted this action, or for 24 years, the Alteras must bedeemed to have incurred in laches.

Lopez vs. Tan TiocoIbenta mo ang asukal pag sinabi kongibenta mo.


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FACTS:Lopez and Tan Tioco entered into a verbal contract thatshe ll deliver certain sugar to Tan Tioco which he obligatedhimself to store until he receives instructions from her to sellthem. She delivered the piculs of sugar and instructed to sellin on Sept 1904 but def did not do so. Pet filed action. Defdenies allegations.

Issue:WON the defendant was in default.Held:Yes. He was in default from the time the Pet demanded todeliver or do something, or the fulfillment of the obligation.Neither the contract nor the law demands to make judicialdemand than extrajudicial. The price of the sugar should befrom the time she instructed the def to sell them. Delay inPerformance: Delay in selling the sugar upon instructions.

HARRY E. KELLER ELEC. CO. vs. RODRIGUEZ

FACTS:

sold a Mathews electric plant to Rodriguez.s for

the Mathews electric plant.

then installed by Cenar.

fact presented a bill to Rodriguez.

payment would just be made in Manila.

Montelibano.

Rodriguez, Rodriguez said that he already paid Montelibano.

Rodriguez.

1.) That the bill was given to Montelibano for collection.2.) That Harry represented Montelibano as an agentauthorized to collect.

ISSUE:Was the lower court correct in ruling that Montelibano wasan agent of Harry Keeler authorized to make collection?

RULING:NO, the lower court ruling is hereby reversed.

odriguez (which was thereceipt given by Montelibano) there was no showing thatmontelibano was an agent

did not contain that Montelibano had authority toreceive money

Rodriguez to Montelibano was at hisown risk.

Rodriguez failed to exercise ordinary prudence and

reasonable diligence in making sure that Montelibano was infact authorized to receive payment.

authority:1.) The law does not presume that an agency exists. it has

to be proven through facts2.) The agent cannot establish his authority3.) Authority cannot be established through mere rumor orgeneral reputation4.) General authority is not equal to unlimited authority5.) That every authority must find its ultimate source in someact or omission by the principal

cautious

without the concurrence of the principal

Important provisions: Art 1162: Payment must be made to the person in whosefavor the obligation is constituted, or to another authorized to

receive it in his name. Art 1727: The principal shall be liable as to matters withrespect to which the agent has exceeded his authority onlywhen he ratifies the same expressly or by implication.

COMPANIA MARITIME V LIMSON (PATAJO, J., 1986)

Facts:Compania filed a complaint against Limson for collection ofthe sum of P44,701.54,which is the unpaid accounts forpassage and freight on shipment of hogs, cattle andcarabaos abroad Compania s vessel. Limson denied liability claiming that he was not the shippernor had he authorized said shipments. He further set up acounterclaim for the refund of the rebate he was entitled topursuant to their agreement. The Court appointed a commissioner to examine theaccounts involved before proceeding with the hearing.The Report indicated that Limson s claim amounted toP676, 416.05, and Compania s claim to P545,394.24.Compania s claim was based among others on several billssigned by one Perry with Limson as the shipper andconsignee, and some for others as shippers and consignee.CFI: Ruled that Perry was not Limson s authorizedrepresentative. Thus, he was not liable for the bills of ladingnot signed by him or his authorized representatives.

Issue:WON the bills of lading signed by Perry should be accepted.

Held/Ratio:YES.

A shipper may be h eld liable for freightage on bills of ladingsigned by another person where the shipper appears asshipper or consignee, bills of lading where persons otherthan Limson appear as shipper, and bills of lading not signedby the shipper where the testimonial evidence shows thatthe goods shipped actually belong to him as the shipper.As regards the controverted bills of lading signed by "Perry"with Limson as shipper or consignee, a witness testified thatthe signatures therein are those of Cipriano Magtibay alias"Perry" who took delivery of the cargoes stated therein aftersigning the delivery receipts. He was known to be the regularrepresentative of Limson.With respect to the unsigned bills of lading, delivery receiptswere issued upon delivery of the shipments. Witnessestestified that the ordinary procedure at Compania's terminaloffice was to require the surrender of the original bill oflading, but when the bill of lading cannot be surrenderedbecause it had not arrived or received by the consignee or

assignee, the delivery of the cargo was authorized just thesame, and the delivery receipt was prepared based on theship's cargo manifests or ship's copy of the bill of lading.This accommodation was especially given Limson, becausedefendant was a regular shipper and ship chandler ofplaintiff, and was a compadre of Cabling.Regarding the controverted bills of lading in the name ofother persons as shippers or consignees and signed byPerry, it was established that said bills of lading were forcattle and hogs-purchased by the defendant from his"viajeros" in Manila which were delivered to and received byLimson.


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AIR PHILIPPINES CORPORATION, petitioner, vs.INTERNATIONAL BUSINESSAVIATION SERVICESPHILS., INC., respondent

FACTS: The Air Philippines, Inc., API, was in need of theservices of a business establishment to ferry its B-737airplane from the United States of America to thePhilippines, via Subic Bay International Airport, at OlongapoCity. API, through Captain Alex Villacampa, its Vice-President for Operations, engaged the services ofInternational Business Aviation Services Phils., Inc., IBASPI,as its agent to look for and engage, for API, a businessenterprise to ferry the airplane. IBASPI did engage theservices of Universal Weather & Aviation, Inc., UWAI, toferry the airplane to the Philippines, where API took deliveryof the plane.

During the pre-trial, on December 7, 1998, Atty.Manolito Manalo, counsel of the petitioner, appeared butwithout any Special Power o f Attorney from the petitioner.The petitioner failed to file its Pre -Trial Brief . Among thedocumentary evidence adduced by the respondent were thexe rox copy of the Certification of Captain Alex Villacampa,and the Memorandum of Rodolfo Estrellado.

The petitioner filed aMotion for New Trial on the grounds that:(a) It was deprived of itsday in court due to the grossnegligence of its former counsel, Atty. Manolito A. Manalo;(b) The Receipt/Agreement executed by Atty. Manolito A.Manalo, in behalf of the petitioner, was unauthorized asthere was no Resolution of the Board of Directorsauthorizing him to execute said Receipt/Agreement and,hence, said counsel acted beyond the scope of his authority;(c) The claim of IBASPI was excessive and unjustified; and(d) the petitioner never agreed to pay the [respondent] acommission of 10% of the billings of UWAI.

ISSUE: Whether the Motion for New Trial should be denied

HELD:The act performed by the counsel within the scope

ofa general or implied authority is regarded as an act of theclient, even the mistake of the counsel will result to anunfavorable judgment against the client. Petitioner s counselis guilty of simple, not gross, negligence. We cannotconsider as gross negligence his resort to dilatory schemes,presentation and assessment of the issues and their justresolution.

Counsel s patent carelessness in citing conflictingreasons in his Motions for Reconsideration verily displays hislack of competence, diligence and candor, but not hisrecklessness or total want of care.

Indeed, the lawyer s failure to live up to thedictates of the canons of the legal profession makes himanswerable to both his profession and his employer. Thenew trial is unwarranted due to the mere negligence of thecounsel.

TIRSO UYTENGSU III vs. ATTY. JOSEPH M. BADUELFACTS:

Complainant is one of the heirs of Tirso Uytengsu,Jr. He and his co-heirs had a pending patent application. Healleges that sometime in December 1998 respondentrequested him to sign a special power of attorney (SPA)

authorizing Luis Wee (Wee) and/or Thomas Jacobo(Jacobo) to claim, demand, acknowledge and receive on hisbehalf the certificates of title from the Register of Deeds,General Santos City, Department of Environment andNatural Resources and from any government office oragency due to complainant and his co-heirs by reason oftheir application for Homestead Patent. Complainant refusedto sign the SPA as he wanted to obtain the documents

personally. The respondent argues that the allegations ofcomplainant are purely hearsay. He stresses that complaintwas instituted to harass him because he was the counsel ofan opposing litigant against complainant s corporation in anejectment case entitled General Mi lling Corporation v. Cebu

Automatic Motors, Inc. and Tirso Uytengsu I II. Complainantcharges that respondent committed an act meritingdisbarment when the latter caused to have a special powerof attorney, which the former refused to sign earlier,executed by Mrs. Connie Kokseng, former guardian ofcomplainant and his co-heirs, authorizing certain individualsto secure the release from the Register of Deeds and othergovernment offices in General Santos City, titles and otherdocuments pertaining to complai nant s and his co - heirshomestead application.

ISSUE:Whether or not the respondent has the authority to representthe complainant in their homestead patent application.

HELD:The relation of attorney and client is in many

respects one of agency and the general rules of ordinaryagency apply to such relation. The extent of authority of alawyer, when acting on behalf of his client outside of court, ismeasured by the same test as that which is applied to anordinary agent.

Such being the case, even respondent himself canacquire the certificates of title and other documents withoutneed of an SPA from complainant and his co-heirs.

In addition, the Court agrees with the investigatingcommissioner that the allegations of complainant constitutesmere hearsay evidence and may not be admissible in anyproceeding. It was proven that the case at bar is withoutmerit and that evidences are weak and proved to be justhearsay.

J-PHIL MARINE, INC. and/or JESUS CANDAVA andNORMAN SHIPPING SERVICES VS NATIONAL LABORCOMMISSION and WARLITO E. DUMALAOG561 SCRA 675 (2008)

FACTS: A compromise agreement is valid as long as theconsideration is reasonable and the employee signed thewaiver voluntarily, with a full understanding of what he wasentering into.

Worked as a cook on aboard vessels plying overseas,

Warlito E. Dumalaog was employed as a cook on boardvessels plying overseas. He filed a pro-forma complaint onMarch 4,2002 before the National Labor RelationsCommission (NLRC) against J-Phil Marine, Inc., its thenpresident Jesus Candava, and its foreign principal NormanShipping Services.

The Labor Arbiter dismissed the complaint for lack of merit.On appeal, the NLRC reversed the decision of the Labor

Arbiter. The Court of Appeals affirmed the dismissal forfailure to attach to the petition all material documents and for


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defective verification and certification. Consequently, apetition was filed before the Court of Appeals.While the case was pending in the Supreme Court, therespondent entered into a compromise agreement andsigned Quitclaims and Release. The same has beensubscribed and sworn to before the Labor Arbiter.

Accordingly, the case was dismissed.

ISSUES:Whether or not the compromise agreement entered into bythe respondent, without his counsel, is valid

HELD: A compromise agreement is valid as long as theconsideration is reasonable and the employee signed thewaiver voluntarily, with a full understanding of what he wasentering into. All that is required for the compromise to bedeemed voluntarily entered into is personal and specificindividual consent. Thus, contrary to Dumalaoag scontention, the employee s counsel need not be present atthe time of the signing of the compromise agreement.

The relation of attorney and client is in many respects one ofagency and the general rules of agency apply to suchrelation. The acts of an agent are deemed the acts of theprincipal only if the agent acts within the scope of hisauthority. The circumstances of this case indicate thatDumalaoag s counsel is acting beyond the scope of hisauthority in questioning the compromise agreement.

COSMIC LUMBER CORPORATION V CA

FACTS* Cosmic Corporation, through its General

Manager executed a Special Power of Attorney appointingPaz G. Villamil-Estrada as attorney-in-fact to initiate, instituteand file any court action for the ejectment of third personsand/or squatters of the entire lot 9127 and 443 for the saidsquatters to remove their houses and vacate the premises inorder that the corporation may take material possession ofthe entire lot

* Paz G. Villamil Estrada, by virtue of her power ofattorney, instituted an action for the ejectment of privaterespondent Isidro Perez and recover the possession of aportion of lot 443 before the RTC

* Estrada entered into a Compromise Agreementwith Perez, the terms and conditions such as: In order for Perez to buy the said lot he is presentlyoccupying, he has to pay to plaintiff through Estada the sumof P26,640 computed at P80/square meter and that CosmicLumber recognizes ownership and possession of Perez byvirtue of this compromise agreement over said portion of 333sqm of lot 443 and whatever expenses of subdivision,registration and other incidental expenses shall beshouldered by Perez* although the agreement was approved by the trial courtand the decision became final and executory it was notexecuted within the 5 year period from date of its finality

allegedly due to the failure of Cosmic Lumber to produce theowner s duplicate copy of title nee ded to segregate from lot443 the portion sold by the attorney-in-fact, Paz Estrada toPerez under the compromise agreement

ISSUE: W/N there is a contract of agency between CosmicLumber, principal and Paz Estrada, agent thus binding theprincipal over the compromise agreement made by the agentto a third person, Perez in selling the portion of the saidproperty

RULING: No

The authority granted Villamil-Estrada under thespecial power of attorney was explicit and exclusionary: forher to institute any action in court to eject all persons foundon lots number 9127 and 443 so that Cosmic Lumber couldtake material possession thereof and for this purpose, toappear at the pre-trial and enter into any stipulation of factsand/or compromise agreement but only insofar as this wasprotective of the rights and interests of Cosmic Lumber in the

property Nowhere in this authorization was Villamil-Estradagranted expressly or impliedly any power to sell the subjectproperty nor a portion thereof

Neither can a conferment of the power to sell bevalidly inferred from the specific authority to enter into acompromise agreement because of the explicit limitationfixed by the grantor that the compromise entered into shallonly be so far as it shall protect the rights and interest of thecorporation in the aforementioned lots.

In the context of special investiture of powers toVillamil-Estrada, alienation by sale of an immovable certainlycannot be deemed protective of the right of Cosmic Lumberto physically possess the same, more so when the land wasbeing sold for a price of P80/sqm , very much less than itsassessed value of P250/sqm and considering further thatplaintiff never received the proceeds of the sale

When the sale of a piece of land or any interestthereon is through an agent, the authority of the latter shallbe in writing; otherwise, the sale should be void. Thus, theauthority of an agent to execute a contract for the sale of realestate must be conferred in writing and must give himspecific authority, either to conduct the general business ofthe principal or to execute a binding contract containingterms and conditions which are in the contract he didexecute

For the principal to confer the right upon an agentto sell real estate, a power of attorney must so express thepowers of the agent in clear and unmistakable language

It is therefore clear that by selling to Perez aportion of Cosmic Lumber s land through a compromiseagreement, Villamil-Estrada acted without or in obviousauthority. The sale ipso jure is consequently void and so isthe compromise agreement. This being the case, the

judgment based thereon is necessarily voidWhen an agent is engaged in the perpetration of a

fraud upon his principal for his own exclusive benefit, he isnot really acting for the principal but is really acting forhimself, entirely outside the scope of his agency.

Linan v.s. Puno 31 Phil. 357 (1915)

FACTS:

Diego Linan, a resident of Daet, Ambas, Camarinestemporarily lived but owned a parcel of land in Tarlac. Heexecuted a document conferring sufficiently to Marcos P.Puno on May 16, 1908, the power to represent him topurchase, sell, collect and pay as well as sue and be suedbefore any authority, appear before the cours of justice and

administrative officers in any proceeding or businessconcerning the good administration and advancement of ofmy said interests and may in necessary cases, appointattorneys at law or in fact to represent him. On June 1911,Puno sold and delivered the said land to the otherdefendants namely: Enrique, Vicente, Aquilina andRemedios all surnamed Maglanok for a sum of Php 800.00.The plaintiff alleged that the document did not confer uponPuno the power to sell the property and prayed that the salebe set aside; the land be returned to him with damages.Puno contended that the sale was valid and prayed to beprayed from liability.


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ISSUE:

Whether or not the sale was valid as performed by Puno asan agent of Linan?

HELD:

YES. The Supreme Court ruled in favor of Puno. The Court

examined the power conferred upon. The words administer,purchase, sell etc. has equal force with each other. Thereseemed to be no good reason for saying that Puno hadauthority to administer and not to sell when to sell wasadvantageous to the plaintiff in the administration of hisaffairs. In reaching this conclusion, the Court took intoaccount the fact that the plaintiff delayed his action to annulsaid sale from June 1911 until February 15, 1913.

Strong vs. Repide

FACTS: Among the lands comprising the friar lands are the

Dominican lands, the only valuable asset owned by thecorporation Philippine Sugar Estates Development CompanyLimited (Philippine Sugar Estates). Francisco GutierrezRepide (Repide), defendant, was the majority stockholderand one of the five directors of Philippine Sugar Estates. Hewas likewise elected by the board as the agent andadministrator general of such company.

The factual backdrop being during US occupation,the US Government wanted to secure title over the friarlands. To accomplish this objective, Governor for thePhilippines entered into negotiations for the purchase of theDominican lands, during which Repide representedPhilippine Sugar Estates. The first offer of the Governor wasto purchase the subject lands in the amount of$6,043,219.47. As the majority stockholder of PhilippineSugar Estates and without prior consultation with the otherstockholders, Repide rejected the offer. For the second offer,the purchase price was increased to $7,535,000.

While negotiations for the second offer wereongoing and while still holding out for a higher price of theDominican lands, Repide took steps to purchase the 800shares of stock of Philippine Sugar Estates. These shareswere owned by Mrs. Eleanor Strong (Strong) which werethen in the possession of her agent, F. Stuart Jones (Jones).Repide, instead of seeing Jones, employed Kauffman wholater on employed Sloan, a broker, to purchase the shares ofStrong. Jones sold the 800 shares of Strong for 16,000Mexican currency. For this sale transaction a check of oneRueda Ramos was issued.

Later on, the negotiations for the purchase of theDominican lands were concluded and a contract of sale wassubsequently executed. This sale transaction increased thevalue of the shares of stocks originally owned by Strong from16,000 Mexican currency to 76,256 US currency. During thenegotiations regarding the purchase of the shares of stock ofStrong, not one word of the facts affecting the value of thisstock was made known to her nor her agent, Jones. After the

sale of Dominican lands and after the purchase of the 800shares of Strong, Repide became the owner of 30,400 out ofthe 42,030 shares of Philippine Sugar Estates.

Strong filed a complaint for the recovery of her 800shares. She argued that her agent Jones had no authority tosell her shares and that Repide fraudulently concealed thefacts affecting their value.

ISSUE:Was there fraud in effecting the purchase of Strong sshares?

RULING:Yes. With the factual circumstances of this case, it became

the duty of Repide, acting in good faith, to state the factsbefore making the purchase of Strong s shares. That Repidewas one of the directors of Philippine Sugar Estates was butone of the facts upon which liability is asserted. He was notonly a director, but he owned three-fourths of the shares ofits stock, and was, at the time of the purchase of the stock,

administrator general of the company with large powers andengaged in the negotiations which finally led to the sale ofthe company s lands at a price which greatly enhanced thevalue of the stock. He was the negotiator for the sale of theDominican lands and was acting substantially as the agentof the shareholders of Philippine Sugar Estates by reason ofhis ownership of the shares in the company. Because ofsuch ownership and agency, no one knew as well as hedoes about the exact condition of the negotiations. He wasthe only one who knew of the probability of the sale of theDominican lands to the government and of the probablepurchase price. Under these circumstances, Repideemployed an agent to purchase the stock of Strong,concealed his own identity and his knowledge of the state ofnegotiations and their probable result. The concealment ofhis identity while procuring the purchase of the stock, by hisagent, was in itself strong evidence of fraud on the part ofRepide. By such means, the more easily was he able toavoid questions relative to the negotiations for the sale ofDominican lands and actual misrepresentations regardingthat subject. He kept up the concealment as long as hecould by giving the check of a third person Rueda Ramos,for the purchase money.

This move of Repide was a studied and intentionalomission to be characterized as part of the deceitfulmachinations to obtain the purchase without giving anyinformation whatever as to the state and probable result ofthe negotiations and to obtain a lower price for the shares ofStrong. After the purchase of stock, he continuednegotiations for the sale of the Dominican lands as theadministrator general and eventually entered into a contractof sale. The whole transaction gives conclusive evidence ofthe overwhelming influence Repide had in the negotiationsand it is clear that the final consummation was in his handsat all times.

KATIGBAK vs. TAI HING CO.

FACTS:1) Gabino Barreto Po Ejap, as attorney-in-fact of Po Tecsi,sold in favor of Jose M. Katigbak the subject land; after saidsale, Po Tecsi leased the property sold, from Gabino BarretoPo Ejap, who administered it in the name of Jose M.Katigbak, at a rental of P1,500 per month, payable inadvance, leaving unpaid the rents accrued from that dateuntil his death which occurred on November 26, 1926,having paid the accrued rents up to October 22, 1925;

2) From November 26, 1926, the defendants Po Sun Suyand Po Ching leased said land for the sum of P1,500 per

month; on February 11, 1927, Po Sun Suy was appointedadministrator of the estate of his father Po Tecsi, and filedwith the court an inventory of said estate including the landin question; and on May 23, 1927, Jose M. Katigbak sold thesame property to Po Sun Boo.

3) Take note that all these transfers happened even thoughthe power of attorney was not registered in the Registry ofdeeds.

ISSUE:


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Can the Principal be bound by the acts of the agent eventhough the power of attorney is not registered the Registry ofdeeds?

RULING:YES1) Inasmuch as in accordance with section 39 of said Act

No. 496, Every applicant receiving a certificate of title in

pursuance of a decree of registration, and every subsequentpurchaser of registered land who takes a certificate of titlefor value in good faith, shall hold the same free of allencumbrance except noted on said certificate, everydocument which in any manner affects the registered land isineffective unless it is recorded in the registry of deeds. Butsuch inefficacy only refers to third persons who, in goodfaith, may have acquired some right to the registered land.

2) While it is true that a power of attorney not recorded in theregistry of deeds is ineffective in order than an agent orattorney-in-fact may validly perform acts in the name of hisprincipal, and that any act performed by the agent by virtueof said with respect to the land is ineffective against a thirdperson who, in good faith, may have acquired a right thereto,it does, however, bind the principal to acknowledge the actsperformed by his attorney-in-fact regarding said property(sec. 50, Act No. 496).

3) In the present case, while it is true that the non-registration of the power of attorney executed by Po Tecsi infavor of his brother Gabino Barreto Po Ejap prevents thesale made by the latter of the litigated land in favor of JoseM. Katigbak from being recorded in the registry of deeds, it isnot ineffective to compel Tecsi to acknowledge said sale.

4) From the fact that said power and sale were not recordedin the registry of deeds, and from the omission of anymention in the deed of sale of the mortgage lien in favor of

Antonio M. H. Limjenco, and the lease of a part of said landin favor of Uy Chia, the appellants deduce that said sale isfraudulent.

5) The record contains many indications that Po Tecsi wasnot unaware of said sale. His several letters complaining ofthe pressing demands of his brother Gabino Barreto Po Ejapto send him the rents of the land, his promises to send themto him, and the remittance of the same were a tacitacknowledgment that he occupied the land in question nolonger as an owner but only as lessee.

Amigo v.s. Teves 96 Phil. 252 (1954)

FACTS:

On August 11, 1937, Macario Amigo and Anacleto Cagalitanexecuted a power of attorney for their son Marcelino Amigogranting the power to lease, let, bargain, transfer, conveyand sell, remise, release, mortgage and hypothecate, part ofany of the properties upon such terms and conditions and

under such covenants as he shall think fit. On October 30,1938, Marcelino executed a deed of sale of a land at Php3,000.00 in favor of Serapin Teves with a repurchasestipulation of 18 months from the date of sale. On July 20,1939 the spouses donated to their sons Justino and Pastorseveral lands including their right to repurchase the said land(sold to Teves). The deed of donation was registered in theRegister of Deeds. On March 9, 1940 Justino and Pastoroffered to repurchase the land from Teves but the latterrefused because ownership had already been consolidatedin him as purchaser a retro. Petitioners contended thatMarcelino Amigo acted in excess of his powers because the

covenant of lease contained in the said deed is notgermane to the said power.

ISSUE:

Whether or not Marcelino Amigo acted in excess of hispower?

HELD:NO. The Court find no plausible reason xxx a cursoryreading thereof would at once reveal that the power grantedto the agent is so broad that if practically covers thecelebration of any contract and the conclusion of anycovenant or stipulation. When the power of attorney saysthat the agent can enter into any contract concerning theland or can sell the land under any term or condition andcovenant he may think fit, it undoubtedly means that he canact in the same manner and with the same breadth andlatitude as the principal could concern the property.

RIZALINO, substituted by his heirs, JOSEFINA,ROLANDO and FERNANDO, ERNESTO,LEONORA,BIBIANO, JR., LIBRADO and ENRIQUETA, allsurnamed OESMER, Petitioners, vs.PARAISODEVELOPMENT CORPORATION, Respondent.

FACTS:Petitioners together with Adolfo Oesmer and

Jesus Oesmer, are brothers and sisters, and the co-ownersof undivided shares of two parcels of agricultural andtenanted land which were acquired byright of succession.

Respondent Paraiso Development Corporation isknown to be engaged in the real estate business.

This case originated when Ernesto Oesmer, oneof the co-owners of the subject land, met with the Presidentof respondent corporation for the purpose of brokering thesale of petitioners properties to respondent corporation.Pursuant to the said meeting, a Contract to Sell was draftedwhereby petitioners Ernesto and Enriqueta subsequentlysigned the aforesaid Contract to Sell. A check in the amountof P100, 000.00, payable to Ernesto, was given as optionmoney. Sometime thereafter, Rizalino, Leonora, Bibiano, Jr.,and Librado also signed the said Contract to Sell. However,two of the brothers, Adolfo and Jesus, did not sign thedocument.

Later on, petitioners informed the respondent,through a letter, of their intention to rescind the Contract toSell and to return the amount of P100, 000.00 given byrespondent as option money. Respondent did not respond tothe aforesaid letter. Afterwards, herein petitioners, togetherwith Adolfo and Jesus, filed a Complaint for Declaration ofNullity or for Annulment of Option Agreement or Contract toSell with Damages before the RTC.

The trial court held that the assailed Contract toSell is valid and binding only to the undivided proportionateshare of Ernesto who signed the document and received thecheck. Ernesto was ordered to execute the Contract of

Absolute Sale concerning his 1/8 share over the subject twoparcels of land in favor of respondent.On appeal, the Court of Appeals modified the

decision of RTC whereby it declared that the Contract to Sellis valid and binding with respect to the undividedproportionate share of the six signatories of the document.

ISSUE:Whether or not the contract to sell binds the co-owners ofErnesto.

HELD:


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Yes. The contract to sell was valid and binding. Incontrast to the contention of the five co-owners who affixedtheir signatures in the contract to sell that their signatures donot confer authority to Ernesto as an agent to sell theirshares, the Court held that they were selling the samedirectly and intheir own right. Hence, written authority is nolonger necessary since they were selling their shares in theirown capacity as owners.

In addition, the petitioners, being owners of theirrespective undivided shares in the subject properties, candispose of their shares even without the consent of all theco- heirs. Article 493 of the Civil Code provides that, Eachco-owner shall have the full ownership of his part and of thefruits and benefits pertaining thereto and he may thereforealienate, assign or mortgage it, and even substitute anotherperson in its enjoyment, except when personal rights areinvolved. But the effect of the alienation or the mortgage,with respect to the co-owners, shall be limited to the portionwhich may be allotted to him in the division upon thetermination of the co- ownership. Consequently, evenwithout the consent of the two co-heirs, Adolfo and Jesus,the Contract to Sell was valid and binding with respect to the6/8 proportionate shares of the petitioners.

gratuity or personal benefit from the vendee, withoutrevealing the same to his principal, the vendor, is guilty of abreach of his loyalty to the principal and forfeits his right tocollect the commission from his principal, even if theprincipal does not suffer any injury by reason of such breachof fidelity, or that he obtained better results or that theagency is a gratuitous one, or that usage or custom allows it.

remedy or repair an actual damage agent thereby assumesa position wholly inconsistent with that of being an agent forhis principal, who has a right to treat him, insofar as hiscommission is concerned, as if no agency had existed

valuable services of the said agent does not exculpate theagent who has only himself to blame for such a result byreason of his treachery or perfidy.

Gregorio Domingo must forfeit his right to the commissionand must return the part of the commission he received fromhis principal. Decisive Provisions Article 1891 and 1909 CC

deliver", which latter term is more comprehensive than theformer.

stress the highest loyalty that is required to an agentcondemning as void any stipulation exempting the agentfrom the duty and liability imposed on him in paragraph onethereof.

honesty, candor and fairness on the part of the agent, thereal estate broker in this case, to his principal, the vendor.

make a full disclosure or complete account to his principal of

all his transactions and other material facts relevant to theagency, so much so that the law as amended does notcountenance any stipulation exempting the agent from suchan obligation and considers such an exemption as void.

apply:h the task of

merely bringing together the vendor and vendee, whothemselves thereafter will negotiate on the terms andconditions of the transaction.

bonus or profit he received from the purchaser and hisprincipal did not objectTeofilo Purisima s entitlement to his share in the 5% commission

whatever amounts Gregorio Domingo received by virtue ofthe transaction as his sub-agency contract was with

Gregorio Domingo alone and not with Vicente Domingo, whowas not even aware of such sub-agency.

, 300 fromOscar and Vicente, P650 of which should be paid byGregorio to Teofilo.

SIASAT vs. INTERMEDIATE APPELLATE COURT

FACTS:

the Department of Education and Culture to purchasewithout public bidding, one million pesos worth of nationalflags for the use of public schools throughout the country.

purchase.

the release of the purchase orders.

the Department that the purchase orders could not bereleased unless a formal offer to deliver the flags was firstsubmitted for approval.

Flag Industry came up with a document which read:Mrs. Tessie Nacianceno,This is to formalize our agreement for you to representUnited Flag Industry to deal with any entity or organization,

private or government in connection with the marketing ofour products-flags and all its accessories.For your service, you will be entitled to a commission of thirty(30%) percent.SignedMr. Primitive Siasat

Owner and Gen. ManagerThe first delivery of 7,933 flags was made by the United

Flag Industry .Then, Nancianceno s authority to represent the United Flag

Industry was revoked by Primitivo Siasat on theground thatshe was not authorized to sell 16, 666 Philippine flags to theDepartment.

Industry tendered the amount of P23,900.00 or five percent(5%) of the amount received as payment of her commission.She refused to accept the said amount insisting on the 30%commission agreed upon.

received payment for the second delivery of 7,833 flags.When she confronted the petitioners, they vehementlydenied receipt of the payment, at the same time claimed that

the respondent had no participation whatsoever with regardto the second delivery of flags and that the agency hadalready been revoked.

Manila to recover the following commissions: 25%, asbalance on the first delivery and 30%, on the seconddelivery.

t.

Appellate Court.

ISSUE:


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1. Did Nancianceno have the capacity to represent UnitedFlag in the transaction with the Department?2. Did the revocation of agency foreclose the respondent'sclaim of 30% commission on the second transaction?3. Was the award for attorney s fees and moral damagesproper?

RULING:

1. YES, she had the capacity to represent United Flag Infact, she was a general agent.- There are several kinds of agents. An agent may be (1)universal: (2) general, or (3) special. A universal; agent isone authorized to do all acts for his principal which canlawfully be delegated to an agent. So far as such a conditionis possible, such an agent may be said to have universalauthority.- A general agent is one authorized to do all acts pertainingto a business of a certain kind or at a particular place, or allacts pertaining to a business of a particular class or series.He has usually authority either expressly conferred ingeneral terms or in effect made general by the usages,customs or nature of the business which he is authorized totransact.- An agent, therefore, who is empowered to transact all the

business of his principal of a particular kind or in a particularplace, would, for this reason, be ordinarily deemed a generalagent.- A special agent is one authorized to do some particular actor to act upon some particular occasion. Lie acts usually inaccordance with specific instructions or under limitationsnecessarily implied from the nature of the act to be done.- By the way general words were employed in theagreement; no restrictions were intended as to the mannerthe agency was to be carried out or in the place where it wasto be executed. The power granted to the respondent was sobroad that it practically covers the negotiations leading to,and the execution of, a contract of sale of petitioners'merchandise with any entity or organization.- There was nothing to prevent the petitioners from stating in

the contract of agency that the respondent could representthem only in the Visayas or to state that the Department ofEducation and Culture and the Department of NationalDefense, which alone would need a million pesos worth offlags, are outside the scope of the agency.

2. NO, the revocation did not foreclose the respondent sclaim of 30% commission on the second transaction.- The revocation of agency could not prevent the

Nancianceno from earning her commission because thecontract of sale had been already perfected and partlyexecuted.- The principal cannot deprive his agent of the commissionagreed upon by cancelling the agency and, thereafter,dealing directly with the buyer.

3. NO, the award was not proper.- Moral damages: To support a judgment for damages, factswhich justify the inference of a lack or absence of good faith

must be alleged and proven. There is no evidence on recordfrom which to conclude that the revocation of the agencywas deliberately effected by the petitioners to avoid paymentof the respondent's commission.- Attorney s fees: Fo r one thing, the respondent did notcome to court with completely clean hands. For another, thepetitioners apparently believed they could legally revoke theagency in the manner they did and deal directly witheducation officials handling the purchase of Philippine flags.They had reason to sincerely believe they did not have topay a commission for the second delivery of flags.

The decision of the respondent court was MODIFIED. Thepetitioners were ordered to pay the respondent the amountof ONE HUNDRED FOURTY THOUSAND NINE HUNDRED

AND NINETY FOUR PESOS (P140, 994.00) as hercommission on the second delivery of flags with legalinterest from the date of the trial court's decision.

FRANCISCO A. VELOSO, Petitioner, v. CA, AGLALOMA

B. ESCARIO, assisted by her husband GREGORIO L.ESCARIO, the REGISTER OF DEEDS -MANILA,Respondent.

DOCTRINE:The special power of attorney can be included in

the general power when it is specified therein the act ortransaction for which the special power is required.

Whethe r the instrument be denominated as"general power of attorney" or "special power of attorney,"what matters is the extent of the power or powerscontemplated upon the agent or attorney in fact. If the poweris couched in general terms, then such power cannot gobeyond acts of administration. However, where the power tosell is specific, it not being merely implied, much lesscouched in general terms, there cannot be any doubt thatthe attorney in fact may execute a valid sale. An instrumentmay be captioned as "special power of attorney" but if thepowers granted are couched in general terms withoutmentioning any specific power to sell or mortgage or to doother specific acts of strict dominion, then in that case onlyacts of administration may be deemed conferred."

FACTS: Petitioner Francisco Veloso owns a parcel of land in Tondo,Manila covered by a TCT issued by the Registry of Deeds-Manila. He acquired the subject property before he gotmarried from Philippine Building Corporation. Hence, theproperty did not belong to the conjugal partnership. The said title was subsequently canceled and a new onewas issued in the name of Aglaloma B. Escario. Subsequently, petitioner filed an action for annulment ofdocuments, reconveyance of property with damages andpreliminary injunction alleging that he was the absoluteowner of the subject property and he never authorizedanybody to sell it. He alleged that when his wife left forabroad, he found out that his copy was missing. The transfer of property was s upported by a General Powerof Attorney and Deed of Absolute Sale, executed by IrmaVeloso, wife of the petitioner. Petitioner denied executing the power of attorney andalleged that his signature was falsified. He also deniedhaving known the supposed witnesses in the execution ofthe power of attorney. Thus, he contended that the sale ofthe property, and the subsequent transfer were null and void. Defendant Aglaloma Escario alleged that she was a buyerin good faith and denied any knowledge of the allegedirregularity. She allegedly relied on the general power ofattorney which was sufficient in form and substance and wasduly notarized.

Witness for the plaintiff Atty. Julian G. Tubig denied anyparticipation in the execution of the general power ofattorney, and attested that he did not sign. RTC ruled in favor of Escaro as the lawful owner of theproperty as she was deemed an innocent purchaser forvalue. The trial court ruled that there was no need for aspecial power of attorney when the special power wasalready mentioned in the general one. CA affirmed in toto the findings of the trial court.

ISSUE:Was the General Power of Attorney valid?


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HELD:The assailed power of attorney was valid and

regular on its face. It was notarized and as such, it carriesthe evidentiary weight conferred upon it with respect to itsdue execution. While it is true that it was denominated as ageneral power of attorney, a perusal thereof revealed that itstated an authority to sell."2. To buy or sell, hire or lease, mortgage or otherwise

hypothecate lands, tenements and hereditaments ." Thus, there was no need to execute a separateand special power of attorney since the general power ofattorney had expressly authorized the agent or attorney infact the power to sell the subject property. The generalpower of attorney was accepted by the Register of Deedswhen the title to the subject property was canceled andtransferred in the name of Private Respondent.RE FALSIFIED SIGNATURE:

SC found that the basis presented by thepetitioner was inadequate to sustain his allegation of forgery.Mere variance of the signatures cannot be considered asconclusive proof that the same were forged. Forgery cannotbe presumed.RE INNOCENT PURCHASER FOR VALUE:

SC agrees with the conclusion of the lower courtthat private respondent was an innocent purchaser for value.Respondent Aglaloma relied on the power of attorneypresented by petitioner s wife, Irma. Being the wife of theowner and having with her the title of the property, there wasno reason for the private respondent not to believe in herauthority. Moreover, the power of attorney was notarized andas such, carried with it the presumption of its due execution.

A purchaser in good faith is one who buysproperty of another, without notice that some other personhas a right to, or interest in such property and pays a full andfair price for the same, at the time of such purchase, orbefore he has notice of the claim or interest of some otherperson in the property. The questioned power of attorneyand deed of sale were notarized and therefore, presumed tobe valid and duly executed.

Atty. Tubig denied having notarized the saiddocuments and alleged that his signature had also beenfalsified. Just like the petitioner, witness Atty. Tubig merelypointed out that his signature was different from that in thepower of attorney and deed of sale.

Even granting for the sake of argument, that thepetitioner s signature was falsified and consequently, thepower of attorney and the deed of sale were null and void,such fact would not revoke the title subsequently issuedin favor of private respondent.

The right of an innocent purchaser for valuemust be respected and protected, even if the sellerobtained his title through fraud . The REMEDY of theperson prejudiced is to bring an action for damages againstthose who caused or employed the fraud, and if the latter areinsolvent, an action against the Treasurer of the Philippinesmay be filed for recovery of damages against the AssuranceFund.RE ESTOPPEL:

The trial court did not err in applying equitableestoppel in this case. The principle of equitable estoppelstates that where one or two innocent persons must suffer aloss, he who by his conduct made the loss possible mustbear it. From the evidence adduced, it should be thepetitioner who should bear the loss.

The fact remains that the Certificate of Title, aswell as other documents necessary for the transfer of titlewere in the possession of Irma, consequently leaving nodoubt or any suspicion on the part of the defendant as toher authority. Under Section 55 of Act 496 , Irma s possession and production of the TCT to defendant operated

as conclusive authority f rom the plaintiff to the Registerof Deeds to enter a new certificate.

ACCORDINGLY, the petition for review is herebyDENIED for lack of merit.

B. H. MACKE ET AL V JOSE CAMPS

FACTS:

* B. H. Macke and W.H. Chandler, partners doingbusiness under the firm name of Macke, Chandler AndCompany, allege that during the months of February andMarch 1905, they sold to Jose Camps and delivered at hisplace of business, known as the :Washington Caf, variousbills of goods amounting to P351.50; that Camps has onlypaid on account of said goods the sum of P174; that there isstill due them on account of said goods the sum of P177.50

* Plaintiffs made demand for the payment fromdefendant and that the latter failed and refused to pay thesaid balance or any part of it

* Macke, one of the plaintiffs, testified that on theorder of one Ricardo Flores, who represented himself to bethe agent of Jose Camps, he shipped the said goods to thedefendant at the Washington Caf; that Flores (agent) lateracknowledged the receipt of the said goods and madevarious payments thereon amounting in all to P174; thatbelieves that Flores is still the agent of Camps; and thatwhen he went to the Washington Caf for the purpose ofcollecting his bill he found Flores, in the absence of Camps,apparently in charge of the business and claiming to be thebusiness manager of Camps, said business being that of ahotel with a bar and restaurant annexed.

* A written contract was introduced as evidence,from which it appears that one Galmes, the former ofWashington Caf subrented the building wherein thebusiness was conducted, to Camps for 1 year for thepurpose of carrying on that business, Camps obligatinghimself not to sublet or subrent the building or the businesswithout the consent of the said Galmes. *This contract wassigned by Camps and the name of Ricardo Flores as awitness and attached thereon is an inventory of the furnitureand fittings which also is signed by Camps with the wordsublessee below the name, and at the foot of this inventorythe word received followed by the name Ricardo Floreswith the wor ds managing agent immediately following hisname.

ISSUE:W/N Ricardol Flores was the agent of Camps

Ruling:Yes.Evidence is sufficient to sustain a finding that

Flores is the agent of Camps in the management of the barof the Washington Caf with authority to bind Camps, hisprincipal, for the payment of the goods

The contract sufficiently establishes the fact thatCamps was the owner of the business and of the bar, andthe title of managing agent attached to the signature of

Flores which appears on that contract, together with the factthat at the time the purchases were made, Flores wasapparently in charge of the business performing the dutiesusually intrusted to a managing agent leave little room fordoubt that he was there as the authorized agent of Camps.

Agency by Estoppel --- One who clothes anotherwith apparent authority as his agent, and holds him out tothe public as such, cannot be permitted to deny the authorityof such person to act as his agent, to the prejudice ofinnocent third persons dealing with such person in good faithand in the honest belief that he is what he appears to be.


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Estoppel--- Whenever a party has, by his owndeclaration, act or omission, intentionally and deliberately ledanother to believe a particular thing true, and to act uponsuch belief, he cannot, in any litigation arising out of suchdeclaration, act, or omission be permitted to falsify; andunless the contrary appears, the authority of the agent mustbe presumed to include all the necessary and usual meansof carrying his agency into effect.

Germann & Co. v.s. Donaldson, Sim & Co. 1 Phil. 63(1901)

FACTS:

Max Leonard Tornow, a German national was the owner ofGermann & Co. which operated in Berlin and Manila. OnFebruary 5, 1900 he executed in Berlin an instrumentconstituting Fernando Kammerzell as his true and lawfulattorney with power to enter the firm name of Germann &Co. in the Commercial Registry of Manila as a branch of thehouse of the company in Berlin, it being the purpose of thispower to invest said attorney with full legal powers andauthorization to direct and administer in the City of Manila forus and in our name a branch of our general commercialbusiness of import and export for which purpose he maymake contracts of lease and employ suitable assistants, aswell as sign every kind of documents, accounts, andobligations connected with the business which may benecessary, take charge in general of the receipt and deliveryof merchandise connected with the business sign all receiptsfor sums of money and collect them and exact their paymentby legal means On October 27, 1900 Kammerzellexecuted a general power for suits in Manila and purportingto be a substitution in favor of several attorneys of powersconferred upon Kammerzell in an instrument executed byTornow. Kammerzell s instrument was authenticated willformalities of domestic laws while Tornow s was not.

ISSUE:Whether or not Kammerzell has the authority to institutesuits for the recovery of sums of money?

HELD:

YES. The Court ruled that the clause conferring the power toexact the payment of sums of money by legal means,provides that the power to exact the payment of debts duethe concern by means of the institution of suits for therecovery. The main object of the instrument is clearly tomake him the manager of the Manila branch with the samegeneral authority. In absence of a clear language, it was theintention of the principal to withhold from his agent a poweressential to the efficient management of the business.

Municipal Council of Iloilo v.s. Evangelista 55 Phil. 290(1930)

FACTS:

On March 20, 1924, the Court of First Instance ofIloilo rendered judgment in Civil Case No. 3514 thereof,wherein the appellant, herein Tan Ong Sze Vda. de TanToco was the plaintiff and the Municipality of Iloilo thedefendant and the former sought to recover of the plaintiffvalue of a strip of land belonging to said plaintiff taken by thedefendant to widen a public street; the judgment entitled theplaintiff to recover Php 42,966.40 representing the value ofsaid strip of land from the defendant. On appeal to the

judgment was affirmed on November 28, 1924. After thecase was remanded to the court of origin and the judgment

rendered therein had become final and executory. AttorneyJose Evangelista in his own behalf and as counsel for theadministratix of Jose Ma. Arroyo s intestate estate filed aclaim in the said case for professional services rendered byhim, which the court acting with the consent of the appellantwidow, fixed at 15% of the amount of the judgment.

At the hearing on said claim, the claimants

appearead as did also for the Philippine National Bank whichprayed that the amount of the judgment be turned over to itbecause the land taken over had been mortgaged to it.

Antero Soriano also appeared claiming the amount of the judgment as it had been assigned to him and by him in turn,assigned to Mauricio Cruz & Co., Inc. After hearing, all theadverse claims on the amount of the judgment, the courtorder ed that the attorney s lien in the amount of 15% of the

judgment be recorded in favor of Attorney Evangelista in hisown behalf and counsel for the administratix of the deceasedJose Ma. Arroyo and directed the Municipality of Iloilo to filean action of interpleading against the adverse claimants: thePNB, Antero Soriano, Mauricio Cruz & Co., Jose Evangelistaand Jose Arroyo, as was done the case being filed in the CFIof Iloilo as civil case no. 7702. On March 29, 1928 with theapproval of the auditor of the provincial treasurer of Iloilo andwith the Executive Bureau paid the late Antero Soriano theamount of Php 6,000.00 in part payment of the judgmentmentioned above assigned to him by Tan Boon Tiong actingas attorney-in-fact of the appellant herein, Tan Ong Sze Vda.de Tan Toco. On December 18, 1928, the municipaltreasurer of Iloilo deposited with the clerk of the Court ofFirst Instance of Iloilo the amount of Php 6,000.00 onaccount of the judgment rendered in said civil case no. 3514.In pursuance of the resolution of the court below orderingthat the attorney s lien in the amount of 15% of the judgmentbe recorded in favor of Attorney Jose Evangelista.In his ownbehalf and as a counsel for the late Jose Ma. Arroyo, thesaid clerk of court delivered on the same date to said

Attorney Evangelista the said amount of Php 6,000.00.

At the hearing of the instant case, the co-defendants ofEvangelista agreed not to discuss the payment made to thelatter by the clerk of CFI of Iloilo of the amount Php 6,000.00mentioned above in consideration of said lawyer s waiver ofthe remainder of the 15% of said judgment amounting to Php44.69. With these 2 payments of Php 6,000.00 each makinga total of Php 12,000.00 , the judgment for Php 42,966.44against the Municipality of Iloilo was reduced to Php30,966.40 which was adjudicated by said court to MauriceCruz & Co. This appeal, then is confined to the claim ofMauricio Cruz & Co. as alleged assignee of the rights of thelate Soriano by virtue of the said judgment in payment ofprofessional services rendered by him to the said widow andher co-heirs.

ISSUE:

Whether or not the assignment made by Tan Boon Tiong asattorney-in-fact of the appellant Tan Ong Sze Vda. de Tan

Toco to Attorney Antero Soriano, of all the credits, rights andinterests belonging to said appellant entitled Vda. de TanToco v.s. the Municipal of Iloilo adjudicating to said widowthe amount of Php 42,966.40 plus the costs of court againstsaid municipal council in consideration of the professionalservices rendered by said attorney to said widow and her co-heirs valid?

HELD:

YES. As to whether Tan Boon Tiong as attorney-in-fact ofthe appellant was empowered by his principal to make as


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assignment of credits, rights and interests, in payment ofdebts for professional services rendered by lawyers.TanBoon Tiong is authorized to employ and contract for theservices of lawyers upon such conditions as he may deemconvenient. This power necessarily implies the authoirty topay the professional services they engaged. In the presentcase, for the appellant in favor of Atty. Soriano forprofessional services rendered in other cases in the interests

of the appellant and her co-heirs was that credit which hadagainst the Municipality and such assignment wasequivalent to the payment of amount of said credit to AnteroSoriano for professional services.

Yu Chuck vs. Kong Li Po 46 Phil 608 (1924)

FACTS:

Kong Li Po was a domestic corporation engagedin the publication of a Chinese newspaper styled Kong Li Po.Its by- laws stated that it will have a president who will signall contracts and other instruments in writing but noprovision for a business manager. In 1919, C.C. or T.C.Chen was appointed manager.

On December 1919, Chen entered a contract withYu Chuck for the printing of the newspaper for Php 580monthly. Chen was replaced by Tan Tia Hong and dismissedthe plaintiff without explanation on January 31, 1921. Theplaintiff filed an action for specific performance withdamages claiming that in its contract with Kong Li Po is for 3years. The plaintiff asked for Php 20,880.00 as damagesand they would be given full pay for the unexpired portion ofthe term x x x even in bankruptcy. Tan Tia Hong assertedthat Chen had no authority to enter into contract. The trialcourt ruled that Chen had authority, taking into considerationof the notice made by its president, Te Kim Hua that it shallnot sign or recognize any document without the signature ofChen.

ISSUE:

Whether or not Chen had the authority to bind Kong Li Powith Yu Chuck?

HELD:

NO. The Court ruled that although officers had an impliedauthority if such was not expressly made by certain officer ordirector, Chen had no authority to bind because the contractwas not usual and reasonable because the duration of it was3 years and was onerous for Kong Li Po when it was statedthat the corporation is liable for the unexpired portion despiteinsolvency. Plaintiff had no right to presume that anyemployee had an implied authority which would bring its ruin.Further, the president had no knowledge of such contract,although saw some printing activities in its office and suchcontract was neither ratified nor approved by the Board.

Goquiolay v Sycip

Facts: Tan Sin An and Goquiolay entered into a generalcommercial partnership under the partnership name TanSin An and Antonio Goquiolay for the purpose of dealing inreal estate. The agreement lodged upon Tan Sin An the solemanagement of the partnership affairs. The lifetime of the partnership was fixed at ten years andtheatrical s of Co -partnership stipulated that in the event ofdeath of any of the partners before the expiration of the term,

the partnership will not be dissolved but will be continued bythe heirs or assigns of the deceased partner. But thepartnership could be dissolved upon mutual agreement inwriting of the partners. Goquiolay executed a GPA in favor of Tan Sin An. The plaintiff partnership purchased 3 parcels of land whichwas mortgaged t o La Urbana as payment of P25,000.

Another 46parcels of land were purchased by Tan Sin An in

his individual capacity which he assumed payment of amortgage debt for P35K. A downpayment and the amortization were advanced byYutivoand Co. The two obligations were consolidated in an instrumentexecuted by the partnership and Tan Sin An, whereby theentire 49 lots were mortgaged in favor of BancoHipotecario Tan Sin An died leaving his widow, Kong Chai Pin and fourminor children. The widow subsequently became theadministratrix of the estate. Repeated demands were made by Banco Hipotecario onthe partnership and on Tan Sin An. Defendant Sing Yee, upon request of defendant YutivoSons, paid the remaining balance of the mortgage debt, themortgage was cancelled Yutivo Sons and Sing Yee filed their claim in the intestateproceedings of Tan Sin An for advances, interest and taxespaid in amortizing and discharging their obligations to LaUrbana and Banco Hipotecario Kong Chai Pin filed a petition with the probate court forauthority to sell all the 49 parcels of land. She then sold it toSycip and Lee inconsideration of P37K and of the vendeesassuming payment of the claims filed by Yutivo Sons andSing Yee. Later, Sycip and Lee executed in favor of InsularDevelopment a deed of transfer covering the 49 parcels ofland. When Goquiolay learned about the sale to Sycip and Lee,he filed a petition in the intestate proceedings to set asidethe order of the probate court approving the sale in so far ashis interest over the parcels of land sold was concerned. Probate court annulled the sale executed by theadministratrix w/respect to the 60% interest of Goquiolayover the properties Administratrix appealed. The decision of probate court was set aside for failure toinclude the indispensable parties. New pleadings were filed The second amended complaint prays for the annulment ofthe sale in favor of Sycip and Lee and their subsequentconveyance to Insular Development. The complaint was dismissed by the lower court hence thisappeal.

Issue:1) Did the lower court err in holding that the widowsucceeded her husband Tan Sin An in the sole managementof the partnership upon Tan s death? 2) WON the consent of the other partners was necessary toperfect the sale of the partnership properties to Sycip and

Lee?

Held:1)Yes. While in the Articles of Co-Partnership and the power

of attorney executed by Goquiolay conferred upon Tan theexclusive management of the business, such powerpremised as it is upon trust and confidence, was a merepersonal right that terminated upon Tan s demise. Theprovision in the articles stating that in the event of death ofany one of the partners within the 10 year term of thepartnership, the deceased partner shall be represented by


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his heirs could not have referred to the managerial rightgiven to Tan. The heirs of the deceased, by neverrepudiating or refusing to be bound under the said provisionin the articles became individual partners with Goquiolayupon Tan s demise. This is sanctioned under Article 222under the Code of Commerce. However, the minority of theheirs is not a bar to the application of that clause in thearticles of co-partnership.

2)No. Strangers dealing with a partnership have the right toassume, in the absence of restrictive clauses in the co-partnership agreement that every general partner has powerto bind the partnership specially those acting with ostensibleauthority. Also, in spite of the provision of Art 129 of theCode of Commerce to the effect that if the management ofthe general partnership has not been limited by specialagreement to any of the members, all shall have the powerto take part in the direction and management of the commonbusiness, and the members present shall come to anagreement for all contracts or obligations which may concernthe association, such obligation is one imposed by law onthe partners among themselves, that does not necessarilyaffect the validity of the acts of a partner while acting withinthe scope of the ordinary course of business of thepartnership as regards third persons without notice. Thelatter may rightfully assume that the contracting partner wasduly authorized to contract for and in behalf of the firm andthat he would not ordinarily act to the prejudice of his co-partners. Also, the records fail to disclose that Goquiolaymade any opposition to the sale of the partnership realty toSycip and Lee. On the contrary, it appears that he onlyinterposed his objections after the deed of conveyance wasexecuted and approved by the probate court, andconsequently, his opposition came too late to be effective

(ii) Admission or representation made by anypartner concerning partnership affairs is evidence againstthe partnership

(iii) Notice to any partner of any matter relating topartnership affairs, and the knowledge of the acting in theparticular matter, acquired while a partner or then present tohis mind, and the knowledge of any other partner whoreasonably could and should have communicated it to theacting partner, operate as notice to or knowledge of thepartnership, except in the case of fraud on the partnership,committed by or with the consent of that partner

(iv) Where, by any wrongful act or omission of anypartner acting in the ordinary course of the business of thepartnership or with the authority of co-partners, loss or injuryis caused to any person, not being a partner in thepartnership, or any penalty is incurred, the partnership isliable therefor to the same extent as the partner so acting oromitting to act.

(v) The partnership is bound to make good theloss:

(1) Where one partner acting within the scope ofhis apparent authority receives money or propertyof a third person and misapplies it; and(2) Where the partnership in the course of its

business receives money or property of a thirdperson and the money or property so received ismisapplied by any partner while it is in the custodyof the partnership.

d. Mutual obligation of Partners(i) Partners shall render on demand true and fullinformation of all things affecting the partnership toany partner or the legal representative of anydeceased partner or of any partner under legaldisability.

5. Fiduciary Dutiesa. Duty of Diligence:

For damages caused to the business

* Every partner is responsible to the partnershipfor damages suffered by it through his fault .* he cannot compensate them with the profits andbenefits which he may have earned for thepartnership by his industry.* However, the courts may equitably lessen this

responsibility if through the partner's extraordinaryefforts in other activities of the partnership,unusual profits have been realized.b. Duty to account:Full accounting to the partnership for partnership

transactions* Every partner must account to the partnership forany benefit and hold as trustee for it any profitsderived by him without the consent of the otherpartners from any transaction connected with the

(FCL) formation, conduct, or liquidation of thepartnership or from any use by him of its property.c. Duty of Loyalty:* The capitalist partners cannot engage for theirown account in any operation which is of the kindof business in which the partnership is engaged,unless there is a stipulation to the contrary.* Any capitalist partner violating this prohibitionshall bring to the common funds any profitsaccruing to him from his transactions ,and shallpersonally bear all the losses.

OLAGUER vs PURUGGANAN

FACTS: Alleges that he was the owner of 60,000 share of stocks(worth 600k), employed as EVP Business day Corporation,President of Business day Info System and Services&Business day Marketing Corp. Active in the politicalopposition against Marcos together with respondents RaulLocsin and Enrique Joaquin. Locsin, Joaquin, and HectorHolifea had an unwritten agreement that, in the event thatEduardo was arrested, they would support the Eduardosfamily by the continued payment of his salary. Executed aSpecial Power of Attorney on 5/26/79 appointing Locsin,Joaquin and Hofilea for the purpose of selling ortransferring petitioner s shares of stock with Business day.During trial, Eduardo testified that he agreed to execute theSPA in order to cancel his shares of stock, even before theyare sold, for the purpose of concealing that he was astockholder of Business day, in the event of a militarycrackdown against the opposition. Parties acknowledged theSPA before respondent Emilio Purugganan,Jr., who wasthen the Corporate Secretary of Business day, and at thesame time, a notary public for Quezon City. By the time hewas released from prison 6 years later, he was no longer ashareholder in the said bank. According to the respondents,they were just doing what was accorded in the SPA, giventhat the price of theirs plummeted below market valuebecause of the stigma brought about by Olaguer being a

very prominent oppositionist.

ISSUE:Whether absence as mentioned in SPA should beunderstood as that of NCC 381.

RULING:NO. If it were, then the very existence of that SPA would berendered nugatory. Olaguer has to be a minor or insane forthat SPA to have function. An SPA has to be construedstrictly but its provision has to be construed as to itsexistence, i.e. understood in a way that will give more power/


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function to that SPA. Since the said SPA executed byOlaguer gave powers to the respondents to actually disposeof his share, he cannot therefore assail such now. And evenif the said contract is assailable, it was already ratified by thereception of the amount 600,000 by Olaguers wife and in -laws from 1980-1982.

BRAVO-GUERRERO vs. BRAVO

FACTS:Spouses Mauricio Bravo ("Mauricio") and Simona

Andaya Bravo ("Simona") owned two parcels of land("Properties") located along Evangelista Street, Makati City,Metro Manila. They have three children - Roland, Cesar andLily, all surnamed Bravo. Cesar died without issue. LilyBravo married David Diaz, and had a son, David B. Diaz, Jr.("David Jr."). Roland had six children, namely, Lily ElizabethBravo-Guerrero ("Elizabeth"), Edward Bravo ("Edward"),Roland Bravo, Jr. ("Roland Jr."), Senia Bravo, BenjaminMauricio Bravo, and their half-sister, Ofelia Bravo ("Ofelia").

Simona executed a General Power of Attorney("GPA") on 17 June 1966 appointing Mauricio asherattorney-in-fact. In the GPA, Simona authorized Mauricio to"mortgage or otherwise hypothecate, sell, assign anddispose of any and all of my property, real, personal ormixed, of any kind whatsoever and whosesoever situated, orany interest therein xxx." Mauricio subsequently mortgagedthe Properties to the Philippine National Bank (PNB) andDevelopment Bank of the Philippines (DBP) for P10,000 andP5,000, respectively.

On 25 October 1970, Mauricio executed a Deed ofSale with Assumption of Real EstateMortgage ("Deed ofSale") conveying the Properties to "Roland A. Bravo, Ofelia

A. Bravo and Elizabeth Bravo" ("vendees"). However, theDeed of Sale was not annotated on TCT Nos.58999 and59000. Neither was it presented to PNB and DBP. Themortgage loans and the receipts for loan payments issuedby PNB and DBP continued to be in Mauricio s name even after his death on 20 November 1973. Simona died in 1977.

On 23 June 1997, Edward, represented by hiswife, Fatima Bravo, filed an action for the judicial partition ofthe Properties. Edward claimed that he and the othergrandchildren of Mauricio and Simona are co-owners of theProperties by succession. Despite this, petitioners refused toshare with him the possession and rental income of theProperties.

ISSUE:Whether Simona validly appointed Mauricio as her attorney-in-fact to dispose the properties in question.

DECISION:The SC also agrees with the trial court that

Simona authorized Mauricio to dispose of the Propertieswhen she executed the GPA. True, Article 1878 requires aspecial power of attorney for an agent to execute a contractthat transfers the ownership of an immovable. However, theCourt has clarified that Article 1878 refers to the nature of

the authorization, not to its form. Even if a document is titledas a general power of attorney, the requirement of a specialpower of attorney is met if there is a clear mandate from theprincipal specifically authorizing the performance of the act.

In Veloso v. Court of Appeals, the Court explainedthat a general power of attorney could contain a specialpower to sell that satisfies the requirement of Article 1878,thus:

While it is true that it was denominated as ageneral power of attorney, a perusal thereof revealed that itstated an authority to sell, to wit:

"2. To buy or sell, hire or lease, mortgage or otherwisehypothecate lands, tenements and hereditaments or otherforms of real property, more specifically TCT No. 49138,upon such terms and conditions and under such covenantsas my said attorney shall deem fit and proper."

Thus, there was no need to execute a separateand special power of attorney since the general power ofattorney had expressly authorized the agent or attorney in

fact the power to sell the subject property. The special powerof attorney can be included in the general power when it isspecified therein the act or transaction for which the specialpower is required.

In this case, Simona expressly authorizedMauricio in the GPA to "sell, assign and dispose of any andall of my property, real, personal or mixed, of any kindwhatsoever and wheresoever situated, or any interesttherein xxx" as well as to "act as my general representativeand agent, with full authority to buy, sell, negotiate andcontract for me and in my behalf." Taken together, theseprovisions constitute a clear and specific mandate toMauricio to sell the Properties. Even if it is called a "generalpower of attorney," the specific provisions in the GPA aresufficient for the purposes of Article 1878. These provisionsin the GPA likewise indicate that Simona consented to thesale of the Properties.

JESUS M. GOZUN, petitioner,vs. JOSE TEOFILO T.MERCADO a.k.a. DON PE PITO MERCADO, respondent.

FACTS:In the local elections of 1995, respondent vied for

the gubernatorial post in Pampanga. Upon respondent srequest, petitioner, owner of JMG Publishing House, aprinting shop located in San Fernando, Pampanga,submitted to respondent draft samples and price quotation ofcampaign materials.

By petitioner s claim, respondent s wife had toldhim that respondent already approved his price quotationand that he could start printing the campaign materials,hence, he did print campaign materials like posters bearingrespondent s photograph, leaflets containing the slate ofparty candidates, sample ballots, poll watcher identificationcards, and stickers.

Given the urgency and limited time to do the joborder, petitioner availed of the services and facilities of Metro

Angeles Printing and of St. Joseph Printing Press, owned byhis daughter Jennifer Gozun and mother Epifania MacalinoGozun, respectively.

Meanwhile, on March 31, 1995, respondent ssister -in-law, Lilian Soriano (Lilian) obtained from petitioner"cash advance" of P253, 000 allegedly for the allowances ofpoll watchers who were attending a seminar and for otherrelated expenses. Lilian ac knowledged on petitioner s 1995diary receipt of the amount.

ISSUE:W/N Lilian R. Soriano was authorized by the respondent toreceive the cash advance from the petitioner in the amount

of P253,000.00.

Held:By the contract of agency a person binds himself

to render some service or to do something in representationor on behalf of another, with the consent or authority of thelatter. Contracts entered into in the name of another personby one who has been given no authority or legalrepresentation or who has acted beyond his powers areclassified as unauthorized contracts and are declaredune

Part 2 Case Digest June 14, 2014

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