8/13/2019 Agency 45

1/32

PNB v. Agudelo, 58 Phil. 655

Fact:

-Nothing in the mortgage deeds to show that Garrucho (mortgagor) is agent of the owner or that he

obtained the loan on behalf of the owners-It appears that Garrucho acted in his personal capacity-He

executed the PNs under his own signature without authority from the principal, therefore, PNs not binding

upon them

Issue: Whether or not Garrucho acted within the authority given to him in obtaining the mortgages

Ruling:

-His SPA does not authorize him to constitute a mortgage to secure his personal obligations, therefore he

exceeded his authority-Exception in Art. 1717 where agent contracts in his own name with things

belonging to the principal binds the latter requires that agent did not exceed his authority.

Philippine Products v Primateria Societe Anonyme Pour Le Commerce (GEN)

Facts:

Primateria Zurich (respondent), through Alexander Baylin, entered into an agreement with Philippine

Products Company (PPC) whereby the latter undertook to buy Copra in the Philippines for the account of

Primateria Zurich. PPC shipped copra to foreign countries pursuant to the instructions of Primateria

Zurich, through Primateria Phils, with Baylin and Jose Crame as officers.

PPC filed a complaint against Primateria Zurich, Primateria Phils, Baylin and Crame to recover the

amount due. The trial court rendered a judgment holding Zurich liable but absolved Baylin and Crame.

PPC appealed the decision as regards the dismissal of the three defendants. PPC alleges that Zurich is a

foreign corporation under Sec. 68 of the Corporation Law; its agents here are personally liable under Art.

1897 for contracts made in behalf.

ISSUE: WON Primateria Phils, Baylin and Crame may be held personally liable

HELD: NO. There is no proof that as agents they exceeded the limits of their authority. The principal,

who should be the one to raise the point, never raised it, denied its liability on the ground of excess of

authority. Art. 1897 does not hold that in cases of excess of authority, both the agent and the principal are

liable to the other contracting party.

NPC vs NAMERCO

8/13/2019 Agency 45

2/32

Facts:

NPC and NAMERCO, as the representative of International Commodities Corporation (ICC) of

New York City, executed in Manila a contract for the purchase by the NPC from the New York Firm

sulphur for its Maria Cristina Fertilizer plant in Iligan City.

A performance bond was likewise executed by the Domestic Insurance Co., in favor of NPC to

guarantee sellers obligations.

After a series of correspondence between NAMERCO and ICC, the former decided to push

through with the transaction.

The New York supplier was not able to deliver the sulfur due to its inability to secure shipping

space. As a result, there was a shut-down of the NPCs fertilizer plant due to the absence of

sulphur and no fertilizer was produced.

The Government Coprporate Counsel in his letter to NAMERCO rescinded the contract of

sale due to the New York suppliers non-performance of its obligations.

The NPC sued the New York firm, Namerco and the Domestic Insurance Company for the

recovery of damages. The trial court in its order of January 17, 1958 dismissed the case as to the

New York firm for lack of jurisdiction because it was not doing business in the Philippines.

ISSUE:

Whether or not NAMERCO acted within the scope of its authority as agent in signing the contract

of sale.

RULING:

It was held that NAMERCO, as agent to the principal, ICC, acted beyond its authority for

still contracting with NPC despite principals prohibition.

From the series of cable correspondence between ICC and NAMERCO, ICC stated that the salewas subject to the availability of a steamer which would transport the sulphur cargo. However,

NAMERCO did not disclose that cable to the NPC and, contrary to its principals instruction, it agreed

that non-availability of a steamer was not a justification for non-payment of damages.

Under article 1897 of the Civil Code, the agent who exceeds the limits of his authority without

giving the party with whom he contracts sufficient notice of his powers is personally liable to such party.

8/13/2019 Agency 45

3/32

The truth is that even before the contract of sale was signed NAMERCO was already aware that its

principal was having difficulties in booking shipping space. One day before the contract of sale was

signed, the New York supplier advised NAMERCO that the latter should not sign the contract

unless it wished to assume sole responsibility for the shipment.

Agent who exceeds authority without giving 3rd

party notice of his powers is personally

liable. Similarly, the unenforceability of the contract is against the principal only.

National Bank v. Welch

FACTS: La Compaa Naviera, a shipping company, was instituted in Manila in 1918. Among its

shareholders was respondent Welch, Fairchild & Co. La Compaia Naviera applied to the Philippine

National Bank for a loan of $125,000. with which to purchase a boat called Benito Juarez. It was the

president of Welch which helped in the transfer of the Benito Juarez to Philippine registry. However, the

vessel needed repairs before it could be dispatched; and it became impracticable to deliver the bill of sale

and insurance policy that were required by PNB in San Francisco at the time the money was needed to

effect the transfer. So, Welch in Manila, addressed a letter on August 8, 1918, to the PNB, requesting

it to cable its correspondent in San Francisco to release the money and make payment for the vessel

without requiring the delivery of the bill of sale or policy of insurance, and that La Compaia

would just deliver the bill of sale and insurance policy later. The Bank acceded. After the repair of

the Benito Juarez, it was insured by Welch & Co. for $150,000 and was dispatched to the

Philippines. A few months after, the vessel encountered a storm off Hawaii and became a total loss.

The proceeds of the insurance came to the hands of Welch, Fairchild & Co. in Manila and has been

applied by Welch, Fairchild & Co. in part satisfaction of indebtedness incurred by La Compaa to

it (instead of paying the bank). This disposition of the insurance money was made with the tacit

approval of La Compaa.

ISSUE: WON PNB has a cause of action against respondent.

RULING: YES.While it is true that an agent who acts for a revealed principal in the making of a contract

does not become personally bound to the other party in the sense that an action can ordinarily be

maintained upon such contract directly against the agent, yet that rule clearly does not control in this case;

for even conceding that the obligation created by the letter of August 8, 1918, was directly binding

only on the principal, and that in law the agent may stand apart there from, yet one who has

intervened in the making of a contract in the character of agent cannot be permitted to intercept

and appropriate the thing which the principal is bound to deliver, and thereby make performance

8/13/2019 Agency 45

4/32

by the principal impossible.The agent in any event must be precluded from doing any positive act

that could prevent performance on the part of his principal. This much, ordinary good faith

towards the other contracting party requires. The situation before us in effect is one where,

notwithstanding the promise held out jointly by principal and agent in the letter of August 8, the

two have conspired to make an application of the proceeds of the insurance entirely contrary to the

tenor of said letters.

TUASON vs. OROZCO

Facts:

Juan de Vargas, Dolores Orozcos husband, executed a power of attorney to Enrique Grupe. Vargas

authorized Grupeto dispose of all his property. Grupe was also authorized to mortgage the house

for the purpose of securing the payment of any amount advanced to Orozco.Thereafter, Grupe and

Orozco obtained a loan from Gonzalo Tuason secured by a mortgage on the said house. In said

instrument, Grupe appeared for himself and in behalf of Juan de Vargas. Grupe also assumed liability

which he promises to pay in current gold or silver coin, without discount. Aside from this, he

pledged as special security for the debts payment his 18 shares of stock in the Compania de los

Tranvias de Filipinas.

Agent acted as such in securing the debt for his principal-To secure payment, principals property was

mortgaged; Ps wife eventook part in the execution of the mortgage

Issue:

WON the debt was incurred by Grupe for his own benefit as evidenced by his assumption of paying the

whole loan and his act of pledging his shares of stock as special security

Ruling: No. Debt incurred by agent is binding upon Principal provided Agent acted withinscope of

authority-The fact that Agent also personally bound himself does not relieve Principalsliability; it was

only a further security to the debt; such an act on thepart of A was valid.

Cervantes v. CA

Facts:

On March 27, 1989, private respondent PAL issued to herein petitioner Nicholas Cervantes a round trip

ticket for Manila-Honolulu-Los Angeles-Honolulu-Manila, which is valid until March 27, 1990. On

March 23, 1990, petitioner used it. Upon his arrival in Los Angeles, he immediately booked a flight to

8/13/2019 Agency 45

5/32

Manila, which was confirmed on April 2. Upon learning that the plane would make a stop-over in San

Francisco, and because he would be there on April 2, petitioner made arrangements to board in

San Francisco. On April 2, he was not allowed to board due to the expiration of his ticket. He filed a

complaint for damages. It was not given due course by both the trial court and the Court of

Appeals.

Issues:

(1) Whether or not the act of the PAL agents in confirming subject ticket extended the period of validity

of petitioner's ticket

(2) Whether or not the denial of the award for damages was proper

Held:

(1) From the facts, it can be gleaned that the petitioner was fully aware that there was a need to

send a letter to the legal counsel of PAL for the extension of the period of validity of his ticket.

Under Article 1898 11 of the New Civil Code, the acts of an agent beyond the scope of his authority

do not bind the principal, unless the latter ratifies the same expressly or impliedly. Furthermore,

when the third person (herein petitioner) knows that the agent was acting beyond his power or

authority, the principal cannot be held liable for the acts of the agent. If the said third person is

aware of such limits of authority, he is to blame, and is not entitled to recover damages from the

agent, unless the latter undertook to secure the principal's ratification.

(2) An award of damages is improper because petitioner failed to show that PAL acted in bad faith in

refusing to allow him to board its plane in San Francisco. In awarding moral damages for breach of

contract of carriage, the breach must be wanton and deliberately injurious or the one responsible acted

fraudulently or with malice or bad faith. Petitioner knew there was a strong possibility that he could not

use the subject ticket, so much so that he bought a back-up ticket to ensure his departure. Should there be

a finding of bad faith, we are of the opinion that it should be on the petitioner. What the employees of

PAL did was one of simple negligence. No injury resulted on the part of petitioner because he had a back-

up ticket should PAL refuse to accommodate him with the use of subject ticket.

Neither can the claim for exemplary damages be upheld. Such kind of damages is imposed by way of

example or correction for the public good, and the existence of bad faith is established. The wrongful act

must be accompanied by bad faith, and an award of damages would be allowed only if the guilty party

8/13/2019 Agency 45

6/32

acted in a wanton, fraudulent, reckless or malevolent manner. Here, there is no showing that PAL acted in

such a manner. An award for attorney's fees is also improper.

Smith, Bell & Co. v Sotelo Matti (1992)

FACTS

Plaintiff Smith, Bell & Co and the defendant Mr. Vicente Sotel entered into a contract. Plaintiff

hasto deliver (1) two steel tanks shipped from New York to Manila within three or four months,

(2)two expellers shipped from SanFrancisco in the month of September 1918 or as soon aspossible,

and (3) two electric motors with approximate delivery within ninety days. This isnot guaranteed.

The tanks arrived at Manila on 27 April 1919; the expellers on 26 October 1918; and the motorson 27

February 1919. Upon notification from plaintiff, defendant refused to receive any of thegoods or to

pay for their price. Plaintiff alleged that the expellers and motors were in goodcondition.Plaintiff

filed a complaint against the defendant. The defendant,Mr Sotelo and intervenor, ManilaOil Refining

and By-Products Co., Inc., denied the plaintiffs allegations. They allege that due toplaintiffs delay in

the delivery of goods, the intervenor suffered damages.The lower court absolved the defendants

from the complaint insofar as the tanks and the electricmotors were concerned, but rendered

judgment against them ordering them to receive expellersand pay the sum of P50,000, with legal

interest and cost.Both parties appealed to the Court.

Issue: WON Sotelo Matti can be ordered to receive and pay for the goods [YES]

HELD: The term which the parties attempted to fix were so uncertain that one cannot tell just

whether those articles could be brought to Manila or not. The obligations were conditional. In cases

like this, the obligor will be deemed to have sufficiently performed his part of the obligation, if he

has done all that was in his power, even if the condition has not been fulfilled in reality. Smith, Bell

& Co was able to deliver the goods even though the conditions for delivery were not completely

fulfilled. [No agency concept expressly discussed in case. My guess why Mr. Sotelo was the one ordered

to accept and receive the goods: (1) he was notified by Smith Bell of the arrival of the goods and yet he

did not inform Manila Oil Co.it is his duty as the manager of the company to inform his principal. (2)

he was the only one who appealed judgment, intervenor Manila Oil Co. did not]

Rural Bank of Bombon v CA

Ederlinda Gallardo transacted with Rufino Aquino,contracting him to be her agent and providing him

with aSpecial Power of Attorney authorizing him to mortgage herproperty in her behalf for the purpose of

8/13/2019 Agency 45

7/32

securing loans frombanks. She provided him with the TCT to the property as well.Rufino Aquino secured

a loan from Rural Bank of Bombon forthe amount of PhP350,000.00 as principal and chargeablewith a

14% interest per annum. In the contract of mortgage,he (Rufino Aquino) represented himself to be

the attorney-in-fact of Gallardo,but proceeded to sign his name as mortgagor. He even got hiswife

to sign the documents as wife of mortgagor.Gallardo, upon knowing of the transaction, went to

court tosecure the annulment of such contract since she wasallegedly surprised to find out that her

property was alreadymortgaged and correspondence regarding the contract of mortgage were not

being sent to her, and instead sent to theaddress of Aquino, who has since disappeared from

Bulacanand now resides in Camarines Sur. Further, the mortgage wassecured to pay off personal loans of

Aquino and to establishhis personal fishpond business.RTC issued a TRO restraining Rural Bank of

Bombon toforeclose the mortgage. In his Answer, Aquino alleged thatGallardo owed him money and

it was already theresponsibility of Aquino to take care of payments due. RTCruled in favor of

Aquino and Bank of Bombon.CA reversed the ruling of the RTC and held that the Deal of Real

Estate Mortgage was not valid. It not binding on theprincipal Gallardo since it was executed not in

her name asprincipal but in the personal capacity of the Aquino spouses.

Issue:WON the Deed of Real Estate Mortgage executed by Rufino S.Aquino as attorney-in-fact of

Ederlinda Gallardo in favor of the Rural Bank of Bombon is valid.

Held:No. Aquino signed the Deed of Real Estate Mortgage in hisname alone as mortgagor, without any

indication that he wassigning for and in behalf of the property owner, EderlindaGallardo. He bound

himself alone in his personal capacity as adebtor of the petitioner Bank and not as the agent orattorney-in-

fact of Gallardo.

In order to bind P on mortgage, it must be made in behalf of P;otherwise, it will bind agent only-Agents

act of signing mortgage deed in his own name bound himself in his personal capacity as debtor-Exception

in Art. 1883 not applicable. There is no principle of law by which one can become liable on a realestate

mortgage which he never executed either in person or byattorney in fact.

Sy Juco v. Sy Juco

Facts: In 1902, Santiago Sy-juco was appointed bythe Vicente and Cipriane Sy-juco as administrator of

their property and the former acted as such until June 30, 1916, when his authority was cancelled. The

plaintiffs are defendant's father and mother who allege that during his administration the defendant

Santiago acquired the property claimed in the complaint in his capacity as plaintiffs' administrator with

8/13/2019 Agency 45

8/32

their money and for their benefit. The trial court ordered Santiago to return the properties in question,

which he bought in his name.

Issue: Whether or not the plaintiffs have a cause of action

Held: YES. From the rule established in article 1717 of the Civil Code that, when an agent acts in his own

name, the principal shall have no right of action against the person with whom the agent has contracted,

cases involving things belonging to the principal are excepted. According to this exception (when things

belonging to the principal are dealt with) the agent is bound to the principal although he does not assume

the character of such agent and appears acting in his own name (Decision of the Supreme Court of Spain,

May 1, 1900). This means that in the case of this exception the agent's apparent representation yields to

the principal's true representation and that, in reality and in effect, the contract must be considered as

entered into between the principal and the third person; and, consequently, if the obligations belong to the

former, to him alone must also belong the rights arising from the contract. The money with which the

launch was bough having come from the plaintiff, the exception established in article 1717 is applicable

to the instant case.

NFA vs IAC

Facts:

Gil Medalla, as commission agent of the plaintiff Superior Shipping Corp., entered into a contract

for hire of ship with defendant NFA. Under the said contract Medalla obligated to transport on the

plaintiffs ship, sacks of rice belonging to NFA.

But instead of payment for the services being rendered to Superior Shipping, NFA admitted that

they gave the payment to Medalla.

But Medalla never turned over the payment to Superior shipping despite demands.

Plaintiff was therefore constrained to file the instant complaint.

Judgment was rendered in favor of plaintiff and of which was affirmed by the appellate court.

Hence this petition.

8/13/2019 Agency 45

9/32

ISSUE:

Whether or not the instant case falls within the exception of the general rule provided for in Art.

1883.

Ruling:

It was undisputed that Medalla was a commission agent of thecompany-Art. 1883 applicable-Agents

apparent representation yields to the principals truerepresentation, therefore, contract considered to have

been enteredinto between the principal and the 3rdparty.

Gold Star Mining v. Lim Jimena, 25 SCRA 597

Facts;

Jimena filed a suit against Lincallo for recovery of his advances and his one-half share in the royalties,

and impleaded Gold Star and Marinduque Iron Mines, as well as Tolentino, later on as defendants. Two

weeks later, the trial court issued a writ of preliminary injunction, preventing both mining companies

from paying royalties during the pendency of the case to Lincallo, his assigns or legal representatives.

Despite of such injunction, Gold Star still paid P30,691.92 to Lincallo and Tolentino (claiming that a writ

of prelimary attachment filed by Jimena supposedly superseded the injunction, but the condition to such

attachment - the filing of a bond - was not fulfilled, so it cannot be said that the injunction was

superseded).

the case in the trial court and were,

accordingly, substituted by their respective widows and children.

the shares of the royalties of Lincallo in his contracts with Gold Star, Marinduque Iron Mines and

Alejandro Marquez, that both mining companies pay directly to the former half of the shares of the

royalties until said contracts were terminated, that Lincallo pay the heirs the capital Victor Jimena gave

him to purchase the mining claims and the latters shares with interest, and that Gold Star Mining Co.,

Inc. pay them the sum of P30,691.92 solidarily with Ananias Isaac Lincallo for violation of an injunction.

ISSUES:

1. WON the CA erred in finding that the Jimenas have a cause of action against Gold Star Mining Co., as

there is no privity of contract between Gold Star and Jimena.

8/13/2019 Agency 45

10/32

2. WON the CA erred in condemning Gold Star to pay the sum of P30,691.92 for violation of an

allegedly non-existent injunction.

RATIO DECIDENDI:

1. NO. The existence of a common subject-matter supplies the juridical link. Jimena repeatedly made

demands upon God Star for the payment of his share of the royalties, but all in vain, so he was forced

to implead Gold Star for having refused to recognize his right. Furthermore, under such conditions

wherein Jimena was repeatedly denied of his interests, Jimena has an action against Gold Star, pursuant to

Art. 1883, NCC, which provides that the principal may sue the person with whom the agent dealt with in

his (agents) own name, when the transaction involves things belonging to the principal.

2. NO. Said award is not so much a penalty against petitioner as a decree of restitution. Said sum to be

paid by the company to Jimena is to be imputed to Lincallos liability under this judgment. CA thus left

the way open for Gold Star to recover later the whole amount from Lincallo.

-When Lincallo (agent) transferred his mining claims to Gold Star, even without disclosing that Jimena

was part owner, he acted as agent of Jimena with respect to Jimena share of the claims-Art. 1883

applicable-While there is no privity of contract between 3 rdparty (Gold Star) and principal (Jimena) in

this case, the common subject matter supplies the juridical link

Macondray v. Sellner (ROG)

Feb. 2, 1916

Facts:

Sellner, a real estate broker, sold land toMacondray. Formal deed of sale not executed until

delivery of a Torrens title. In the meantime, landwas flooded by high tides and Macondray

becamehighly dissatisfied with its purchase. When finaltransfer was made company informed Sellner

thatland as wholly unsuited for use as a coal-yard, forwhich it had been bought and requested him tofind

another purchaser. Both parties had anunderstanding that Sellner was to have ascommission for getting a

purchaser anything overamount which he could get.Sellner found another buyer Barretto. A

formaldeed of sale was executed together with Torrenswhich was delivered to Sellner by

Company.Barretto agreed to accept land if uponexamination, title and deed be satisfactory. Sellner

retained the Torrents title but left deed of sale withBarretto with understanding that if both

weresatisfactory, latter would just issued check toformer. A few days later Barretto was detained

bytyphoon on his way to Tayabassohis return wasdelayed. During the absence of Barrtto, company

8/13/2019 Agency 45

11/32

advisedSellner that latter must consummate sale andcollect money without delay upon Barretto's

return.All the while company kept asking Sellner to speedup in closing the deal but Barretto could

notimmediately do so coz he was indisposed from his

trip. Barretto arrived Saturday and promised he'dget to checking the docs in a day or two.By

Monday, Company gave an ultimatum.-Young, Company's general manager then formallynotified Sellner

that unless purchase price was paidbefore 5pm of that afternoon deal was off. Barrettothen asked Sellner

to turn over the Torrens titlewhich latter did but latter would only receive thecheck 36hrs later,

Wednesday morning. Uponreceipt of check, Sellner immediately tendered toCo but Co's manager

refused to accept and filedthis action claiming that sale had been "cancelled"upon failure of Selner

to turn over price.

Issue: WON sale be cancelled on ground of latedelivery of purchase price? NOWON Macondray

entitled to damages from realestate broker Sellner? NO

Held:

Court's preliminaries:

-No reason given by Company for delivery of priceat certain hour other than that manager had

beenannoyed by delays or changed mind about sellingbecause he found a better deal or land worth

morethan he offered.

-As to value of land--no real diff actual and truemarket value of land. Witness Company providedwas of a

rival real estate broker, who had neverbeen on the land but claimed familiarity withgeneral location. Such

witness insufficient toestablish such fact. It may be that land hasspeculative value higher than actual

market valueat time of sale but the question of fact ruled uponis the actual market value at time of sale

and NOTspeculative value.-Market value = price which property will bring ina fair-market after fair and

reasonable efforts havebeen made to find a purchaser who will give thehighest price for it.

2. Macondray no cause of action to file fordamages v Sellner its real estate agent.

-Measure of damages recoverable from real estateagent = actual market value of property, title towhich

had been lost as a result of the sale. This isdamages which company has a right to should hechoose to

ratify sale and recoup from agent anyloss resulting from latter's alleged unauthorizedconsummation of the

sale.

8/13/2019 Agency 45

12/32

-Company still liable to real estate agent in eventthat former terminate negotiations, for the

amountof commission, which former agreed to pay latterupon his agency contract.Market value of

land =18k of this company received 17k leaving a bal of1,717 unpaid. The commission agreed upon was

allover 17k which Sellner would secure fromproperty---allowing Sellner this commission, andoffsetting it

against the unpaid balance, Macondraynot entitled to money judgment against Sellner.

-At the time fixed by manager of Co for thetermination of the negotiations, Sellner had

alreadyearned the commissions agreed upon, and couldnot be deprived thereof by arbitrary action

of Co indeclining to execute the contract of sale for some

reason personal to itself.

Danon v. Brimo (MARK)

Sept. 12, 1921

J. Johnson

FACTS:

Defendant Antonio A. Brimo, in a conversationwith the plaintiff Julio Danon, informed thelatter

that he (Brimo) desired to sell his factory,the Holland American Oil Co., for the sum ofP1,200,000.

He agreed and promised to pay tothe plaintiff a commission of 5 per centprovided the latter finds a

buyer that will buysaid factory for the said amount.

No definite period of time was fixed withinwhich the plaintiff should effect the sale. Therewas

likewise another broker (Sellner) who wasnegotiating the sale of said property.

Sellner, the other broker referred to, had founda purchaser who ultimately bought the factory for

P1,300,000. For that reason Mr. Prieto, thewould be purchaser found by the plaintiff,

never came to see Mr. Brimo to perfect theproposed negotiation.

him, as broker, to the defendant.

ISSUES WON Danon is entitled to the commissionagreed upon. NO.

RATIONALE

8/13/2019 Agency 45

13/32

8/13/2019 Agency 45

14/32

8/13/2019 Agency 45

15/32

Hermosisisima, Jr., J.:

FACTS: On September 16, 1975, defendantcorporation (Araneta, Inc.) thru its co-defendantAsst. Gen.

Mgr. Eduque, granted to Inland RealtyInvestment Service, Inc. (Inland) represented byone Roman de los

Reyes (entitled to of the claimasserted which is 5% brokers commission) a 30-day authority to sell its

shares stock in anothercorporation.Inland was able to find a prospective buyer, theStanford Microsystems,

Inc., but the offer of saidbuyer was rejected by Araneta, Inc. Thus, Inlandlooked for other buyers and

found two moreprospective ones.The authority was extended several times: first on

Oct. 2, 1975, for 30 days from the said date, thesecond on Oct. 28, 1975 for 30 days from saiddate, and on

Dec. 2, 1975 for 30 days from the saiddate.On July 8, 1977 or 1 year and 5 months after thelast extension

granted to Inland, the shares ofstock were finally sold to Standford Microsystems,Inc.

Thus, Inland and de los Reyes formally demandedtheir 5% brokers commission, which was deniedby

Araneta, Inc. on the ground that the claim hasno factual or legal basis.Inland and de los Reyes claimed

that a letter datedOctober 28, 1976 was signed by Araneta II,renewing their authority to act as sales agent

for aperiod of 30 days from said date. They alsoasserted that a broker is automatically entitled tothe

stipulated commission merely upon securingfor, and introducing to, the seller the particularbuyer who

ultimately purchases from the formerthe object of the sales, regardless of the expirationof the brokers

contact of agency and authority tosell.Trial court and CA ruled in favor of Araneta, Inc.

ISSUE: W/N Inland and de los Reyes are entitled tothe brokers commission. NO.

RATIO:

1. The alleged letter extending the authority 30more days from October 28, 1976 is a blatant lie.Inland

and de los Reyes failed to attach a certifiedcopy of this letter. Thus, their contract alreadyexpired thirty

days from its last renewal onDecember 2, 1975.

2. On the claim of automatic brokerscommission, this is devoid of merit. FromSeptember 16, 1975 to

January 1, 1976, whenInlandsauthority to sell was subsisting, if at all,petitioners had nothing to show

that they activelyserved their principals interests, pursued to sellthe shares in accordance with their

principalsterms and conditions, and performed substantialacts that proximately and causatively led to

theconsummation of the sale to Stanford of Araneta,Inc.s shares.

Rocha v. Prats, 43 Phil. 397

8/13/2019 Agency 45

16/32

-Broker never succeeded in his duty to bring buyer and seller to anagreement; until that is done, his right

to commission does not accrue.

Pratts v. CA

Facts:

This complaint for sum of money filed by

Prats, doing business under name of Philippine

Real Estate Exchange, against Doronila and PNB.

Doronila was registered owner of 300hectares of

land. He wrote to SSS Chair offering his property to

SSS at P4 per square meter (per sqm). There were

several counter offers made as to the price.

Doronilla requested certification from Board of

Realtor regarding the actual prices of his real

estate raw-land properties. The Board replied that

the fair market value of raw land is P3-P3.50 per

sqm. Current prices before reaching Doronilla's

property range from 6-7 per sqm.

Doronilla granted an exclusive option and authority

to Prats to sell former's property. Commission will

be 10% based on P2.10 per sqm or at any price

finally agreed upon. Doronilla asked SSS to return

all papers related to his property in view of the

8/13/2019 Agency 45

17/32

exclusive option granted to Prats.

SSS asked for a meeting with Doronilla but latter

asked that SSS meet with Philippine Real Estate

Exchange instead because Doronilla had given

exclusive option to it. Prats gave notice to Doronilla

that SSS had agreed to purchase the land. The

latter replied that he had not received any written

offer from SSS during the 60day period of the

exclusive authority nor during its extension.

Doronilla wrote to SSS renewing his offer to sell

revising his original offer of P4 per sqm to P3.25.

SSS passed a resolution NO. 636 making a counter

offer of Php3.25 per sq m subject to an appraisal of

the property and to submit a report thereon. After

a favorable appraisal report of the Toples &

Harding SSS passed Res no. 738 approving

purchase of the land for Php3.25 or for total of

P9.7m. Deed of Sale was executed. Doronilla

received the full purchase price. Prats then

demanded payment of his professional fee.

TC: ordered Doronilla to pay

CA: reversed.

8/13/2019 Agency 45

18/32

Issue:

WON Prats was not the efficient procuring

cause in bringing about the sale of Doronila's land

to SSS? YES

Held:

1. Doronilla's offer to sell land to SSS was

formally accepted only on June 1968 after

the exclusive authority in favor of Prats had

expired.

The CA's factual finding that Prats not the efficient

procuring cause in bringing about the sale are final.

Prats was not categorical that it was through his

efforts that the meeting between SSS

Administrator Teodoro and Doronilla took place. He

refers to a phone call he made a few days before

May 29, 1968 but in the conversation he had with

Mr. Teodoro, the latter requested him NOT to be

present in the meeting. It is manifest that SSS

officials never wanted to be in any way guided by,

or mediated by Prats relative to the negotiation for

8/13/2019 Agency 45

19/32

purchase of property. The meeting was done

independently and not by virtue of Prat's efforts.

2. In equity, court notes that Prats had

diligently taken steps to bring back together

Doronilla and SSS and therefore grants him

100k by way of compensation for his efforts

and assistance in the transaction. .

Among others: He wrote to the Office of

Presidential Housing Commission offering the land

and wrote a follow up letter which was answered

by Commission suggesting that property be offered

directly to SSS.

Sale was perfected only at the price offered by

Doronila when he alone was dealing exclusively

with buyer long before Prats came along but Prats

efforts were instrumental in bringing them together

again and finally consummating the sale although

sale finalized after expiration of Prats' extended

exclusive authority.

62)

UNILAND RESOURCES VS DBP

8/13/2019 Agency 45

20/32

200 SCRA 757

Facts:

Uniland Resources, a licensed real estate brokerage firm, stood as middleman to broker a deal

with Counsel Realty Corp., an affiliate of Glaxo, Philippines and DBP, for the sale of a warehouse lot.

But as a result of a conflict in the bidding guidelines, the deal did not materialize.

Thereafter, DBP agreed to sell the warehouse lot to Charges Realty Corp., another affiliate of

Glaxo, Philippines. Uniland Resources was not privy to the sale anymore and could not be considered as

a broker. But in spite of that, it wrote to DBP asking for the payment of its brokers fee in instrumenting

the sale of the warehouse lot to Charges Realty Corp. DBP denied their claim.

The instant case filed by Uniland to recover said brokers fee was ruled in favor by the trial court

but was reversed by the Court of Appeals.

ISSUE: Whether or not there existed an implied agency between Uniland Resources and DBP.

RULING:

Petitioner invoked Article 1869 in contending that an implied agency existed. Petitioner argues

that it should have been stopped and outrightly prevented from dealing the warehouse lot by the DBP

from the start.

In the course of petitioner's dealings with the DBP, it was always made clear to petitioner that

only accredited brokers may look for buyers on behalf of respondent DBP. Petitioner was never able to

secure the required accreditation from respondent DBP to transact business on behalf of the latter.

The letters sent by petitioner were merely indicative of petitioner's desire to secure such

accreditation.

8/13/2019 Agency 45

21/32

This is not a situation wherein a third party was prejudiced by the refusal of respondent DBP to recognize

petitioner as its broker. The controversy is only between the DBP and petitioner, to whom it was

emphasized in no uncertain terms that the arrangement sought did not exist.

Therefore, no implied agency ever existed.

63.)GONZALES VS HABERES

Guadalupe Gonzales was the owner of a parcel of land situated in Partida, Municipality of

Guimba, Nueva Ecija which application for registration still pending in the Court of First Instance. She

and the defendant, E.J. Haberes, entered into a contract for the sale of the said land and it was

negotiated by her husband Gomez.

The defendant was led to believe that the plaintiffs were in the possession of the land. On

seeking to obtain possession, the defendant found that practically the entire area of the land was occupied

by adverse claimants and title thereto disputed; and that he consequently has been unable to obtain

possession of the land.

The lower court dismissed Gonzales complaint to recover the balance from the defendant

upon the written agreement for the said sale and declared the contract rescinded and void and gave the

defendant judgment upon his counterclaim to return back the sum he already paid with interest.

ISSUES :

Whether or Not the plaintiffs were under obligation to place the defendant in possession.

Whether or Not Gonzales cannot be charged with the misrepresentations of her husband in the sale.

RULING :

8/13/2019 Agency 45

22/32

One of the essential conditions of the agreement was stated in no. 3 of the obligation to sell in their

contract. It stated - That said Mr. E.J. Haberes shall have the right to take poss ession of the aforesaid

land immediately after the execution of this document together with all the improvements now existing on

the same land, such as palay plantation and others. This necessarily created the obligation on the part of

the plaintiffs to make good the right thus granted. Failure of the plaintiffs to comply with this condition,

without fault on the part of the defendant, is in itself sufficient ground for the recission.

Mr. Gomez, in negotiating for the sale of the land acted as the agent and representative of the other

plaintiff, his wife. And having accepted the benefit of the representations of her agent she cannot escape

liability for them.

64.) ANTONIO M. BARRETTO, plaintiff-appellee, vs. JOSE SANTA MARINA, defendant-appellant.

December 2, 1913

FACTS:

The La Insular cigar and cigarette factory is a joint account association with a nominal capital of

P865,000, the plaintiff's share is P20,000, or 4/173 of the whole. The plaintiff's attorneys wrote the

defendant's local representative a letter offering to sell plaintiff's share in the factory. The result of the

correspondence between the parties and their representatives was that Exhibit G was duly executed on

May 3, 1910. In accordance with the terms of this exhibit a committee of appraisers was appointed to

ascertain and fix the actual value of La Insular. The committee rendered its report, fixing the net value

.Subsequently to the execution of Exhibit J, demand was made by the plaintiff upon the defendant for his

share of the profits from June 30, 1909, to November 22, 1910. This demand was refused and thereupon

this action was instituted to recover said profits. The plaintiff argued that if the agreement of May 3,

1910, was a perfected sale he cannot recover any profits after that date; while on the other hand the

defendant concedes that if said agreement was only a promise to sell in the future it, standing alone,

would not prevent recovery in this action.

ISSUE

: Whether the agreement made by the parties on May 3, 1910 was a perfected contract of sale.

8/13/2019 Agency 45

23/32

HELD:

YES, it was a perfected contract of sale.

Article 1450 of the Civil Code reads:

"The sale shall be perfected between vendor and vendee and shall be binding on both of them, if they

have agreed upon the thing which is the object of the contract and upon the price, even when neither has

been delivered. "The contract of May 3, 1910, provides that:"Whereas the respective contracting parties

have agreed, the one to sell and the other to buy the whole of the right, title and interest of the said

Antonio Maria Barretto in and to the said joint account association, including not only the individual

participation of the said party of the second part standing on the books of the association in the name of

Antonio M. Barretto, but also one-half of the share in the business which stands on the books in the name

of Barretto & Company .Under article 1450, supra there are two indispensable requisites in a perfected

sale :(1) There must be an agreement upon the things which is the object of the contract; and (2)the

contracting parties must agree upon the price. The object of the contract in the case at bar was the whole

of the plaintiff's right, title, and interest in La Insular. As to the thing and the price the minds of the

contracting parties met, and all questions relating thereto were settled. Nothing was left unfinished in so

far as the contracting parties were concerned. Neither party could withdraw from the contract without the

consent of the other. The result is that the two essential requisites necessary to constitute a perfected sale

were present.

According to the ordinary and well-understood use of the words "purchase"and "sale" they mean, in the

absence of any expression to limit their significance, a transmutation of property from one party to

another in consideration of some price or recompense in value; a transmission of property by a voluntary

act or agreement, founded on a valuable consideration;divesting the title out of the vendor and vesting it

in the vendee. Again, not only was the title of the plaintiff's interest vested in the defendant on the

execution of the contract of May 3 but the possession of that interest was also then transferred to the

defendant. (Art. 1462, Civil Code; UyPiaoco vs. McMicking, 10 Phil. Rep., 286.)

-----------------------------------------------------------------------------------------------------------------------

Dili nako Makita ni Barreto v. Sta. Maria, 26 Phil. 440 n case ..kani r s taas ang mugawas pero mao ni s

baba ang gist s agency

Barreto v. Sta. Maria, 26 Phil. 440

8/13/2019 Agency 45

24/32

-Agent made his intent to resign as manager known to his principal and the principal later accepted it and

appointed a new manager; he was not unlawfully dismissed-No period was fixed for the duration of

managersposition; even if there was, principal still entitled to revoke if he no longer has confidence on

his agent even before expiration of the period

DIOLOSA VS CA

FACTS:

The plaintiff, Quirino Baternaowner and proprietor of Quin Baterna Realty, was a licensed real

estate broker. On June 20, 1968, he entered into an agreement and was constituted as exclusive sales

agent of the defendants, to dispose of, sell, cede, transfer and convey the lots included in Villa Alegre

Subdivision which were owned by the defendants, until all the lots shall have been disposed of.

On September 27, 1968, the defendants terminated the agency and rescinded the contract for the

reason that the lots remained unsold were for the reservation for their grandchildren.

ISSUE :

Whether or not the petitioners could terminate the agency agreement without paying damages to the

private respondent.

Ruling:

Under the terms of their contract, herein petitioners engaged the private respondent and allowed

him "to dispose of, sell, cede, transfer and convey the subject property until all the said property as

subdivided is fully disposed of." The authority to sell is not extinguished until all the lots have been

disposed of. When, therefore, the petitioners revoked the contract with private respondent in a letter they

become liable to the private respondent for damages for breach of contract.

New Manila v. Republic, 107 Phil. 824

-Contractor (principal) already did what he had authorized agent to doin his behalf which is to collect the

amounts due him from thegovernment; therefore, agency was already revoked

Dy Buncio & Co., Inc. v Ong Guan Can

FACTS: Ong Guan Can, Jr. executed on behalf of

8/13/2019 Agency 45

25/32

the Ong Guan Can, the deed covering the sale of a

rice-mill and camarin, in favor of buyers who relied

upon a 1928 power of attorney attached to the

deed, but which turned out was not a general

power of attorney but a limited one and [did] not

give the express power to alienate the properties

in question.

The creditors of Ong Guan Can sought to have the

sale declared void. But the buyers, defendants Juan

Tong and Pua Giok Eng claimed that they were the

owners and lessees of the property.

Defendants claimed that the defect in the sons

authority to sell on behalf of the father was cured

by an earlier 1920 general power of attorney

given to the same agent [son] by the father.

The CFI of Capiz held that the deed was invalid and

that the property was subject to the execution

which has been levied on the properties by the

judgment creditor of the owner.

ISSUE: WON the deed of sale was invalid

HELD: YES. The sale is void. The making and

accepting of a new power of attorney, whether it

8/13/2019 Agency 45

26/32

enlarges or decreases the power of the agent

under a prior power of attorney, must be held to

supplant and revoke the latter when the two are

inconsistent. If the new appointment with limited

powers does not revoke the general power of

attorney, the execution of the second power of

attorney would be a mere futile gesture.

Since the title of Ong Guan Can has not been

divested by deed of sale, his properties are subject

to attachment and execution.

Garcia v. De Manzano, 39 Phil. 577

-PoA given to son (1st) was not revoked by PoA given to mother (2nd)because son had no knowledge of

2ndPoA-PoA authorizes sale and purchase of real property and mortgaging thesame as well as borrowing

of money; it is general and complete-A power so full and complete must necessarily carry with it right to

sellhalf interest in a small boat, especially since sale was necessary to getmoney or credit.

Rallos vs. Yangco

FACTS: On November 27, 1907, Teodoro Yangco

sent a letter to Florentino Rallos, offering Yangco

his services. Accordingly, he has just opened a

shipping and commission department for buying

and selling tobacco leaf and other native products

in his steamship office in Manila. He expressly

8/13/2019 Agency 45

27/32

indicated in his letter that Florentino Collantes will

act for and in his behalf in transacting with Rallos.

He further stated that he has given Collantes a

power of attorney, notarized by Mr. Rodriguez.

On February 1909, Rallos sent to Collantes 218

bundles of tobacco in the leaf to be sold on

commission. After deducting the commission

(P206.96) from the total amount of P1744, Rallos is

entitled to P1537.08.

It appears that at the time Rallos gave the tobacco

to Collantes, he was not the agent of Yangco

anymore, Yangco having severed his relationship

with Collantes. This fact however was not known to

nor communicated with Rallos. As a result, when Rallos tried to collect from Yangco the P1537.08,

Yangco refused to pay him the amount, on the

basis that Collantes was already acting on his

behalf at the time he collected the 218 bundles of

tobacco.

ISSUE: WON Yangco is still liable to pay Rallos the

amount of P1537.

HELD: Yes. Having advertised the fact that

Collantes was his agent and having given them a

8/13/2019 Agency 45

28/32

special invitation to deal with such agent, it was

the duty of the defendant on the termination of the

relationship of principal and agent to give due and

timely notice thereof to the plaintiffs. Failing to do

so, he is responsible to them for whatever goods

may have been in good faith and without

negligence sent to the agent without knowledge,

actual or constructive, of the termination of such

relationship.

For his failure to inform Rallos of the termination of

the agency relationship with Collantes, Yangco is

liable.

Compania General de Tobacos v. Diabu, 20 Phil. 321

-Agent has been selling and buying goods on behalf of principal formore than 8 years-Upon terminationof agency but without notice to 3rd party, 3rd partyhad a perfect right to believe that agent was still

representing theprincipal-Evident here that principal was willing to ratify agents acts in sellinggoods but

unwilling to ratify acts in purchasing goods.

COLEONGCO vs. CLAPAROLS

Facts:

The respondent, Eduardo L. Claparols, , operated a factory for the manufacture of nails in Talisay,

Occidental Negros, under the style of "Claparols Steel & Nail Plant". He entered into an agreement with

Vicente Coleongco, whereby the latter undertook the following: to finance and put up the funds

required for the importation of the nail wire; he would have the exclusive distribution of the product, and

the absolute care in the marketing of these nails and the promotion of sales all over the Philippines; he

would share the control of all the cash from sales or deposited in banks; that he would have a

representative in the management; that all contracts and transactions should be jointly approved by both

8/13/2019 Agency 45

29/32

parties; that proper books would be kept and annual accounts rendered; and that profits and losses would

be shared on a 50-50 basis.

On April 27, 1953, Claparols executed a special power of attorney to open and negotiate

letters of credit, to sign contracts, bills of lading, invoices, and papers covering transactions; to represent

appellee and the nail factory; and to accept payments and cash advances from dealers and distributors in

favor of Coleongco, who also became the assistant manager of the factory, and took over its business

transactions, while Claparols devoted most of his time to the nail manufacture processes.

Issue:

Whether or Not the special power of attorney is irrevocable.

Ruling:

A power of attorney can be made irrevocable by contract only in the sense that the principal may not

recall it at his pleasure but the authority certainly can be revoke by a just cause.

Coleongco, with such power and his interest to the subject matter of the agency, acted in bad faith for

several instances: his letters to the Philippine National Bank attempting to undermine the credit of the

principal and to acquire the factory of the latter, without the principal's knowledge; his letter to his cousin,

Kho To, instructing the latter to reduce to one-half the usual monthly advances to Claparols on account of

nail sales in order to squeeze said appellee and compel him to extend the contract entitling him to share in

the profits of the nail factory on better terms, and ultimately own his factory; his attempt to, have

Romulo Agsam pour acid on the machinery; his illegal diversion of the profits of the factory to his own

benefit; and the surreptitious disposition of the Yates band resaw machine in favor of his cousin's Hong

Shing Lumber Yard, made while Claparols was in Baguio in July and August of 1956. Those were plain

acts of deliberate sabotage by the agent that fully justified the revocation of the power of attorney by

Claparols and his demand for an accounting from his agent Coleongco.

FEDERICO VALERA VS MIGUEL VELASCO

Facts:

The defendant, Miguel Velasco, was appointed attorneyin-fact of the Plaintiff, Federico Valera. The

defendant, by virtue of powers of attorney, has the authority to manage plaintiffs property in the

8/13/2019 Agency 45

30/32

Philippines, consisting of the usufruct of a real property located at Echague St., Manila. He made reports

of his operations and rendered accounts of his administration.

On March 31, 1923, the defendant presented to plaintiff his final account of his administration

for said month wherein it appears that there is a balance of P3,058.33 in favor of the plaintiff but in the

liquidation of accounts revealed that he also owed the defendant the amount of P1,100.00.

As misunderstanding arose between them, the defendant filed a civil action against the plaintiff

for the collection of the balance resulting from a liquidation of the agency accounts.

Issue:

Whether or not the lower court erred in holding that the agency is terminated even the agent has not

expressly told his principal that he renounced the agency.

Ruling:

It is not always necessary for the agent to renounce the agency expressly . The fact that an agent

institutes an action against his principal for the recovery of the balance in his favor resulting from the

liquidation of the accounts between them arising from the agency, and renders final account of his

operations, is equivalent to an express renunciation of the agency, and terminates the juridical relation

between them.

Although he did not expressly told the principal, Federico Valera, that he renounced the agency yet

neither dignity nor decorum permits the latter to continue representing a person who has adopted such

antagonistic attitude towards him.

Pasno v. Ravina, 54 Phil. 378

-Power of sale given in a mortgage is a power coupled with an interestwhich survives the death of thegrantor-The creditor-mortgagee with a power of sale has 3 options (forproperty under custody of a

judicial administrator after owner-principals death):

o

Waive his security and prove his credit as an ordinary against theestate

8/13/2019 Agency 45

31/32

o

Foreclose mortgage by ordinary action in court at any time withinthe period allowed by the statute of

limitations, in accordancewith Code of Civil Procedure

o

Foreclose the mortgage without action in accordance with Act3135, which is less prejudicial to the estate

Ramos vs Caoibes

Concepcion Ramos executed 2 documents. The first is a power of attorney appointing Caoibes tocollect

from Phil. War damage Commission any claim regarding property lost during the last war. The 2

nd

document is an affidavit stating that any claim made- half to be given to her sister andthe other to

Caoibes. Before Ramos died, she filed a claim with the Commission. This wasencashed by Caoibes after

death of Ramos thru the power of atty. Administratrix ConsolacionRamos discovered the collection made

by Caoibes. She filed a motion with the court asking thatCaoibes be ordered to deposit the sum of

P501.62 with the clerk of court. Caoibes was willing todeliver P250. This was refused by administratrix.

TC ruled in favour of Caoibes. SC reversed

ISSUE:

WON atty-in-fact Caoibes is obliged to deliver the full amount of the check P501.62

Ruling:

Agent has the obligation to deliver amount y virtue of PoA to hisprincipal-There was no cession of rights

made in favor of the agent in the PoA,and the contract of agency is presumed to be gratuitous, unless

theagent is a professional agent-When the agent made use of the PoA, principal was already dead;agency

was terminated upon the death of the principal; therefore, hecant keep the proceeds of the claim for

himself -Agents act of collecting the claim is not such a service as to requirecompensation

Herrera v. Luy Kim Guan, 1 SCRA 406

-Date of death of the principal has not been satisfactorily proven,therefore, documents are presumed to

have been executed during thelifetime of the principal-Also, there was no proof that agent was aware of

8/13/2019 Agency 45

32/32

death of theprincipal; death of the principal does not render th act of an agentunenforceable, where the

agent had no knowledge of suchextinguishment of the agency