Agency Cases Pt1

8/12/2019 Agency Cases Pt1

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AGENCY CASES Part 1 under Atty. Dimayuga AY 2012-2013 Page 1of 19

WILLIAM UY and RODEL ROXAS, petitioners, vs. COURT OF APPEALS, HON. ROBERT BALAO andNATIONAL HOUSING AUTHORITY, respondents.

William Uy and Rodel Roxas are agents authorized to sell eight parcels of land by the owners thereof. By virtue ofsuch authority, petitioners offered to sell the lands, located in Tuba, Tadiangan, Benguet to respondent ational!ousing "uthority #!"$ to be utilized and developed as a housing pro%ect.

&n 'ebruary (), (*+*, the !" Board passed Resolution o. (- approving the ac/uisition of said lands, withan area of -(.+-( hectares, at the cost of 0-.+1 million, pursuant to which the parties executed a series of

2eeds of "bsolute 3ale covering the sub%ect lands. &f the eight parcels of land, however, only five were paid for bythe !" because of the report 1it received from the 4and 5eosciences Bureau of the 2epartment of 6nvironmentand atural Resources #26R$ that the remaining area is located at an active landslide area and therefore, notsuitable for development into a housing pro%ect. !ence, !" cancelled the sale over the three parcels of land.They also offered (.7 8 as damages.

Uy and Roxas filed before the Regional Trial 9ourt #RT9$ of :uezon 9ity a 9omplaint for 2amages against !"and its 5eneral 8anager Robert Balao.

"fter trial, the RT9 rendered a decision declaring the cancellation of the contract to be %ustified.

9" reversed the decision of the RT9 and dismissed the complaint. "nd that there was no reason for the award ofdamages. The 9ourt of "ppeals also noted that petitioners were mere attorneys;in;fact and, therefore, not the realparties;in;interest in the action before the trial court.

Whether they should have %oined the lot owners asindispensable parties

39? "ffirmed 9"@s ruling and 26


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. . . recognizes the assignments of rights of action and also recognizes that when one has a right of actionassigned to him he is then the real party in interest and may maintain an action upon such claim or right. Thepurpose of Dthis ruleE is to re/uire the plaintiff to be the real party in interest, or, in other words, he must be theperson to whom the proceeds of the action shall belong, and to prevent actions by persons who have no interest inthe result of the same. . . .

Thus, an agent, in his own behalf, may bring an action founded on a contract made for his principal, as anassignee of such contract. We find the following declaration in 3ection -1 #($ of the Restatement of the 4aw on"gency #3econd$? 11

3ec. -1. "gent as &wner of 9ontract Right

#($ Unless otherwise agreed, an agent who has or who ac/uires an interest in a contract which he maes on behalfof his principal can, although not a promisee, maintain such action thereon maintain such action thereon as mighta transferee having a similar interest.

The 9omment on subsection #($ states?

a."gent a transferee. &ne who has made a contract on behalf of another may become an assignee of the contractand bring suit against the other party to it, as any other transferee. The customs of business or the course ofconduct between the principal and the agent may indicate that an agent who ordinarily has merely a securityinterest is a transferee of the principals rights under the contract and as such is permitted to bring suit.


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"s petitioners are not parties, heirs, assignees, or beneficiaries of a stipulation pour autruiunder the contracts ofsale, they do not, under substantive law, possess the right they see to enforce. Therefore, they are not the realparties;in;interest in this case.

0etitioners not being the real parties;in;interest, any decision rendered herein would be pointless since the samewould not bind the real parties;in;interest. 14

PNB #$ MANILA SURETY and FIDELITY CO., INC. and THE COURT OF APPEALS

'acts?

The 0hilippine ational Ban had opened a letter of credit and advanced H(I,III.II to 6dgington &il Refinery for+,III tons of hot asphalt. &f this amount, ,III tons worth 01*,III.II were released and delivered to "dams JTaguba 9orporation #nown as "T"9&$ under a trust receipt guaranteed by 8anila 3urety J 'idelity 9o. up to theamount of 017,III.II. To pay for the asphalt, "T"9& constituted the Ban its assignee and attorney;in;fact toreceive and collect from the Bureau of 0ublic Wors the amount out of funds payable to "T"9&.

$. %he &'I(I&&I)E )"%I*)"( B")+ is hereby appointed as our "ttorneyin!act for us and in our name, placeand stead, to collect and to receive the payments to be made by virtue of the aforesaid &urchase *rder, with full

power and authority to eecute and deliver on our behalf, receipt for all payments made to it- to endorse fordeposit or encashment checks, money order and treasury warrants which said Bank may receive, and to applysaid payments to the settlement of said credit accommodation.

%his power of attorney shall also remain irrevocable until our total indebtedness to the said Bank have been fullyliuidated. /Ehibit E0

"T"9& delivered to the Bureau of 0ublic Wors, and the latter accepted, asphalt to the total value of 0)-(,).7.&f this amount the Ban regularly collected, from "pril (, (*)+ to ovember (+, (*)+, 0(I,-+.I(. Then, forunexplained reasons, the Ban ceased to collect.


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6ven if the assignment with power of attorney from the principal debtor were considered as mere additionalsecurity still, by allowing the assigned funds to be exhausted without notifying the surety, the Ban deprived theformer of any possibility of recoursing against that security. The Ban thereby exonerated the surety, pursuant to"rticle I+I of the 9ivil 9ode?

"RT. I+I. K The guarantors, even though they be solidary, are released from their obligation wheneverby come act of the creditor they cannot be subrogated to the rights, mortgages and preferences of thelatter. #6mphasis supplied.$

xx "s to the letter of demand on the 0ublic Wors office, it does not appear that any reply thereto was madeG northat the demand was pressed, nor that the debtor or the surety were ever apprised that payment was not beingmade. The fact remains that because of the BanFs inactivity the other creditors were able to collect 0(1-,+1I.-(,

when the balance due to appellant Ban was only 0(7+,7-.(+. xx the principal reason based on the BanFsnegligence furnishes ade/uate support to the decision of the 9ourt of "ppeals that the surety was therebyreleased.

RAMON ABOITI%,plaintiff;appellant, vs.ARNALDO F. DE SIL&A, ET AL., defendants. ARNALDO F. DE SIL&A,

appellant.

Ramon "boitiz sold his share in the partnerships of 5. J R. "boitiz and Liuda e !i%os de 0. "boitiz to the de 3ilva.ow "boitiz filed an action to recover the alleged unpaid balance #0(7*,III$of the purchase price.xx!owever,Lidal alleged that accounts between the parties upon the boos of "boitiz J 9o. are inaccurate and tha xx there isin reality a balance in favor of the defendants in the sum of 0)(,(+.++. The action is based on a notarialdocumentxx

0(I,III was paid in cash and there were 7- promissory notes #0),III$ to answer for the remaining balance. 2e3ilvas also xx re/uired the interests of the plaintiffFs partners, and the three defendants, together with 8anuel8oraza and Moa/uin


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the entries therein can only be regarded as admissions against interests which may be overcome by othercompetent evidence, unless the adverse party has been misled to his pre%udice by such entries or admissions.


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The 9ourt of "ppeals found from the evidence that 6xhibit A"A, the exclusive agency contract, is genuineG that"mparo 2iaz, the vendee, being the wife of &scar de 4eon the sale by Licente of his property is practically a saleto &scar de 4eon since husband and wife have common or identical interestsG that 5regorio and intervenor Teofilo0urisima were the efficient cause in the consummation of the sale in favor of the spouses &scar de 4eon and"mparo 2iazG xxx

The three


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Because of his responsibility under the aforecited article (1I, an agent is liewise liable for estafa for failure todeliver to his principal the total amount collected by him in behalf of his principal and cannot retain the commissionpertaining to him by subtracting the same from his collections. " lawyer is e/ually liable under said "rticle (1I ifhe fails to deliver to his client all the money and property received by him for his client despite his attorneyFs lien. 7

The agent has a duty to render a full account his operations to his principal.

7It is well settled that the agent is bound to eercise the utmost good faith in his dealings with his principal. "s (ordCairns said, this rule 7is not a technical or arbitrary rule. It is a rule founded on the highest and truest principles, ofmorality.7 &arker vs. Mc+enna /23890 (: 25,Ch/Eng0 4;,223 ... If the agent does not conduct himself with entirefidelity towards his principal, but is guilty of taking a secret profit or commission in regard the matter in which he isemployed, he loses his right to compensation on the ground that he has taken a position wholly inconsistent withthat of agent for his employer, and which gives his employer, upon discovering it, the right to treat him so far ascompensation, at least, is concerned as if no agency had eisted. %his may operate to give to the principal thebenefit of valuable services rendered by the agent, but the agent has only himself to blame for that result.7

"s a general rule, it is a breach of good faith and loyalty to his principal for an agent, while the agency eists, so todeal with the sub6ect matter thereof, or with information acuired during the course of the agency, as to make a

profit out of it for himself in ecess of his lawful compensation- and if he does so he may be held as a trustee andmay be compelled to account to his principal for all profits, advantages, rights, or privileges acuired by him insuch dealings, whether in performance or in violation of his duties, and be reuired to transfer them to his principalupon being reimbursed for his ependitures for the same, unless the principal has consented to or ratified thetransaction knowing that benefit or profit would accrue or had accrued, to the agent, or unless with suchknowledge he has allowed the agent so as to change his condition that he cannot be put in status uo. %heapplication of this rule is not affected by the fact that the principal did not suffer any in6ury by reason of the agent


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Upon petitioner@s failure to pay on 3eptember ), (**, :uilatan re/uired her to execute an acnowledgmentreceipt xxx Unnown to :uilatan, 3erona had earlier entrusted the %ewelry to one 8arichu 4abrador for the latter tosell on commission basis. 0etitioner was not able to collect payment from 4abrador, which caused her to liewisefail to pay her obligation to :uilatan.

3ubse/uently, :uilatan, through counsel, sent a formal letter of demand to petitioner for failure to settle herobligation. 3he then filed a complaint and an information for estafa under "rticle -(7, paragraph (#b$ ) of theRevised 0enal 9ode was filed against 3erona xxxThe information alleged?

That on or about and sometime during the period from Muly (** up to 3eptember (**, in the 8unicipality of 4as0inas, 8etro 8anila, 0hilippines, and within the %urisdiction of this !onorable 9ourt, the said accused received intrust from the complainant 4eonida 6. :uilatan various pieces of %ewelry in the total value of 071,17I.II to besold on commission basis under the express duty and obligation of remitting the proceeds thereof to the saidcomplainant if sold or returning the same to the latter if unsold but the said accused once in possession of saidvarious pieces of %ewelry, with unfaithfulness and abuse of confidence and with intent to defraud, did then andthere willfully, unlawfully and feloniously misappropriate and convert the same for her own personal use andbenefit and despite oral and written demands, she failed and refused to account for said %ewelry or the proceeds ofsale thereof, to the damage and pre%udice of complainant 4eonida 6. :uilatan in the aforestated total amount of071,17I.II.

9&TR"RP T& 4"W.7

:uilatan testified that petitioner was able to remit 0(II,III.II and returned 0)-,III.II worth of %ewelriyG 1that atthe start, petitioner was prompt in settling her obligationG however, subse/uently the payments were remitted lateG+

that petitioner still owed her in the amount of 0)),17I.II.*

&n the other hand, petitioner admitted that she received several pieces of %ewelry from :uilatan and that sheindeed failed to pay for the same. 3he claimed that she entrusted the pieces of %ewelry to 8arichu 4abrador whofailed to pay for the same, thereby causing her to default in paying :uilatan.(I3he presented handwritten receipts#6xhibits ( J $((evidencing payments made to :uilatan prior to the filing of the criminal case.

8arichu 4abrador xxx testified that she sold the %ewelry to a person who absconded without paying her. &november (1, (**), the trial court rendered a decision finding petitioner guilty of estafa

0etitioner appealed to the 9ourt of "ppeals, which affirmed the %udgment of conviction but modified the penalty


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0etitioner did not ipso facto commit the crime of estafa through conversion or misappropriation by delivering the%ewelry to a sub;agent for sale on commission basis. We are unable to agree with the lower courts@ conclusion thatthis fact alone is sufficient ground for holding that petitioner disposed of the %ewelry Aas if it were hers, therebycommitting conversion and a clear breach of trust.A(*


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&n 8ay 7, (***, respondents filed a complaint for in%unction> TR& which was granted #TR& ; 1hrs$. 0B thenassailed xx the writ of preliminary in%unction before the 9ourt of "ppeals. 9" dismissed petition. !T"


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#f$ The parent corporation pays the salaries and other expenses or losses of the subsidiary.#g$ The subsidiary has substantially no business except with the parent corporation or no assets except thoseconveyed to or by the parent corporation.#h$ ictory #steamer > vessel$,demanding settlement, and when no action was taen Movito demanded payment from Warner, Barnes and 9o.,4td., as agent of the insurance company in the 0hilippines but Warner Barnes refused.

OraEtLaora. 02!0"!13


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new Por comes within the import of this rule for even if it has not designated an agent as re/uired by law, it hashowever a settling agent who may serve the purpose.


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a*-9'*, *-( )'n5)a0 5ann9* +( -(0d 0a+0( ;9' *-( a5*$ 9; *-( a(n*. I; *-( $ad *-'d )('$9n $a


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"ccording to respondent court, Athe /uestioned T0RFs are merely FprovisionalF and were, as printed at the bottom ofsaid receipts, to be officially confirmed by plaintiff within fifteen #(7$ days by delivering the original copy thereofstamped paid and signed by its cashier to the customer. . . . 2efendants;appellants #herein petitioners$ failed topresent the original copies of the T0Rs in /uestion, showing that they were never confirmed by the plaintiff, nor didthey demand from plaintiff the confirmed original copies thereof.A "

T-( TPR$ )'($(n*(d n (#d(n5( + )(**9n('$ a'( d$)*a+0 )'($2(d a$ (#d(n*a' 9; )a2(n*$ 2ad(9n a559n* 9; )(**9n('$.xxx 0rivate respondent having failed to rebut the aforestated presumptions in favor ofvalid payment by petitioners, these would necessarily continue to stand in their favor in this case.

Besides, even assuming arguendo that herein private respondentFs cashier never received the amounts reflectedin the T0Rs, still private respondent failed to prove that 6strada, who is its duly authorized agent with respect topetitioners, did not receive those amounts from the latter. "s correctly explained by petitioners, Ain so far as theprivate respondentFs customers are concerned, for as long as they pay their obligations to the sales representativeof the private respondent using the latterFs official receipt, said payment extinguishes their obligations.A "8&therwise, it would unreasonably cast the burden of supervision over its employees from respondent corporationto its customers.

The substantive law is that payment shall be made to the person in whose favor the obligation has beenconstituted, or his successor;in;interest or any person authorized to receive it. ""s far as third persons areconcerned, an act is deemed to have been performed within the scope of the agentFs authority, if such is within theterms of the power of attorney, as written, even if the agent has in fact exceeded the limits of his authorityaccording to an understanding between the principal and his agent. 4!


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receiving private respondentFs partial payment amounting to 0-II,III.II pursuant to the 9ontract of 4ease with&ption to Buy.

9" decided in favor of &verland 6xpress and opined that the payment by private respondent of 0-II,III.II onMune I, (*17 as partial payment for the leased property, which petitioners accepted #through "lice ". 2izon$ andfor which an official receipt was issued, was the operative act that gave rise to a perfected contract of sale, andthat for failure of petitioners to deny receipt thereof, private respondent can therefore assume that "lice ". 2izon,acting as agent of petitioners, was authorized by them to receive the money in their behalf.

9" denied 8R? &verland 6xpress ac/uired the rights of a vendee in a contract of sale, in effect, recognizing theright of the private respondent to possess the sub%ect premises. !ence e%ectment cannot be allowed.

Ruling of 39?

'irst. 0etitioners have established a right to evict private respondent from the sub%ect premises for non;payment ofrentals. Nxx When private respondent failed to pay the increased rental of 0+,III.II per month in Mune (*1, thepetitioners had a cause of action to institute an e%ectment suit against &verland.

3econd. !aving failed to exercise the option within the stipulated one;year period, private respondent cannotenforce its option to purchase anymore. 8oreover, even assuming arguendo that the right to exercise the optionstill subsists at the time &verland 6xpress tendered the amount on Mune I, (*17, the suit for specific performanceto enforce the option to purchase was filed only on &ctober 1, (*+7 or more than ten #(I$ years after accrual of thecause of action as provided under "rticle (()) of the ew 9ivil 9ode.31xxx

Third. There was no perfected contract of sale between petitioners and private respondent. 0rivate respondentargued that it delivered the chec of 0-II,III.II to "lice ". 2izon who acted as agent of petitioners pursuant tothe supposed authority given by petitioner 'idela 2izon, the payee thereofG that the payment of 0-II,III.II aspartial payment of the purchase price constituted a valid exercise of the option to buy. xxx

There was no perfected contract of sale. There was no valid consent by the petitioners #as co;owners of the leasedpremises$ on the supposed sale entered into by "lice ". 2izon, as petitionersF alleged agent, and privaterespondent. The basis for agency is representation and a person dealing with an agent is put upon in/uiry andmust discover upon his peril the authority of the agent. 3"s provided in "rticle (++ of the ew 9ivil 9ode, 37there

was no showing that petitioners consented to the act of "lice ". 2izon nor authorized her to act on their behalf withregard to her transaction with private respondent. The most prudent thing private respondent should have done

was to ascertain the extent of the authority of "lice ". 2izon. Being negligent in this regard, private respondentcannot see relief on the basis of a supposed agency.

0rivate respondent filed a 8otion for Reconsideration, 3econd 8otion for Reconsideration, and 8otion to 3uspend0rocedural Rules in the !igher


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2eals and 3pecial &ffers purchased for resale at regular price invoiced at net deal or special offer price.

0rices are sub%ect to change without notice. 3/uibb will endeavor to advise you promptly of any pricechanges. !owever, prices in effect at the tune orders are received by 3/uibb &rder 2epartment will applyin all instances.

5reen Lalley 0oultry J "llied 0roducts,

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Agency Cases Pt1