FIRST DIVISION [ G.R. No.L-24332, January 31, 1978 ]RAMON RALLOS, ADMINISTRATOR OF THE ESTATE OF CONCEPCION RALLOS, PETITIONER, VS. FELIX GO CHAN AND SONS REALTY CORPORATION AND COURT OF APPEALS, RESPONDENTS.

D E C I S I O NMUOZ PALMA, J.:This is a case of an attorney-in-fact, Simeon Rallos, who after the death of his principal, Concepcion Rallos, sold the latter's undivided share in a parcel of land pursuant to a special power of attorney which the principal had executed in his favor. The administrator of the estate of the deceased principal went to court to have the sale declared unenforceable and to recover the disposed share. The trial court granted the relief prayed for, but upon appeal, the Court of Appeals upheld the validity of the sale and dismissed the complaint.Hence, this Petition for Review oncertiorari.The following facts are not disputed. Concepcion and Gerundia both surnamed Rallos were sisters and registered co-owners of a parcel of land known as Lot No. 5983 of the Cadastral Survey of Cebu covered by Transfer Certificate of Title No. 11118 of the Registry of Cebu. On April 21, 1954, the sisters executed a special power of attorney in favor of their brother, Simeon Rallos, authorizing him to sell for and in their behalf lot 5983. On March 3, 1955, Concepcion Rallos died. On September 12, 1955, Simeon Rallos sold the undivided shares of his sisters Concepcion and Gerundia in lot 5983 to Felix Go Chan & Sons Realty Corporation for the sum of P10,686.90. The deed of sale was registered in the Registry of Deeds of Cebu, TCT No. 11118 was cancelled, and a new Transfer Certificate of Title No. 12989 was issued in the name of the vendee.On May 18, 1956 Ramon Rallos as administrator of the Intestate Estate of Concepcion Rallos filed a complaint docketed as Civil Case No. R-4530 of the Court of First Instance of Cebu, praying (1) that the sale of the undivided share of the deceased Concepcion Rallos in lot 5983 be declared unenforceable, and said share be reconveyed to her estate; (2) that the Certificate of Title issued in the name of Felix Go Chan & Sons Realty Corporation be cancelled and another title be issued in the names of the corporation and the "Intestate estate of Concepcion Rallos" in equal undivided shares; and (3) that plaintiff be indemnified by way of attorney's fees and payment of costs of suit. Named party defendants were Felix Go Chan & Sons Realty Corporation, Simeon Rallos, and the Register of Deeds of Cebu, but subsequently, the latter was dropped from the complaint. The complaint was amended twice; defendant Corporation's Answer con-tained a cross-claim against its co-defendant, Simeon Rallos, while the latter filed a third-party complaint against his sister, Gerundia Rallos. While the case was pending in the trial court, both Simeon and his sister Gerundia died and they were substituted by the respective administrators of their estates.After trial, the courta quorendered judgment with the following dispositive portion:"A. On Plaintiff's Complaint -(1) Declaring the deed of sale, Exh. 'C', null and void insofar as the one-half pro-indiviso share of Concepcion Rallos in the property in question, - Lot 5983 of the Cadastral Survey of Cebu - is concerned;(2) Ordering the Register of Deeds of Cebu City to cancel Transfer Certificate of Title No. 12989 covering Lot 5983 and to issue in lieu thereof another in the names of FELIX GO CHAN & SONS REALTY CORPORATION and the Estate of Concepcion Rallos in the proportion of one-half (1/2) share each pro-indiviso;(3) Ordering Felix Go Chan & Sons Realty Corporation to deliver the possession of an undivided one-half (1/2) share of Lot 5983 to the herein plaintiff;(4) Sentencing the defendant Juan T. Borromeo, administrator of the Estate of Simeon Rallos, to pay to plaintiff in concept of reasonable attorney's fees the sum of P1,000.00; and(5) Ordering both defendants to pay the costs jointly and severally."B. On GO CHAN'S Cross-Claim:(1) Sentencing the co-defendant Juan T. Borromeo, administrator of the Estate of Simeon Rallos, to pay to defendant Felix Go Chan & Sons Realty Corporation the sum of P5,343.45, representing the price of one-half (1/2) share of lot 5983;(2) Ordering co-defendant Juan T. Borromeo, administrator of the Estate of Simeon Rallos, to pay in concept of reasonable attorney's fees to Felix Go Chan & Sons Realty Corporation the sum of P500.00."C. On Third-Party Complaint of defendant Juan T. Borromeo, administrator of Estate of Simeon Rallos, against Josefina Rallos, special administratrix of the Estate of Gerundia Rallos:(1) Dismissing the third-party complaint without prejudice to filing either a complaint against the regular administrator of the Estate of Gerundia Rallos or a claim in the Intestate-Estate of Gerundia Rallos, covering the same subject-matter of the third-party complaint, at bar." (pp. 98-100, Record on Appeal)Felix Go Chan & Sons Realty Corporation appealed in due time to the Court of Appeals from the foregoing judgment insofar as it set aside the sale of the one-half (1/2) share of Concepcion Rallos. The appellate tribunal, as adverted to earlier, resolved the appeal on November 20, 1964 in favor of the appellant corpo-ration sustaining the sale in question.[1]The appellee-administrator, Ramon Rallos, moved for a reconsideration of the decision but the same was denied in a resolution of March 4, 1965.[2]What is the legal effect of an act performed by an agent after the death of his principal? Applied more particularly to the instant case, We have the query: is the sale of the undivided share of Concepcion Rallos in lot 5983 valid although it was executed by the agent after the death of his principal? What is the law in this jurisdiction as to the effect of the death of the principal on the authority of the agent to act for and in behalf of the latter? Is the fact of knowledge of the death of the principal a material factor in determining the legal effect of an act performed after such death?Before proceeding to the issues, We shall briefly restate certain principles of law relevant to the matter under consideration.1. It is a basic axiom in civil law embodied in our Civil Code that no one may contract in the name of another without being authorized by the latter, or unless he has by law a right to represent him.[3] A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party.[4]Article 1403 (1) of the same Code also provides:"ART. 1403. The following contracts are unenforceable, unless they are ratified:"(1) Those entered into in the name of another person by one who has been given no authority or legal representation or who has acted beyond his powers; x x x."Out of the above given principles, sprung the creation and acceptance of therelationship of agencywhereby one party, called the principal (mandante), authorizes another, called the agent (mandatario), to act for and in his behalf in transactions with third persons. The essential elements of agency are: (1) there is consent, express or implied, of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for himself; and (4) the agent acts within the scope of his authority.[5]Agency is basicallypersonal, representative, andderivative in nature. The authority of the agent to act emanates from the powers granted to him by his principal; his act is the act of the principal if done within the scope of the authority.Qui facit per alium facit per se. "He who acts through another acts himself."[6]2. There are various ways of extinguishing agency,[7] but here We are concerned only with one cause-death of the principal. Paragraph 3 of Art. 1919 of the Civil Code which was taken from Art. 1709 of the Spanish Civil Code provides:"ART. 1919. Agency is extinguished:xx xx xx"3. By the death, civil interdiction, insanity or insolvency of the principal or of the agent; x x x." (Underline supplied)By reason of the very nature of the relationship between principal and agent, agency is extinguished by the death of the principal or of the agent. This is the law in this jurisdiction.[8]Manresacommenting on Art. 1709 of the Spanish Civil Code explains that the rationale for the law is found in thejuridical basisof agency which isrepresentation. There being an integration of the personality of the principal into that of the agent it is not possible for the representation to continue to exist once the death of either is established.Pothieragrees with Manresa that by reason of the nature of agency, death is a necessary cause for its extinction.Laurentsays that the juridical tie between the principal and the agent is severedipso jure upon the death of either without necessity for the heirs of the principal to notify the agent of the fact of death of the former.[9]The same rule prevails at common law - the death of the principal effects instantaneous and absolute revocation of the authority of the agent unless the power be coupled with an interest.[10] This is the prevalent rule in American Jurisprudence where it is well-settled that a power without an interest conferred upon an agent is dissolved by the principal's death, and any attempted execution of the power afterwards is not binding on the heirs or representatives of the deceased.[11]3. Is the general rule provided for in Article 1919 that the death of the principal or of the agent extinguishes the agency, subject to any exception, and if so, is the instant, case within that exception? That is the determinative point in issue in this litigation. It is the contention of respondent corporation which was sustained by respondent court that notwithstanding the death of the principal, Concepcion Rallos, the act of the attorney-in-fact, Simeon Rallos, in selling the former's share in the property is valid and enforceable inasmuch as the corporation acted in good faith in buying the property in question.Articles 1930 and 1931 of the Civil Code provide the exceptions to the general rule aforementioned.ART. 1930. The agency shall remain in full force and effect even after the death of the principal, if it has been constituted in the common interest of the latter and of the agent, or in the interest of a third person who has accepted the stipulation in his favor.ART. 1931. Anything done by the agent, without knowledge of the death of the principal or of any other cause which extinguishes the agency, is valid and shall be fully effective with respect to third persons who may have contracted with him in good faith.Article 1930 is not involved because admittedly the special power of attorney executed in favor of Simeon Rallos was not coupled with an interest.Article 1931 is the applicable law. Under this provision, an act done by the agent after the death of his principal is valid and effectiveonly under two conditions, viz: (1)that the agent acted without knowledge of the death of the principal, and (2) that thethird person who contracted with the agent himself acted in good faith. Good faith here means that the third personwas notaware of the death of the principal at the time he contracted with said agent.These two requisites must concur: the absence of one will render the act of the agent invalid and unenforceable.In the instant case, it cannot be questioned that the agent, Simeon Rallos, knew of the death of his principal at the time he sold the latter's share in Lot No. 5983 to respondent corporation. The knowledge of the death is clearly to be inferred from the pleadings filed by Simeon Rallos before the trial court.[12]That Simeon Rallos knew of the death of his sister Concepcion is also a finding of fact of the courta quo[13] and of respondent appellate court when the latter stated that Simeon Rallos "must have known of the death of his sister, and yet he proceeded with the sale of the lot in the name of both his sisters Concepcion and Gerundia Rallos without informing appellant (the realty corporation) of the death of the former."[14]On the basis of the established knowledge of Simeon Rallos concerning the death of his principal, Concepcion Rallos,Article 1931 of the Civil Code is inapplicable. The law expressly requires for its application lack of knowledge on the part of the agent of the death of his principal; it is not enough that the third person acted in good faith. Thus inBuason & Reyes v. Panuyas, the Court applying Article 1738 of the old Civil Code now Art. 1931 of the new Civil Code sustained the validity of a sale made after the death of the principalbecause it was not shown that the agent knew of his principal's demise.[15]To the same effect is the case ofHerrera, et al. v. Luy Kim Guan, et al., 1961, where in the words of Justice Jesus Barrera the Court stated:"x x x even grantingarguendothat Luis-Herrera did die in 1936, plaintiffs presented no proof and there is no indication in the record, that the agent Luy Kim Guan was aware of the death of his principal at the time he sold the property. The death of the principal does not render the act of an agent unenforceable, where the latter had no knowledge of such extinguishment of the agency." (1 SCRA 406, 412)4. In sustaining the validity of the sale to respondent corporation, the Court of Appeals reasoned out that there is no provision in the Code which provides that whatever is done by an agent having knowledge of the death of his principal is void even with respect to third persons who may have contracted with him in good faith and without knowledge of the death of the principal.[16]We cannot see the merits of the foregoing argument as it ignores the existence of the general rule enunciated in Article 1919 that the death of the principal extinguishes the agency. That being the general rule it followsa fortiorithat any act of an agent after the death of his principal is voidab initio unless the same falls under the exceptions provided for in the aforementioned Articles 1930 and 1931. Article 1931, being an exception to the general rule, is to be strictly construed; it is not to be given an interpretation or application beyond the clear import of its terms for otherwise the courts will be involved in a process of legislation outside of their judicial function.5. Another argument advanced by respondent court is that the vendee acting in good faith relied on the power of attorney which was duly registered on the original certificate of title recorded in the Register of Deeds of the Province of Cebu, that no notice of the death was ever annotated on said certificate of title by the heirs of the principal and accordingly they must suffer the consequences of such omission.[17]To support such argument reference is made to a portion inManresa'sCommentaries which We quote:"If the agency has been granted for the purpose of contracting with certain persons, the revocation must be made known to them. But if the agency is general in nature, without reference to particular persons with whom the agent is to contract, it is sufficient that the principal exercise due diligence to make the revocation of the agency publicly known."In case of a general power which does not specify the persons to whom representation should be made, it is the general opinion that all acts executed with third persons who contracted in good faith, without knowledge of the revocation, are valid. In such case, the principal may exercise his right against the agent, who, knowing of the revocation, continued to assume a personality which he no longer had." (Manresa, Vol. 11, pp. 561 and 575; pp. 15-16, rollo)The above discourse, however, treats of revocation by an act of the principal as a mode of terminating an agency which is to be distinguished from revocation byoperation of lawsuch as death of the principal which obtains in this case. On page six of this Opinion We stressed that by reason of the very nature of the relationship between principal and agent, agency is extinguishedipso jure upon the death of either principal or agent. Although a revocation of a power of attorney to be effective must be communicated to the parties concerned,[18]yet a revocation by operation of law, such as by death of the principal is, as a rule, instantaneously effective inasmuch as "by legal fiction the agent's exercise of authority is regarded as an execution of the principal'scontinuing will."[19]With death, the principal's will ceases or is terminated; the source of authority is extinguished.The Civil Code does not impose a duty on the heirs to notify the agent of the death of the principal. What the Code provides in Article 1932 is that, ifthe agent dies,his heirs must notify the principal thereof, and in the meantime adopt such measures as the circumstances may demand in the interest of the latter. Hence, the fact that no notice of the death of the principal was registered on the certificate of title of the property in the Office of the Register of Deeds, is not fatal to the cause of the estate of the principal.6. Holding that the good faith of a third person in dealing with an agent affords the former sufficient protection, respondent court drew a "parallel" between the instant case and that of an innocent purchaser for value of a registered land, stating that if a person purchases a registered land from one who acquired it in bad faith - even to the extent of forging or falsifying the deed of sale in his favor - the registered owner has no recourse against such innocent purchaser for value but only against the forger.[20]To support the correctness of this "parallelism", respondent corporation, in its brief, cites the case ofBlondeau, et al. v. Nano and Vallejo, 61 Phil. 625. We quote from the brief:"In the case ofAngela Blondeau et al. v. Agustin Nano et al., 61 Phil. 630, one Vallejo was a co-owner of lands with Agustin Nano. The latter had a power of attorney supposedly executed by Vallejo in his favor. Vallejo delivered to Nano his land titles. The power was registered in the Office of the Register of Deeds. When the lawyer husband of Angela Blondeau went to that Office, he found all in order including the power of attorney. But Vallejo denied having executed the power. The lower court sustained Vallejo and the plaintiff Blondeau appealed. Reversing the decision of the courta quo, the Supreme Court, quoting the ruling in the case ofEliason v. Wilborn, 261 U.S. 457, held:'But there is a narrower ground on which the defenses of the defendant-appellee must be overruled. Agustin Nano had possession of Jose Vallejo's title papers. Without those title papers handed over to Nano with the acquiescence of Vallejo, a fraud could not have been perpetuated. When Fernando de la Cantera, a member of the Philippine Bar and the husband of Angela Blondeau, the principal plaintiff, searched the registration record, he found them in due form including the power of attorney of Vallejo in favor of Nano. If this had not been so and if thereafter the proper notation of the encumbrance could not have been made, Angela Blondeau would not have lent P12,000.00 to the defendant Vallejo.' An executed transfer of registered lands placed by the registered owner thereof in the hands of another operates as a representation to a third party that the holder of the transfer is authorized to deal with the land.'As between two innocent persons, one of whom must suffer the consequence of a breach of trust, the one who made it possible by his act of confidence bear the loss.' " (pp. 19-21)TheBlondeaudecision, however, is not on all fours with the case before Us because here We are confronted with one who admittedly was an agent of his sister and who sold the property of the latter after her death with full knowledge of such death. The situation is expressly covered by a provision of law on agency the terms of which are clear and unmistakable leaving no room for an interpretation contrary to its tenor, in the same manner that the ruling inBlondeauand the cases cited therein found a basis in Section 55 of the Land Registration Law which in part provides:xxx xxx xxx"The production of the owner's duplicate certificate whenever any voluntary instrument is presented for registration shall be conclusive authority from the registered owner to the register of deeds to enter a new certificate or to make a memorandum of registration in accordance with such instrument, and the new certificate or memorandum shall be binding upon the registered owner and upon all persons claiming under him in favor of every purchaser for value and in good faith: Provided, however, That in all cases of registration procured by fraud the owner may pursue all his legal and equitable remedies against the parties to such fraud, without prejudice, however, to the rights of any innocent holder for value of a certificate of title. xx xx xx " (Act No. 496 as amended)7. One last point raised by respondent corporation in support of the appealed decision is an 1842 rulings of the Supreme Court of Pennsylvania inCassiday v. McKenziewherein payments made to an agent after the death of the principal were held to be "good", "the parties being ignorant of the death". Let us take note that the Opinion of Justice Rogers was premised on the statement that the parties were ignorant of the death of theprincipal. We quote from that decision the following:"x x x Here the precise point is, whether a payment to an agent when the parties are ignorant of the death is a good payment. In addition to the case in Campbell before cited, the same judge Lord Ellenborough, has decided in 5 Esp. 117, the general question that a payment after the death of principal is not good. Thus, a payment of sailor's wages to a person having a power of attorney to receive them, has been held void when the principal was dead at the time of the payment. If, by this case, it is meant merely to decide the general proposition that by operation of law the death of the principal is a revocation of the powers of the attorney, no objection can be taken to it. But if it is intended to say that this principle applieswhere there was no notice of death, or opportunity of notice, I must be permitted to dissent from it."x x x That a payment may be good today, or bad tomorrow, from accidental circumstance of the death of the principal which he did not know, and which by no possibility could he know? It would be unjust to the agent and unjust to the debtor. In the civil law, the acts of the agent, donebona fideinignorance of the death of his principal, are held valid and binding upon the heirs of the latter. The same rule holds in the Scottish law, and I cannot believe the common law is so unreasonable. . . . (39 Am. Dec. 76, 80, 81; italics supplied)To avoid any wrong impression which the Opinion inCassiday v. McKenziemay evoke, mention may be made that the above represents the minority view in American jurisprudence. Thus inClayton v. Merrett, the Court said:" 'There are several cases which seem to hold that although, as a general principle, death revokes an agency and renders null every act of the agent thereafter performed, yet that where a payment has been made in ignorance of the death, such payment will be good. The leading case so holding is that ofCassiday v. McKenzie, 4 Watts & S. (Pa.) 282, 39 AmD 76, where, in an elaborate opinion, this view is broadly announced. It is referred to, and seems to have been followed, in the case ofDick v. Page, 17 Mo. 234, 57 AmD 267; but in this latter case it appeared that the estate of the deceased principal had received the benefit of the money paid, and therefore the representative of the estate might well have been held to be estopped from suing for it again. . . . These cases, in so far, at least, as they announce the doctrine under discussion, are exceptional. The Pennsylvania Case,supra(Cassiday v. McKenzie, 4 Watts & S. 282, 39 AmD 76), is believed to stand almost, if not quite, alone in announcing the principle in its broadest scope.' " (52 Misc. 353, 357, cited in 2 C.J. 549)So also inTravers v. Crane, speaking ofCassiday v. McKenzie, and pointing out that the opinion, except so far as it related to the particular facts, was a meredictum, Baldwin, J. said:" 'The opinion, therefore, of the learned Judge may be regarded more as an extrajudicial indication of his views on the general subject, than as the adjudication of the Court upon the point in question. But according all proper weight to this opinion, as the judgment of a Court of great respectability, it stands alone among common law authorities, and is opposed by an array too formidable to permit us to follow it.' " (15 Cal. 12, 17, cited in 2 C.J. 549)Whatever conflict of legal opinion was generated byCassiday v. McKenzie in American jurisprudence, no such conflict exists in our own for the simple reason that our statute, the Civil Code, expressly provides for two exceptions to the general rule that death of the principal revokesipso jure the agency, to wit: (1) that the agency is coupled with an interest (Art. 1930), and (2) that the act of the agent was executed without knowledge of the death of the principal and the third person who contracted with the agent acted also in good faith (Art. 1931). Exception No. 2 is the doctrine followed inCassiday, and again We stress the indispensable requirement - that the agent acted without knowledge or notice of the death of the principal. In the case before Us the agent Ramon Rallos executed the sale notwithstanding notice of the death of his principal. Accordingly, the agent's act is unenforceable against the estate of his principal.IN VIEW OF ALL THE FOREGOING, We set aside the decision of respondent appellate court, and We affirm en toto the judgment rendered by then Hon. Amador E. Gomez of the Court of First Instance of Cebu, quoted in pages 2 and 3 of this Opinion, with costs against respondent realty corporation at all instances.SO ORDERED.Teehankee, (Chairman), Makasiar, Fernandez, andGuerrero, JJ., concur.

FIRST DIVISION[G.R. No. 123560. March 27, 2000]SPOUSES YU ENG CHO and FRANCISCO TAO YU,petitioners,vs. PAN AMERICAN WORLD AIRWAYS, INC., TOURIST WORLD SERVICES, INC., JULIETA CANILAO and CLAUDIA TAGUNICAR,respondents.D E C I S I O NPUNO,J.:This petition for review seeks a reversal of the 31 August 1995 Decision[1]and 11 January 1998 Resolution[2]of the Court of Appeals holding private respondent Claudia Tagunicar solely liable for moral and exemplary damages and attorneys fees, and deleting the trial courts award for actual damages.The facts as found by the trial court are as follows:Kycalr"Plaintiff Yu Eng Cho is the owner of Young Hardware Co. and Achilles Marketing. In connection with [this] business, he travels from time to time to Malaysia, Taipei and Hongkong. On July 10, 1976, plaintiffs bought plane tickets (Exhs. A & B) from defendant Claudia Tagunicar who represented herself to be an agent of defendant Tourist World Services, Inc. (TWSI). The destination[s] are Hongkong, Tokyo, San Francisco, U.S.A., for the amount of P25,000.00 per computation of said defendant Claudia Tagunicar (Exhs. C & C-1). The purpose of this trip is to go to Fairfield, New Jersey, U.S.A. to buy two (2) lines of infrared heating system processing textured plastic article (Exh. K)."On said date, only the passage from Manila to Hongkong, then to Tokyo, were confirmed. [PAA] Flight 002 from Tokyo to San Francisco was on "RQ" status, meaning "on request". Per instruction of defendant Claudia Tagunicar, plaintiffs returned after a few days for the confirmation of the Tokyo-San Francisco segment of the trip. After calling up Canilao of TWSI, defendant Tagunicar told plaintiffs that their flight is now confirmed all the way. Thereafter, she attached the confirmation stickers on the plane tickets (Exhs. A & B)."A few days before the scheduled flight of plaintiffs, their son, Adrian Yu, called the Pan Am office to verify the status of the flight. According to said Adrian Yu, a personnel of defendant Pan Am told him over the phone that plaintiffs booking[s] are confirmed."On July 23, 1978, plaintiffs left for Hongkong and stayed there for five (5) days. They left Hongkong for Tokyo on July 28, 1978. Upon their arrival in Tokyo, they called up Pan-Am office for reconfirmation of their flight to San Francisco. Said office, however, informed them that their names are not in the manifest. Since plaintiffs were supposed to leave on the 29thof July, 1978, and could not remain in Japan for more than 72 hours, they were constrained to agree to accept airline tickets for Taipei instead, per advise of JAL officials. This is the only option left to them because Northwest Airlines was then on strike, hence, there was no chance for the plaintiffs to obtain airline seats to the United States within 72 hours. Plaintiffs paid for these tickets."Upon reaching Taipei, there were no flight[s] available for plaintiffs, thus, they were forced to return back to Manila on August 3, 1978, instead of proceeding to the United States. [Japan] Air Lines (JAL) refunded the plaintiffs the difference of the price for Tokyo-Taipei [and] Tokyo-San Francisco (Exhs. I & J) in the total amount of P2,602.00."In view of their failure to reach Fairfield, New Jersey, Radiant Heat Enterprises, Inc. cancelled Yu Eng Chos option to buy the two lines of infra-red heating system (Exh. K). The agreement was for him to inspect the equipment and make final arrangement[s] with the said company not later than August 7, 1978. From this business transaction, plaintiff Yu Eng Cho expected to realize a profit of P300,000.00 to P400,000.00.""[A] scrutiny of defendants respective evidence reveals the following:"Plaintiffs, who were intending to go to the United States, were referred to defendant Claudia Tagunicar, an independent travel solicitor, for the purchase of their plane tickets. As such travel solicitor, she helps in the processing of travel papers like passport, plane tickets, booking of passengers and some assistance at the airport. She is known to defendants Pan-Am, TWSI/Julieta Canilao, because she has been dealing with them in the past years. Defendant Tagunicar advised plaintiffs to take Pan-Am because Northwest Airlines was then on strike and plaintiffs are passing Hongkong, Tokyo, then San Francisco and Pan-Am has a flight from Tokyo to San Francisco. After verifying from defendant TWSI, thru Julieta Canilao, she informed plaintiffs that the fare would be P25,093.93 giving them a discount of P738.95 (Exhs. C, C-1). Plaintiffs, however, gave her a check in the amount of P25,000.00 only for the two round trip tickets. Out of this transaction, Tagunicar received a 7% commission and 1% commission for defendant TWSI.Defendant Claudia Tagunicar purchased the two round-trip Pan-Am tickets from defendant Julieta Canilao with the following schedules:OriginDestinationAirlineDateTime/TravelManila Hongkong CX900 7-23-78 1135/1325hrsHongkong Tokyo CS500 7-28-78 1615/2115hrsTokyo San Francisco PA002 7-29-78 1930/1640hrsThe use of another airline, like in this case it is Cathay Pacific out of Manila, is allowed, although the tickets issued are Pan-Am tickets, as long as it is in connection with a Pan-Am flight. When the two (2) tickets (Exhs. A & B) were issued to plaintiffs, the letter "RQ" appears below the printed word "status" for the flights from Tokyo to San Francisco which means "under request," (Exh. 3-A, 4-A Pan-Am). Before the date of the scheduled departure, defendant Tagunicar received several calls from the plaintiffs inquiring about the status of their bookings. Tagunicar in turn called up TWSI/Canilao to verify; and if Canilao would answer that the bookings are not yet confirmed, she would relate that to the plaintiffs.Calrky"Defendant Tagunicar claims that on July 13, 1978, a few days before the scheduled flight, plaintiff Yu Eng Cho personally went to her office, pressing her about their flight. She called up defendant Julieta Canilao, and the latter told her "o sige Claudia, confirm na." She even noted this in her index card (Exh. L), that it was Julieta who confirmed the booking (Exh. L-1). It was then that she allegedly attached the confirmation stickers (Exhs. 2, 2-B TWSI) to the tickets. These stickers came from TWSI.Defendant Tagunicar alleges that it was only in the first week of August, 1978 that she learned from Adrian Yu, son of plaintiffs, that the latter were not able to take the flight from Tokyo to San Francisco, U.S.A. After a few days, said Adrian Yu came over with a gentleman and a lady, who turned out to be a lawyer and his secretary. Defendant Tagunicar claims that plaintiffs were asking for her help so that they could file an action against Pan-Am. Because of plaintiffs promise she will not be involved, she agreed to sign the affidavit (Exh. M) prepared by the lawyer.MesmDefendants TWSI/Canilao denied having confirmed the Tokyo-San Francisco segment of plaintiffs flight because flights then were really tight because of the on-going strike at Northwest Airlines. Defendant Claudia Tagunicar is very much aware that [said] particular segment was not confirmed, because on the very day of plaintiffs departure, Tagunicar called up TWSI from the airport; defendant Canilao asked her why she attached stickers on the tickets when in fact that portion of the flight was not yet confirmed. Neither TWSI nor Pan-Am confirmed the flight and never authorized defendant Tagunicar to attach the confirmation stickers. In fact, the confirmation stickers used by defendant Tagunicar are stickers exclusively for use of Pan-Am only. Furthermore, if it is the travel agency that confirms the booking, the IATA number of said agency should appear on the validation or confirmation stickers. The IATA number that appears on the stickers attached to plaintiffs tickets (Exhs. A & B) is 2-82-0770 (Exhs. 1, 1-A TWSI), when in fact TWSIs IATA number is 2-83-0770 (Exhs. 5, 5-A TWSI)."[3]A complaint for damages was filed by petitioners against private respondents Pan American World Airways, Inc.(Pan Am), Tourist World Services, Inc. (TWSI), Julieta Canilao (Canilao), and Claudia Tagunicar (Tagunicar) for expenses allegedly incurred such as costs of tickets and hotel accommodations when petitioners were compelled to stay in Hongkong and then in Tokyo by reason of the non-confirmation of their booking with Pan-Am. In a Decision dated November 14, 1991, the Regional Trial Court of Manila, Branch 3, held the defendants jointly and severally liable, except defendant Julieta Canilao, thus:Scslx"WHEREFORE, judgment is hereby rendered for the plaintiffs and ordering defendants Pan American World Airways, Inc., Tourist World Services, Inc. and Claudia Tagunicar, jointly and severally, to pay plaintiffs the sum of P200,000.00 as actual damages, minus P2,602.00 already refunded to the plaintiffs; P200,000.00 as moral damages; P100,000.00 as exemplary damages; an amount equivalent to 20% of the award for and as attorneys fees, plus the sum of P30,000.00 as litigation expenses.Defendants counterclaims are hereby dismissed for lack of merit.SO ORDERED."Only respondents Pan Am and Tagunicar appealed to the Court of Appeals. On 11 August 1995, the appellate court rendered judgment modifying the amount of damages awarded, holding private respondent Tagunicar solely liable therefor, and absolving respondents Pan Am and TWSI from any and all liability, thus:Slxs c"PREMISES CONSIDERED, the decision of the Regional Trial Court is herebySET ASIDEand a new one entered declaring appellant Tagunicar solely liable for:1) Moral damages in the amount of P50,000.00;2) Exemplary damages in the amount of P25,000.00; and3) Attorneys fees in the amount of P10,000.00 plus costs of suit.The award of actual damages is hereby DELETED.SO ORDERED."In so ruling, respondent court found that Tagunicar is an independent travel solicitor and is not a duly authorized agent or representative of either Pan Am or TWSI. It held that their business transactions are not sufficient to consider Pan Am as the principal, and Tagunicar and TWSI as its agent and sub-agent, respectively. It further held that Tagunicar was not authorized to confirm the bookings of, nor issue validation stickers to, herein petitioners and hence, Pan Am and TWSI cannot be held responsible for her actions. Finally, it deleted the award for actual damages for lack of proof.Hence this petition based on the following assignment of errors:slx mis1. the Court of Appeals, in reversing the decision of the trial court, misapplied the ruling in Nicos Industrial Corporation vs. Court of Appeals, et. al. [206 SCRA 127]; and2. the findings of the Court of Appeals that petitioners ticket reservations in question were not confirmed and that there is no agency relationship among PAN-AM, TWSI and Tagunicar are contrary to the judicial admissions of PAN-AM, TWSI and Tagunicar and likewise contrary to the findings of fact of the trial court.We affirm.I. The first issue deserves scant consideration. Petitioners contend that contrary to the ruling of the Court of Appeals, the decision of the trial court conforms to the standards of an ideal decision set inNicos Industrial Corporation, et. al. vs. Court of Appeals, et. al.,[4]as "that which, with welcome economy of words, arrives at the factual findings, reaches the legal conclusions, renders its ruling and, having done so, ends." It is averred that the trial courts decision contains a detailed statement of the relevant facts and evidence adduced by the parties which thereafter became the bases for the courts conclusions.A careful scrutiny of the decision rendered by the trial court will show that after narrating the evidence of the parties, it proceeded to dispose of the case with a one-paragraph generalization, to wit:Missdaa"On the basis of the foregoing facts, the Court is constrained to conclude that defendant Pan-Am is the principal, and defendants TWSI and Tagunicar, its authorized agent and sub-agent, respectively. Consequently, defendants Pan-Am, TWSI and Claudia Tagunicar should be held jointly and severally liable to plaintiffs for damages. Defendant Julieta Canilao, who acted in her official capacity as Office Manager of defendant TWSI should not be held personally liable."[5]The trial courts finding of facts is but a summary of the testimonies of the witnesses and the documentary evidence presented by the parties. It did not distinctly and clearly set forth, nor substantiate, the factual and legal bases for holding respondents TWSI, Pan Am and Tagunicar jointly and severally liable. InDel Mundo vs. CA, et al.[6]where the trial court, after summarizing the conflicting asseverations of the parties, disposed of the kernel issue in just two (2) paragraphs, we held:Sda adsc"It is understandable that courts, with their heavy dockets and time constraints, often find themselves with little to spare in the preparation of decisions to the extent most desirable. We have thus pointed out that judges might learn to synthesize and to simplify their pronouncements. Nevertheless, concisely written such as they may be, decisions must still distinctly and clearly express, at least in minimum essence, its factual and legal bases."For failing to explain clearly and well the factual and legal bases of its award of moral damages, we set it aside in said case. Once more, we stress that nothing less than Section 14 of Article VIII of the Constitution requires that "no decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based." This is demanded by the due process clause of the Constitution. In the case at bar, the decision of the trial court leaves much to be desired both in form and substance. Even while said decision infringes the Constitution, we will not belabor this infirmity and rather examine the sufficiency of the evidence submitted by the petitioners.Rtc sppedII. Petitioners assert that Tagunicar is a sub-agent of TWSI while TWSI is a duly authorized ticketing agent of Pan Am. Proceeding from this premise, they contend that TWSI and Pan Am should be held liable as principals for the acts of Tagunicar. Petitioners stubbornly insist that the existence of the agency relationship has been established by the judicial admissions allegedly made by respondents herein, to wit: (1) the admission made by Pan Am in its Answer that TWSI is its authorized ticket agent; (2) the affidavit executed by Tagunicar where she admitted that she is a duly authorized agent of TWSI; and (3) the admission made by Canilao that TWSI received commissions from ticket sales made by Tagunicar.KorteWe do not agree. By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter.[7]The elements of agency are: (1) consent, express or implied, of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for himself; (4) the agent acts within the scope of his authority.[8]It is a settled rule that persons dealing with an assumed agent are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it.[9]In the case at bar, petitioners rely on the affidavit of respondent Tagunicar where she stated that she is an authorized agent of TWSI. This affidavit, however, has weak probative value in light of respondent Tagunicars testimony in court to the contrary. Affidavits, being takenex parte, are almost always incomplete and often inaccurate, sometimes from partial suggestion, or for want of suggestion and inquiries. Their infirmity as a species of evidence is a matter of judicial experience and are thus considered inferior to the testimony given in court.[10]Further, affidavits are not complete reproductions of what the declarant has in mind because they are generally prepared by the administering officer and the affiant simply signs them after the same have been read to her.[11]Respondent Tagunicar testified that her affidavit was prepared and typewritten by the secretary of petitioners lawyer, Atty. Acebedo, who both came with Adrian Yu, son of petitioners, when the latter went to see her at her office. This was confirmed by Adrian Yu who testified that Atty. Acebedo brought his notarial seal and notarized the affidavit of the same day.[12]The circumstances under which said affidavit was prepared put in doubt petitioners claim that it was executed voluntarily by respondent Tagunicar. It appears that the affidavit was prepared and was based on the answers which respondent Tagunicar gave to the questions propounded to her by Atty. Acebedo.[13]They never told her that the affidavit would be used in a case to be filed against her.[14]They even assured her that she would not be included as defendant if she agreed to execute the affidavit.[15]Respondent Tagunicar was prevailed upon by petitioners son and their lawyer to sign the affidavit despite her objection to the statement therein that she was an agent of TWSI. They assured her that "it is immaterial"[16]and that "if we file a suit against you we cannot get anything from you."[17]This purported admission of respondent Tagunicar cannot be used by petitioners to prove their agency relationship. At any rate, even if such affidavit is to be given any probative value, the existence of the agency relationship cannot be established on its sole basis. The declarations of the agent alone are generally insufficient to establish the fact or extent of his authority.[18]In addition, as between the negative allegation of respondents Canilao and Tagunicar that neither is an agent nor principal of the other, and the affirmative allegation of petitioners that an agency relationship exists, it is the latter who have the burden of evidence to prove their allegation,[19]failing in which, their claim must necessarily fail.SclawWe stress that respondent Tagunicar categorically denied in open court that she is a duly authorized agent of TWSI, and declared that she is an independent travel agent.[20]We have consistently ruled that in case of conflict between statements in the affidavit and testimonial declarations, the latter command greater weight.[21]As further proofs of agency, petitioners call our attention to TWSIs Exhibits "7", "7-A", and "8" which show that Tagunicar and TWSI received sales commissions from Pan Am. Exhibit "7"[22]is the Ticket Sales Report submitted by TWSI to Pan Am reflecting the commissions received by TWSI as an agent of Pan Am. Exhibit "7-A"[23]is a listing of the routes taken by passengers who were audited to TWSIs sales report. Exhibit "8"[24]is a receipt issued by TWSI covering the payment made by Tagunicar for the tickets she bought from TWSI. These documents cannot justify the deduction that Tagunicar was paid a commission either by TWSI or Pan Am. On the contrary, Tagunicar testified that when she pays TWSI, she already deducts in advance her commission and merely gives the net amount to TWSI.[25]From all sides of the legal prism, the transaction is simply a contract of sale wherein Tagunicar buys airline tickets from TWSI and then sells it at a premium to her clients.Sc lexIII. Petitioners included respondent Pan Am in the complaint on the supposition that since TWSI is its duly authorized agent, and respondent Tagunicar is an agent of TWSI, then Pan Am should also be held responsible for the acts of respondent Tagunicar. Our disquisitions above show that this contention lacks factual and legal bases. Indeed, there is nothing in the records to show that respondent Tagunicar has been employed by Pan Am as its agent, except the bare allegation of petitioners. The real motive of petitioners in suing Pan Am appears in its Amended Complaint that "[d]efendants TWSI, Canilao and Tagunicar may not be financially capable of paying plaintiffs the amounts herein sought to be recovered, and in such event, defendant Pan Am, being their ultimate principal, is primarily and/or subsidiarily liable to pay said amounts to plaintiffs."[26]This lends credence to respondent Tagunicars testimony that she was persuaded to execute an affidavit implicating respondents because petitioners knew they would not be able to get anything of value from her. In the past, we have warned that this Court will not tolerate an abuse of the judicial process by passengers in order to pry on international airlines for damage awards, like "trophies in a safari."[27]This meritless suit against Pan Am becomes more glaring with petitioners inaction after they were bumped off in Tokyo. If petitioners were of the honest belief that Pan Am was responsible for the misfortune which beset them, there is no evidence to show that they lodged a protest with Pan Ams Tokyo office immediately after they were refused passage for the flight to San Francisco, or even upon their arrival in Manila. The testimony of petitioner Yu Eng Cho in this regard is of little value,viz.:"Atty. Jalandoni: x x xq Upon arrival at the Tokyo airport, what did you do if any in connection with your schedule[d] trip?a I went to the Hotel, Holiday Inn and from there I immediately called up Pan Am office in Tokyo to reconfirm my flight, but they told me that our names were not listed in the manifest, so next morning, very early in the morning I went to the airport, Pan Am office in the airport to verify and they told me the same and we were not allowed to leave.q You were scheduled to be in Tokyo for how long Mr. Yu?a We have to leave the next day 29th.q In other words, what was your status as a passenger?a Transient passengers. We cannot stay there for more than 72 hours.x x x x x x x x xq As a consequence of the fact that you claimed that the Pan Am office in Tokyo told you that your names were not in the manifest, what did you do, if any?a I ask[ed] them if I can go anywhere in the States? They told me I can go to LA via Japan Airlines and I accepted it.q Do you have the tickets with you that they issued for Los Angeles?a It was taken by the Japanese Airlines instead they issue[d] me a ticket to Taipei.x x x x x x x x xq Were you able to take the trip to Los Angeles via Pan Am tickets that was issued to you in lieu of the tickets to San Francisco?a No, sir.q Why not?a The Japanese Airlines said that there were no more available seats.q And as a consequence of that, what did you do, if any?aI am so much scared and worried, so the Japanese Airlines advised us to go to Taipei and I accepted it.x x x x x x x x xq Why did you accept the Japan Airlines offer for you to go to Taipei?a Because there is no chance for us to go to the United States within 72 hours because during that time Northwest Airlines [was] on strike so the seats are very scarce. So they advised me better left (sic) before the 72 hours otherwise you will have trouble with the Japanese immigration.q As a consequence of that you were force[d] to take the trip to Taipei?a Yes, sir."[28](emphasis supplied)It grinds against the grain of human experience that petitioners did not insist that they be allowed to board, considering that it was then doubly difficult to get seats because of the ongoing Northwest Airlines strike. It is also perplexing that petitioners readily accepted whatever the Tokyo office had to offer as an alternative. Inexplicably too, no demand letter was sent to respondents TWSI and Canilao.[29]Nor was a demand letter sent to respondent Pan Am. To say the least, the motive of petitioners in suing Pan Am is suspect.x lawWe hasten to add that it is not sufficient to prove that Pan Am did not allow petitioners to board to justify petitioners claim for damages. Mere refusal to accede to the passengers wishes does not necessarily translate into damages in the absence of bad faith.[30]The settled rule is that the law presumes good faith such that any person who seeks to be awarded damages due to acts of another has the burden of proving that the latter acted in bad faith or with ill motive.[31]In the case at bar, we find the evidence presented by petitioners insufficient to overcome the presumption of good faith. They have failed to show any wanton, malevolent or reckless misconduct imputable to respondent Pan Am in its refusal to accommodate petitioners in its Tokyo-San Francisco flight. Pan Am could not have acted in bad faith because petitioners did not have confirmed tickets and more importantly, they were not in the passenger manifest.ScIn not a few cases, this Court did not hesitable to hold an airline liable for damages for having acted in bad faith in refusing to accommodate a passenger who had a confirmed ticket and whose name appeared in the passenger manifest. InOrtigas Jr. v. Lufthansa German Airlines Inc.[32]we ruled that there was a valid and binding contract between the airline and its passenger after finding that validating sticker on the passengers ticket had the letters "O.K." appearing in the Res. Status box which means "space confirmed" and that the ticket is confirmed or validated. InPan American World Airways Inc. v. IAC, et al.[33]where a would-be-passenger had the necessary ticket, baggage claim and clearance from immigration all clearly showing that she was a confirmed passenger and included in the passenger manifest and yet was denied accommodation in said flight, we awarded damages. InArmovit, et al. v. CA, et al.,[34]we upheld the award of damages made against an airline for gross negligence committed in the issuance of tickets with erroneous entries as to the time of flight. InAlitalia Airways v. CA, et al.,[35]we held that when airline issues a ticket to a passenger confirmed on a particular flight, on a certain date, a contract of carriage arises, and the passenger has every right to expect that he would fly on that flight and on that date. If he does not, then the carrier opens itself to a suit for breach of contract of carriage. And finally, an award of damages was held proper in the case ofZalamea, et al. v. CA, et al.,[36]where a confirmed passenger included in the manifest was denied accommodation in such flight.ScmisOn the other hand, the respondent airline inSarreal, Sr. v. Japan Airlines Co., Ltd.,[37]was held not liable for damages where the passenger was not allowed to board the plane because his ticket had not been confirmed. We ruled that "[t]he stub that the lady employee put on the petitioners ticket showed among other coded items, under the column "status" the letters "RQ" which was understood to mean "Request." Clearly, this does not mean a confirmation but only a request. JAL Traffic Supervisor explained that it would have been different if what was written on the stub were the letter "ok" in which case the petitioner would have been assured of a seat on said flight. But in this case, the petitioner was more of a wait-listed passenger than a regularly booked passenger."Mis scIn the case at bar, petitioners ticket were on "RQ" status. They were not confirmed passengers and their names were not listed in the passenger manifest. In other words, this is not a case where Pan Am bound itself to transport petitioners and thereafter reneged on its obligation. Hence, respondent airline cannot be held liable for damages.Mis sppedIV. We hold that respondent Court of Appeals correctly ruled that the tickets were never confirmed for good reasons: (1) The persistent calls made by respondent Tagunicar to Canilao, and those made by petitioners at the Manila, Hongkong and Tokyo offices of Pan Am, are eloquent indications that petitioners knew that their tickets have not been confirmed. For, as correctly observed by Pan Am, why would one continually try to have ones ticket confirmed if it had already been confirmed? (2) The validation stickers which respondent Tagunicar attached to petitioners tickets were those intended for the exclusive use of airline companies. She had no authority to use them. Hence, said validation stickers, wherein the word "OK" appears in the status box, are not valid and binding. (3) The names of petitioners do not appear in the passenger manifest. (4) Respondent Tagunicars "Exhibit 1"[38]shows that the status of the San Francisco-New York segment was "Ok", meaning it was confirmed, but that the status of the Tokyo-San Francisco segment was still "on request". (5) Respondent Canilao testified that on the day that petitioners were to depart for Hongkong, respondent Tagunicar called her from the airport asking for confirmation of the Tokyo-San Francisco flight, and that when she told respondent Tagunicar that she should not have allowed petitioners to leave because their tickets have not been confirmed, respondent Tagunicar merely said "Bahala na."[39]This was never controverted nor refuted by respondent Tagunicar. (6) To prove that it really did not confirm the bookings of petitioners, respondent Canilao pointed out that the validation stickers which respondent Tagunicar attached to the tickets of petitioners had IATA No. 2-82-0770 stamped on it, whereas the IATA number of TWSI is 28-30770.[40]Undoubtedly, respondent Tagunicar should be liable for having acted in bad faith in misrepresenting to petitioners that their tickets have been confirmed. Her culpability, however, was properly mitigated. Petitioner Yu Eng Cho testified that he repeatedly tried to follow up on the confirmation of their tickets with Pan Am because he doubted the confirmation made by respondent Tagunicar.[41]This is clear proof that petitioners knew that they might be bumped off at Tokyo when they decided to proceed with the trip. Aware of this risk, petitioners exerted efforts to confirm their tickets in Manila, then in Hongkong, and finally in Tokyo. Resultantly, we find the modification as to the amount of damages awarded just and equitable under the circumstances.SppedWHEREFORE, the decision appealed from is hereby AFFIRMED. Cost against petitioners.Jo sppedSO ORDERED.Davide, Jr., C.J., (Chairman), Kapunan,andPardo, JJ.,concur.Ynares-Santiago, J.,no part.

FIRST DIVISION[G.R. No. 120465.September 9, 1999]WILLIAM UY and RODEL ROXAS,petitioners,vs. COURT OF APPEALS, HON. ROBERT BALAO and NATIONAL HOUSING AUTHORITY,respondents.D E C I S I O NKAPUNAN,J.:Petitioners William Uy and Rodel Roxas are agents authorized to sell eight parcels of land by the owners thereof.By virtue of such authority, petitioners offered to sell the lands, located in Tuba, Tadiangan, Benguet to respondent National Housing Authority (NHA) to be utilized and developed as a housing project.On February 14, 1989, the NHA Board passed Resolution No. 1632 approving the acquisition of said lands, with an area of 31.8231 hectares, at the cost ofP23.867 million, pursuant to which the parties executed a series of Deeds of Absolute Sale covering the subject lands.Of the eight parcels of land, however, only five were paid for by the NHA because of the report[1]it received from the Land Geosciences Bureau of the Department of Environment and Natural Resources (DENR) that the remaining area is located at an active landslide area and therefore, not suitable for development into a housing project.On 22 November 1991, the NHA issued Resolution No. 2352 cancelling the sale over the three parcels of land.The NHA, through Resolution No. 2394, subsequently offered the amount ofP1.225 million to the landowners asdaos perjuicios.On 9 March 1992, petitioners filed before the Regional Trial Court (RTC) of Quezon City a Complaint for Damages against NHA and its General Manager Robert Balao.After trial, the RTC rendered a decision declaring the cancellation of the contract to be justified.The trial court nevertheless awarded damages to plaintiffs in the sum of P1.255 million, the same amount initially offered by NHA to petitioners as damages.Upon appeal by petitioners, the Court of Appeals reversed the decision of the trial court and entered a new one dismissing the complaint.It held that since there was sufficient justifiable basis in cancelling the sale, it saw no reason for the award of damages.The Court of Appeals also noted that petitioners were mere attorneys-in-fact and, therefore, not the real parties-in-interest in the action before the trial court.xxx In paragraph 4 of the complaint, plaintiffs alleged themselves to besellers agents for several owners of the 8 lotssubject matter of the case.Obviously, William Uy and Rodel Roxas in filing this case acted as attorneys-in-fact of the lot owners who are the real parties in interest but who were omitted to be pleaded as party-plaintiffs in the case.This omission is fatal.Where the action is brought by an attorney-in-fact of a land owner in his name, (as in our present action) and not in the name of his principal, the action was properly dismissed (Ferrervs. Villamor, 60 SCRA 406 [1974]; Marcelovs. de Leon, 105 Phil. 1175) because the rule is that every action must be prosecuted in the name of the real parties-in-interest (Section 2, Rule 3, Rules of Court).When plaintiffs Uy and Roxas sought payment of damages in their favor in view of the partial rescission of Resolution No. 1632 and the Deed of Absolute Sale covering TCT Nos. 10998, 10999 and 11292 (Prayer complaint, page 5, RTC records), it becomes obviously indispensable that the lot owners be included, mentioned and named as party-plaintiffs, being the real party-in-interest.Uy and Roxas, as attorneys-in-fact or apoderados, cannot by themselves lawfully commence this action, more so, when the supposed special power of attorney, in their favor, was never presented as an evidence in this case.Besides, even if herein plaintiffs Uy and Roxas were authorized by the lot owners to commence this action, the same must still be filed in the name of the pricipal, (Filipino Industrial Corporationvs.San Diego, 23 SCRA 706 [1968]).As such indispensable party, their joinder in the action is mandatory and the complaint may be dismissed if not so impleaded (NDCvs. CA, 211 SCRA 422 [1992]).[2]Their motion for reconsideration having been denied, petitioners seek relief from this Court contending that:I.COMPLAINT FINDING THE RESPONDENT CA ERRED IN DECLARING THAT RESPONDENT NHA HAD ANY LEGAL BASIS FOR RESCINDING THE SALE INVOLVING THE LAST THREE (3) PARCELS COVERED BY NHA RESOLUTION NO. 1632.II.GRANTING ARGUENDO THAT THE RESPONDENT NHA HAD LEGAL BASIS TO RESCIND THE SUBJECT SALE, THE RESPONDENT CA NONETHELESS ERRED IN DENYING HEREIN PETITIONERS CLAIM TO DAMAGES, CONTRARY TO THE PROVISIONS OF ART. 1191 OF THE CIVIL CODE.III.THE RESPONDENT CA ERRED IN DISMISSING THE SUBJECT COMPLAINT FINDING THAT THE PETITIONERS FAILED TO JOIN AS INDISPENSABLE PARTY PLAINTIFF THE SELLING LOT-OWNERS.[3]We first resolve the issue raised in the third assignment of error.Petitioners claim that they lodged the complaint not in behalf of their principles but in their own name as agents directly damaged by the termination of the contract.The damages prayed for were intended not for the benefit of their principals but to indemnify petitioners for the losses they themselves allegedly incurred as a result of such termination.These damages consist mainly of unearned income and advances.[4]Petitioners, thus, attempt to distinguish the case at bar from those involving agents orapoderadosinstituting actions in their own name butin behalf of their principals.[5]Petitioners in this case purportedly brought the action for damages in their own name andin their own behalf.We find this contention unmeritorious.Section 2, Rule 3 of the Rules of Court requires that every action must be prosecuted and defended in the name of the real party-in-interest.The real party-in-interest is the party who stands to be benefited or injured by the judgment or the party entitled to the avails of the suit.Interest, within the meaning of the rule, means material interest, an interest in the issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest.[6]Cases construing the real party-in-interest provision can be more easily understood if it is borne in mind that the true meaning of real party-in-interest may be summarized as follows:An action shall be prosecuted in the name of the party who, by the substantive law, has the right sought to be enforced.[7]Do petitioners, under substantive law, possess the right they seek to enforce?We rule in the negative.The applicable substantive law in this case is Article 1311 of the Civil Code, which states:Contracts take effect only between theparties, theirassigns, andheirs,except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation, or by provision of law.x x x.If a contract should contain some stipulation in favor of athird person, he may demand its fulfillmentprovided he communicated his acceptance to the obligor before its revocation.A mere incidental benefit or interest of a person is not sufficient.The contracting parties must have clearly and deliberately conferred a favor upon a third person.(Underscoring supplied.)Petitioners are notpartiesto the contract of sale between their principals and NHA.They are mereagentsof the owners of the land subject of the sale.As agents, they only render some service or do somethingin representationoron behalfof their principals.[8]The rendering of such service did not make them parties to the contracts of sale executed in behalf of the latter.Since a contract may be violated only by the parties thereto as against each other, the real parties-in-interest, either as plaintiff or defendant, in an action upon that contract must, generally, either be parties to said contract.[9]Neither has there been any allegation, much less proof, that petitioners are theheirsof their principals.Are petitionersassigneesto the rights under the contracts of sale?InMcMicking vs. Banco Espaol-Filipino,[10]we held that the rule requiring every action to be prosecuted in the name of the real party-in-interestx x x recognizes the assignments of rights of action and also recognizes that when one has a right of action assigned to him he is then the real party in interest and may maintain an action upon such claim or right.The purpose of [this rule] is to require the plaintiff to be the real party in interest, or, in other words, he must be the person to whom the proceeds of the action shall belong, and to prevent actions by persons who have no interest in the result of the same.xxxThus, an agent, in his own behalf, may bring an action founded on a contract made for his principal, as an assignee of such contract.We find the following declaration in Section 372 (1) of the Restatement of the Law on Agency (Second):[11]Section 372.Agent as Owner of Contract Right(1)Unless otherwise agreed, an agent who has or who acquires an interest in a contract which he makes on behalf of his principal can, although not a promisee, maintain such action thereon as might a transferee having a similar interest.The Comment on subsection (1) states:a.Agent a transferee.One who has made a contract on behalf of another may become an assignee of the contract and bring suit against the other party to it, as any other transferee.The customs of business or the course of conduct between the principal and the agent may indicate that an agent who ordinarily has merely a security interest is a transferee of the principals rights under the contract and as such is permitted to bring suit.If the agent has settled with his principal with the understanding that he is to collect the claim against the obligor by way of reimbursing himself for his advances and commissions, the agent is in the position of an assignee who is the beneficial owner of the chose in action.He has an irrevocable power to sue in his principals name.x x x.And, under the statutes which permit the real party in interest to sue, he can maintain an action in his own name.This power to sue is not affected by a settlement between the principal and the obligor if the latter has notice of the agents interest.x x x.Even though the agent has not settled with his principal, he may, by agreement with the principal, have a right to receive payment and out of the proceeds to reimburse himself for advances and commissions before turning the balance over to the principal.In such a case, although there is no formal assignment, the agent is in the position of a transferee of the whole claim for security; he has an irrevocable power to sue in his principals name and, under statutes which permit the real party in interest to sue, he can maintain an action in his own name.Petitioners, however, have not shown that they are assignees of their principals to the subject contracts.While they alleged that they made advances and that they suffered loss of commissions, they have not established any agreement granting them the right to receive payment and out of the proceeds to reimburse [themselves] for advances and commissions before turning the balance over to the principal[s].Finally, it does not appear that petitioners arebeneficiaries of a stipulationpour autruiunder the second paragraph of Article 1311 of the Civil Code.Indeed, there is no stipulation in any of the Deeds of Absolute Sale clearly and deliberately conferring a favor to any third person.That petitioners did not obtain their commissions or recoup their advances because of the non-performance of the contract did not entitle them to file the action below against respondent NHA.Section 372 (2) of the Restatement of the Law on Agency (Second) states:(2)An agent does not have such an interest in a contract as to entitle him to maintain an action at law upon it in his own name merely because he is entilted to a portion of the proceeds as compensation for making it or because he is liable for its breach.The following Comment on the above subsection is illuminating:The fact that an agent who makes a contract for his principal will gain or suffer loss by the performance or nonperformance of the contract by the principal or by the other party thereto does not entitle him to maintain an action on his own behalf against the other party for its breach.An agent entitled to receive a commission from his principal upon the performance of a contract which he has made on his principals account does not, from this fact alone, have any claim against the other party for breach of the contract, either in an action on the contract or otherwise.An agent who is not a promisee cannot maintain an action at law against a purchaser merely because he is entitled to have his compensation or advances paid out of the purchase price before payment to the principal.x x x.Thus, inHopkins vs. Ives,[12]the Supreme Court of Arkansas, citing Section 372 (2) above, denied the claim of a real estate broker to recover his alleged commission against the purchaser in an agreement to purchase property.InGoduco vs. Court of Appeals,[13]this Court held that:x x x granting that appellant had the authority to sell the property, the same did not make the buyer liable for the commission she claimed.At most, the owner of the property and the one who promised to give her a commission should be the one liable to pay the same and to whom the claim should have been directed.xxxAs petitioners are not parties, heirs, assignees, or beneficiaries of a stipulationpour autruiunder the contracts of sale, they do not, under substantive law, possess the right they seek to enforce.Therefore, they are not the real parties-in-interest in this case.Petitioners not being the real parties-in-interest, any decision rendered herein would be pointless since the same would not bind therealparties-in-interest.[14]Nevertheless, to forestall further litigation on the substantive aspects of this case, we shall proceed to rule on the merits.[15]Petitioners submit that respondent NHA had no legal basis to rescind the sale of the subject three parcels of land.The existence of such legal basis, notwithstanding, petitioners argue that they are still entitled to an award of damages.Petitioners confuse the cancellation of the contract by the NHA as a rescission of the contract under Article 1191 of the Civil Code.The right of rescission or, more accurately, resolution, of a party to an obligation under Article 1191 is predicated on a breach of faith by the other party that violates the reciprocity between them.[16]The power to rescind, therefore, is given to the injured party.[17]Article 1191 states:The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case.He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.In this case, the NHA did not rescind the contract.Indeed, it did not have the right to do so for the other parties to the contract, the vendors, did not commit any breach, much less a substantial breach,[18]of their obligation.Their obligation was merely to deliver the parcels of land to the NHA, an obligation that they fulfilled.The NHA did not suffer any injury by the performance thereof.The cancellation, therefore, was not a rescission under Article 1191.Rather, the cancellation was based on the negation of the cause arising from the realization that the lands, which were the object of the sale, were not suitable for housing.Cause is the essential reason which moves the contracting parties to enter into it.[19]In other words, the cause is the immediate, direct and proximate reason which justifies the creation of an obligation through the will of the contracting parties.[20]Cause, which is the essential reason for the contract, should be distinguished from motive, which is the particular reason of a contracting party which does not affect the other party.[21]For example, in a contract of sale of a piece of land, such as in this case, the cause of the vendor (petitioners principals) in entering into the contract is to obtain the price.For the vendee, NHA, it is the acquisition of the land.[22]Themotiveof the NHA, on the other hand, is to use said lands for housing.This is apparent from the portion of the Deeds of Absolute Sale[23]stating:WHEREAS, under the Executive Order No. 90 dated December 17, 1986, the VENDEE is mandated to focus and concentrate its efforts and resources in providing housing assistance to the lowest thirty percent (30%) of urban income earners, thru slum upgrading and development of sites and services projects;WHEREAS, Letters of Instructions Nos. 555 and 557 [as] amended by Letter of Instruction No. 630, prescribed slum improvement and upgrading, as well as the development of sites and services as the principal housing strategy for dealing with slum, squatter and other blighted communities;x x xWHEREAS, the VENDEE, in pursuit of and in compliance with the above-stated purposes offers to buy and the VENDORS, in a gesture of their willing to cooperate with the above policy and commitments, agree to sell the aforesaid property together with all the existing improvements there or belonging to the VENDORS;NOW, THEREFORE, for and in consideration of the foregoing premises and the terms and conditions hereinbelow stipulated, the VENDORS hereby, sell, transfer, cede and convey unto the VENDEE, its assigns, or successors-in-interest, a parcel of land located at Bo. Tadiangan, Tuba, Benguet containing a total area of FIFTY SIX THOUSAND EIGHT HUNDRED NINETEEN (56,819) SQUARE METERS, more or less x x x.Ordinarily, a partys motives for entering into the contract do not affect the contract.However, when the motive predetermines the cause, the motive may be regarded as the cause.InLiguez vs. Court of Appeals,[24]this Court, speaking through Justice J.B.L. Reyes, held:xxx It is well to note, however, that Manresa himself (Vol. 8, pp. 641-642) while maintaining the distinction and upholding the inoperativeness of the motives of the parties to determine the validity of the contract, expressly excepts from the rule those contracts that are conditioned upon the attainment of the motives of either party.The same view is held by the Supreme Court of Spain, in its decisions of February 4, 1941, and December 4, 1946, holding that the motive may be regarded ascausawhen it predetermines the purpose of the contract.In this case, it is clear, and petitioners do not dispute, that NHA would not have entered into the contract were the lands not suitable for housing.In other words, the quality of the land was an implied condition for the NHA to enter into the contract.On the part of the NHA, therefore, the motive was the cause for its being a party to the sale.Were the lands indeed unsuitable for the housing as NHA claimed?We deem the findings contained in the report of the Land Geosciences Bureau dated 15 July 1991 sufficient basis for the cancellation of the sale, thus:In Tadiangan, Tuba, the housing site is situated in an area of moderate topography.There [are] more areas of less sloping ground apparently habitable.The site is underlain by x x x thick slide deposits (4-45m) consisting of huge conglomerate boulders (see Photo No. 2) mix[ed] with silty clay materials.These clay particles when saturated have some swelling characteristics which is dangerous for any civil structures especially mass housing development.[25]Petitioners content that the report was merely preliminary, and not conclusive, as indicated in its title:MEMORANDUMTO:EDWIN G. DOMINGOChief, Lands Geology DivisionFROM:ARISTOTLE A. RILLONGeologist IISUBJECT:Preliminary Assessmentof Tadiangan Housing Project in Tuba, Benguet[26]Thus, page 2 of the report states in part:x x xActually there is a need to conduct further geottechnical [sic] studies in the NHA property.Standard Penetration Test (SPT) must be carried out to give an estimate of the degree of compaction (the relative density) of the slide deposit and also the bearing capacity of the soil materials.Another thing to consider is the vulnerability of the area to landslides and other mass movements due to thick soil cover.Preventive physical mitigation methods such as surface and subsurface drainage and regrading of the slope must be done in the area.[27]We read the quoted portion, however, to mean only that further tests are required to determine the degree of compaction, the bearing capacity of the soil materials, and vulnerability of the area to landslides, since the tests already conducted were inadequate to ascertain such geological attributes.It is only in this sense that the assessment was preliminary.Accordingly, we hold that the NHA was justified in cancelling the contract.The realization of the mistake as regards the quality of the land resulted in the negation of the motive/cause thus rendering the contract inexistent.[28]Article 1318 of the Civil Code states that:Art. 1318.There is no contract unless the following requisites concur:(1)Consent of the contracting parties;(2)Object certain which is the subject matter of the contract;(3)Causeof the obligation which is established. (Underscoring supplied.)Therefore, assuming that petitioners are parties, assignees or beneficiaries to the contract of sale, they would not be entitled to any award of damages.WHEREFORE, the instant petition is hereby DENIED.SO ORDERED.Davide, C.J., (Chairman),on leave.Puno, Pardo,andYnares-Santiago, JJ.,concur.

SECOND DIVISION[G.R. No. 130148.December 15, 1997]JOSE BORDADOR and LYDIA BORDADOR,petitioners, vs.BRIGIDA D. LUZ, ERNESTO M. LUZ and NARCISO DEGANOS,respondents.D E C I S I O NREGALADO,J.:In this appeal bycertiorari, petitioners assail the judgment of the Court of Appeals in CA-G.R. CV No. 49175 affirming the adjudication ofthe Regional Trial Court of Malolos, Bulacan which found private respondent Narciso Deganos liable to petitioners for actual damages, but absolved respondent spouses Brigida D. Luz and Ernesto M. Luz of liability. Petitioners likewise belabor the subsequent resolution of the Court of Appeals which denied their motion for reconsideration of its challenged decision.Petitioners were engaged in the business of purchase and sale of jewelry and respondent Brigida D. Luz, also known as Aida D. Luz, was their regular customer.On several occasions during the period from April 27, 1987 to September 4, 1987, respondent Narciso Deganos, the brother of Brigida D. Luz, received several pieces of gold and jewelry from petitioners amounting toP382,816.00.[1]These items and their prices were indicated in seventeen receipts covering the same.Eleven of the receipts stated that they were received for a certain Evelyn Aquino, a niece of Deganos, and the remaining six indicated that they were received for Brigida D. Luz.[2]Deganos was supposed to sell the items at a profit and thereafter remit the proceeds and return the unsold items to petitioners.Deganos remitted only the sum ofP53,207.00.He neither paid the balance of the sales proceeds, nor did he return any unsold item to petitioners.By January 1990, the total of his unpaid account to petitioners, including interest, reached the sum ofP725,463.98.[3]Petitioners eventually filed a complaint in thebarangaycourt against Deganos to recover said amount.In thebarangayproceedings, Brigida D. Luz, who was not impleaded in the case, appeared as a witness for Deganos and ultimately, she and her husband, together with Deganos, signed a compromise agreement with petitioners.In that compromise agreement, Deganos obligated himself to pay petitioners, on installment basis, the balance of his account plus interest thereon.However, he failed to comply with his aforestated undertakings.On June 25, 1990, petitioners instituted Civil Case No. 412-M-90 in the Regional Trial Court of Malolos, Bulacan against Deganos and Brigida D. Luz for recovery of a sum of money and damages, with an application for preliminary attachment.[4]Ernesto Luz was impleaded therein as the spouse of Brigida.Four years later, or on March 29, 1994, Deganos and Brigida D. Luz were charged with estafa[5]in the Regional Trial Court of Malolos, Bulacan, which was docketed as Criminal Case No. 785-M-94.That criminal case appears to be still pending in said trial court.During the trial of the civil case, petitioners claimed that Deganos acted as the agent of Brigida D. Luz when he received the subject items of jewelry and, because he failed to pay for the same, Brigida, as principal, and her spouse are solidarily liable with him therefor.On the other hand, while Deganos admitted that he had an unpaid obligation to petitioners, he claimed that the same was only in the sum ofP382,816.00 and notP725,463.98.He further asserted that it was he alone who was involved in the transaction with the petitioners; that he neither acted as agent for nor was he authorized to act as an agent by Brigida D. Luz, notwithstanding the fact that six of the receipts indicated that the items were received by him for the latter.He further claimed that he never delivered any of the items he received from petitioners to Brigida.Brigida, on her part, denied that she had anything to do with the transactions between petitioners and Deganos.She claimed that she never authorized Deganos to receive any item of jewelry in her behalf and, for that matter, neither did she actually receive any of the articles in question.After trial, the court below found that only Deganos was liable to petitioners for the amount and damages claimed.It held that while Brigida D. Luz did have transactions with petitioners in the past, the items involved were already paid for and all that Brigida owed petitioners was the sum ofP21,483.00 representing interest on the principal account which she had previously paid for.[6]The trial court also found that it was petitioner Lydia Bordador who indicated in the receipts that the items were received by Deganos for Evelyn Aquino and Brigida D. Luz.[7]Said court was persuaded that Brigida D. Luz was behind Deganos, but because there was no memorandum to this effect, the agreement between the parties was unenforceable under the Statute of Frauds.[8]Absent the required memorandum or any written document connecting the respondent Luz spouses with the subject receipts, or authorizing Deganos to act on their behalf, the alleged agreement between petitioners and Brigida D. Luz was unenforceable.Deganos was ordered to pay petitioners the amount ofP725,463.98, plus legal interest thereon from June 25, 1990, and attorneys fees.Brigida D. Luz was ordered to payP21,483.00 representing the interest on her own personal loan.She and her co-defendant spouse were absolved from any other or further liability.[9]As stated at the outset, petitioners appealed the judgment of the courta quoto the Court of Appeals which affirmed said judgment.[10]The motion for reconsideration filed by petitioners was subsequently dismissed,[11]hence the present recourse to this Court.The primary issue in the instant petition is whether or not herein respondent spouses are liable to petitioners for the latters claim for money and damages in the sum ofP725,463.98, plus interests and attorneys fees, despite the fact that the evidence does not show that they signed any of the subject receipts or authorized Deganos to receive the items of jewelry on their behalf.Petitioners argue that the Court of Appeals erred in adopting the findings of the courta quothat respondent spouses are not liable to them, as said conclusion of the trial court is contradicted by the finding of fact of the appellate court that (Deganos) acted as agent of his sister (Brigida Luz).[12]In support of this contention, petitioners quoted several letters sent to them by Brigida D. Luz wherein the latter acknowledged her obligation to petitioners and requested for more time to fulfill the same.They likewise aver that Brigida testified in the trial court that Deganos took some gold articles from petitioners and delivered the same to her.Both the Court of Appeals and the trial court, however, found as a fact that the aforementioned letters concerned the previous obligations of Brigida to petitioners, and had nothing to do with the money sought to be recovered in the instant case.Such concurrent factual findings are entitled to great weight, hence, petitioners cannot plausibly claim in this appellate review that the letters were in the nature of acknowledgments by Brigida that she was the principal of Deganos in the subject transactions.On the other hand, with regard to the testimony of Brigida admitting delivery of the gold to her, there is no showing whatsoever that her statement referred to the items which are the subject matter of this case.It cannot, therefore, be validly said that she admitted her liability regarding the same.Petitioners insist that Deganos was the agent of Brigida D. Luz as the latter clothed him with apparent authority as her agent and held him out to the public as such, hence Brigida can not be permitted to deny said authority to innocent third parties who dealt with Deganos under such belief.[13]Petitioners further represent that the Court of Appeals recognized in its decision that Deganos was an agent of Brigida.[14]The evidence does not support the theory of petitioners that Deganos was an agent of Brigida D. Luz and that the latter should consequently be held solidarily liable with Deganos in his obligation to petitioners.While the quoted statement in the findings of fact of the assailed appellate decision mentioned that Deganos ostensibly acted as an agent of Brigida, the actual conclusion and ruling of the Court of Appeals categorically stated that, (Brigida Luz) never authorized her brother (Deganos) to act for and in her behalf in any transaction with Petitioners xxx.[15]It is clear, therefore, that even assumingarguendothat Deganos acted as an agent of Brigida, the latter never authorized him to act on her behalfwith regard to the transactions subject of this case.The Civil Code provides:Art. 1868. By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter.The basis for agency is representation.Here, there is no showing that Brigida consented to the acts of Deganos or authorized him to act on her behalf, much less with respect to the particular transactions involved.Petitioners attempt to foist liability on respondent spouses through the supposed agency relation with Deganos is groundless and ill-advised.Besides, it was grossly and inexcusably negligent of petitioners to entrust to Deganos, not once or twice but on at least six occasions as evidenced by six receipts, several pieces of jewelry of substantial value without requiring a written authorization from his alleged principal.A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent.[16]The records show that neither an express nor an implied agency was proven to have existed between Deganos and Brigida D. Luz.Evidently, petitioners, who were negligent in their transactions with Deganos, cannot seek relief from the effects of their negligence by conjuring a supposed agency relation between the two respondents where no evidence supports such claim.Petitioners next allege that the Court of Appeals erred in ignoring the fact that the decision of the court below, which it affirmed, is null and void as it contradicted its ruling in CA-G.R. SP No. 39445 holding that there is sufficient evidence/proof against Brigida D. Luz and Deganos for estafa in the pending criminal case.They further aver that said appellate court erred in ruling against them in this civil action since the same would result in an inevitable conflict of decisions should the trial court convict the accused in the criminal case.By way of backdrop for this argument of petitioners, herein respondents Brigida D. Luz and Deganos had filed a demurrer to evidence and a motion for reconsideration in the aforestated criminal case, both of which were denied by the trial court.They then filed a petition forcertiorariin the Court of Appeals to set aside the denial of their demurrer and motion for reconsideration but, as just stated, their petition therefor was dismissed.[17]Petitioners now claim that the aforesaid dismissal by the Court of Appeals of the petition in CA-G.R. SP No. 39445 with respect to the criminal case is equivalent to a finding that there is sufficient evidence in the estafa case against Brigida D. Luz and Deganos.Hence, as already stated, petitioners theorize that the decision and resolution of the Court of Appeals now being impugned in the case at bar would result in a possible conflict with the prospective decision in the criminal case.Instead of promulgating the present decision and resolution under review, so they suggest, the Court of Appeals should have awaited the decision in the criminal case, so as not to render academic or preempt the same or, worse, create two conflicting rulings.[18]Petitioners have apparently lost sight of Article 33 of the Civil Code which provides that in cases involving alleged fraudulent acts, a civil