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ISSUE: whether or not the defendant company, the Lyric Film Exchange, Inc., is responsible to the plaintiff, International Films (China) Ltd., for the destruction by fire of the film in question, entitled "Monte Carlo Madness". Argument of Plaintiff Company: defendant's failure to return the film "Monte Carlo Madness" to the former was due to the fact that the period for the delivery thereof, which expired on June 22, 1933, had been extended in order that it might be shown in Cebu on August 29 and 30, 1933, in accordance with an understanding had between Lazarus Joseph, the new agent of the plaintiff company, and the defendant. Argument of Defendant Company: when it wanted to return the film "Monte Carlo Madness" to Bernard Gabelman, the former agent of the plaintiff company, because of the arrival of the date for the return thereof, under the contract Exhibit C, said agent, not having a safety vault, requested Vicente Albo, chief of the film department of the defendant company, to keep said film in the latter's vault under Gabelman's own responsibility, verbally stipulating at the same time that the defendant company, as subagent of the International Films (China) Ltd., might show the film in question in its theaters. HELD: NO. The defendant company, as subagent of the plaintiff in the exhibition of the film "Monte Carlo Madness", was not obliged to insure it against fire, not having received any express mandate to that effect, and it is not liable for the accidental destruction thereof by fire. RATIO: It does not appear sufficiently proven that the understanding had between Lazarus Joseph, second agent of the plaintiff company, and Vicente Albo, chief of the film department of the defendant company, was that the defendant company would continue showing said film under the same contract Exhibit C. If the verbal contract had between Bernard Gabelman, the former agent of the plaintiff company, and Vicente Albo, chief of the film department of the defendant company, was a sub-agency or a submandate, the defendant company is not civilly liable for the destruction by fire of the film in question because as a mere submandatary or subagent, it was not obliged to fulfill more than the contents of the mandate and to answer for the damages caused to the principal by his failure to do so (art. 1718, Civil Code). The fact that the film was not insured against fire does not constitute fraud or negligence on the part of the defendant company, the Lyric Film Exchange, Inc., because as a subagent, it received no instruction to that effect from its principal and the insurance of the film does not form a part of the obligation imposed upon it by law. PNB v. AGULEDO 58 PHIL 655 FACTS: On November 9, 1920, the defendant-appellant Paz Agudelo y Gonzaga executed in favor of her nephew, Mauro A. Garrucho, the document conferring upon him a special power of attorney sufficiently broad in scope to enable him to sell, alienate and mortgage in the manner and form he might deem convenient, all her real estate situated in the municipalities of Murcia and Bacolod, Occidental Negros, consisting in lots Nos. 61 and 207 On December 22, 1920, Amparo A. Garrucho executed the document whereby she conferred upon her brother Mauro A Garrucho a special power of attorney sufficiently broad in scope to enable him to sell, alienate, mortgage or otherwise encumber, in the manner and form he might deem convenient, all her real estate situated in the municipalities of Murcia and Bago, Occidental Negros. Nothing in the aforesaid powers of attorney expressly authorized Mauro A. Garrucho to contract any loan nor to constitute a mortgage on the properties belonging to the respective principals, to secure his obligations. On December 23, 1920, Mauro A. Garrucho executed in the favor of the Philippine National bank, whereby he constituted a mortgage on lot No. 878 of the cadastral survey of Murcia, Occidental Negros, with all the improvements thereon, described in transfer certificate of title No. 2415 issued in the name of Amparo A. Garrucho (his sister), to secure the payment of credits, loans, commercial overdrafts, etc., not exceeding P6,000.
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WON Paz Agudelo y Gonzaga is liable for the lien on lot No. 878, which was tranferred to her by her niece. YES Paz Agudelo y Gonzaga in an affidavit dated January 15, 1926 , and in a letter dated January 16, 1926, gave her consent to the lien on lot No. 878, the ownership of which was transferred to her by her niece Amparo A. Garrucho. However, this acknowledgment, however, does not extend to lots Nos. 207 and 61, respectively, inasmuch as, although it is true that a mortgage is indivisible as to the contracting parties and as top their successors in interest (article 1860, Civil Code), it is not so with respect to a third person who did not take part in the constitution thereof either personally or through an agent, inasmuch as he can make the acknowledgment thereof in the form and to the extent he may deem convenient, on the ground that he is not in duty bound to acknowledge the said mortgage. Therefore, the only liability of the defendant-appellant Paz Agudelo y Gonzaga is that which arises from the aforesaid acknowledgment, but only with respect to the lien and not to the principal obligation secured by the mortgage acknowledged by her to have been constituted on said lot No. 878 . Such liability is not direct but a subsidiary one. In view of the foregoing consideration, when an agent negotiates a loan in his personal capacity and executes a promissory note under his own signature, without express authority from his principal, giving as security therefor real estate belonging to the letter, also in his own name and not in the name and representation of the said principal, the obligation do constructed by him is personal and does not bind his aforesaid principal. Wherefore, it is hereby held that the liability constructed by the aforesaid defendant-appellant Paz Agudelo y Gonzaga is merely subsidiary to that of Mauro A. Garrucho, limited lot No. 878 of the cadastral survey of Murcia, Occidental Negros, described in Torrens title No. 2415. However, inasmuch as the principal obligator, Mauro A. Garrucho, has been absolved from the complaint and the plaintiffappellee has not appealed from the judgment absolving him, the law does not afford any remedy whereby Paz Agudelo y Gonzaga may be required to comply with the said subsidiary obligation in view of the legal maxim that the accessory follows the principal. Wherefore, the defendant herein should also be absolved from the complaint which is hereby dismissed, with the costs against the appellee. So ordered. PHILIPPINE PRODUCTS v. PRIMATERIA 15 SCRA 301 FACTS: Defendant Primateria Societe Anonyme Pour Le Commerce Exterieur (Primateria Zurich) was engaged in "Transactions in international trade with agricultural products, particularly in oils, fats and oil-seeds and related products." The record shows that: Primateria Zurich, through defendant Alexander B. Baylin, entered into an agreement with plaintiff Philippine Products Company,
ISSUE/HELD: WON Paz Agudelo y Gonzaga is liable for the payment of the loans obtained by Mauro A. Garrucho from the Philippine National Bank for the security of which he constituted a mortgage on the aforesaid real estate belonging to the defendant-appellant Paz Agudelo y Gonzaga. NO there is nothing in the said mortgage deeds to show that Mauro A. Garrucho is attorney in fact of Amparo A. Garrucho and of Paz Agudelo y Gonzaga, and that he obtained the loans mentioned in the aforesaid mortgage deeds and constituted said mortgages as security for the payment of said loans, for the account and at the request of said Amparo A. Garrucho and Paz Agudelo y Gonzaga. From the titles as well as from the signatures therein, Mauro A. Garrucho, appears to have acted in his personal capacity. In the aforesaid mortgage deeds, Mauro A. Garrucho, in his capacity as mortgage debtor, appointed the mortgage creditor Philippine National Bank as his attorney in fact so that it might take actual and full possession of the mortgaged properties by means of force in case of violation of any of the conditions stipulated in the respective mortgage contracts. If Mauro A. Garrucho acted in his capacity as mere attorney in fact of Amparo A. Garrucho and of Paz Agudelo y Gonzaga, he could not delegate his power, in view of the legal principle of "delegata potestas delegare non potest" (a delegated power cannot be delegated), inasmuch as there is nothing in the records to show that he has been expressly authorized to do so. He executed the promissory notes evidencing the aforesaid loans, under his own signature, without authority from his principal and, therefore, were not binding upon the latter(Agudelo). Neither is there anything to show that he executed the promissory notes in question for the account, and at the request, of his respective principals. Furthermore, it is noted that the mortgage deeds, Exhibits C and J, were cancelled by the documents, Exhibits I and L, on July 15, 1922, and in their stead the mortgage deed, Exhibit C, was executed, in which there is absolutely no mention of Mauro A. Garrucho being attorney in fact of anybody, and which shows that he obtained such credit fro himself in his personal capacity and secured the payment thereof by mortgage constituted by him in his personal capacity,
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ISSUE: WON the agents may be held personally liable on contracts made in the name of the entity with third persons in the Philippines.- NO RATIO: At any rate, the plaintiff could never recover from both the principal (Primateria Zurich) and its agents. It has been given judgment against the principal for the whole amount. It asked for such judgment, and did not appeal from it. It clearly stated that its appeal concerned the other three defendants. There is no proof that, as agents, they exceeded the limits of their authority. In fact, the principal Primateria Zurich who should be the one to raise the point, never raised it, denied its liability on the ground of excess of authority. At any rate, article 1897 does not hold that in cases of excess of authority, both the agent and the principal are liable to the other contracting party. This view of the cause dispenses with the necessity of deciding the other issues, namely: whether the agent of a foreign corporation doing business, but not licensed here is personally liable for contracts made by him in the name of such corporation. Although, the solution should not be difficult, since it was already held that such foreign corporation may be sued here (General Corporation vs. Union Ins., 87 Phil. 509).
2.
Section 68 of the Corporation Law states: "No foreign corporation or corporation formed, organized, or existing under any laws other than those of the Philippines shall be permitted to transact business in the Philippines, until after it shall have obtained a license for that purpose from the Securities and Exchange Commission .. ." And under Section 69, "any officer or agent of the corporation or any person transacting business for any foreign corporation not having the license prescribed shall be punished by imprisonment for etc. ... ." 2 Art. 1897. The agent who acts as such is not personally liable to the party with whom he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers.
1
3.
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4.
It was NAMERCO that actually solicited the bond from the insurance company and as earlier explained, NAMERCO is being held liable under the contract because it virtually acted in its own name. It became the principal in the performance of the bond. The insurance company acted as a surety for NAMERCO. Rule is that want of authority of the person who executes an obligation as the agent or representative of the principal will not as a general rule, affect the surety's liability thereon, especially in the absence of fraud, even though the obligation is not binding on the principal. NATIONAL BANK & WELCH FAIRCHILD 44 PHIL 780
CHARACTERS: PNB plaintiff, lender of money Welch, Fairchild & Co. defendant, owner of 325 shares of La Compania, agent who borrowed money for the principal La Compania Naviera Inc. not a party in the case at bar, buyer of the ship, principal Welch & Co. correspondent of Welch, Fairchild & Co. in San Francisco, USA Mr. Fairchild president of Welch, Fairchild & Co. Benito Juarez the ship (oo, character siya :p) FACTS: La Compania bought Benito Juarez. It was through the efforts of Mr. Fairchild that the consent of the proper authorities in Washington, D.C. was obtained for the transfer of the ship to Philippine registry. While the ship was being delivered to the agent of the buyer in San Francisco (Welch & Co., I think), it was found out that it needed repairs before it could be transported to the Philippines. It also became impracticable to deliver the bill of sale and insurance money to Anglo-London and Paris National Bank, PNBs agent in San Francisco which was supposed to deliver the purchase money (Ignore the agency between PNB ang Anglo-London. Not the subject agency in this case.). Because of this, defendant wrote a letter to PNB to request the latter to cable Anglo-London to release the money and make payment for the ship upon Welch &Co.s application without requiring the delivery of the bill of sale or insurance policy. It was written in the letter that the Compania Naviera will deliver to you here the bill of sale also the insurance policy covering the voyage to Manila. La Compania also addressed a letter to PNB confirming the request and authorizing the bank to send the necessary cablegram. PNB sent the cablegram authorizing payment without the production of the bill of sale or insurance policy. Anglo-London did, and the ship was delivered. After the repair of the ship, it was insured by Welch & Co to the value of $150,000 and was dispatched on its voyage to the Phils. The vessel encountered a storm off the Island in Hawaii and became a total loss. When the insurance was taken out to cover the voyage to Manila, no policy was issued by any insurer; but the insurance was placed by Welch & Co. of San Francisco, upon the instructions of Welch, Fairchild & Co., as agents of the Compaa Naviera, and it was taken out in the ordinary course of business to protect the interests of all parties concerned. (copy-paste) The risk was distributed among several companies, some in remote centers; and it was many months before Welch & Co., of San Francisco, had collected the full amount due from the insurers. However, as the money came to the hands of Welch & Co., of San Francisco, it was remitted by draft or telegraphic transfer to Welch, Fairchild & Co. in Manila. (copy-paste) The amount of $13,000 was mistakenly remitted to PNB in New York, and it was only a month after this that PNB Manila received authority to pay defendant the said amount. This drew the attention of the bank to the fact that the transfer was related to the proceeds of the insurance on Benito Juarez. PNB Manila first determined to intercept the transfer and withhold the credit from the defendant.
ISSUE/HELD: WON PNB could collect from Welch, Fairchild & Co. YES. RATIO: (copy-paste) While it is true that an agent who acts for a revealed principal in the making of a contract does not become personally bound to the other party in the sense that an action can ordinarily be maintained upon such contract directly against the agent (art. 1725, Civ. Code), yet that rule clearly does not control this case; for even conceding that the obligation created by the letter of August 8, 1918, was directly binding only on the principal, and that in law the agent may stand apart therefrom. yet it is manifest upon the simplest principles of jurisprudence that one who has intervened in the making of a contract in the character of agent cannot be permitted to intercept and appropriate the thing which the principal is bound to deliver, and thereby make performance by the principal impossible. The agent in any event must be precluded from doing any positive act that could prevent performance on the part of his principal. This much, ordinary good faith towards the other contracting party requires. The situation before us in effect is one where, notwithstanding the promise held out jointly by principal and agent in the letters of August 8 and 10, 1918, the two have conspired to make an application of the proceeds of the insurance entirely contrary to the tenor of said letters. This cannot be permitted. The idea on which we here proceed can perhaps be made more readily apprehensible from another point of view, which is this: By virtue of the promise contained in the letter of August 8, 1918, the bank became the equitable owner of the insurance effected on the Benito Juarez to the extent necessary to indemnify the bank for the money advanced by it, in reliance upon that promise, for the purchase of said vessel; and this right of the bank must be respected by all persons having due notice thereof, and most of all by the defendant which took out the insurance itself in the interest of the parties then concerned, including of course the bank. The defendant therefore cannot now be permitted to ignore the right of the bank and appropriate the insurance to the prejudice of the bank, even though the act be done with the consent of its principal. As to the argument founded upon the delay of the bank in asserting its right to the insurance money, it is enough to say that mere delay unaccompanied by acts sufficient to create an equitable estoppel does not destroy legal rights, but such delay as occurred here is in part explained by the fact that the loan to La Compaa Naviera did not mature till May 17, 1919, and a demand for the surrender of the proceeds of the insurance before that date would have seemed premature. Besides, it is to be borne in mind that most of the insurance was not in fact collected until in June of 1919. x x x the bank was not slow in asserting its right to the remittance that came through the bank in June to Welch, Fairchild & Co., consisting of $13,000 of the proceeds of this insurance. TUAZON v. OROSCO 5 PHIL 596 FACTS: Juan de VARGAS (OROZCO's husband) executed a power of attorney to Enrique GRUPE, authorizing him, among other things, to dispose
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ISSUES: WON the mortgage over the house and lot is valid. WON OROZCO is liable to pay TUASON HELD: YES. YES. Trial courts judgment is AFFIRMED. OROZCO is ordered to pay TUASON the sum of P2,200, together with interest thereon until the debt shall have been fully discharged, plus costs. RATIO: A. OROZCOs bare denial of ever receiving the P2,200 cannot overcome the convincing proof to the contrary as presented by TUASON (1) She was one of the parties to that debt instrument and signed it this necessarily implies an admission on her part that the statements in the agreement relating to her are true (2) She also personally intervened in the execution of the mortgage and there she attested that the mortgage had been created with her knowledge and consent this furthers the assumption that she had received that amount and that for the purpose of securing its payment, the mortgage was executed (3) In addition, OROZCO also wrote TUASONs attorneys promising to pay the debt. She confirmed the authenticity of this letter! this puts beyond doubt the truth of her receiving the money (4) 13 years had elapsed since she signed the mortgage deed. During all this time she never denied having received the money. The only explanation for this is that she actually received the money as set forth in the debt instrument! *The fact that OROZCO received the money from her husband's agent and not from the creditor directly does not affect the validity of the mortgage. Nowhere does it appear in the agency contract that the money loaned was to be delivered to her by the creditor himself and not through the agent or any other person. The important thing was that she should have received the money B. OROZCO claims that GRUPE is TUASONs principal debtor, not VARGAS; that the debt was personally incurred by GRUPE for his D.
E.
3 This is the only relevant part for our purposes. The rest you can
dispense with because they are issues of procedure, on persons and family relations and on the mortgage law.
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when the terms are clear and leave no doubt as to the intention of the contracting parties, contracts are to be interpreted according to their literal meaning." He was aware of the risk that his ticket could expire, as it did, before he returned to the Philippines. The 2 employees did not extend the validity of the ticket. Both had no authority to do so. Cervantes knew this from the very start when he called up the Legal Department of PAL in the Philippines before he left for US. He knew that to secure an extension, he would have to file a written request for extension at the PAL's office in the Philippines. Despite this knowledge, Cervantes persisted to use the ticket in question. Since the PAL agents are not privy to the said Agreement and Cervantes knew that a written request to the legal counsel of PAL was necessary, he cannot use what the PAL agents did to his advantage. The said agents acted without authority when they confirmed the flights of the petitioner.
(2) Notwithstanding PAL's failure to raise the defense of lack of authority of the said PAL agents in its answer or in a motion to dismiss, the omission was cured since the said issue was litigated upon, as shown by the testimony of Cervantes in the course of trial. Cervantes - the defense of lack of authority on the part of the PAL employees was deemed waived under Rule 9, Section 2 of the Revised Rules of Court. The lack of authority of the PAL employees was neither raised in the answer nor in the motion to dismiss. The question of whether there was authority on the part of the PAL employees was acted upon by the trial court when was presented as a witness and the depositions of the PAL employees, Georgina M. Reyes and Ruth Villanueva, were presented. (3) In awarding moral damages for breach of contract of carriage, the breach must be wanton and deliberately injurious or the one responsible acted fraudulently or with malice or bad faith. Cervantes knew there was a strong possibility that he could not use the subject ticket, so much so that he bought a back-up ticket to ensure his departure. Should there be a finding of bad faith, we are of the opinion that it should be on Cervantes. What the employees of PAL did was one of simple negligence Neither can the claim for exemplary damages be upheld. Such kind of damages is imposed by way of example or correction for the public good, and the existence of bad faith is established. The wrongful act must be accompanied by bad faith, and an award of damages would be allowed only if the guilty party acted in a wanton, fraudulent, reckless or malevolent manner. There is no showing that PAL acted in such a manner. An award for attorney's fees is also improper. The Petition is DENIED and the decision of the Court of Appeals AFFIRMED in toto. SMITH BELL v. SOTELO 44 PHIL 874 *from ADAPT 2009 FACTS: On August 1918, Smith, Bell and Co. (Company), and Vicente Sotelo (Sotelo), entered into a contract where the Company obligated itself to sell and Sotelo to buy 2 steel tanks (P21,000 total), 2 expellers (P25,000 each), and two electric motors (P2,000 each). With respect to delivery dates, the stipulations were: 2 tanks Within 3 or 4 mos., no obligation on the Companys part 2 expellers September 1918 or as soon as possible 2 electric motors Within 90 days, not guaranteed Arrival dates: 2 tanks 2 expellers 2 electric motors April 27, 1919 (8 mos. after signing) October 26, 1918 (1 mo. late) February 27, 1919 (3 mos. late)
8. This ticket is good for carriage for one year from date of issue, except as otherwise provided in this ticket, in carrier's tariffs, conditions of carriage, or related regulations. The fare for carriage hereunder is subject to change prior to commencement of carriage. Carrier may refuse transportation if the applicable fare has not been paid.
Sotelo refused to receive and pay. The Company sued him. Sotelo countered that the deliveries were late and made counterclaims against the Company. The lower court absolved Sotelo with regards to the tanks and the motors, but ordered him to receive and pay for the expellers. Both parties appealed.
Issue: WON the Company has fulfilled its obligation to deliver in due time.
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ISSUE: validity of the Deed of Real Estate Mortgage dated August 26, 1981, executed by Rufino S. Aquino, as attorney-in-fact of Ederlinda Gallardo, in favor of the Rural Bank of Bombon (Cam. Sur), Inc. HELD: Aquino's act of signing the Deed of Real Estate Mortgage in his name alone as mortgagor, without any indication that he was signing for and in behalf of the property owner, Ederlinda Gallardo, bound himself alone in his personal capacity as a debtor of the petitioner Bank and not as the agent or attorney-in-fact of Gallardo. RATIO: defendant Aquino in executing the deed of Real Estate Mortgage in favor of the rural bank over the three parcels of land covered by Gallardo's title named himself as the mortgagor without stating that his signature on the deed was for and in behalf of Ederlinda Gallardo in his capacity as her attorney-in-fact. The three (3) promissory notes respectively dated August 31, 1981, September 23, 1981 and October 26, 1981, were each signed by Rufino Aquino on top of a line beneath which is written "signature of mortgagor" and by Bibiana P. Aquino on top of a line under which is written "signature of spouse," without any mention that execution thereof was for and in behalf of the plaintiff as mortgagor. It results, borne out from what were written on the deed, that the amounts were the personal loans of defendant Aquino. As pointed out by the appellant, Aquino's wife has not been appointed co-agent of defendant Aquino and her signature on the deed and on the promissory notes can only mean that the obligation was personally incurred by them and for their own personal account. in order to bind the principal by a mortgage on real property executed by an agent, it must upon its face purport to be made, signed and sealed in the name of the principal, otherwise, it will bind the agent only. Agents act of signing mortgage deed in his own name bound himself in his personal capacity as debtor Argument of Petitioner: the Deed of Real Estate Mortgage is enforceable against Gallardo since it was executed in accordance with Article 1883 which provides (Art. 1883. If an agent acts in his own name, the principal has no right of action against the persons with whom the agent has contracted; neither have such persons against the principal. In such case the agent is the one directly bound in favor of the person with whom he has contracted, as if the transaction were his own, except when the contract involves things belonging to the principal.) SC: Exception in Art. 1883 not applicable to the case at bar. Herein respondent Aquino acted purportedly as an agent of Gallardo, but actually acted in his personal capacity. Involved herein are properties titled in the name of respondent Gallardo against which the Bank proposes to foreclose the mortgage constituted by an agent (Aquino) acting in his personal capacity. Under these circumstances, Gallardo's property is not liable on the real estate mortgage: There is no principle of law by which one can become liable on a real estate mortgage which he never executed either in person or by attorney in fact SY-JUCO v. SY-JUCO 40 PHIL 634 FACTS: In 1902 the defendant was appointed by the plaintiffs administrator of their property and acted as such until June 30, 1916, when his authority was cancelled. The plaintiffs are defendant's father and mother who allege that during his administration, the defendant acquired the property claimed in the Complaint in his capacity as plaintiffs' administrator with their money and for their benefit. After hearing the case the trial court the following: 1. That the defendant return to the plaintiffs the launch Malabon, in question, and execute all the necessary documents and instruments for such delivery and the registration in the
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WON the Launch belongs to the plaintiffs HELD: Yes it belong to the plaintiffs. RATIO: On July, 1914, the defendant bought it in his own name from the Pacific Commercial Co., and afterwards, registered it at the Custom House. But this does not necessarily show that the defendant bought it for himself and with his own money, as he claims. This transaction was within the agency which he had received from the plaintiffs. The fact that he has acted in his own name may be only, as we believe it was, a violation of the agency on his part. It was bought with their money and for them (Plaintiffs) is supported by the fact that, immediately after its purchase, the launch had to be repaired at their expense, although said expense was collected from the defendant. If the launch was not bought for the plaintiffs and with their money, it is not explained why they had to pay for its repairs. By this agency the plaintiffs herein clothed the defendant with their representation in order to purchase the launch in question. However, the defendant acted without this representation and bought the launch in his own name thereby violating the agency. If the result of this transaction should be that the defendant has acquired for himself the ownership of the launch, it would be equivalent to sanctioning this violation and accepting its consequences. If the defendant contracted the obligation to buy the launch for the plaintiffs and in their representation, by virtue of the agency, notwithstanding the fact that he bought it in his own name, he is obliged to transfer to the plaintiffs the rights he received from the vendor, and the plaintiffs are entitled to be subrogated in these rights. There is another point of view leading Us to the same conclusion. From the rule established in Article 1717 of the Civil Code that when an agent acts in his own name, the principal shall have no right of action against the person with whom the agent has contracted, cases involving things belonging to the principal are excepted. According to this exception [when things belonging to the principal are dealt with] the agent is bound to the principal although he does not assume the character of such agent and appears acting on his own name [Decision of the Supreme Court of Spain, May 1, 1900]. This means that in the case of this exception the agent's apparent representation yields to the principal's true representation and that, in reality and in effect, the contract must be considered as entered into between the principal and the third person; and, consequently, if the obligations belong to the former, to him alone must also belong the rights arising from the contract. The money with which the launch was bought having come from the plaintiff, the exception established in Article 1717 is applicable to the instant case. WON the defendant has to return the Casco HELD: Yes RATIO The defendant admits it was constructed by the plaintiff himself in the latter's ship-yard. Defendant's allegation that it was constructed at his instance and with his money is not supported by the evidence. In fact the only proof presented to support this allegation is his own testimony contradicted, on the one hand, by the plaintiffs' testimony and, on the other hand, rebutted by the fact that, on the date this casco was constructed, he (defendant) did not have sufficient money with which to pay the expense of its construction. WON the defendant has to return the car
2.
3.
HELD: No RATIO: Concerning the wood, windows and doors given by the plaintiffs to the defendant and used in the construction of the latter's house on Calle Real of the Barrio of La Concepcion of the Municipality of Malabon, Rizal, we find correct the trial Court's decision that they were given to the defendant as his and his wife's property. NATIONAL FOOD AUTHORITY v. IAC 184 SCRA 166 FACTS: Gil Medalla, as commission agent of the Superior Shipping Corporation (SSC), entered into a contract for hire of ship known as "MV Sea Runner" with defendant National Grains Authority. Under the said contract Medalla obligated to transport on the "MV Sea Runner" 8,550 sacks of rice belonging to National Grains Authority from the port of San Jose, Occidental Mindoro, to Malabon, Metro Manila. Upon completion of the delivery of rice at its destination, SSC wrote a letter requesting defendant NGA that it be allowed to collect the amount stated in its statement of account. The statement of account included not only a claim for freightage but also claims for demurrage and stevedoring charges amounting to P93,538.70. SSC wrote again defendant NGA, this time specifically requesting that the payment for freightage and other charges be made to it and not to defendant Medalla because plaintiff was the owner of the vessel "MV Sea Runner" In reply, NGA informed plaintiff that it could not grant its request because the contract to transport the rice was entered into by
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ISSUE: WON NFA is liable noting the general rule provided for in Art. 1883 of the Civil Code of the Philippines- YES RATIO: Art. 1883. If an agent acts in his own name, the principal has no right of action against the persons with whom the agent has contracted; neither have such persons against the principal. In such case the agent is the one directly bound in favor of the person with whom he has contracted, as if the transaction were his own, except when the contract involves things belonging to the principal. The provision of this article shall be understood to be without prejudice to the actions between the principal and agent. Consequently, when things belonging to the principal (in this case, Superior Shipping Corporation) are dealt with, the agent is bound to the principal although he does not assume the character of such agent and appears acting in his own name. In other words, the agent's apparent representation yields to the principal's true representation and that, in reality and in effect, the contract must be considered as entered into between the principal and the third person (Sy Juco and Viardo v. Sy Juco, 40 Phil. 634). Corollarily, if the principal can be obliged to perform his duties under the contract, then it can also demand the enforcement of its rights arising from the contract. GOLD STAR MINING v. LIM JIMENEZ 25 SCRA 597 NATURE: Appeal from a decision of the Court of Appeals PARTIES INVOLVED: Gold Star Mining Co., Inc., petitioner Marta Lim-Jimena, et al., as legal heirs of the deceased Victor Jimena, and Jose Hidalgo, respondents FACTS: In 1937, Ananias Isaac Lincallo bound himself in writing to turn to Victor Jimena half of the proceeds from all mining claims that he would purchase with the money to be advanced by the latter. This agreement was later on modified to include in the equal sharing agreement not only the proceeds from several mining claims, but also the lands constituting the same, and so as to bing thereby their heirs, assigns, or legal representatives. Eventually, the mining rights over parts of the claims were assigned by Lincallo to Gold Star Mining Co., Inc., while others were assigned to Marinduque Iron Mines Agents. Meanwhile, Jimena repeatedly apprised both mining corporations of his interests over the mining claims so assigned and/or leased by Lincallo. However, both corporations ignored his demands. Jimena also demanded Lincallo for the payment of the P5,800 he gave Lincallo as money to purchase the mining claims and the lands, but to no avail. Lincallo did not only fail to settle his accounts with Jimena, he even transferred about majority of his share in the royalties due from Gold Star to Gregorio Tolentino, a salaried employee. Hence, on Sept. 2, 1954, Jimena filed a suit against Lincallo for recovery of his advances and his one-half share in the royalties, and impleaded Gold Star and Marinduque Iron Mines, as well as Tolentino, later on as defendants. Two weeks later, the trial court issued a writ of preliminary injunction, preventing both mining companies from paying royalties during the pendency of the case to Lincallo, his assigns or legal representatives. Despite of such injunction, Gold Star still paid P30,691.92 to Lincallo and Tolentino (claiming that a writ of prelimary attachment filed by Jimena supposedly superseded the injunction, but the condition to such
LEGAL ISSUES: 1. WON the CA erred in finding that the Jimenas have a cause of action against Gold Star Mining Co., as there is no privity of contract between Gold Star and Jimena. 2. WON the CA erred in condemning Gold Star to pay the sum of P30,691.92 for violation of an allegedly non-existent injunction. JUDGMENT: Affirmed. RATIO DECIDENDI: 1. NO. The existence of a common subject-matter supplies the juridical link. Jimena repeatedly made demands upon God Star for the payment of his share of the royalties, but all in vain, so he was forced to implead Gold Star for having refused to recognize his right. Furthermore, under such conditions wherein Jimena was repeatedly denied of his interests, Jimena has an action against Gold Star, pursuant to Art. 1883, NCC, which provides that the principal may sue the person with whom the agent dealt with in his (agents) own name, when the transaction involves things belonging to the principal. 2. NO. Said award is not so much a penalty against petitioner as a decree of restitution. Said sum to be paid by the company to Jimena is to be imputed to Lincallos liability under this judgment. CA thus left the way open for Gold Star to recover later the whole amount from Lincallo. MACONDRAY v. SELLNER 33 PHIL 370 FACTS: Macondray & Co. bought a parcel of land from Sellner. The land was flooded by high tides, and Macondray became dissatisfied with its purchase. It then requested Sellner, after the final transfer was made,to find another buyer because the land was unsuited for use as a coal-yard, the purpose for which it had been purchased. It was expressly understood that Macondray was willing to sell the land for P17,175 and that Sellner would receive as commission for securing a purchaser anything over that amount he could get. Sellner found a purchaser, Antonio Barretto, who was willing to buy the land for P18892.5o. Macondray executed a formal deed of conveyance which, together with the certificate of title, was delivered to Sellner with the understanding that the latter would consummate the sale, deliver the title to the buyer and receive the purchase price. Barretto asked that he be given time to examine the title deed. if he found it satisfactory, he would accept the land and give Barretto the check for the amount of the purchase price. Because Barretto had to go to Tayabas for a business trip and was delayed by a typhoon, Macondray advised Sellner that he must consummate the sale upon Barrettos return to Manila. When he got back, Barretto told Sellner that he would pay the purchase price in a day or two if he found the documents satisfactory. Monday morning - Young (person from Macondray) formally notified Sellner that the deal would be off if purchase price was not paid before 5pm of that afternoon. Sellner received the check from Barretto on Wednesday morning. He immediately turned over the amount of P17175 to Macondray, but mAcondrays manager refused to accept the check and iled this action, claiming that the sale had been cancelled when the
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INFANTE v. CUNANAN 93 PHIL 691 Quick facts: Principal terminated agency after referral of a buyer, allegedly because of change of mind, but subsequently transacted directly with the proposed buyer FACTS: Consejo Infante (owner of the lands) contracted the services of Jose Cunanan and Juan Mijares, plaintiff herein, to sell the abovementioned property for a price of P30,000 subject to the condition that the purchaser would assume the mortgage existing thereon in the favor of the Rehabilitation Finance Corporation. She agreed to pay them a commission of 5 per cent on the purchase price plus whatever overprice they may obtain for the property. Plaintiffs found one Pio S. Noche who was willing to buy the property under the terms agreed upon with defendant, but when they introduced him to defendant, the latter informed them that she was no longer interested in selling the property and succeeded in making them sign a document stating therein that the written authority she had given them was already can-celled. defendant dealt directly with Pio S. Noche selling to him the property for P31,000. Upon learning this transaction, plaintiffs demanded from defendant the payment of their commission, but she refused and so they brought the present action. Argument of petitioner: authority has already been withdrawn on November 30, 1948 when, by the voluntary act of respondents, they executed a document stating that said authority shall be considered cancelled and without any effect, so that when petitioner sold the property to Pio S. Noche on December 20, 1948, she was already free from her commitment with respondents and, therefore, was not in duty bound to pay them any commission for the transaction. Argument of respondents: while they agreed to cancel the written authority given to them, they did so merely upon the verbal assurance given by petitioner that, should the property be sold to their own buyer, Pio S. Noche, they would be given the commission agreed upon. ISSUE: WON respondents are entitled to the commission originally agreed upon
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2.
Purisima can only recover from Gregorio of whatever amount Gregorio received by virtue of the transaction as his sub-agency contract was with Gregorio alone and not with Vicente who was not even aware of the sub-agency.