1.

Blondeau vs. Nano 61 Phil 625 (1935)

2.

Limketkai Sons Milling Inc. vs. CA 250 SCRA 523 (1995)

A registered owner who places in the hands of another an executed document of transfer of registered land effectively represents to a third party that the holder of such document is authorized to deal with the property. FACTS: Blondeau, mortgagee , relying upon a Torrens title, granted a loan of money in all good faith on the basis of the title standing in the name of the mortgagors (Nano and Vallejo) only thereafter to discover defendant Nano to be an alleged forger and the other defendant Vallejo, if not a party to the conspiracy, at least having by his negligence or acquiescence made it possible for the fraud to transpire. Not only the mortgage but the power of attorney of Vallejo in favor of Nano and a series of documents were the product of the evil machinations of Nano, and that although Nano and Vallejo, members of same family, lived together, Vallejo was entirely unacquainted with the activities of Nano in dealing with their joint property. ISSUE: WON Vallejo being innocent on the transaction, having his signature forged by Nano, liable to the plaintiff. HELD: Giving to the facts the most favorable interpretation for Vallejo, yet, as announced by the United States Supreme Court, the maxim is, as between two innocent persons, in this case Angela Blondeau and Jose Vallejo, one of whom must suffer the consequence of a breach of trust, the one who made it possible by his act of confidence must bear the loss, in this case Jose Vallejo. Thus, it has been held that if a bank could give the authority to sell to a licensed broker, there is no reason to doubt the authority to sell of two of the banks VP (with whom the broker finalized the details of the contract to sell) whose precise job in the bank was to manage and administer its real property. FACTS: On June 23, 1988, Pedro Revilla, Jr., a licensed real estate broker was given formal authority by BPI to sell the lot for P1,000.00 per square meter. This arrangement was concurred in by the owners of the Philippine Remnants. Broker Revilla contacted Alfonso Lim of petitioner company who agreed to buy the land. On July 8, 1988, petitioner's officials and Revilla were given permission by Rolando V. Aromin, BPI Assistant Vice-President, to enter and view the property they were buying. Later, petitioner learned that its offer to pay on terms had been frozen. Alfonso Lim went to BPI on July 18, 1988 and tendered the full payment of P33,056,000.00 to Albano. The payment was refused because Albano stated that the authority to sell that particular piece of property in Pasig had been withdrawn from his unit. The same check was tendered to BPI Vice-President Nelson Bona who also refused to receive payment. An action for specific performance with damages was thereupon filed on August 25, 1988 by petitioner against BPI. In the course of the trial, BPI informed the trial court that it had sold the property under litigation to NBS on July 14, 1989. ISSUE: WON Officials of BPI has authority to bind petitioner in the contract of sale thereby making BPI liable to the petitioner. HELD: The court rule that there was a perfected contract between BPI and petitioner Limketkai; that the BPI officials who transacted with petitioner had full authority to bind the bank; that the evidence supporting the sale is competent and admissible; and that the sale of the lot to NBS during the trial of the case was characterized by bad faith. Both the principal and the agent may be considered as joint tortfeasors whose liability is solidary. FACTS: Vicente Versoza and Ruiz, Rementeria y Compania, are owners of the coastwise vessel Perla while Silvino Lim and Siy Cong Bieng & Company, Inc., owner and agent, respectively, of the vessel Ban Yek. The action was brought for the purpose of recovering a sum of money alleged to be the damages resulting to the plaintiffs from a collision which occurred on March 9, 1921, between the two vessels mentioned, it being alleged that said collision was due to the inexperience, carelessness and lack of skill on the part of the captain of the Ban Yek and to his failure to observe the rules of navigation appropriate to the case. The court found that the fault is to be attributed exclusively to the negligence and inattention of the captain and pilot in charge of the Ban Yek. The Perla undoubtedly had the right of way, since this vessel was navigating with the current, and the officers in charge of the Perla were correct in assuming, from the failure of the Ban Yek to respond to the single blast of the Perla, that the officers in charge of the Ban Yek recognized that the Perla had a right of way and acquiesced in her resolution to keep to the right.

3.

Verzosa vs. Lim 45 Phil 416 (1923)

Apostol, Maria Maida D. (Obligations of the Principal)

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4.

Cuison vs. CA 227 SCRA 391 (1993)

5.

Lustan vs. CA 266 SCRA 663 (1997)

ISSUE: WON Silvino Lim and Siy Cong Bieng & Company, Inc., owner and agent, respectively, of the vessel Ban Yek liable to the plaintiff. HELD: Both the owner and agent (naviero) should be declared to be jointly and severally liable, since the obligation which is the subject of the action had its origin in a tortious act and did not arise from contract. Article 1137 of the Civil Code, declaring that joint obligations shall be apportionable unless otherwise provided, has no application to obligation arising from tort. -same as aboveFACTS: Petitioner Kue Cuison is a sole proprietorship engaged in the purchase and sale of newsprint, bond paper and scrap, with places of business at Baesa, Quezon City, and Sto. Cristo, Binondo, Manila. Private respondent Valiant Investment Associates, on the other hand, is a partnership duly organized and existing under the laws of the Philippines. From December 4, 1979 to February 15, 1980, private respondent delivered various kinds of paper products amounting to P297,487.30 to a certain Lilian Tan of LT Trading. The deliveries were made by Valiant Investments Associates pursuant to orders allegedly placed by Tiu Huy Tiac who was then employed in the Binondo office of Cuison. It was likewise pursuant to Tiac's instructions that the merchandise was delivered to Lilian Tan. Upon delivery, Lilian Tan paid for the merchandise by issuing several checks payable to cash at the specific request of Tiu Huy Tiac. In turn, Tiac issued nine (9) postdated checks to private respondent as payment for the paper products. Unfortunately, sad checks were later dishonored by the drawee bank. ISSUE: WON Tiu Huy Tiac possessed the required authority from petitioner sufficient to hold the latter liable for the disputed transaction. HELD: It is evident from the records that by his own acts and admission, petitioner held out Tiu Huy Tiac to the public as the manager of his store in Sto. Cristo, Binondo, Manila. More particularly, petitioner explicitly introduced Tiu Huy Tiac to Bernardino Villanueva, respondent's manager, as his (petitioner's) branch manager. Secondly, Lilian Tan, who has been doing business with petitioner for quite a while, also testified that she knew Tiu Huy Tiac to be the manager of petitioner's Sto. Cristo, Binondo branch. There was thus no reason for anybody especially those transacting business with petitioner to even doubt the authority of Tiu Huy Tiac as his manager in the Sto. Cristo Binondo branch. As to the merits of the case, it is a well-established rule that one who clothes another with apparent authority as his agent and holds him out to the public as such cannot be permitted to deny the authority of such person to act as his agent, to the prejudice of innocent third parties dealing with such person in good faith and in the honest belief that he is what he appears to be. By his representations, petitioner is now estopped from disclaiming liability for the transaction entered by Tiu Huy Tiac on his behalf. It matters not whether the representations are intentional or merely negligent so long as innocent, third persons relied upon such representations in good faith and for value. Even when the agent has exceeded his authority, the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers. -same as aboveFACTS: Petitioner Adoracion Lustan is the registered owner of a parcel of land. On February 25, 1969, petitioner leased the above described property to private respondent Nicolas Parangan for a term of ten (10) years and an annual rent of One Thousand (P1,000.00) Pesos. During the period of lease, Parangan was regularly extending loans in small amounts to petitioner to defray her daily expenses and to finance her daughter's education. On July 29, 1970, petitioner executed a Special Power of Attorney in favor of Parangan to secure an agricultural loan from private respondent Philippine National Bank (PNB) with the aforesaid lot as collateral. On February 18, 1972, a second Special Power of Attorney was executed by petitioner, by virtue of which, Parangan was able to secure four (4) additional loans. The last three loans were without the knowledge of herein petitioner and all the proceeds therefrom were used by Parangan for his own benefit. These encumbrances were duly annotated on the certificate of title. On April 16, 1973, petitioner signed a Deed of Pacto de Retro Sale in favor of Parangan which was superseded by the Deed of Definite Sale dated May 4, 1979 which petitioner signed upon Parangan's representation that the same merely evidences the loans extended by him unto the former. For fear that her property might be prejudiced by the continued borrowing of Parangan, petitioner demanded the return of her certificate of title. Instead of complying with the request, Parangan asserted his rights over the property which allegedly had become his by virtue of the aforementioned Deed of Definite Sale. Under said document, petitioner conveyed the subject property and all the improvements thereon unto Parangan absolutely for and in consideration of the

Apostol, Maria Maida D. (Obligations of the Principal)

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6.

Albaladejo y Cia vs. Phil. Refining Co., 48 Phil 556 (1925)

sum of Seventy Five Thousand (P75,000.00) Pesos. ISSUE: WON the SPA duly authorize Parangan to act on behalf of Lustan in mortgaging the latters property to PNB making him liable to the bank. HELD: The Special Power of Attorney executed by petitioner in favor of Parangan duly authorized the latter to represent and act on behalf of the former. Having done so, petitioner clothed Parangan with authority to deal with PNB on her behalf and in the absence of any proof that the bank had knowledge that the last three loans were without the express authority of petitioner, it cannot be prejudiced thereby. As far as third persons are concerned, an act is deemed to have been performed within the scope of the agent's authority if such is within the terms of the power of attorney as written even if the agent has in fact exceeded the limits of his authority according to the understanding between the principal and the agent. The Special Power of Attorney particularly provides that the same is good not only for the principal loan but also for subsequent commercial, industrial, agricultural loan or credit accommodation that the attorney-in-fact may obtain and until the power of attorney is revoked in a public instrument and a copy of which is furnished to PNB. Even when the agent has exceeded his authority, the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers (Article 1911, Civil Code). The mortgage directly and immediately subjects the property upon which it is imposed. The property of third persons which has been expressly mortgaged to guarantee an obligation to which the said persons are foreign, is directly and jointly liable for the fulfillment thereof; it is therefore subject to execution and sale for the purpose of paying the amount of the debt for which it is liable. However, petitioner has an unquestionable right to demand proportional indemnification from Parangan with respect to the sum paid to PNB from the proceeds of the sale of her property in case the same is sold to satisfy the unpaid debts. Where agent acted upon his own account. There is no obligation to indemnify where no agency relation exists, as where it appears that the supposed agent acted upon its own account and not as an agent, in the legal sense. FACTS: Albaladejo y Cia. is a limited partnership engaged in the buying and selling of the products of the country, especially copra, and in the conduct of a general mercantile business in Legaspi and in other places where it maintained agencies, or sub-agencies, for the prosecution of its commercial enterprises. The Visayan Refining Co. is a corporation organized under the laws of the Philippine Islands; and prior to July 9, 1920, it was engaged in operating its extensive plant at Opon, Cebu, for the manufacture of coconut oil. On August 28, 1918, the plaintiff made a contract with the Visayan Refining Co., for which the latter binds himself to buy the copras of Cia and that during the continuance of this contract Visayan Refining will not appoint any other agent for the purchase of copra in Legaspi, nor buy copra from any vendor in Legaspi. Later, the market for copras grew weak. Conditions were uncertain that company desires to drop out of the copra market until conditions have a chance to readjust themselves. The plaintiff seeks then to recover the sum of P110,000, the alleged amount expended by the plaintiff in maintaining and extending its organization as above stated. As a basis for the defendants liability in this respect it is alleged that said organization was maintained and extended at the express request, or requirement, of the defendant, in conjunction with repeated assurances that the defendant would soon resume activity as a purchaser of copra. ISSUE: WON the defendant company liable to the plaintiff for the alleged damages for maintaining the organization due to the assurances of the former that it will resume its activity. HELD: The SC held that In the appellants brief the contention is advanced that the contract between the plaintiff and the Visayan Refining Co. created the relation of principal and agent between the parties, and the reliance is placed upon article 1729 of the Civil Code which requires the principal to indemnify the agent for damages incurred in carrying out the agency. Attentive perusal of the contract is, however, convincing to the effect that the relation between the parties was not that of principal and agent in so far as relates to the purchase of copra by the plaintiff. It is true that the Visayan Refining Co. made the plaintiff one of its instruments for the collection of copra; but it is clear that in making its purchases from the producers the plaintiff was buying upon its own account and that when it turned over the copra to the Visayan Refining Co., pursuant to that agreement, a second sale was effected. In paragraph three of the contract it is declared that during the continuance of this contract the Visayan Refining Co. would not appoint any other agent for the purchase of copra in Legaspi; and this gives rise indirectly to the inference that the plaintiff was considered its buying agent. But the use of this term in one clause of the contract cannot dominate the real nature of the

Apostol, Maria Maida D. (Obligations of the Principal)

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7.

De Castro vs. CA 384 SCRA 607 (2002)

agreement as revealed in other clauses, no less than in the caption of the agreement itself. In some of the trade letters also the various instrumentalities used by the Visayan Refining Co. for the collection of copra are spoken of as agents. But this designation was evidently used for convenience; and it is very clear that in its activities as a buyer the plaintiff was acting upon its own account and not as agents, in the legal sense, of the Visayan Refining Co. The title to all of the copra purchased by the plaintiff undoubtedly remained in it until it was delivered by way of subsequent sale to said company. The rule in Art 1915 applies even when the appointments were made by the principals in separate acts, provided that they are for the same transaction. The solidarity arises from the common interest of the principals and not from the act of constituting the agency. The parties, however, may by express agreement negate this solidarity responsibility. FACTS: The De Castros were co-owners of four (4) lots located at EDSA. In a letter dated January 24, 1984, Artigo was authorized by appellants to act as real estate broker in the sale of these properties for the amount of P23,000,000.00, five percent (5%) of which will be given to the agent as commission. It was Artigo who first found Times Transit Corporation, represented by its president Mr. Rondaris, as prospective buyer which desired to buy two (2) lots only, specifically lots 14 and 15. Eventually, sometime in May of 1985, the sale of lots 14 and 15 was consummated. Appellee received from appellants P48,893.76 as commission. Appellee apparently felt short changed because according to him, his total commission should be P352,500.00 which is five percent (5%) of the agreed price of P7,050,000.00 paid by Times Transit Corporation to appellants for the two (2) lots, and that it was he who introduced the buyer to appellants and unceasingly facilitated the negotiation which ultimately led to the consummation of the sale. Hence, he sued below to collect the balance of P303,606.24 after having received P48,893.76 in advance. The de Castros however claimed that the purchase price was only P3.6M and there were 18 other brokers who had to share of the commission. They further claimed that the case must be dismissed for failure to implead the co-owners as indispensable parties. The De Castros claim that Artigo always knew that the two lots were co-owned by Constante and Corazon with their other siblings Jose and Carmela whom Constante merely represented. The De Castros contend that failure to implead such indispensable parties is fatal to the complaint since Artigo, as agent of all the four co-owners, would be paid with funds co-owned by the four co-owners. ISSUE: WON Artigo has no cause of action against the de Castros for failure to implead other indispensable parties. HELD: The rule on mandatory joinder of indispensable parties is not applicable to the instant case. There is no dispute that Constante appointed Artigo in a handwritten note dated January 24, 1984 to sell the properties of the De Castros for P23 million at a 5 percent commission. Constante signed the note as owner and as representative of the other co-owners. Under this note, a contract of agency was clearly constituted between Constante and Artigo. Whether Constante appointed Artigo as agent, in Constantes individual or representative capacity, or both, the De Castros cannot seek the dismissal of the case for failure to implead the other co-owners as indispensable parties. The De Castros admit that the other co-owners are solidarily liable under the contract of agency,citing Article 1915 of the Civil Code. The solidary liability of the four co-owners, however, militates against the De Castros theory that the other co-owners should be impleaded as indispensable parties. A noted commentator explained Article 1915 thus The rule in this article applies even when the appointments were made by the principals in separate acts, provided that they are for the same transaction. The solidarity arises from the common interest of the principals, and not from the act of constituting the agency. By virtue of this solidarity, the agent can recover from any principal the whole compensation and indemnity owing to him by the others. The parties, however, may, by express agreement, negate this solidary responsibility. The solidarity does not disappear by the mere partition effected by the principals after the accomplishment of the agency.

Apostol, Maria Maida D. (Obligations of the Principal)

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