PNB v. Agudelo, 58 Phil.

655 Fact: -Nothing in the mortgage deeds to show that Garrucho (mortgagor) is agent of the owner or that he obtained the loan on behalf of the owners-It appears that Garrucho acted in his personal capacity-He executed the PNs under his own signature without authority from the principal, therefore, PNs not binding upon them Issue: Whether or not Garrucho acted within the authority given to him in obtaining the mortgages Ruling: -His SPA does not authorize him to constitute a mortgage to secure his personal obligations, therefore he exceeded his authority-Exception in Art. 1717 where agent contracts in his own name with things belonging to the principal binds the latter requires that agent did not exceed his authority. Philippine Products v Primateria Societe Anonyme Pour Le Commerce (GEN) Facts: Primateria Zurich (respondent), through Alexander Baylin, entered into an agreement with Philippine Products Company (PPC) whereby the latter undertook to buy Copra in the Philippines for the account of Primateria Zurich. PPC shipped copra to foreign countries pursuant to the instructions of Primateria Zurich, through Primateria Phils, with Baylin and Jose Crame as officers. PPC filed a complaint against Primateria Zurich, Primateria Phils, Baylin and Crame to recover the amount due. The trial court rendered a judgment holding Zurich liable but absolved Baylin and Crame. PPC appealed the decision as regards the dismissal of the three defendants. PPC alleges that Zurich is a foreign corporation under Sec. 68 of the Corporation Law; its agents here are personally liable under Art. 1897 for contracts made in behalf. ISSUE: WON Primateria Phils, Baylin and Crame may be held personally liable HELD: NO. There is no proof that as agents they exceeded the limits of their authority. The principal, who should be the one to raise the point, never raised it, denied its liability on the ground of excess of authority. Art. 1897 does not hold that in cases of excess of authority, both the agent and the principal are liable to the other contracting party. NPC vs NAMERCO

Facts: NPC and NAMERCO, as the representative of International Commodities Corporation (ICC) of New York City, executed in Manila a contract for the purchase by the NPC from the New York Firm sulphur for its Maria Cristina Fertilizer plant in Iligan City. A performance bond was likewise executed by the Domestic Insurance Co., in favor of NPC to guarantee sellers obligations. After a series of correspondence between NAMERCO and ICC, the former decided to push through with the transaction. The New York supplier was not able to deliver the sulfur due to its inability to secure shipping space. As a result, there was a shut-down of the NPCs fertilizer plant due to the absence of sulphur and no fertilizer was produced. The Government Coprporate Counsel in his letter to NAMERCO rescinded the contract of sale due to the New York suppliers non-performance of its obligations. The NPC sued the New York firm, Namerco and the Domestic Insurance Company for the recovery of damages. The trial court in its order of January 17, 1958 dismissed the case as to the New York firm for lack of jurisdiction because it was not doing business in the Philippines. ISSUE: Whether or not NAMERCO acted within the scope of its authority as agent in signing the contract of sale. RULING: It was held that NAMERCO, as agent to the principal, ICC, acted beyond its authority for still contracting with NPC despite principals prohibition. From the series of cable correspondence between ICC and NAMERCO, ICC stated that the sale was subject to the availability of a steamer which would transport the sulphur cargo. However, NAMERCO did not disclose that cable to the NPC and, contrary to its principals instruction, it agreed that non-availability of a steamer was not a justification for non-payment of damages. Under article 1897 of the Civil Code, the agent who exceeds the limits of his authority without giving the party with whom he contracts sufficient notice of his powers is personally liable to such party.

The truth is that even before the contract of sale was signed NAMERCO was already aware that its principal was having difficulties in booking shipping space. One day before the contract of sale was signed, the New York supplier advised NAMERCO that the latter should not sign the contract unless it wished to assume sole responsibility for the shipment. Agent who exceeds authority without giving 3rd party notice of his powers is personally liable. Similarly, the unenforceability of the contract is against the principal only. National Bank v. Welch FACTS: La Compaa Naviera, a shipping company, was instituted in Manila in 1918. Among its shareholders was respondent Welch, Fairchild & Co. La Compaia Naviera applied to the Philippine National Bank for a loan of $125,000. with which to purchase a boat called Benito Juarez. It was the president of Welch which helped in the transfer of the Benito Juarez to Philippine registry. However, the vessel needed repairs before it could be dispatched; and it became impracticable to deliver the bill of sale and insurance policy that were required by PNB in San Francisco at the time the money was needed to effect the transfer. So, Welch in Manila, addressed a letter on August 8, 1918, to the PNB, requesting it to cable its correspondent in San Francisco to release the money and make payment for the vessel without requiring the delivery of the bill of sale or policy of insurance, and that La Compaia would just deliver the bill of sale and insurance policy later. The Bank acceded. After the repair of the Benito Juarez, it was insured by Welch & Co. for $150,000 and was dispatched to the Philippines. A few months after, the vessel encountered a storm off Hawaii and became a total loss. The proceeds of the insurance came to the hands of Welch, Fairchild & Co. in Manila and has been applied by Welch, Fairchild & Co. in part satisfaction of indebtedness incurred by La Compaa to it (instead of paying the bank). This disposition of the insurance money was made with the tacit approval of La Compaa. ISSUE: WON PNB has a cause of action against respondent. RULING: YES. While it is true that an agent who acts for a revealed principal in the making of a contract does not become personally bound to the other party in the sense that an action can ordinarily be maintained upon such contract directly against the agent, yet that rule clearly does not control in this case; for even conceding that the obligation created by the letter of August 8, 1918, was directly binding only on the principal, and that in law the agent may stand apart there from, yet one who has intervened in the making of a contract in the character of agent cannot be permitted to intercept and appropriate the thing which the principal is bound to deliver, and thereby make performance

by the principal impossible. The agent in any event must be precluded from doing any positive act that could prevent performance on the part of his principal. This much, ordinary good faith towards the other contracting party requires. The situation before us in effect is one where, notwithstanding the promise held out jointly by principal and agent in the letter of August 8, the two have conspired to make an application of the proceeds of the insurance entirely contrary to the tenor of said letters. TUASON vs. OROZCO Facts: Juan de Vargas, Dolores Orozcos husband, executed a power of attorney to Enrique Grupe. Vargas authorized Grupeto dispose of all his property. Grupe was also authorized to mortgage the house for the purpose of securing the payment of any amount advanced to Orozco. Thereafter, Grupe and Orozco obtained a loan from Gonzalo Tuason secured by a mortgage on the said house. In said instrument, Grupe appeared for himself and in behalf of Juan de Vargas. Grupe also assumed liability which he promises to pay in current gold or silver coin, without discount. Aside from this, he pledged as special security for the debts payment his 18 shares of stock in the Compania de los Tranvias de Filipinas. Agent acted as such in securing the debt for his principal-To secure payment, principals property was mortgaged; Ps wife eventook part in the execution of the mortgage Issue: WON the debt was incurred by Grupe for his own benefit as evidenced by his assumption of paying the whole loan and his act of pledging his shares of stock as special security Ruling: No. Debt incurred by agent is binding upon Principal provided Agent acted withinscope of authority-The fact that Agent also personally bound himself does not relieve Principalsliability; it was only a further security to the debt; such an act on thepart of A was valid. Cervantes v. CA Facts: On March 27, 1989, private respondent PAL issued to herein petitioner Nicholas Cervantes a round trip ticket for Manila-Honolulu-Los Angeles-Honolulu-Manila, which is valid until March 27, 1990. On March 23, 1990, petitioner used it. Upon his arrival in Los Angeles, he immediately booked a flight to

Manila, which was confirmed on April 2. Upon learning that the plane would make a stop-over in San Francisco, and because he would be there on April 2, petitioner made arrangements to board in San Francisco. On April 2, he was not allowed to board due to the expiration of his ticket. He filed a complaint for damages. It was not given due course by both the trial court and the Court of Appeals. Issues: (1) Whether or not the act of the PAL agents in confirming subject ticket extended the period of validity of petitioner's ticket (2) Whether or not the denial of the award for damages was proper Held: (1) From the facts, it can be gleaned that the petitioner was fully aware that there was a need to send a letter to the legal counsel of PAL for the extension of the period of validity of his ticket. Under Article 1898 11 of the New Civil Code, the acts of an agent beyond the scope of his authority do not bind the principal, unless the latter ratifies the same expressly or impliedly. Furthermore, when the third person (herein petitioner) knows that the agent was acting beyond his power or authority, the principal cannot be held liable for the acts of the agent. If the said third person is aware of such limits of authority, he is to blame, and is not entitled to recover damages from the agent, unless the latter undertook to secure the principal's ratification. (2) An award of damages is improper because petitioner failed to show that PAL acted in bad faith in refusing to allow him to board its plane in San Francisco. In awarding moral damages for breach of contract of carriage, the breach must be wanton and deliberately injurious or the one responsible acted fraudulently or with malice or bad faith. Petitioner knew there was a strong possibility that he could not use the subject ticket, so much so that he bought a back-up ticket to ensure his departure. Should there be a finding of bad faith, we are of the opinion that it should be on the petitioner. What the employees of PAL did was one of simple negligence. No injury resulted on the part of petitioner because he had a backup ticket should PAL refuse to accommodate him with the use of subject ticket. Neither can the claim for exemplary damages be upheld. Such kind of damages is imposed by way of example or correction for the public good, and the existence of bad faith is established. The wrongful act must be accompanied by bad faith, and an award of damages would be allowed only if the guilty party

acted in a wanton, fraudulent, reckless or malevolent manner. Here, there is no showing that PAL acted in such a manner. An award for attorney's fees is also improper. Smith, Bell & Co. v Sotelo Matti (1992) FACTS Plaintiff Smith, Bell & Co and the defendant Mr. Vicente Sotel entered into a contract. Plaintiff hasto deliver (1) two steel tanks shipped from New York to Manila within three or four months, (2)two expellers shipped from SanFrancisco in the month of September 1918 or as soon aspossible, and (3) two electric motors with approximate delivery within ninety days. This isnot guaranteed. The tanks arrived at Manila on 27 April 1919; the expellers on 26 October 1918; and the motorson 27 February 1919. Upon notification from plaintiff, defendant refused to receive any of thegoods or to pay for their price. Plaintiff alleged that the expellers and motors were in goodcondition.Plaintiff filed a complaint against the defendant. The defendant, Mr Sotelo and intervenor, ManilaOil Refining and By-Products Co., Inc., denied the plaintiffs allegations. They allege that due toplaintiffs delay in the delivery of goods, the intervenor suffered damages.The lower court absolved the defendants from the complaint insofar as the tanks and the electricmotors were concerned, but rendered judgment against them ordering them to receive expellersand pay the sum of P50,000, with legal interest and cost.Both parties appealed to the Court. Issue: WON Sotelo Matti can be ordered to receive and pay for the goods [YES] HELD: The term which the parties attempted to fix were so uncertain that one cannot tell just whether those articles could be brought to Manila or not. The obligations were conditional. In cases like this, the obligor will be deemed to have sufficiently performed his part of the obligation, if he has done all that was in his power, even if the condition has not been fulfilled in reality. Smith, Bell & Co was able to deliver the goods even though the conditions for delivery were not completely fulfilled. [No agency concept expressly discussed in case. My guess why Mr. Sotelo was the one ordered to accept and receive the goods: (1) he was notified by Smith Bell of the arrival of the goods and yet he did not inform Manila Oil Co. it is his duty as the manager of the company to inform his principal. (2) he was the only one who appealed judgment, intervenor Manila Oil Co. did not] Rural Bank of Bombon v CA Ederlinda Gallardo transacted with Rufino Aquino,contracting him to be her agent and providing him with aSpecial Power of Attorney authorizing him to mortgage herproperty in her behalf for the purpose of

securing loans frombanks. She provided him with the TCT to the property as well.Rufino Aquino secured a loan from Rural Bank of Bombon forthe amount of PhP350,000.00 as principal and chargeablewith a 14% interest per annum. In the contract of mortgage,he (Rufino Aquino) represented himself to be the attorney-in-fact of Gallardo,but proceeded to sign his name as mortgagor. He even got hiswife to sign the documents as wife of mortgagor.Gallardo, upon knowing of the transaction, went to court tosecure the annulment of such contract since she wasallegedly surprised to find out that her property was alreadymortgaged and correspondence regarding the contract of mortgage were not being sent to her, and instead sent to theaddress of Aquino, who has since disappeared from Bulacanand now resides in Camarines Sur. Further, the mortgage wassecured to pay off personal loans of Aquino and to establishhis personal fishpond business.RTC issued a TRO restraining Rural Bank of Bombon toforeclose the mortgage. In his Answer, Aquino alleged thatGallardo owed him money and it was already theresponsibility of Aquino to take care of payments due. RTCruled in favor of Aquino and Bank of Bombon.CA reversed the ruling of the RTC and held that the Deal of Real Estate Mortgage was not valid. It not binding on theprincipal Gallardo since it was executed not in her name asprincipal but in the personal capacity of the Aquino spouses. Issue:WON the Deed of Real Estate Mortgage executed by Rufino S.Aquino as attorney-in-fact of Ederlinda Gallardo in favor of the Rural Bank of Bombon is valid. Held:No. Aquino signed the Deed of Real Estate Mortgage in hisname alone as mortgagor, without any indication that he wassigning for and in behalf of the property owner, EderlindaGallardo. He bound himself alone in his personal capacity as adebtor of the petitioner Bank and not as the agent orattorney-infact of Gallardo. In order to bind P on mortgage, it must be made in behalf of P;otherwise, it will bind agent only-Agents act of signing mortgage deed in his own name bound himself in his personal capacity as debtor-Exception in Art. 1883 not applicable. There is no principle of law by which one can become liable on a realestate mortgage which he never executed either in person or byattorney in fact. Sy Juco v. Sy Juco Facts: In 1902, Santiago Sy-juco was appointed bythe Vicente and Cipriane Sy-juco as administrator of their property and the former acted as such until June 30, 1916, when his authority was cancelled. The plaintiffs are defendant's father and mother who allege that during his administration the defendant Santiago acquired the property claimed in the complaint in his capacity as plaintiffs' administrator with

their money and for their benefit. The trial court ordered Santiago to return the properties in question, which he bought in his name. Issue: Whether or not the plaintiffs have a cause of action Held: YES. From the rule established in article 1717 of the Civil Code that, when an agent acts in his own name, the principal shall have no right of action against the person with whom the agent has contracted, cases involving things belonging to the principal are excepted. According to this exception (when things belonging to the principal are dealt with) the agent is bound to the principal although he does not assume the character of such agent and appears acting in his own name (Decision of the Supreme Court of Spain, May 1, 1900). This means that in the case of this exception the agent's apparent representation yields to the principal's true representation and that, in reality and in effect, the contract must be considered as entered into between the principal and the third person; and, consequently, if the obligations belong to the former, to him alone must also belong the rights arising from the contract. The money with which the launch was bough having come from the plaintiff, the exception established in article 1717 is applicable to the instant case. NFA vs IAC Facts: Gil Medalla, as commission agent of the plaintiff Superior Shipping Corp., entered into a contract for hire of ship with defendant NFA. Under the said contract Medalla obligated to transport on the plaintiffs ship, sacks of rice belonging to NFA. But instead of payment for the services being rendered to Superior Shipping, NFA admitted that they gave the payment to Medalla. But Medalla never turned over the payment to Superior shipping despite demands. Plaintiff was therefore constrained to file the instant complaint.

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

Hence this petition.

ISSUE: Whether or not the instant case falls within the exception of the general rule provided for in Art. 1883. Ruling: It was undisputed that Medalla was a commission agent of thecompany-Art. 1883 applicable-Agents apparent representation yields to the principals truerepresentation, therefore, contract considered to have been enteredinto between the principal and the 3rd party. Gold Star Mining v. Lim Jimena, 25 SCRA 597 Facts; Jimena filed a suit against Lincallo for recovery of his advances and his one-half share in the royalties, and impleaded Gold Star and Marinduque Iron Mines, as well as Tolentino, later on as defendants. Two weeks later, the trial court issued a writ of preliminary injunction, preventing both mining companies from paying royalties during the pendency of the case to Lincallo, his assigns or legal representatives. Despite of such injunction, Gold Star still paid P30,691.92 to Lincallo and Tolentino (claiming that a writ of prelimary attachment filed by Jimena supposedly superseded the injunction, but the condition to such attachment - the filing of a bond - was not fulfilled, so it cannot be said that the injunction was superseded). the case in the trial court and were, accordingly, substituted by their respective widows and children.

the shares of the royalties of Lincallo in his contracts with Gold Star, Marinduque Iron Mines and Alejandro Marquez, that both mining companies pay directly to the former half of the shares of the royalties until said contracts were terminated, that Lincallo pay the heirs the capital Victor Jimena gave him to purchase the mining claims and the latters shares with interest, and that Gold Star Mining Co., Inc. pay them the sum of P30,691.92 solidarily with Ananias Isaac Lincallo for violation of an injunction. ISSUES: 1. WON the CA erred in finding that the Jimenas have a cause of action against Gold Star Mining Co., as there is no privity of contract between Gold Star and Jimena.

2. WON the CA erred in condemning Gold Star to pay the sum of P30,691.92 for violation of an allegedly non-existent injunction. RATIO DECIDENDI: 1. NO. The existence of a common subject-matter supplies the juridical link. Jimena repeatedly made demands upon God Star for the payment of his share of the royalties, but all in vain, so he was forced to implead Gold Star for having refused to recognize his right. Furthermore, under such conditions wherein Jimena was repeatedly denied of his interests, Jimena has an action against Gold Star, pursuant to Art. 1883, NCC, which provides that the principal may sue the person with whom the agent dealt with in his (agents) own name, when the transaction involves things belonging to the principal. 2. NO. Said award is not so much a penalty against petitioner as a decree of restitution. Said sum to be paid by the company to Jimena is to be imputed to Lincallos liability under this judgment. CA thus left the way open for Gold Star to recover later the whole amount from Lincallo. -When Lincallo (agent) transferred his mining claims to Gold Star, even without disclosing that Jimena was part owner, he acted as agent of Jimena with respect to Jimena share of the claims -Art. 1883 applicable-While there is no privity of contract between 3rd party (Gold Star) and principal (Jimena) in this case, the common subject matter supplies the juridical link Macondray v. Sellner (ROG) Feb. 2, 1916 Facts: Sellner, a real estate broker, sold land toMacondray. Formal deed of sale not executed until delivery of a Torrens title. In the meantime, landwas flooded by high tides and Macondray becamehighly dissatisfied with its purchase. When finaltransfer was made company informed Sellner thatland as wholly unsuited for use as a coal-yard, forwhich it had been bought and requested him tofind another purchaser. Both parties had anunderstanding that Sellner was to have ascommission for getting a purchaser anything overamount which he could get.Sellner found another buyer Barretto. A formaldeed of sale was executed together with Torrenswhich was delivered to Sellner by Company.Barretto agreed to accept land if uponexamination, title and deed be satisfactory. Sellner retained the Torrents title but left deed of sale withBarretto with understanding that if both weresatisfactory, latter would just issued check toformer. A few days later Barretto was detained bytyphoon on his way to Tayabassohis return wasdelayed. During the absence of Barrtto, company

advisedSellner that latter must consummate sale andcollect money without delay upon Barretto's return.All the while company kept asking Sellner to speedup in closing the deal but Barretto could notimmediately do so coz he was indisposed from his trip. Barretto arrived Saturday and promised he'dget to checking the docs in a day or two. By Monday, Company gave an ultimatum.-Young, Company's general manager then formallynotified Sellner that unless purchase price was paidbefore 5pm of that afternoon deal was off. Barrettothen asked Sellner to turn over the Torrens titlewhich latter did but latter would only receive thecheck 36hrs later, Wednesday morning. Uponreceipt of check, Sellner immediately tendered toCo but Co's manager refused to accept and filedthis action claiming that sale had been "cancelled"upon failure of Selner to turn over price. Issue: WON sale be cancelled on ground of latedelivery of purchase price? NOWON Macondray entitled to damages from realestate broker Sellner? NO Held: Court's preliminaries: -No reason given by Company for delivery of priceat certain hour other than that manager had beenannoyed by delays or changed mind about sellingbecause he found a better deal or land worth morethan he offered. -As to value of land--no real diff actual and truemarket value of land. Witness Company providedwas of a rival real estate broker, who had neverbeen on the land but claimed familiarity withgeneral location. Such witness insufficient toestablish such fact. It may be that land hasspeculative value higher than actual market valueat time of sale but the question of fact ruled uponis the actual market value at time of sale and NOTspeculative value.-Market value = price which property will bring ina fair-market after fair and reasonable efforts havebeen made to find a purchaser who will give thehighest price for it. 2. Macondray no cause of action to file fordamages v Sellner its real estate agent. -Measure of damages recoverable from real estateagent = actual market value of property, title towhich had been lost as a result of the sale. This isdamages which company has a right to should hechoose to ratify sale and recoup from agent anyloss resulting from latter's alleged unauthorizedconsummation of the sale.

-Company still liable to real estate agent in eventthat former terminate negotiations, for the amountof commission, which former agreed to pay latterupon his agency contract. Market value of land =18k of this company received 17k leaving a bal of1,717 unpaid. The commission agreed upon was allover 17k which Sellner would secure fromproperty---allowing Sellner this commission, andoffsetting it against the unpaid balance, Macondraynot entitled to money judgment against Sellner. -At the time fixed by manager of Co for thetermination of the negotiations, Sellner had alreadyearned the commissions agreed upon, and couldnot be deprived thereof by arbitrary action of Co indeclining to execute the contract of sale for some reason personal to itself.

Danon v. Brimo (MARK) Sept. 12, 1921 J. Johnson FACTS: Defendant Antonio A. Brimo, in a conversationwith the plaintiff Julio Danon, informed thelatter that he (Brimo) desired to sell his factory,the Holland American Oil Co., for the sum ofP1,200,000. He agreed and promised to pay tothe plaintiff a commission of 5 per centprovided the latter finds a buyer that will buysaid factory for the said amount. No definite period of time was fixed withinwhich the plaintiff should effect the sale. Therewas likewise another broker (Sellner) who wasnegotiating the sale of said property. Sellner, the other broker referred to, had founda purchaser who ultimately bought the factory for P1,300,000. For that reason Mr. Prieto, thewould be purchaser found by the plaintiff, never came to see Mr. Brimo to perfect theproposed negotiation.

him, as broker, to the defendant. ISSUES WON Danon is entitled to the commissionagreed upon. NO. RATIONALE

Plaintiff is not entitled to the commission.Themost that can be said as to what the plaintiffhad accomplished is, that he had found aperson who might have bought the defendant'sfactory if the defendant had not sold it tosomeone else. The evidence does not showthat the Santa Ana Oil Mill had definitelydecided to buy the property in question at thefixed price of P1,200,000. The board ofdirectors of said corporation had not resolvedto purchase said property; and even if itspresident could legally make the purchasewithout previous formal authorization of theboard of directors, yet said president does notpretend that he had definitely and formallyagreed to buy the factory in question on behalfof his corporation at the price stated. It is undisputed that plaintiffs services did notany way contribute towards bringing about thesale of the factory in question. He was not "theefficient agent or the procuring cause of thesale."

Infante v. Cunanan, Mijares, CA (ABBY) Aug. 31, 1953 J. Bautista Angelo Facts: ConsejoInfante owned 2 parcels of land with ahouse in Taft Manila. Infante contracted the services of Cunanan and Mijares to look for abuyer. The selling price was for P30,000, buyermust assume mortgage on the property; 5%commission on selling price. Cunanan and Mijares found a buyer, Pio S.Noche and introduced him to Infante. Sheinformed them that she was no longerinterested in selling the property andsucceeded in making them sign a documentstating therein that the written authority shehad given them was already can-celled. It turns out that Infante dealt with Nochedirectly and sold the property for P31,000. Therespondents found out and instituted an actionfor recovery of the commission when sherefused to give the respondents anything.Infante said she procured their services butonly for P1,200, only on condition that they buyher a property somewhere in Taft Avenue towhere she might transfer after selling herproperty. Defendant avers that while plaintiffstook steps to sell her property as agreed upon,they sold the property at Taft Avenue toanother party and because of this failure it wasagreed that the authority she had given thembe cancelled Respondents claim that while they agreed tocancel the written authority given to them,they did so merely upon the verbal assurancegiven by petitioner that, should the property besold to their own buyer, Pio S. Noche, theywould be given the commission agreed upon.True, this verbal assurance does not appear inthe written cancellation, Exhibit 1, and, on theother

hand, it is disputed by petitioner, butrespondents were allowed to present oralevidence to prove it, and this is now assignedas error in this petition for review. LC found for the Cunanan and Mijares orderingInfante to pay them P2,500 w/ legal interest. CA affirmed LC Issue: WoNInfante was liable to pay Cunanan andMijares commission despite the writtencancellation of authority signed by therespondents. Held: Yes. Petition denied There is enough justification for the conclusionreached by the lower court as well as by theCourt of Appeals to the effect that respondentsare entitled to the commission originallyagreed upon. It is a fact found by the Court ofAppeals that after petitioner had given thewritten authority to respondents to sell herland for the sum of P30,000, respondentsfound a buyer in the person of one Pio S. Nochewho was willing to buy the property under theterms agreed upon, and this matter wasimmediately brought to the knowledge ofpetitioner. But the latter, perhaps by way ofstrategem, advised respondents that she wasno longer interested in the deal and was ableto prevail upon them to sign a documentagreeing to the cancellation of the writtenauthority. That petitioner had changed her mind even ifrespondents had found a buyer who was willingto close the deal, is a matter that would notgive rise to a legal consequence if respondentsagree to call off the transaction in deference tohe request of the petitioner. But the situationvaries if one of the parties takes advantage ofthe benevolence of the other and acts in amanner that would promote his own selfishinterest. This act is unfair as would amount to bad faith. This act cannot be sanctionedwithout ac-cording to the party prejudiced the reward which is due him. This is the situation inwhich respondents were placed by petitioner. Petitioner took advantage of the servicesrendered by respondents, but believing thatshe could evade payment of their commission,she made use of a ruse by inducing them tosign the deed of cancellation Exhibit 1. This actof subversion cannot be sanctioned and cannotserve as basis for petitioner to escape paymentof the commission agreed upon.

Inland Realty Investment v. CA (ALAIN) June 9, 1997

Hermosisisima, Jr., J.: FACTS: On September 16, 1975, defendantcorporation (Araneta, Inc.) thru its co-defendantAsst. Gen. Mgr. Eduque, granted to Inland RealtyInvestment Service, Inc. (Inland) represented byone Roman de los Reyes (entitled to of the claimasserted which is 5% brokers commission) a 30 -day authority to sell its shares stock in anothercorporation.Inland was able to find a prospective buyer, theStanford Microsystems, Inc., but the offer of saidbuyer was rejected by Araneta, Inc. Thus, Inlandlooked for other buyers and found two moreprospective ones.The authority was extended several times: first on Oct. 2, 1975, for 30 days from the said date, thesecond on Oct. 28, 1975 for 30 days from saiddate, and on Dec. 2, 1975 for 30 days from the saiddate.On July 8, 1977 or 1 year and 5 months after thelast extension granted to Inland, the shares ofstock were finally sold to Standford Microsystems,Inc. Thus, Inland and de los Reyes formally demandedtheir 5% brokers commission, which was deniedby Araneta, Inc. on the ground that the claim hasno factual or legal basis.Inland and de los Reyes claimed that a letter datedOctober 28, 1976 was signed by Araneta II,renewing their authority to act as sales agent for aperiod of 30 days from said date. They alsoasserted that a broker is automatically entitled tothe stipulated commission merely upon securingfor, and introducing to, the seller the particularbuyer who ultimately purchases from the formerthe object of the sales, regardless of the expirationof the brokers contact of agency and authority tosell.Trial court and CA ruled in favor of Araneta, Inc.

ISSUE: W/N Inland and de los Reyes are entitled tothe brokers commission. NO. RATIO: 1. The alleged letter extending the authority 30more days from October 28, 1976 is a blatant lie.Inland and de los Reyes failed to attach a certifiedcopy of this letter. Thus, their contract alreadyexpired thirty days from its last renewal onDecember 2, 1975. 2. On the claim of automatic brokerscommission, this is devoid of merit. FromSeptember 16, 1975 to January 1, 1976, whenInlands authority to sell was subsisting, if at all,petitioners had nothing to show that they activelyserved their principals interests, pursued to sellthe shares in accordance with their principalsterms and conditions, and performed substantialacts that proximately and causatively led to theconsummation of the sale to Stanford of Araneta,Inc.s shares. Rocha v. Prats, 43 Phil. 397

-Broker never succeeded in his duty to bring buyer and seller to anagreement; until that is done, his right to commission does not accrue. Pratts v. CA

Facts: This complaint for sum of money filed by Prats, doing business under name of Philippine Real Estate Exchange, against Doronila and PNB. Doronila was registered owner of 300hectares of land. He wrote to SSS Chair offering his property to SSS at P4 per square meter (per sqm). There were several counter offers made as to the price. Doronilla requested certification from Board of Realtor regarding the actual prices of his real estate raw-land properties. The Board replied that the fair market value of raw land is P3-P3.50 per sqm. Current prices before reaching Doronilla's property range from 6-7 per sqm. Doronilla granted an exclusive option and authority to Prats to sell former's property. Commission will be 10% based on P2.10 per sqm or at any price finally agreed upon. Doronilla asked SSS to return all papers related to his property in view of the

exclusive option granted to Prats. SSS asked for a meeting with Doronilla but latter asked that SSS meet with Philippine Real Estate Exchange instead because Doronilla had given exclusive option to it. Prats gave notice to Doronilla that SSS had agreed to purchase the land. The latter replied that he had not received any written offer from SSS during the 60day period of the exclusive authority nor during its extension. Doronilla wrote to SSS renewing his offer to sell revising his original offer of P4 per sqm to P3.25. SSS passed a resolution NO. 636 making a counter offer of Php3.25 per sq m subject to an appraisal of the property and to submit a report thereon. After a favorable appraisal report of the Toples & Harding SSS passed Res no. 738 approving purchase of the land for Php3.25 or for total of P9.7m. Deed of Sale was executed. Doronilla received the full purchase price. Prats then demanded payment of his professional fee. TC: ordered Doronilla to pay CA: reversed.

Issue: WON Prats was not the efficient procuring cause in bringing about the sale of Doronila's land to SSS? YES

Held: 1. Doronilla's offer to sell land to SSS was formally accepted only on June 1968 after the exclusive authority in favor of Prats had expired. The CA's factual finding that Prats not the efficient procuring cause in bringing about the sale are final. Prats was not categorical that it was through his efforts that the meeting between SSS Administrator Teodoro and Doronilla took place. He refers to a phone call he made a few days before May 29, 1968 but in the conversation he had with Mr. Teodoro, the latter requested him NOT to be present in the meeting. It is manifest that SSS officials never wanted to be in any way guided by, or mediated by Prats relative to the negotiation for

purchase of property. The meeting was done independently and not by virtue of Prat's efforts. 2. In equity, court notes that Prats had diligently taken steps to bring back together Doronilla and SSS and therefore grants him 100k by way of compensation for his efforts and assistance in the transaction. . Among others: He wrote to the Office of Presidential Housing Commission offering the land and wrote a follow up letter which was answered by Commission suggesting that property be offered directly to SSS. Sale was perfected only at the price offered by Doronila when he alone was dealing exclusively with buyer long before Prats came along but Prats efforts were instrumental in bringing them together again and finally consummating the sale although sale finalized after expiration of Prats' extended exclusive authority.

62) UNILAND RESOURCES VS DBP

200 SCRA 757

Facts: Uniland Resources, a licensed real estate brokerage firm, stood as middleman to broker a deal with Counsel Realty Corp., an affiliate of Glaxo, Philippines and DBP, for the sale of a warehouse lot. But as a result of a conflict in the bidding guidelines, the deal did not materialize. Thereafter, DBP agreed to sell the warehouse lot to Charges Realty Corp., another affiliate of Glaxo, Philippines. Uniland Resources was not privy to the sale anymore and could not be considered as a broker. But in spite of that, it wrote to DBP asking for the payment of its brokers fee in instrumenting the sale of the warehouse lot to Charges Realty Corp. DBP denied their claim. The instant case filed by Uniland to recover said brokers fee was ruled in favor by the trial cour t but was reversed by the Court of Appeals.

ISSUE:

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

RULING: Petitioner invoked Article 1869 in contending that an implied agency existed. Petitioner argues that it should have been stopped and outrightly prevented from dealing the warehouse lot by the DBP from the start. In the course of petitioner's dealings with the DBP, it was always made clear to petitioner that only accredited brokers may look for buyers on behalf of respondent DBP. Petitioner was never able to secure the required accreditation from respondent DBP to transact business on behalf of the latter. The letters sent by petitioner were merely indicative of petitioner's desire to secure such accreditation.

This is not a situation wherein a third party was prejudiced by the refusal of respondent DBP to recognize petitioner as its broker. The controversy is only between the DBP and petitioner, to whom it was emphasized in no uncertain terms that the arrangement sought did not exist. Therefore, no implied agency ever existed.

63.)GONZALES VS HABERES

Guadalupe Gonzales was the owner of a parcel of land situated in Partida, Municipality of Guimba, Nueva Ecija which application for registration still pending in the Court of First Instance. She and the defendant, E.J. Haberes, entered into a contract for the sale of the said land and it was negotiated by her husband Gomez.

The defendant was led to believe that the plaintiffs were in the possession of the land. On seeking to obtain possession, the defendant found that practically the entire area of the land was occupied by adverse claimants and title thereto disputed; and that he consequently has been unable to obtain possession of the land.

The lower court dismissed Gonzales complaint to recover the balance from the defendant upon the written agreement for the said sale and declared the contract rescinded and void and gave the defendant judgment upon his counterclaim to return back the sum he already paid with interest. ISSUES : Whether or Not the plaintiffs were under obligation to place the defendant in possession.

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

RULING :

One of the essential conditions of the agreement was stated in no. 3 of the obligation to sell in their contract. It stated - That said Mr. E.J. Haberes shall have the right to take poss ession of the aforesaid land immediately after the execution of this document together with all the improvements now existing on the same land, such as palay plantation and others. This necessarily created the obligation on the part of the plaintiffs to make good the right thus granted. Failure of the plaintiffs to comply with this condition, without fault on the part of the defendant, is in itself sufficient ground for the recission.

Mr. Gomez, in negotiating for the sale of the land acted as the agent and representative of the other plaintiff, his wife. And having accepted the benefit of the representations of her agent she cannot escape liability for them.

64.) ANTONIO M. BARRETTO, plaintiff-appellee, vs. JOSE SANTA MARINA, defendant-appellant. December 2, 1913

FACTS: The La Insular cigar and cigarette factory is a joint account association with a nominal capital of P865,000, the plaintiff's share is P20,000, or 4/173 of the whole. The plaintiff's attorneys wrote the defendant's local representative a letter offering to sell plaintiff's share in the factory. The result of the correspondence between the parties and their representatives was that Exhibit G was duly executed on May 3, 1910. In accordance with the terms of this exhibit a committee of appraisers was appointed to ascertain and fix the actual value of La Insular. The committee rendered its report, fixing the net value .Subsequently to the execution of Exhibit J, demand was made by the plaintiff upon the defendant for his share of the profits from June 30, 1909, to November 22, 1910. This demand was refused and thereupon this action was instituted to recover said profits. The plaintiff argued that if the agreement of May 3, 1910, was a perfected sale he cannot recover any profits after that date; while on the other hand the defendant concedes that if said agreement was only a promise to sell in the future it, standing alone, would not prevent recovery in this action. ISSUE : Whether the agreement made by the parties on May 3, 1910 was a perfected contract of sale.

HELD: YES, it was a perfected contract of sale. Article 1450 of the Civil Code reads: "The sale shall be perfected between vendor and vendee and shall be binding on both of them, if they have agreed upon the thing which is the object of the contract and upon the price, even when neither has been delivered. "The contract of May 3, 1910, provides that:"Whereas the respective contracting parties have agreed, the one to sell and the other to buy the whole of the right, title and interest of the said Antonio Maria Barretto in and to the said joint account association, including not only the individual participation of the said party of the second part standing on the books of the association in the name of Antonio M. Barretto, but also one-half of the share in the business which stands on the books in the name of Barretto & Company .Under article 1450, supra there are two indispensable requisites in a perfected sale :(1) There must be an agreement upon the things which is the object of the contract; and (2)the contracting parties must agree upon the price. The object of the contract in the case at bar was the whole of the plaintiff's right, title, and interest in La Insular. As to the thing and the price the minds of the contracting parties met, and all questions relating thereto were settled. Nothing was left unfinished in so far as the contracting parties were concerned. Neither party could withdraw from the contract without the consent of the other. The result is that the two essential requisites necessary to constitute a perfected sale were present. According to the ordinary and well-understood use of the words "purchase"and "sale" they mean, in the absence of any expression to limit their significance, a transmutation of property from one party to another in consideration of some price or recompense in value; a transmission of property by a voluntary act or agreement, founded on a valuable consideration;divesting the title out of the vendor and vesting it in the vendee. Again, not only was the title of the plaintiff's interest vested in the defendant on the execution of the contract of May 3 but the possession of that interest was also then transferred to the defendant. (Art. 1462, Civil Code; UyPiaoco vs. McMicking, 10 Phil. Rep., 286.) ----------------------------------------------------------------------------------------------------------------------Dili nako Makita ni Barreto v. Sta. Maria, 26 Phil. 440 n case ..kani r s taas ang mugawas pero mao ni s baba ang gist s agency Barreto v. Sta. Maria, 26 Phil. 440

-Agent made his intent to resign as manager known to his principal and the principal later accepted it and appointed a new manager; he was not unlawfully dismissed-No period was fixed for the duration of managers position; even if there was, principal still entitled to revoke if he no longer has confidence on his agent even before expiration of the period DIOLOSA VS CA FACTS:

The plaintiff, Quirino Baterna owner and proprietor of Quin Baterna Realty, was a licensed real estate broker. On June 20, 1968, he entered into an agreement and was constituted as exclusive sales agent of the defendants, to dispose of, sell, cede, transfer and convey the lots included in Villa Alegre Subdivision which were owned by the defendants, until all the lots shall have been disposed of. On September 27, 1968, the defendants terminated the agency and rescinded the contract for the reason that the lots remained unsold were for the reservation for their grandchildren. ISSUE : Whether or not the petitioners could terminate the agency agreement without paying damages to the private respondent. Ruling: Under the terms of their contract, herein petitioners engaged the private respondent and allowed him "to dispose of, sell, cede, transfer and convey the subject property until all the said property as subdivided is fully disposed of." The authority to sell is not extinguished until all the lots have been disposed of. When, therefore, the petitioners revoked the contract with private respondent in a letter they become liable to the private respondent for damages for breach of contract. New Manila v. Republic, 107 Phil. 824 -Contractor (principal) already did what he had authorized agent to doin his behalf which is to collect the amounts due him from thegovernment; therefore, agency was already revoked Dy Buncio & Co., Inc. v Ong Guan Can FACTS: Ong Guan Can, Jr. executed on behalf of

the Ong Guan Can, the deed covering the sale of a rice-mill and camarin, in favor of buyers who relied upon a 1928 power of attorney attached to the deed, but which turned out was not a general power of attorney but a limited one and [did] not give the express power to alienate the properties in question. The creditors of Ong Guan Can sought to have the sale declared void. But the buyers, defendants Juan Tong and Pua Giok Eng claimed that they were the owners and lessees of the property. Defendants claimed that the defect in the sons authority to sell on behalf of the father was cured by an earlier 1920 general power of attorney given to the same agent [son] by the father. The CFI of Capiz held that the deed was invalid and that the property was subject to the execution which has been levied on the properties by the judgment creditor of the owner. ISSUE: WON the deed of sale was invalid HELD: YES. The sale is void. The making and accepting of a new power of attorney, whether it

enlarges or decreases the power of the agent under a prior power of attorney, must be held to supplant and revoke the latter when the two are inconsistent. If the new appointment with limited powers does not revoke the general power of attorney, the execution of the second power of attorney would be a mere futile gesture. Since the title of Ong Guan Can has not been divested by deed of sale, his properties are subject to attachment and execution. Garcia v. De Manzano, 39 Phil. 577

-PoA given to son (1st) was not revoked by PoA given to mother (2nd)because son had no knowledge of 2ndPoA-PoA authorizes sale and purchase of real property and mortgaging thesame as well as borrowing of money; it is general and complete-A power so full and complete must necessarily carry with it right to sellhalf interest in a small boat, especially since sale was necessary to getmoney or credit. Rallos vs. Yangco FACTS: On November 27, 1907, Teodoro Yangco sent a letter to Florentino Rallos, offering Yangco his services. Accordingly, he has just opened a shipping and commission department for buying and selling tobacco leaf and other native products in his steamship office in Manila. He expressly

indicated in his letter that Florentino Collantes will act for and in his behalf in transacting with Rallos. He further stated that he has given Collantes a power of attorney, notarized by Mr. Rodriguez. On February 1909, Rallos sent to Collantes 218 bundles of tobacco in the leaf to be sold on commission. After deducting the commission (P206.96) from the total amount of P1744, Rallos is entitled to P1537.08. It appears that at the time Rallos gave the tobacco to Collantes, he was not the agent of Yangco anymore, Yangco having severed his relationship with Collantes. This fact however was not known to nor communicated with Rallos. As a result, when Rallos tried to collect from Yangco the P1537.08, Yangco refused to pay him the amount, on the basis that Collantes was already acting on his behalf at the time he collected the 218 bundles of tobacco. ISSUE: WON Yangco is still liable to pay Rallos the amount of P1537. HELD: Yes. Having advertised the fact that Collantes was his agent and having given them a

special invitation to deal with such agent, it was the duty of the defendant on the termination of the relationship of principal and agent to give due and timely notice thereof to the plaintiffs. Failing to do so, he is responsible to them for whatever goods may have been in good faith and without negligence sent to the agent without knowledge, actual or constructive, of the termination of such relationship. For his failure to inform Rallos of the termination of the agency relationship with Collantes, Yangco is liable. Compania General de Tobacos v. Diabu, 20 Phil. 321 -Agent has been selling and buying goods on behalf of principal formore than 8 years-Upon termination of agency but without notice to 3rd party, 3rd partyhad a perfect right to believe that agent was still representing theprincipal-Evident here that principal was willing to ratify agents acts in sellinggoods but unwilling to ratify acts in purchasing goods. COLEONGCO vs. CLAPAROLS Facts: The respondent, Eduardo L. Claparols, , operated a factory for the manufacture of nails in Talisay, Occidental Negros, under the style of "Claparols Steel & Nail Plant". He entered into an agreement with Vicente Coleongco, whereby the latter undertook the following: to finance and put up the funds

required for the importation of the nail wire; he would have the exclusive distribution of the product, and the absolute care in the marketing of these nails and the promotion of sales all over the Philippines; he would share the control of all the cash from sales or deposited in banks; that he would have a representative in the management; that all contracts and transactions should be jointly approved by both

parties; that proper books would be kept and annual accounts rendered; and that profits and losses would be shared on a 50-50 basis.

On April 27, 1953, Claparols executed a special power of attorney to open and negotiate letters of credit, to sign contracts, bills of lading, invoices, and papers covering transactions; to represent appellee and the nail factory; and to accept payments and cash advances from dealers and distributors in favor of Coleongco, who also became the assistant manager of the factory, and took over its business transactions, while Claparols devoted most of his time to the nail manufacture processes. Issue: Whether or Not the special power of attorney is irrevocable. Ruling: A power of attorney can be made irrevocable by contract only in the sense that the principal may not recall it at his pleasure but the authority certainly can be revoke by a just cause. Coleongco, with such power and his interest to the subject matter of the agency, acted in bad faith for several instances: his letters to the Philippine National Bank attempting to undermine the credit of the principal and to acquire the factory of the latter, without the principal's knowledge; his letter to his cousin, Kho To, instructing the latter to reduce to one-half the usual monthly advances to Claparols on account of nail sales in order to squeeze said appellee and compel him to extend the contract entitling him to share in the profits of the nail factory on better terms, and ultimately own his factory; his attempt to, have Romulo Agsam pour acid on the machinery; his illegal diversion of the profits of the factory to his own benefit; and the surreptitious disposition of the Yates band resaw machine in favor of his cousin's Hong Shing Lumber Yard, made while Claparols was in Baguio in July and August of 1956. Those were plain acts of deliberate sabotage by the agent that fully justified the revocation of the power of attorney by Claparols and his demand for an accounting from his agent Coleongco. FEDERICO VALERA VS MIGUEL VELASCO Facts: The defendant, Miguel Velasco, was appointed attorneyin-fact of the Plaintiff, Federico Valera. The defendant, by virtue of powers of attorney, has the authority to manage plaintiffs property in the

Philippines, consisting of the usufruct of a real property located at Echague St., Manila. He made reports of his operations and rendered accounts of his administration. On March 31, 1923, the defendant presented to plaintiff his final account of his administration for said month wherein it appears that there is a balance of P3,058.33 in favor of the plaintiff but in the liquidation of accounts revealed that he also owed the defendant the amount of P1,100.00. As misunderstanding arose between them, the defendant filed a civil action against the plaintiff for the collection of the balance resulting from a liquidation of the agency accounts. Issue: Whether or not the lower court erred in holding that the agency is terminated even the agent has not expressly told his principal that he renounced the agency.

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

institutes an action against his principal for the recovery of the balance in his favor resulting from the liquidation of the accounts between them arising from the agency, and renders final account of his operations, is equivalent to an express renunciation of the agency, and terminates the juridical relation between them.

Although he did not expressly told the principal, Federico Valera, that he renounced the agency yet neither dignity nor decorum permits the latter to continue representing a person who has adopted such antagonistic attitude towards him. Pasno v. Ravina, 54 Phil. 378 -Power of sale given in a mortgage is a power coupled with an interestwhich survives the death of the grantor-The creditor-mortgagee with a power of sale has 3 options (forproperty under custody of a judicial administrator after owner-principals death): o Waive his security and prove his credit as an ordinary against theestate

o Foreclose mortgage by ordinary action in court at any time withinthe period allowed by the statute of limitations, in accordancewith Code of Civil Procedure o Foreclose the mortgage without action in accordance with Act3135, which is less prejudicial to the estate Ramos vs Caoibes Concepcion Ramos executed 2 documents. The first is a power of attorney appointing Caoibes tocollect from Phil. War damage Commission any claim regarding property lost during the last war. The 2 nd document is an affidavit stating that any claim made- half to be given to her sister andthe other to Caoibes. Before Ramos died, she filed a claim with the Commission. This wasencashed by Caoibes after death of Ramos thru the power of atty. Administratrix ConsolacionRamos discovered the collection made by Caoibes. She filed a motion with the court asking thatCaoibes be ordered to deposit the sum of P501.62 with the clerk of court. Caoibes was willing todeliver P250. This was refused by administratrix. TC ruled in favour of Caoibes. SC reversed ISSUE: WON atty-in-fact Caoibes is obliged to deliver the full amount of the check P501.62 Ruling: Agent has the obligation to deliver amount y virtue of PoA to hisprincipal-There was no cession of rights made in favor of the agent in the PoA,and the contract of agency is presumed to be gratuitous, unless theagent is a professional agent-When the agent made use of the PoA, principal was already dead;agency was terminated upon the death of the principal; therefore, hecant keep the proceeds of the claim for himself -Agents act of collecting the claim is not such a service as to requirecompensation Herrera v. Luy Kim Guan, 1 SCRA 406 -Date of death of the principal has not been satisfactorily proven,therefore, documents are presumed to have been executed during thelifetime of the principal-Also, there was no proof that agent was aware of

death of theprincipal; death of the principal does not render th act of an agentunenforceable, where the agent had no knowledge of suchextinguishment of the agency