Orient Air Services & Hotel Rep.

v CA (GEN)
May 29, 1991
Padilla, J.
FACTS: American Airlines Inc. (AAI) and Orient Air
Serices and !"tel #e$resentaties (Orient Air) entered
int" a %eneral Sales A&ency A&reement a't("ri)in& t(e
latter t" act as its e*cl'sie &eneral sales a&ent +it(in
t(e P(ili$$ines ,"r t(e sale ", air $assen&er
trans$"rtati"n.
-'e t" t(e alle&ed ,ail're ", Orient Air t" $r"m$tly
remit t(e net $r"ceeds ", sales ,"r . m"nt(s, AAI
'ndert""/ t(e c"llecti"n ", t(e $r"ceeds ", tic/ets s"ld
"ri&inally 0y Orient Air and terminated t(e a&ency
a&reement. AAI t(en instit'ted s'it a&ainst Orient Air
+it( CFI ", Manila ,"r Acc"'ntin& +it( Preliminary
Attac(ment "r %arnis(ment, Mandat"ry In1'ncti"n and
#estrainin& Order.
T(e CFI ", Manila r'led in ,a"r ", Orient Air and
dismissed t(e c"m$laint. It t(en "rdered AAI t"
reinstated Orient Air as its &eneral sales a&ent ,"r
$assen&er trans$"rtati"n in t(e P(ili$$ines. T(e IAC
a2rmed +it( m"di3cati"ns t(e 3ndin&s ", CFI ",
Manila.
ISS45: 6O7 t(e l"+er c"'rt may c"m$el AAI t" e*tend
its $ers"nality t" Orient Air8
!59-: 7O. It +"'ld 0e i"latie ", t(e $rinci$les and
essence ", a&ency, de3ned 0y la+ as a c"ntract
+(ere0y :a $ers"n 0inds (imsel, t" an"t(er t" render
s"me serice "r t" d" s"met(in& in re$resentati"n "r
"n 0e(al, ", an"t(er 6IT! T!5 CO7S57T O#
A4T!O#IT; OF T!5 9ATT5#<. In an a&ent=$rinci$al
relati"ns(i$, t(e $ers"nality ", t(e $rinci$al is
e*tended t(r"'&( t(e ,acility ", t(e a&ent. In s" d"in&,
t(e a&ent, 0y le&al 3cti"n, 0ec"mes t(e $rinci$al,
a't("ri)ed t" $er,"rm all acts +(ic( t(e latter +"'ld
(ae (im d". S'c( a relati"ns(i$ can "nly 0e e>ected
+it( t(e c"nsent ", t(e $rinci$al, +(ic( m'st n"t, in
any +ay, 0e c"m$elled 0y la+ "r 0y any c"'rt.

Victoria Milling Co., Inc. v. CA an Consoliate
S!gar Corporation
%.#. 7". 11?@A. J'ne 19, 2BBB
C'is'm0in&, J.
"AC#S$
St. T(erese Merc(andisin& re&'larly 0"'&(t s'&ar
,r"m Dict"rias Millin& C"., Inc. In t(e c"'rse ", t(eir
dealin&s, Dict"rias Millin& iss'ed seeral S(i$$in&
9istE-eliery #ecei$ts (S9-#s) t" St. T(erese
Merc(andisin& as $r"", ", $'rc(ases. Am"n& t(ese
+as S9-# 7". 121FM +(ic( c"ers 2A,BBB 0a&s ",
s'&ar. 5ac( 0a& c"ntained AB /il"&rams and $riced
at P.@G.BB $er 0a&. T(e transacti"n it c"ered +as a
direct sale.
On Oct"0er 2A, 19G9, St. T(erese Merc(andisin& s"ld
t" C"ns"lidated S'&ar C"r$. its ri&(ts in S9-# 7".
121FM ,"r P1F,?AB,BBB.BB. C"ns"lidated S'&ar C"r$.
iss'ed c(ec/s in $ayment. T(at same day,
C"ns"lidated S'&ar C"r$. +r"te Dict"rias Millin& t(at
it (ad 0een a't("ri)ed 0y St. T(erese Merc(andisin&
t" +it(dra+ t(e s'&ar c"ered 0y S9-# 7". 121FM.
C"ns"lidated S'&ar C"r$. s'rrendered S9-# 7".
121FM t" Dict"rias Millin&Hs 7A6ACO +are("'se and
+as all"+ed t" +it(dra+ s'&ar. !"+eer, a,ter 2,BBB
0a&s (ad 0een released, Dict"rias Millin& re,'sed t"
all"+ ,'rt(er +it(dra+als ", s'&ar a&ainst S9-# 7".
121FM 0eca'se, acc"rdin& t" it, St. T(erese
Merc(andisin& (ad already +it(dra+n all t(e s'&ar
c"ered 0y t(e cleared c(ec/s.
ISS%E$ 6O7 t(e c"ntract +as "ne ", a&ency "r sale
HE&'$ Sale.
Dict"rias Millin& (eaily relies '$"n St. T(erese
Merc(andisin&Hs letter ", a't("rity all"+in&
C"ns"lidated S'&ar C"r$. t" +it(dra+ s'&ar a&ainst
S9-# 7". 121FM t" s("+ t(at t(e latter +as St.
T(erese Merc(andisin&Hs a&ent. T(e $ertinent $"rti"n
", said letter reads: :T(is is t" a't("ri)e C"ns"lidated
S'&ar C"r$"rati"n "r its re$resentatie t" +it(dra+ ,"r
and in "'r 0e(al, (stress s'$$lied) t(e re3ned s'&ar
c"ered 0y S(i$$in& 9istE-eliery #ecei$t I #e3ned
S'&ar (S-#) 7". 121F dated Oct"0er 1., 19G9 in t(e
t"tal J'antity ", 2A, BBB 0a&s.<
Art. 1G.G. Ky t(e c"ntract ", a&ency a $ers"n 0inds
(imsel, t" render s"me serice "r t" d" s"met(in& in
re$resentati"n "r "n 0e(al, ", an"t(er, +it( t(e
c"nsent "r a't("rity ", t(e latter.
T(e 0asis ", a&ency is re$resentati"n. On t(e $art ",
t(e $rinci$al, t(ere m'st 0e an act'al intenti"n t"
a$$"int "r an intenti"n nat'rally in,era0le ,r"m (is
+"rds "r acti"nsL and "n t(e $art ", t(e a&ent, t(ere
m'st 0e an intenti"n t" acce$t t(e a$$"intment and
act "n it, and in t(e a0sence ", s'c( intent, t(ere is
&enerally n" a&ency. One ,act"r +(ic( m"st clearly
distin&'is(es a&ency ,r"m "t(er le&al c"nce$ts is
c"ntr"lL "ne $ers"n = t(e a&ent = a&rees t" act 'nder
t(e c"ntr"l "r directi"n ", an"t(er = t(e $rinci$al.
Dict"rias Millin& ,ailed t" s'2ciently esta0lis( t(e
e*istence ", an a&ency relati"n 0et+een C"ns"lidated
S'&ar C"r$. and St. T(erese Merc(andisin&. T(e ,act
al"ne t(at it (St. T(erese Merc(andisin&) (ad
a't("ri)ed +it(dra+al ", s'&ar 0y C"ns"lidated S'&ar
C"r$. :,"r and in "'r (St. T(erese Merc(andisin&Hs)
0e(al,< s("'ld n"t 0e eyed as $"intin& t" t(e e*istence
", an a&ency relati"n. F'rt(er, C"ns"lidated S'&ar
C"r$. (as s("+n t(at t(e 2A,BBB 0a&s ", s'&ar c"ered
0y t(e S9-# 7". 121FM +ere s"ld and trans,erred 0y
St. T(erese Merc(andisin& t" it. A c"ncl'si"n t(at t(ere
+as a alid sale and trans,er t" C"ns"lidated S'&ar
C"r$. may, t(ere,"re, 0e made t('s ca$acitatin&
C"ns"lidated S'&ar C"r$. t" s'e in its "+n name,
+it("'t need ", 1"inin& its im$'ted $rinci$al St.
T(erese Merc(andisin& as c"=$lainti>.
C"ns"lidated S'&ar C"r$. +as a 0'yer ", t(e S9-F#
,"rm, and n"t an a&ent ", STM. C"ns"lidated S'&ar
C"r$. +as n"t s'01ect t" St. T(erese Merc(andisin&Hs
c"ntr"l. T(at n" a&ency +as meant t" 0e esta0lis(ed
0y t(e C"ns"lidated S'&ar C"r$. and STM is clearly
s("+n 0y C"ns"lidated S'&ar C"r$.Hs c"mm'nicati"n
t" $etiti"ner t(at S9-# 7". 121FM (ad 0een :s"ld and
end"rsed< t" it.2? T(e 'se ", t(e +"rds :s"ld and
end"rsed< means t(at St. T(erese Merc(andisin& and
C"ns"lidated S'&ar C"r$. intended a c"ntract ", sale,
and n"t an a&ency.
1 ( P a & e
A)on #raing Corp. an *!liana Mar+eting v. CA
an #ri,Realt- 'evelop)ent an Constr!ction
Corp.
%.#. 7". 1AGAGA -ecem0er 1@, 2BBA
C(ic"=7a)ari", J.
"AC#S$
Tri=#ealty is a deel"$er and c"ntract"r +it( $r"1ects
in K'lacan and C'e)"n City. S"metime in Fe0r'ary
1992, Tri=#ealty (ad di2c'lty in $'rc(asin& cement
needed ,"r its $r"1ects. 9ines M S$aces Interi"r
Center, re$resented 0y 5lean"r Ka(ia Sanc(e),
in,"rmed Tri=#ealty t(at it c"'ld "0tain cement t" its
satis,acti"n ,r"m Am"n Tradin& C"r$"rati"n and its
sister c"m$any, J'liana Mar/etin&. On t(e stren&t( ",
s'c( re$resentati"n, Tri=#ealty $r"ceeded t" "rder
,r"m Sanc(e) .,BAB 0a&s ", cement ,r"m Am"n
Tradin& C"r$"rati"n, and ,r"m J'liana Mar/etin&,
.,BBB 0a&s at P9G.BBE0a&.
Tri=#ealty, t(r"'&( Mrs. Sanc(e) ", 9ines M S$aces,
$aid in adance t(e am"'nt ", t(e cement. Tri=#ealty
li/e+ise $aid t" 9ines M S$aces an adance ,ee ,"r
t(e 12,BAB cement 0a&s at t(e rate ", P?.BBE0a&, "r
a t"tal ", PGF,@AB.BB, in c"nsiderati"n ", t(e
,acilitati"n ", t(e "rders and certainty ", deliery.
T(e 0alance ", 2,2BB 0a&s ,r"m Am"n Tradin&
C"r$"rati"n and @,BBB 0a&s ,r"m J'liana Mar/etin&,
"r a t"tal ", A,2BB 0a&s, +as n"t deliered. Tri=#ealty,
t('s, sent Am"n Tradin& and J'liana Mar/etin&
+ritten demands 0't in re$ly, t(ey stated t(at t(ey
(ae already re,'nded t(e am"'nt ", 'ndeliered
0a&s ", cement t" 9ines M S$aces $er +ritten
instr'cti"ns ", Sanc(e).
ISS%ES$
(1) 6O7 t(ere +as a c"ntract ", a&ency 0et+een 9ines
M S$aces and Tri=#ealtyL (2) 6O7 Am"n Tradin& and
J'liana Mar/etin& and Tri=#ealty (as $riity ", c"ntract
HE&'$
(1 M 2) 7"
T(ere +as n" +ritten c"ntract entered int" 0et+een
Am"n Tradin& and J'liana Mar/etin& and Tri=#ealty ,"r
t(e deliery ", t(e 0a&s ", cement. Tri=#ealty a&reed
+it( Sanc(e) ", 9ines M S$aces ,"r t(e latter t"
s"'rce t(e cement needs ", t(e ,"rmer in
c"nsiderati"n ", P?.BB $er 0a& ", cement. It is +"rt(y
t" n"te t(at t(e $ayment in mana&erHs c(ec/s +as
made t" Sanc(e) and +as n"t directly $aid t" Am"n
Tradin& and J'liana Mar/etin&. 6(ile t(e mana&erHs
c(ec/ iss'ed 0y Tri=#ealty +as eent'ally $aid t"
Am"n Tradin& and J'liana Mar/etin& ,"r t(e deliery
", t(e 0a&s ", cement, t(ere is "0i"'sly n"t(in&
,r"m t(e ,ace ", said mana&erHs c(ec/ t" (int t(at
Tri=#ealty +as t(e "ne ma/in& t(e $ayments. T(ere
+as li/e+ise n" intimati"n ,r"m Sanc(e) t(at t(e
$'rc(ase "rder $laced 0y (er +as ,"r Tri=#ealtyHs
0ene3t. T(e meetin& ", minds, t(ere,"re, +as
0et+een Tri=#ealty and Sanc(e). T(is c"ntract is
distinct and se$arate ,r"m t(e c"ntract ", sale
0et+een Am"n Tradin& and J'liana Mar/etin& and
Sanc(e) +(" re$resented (ersel, t" 0e ,r"m 9ines M
S$acesETri=#ealty, +(ic(, $er (er re$resentati"n, +as
a sin&le acc"'nt "r entity.
7eit(er Sanc(e) n"r 9ines M S$aces +as an a&ent ,"r
Tri=#ealty, 0't rat(er a s'$$lier ,"r t(e latterHs
cement needs.
Art. 1G.G. Ky t(e c"ntract ", a&ency a $ers"n 0inds
(imsel, t" render s"me serice "r t" d" s"met(in& in
re$resentati"n "r "n 0e(al, ", an"t(er, +it( t(e
c"nsent "r a't("rity ", t(e latter.
On t(e $art ", t(e $rinci$al, t(ere m'st 0e an act'al
intenti"n t" a$$"int "r an intenti"n nat'rally
in,era0le ,r"m (is +"rds "r acti"ns and "n t(e $art ",
t(e a&ent, t(ere m'st 0e an intenti"n t" acce$t t(e
a$$"intment and act "n it, and in t(e a0sence ",
s'c( intent, t(ere is &enerally n" a&ency. One ,act"r
+(ic( m"st clearly distin&'is(es a&ency ,r"m "t(er
le&al c"nce$ts is c"ntr"lL "ne $ers"n = t(e a&ent =
a&rees t" act 'nder t(e c"ntr"l "r directi"n ",
an"t(er = t(e $rinci$al. Indeed, t(e ery +"rd
:a&ency< (as c"me t" c"nn"te c"ntr"l 0y t(e
$rinci$al. T(e c"ntr"l ,act"r, m"re t(an any "t(er,
(as ca'sed t(e c"'rts t" $'t c"ntracts 0et+een
$rinci$al and a&ent in a se$arate cate&"ry.
T(e intenti"n ", Tri=#ealty +as merely ,"r 9ines M
S$aces, t(r"'&( 5lean"r Sanc(e), t" s'$$ly t(em
+it( t(e needed 0a&s ", cement. Inasm'c( as Am"n
Tradin& and J'liana Mar/etin& (ae neer directly
dealt +it( Tri=#ealty and t(ere is n" $a$er trail "n
rec"rd t" &'ide t(em t(at t(e Tri=#ealty, in ,act, is
t(e 0ene3ciary, Am"n Tradin& and J'liana Mar/etin&
(ad n" reas"n t" d"'0t t(e reJ'est ", Sanc(e) later
"n t" re,'nd t(e al'e ", t(e 'ndeliered 0a&s ",
cement t" 9ines M S$aces. M"re"er, t(e c(ec/
re,'nd +as $aya0le t" 9ines M S$aces, n"t t"
Sanc(e), s" t(ere +as indeed n" ca'se t" s's$ect
t(e sc(eme.
Tri=#ealty +as ne&li&ent. It +as t(e "ne +(" (ad
re$"sed t"" m'c( tr'st "n Sanc(e) ,"r t(e latter t"
s"'rce its cement needs. Sec"nd, it ,ailed t" em$l"y
sa,ety nets t" steer clear ", t(e ri$=">. F"r s'c( ('&e
s'ms ", m"ney in"led in t(is case, it is s'r$risin&
t(at a c"r$"rati"n s'c( as Tri=#ealty +"'ld $ay its
c"nstr'cti"n materials in adance instead ", in credit
t('s "$enin& a +ind"+ ", "$$"rt'nity ,"r Sanc(e) "r
9ines M S$aces t" $"c/et t(e remainin& 0alance ",
t(e am"'nt $aid c"rres$"ndin& t" t(e 'ndeliered
materials. Tri=#ealty li/e+ise $aid in adance t(e
c"mmissi"n ", Sanc(e) ,"r t(e materials t(at (ae
yet t" 0e deliered s" it really (ad n" means ",
c"ntr"l "er (er. Finally, t(ere is n" $a$er trail lin/in&
Tri=#ealty t" Am"n Tradin& and J'liana Mar/etin&
t(ere0y leain& t(e latter cl'eless t(at Tri=#ealty +as
t(eir tr'e client. Tri=#ealty s("'ld (ae, at t(e ery
least, reJ'ired Am"n Tradin& and J'liana Mar/etin& t"
si&n t(e c(ec/ "'c(ers "r t" iss'e recei$ts ,"r t(e
adance $ayments s" t(at it c"'ld (ae a ("ld "n
Am"n Tradin& and J'liana Mar/etin&. In t(is case, it
+as t(e re$resentatie ", 9ines M S$aces +(" si&ned
t(e c(ec/ "'c(ers.
2 ( P a & e