Facts: Gonzalo Puyat & Sons is the exclusive agent of Starr Piano Company of Richmond, Indiana USA, in the Philippines. Teatro Arco, or Arco Amusement Company, desiring to equip its cinematograph with sound reproducing devices, approached Puyat. It was agreed by the parties that Puyat would in behalf of Arco order equipment from Starr Piano and that Arco would pay Puyat in addition to price of the equipment, 10% commission plus all expenses such as freight, insurance, banking charges, cables, etc. Puyat informed Arco that the price of the equipment was $1,700, to which Arco agreed. Later, a similar arrangement was made by Arco for the purchase of similar equipment for $1,600 with 10% commission, with Puyat charging an additional flat charge of $160 for all expenses and charges. 3 years later, Arco learned that the price quoted by Puyat on the 2 orders were not the net price but the list price for the equipment. Arco filed a complaint with the trial court (CFI) demanding reimbursement from said overpriced sales. The trial court ruled in favor of Puyat, but the Court of Appeals reversed such decision and declared Puyat an agent of Arco Amusement in the purchase of said equipment.
Issue: Whether the agreement made between Puyat and Arco Amusement is that of purchase and sale or that of agency.
Held: Gonzalo Puyat & Sons cannot be the agent of Arco Amusement in the purchase of equipment from Starr Piano Company as Puyat & Sons is already the exclusive agent of Starr Piano in the Philippines. Puyat cannot be the agent of both vendor and purchaser. The fact that a commission was offered to the other does not necessarily mean that the latter has become the agent of the former, as this was only an additional price which Arco bound itself to pay and which is not incompatible with the contract of purchase and sale. Puyat is not bound to reimburse the profit acquired in the transaction, as this is the very essence of commerce involving middlemen and merchants. The contract is the law between the parties. What does not appear on the face of the contract should be regarded as dealers or traders talk which cannot bind either party. Not every concealment is fraud, short of fraud, and such as that in this case, is considered as business acumen.
FAR EASTERN EXPORT & IMPORT CO, vs. LIM TECK SUAN CASE NUMBER: L-7144 DATE: May 31, 1955
FACTS: Import Company, went to the store of Lim Teck Suan in Manila and offered to sell textile. General Manager of Lim Teck Suan, Delizalde returned with a buyers order. our of Frenkel International Corporation through HSBC. complained to Far Eastern of the inferior quality of the textile. goods in a warehouse and withdrew the same and was offered for sale. The net direct loss is now being claimed against Far Eastern. broker in this transaction.
asing its decision of reversal on the case of Jose Velasco v. Universal Trading where the transaction therein involved was found by the court to be one of purchase and sale and not of brokerage or agency.
ISSUE: Was the transaction one of agency that will exonerate Far Eastern from liability, or one of purchase and sale?
RULING: One of purchase and sale similar to those in the Velasco case. * In the Velasco case, Universal Trading contends that it merely acted as agent for Velasco and could not be held responsible for the substitution of Blended Whisky for Bourbon Whisky. * The Court held that the transaction was purchase and sale and ordered the defendant to refund his deposit with legal interest. goods and merchandise, that same agent could not very well act as agent for local buyers, because the interests of his foreign principal and those of the buyer would be in direct conflict. * He could not serve two masters at the same time. * Far Eastern, being an agent of Frenkel, could not have acted as an agent or broker for Suan. one of purchase and sale. *Far Eastern acted as agent for Frenkel International Corporation, presumably the supplier of the textile sold. *Suan according to the first part of the agreement is said merely to be commissioning Far Eastern to procure for him the merchandise in question. *The price of the merchandise bought was paid for by Suan by means of an irrevocable letter of credit opened in favour of the supplier, Frenkel International Corporation. *The agreement speaks of the items involved as sold, and the sale was even confirmed by Far Eastern. *Far Eastern dealt directly with Suan without expressly indicating or revealing the principal. *There was no privity of contract between the buyer and supplier. *No commission or monetary consideration was paid or agreed to be paid by the buyer to export company proof that there was no agency or brokerage, and that the profit of the latter was undoubtedly the difference between the price listed to the buyer and the net or special price quoted to the seller by the supplier.
National Rice and Corn Corporation (NARIC) vs. CA et al G.R. No. L-32320, July 16, 1979
FACTS: The National Rice and Corn Corporation (Naric) had on stock 8000 metric tons of corn which it could not dispose of due to its poor quality. Naric called for bids for the purchase of the corn and rice. But precisely because of the poor quality of the corn, a direct purchase of said corn even with the privilege of importing commodities did not attract good offers. Davao Merchandising Corporation (Damerco) came in with its offer to act as agent in the exportation of the corn, with the agent answering for the price thereof and shouldering all expenses incidental thereto, provided it can import commodities, paying the NARIC therefor from the price it offered for the corn. Damerco was to open a domestic letter of credit, which shall be available to the NARIC drawing therefrom through sight draft without recourse. The availability of said letter or letters of credit to the NARIC was dependent upon the issuance of the export permit. The payment therefor depended on the importation of the collateral goods, that is after its arrival.
The first half of the collateral goods were successfully imported. Due to the inferior quality of the corn, it had to be replaced with more acceptable stock. This caused such delay that the letters of credit expired without the NARIC being able to draw the full amount therefrom. Checks and PN were issued by DAMERCO for the purpose of securing the unpaid part of the price of the corn and as guaranty that DAMERCO will purchase the corresponding collateral goods.
But because of the change of administration in the government, barter transactions were suspended. Hence, DAMERCO was not able to import the remaining collateral goods.
NARIC instituted in the CFI of Manila against DAMERCO and Fieldmens Insurance Co. Inc. an action for recovery of a sum of money representing the balance of the value of corn and rice exported by DAMERCO.
The trial court rendered in favor of NARIC ordering DAMERCO and Fieldmens Insurance Co. Inc., to pay, jointly and severally. CA reversed the trial courts decision and rendered a new judgement dismissing the complaint as premature and for lack of cause of action. Hence this petition for certiorari.
ISSUE: Whether DAMERCO only acted as an agent of NARIC or is a buyer
HELD: the petition for review is denied and the resolution of the CA appealed from is hereby affirmed.
AGENT
Clearly from the contract between NARIC and DAMERCO: bids were previously called for by the NARIC for the purchase of corn and rice to be exported as well as of the imported commodities that will be brought in, but said biddings did not succeed in attracting good offers. Subsequently, Damerco made an offer. Now, to be sure, the contract designates the Naric as the seller and the Damerco as the buyer. These designations, however, are merely nominal, since the contract thereafter sets forth the role of the buyer (Damerco) as agent of the seller in exporting the quantity and kind of corn and rice as well as in importing the collateral goods thru barter and to pay the aforementioned collateral goods.
The contract between the NARIC and the DAMERCO is bilateral and gives rise to a reciprocal obligation. The said contract consists of two parts: (1) the exportation by the DAMERCO as agent for the NARIC of the rice and corn; and (2) the importation of collateral goods by barter on a back to back letter of credit or no-dollar remittance basis. It is evident that the DAMERCO would not have entered into the agreement were it not for the stipulation as to the importation of the collateral goods which it could purchase.
It appears that we were also misled to believe that the Damerco was buying the corn. A closer look at the pertinent provisions of the contract, however, reveals that the price as stated in the contract was given tentatively for the purpose of fixing the price in barter. It should likewise be stressed that the aforesaid exportation and importation was on a no-dollar remittance basis. In other words, the agent, herein defendant Damerco, was not to be paid by its foreign buyer in dollars but in commodities. Damerco could not get paid unless the commodities were imported, and Damerco was not exporting and importing on its own but as agent of the plaintiff, because it is the latter alone which could export and import on barter basis according to its charter. Thus, unless Damerco was made an agent of the plaintiff, the former could not export the corn and rice nor import at the same time the collateral goods. This was precisely the intention of the parties.
He is not to be considered a buyer, who should be liable for the sum sought by NARIC because the contract itself clearly provides the Damerco was to export the rice and corn, AND TO BUY THE collateral goods. There is nothing in the contract providing unconditionally that Damerco was buying the rice and corn. To be more specific, if the agreement was just a sale of corn to Damerco, the contract need not specify that Damerco was to buy the collateral goods.
ALFRED HAHN, petitioner, vs. COURT OF APPEALS and BAYERISCHE MOTOREN WERKEAKTIENGESELLSCHAFT (BMW), respondents. January 22, 1997
Facts: 1 .Alfred Hahn is a Filipino citizen doing business under the name and style "Hahn-Manila." 2. Bayerische Motoren Werke Aktiengesellschaft (BMW) is a nonresident foreign corporation existing under the laws of the former Federal Republic of Germany, with principal office at Munich, Germany. 3. In 1963, Hahn executed in favor of BMW a Deed of Assignment with Special Power of Attorney which essentially, makes Hahn as the exclusive dealer of BMW in the Philippines. Moreover, it stated there that Hahn and BMW shall continue business relations as has been usual in the past without a formal contract." 4. In 1993, BMW and Columbia Motors Corp (CMC) had a meeting which would grant CMC exclusive dealership of BMW cars. 5. Hahn was informed later that BMW was dissatisfied with how it carrying its business. However, BMW expressed willingness to continue business relations with the petitioner on the basis of a "standard BMW importer" contract, otherwise, it said, if this was not acceptable to petitioner, BMW would have no alternative but to terminate petitioners exclusive dealership effective June 30, 1993. 6. Hahn protested alleging that such termination is a breach of the Deed of Assignment. Hahn insisted that as long as the assignment of its trademark and device subsisted, he remained BMW's exclusive dealer in the Philippines because the assignment was made inconsideration of the exclusive dealership. 7. BMW, however, went on to terminate its dealership with Hahn. 8. Hahn filed a complaint for specific performance and damages in the RTC. RTC issued a writ preliminary injunction. 9. BMW appealed to the CA. CA reversed on the ground that Hahn is not an agent of BMW and that BMW is not doing business in the Phils. By virtue of the latter, the writ of preliminary injunction should not have been issued since RTC did not have jurisdiction over it.
Issues 1. W/N Hahn is agent or a distributor (or broker) in the Philippines of BMW. He is an agent. 2. W/N BMW is doing business here in the Philippines. YES Held/Ratio: 1. There is nothing to support the appellate court's finding that Hahn solicited orders alone and for his own account and without "interference from, let alone direction of, BMW. To the contrary, Hahn claimed he took orders for BMW cars and transmitted them to BMW. Upon receipt of the orders, BMW fixed the down payment and pricing charges, notified Hahn of the scheduled production month for the orders, and reconfirmed the orders by signing and returning to Hahn the acceptance sheets. Payment was made by the buyer directly to BMW. Title to cars purchased passed directly to the buyer and Hahn never paid for the purchase price of BMW cars sold in the Philippines. Hahn was credited with a commission equal to 14% of the purchase price upon the invoicing of a vehicle order by BMW. Upon confirmation in writing that the vehicles had been registered in the Philippines and serviced by him, Hahn received an additional 3% of the full purchase price. Hahn performed after-sale services, including, warranty services, for which he received reimbursement from BMW. All orders were on invoices and forms of BMW. BMW periodically inspected the service centers to see to it that BMW standards were maintained. Indeed, it would seem from BMW's letter to Hahn that it was for Hahn's alleged failure to maintain BMW standards that BMW was terminating Hahn's dealership. The fact that Hahn invested his own money to put up these service centers and showrooms does not necessarily prove that he is not an agent of BMW. For as already noted, there are facts in the record which suggest that BMW exercised control over Hahn's activities as a dealer and made regular inspections of Hahn's premises to enforce compliance with BMW standards and specifications. This was proven by a letter. These allegations were admitted by BMW. This arrangement shows an agency. 2. Hahn and BMW had a Representative Agreement or a Licensing Agreement. This arrangement is whereby a domestic corporation, by virtue of which the latter was appointed exclusive representative" in the Philippines for a stipulated commission. Pursuant to these contracts, the domestic corporation sold products exported by the foreign corporation and put up a service center for the products sold locally. This Court held that these acts constituted doing business in the Philippines. The arrangement showed that the foreign corporations purpose was to penetrate the Philippine market and establish its presence in the Philippines. In addition, BMW held out private respondent Hahn as its exclusive distributor in the Philippines, even as it announced in the Asian region that Hahn was the "official BMW agent in the Philippines.
LIM vs. COURT OF APPEALS and PEOPLE G.R. No. 102784 February 28, 1996
Facts: On October 8, 1987, Rosa Lim who had come from Cebu received from private respondent Victoria Suarez the following two pieces of jewelry; one 3.35 carat diamond ring worth P169K and one bracelet worth P170K, to be sold on commission basis. The agreement was reflected in a receipt. On December 15, 1987, Lim returned the bracelet to Suarez, but failed to return the diamond ring or to turn over the proceeds thereof if sold. As a result, private complainant, aside from making verbal demands, wrote a demand letter to petitioner asking for the return of said ring or the proceeds of the sale thereof. Lims contention: She was not an agent of Suarez. In fact, she was a prospective buyer of the pieces of jewelry. She told Mrs. Suarez that she would consider buying the pieces of jewelry for her own use and that she would inform the private complainant of such decision before she goes back to Cebu. She cannot be liable for estafa since she never received the jewelries in trust or on commission basis from Vicky Suarez. The real agreement between her and the private respondent was a sale on credit with Mrs. Suarez as the owner-seller and petitioner as the buyer, as indicated by the bet that petitioner did not sign on the blank space provided for the signature of the person receiving the jewelry but at the upper portion thereof immediately below the description of the items taken.
Issue:
WON the real transaction between Lim and Suarez was that of sale or that of contract of agency to sell? Contract of Agency.
Held:
Receipt contains the following provisions: XXX I received from Vicky Suarez the following jewelries XXX XXX if I could not sell, I shall return all the jewelry within the period mentioned above; if I would be able to sell, I shall immediately deliver and account the whole proceeds of sale thereof to the owner of the jewelries at his/her residence XXX
Materiality of the location of Lims signature:
Rosa Lims signature indeed appears on the upper portion of the receipt immediately below the description of the items taken. This does not have the effect of altering the terms of the transaction from a contract of agency to sell on commission basis to a contract of sale. Contracts shall be obligatory in whatever form they may have been entered into, provided all the essential requisites for their validity are present. There are some provisions of the law which require certain formalities for particular contracts. It is required for the validity of the contract; to make the contract effective as against third parties and; for the purpose of proving the existence of the contract. A contract of agency to sell on commission basis does not belong to any of these three categories, hence it is valid and enforceable in whatever form it may be entered into. FYI: There is only one type of legal instrument where the law strictly prescribes the location of the signature which is in notarial wills found in Article 805 NCC. In the case before us, the parties did not execute a notarial will but a simple contract of agency to sell on commission basis, thus making the position of petitioners signature thereto immaterial.
Contention of Lim that Suarez authorized Nadera to receive the ring:
Suarez testified that Aurelia Nadera is highly indebted to her, so if she gave authority for Nadera to get possession of it she will be exposing herself to a high risk.
DE LA PENA V. HIDALGO
FACTS: 1887-1893 (1 st period) 1893-1902 (2 nd period) FEDERICO ANTONIO 1902-1904 (3 rd period) FRANCISCO Before DE LA PENA went to Spain, he executed a power of attorney in favor of FEDERICO and 3 other people. Their task is to represent him and administer various properties he owned in Manila. FEDERICO took charge in Nov. 1887.After a few years, FEDERICO wrote a letter to DE LA PENA. It contains a request that DE LA PENA assign a person who might substitute FEDERICO in the event that he leaves the Philippines because one of the agents died and the other 2 are unwilling to take charge. DE LA PENA did not answer the letter there was neither approval nor objection on the accounts and no appointment of another person who might substitute FEDERICO. Because of health reasons, FEDERICO went to Spain. Before he departed, he sent another letter to DE LAPENA a summary of accounts and informing that he will be leaving the Philippines and that he turned over the administration to ANTONIO (though FEDERICO stated that if DE LA PENA is not happy with this, DE LA PENA must send ANTONIO a new power of attorney). DE LA PENA files in court for the collection of revenue from his accounts which was handled by FEDERICO. DE LA PENA alleges that FEDERICO has only remitted 1.2k and still owes him roughly 72k. Furthermore, DE LA PENA seeks to hold FEDERICO liable for the administration from the period of 1887 until 1904.FEDERICO asserts that he cannot be liable for the period after he renounced his agency. Furthermore FEDERICO argues that his renunciation and appointment of a substitute was legal for there was no objection on the part of DE LA PENA.
ISSUE: Whether there was a valid agency in the case of ANTONIO (2 nd period)
HELD: There was an implied agency in the case of ANTONIO. DE LA PENA created an implied agency in favor of ANTONIO because of his silence on the matter for a number of years. There was a valid renunciation in the case of FEDERICO. His reason for leaving the country is legitimate. Furthermore, he gave notice to DE LA PENA about his situation in which the latter failed to give his objection. Being a valid agency on the part of ANTONIO and a valid renunciation on the party of FEDERICO, it must follow that the liability of FEDERICO only extends up to the point before his renunciation of the agency (1 st period).
DOCTRINE: The implied agency is founded on the lack of contradiction or opposition, which constitutes simultaneous agreement on the part of the presumed principal to the execution of the contract. The agent and administrator who was obliged to leave his charge for a legitimate cause and who duly informed his principal, is thenceforward released and freed from the results and consequences of the management of the person who substituted him with the consent, even tacit though it be, ofhis principal.
SIDE NOTE ON POWER OF ATTORNEY: It was also argued by DE LA PENA that there was no authority on the part of FEDERICO to appoint a substitute. The COURT ruled that the power of attorney given by DE LA PENA to FEDERICO did not include a power to appoint a substitute. Nevertheless, it was pointed out that the appointment made by FEDERICO was not based on the power of attorney of DE LA PENA. The appointment was grounded on a new power of attorney FEDERICO himself executed in favor of ANTONIO. Thus, there was no violation incurred by FEDERICO. And as stated in the case, DE LA PENA was duly informed of this but nevertheless kept his silence on the matter.
CONDE vs. CA G.R. No. L-40242 December 15, 1982
FACTS: 1. Margarita Conde, Bernardo Conde and the petitioner Dominga Conde, as heirs of Santiago Conde, sold with right of repurchase, within ten (10) years, a parcel of agricultural land with to Casimira Pasagui, married to Pio Altera), for P165.00. 2. On 17 April 1941, the Cadastral Court of Leyte adjudicated Lot No. 840 to the Alteras" subject to the right of redemption by Dominga Conde. 3. Original Certificate of Title No. N-534 in the name of the spouses Pio Altera and Casimira Pasagui was then transcribed in the "Registration Book" of the Registry of Deeds of Leyte. 4. On 28 November 1945, private respondent Paciente Cordero, son-in-law of theAlteras, signed a document in the Visayan dialect. Neither of the vendees-a-retro, Pio Altera nor Casimira Pasagui, was a signatory to the deed. 5. Petitioner maintains that because Pio Altera was very ill at the time, Paciente Cordero executed the deed of resale for and on behalf of his father-in-law. Petitioner further states that she redeemed the property with her own money as her co-heirs were bereft of funds for the purpose 6. After which, Pio Altera sold the disputed lot to the spouses Ramon Conde and CatalinaT. Conde (not related to petitioner). 7. Contending that she had validly repurchased the lot in question in 1945, Dominga Conde filed, a Complaint against the respondents for quieting of title to real property and declaration of ownership.
ISSUE: WON there was an implied agency when Cordero signed the repurchase document
HELD: YES. If petitioner had done nothing to formalize her repurchase, by the same token, neither have the vendees-a- retro done anything to clear their title of the encumbrance therein regarding petitioners right to repurchase. No new agreement was entered into by the parties as stipulated in the deed of pacto de retro, if the vendors a retro failed to exercise their right of redemption after ten years. If, petitioner exerted no effort to procure the signature of Pio Altera after he had recovered from his illness, neither did the Alteras repudiate the deed that their son-in-law had signed. Thus, an implied agency must be held to have been created from their silence or lack of action, or their failure to repudiate the agency. Possession of the lot in dispute having been adversely and uninterruptedly with petitioner from1945 when the document of repurchase was executed, to 1969, when she instituted this action, or for 24 years, the Alteras must be deemed to have incurred in laches.
Lopez vs. Tan Tioco Ibenta mo ang asukal pag sinabi kongibenta mo. FACTS: Lopez and Tan Tioco entered into a verbal contract that shell deliver certain sugar to Tan Tioco which he obligated himself to store until he receives instructions from her to sell them. She delivered the piculs of sugar and instructed to sell in on Sept 1904 but def did not do so. Pet filed action. Def denies allegations.
Issue: WON the defendant was in default. Held: Yes. He was in default from the time the Pet demanded to deliver or do something, or the fulfillment of the obligation. Neither the contract nor the law demands to make judicial demand than extrajudicial. The price of the sugar should be from the time she instructed the def to sell them. Delay in Performance: Delay in selling the sugar upon instructions.
HARRY E. KELLER ELEC. CO. vs. RODRIGUEZ
FACTS: sold a Mathews electric plant to Rodriguez. s for the Mathews electric plant.
then installed by Cenar. fact presented a bill to Rodriguez. payment would just be made in Manila. Montelibano. Rodriguez, Rodriguez said that he already paid Montelibano. Rodriguez.
1.) That the bill was given to Montelibano for collection. 2.) That Harry represented Montelibano as an agent authorized to collect.
ISSUE: Was the lower court correct in ruling that Montelibano was an agent of Harry Keeler authorized to make collection?
RULING: NO, the lower court ruling is hereby reversed. odriguez (which was the receipt given by Montelibano) there was no showing that montelibano was an agent did not contain that Montelibano had authority to receive money Rodriguez to Montelibano was at his own risk. Rodriguez failed to exercise ordinary prudence and reasonable diligence in making sure that Montelibano was in fact authorized to receive payment. authority: 1.) The law does not presume that an agency exists. it has to be proven through facts 2.) The agent cannot establish his authority 3.) Authority cannot be established through mere rumor or general reputation 4.) General authority is not equal to unlimited authority 5.) That every authority must find its ultimate source in some act or omission by the principal cautious without the concurrence of the principal
Important provisions: Art 1162: Payment must be made to the person in whose favor the obligation is constituted, or to another authorized to receive it in his name. Art 1727: The principal shall be liable as to matters with respect to which the agent has exceeded his authority only when he ratifies the same expressly or by implication.
COMPANIA MARITIME V LIMSON (PATAJO, J., 1986)
Facts: Compania filed a complaint against Limson for collection of the sum of P44,701.54,which is the unpaid accounts for passage and freight on shipment of hogs, cattle and carabaos abroad Companias vessel. Limson denied liability claiming that he was not the shipper nor had he authorized said shipments. He further set up a counterclaim for the refund of the rebate he was entitled to pursuant to their agreement. The Court appointed a commissioner to examine the accounts involved before proceeding with the hearing. The Report indicated that Limsons claim amounted to P676, 416.05, and Companias claim to P545,394.24. Companias claim was based among others on several bills signed by one Perry with Limson as the shipper and consignee, and some for others as shippers and consignee. CFI: Ruled that Perry was not Limsons authorized representative. Thus, he was not liable for the bills of lading not signed by him or his authorized representatives.
Issue: WON the bills of lading signed by Perry should be accepted.
Held/Ratio: YES. A shipper may be held liable for freightage on bills of lading signed by another person where the shipper appears as shipper or consignee, bills of lading where persons other than Limson appear as shipper, and bills of lading not signed by the shipper where the testimonial evidence shows that the goods shipped actually belong to him as the shipper. As regards the controverted bills of lading signed by "Perry" with Limson as shipper or consignee, a witness testified that the signatures therein are those of Cipriano Magtibay alias "Perry" who took delivery of the cargoes stated therein after signing the delivery receipts. He was known to be the regular representative of Limson. With respect to the unsigned bills of lading, delivery receipts were issued upon delivery of the shipments. Witnesses testified that the ordinary procedure at Compania's terminal office was to require the surrender of the original bill of lading, but when the bill of lading cannot be surrendered because it had not arrived or received by the consignee or assignee, the delivery of the cargo was authorized just the same, and the delivery receipt was prepared based on the ship's cargo manifests or ship's copy of the bill of lading. This accommodation was especially given Limson, because defendant was a regular shipper and ship chandler of plaintiff, and was a compadre of Cabling. Regarding the controverted bills of lading in the name of other persons as shippers or consignees and signed by Perry, it was established that said bills of lading were for cattle and hogs-purchased by the defendant from his "viajeros" in Manila which were delivered to and received by Limson.
AIR PHILIPPINES CORPORATION, petitioner, vs. INTERNATIONAL BUSINESSAVIATION SERVICES PHILS., INC., respondent
FACTS: The Air Philippines, Inc., API, was in need of the services of a business establishment to ferry its B-737 airplane from the United States of America to the Philippines, via Subic Bay International Airport, at Olongapo City. API, through Captain Alex Villacampa, its Vice- President for Operations, engaged the services of International Business Aviation Services Phils., Inc., IBASPI, as its agent to look for and engage, for API, a business enterprise to ferry the airplane. IBASPI did engage the services of Universal Weather & Aviation, Inc., UWAI, to ferry the airplane to the Philippines, where API took delivery of the plane. During the pre-trial, on December 7, 1998, Atty. Manolito Manalo, counsel of the petitioner, appeared but without any Special Power of Attorney from the petitioner. The petitioner failed to file its Pre-Trial Brief . Among the documentary evidence adduced by the respondent were the xerox copy of the Certification of Captain Alex Villacampa, and the Memorandum of Rodolfo Estrellado. The petitioner filed a Motion for New Trial on the grounds that: (a) It was deprived of itsday in court due to the gross negligence of its former counsel, Atty. Manolito A. Manalo; (b) The Receipt/Agreement executed by Atty. Manolito A. Manalo, in behalf of the petitioner, was unauthorized as there was no Resolution of the Board of Directors authorizing him to execute said Receipt/Agreement and, hence, said counsel acted beyond the scope of his authority; (c) The claim of IBASPI was excessive and unjustified; and (d) the petitioner never agreed to pay the [respondent] a commission of 10% of the billings of UWAI.
ISSUE: Whether the Motion for New Trial should be denied
HELD: The act performed by the counsel within the scope of a general or implied authority is regarded as an act of the client, even the mistake of the counsel will result to an unfavorable judgment against the client. Petitioners counsel is guilty of simple, not gross, negligence. We cannot consider as gross negligence his resort to dilatory schemes, presentation and assessment of the issues and their just resolution.
Counsels patent carelessness in citing conflicting reasons in his Motions for Reconsideration verily displays his lack of competence, diligence and candor, but not his recklessness or total want of care. Indeed, the lawyers failure to live up to the dictates of the canons of the legal profession makes him answerable to both his profession and his employer. The new trial is unwarranted due to the mere negligence of the counsel.
TIRSO UYTENGSU III vs. ATTY. JOSEPH M. BADUEL FACTS: Complainant is one of the heirs of Tirso Uytengsu, Jr. He and his co-heirs had a pending patent application. He alleges that sometime in December 1998 respondent requested him to sign a special power of attorney (SPA) authorizing Luis Wee (Wee) and/or Thomas Jacobo (Jacobo) to claim, demand, acknowledge and receive on his behalf the certificates of title from the Register of Deeds, General Santos City, Department of Environment and Natural Resources and from any government office or agency due to complainant and his co-heirs by reason of their application for Homestead Patent. Complainant refused to sign the SPA as he wanted to obtain the documents personally. The respondent argues that the allegations of complainant are purely hearsay. He stresses that complaint was instituted to harass him because he was the counsel of an opposing litigant against complainants corporation in an ejectment case entitled General Milling Corporation v. Cebu Automatic Motors, Inc. and Tirso Uytengsu III. Complainant charges that respondent committed an act meriting disbarment when the latter caused to have a special power of attorney, which the former refused to sign earlier, executed by Mrs. Connie Kokseng, former guardian of complainant and his co-heirs, authorizing certain individuals to secure the release from the Register of Deeds and other government offices in General Santos City, titles and other documents pertaining to complainants and his co- heirs homestead application.
ISSUE: Whether or not the respondent has the authority to represent the complainant in their homestead patent application.
HELD: The relation of attorney and client is in many respects one of agency and the general rules of ordinary agency apply to such relation. The extent of authority of a lawyer, when acting on behalf of his client outside of court, is measured by the same test as that which is applied to an ordinary agent. Such being the case, even respondent himself can acquire the certificates of title and other documents without need of an SPA from complainant and his co-heirs. In addition, the Court agrees with the investigating commissioner that the allegations of complainant constitutes mere hearsay evidence and may not be admissible in any proceeding. It was proven that the case at bar is without merit and that evidences are weak and proved to be just hearsay.
J-PHIL MARINE, INC. and/or JESUS CANDAVA and NORMAN SHIPPING SERVICES VS NATIONAL LABOR COMMISSION and WARLITO E. DUMALAOG 561 SCRA 675 (2008)
FACTS: A compromise agreement is valid as long as the consideration is reasonable and the employee signed the waiver voluntarily, with a full understanding of what he was entering into.
Worked as a cook on aboard vessels plying overseas, Warlito E. Dumalaog was employed as a cook on board vessels plying overseas. He filed a pro-forma complaint on March 4,2002 before the National Labor Relations Commission (NLRC) against J-Phil Marine, Inc., its then president Jesus Candava, and its foreign principal Norman Shipping Services.
The Labor Arbiter dismissed the complaint for lack of merit. On appeal, the NLRC reversed the decision of the Labor Arbiter. The Court of Appeals affirmed the dismissal for failure to attach to the petition all material documents and for defective verification and certification. Consequently, a petition was filed before the Court of Appeals. While the case was pending in the Supreme Court, the respondent entered into a compromise agreement and signed Quitclaims and Release. The same has been subscribed and sworn to before the Labor Arbiter. Accordingly, the case was dismissed.
ISSUES: Whether or not the compromise agreement entered into by the respondent, without his counsel, is valid
HELD: A compromise agreement is valid as long as the consideration is reasonable and the employee signed the waiver voluntarily, with a full understanding of what he was entering into. All that is required for the compromise to be deemed voluntarily entered into is personal and specific individual consent. Thus, contrary to Dumalaoags contention, the employees counsel need not be present at the time of the signing of the compromise agreement.
The relation of attorney and client is in many respects one of agency and the general rules of agency apply to such relation. The acts of an agent are deemed the acts of the principal only if the agent acts within the scope of his authority. The circumstances of this case indicate that Dumalaoags counsel is acting beyond the scope of his authority in questioning the compromise agreement.
COSMIC LUMBER CORPORATION V CA
FACTS * Cosmic Corporation, through its General Manager executed a Special Power of Attorney appointing Paz G. Villamil-Estrada as attorney-in-fact to initiate, institute and file any court action for the ejectment of third persons and/or squatters of the entire lot 9127 and 443 for the said squatters to remove their houses and vacate the premises in order that the corporation may take material possession of the entire lot * Paz G. Villamil Estrada, by virtue of her power of attorney, instituted an action for the ejectment of private respondent Isidro Perez and recover the possession of a portion of lot 443 before the RTC * Estrada entered into a Compromise Agreement with Perez, the terms and conditions such as: In order for Perez to buy the said lot he is presently occupying, he has to pay to plaintiff through Estada the sum of P26,640 computed at P80/square meter and that Cosmic Lumber recognizes ownership and possession of Perez by virtue of this compromise agreement over said portion of 333 sqm of lot 443 and whatever expenses of subdivision, registration and other incidental expenses shall be shouldered by Perez * although the agreement was approved by the trial court and the decision became final and executory it was not executed within the 5 year period from date of its finality allegedly due to the failure of Cosmic Lumber to produce the owners duplicate copy of title needed to segregate from lot 443 the portion sold by the attorney-in-fact, Paz Estrada to Perez under the compromise agreement
ISSUE: W/N there is a contract of agency between Cosmic Lumber, principal and Paz Estrada, agent thus binding the principal over the compromise agreement made by the agent to a third person, Perez in selling the portion of the said property
RULING: No The authority granted Villamil-Estrada under the special power of attorney was explicit and exclusionary: for her to institute any action in court to eject all persons found on lots number 9127 and 443 so that Cosmic Lumber could take material possession thereof and for this purpose, to appear at the pre-trial and enter into any stipulation of facts and/or compromise agreement but only insofar as this was protective of the rights and interests of Cosmic Lumber in the property Nowhere in this authorization was Villamil-Estrada granted expressly or impliedly any power to sell the subject property nor a portion thereof Neither can a conferment of the power to sell be validly inferred from the specific authority to enter into a compromise agreement because of the explicit limitation fixed by the grantor that the compromise entered into shall only be so far as it shall protect the rights and interest of the corporation in the aforementioned lots. In the context of special investiture of powers to Villamil-Estrada, alienation by sale of an immovable certainly cannot be deemed protective of the right of Cosmic Lumber to physically possess the same, more so when the land was being sold for a price of P80/sqm , very much less than its assessed value of P250/sqm and considering further that plaintiff never received the proceeds of the sale When the sale of a piece of land or any interest thereon is through an agent, the authority of the latter shall be in writing; otherwise, the sale should be void. Thus, the authority of an agent to execute a contract for the sale of real estate must be conferred in writing and must give him specific authority, either to conduct the general business of the principal or to execute a binding contract containing terms and conditions which are in the contract he did execute For the principal to confer the right upon an agent to sell real estate, a power of attorney must so express the powers of the agent in clear and unmistakable language It is therefore clear that by selling to Perez a portion of Cosmic Lumbers land through a compromise agreement, Villamil-Estrada acted without or in obvious authority. The sale ipso jure is consequently void and so is the compromise agreement. This being the case, the judgment based thereon is necessarily void When an agent is engaged in the perpetration of a fraud upon his principal for his own exclusive benefit, he is not really acting for the principal but is really acting for himself, entirely outside the scope of his agency.
Linan v.s. Puno 31 Phil. 357 (1915)
FACTS:
Diego Linan, a resident of Daet, Ambas, Camarines temporarily lived but owned a parcel of land in Tarlac. He executed a document conferring sufficiently to Marcos P. Puno on May 16, 1908, the power to represent him to purchase, sell, collect and pay as well as sue and be sued before any authority, appear before the cours of justice and administrative officers in any proceeding or business concerning the good administration and advancement of of my said interests and may in necessary cases, appoint attorneys at law or in fact to represent him. On June 1911, Puno sold and delivered the said land to the other defendants namely: Enrique, Vicente, Aquilina and Remedios all surnamed Maglanok for a sum of Php 800.00. The plaintiff alleged that the document did not confer upon Puno the power to sell the property and prayed that the sale be set aside; the land be returned to him with damages. Puno contended that the sale was valid and prayed to be prayed from liability.
ISSUE: Whether or not the sale was valid as performed by Puno as an agent of Linan?
HELD:
YES. The Supreme Court ruled in favor of Puno. The Court examined the power conferred upon. The words administer, purchase, sell etc. has equal force with each other. There seemed to be no good reason for saying that Puno had authority to administer and not to sell when to sell was advantageous to the plaintiff in the administration of his affairs. In reaching this conclusion, the Court took into account the fact that the plaintiff delayed his action to annul said sale from June 1911 until February 15, 1913.
Strong vs. Repide
FACTS: Among the lands comprising the friar lands are the Dominican lands, the only valuable asset owned by the corporation Philippine Sugar Estates Development Company Limited (Philippine Sugar Estates). Francisco Gutierrez Repide (Repide), defendant, was the majority stockholder and one of the five directors of Philippine Sugar Estates. He was likewise elected by the board as the agent and administrator general of such company. The factual backdrop being during US occupation, the US Government wanted to secure title over the friar lands. To accomplish this objective, Governor for the Philippines entered into negotiations for the purchase of the Dominican lands, during which Repide represented Philippine Sugar Estates. The first offer of the Governor was to purchase the subject lands in the amount of $6,043,219.47. As the majority stockholder of Philippine Sugar Estates and without prior consultation with the other stockholders, Repide rejected the offer. For the second offer, the purchase price was increased to $7,535,000. While negotiations for the second offer were ongoing and while still holding out for a higher price of the Dominican lands, Repide took steps to purchase the 800 shares of stock of Philippine Sugar Estates. These shares were owned by Mrs. Eleanor Strong (Strong) which were then in the possession of her agent, F. Stuart Jones (Jones). Repide, instead of seeing Jones, employed Kauffman who later on employed Sloan, a broker, to purchase the shares of Strong. Jones sold the 800 shares of Strong for 16,000 Mexican currency. For this sale transaction a check of one Rueda Ramos was issued. Later on, the negotiations for the purchase of the Dominican lands were concluded and a contract of sale was subsequently executed. This sale transaction increased the value of the shares of stocks originally owned by Strong from 16,000 Mexican currency to 76,256 US currency. During the negotiations regarding the purchase of the shares of stock of Strong, not one word of the facts affecting the value of this stock was made known to her nor her agent, Jones. After the sale of Dominican lands and after the purchase of the 800 shares of Strong, Repide became the owner of 30,400 out of the 42,030 shares of Philippine Sugar Estates. Strong filed a complaint for the recovery of her 800 shares. She argued that her agent Jones had no authority to sell her shares and that Repide fraudulently concealed the facts affecting their value.
ISSUE: Was there fraud in effecting the purchase of Strongs shares?
RULING: Yes. With the factual circumstances of this case, it became the duty of Repide, acting in good faith, to state the facts before making the purchase of Strongs shares. That Repide was one of the directors of Philippine Sugar Estates was but one of the facts upon which liability is asserted. He was not only a director, but he owned three-fourths of the shares of its stock, and was, at the time of the purchase of the stock, administrator general of the company with large powers and engaged in the negotiations which finally led to the sale of the companys lands at a price which greatly enhanced the value of the stock. He was the negotiator for the sale of the Dominican lands and was acting substantially as the agent of the shareholders of Philippine Sugar Estates by reason of his ownership of the shares in the company. Because of such ownership and agency, no one knew as well as he does about the exact condition of the negotiations. He was the only one who knew of the probability of the sale of the Dominican lands to the government and of the probable purchase price. Under these circumstances, Repide employed an agent to purchase the stock of Strong, concealed his own identity and his knowledge of the state of negotiations and their probable result. The concealment of his identity while procuring the purchase of the stock, by his agent, was in itself strong evidence of fraud on the part of Repide. By such means, the more easily was he able to avoid questions relative to the negotiations for the sale of Dominican lands and actual misrepresentations regarding that subject. He kept up the concealment as long as he could by giving the check of a third person Rueda Ramos, for the purchase money. This move of Repide was a studied and intentional omission to be characterized as part of the deceitful machinations to obtain the purchase without giving any information whatever as to the state and probable result of the negotiations and to obtain a lower price for the shares of Strong. After the purchase of stock, he continued negotiations for the sale of the Dominican lands as the administrator general and eventually entered into a contract of sale. The whole transaction gives conclusive evidence of the overwhelming influence Repide had in the negotiations and it is clear that the final consummation was in his hands at all times.
KATIGBAK vs. TAI HING CO.
FACTS: 1) Gabino Barreto Po Ejap, as attorney-in-fact of Po Tecsi, sold in favor of Jose M. Katigbak the subject land; after said sale, Po Tecsi leased the property sold, from Gabino Barreto Po Ejap, who administered it in the name of Jose M. Katigbak, at a rental of P1,500 per month, payable in advance, leaving unpaid the rents accrued from that date until his death which occurred on November 26, 1926, having paid the accrued rents up to October 22, 1925;
2) From November 26, 1926, the defendants Po Sun Suy and Po Ching leased said land for the sum of P1,500 per month; on February 11, 1927, Po Sun Suy was appointed administrator of the estate of his father Po Tecsi, and filed with the court an inventory of said estate including the land in question; and on May 23, 1927, Jose M. Katigbak sold the same property to Po Sun Boo.
3) Take note that all these transfers happened even though the power of attorney was not registered in the Registry of deeds.
ISSUE: Can the Principal be bound by the acts of the agent even though the power of attorney is not registered the Registry of deeds?
RULING: YES 1) Inasmuch as in accordance with section 39 of said Act No. 496, Every applicant receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land who takes a certificate of title for value in good faith, shall hold the same free of all encumbrance except noted on said certificate, every document which in any manner affects the registered land is ineffective unless it is recorded in the registry of deeds. But such inefficacy only refers to third persons who, in good faith, may have acquired some right to the registered land.
2) While it is true that a power of attorney not recorded in the registry of deeds is ineffective in order than an agent or attorney-in-fact may validly perform acts in the name of his principal, and that any act performed by the agent by virtue of said with respect to the land is ineffective against a third person who, in good faith, may have acquired a right thereto, it does, however, bind the principal to acknowledge the acts performed by his attorney-in-fact regarding said property (sec. 50, Act No. 496).
3) In the present case, while it is true that the non- registration of the power of attorney executed by Po Tecsi in favor of his brother Gabino Barreto Po Ejap prevents the sale made by the latter of the litigated land in favor of Jose M. Katigbak from being recorded in the registry of deeds, it is not ineffective to compel Tecsi to acknowledge said sale.
4) From the fact that said power and sale were not recorded in the registry of deeds, and from the omission of any mention in the deed of sale of the mortgage lien in favor of Antonio M. H. Limjenco, and the lease of a part of said land in favor of Uy Chia, the appellants deduce that said sale is fraudulent.
5) The record contains many indications that Po Tecsi was not unaware of said sale. His several letters complaining of the pressing demands of his brother Gabino Barreto Po Ejap to send him the rents of the land, his promises to send them to him, and the remittance of the same were a tacit acknowledgment that he occupied the land in question no longer as an owner but only as lessee.
Amigo v.s. Teves 96 Phil. 252 (1954)
FACTS:
On August 11, 1937, Macario Amigo and Anacleto Cagalitan executed a power of attorney for their son Marcelino Amigo granting the power to lease, let, bargain, transfer, convey and sell, remise, release, mortgage and hypothecate, part of any of the properties upon such terms and conditions and under such covenants as he shall think fit. On October 30, 1938, Marcelino executed a deed of sale of a land at Php 3,000.00 in favor of Serapin Teves with a repurchase stipulation of 18 months from the date of sale. On July 20, 1939 the spouses donated to their sons Justino and Pastor several lands including their right to repurchase the said land (sold to Teves). The deed of donation was registered in the Register of Deeds. On March 9, 1940 Justino and Pastor offered to repurchase the land from Teves but the latter refused because ownership had already been consolidated in him as purchaser a retro. Petitioners contended that Marcelino Amigo acted in excess of his powers because the covenant of lease contained in the said deed is not germane to the said power.
ISSUE:
Whether or not Marcelino Amigo acted in excess of his power?
HELD:
NO. The Court find no plausible reason xxx a cursory reading thereof would at once reveal that the power granted to the agent is so broad that if practically covers the celebration of any contract and the conclusion of any covenant or stipulation. When the power of attorney says that the agent can enter into any contract concerning the land or can sell the land under any term or condition and covenant he may think fit, it undoubtedly means that he can act in the same manner and with the same breadth and latitude as the principal could concern the property.
RIZALINO, substituted by his heirs, JOSEFINA, ROLANDO and FERNANDO, ERNESTO, LEONORA,BIBIANO, JR., LIBRADO and ENRIQUETA, all surnamed OESMER, Petitioners, vs. PARAISODEVELOPMENT CORPORATION, Respondent.
FACTS: Petitioners together with Adolfo Oesmer and Jesus Oesmer, are brothers and sisters, and the co-owners of undivided shares of two parcels of agricultural and tenanted land which were acquired byright of succession. Respondent Paraiso Development Corporation is known to be engaged in the real estate business. This case originated when Ernesto Oesmer, one of the co-owners of the subject land, met with the President of respondent corporation for the purpose of brokering the sale of petitioners properties to respondent corporation. Pursuant to the said meeting, a Contract to Sell was drafted whereby petitioners Ernesto and Enriqueta subsequently signed the aforesaid Contract to Sell. A check in the amount of P100, 000.00, payable to Ernesto, was given as option money. Sometime thereafter, Rizalino, Leonora, Bibiano, Jr., and Librado also signed the said Contract to Sell. However, two of the brothers, Adolfo and Jesus, did not sign the document. Later on, petitioners informed the respondent, through a letter, of their intention to rescind the Contract to Sell and to return the amount of P100, 000.00 given by respondent as option money. Respondent did not respond to the aforesaid letter. Afterwards, herein petitioners, together with Adolfo and Jesus, filed a Complaint for Declaration of Nullity or for Annulment of Option Agreement or Contract to Sell with Damages before the RTC. The trial court held that the assailed Contract to Sell is valid and binding only to the undivided proportionate share of Ernesto who signed the document and received the check. Ernesto was ordered to execute the Contract of Absolute Sale concerning his 1/8 share over the subject two parcels of land in favor of respondent. On appeal, the Court of Appeals modified the decision of RTC whereby it declared that the Contract to Sell is valid and binding with respect to the undivided proportionate share of the six signatories of the document.
ISSUE: Whether or not the contract to sell binds the co-owners of Ernesto.
HELD: Yes. The contract to sell was valid and binding. In contrast to the contention of the five co-owners who affixed their signatures in the contract to sell that their signatures do not confer authority to Ernesto as an agent to sell their shares, the Court held that they were selling the same directly and intheir own right. Hence, written authority is no longer necessary since they were selling their shares in their own capacity as owners. In addition, the petitioners, being owners of their respective undivided shares in the subject properties, can dispose of their shares even without the consent of all the co-heirs. Article 493 of the Civil Code provides that, Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. Consequently, even without the consent of the two co-heirs, Adolfo and Jesus, the Contract to Sell was valid and binding with respect to the 6/8 proportionate shares of the petitioners.
gratuity or personal benefit from the vendee, without revealing the same to his principal, the vendor, is guilty of a breach of his loyalty to the principal and forfeits his right to collect the commission from his principal, even if the principal does not suffer any injury by reason of such breach of fidelity, or that he obtained better results or that the agency is a gratuitous one, or that usage or custom allows it. remedy or repair an actual damage agent thereby assumes a position wholly inconsistent with that of being an agent for his principal, who has a right to treat him, insofar as his commission is concerned, as if no agency had existed valuable services of the said agent does not exculpate the agent who has only himself to blame for such a result by reason of his treachery or perfidy. Gregorio Domingo must forfeit his right to the commission and must return the part of the commission he received from his principal. Decisive Provisions Article 1891 and 1909 CC deliver", which latter term is more comprehensive than the former. stress the highest loyalty that is required to an agent condemning as void any stipulation exempting the agent from the duty and liability imposed on him in paragraph one thereof. honesty, candor and fairness on the part of the agent, the real estate broker in this case, to his principal, the vendor. make a full disclosure or complete account to his principal of all his transactions and other material facts relevant to the agency, so much so that the law as amended does not countenance any stipulation exempting the agent from such an obligation and considers such an exemption as void.
apply: h the task of merely bringing together the vendor and vendee, who themselves thereafter will negotiate on the terms and conditions of the transaction. bonus or profit he received from the purchaser and his principal did not object Teofilo Purisimas entitlement to his share in the 5% commission whatever amounts Gregorio Domingo received by virtue of the transaction as his sub-agency contract was with Gregorio Domingo alone and not with Vicente Domingo, who was not even aware of such sub-agency.
, 300 from Oscar and Vicente, P650 of which should be paid by Gregorio to Teofilo.
SIASAT vs. INTERMEDIATE APPELLATE COURT
FACTS: the Department of Education and Culture to purchase without public bidding, one million pesos worth of national flags for the use of public schools throughout the country. purchase. the release of the purchase orders. the Department that the purchase orders could not be released unless a formal offer to deliver the flags was first submitted for approval.
Flag Industry came up with a document which read: Mrs. Tessie Nacianceno, This is to formalize our agreement for you to represent United Flag Industry to deal with any entity or organization, private or government in connection with the marketing of our products-flags and all its accessories. For your service, you will be entitled to a commission of thirty (30%) percent. Signed Mr. Primitive Siasat Owner and Gen. Manager The first delivery of 7,933 flags was made by the United Flag Industry. Then, Nanciancenos authority to represent the United Flag Industry was revoked by Primitivo Siasat on theground that she was not authorized to sell 16, 666 Philippine flags to the Department. Industry tendered the amount of P23,900.00 or five percent (5%) of the amount received as payment of her commission. She refused to accept the said amount insisting on the 30% commission agreed upon. received payment for the second delivery of 7,833 flags. When she confronted the petitioners, they vehemently denied receipt of the payment, at the same time claimed that the respondent had no participation whatsoever with regard to the second delivery of flags and that the agency had already been revoked. Manila to recover the following commissions: 25%, as balance on the first delivery and 30%, on the second delivery. t. Appellate Court.
ISSUE: 1. Did Nancianceno have the capacity to represent United Flag in the transaction with the Department? 2. Did the revocation of agency foreclose the respondent's claim of 30% commission on the second transaction? 3. Was the award for attorneys fees and moral damages proper?
RULING: 1. YES, she had the capacity to represent United Flag In fact, she was a general agent. - There are several kinds of agents. An agent may be (1) universal: (2) general, or (3) special. A universal; agent is one authorized to do all acts for his principal which can lawfully be delegated to an agent. So far as such a condition is possible, such an agent may be said to have universal authority. - A general agent is one authorized to do all acts pertaining to a business of a certain kind or at a particular place, or all acts pertaining to a business of a particular class or series. He has usually authority either expressly conferred in general terms or in effect made general by the usages, customs or nature of the business which he is authorized to transact. - An agent, therefore, who is empowered to transact all the business of his principal of a particular kind or in a particular place, would, for this reason, be ordinarily deemed a general agent. - A special agent is one authorized to do some particular act or to act upon some particular occasion. Lie acts usually in accordance with specific instructions or under limitations necessarily implied from the nature of the act to be done. - By the way general words were employed in the agreement; no restrictions were intended as to the manner the agency was to be carried out or in the place where it was to be executed. The power granted to the respondent was so broad that it practically covers the negotiations leading to, and the execution of, a contract of sale of petitioners' merchandise with any entity or organization. - There was nothing to prevent the petitioners from stating in the contract of agency that the respondent could represent them only in the Visayas or to state that the Department of Education and Culture and the Department of National Defense, which alone would need a million pesos worth of flags, are outside the scope of the agency.
2. NO, the revocation did not foreclose the respondents claim of 30% commission on the second transaction. - The revocation of agency could not prevent the Nancianceno from earning her commission because the contract of sale had been already perfected and partly executed. - The principal cannot deprive his agent of the commission agreed upon by cancelling the agency and, thereafter, dealing directly with the buyer.
3. NO, the award was not proper. - Moral damages: To support a judgment for damages, facts which justify the inference of a lack or absence of good faith must be alleged and proven. There is no evidence on record from which to conclude that the revocation of the agency was deliberately effected by the petitioners to avoid payment of the respondent's commission. - Attorneys fees: Fo r one thing, the respondent did not come to court with completely clean hands. For another, the petitioners apparently believed they could legally revoke the agency in the manner they did and deal directly with education officials handling the purchase of Philippine flags. They had reason to sincerely believe they did not have to pay a commission for the second delivery of flags. The decision of the respondent court was MODIFIED. The petitioners were ordered to pay the respondent the amount of ONE HUNDRED FOURTY THOUSAND NINE HUNDRED AND NINETY FOUR PESOS (P140, 994.00) as her commission on the second delivery of flags with legal interest from the date of the trial court's decision.
FRANCISCO A. VELOSO, Petitioner, v. CA, AGLALOMA B. ESCARIO, assisted by her husband GREGORIO L. ESCARIO, the REGISTER OF DEEDS -MANILA, Respondent.
DOCTRINE: The special power of attorney can be included in the general power when it is specified therein the act or transaction for which the special power is required. Whether the instrument be denominated as "general power of attorney" or "special power of attorney," what matters is the extent of the power or powers contemplated upon the agent or attorney in fact. If the power is couched in general terms, then such power cannot go beyond acts of administration. However, where the power to sell is specific, it not being merely implied, much less couched in general terms, there cannot be any doubt that the attorney in fact may execute a valid sale. An instrument may be captioned as "special power of attorney" but if the powers granted are couched in general terms without mentioning any specific power to sell or mortgage or to do other specific acts of strict dominion, then in that case only acts of administration may be deemed conferred."
FACTS: Petitioner Francisco Veloso owns a parcel of land in Tondo, Manila covered by a TCT issued by the Registry of Deeds- Manila. He acquired the subject property before he got married from Philippine Building Corporation. Hence, the property did not belong to the conjugal partnership. The said title was subsequently canceled and a new one was issued in the name of Aglaloma B. Escario. Subsequently, petitioner filed an action for annulment of documents, reconveyance of property with damages and preliminary injunction alleging that he was the absolute owner of the subject property and he never authorized anybody to sell it. He alleged that when his wife left for abroad, he found out that his copy was missing. The transfer of property was supported by a General Power of Attorney and Deed of Absolute Sale, executed by Irma Veloso, wife of the petitioner. Petitioner denied executing the power of attorney and alleged that his signature was falsified. He also denied having known the supposed witnesses in the execution of the power of attorney. Thus, he contended that the sale of the property, and the subsequent transfer were null and void. Defendant Aglaloma Escario alleged that she was a buyer in good faith and denied any knowledge of the alleged irregularity. She allegedly relied on the general power of attorney which was sufficient in form and substance and was duly notarized. Witness for the plaintiff Atty. Julian G. Tubig denied any participation in the execution of the general power of attorney, and attested that he did not sign. RTC ruled in favor of Escaro as the lawful owner of the property as she was deemed an innocent purchaser for value. The trial court ruled that there was no need for a special power of attorney when the special power was already mentioned in the general one. CA affirmed in toto the findings of the trial court.
ISSUE: Was the General Power of Attorney valid? HELD: The assailed power of attorney was valid and regular on its face. It was notarized and as such, it carries the evidentiary weight conferred upon it with respect to its due execution. While it is true that it was denominated as a general power of attorney, a perusal thereof revealed that it stated an authority to sell. "2. To buy or sell, hire or lease, mortgage or otherwise hypothecate lands, tenements and hereditaments ." Thus, there was no need to execute a separate and special power of attorney since the general power of attorney had expressly authorized the agent or attorney in fact the power to sell the subject property. The general power of attorney was accepted by the Register of Deeds when the title to the subject property was canceled and transferred in the name of Private Respondent. RE FALSIFIED SIGNATURE: SC found that the basis presented by the petitioner was inadequate to sustain his allegation of forgery. Mere variance of the signatures cannot be considered as conclusive proof that the same were forged. Forgery cannot be presumed. RE INNOCENT PURCHASER FOR VALUE: SC agrees with the conclusion of the lower court that private respondent was an innocent purchaser for value. Respondent Aglaloma relied on the power of attorney presented by petitioners wife, Irma. Being the wife of the owner and having with her the title of the property, there was no reason for the private respondent not to believe in her authority. Moreover, the power of attorney was notarized and as such, carried with it the presumption of its due execution. A purchaser in good faith is one who buys property of another, without notice that some other person has a right to, or interest in such property and pays a full and fair price for the same, at the time of such purchase, or before he has notice of the claim or interest of some other person in the property. The questioned power of attorney and deed of sale were notarized and therefore, presumed to be valid and duly executed. Atty. Tubig denied having notarized the said documents and alleged that his signature had also been falsified. Just like the petitioner, witness Atty. Tubig merely pointed out that his signature was different from that in the power of attorney and deed of sale. Even granting for the sake of argument, that the petitioners signature was falsified and consequently, the power of attorney and the deed of sale were null and void, such fact would not revoke the title subsequently issued in favor of private respondent. The right of an innocent purchaser for value must be respected and protected, even if the seller obtained his title through fraud. The REMEDY of the person prejudiced is to bring an action for damages against those who caused or employed the fraud, and if the latter are insolvent, an action against the Treasurer of the Philippines may be filed for recovery of damages against the Assurance Fund. RE ESTOPPEL: The trial court did not err in applying equitable estoppel in this case. The principle of equitable estoppel states that where one or two innocent persons must suffer a loss, he who by his conduct made the loss possible must bear it. From the evidence adduced, it should be the petitioner who should bear the loss. The fact remains that the Certificate of Title, as well as other documents necessary for the transfer of title were in the possession of Irma, consequently leaving no doubt or any suspicion on the part of the defendant as to her authority. Under Section 55 of Act 496, Irmas possession and production of the TCT to defendant operated as conclusive authority from the plaintiff to the Register of Deeds to enter a new certificate. ACCORDINGLY, the petition for review is hereby DENIED for lack of merit.
B. H. MACKE ET AL V JOSE CAMPS
FACTS: * B. H. Macke and W.H. Chandler, partners doing business under the firm name of Macke, Chandler And Company, allege that during the months of February and March 1905, they sold to Jose Camps and delivered at his place of business, known as the :Washington Caf, various bills of goods amounting to P351.50; that Camps has only paid on account of said goods the sum of P174; that there is still due them on account of said goods the sum of P177.50 * Plaintiffs made demand for the payment from defendant and that the latter failed and refused to pay the said balance or any part of it * Macke, one of the plaintiffs, testified that on the order of one Ricardo Flores, who represented himself to be the agent of Jose Camps, he shipped the said goods to the defendant at the Washington Caf; that Flores (agent) later acknowledged the receipt of the said goods and made various payments thereon amounting in all to P174; that believes that Flores is still the agent of Camps; and that when he went to the Washington Caf for the purpose of collecting his bill he found Flores, in the absence of Camps, apparently in charge of the business and claiming to be the business manager of Camps, said business being that of a hotel with a bar and restaurant annexed. * A written contract was introduced as evidence, from which it appears that one Galmes, the former of Washington Caf subrented the building wherein the business was conducted, to Camps for 1 year for the purpose of carrying on that business, Camps obligating himself not to sublet or subrent the building or the business without the consent of the said Galmes. *This contract was signed by Camps and the name of Ricardo Flores as a witness and attached thereon is an inventory of the furniture and fittings which also is signed by Camps with the word sublessee below the name, and at the foot of this inventory the word received followed by the name Ricardo Flores with the words managing agent immediately following his name.
ISSUE: W/N Ricardol Flores was the agent of Camps
Ruling: Yes. Evidence is sufficient to sustain a finding that Flores is the agent of Camps in the management of the bar of the Washington Caf with authority to bind Camps, his principal, for the payment of the goods The contract sufficiently establishes the fact that Camps was the owner of the business and of the bar, and the title of managing agent attached to the signature of Flores which appears on that contract, together with the fact that at the time the purchases were made, Flores was apparently in charge of the business performing the duties usually intrusted to a managing agent leave little room for doubt that he was there as the authorized agent of Camps. Agency by Estoppel --- 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 persons dealing with such person in good faith and in the honest belief that he is what he appears to be. Estoppel--- Whenever a party has, by his own declaration, act or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act, or omission be permitted to falsify; and unless the contrary appears, the authority of the agent must be presumed to include all the necessary and usual means of carrying his agency into effect.
Max Leonard Tornow, a German national was the owner of Germann & Co. which operated in Berlin and Manila. On February 5, 1900 he executed in Berlin an instrument constituting Fernando Kammerzell as his true and lawful attorney with power to enter the firm name of Germann & Co. in the Commercial Registry of Manila as a branch of the house of the company in Berlin, it being the purpose of this power to invest said attorney with full legal powers and authorization to direct and administer in the City of Manila for us and in our name a branch of our general commercial business of import and export for which purpose he may make contracts of lease and employ suitable assistants, as well as sign every kind of documents, accounts, and obligations connected with the business which may be necessary, take charge in general of the receipt and delivery of merchandise connected with the business sign all receipts for sums of money and collect them and exact their payment by legal means On October 27, 1900 Kammerzell executed a general power for suits in Manila and purporting to be a substitution in favor of several attorneys of powers conferred upon Kammerzell in an instrument executed by Tornow. Kammerzells instrument was authenticated will formalities of domestic laws while Tornows was not.
ISSUE: Whether or not Kammerzell has the authority to institute suits for the recovery of sums of money?
HELD:
YES. The Court ruled that the clause conferring the power to exact the payment of sums of money by legal means, provides that the power to exact the payment of debts due the concern by means of the institution of suits for the recovery. The main object of the instrument is clearly to make him the manager of the Manila branch with the same general authority. In absence of a clear language, it was the intention of the principal to withhold from his agent a power essential to the efficient management of the business.
Municipal Council of Iloilo v.s. Evangelista 55 Phil. 290 (1930)
FACTS:
On March 20, 1924, the Court of First Instance of Iloilo rendered judgment in Civil Case No. 3514 thereof, wherein the appellant, herein Tan Ong Sze Vda. de Tan Toco was the plaintiff and the Municipality of Iloilo the defendant and the former sought to recover of the plaintiff value of a strip of land belonging to said plaintiff taken by the defendant to widen a public street; the judgment entitled the plaintiff to recover Php 42,966.40 representing the value of said strip of land from the defendant. On appeal to the judgment was affirmed on November 28, 1924. After the case was remanded to the court of origin and the judgment rendered therein had become final and executory. Attorney Jose Evangelista in his own behalf and as counsel for the administratix of Jose Ma. Arroyos intestate estate filed a claim in the said case for professional services rendered by him, which the court acting with the consent of the appellant widow, fixed at 15% of the amount of the judgment.
At the hearing on said claim, the claimants appearead as did also for the Philippine National Bank which prayed that the amount of the judgment be turned over to it because the land taken over had been mortgaged to it. Antero Soriano also appeared claiming the amount of the judgment as it had been assigned to him and by him in turn, assigned to Mauricio Cruz & Co., Inc. After hearing, all the adverse claims on the amount of the judgment, the court ordered that the attorneys lien in the amount of 15% of the judgment be recorded in favor of Attorney Evangelista in his own behalf and counsel for the administratix of the deceased Jose Ma. Arroyo and directed the Municipality of Iloilo to file an action of interpleading against the adverse claimants: the PNB, Antero Soriano, Mauricio Cruz & Co., Jose Evangelista and Jose Arroyo, as was done the case being filed in the CFI of Iloilo as civil case no. 7702. On March 29, 1928 with the approval of the auditor of the provincial treasurer of Iloilo and with the Executive Bureau paid the late Antero Soriano the amount of Php 6,000.00 in part payment of the judgment mentioned above assigned to him by Tan Boon Tiong acting as attorney-in-fact of the appellant herein, Tan Ong Sze Vda. de Tan Toco. On December 18, 1928, the municipal treasurer of Iloilo deposited with the clerk of the Court of First Instance of Iloilo the amount of Php 6,000.00 on account of the judgment rendered in said civil case no. 3514. In pursuance of the resolution of the court below ordering that the attorneys lien in the amount of 15% of the judgment be recorded in favor of Attorney Jose Evangelista.In his own behalf and as a counsel for the late Jose Ma. Arroyo, the said clerk of court delivered on the same date to said Attorney Evangelista the said amount of Php 6,000.00.
At the hearing of the instant case, the co-defendants of Evangelista agreed not to discuss the payment made to the latter by the clerk of CFI of Iloilo of the amount Php 6,000.00 mentioned above in consideration of said lawyers waiver of the remainder of the 15% of said judgment amounting to Php 44.69. With these 2 payments of Php 6,000.00 each making a total of Php 12,000.00 , the judgment for Php 42,966.44 against the Municipality of Iloilo was reduced to Php 30,966.40 which was adjudicated by said court to Maurice Cruz & Co. This appeal, then is confined to the claim of Mauricio Cruz & Co. as alleged assignee of the rights of the late Soriano by virtue of the said judgment in payment of professional services rendered by him to the said widow and her co-heirs.
ISSUE:
Whether or not the assignment made by Tan Boon Tiong as attorney-in-fact of the appellant Tan Ong Sze Vda. de Tan Toco to Attorney Antero Soriano, of all the credits, rights and interests belonging to said appellant entitled Vda. de Tan Toco v.s. the Municipal of Iloilo adjudicating to said widow the amount of Php 42,966.40 plus the costs of court against said municipal council in consideration of the professional services rendered by said attorney to said widow and her co- heirs valid?
HELD:
YES. As to whether Tan Boon Tiong as attorney-in-fact of the appellant was empowered by his principal to make as assignment of credits, rights and interests, in payment of debts for professional services rendered by lawyers.Tan Boon Tiong is authorized to employ and contract for the services of lawyers upon such conditions as he may deem convenient. This power necessarily implies the authoirty to pay the professional services they engaged. In the present case, for the appellant in favor of Atty. Soriano for professional services rendered in other cases in the interests of the appellant and her co-heirs was that credit which had against the Municipality and such assignment was equivalent to the payment of amount of said credit to Antero Soriano for professional services.
Yu Chuck vs. Kong Li Po 46 Phil 608 (1924)
FACTS:
Kong Li Po was a domestic corporation engaged in the publication of a Chinese newspaper styled Kong Li Po. Its by-laws stated that it will have a president who will sign all contracts and other instruments in writing but no provision for a business manager. In 1919, C.C. or T.C. Chen was appointed manager.
On December 1919, Chen entered a contract with Yu Chuck for the printing of the newspaper for Php 580 monthly. Chen was replaced by Tan Tia Hong and dismissed the plaintiff without explanation on January 31, 1921. The plaintiff filed an action for specific performance with damages claiming that in its contract with Kong Li Po is for 3 years. The plaintiff asked for Php 20,880.00 as damages and they would be given full pay for the unexpired portion of the term x x x even in bankruptcy. Tan Tia Hong asserted that Chen had no authority to enter into contract. The trial court ruled that Chen had authority, taking into consideration of the notice made by its president, Te Kim Hua that it shall not sign or recognize any document without the signature of Chen.
ISSUE:
Whether or not Chen had the authority to bind Kong Li Po with Yu Chuck?
HELD:
NO. The Court ruled that although officers had an implied authority if such was not expressly made by certain officer or director, Chen had no authority to bind because the contract was not usual and reasonable because the duration of it was 3 years and was onerous for Kong Li Po when it was stated that the corporation is liable for the unexpired portion despite insolvency. Plaintiff had no right to presume that any employee had an implied authority which would bring its ruin. Further, the president had no knowledge of such contract, although saw some printing activities in its office and such contract was neither ratified nor approved by the Board.
Goquiolay v Sycip
Facts: Tan Sin An and Goquiolay entered into a general commercial partnership under the partnership name Tan Sin An and Antonio Goquiolay for the purpose of dealing in real estate. The agreement lodged upon Tan Sin An the sole management of the partnership affairs. The lifetime of the partnership was fixed at ten years and theatricals of Co-partnership stipulated that in the event of death of any of the partners before the expiration of the term, the partnership will not be dissolved but will be continued by the heirs or assigns of the deceased partner. But the partnership could be dissolved upon mutual agreement in writing of the partners. Goquiolay executed a GPA in favor of Tan Sin An. The plaintiff partnership purchased 3 parcels of land which was mortgaged to La Urbana as payment of P25,000. Another 46parcels of land were purchased by Tan Sin An in his individual capacity which he assumed payment of a mortgage debt for P35K. A downpayment and the amortization were advanced by Yutivoand Co. The two obligations were consolidated in an instrument executed by the partnership and Tan Sin An, whereby the entire 49 lots were mortgaged in favor of Banco Hipotecario Tan Sin An died leaving his widow, Kong Chai Pin and four minor children. The widow subsequently became the administratrix of the estate. Repeated demands were made by Banco Hipotecario on the partnership and on Tan Sin An. Defendant Sing Yee, upon request of defendant Yutivo Sons, paid the remaining balance of the mortgage debt, the mortgage was cancelled Yutivo Sons and Sing Yee filed their claim in the intestate proceedings of Tan Sin An for advances, interest and taxes paid in amortizing and discharging their obligations to La Urbana and Banco Hipotecario Kong Chai Pin filed a petition with the probate court for authority to sell all the 49 parcels of land. She then sold it to Sycip and Lee inconsideration of P37K and of the vendees assuming payment of the claims filed by Yutivo Sons and Sing Yee. Later, Sycip and Lee executed in favor of Insular Development a deed of transfer covering the 49 parcels of land. When Goquiolay learned about the sale to Sycip and Lee, he filed a petition in the intestate proceedings to set aside the order of the probate court approving the sale in so far as his interest over the parcels of land sold was concerned. Probate court annulled the sale executed by the administratrix w/respect to the 60% interest of Goquiolay over the properties Administratrix appealed. The decision of probate court was set aside for failure to include the indispensable parties. New pleadings were filed The second amended complaint prays for the annulment of the sale in favor of Sycip and Lee and their subsequent conveyance to Insular Development. The complaint was dismissed by the lower court hence this appeal.
Issue: 1) Did the lower court err in holding that the widow succeeded her husband Tan Sin An in the sole management of the partnership upon Tans death? 2) WON the consent of the other partners was necessary to perfect the sale of the partnership properties to Sycip and Lee?
Held: 1) Yes. While in the Articles of Co-Partnership and the power of attorney executed by Goquiolay conferred upon Tan the exclusive management of the business, such power premised as it is upon trust and confidence, was a mere personal right that terminated upon Tans demise. The provision in the articles stating that in the event of death of any one of the partners within the 10 year term of the partnership, the deceased partner shall be represented by his heirs could not have referred to the managerial right given to Tan. The heirs of the deceased, by never repudiating or refusing to be bound under the said provision in the articles became individual partners with Goquiolay upon Tans demise. This is sanctioned under Article 222 under the Code of Commerce. However, the minority of the heirs is not a bar to the application of that clause in the articles of co-partnership. 2) No. Strangers dealing with a partnership have the right to assume, in the absence of restrictive clauses in the co- partnership agreement that every general partner has power to bind the partnership specially those acting with ostensible authority. Also, in spite of the provision of Art 129 of the Code of Commerce to the effect that if the management of the general partnership has not been limited by special agreement to any of the members, all shall have the power to take part in the direction and management of the common business, and the members present shall come to an agreement for all contracts or obligations which may concern the association, such obligation is one imposed by law on the partners among themselves, that does not necessarily affect the validity of the acts of a partner while acting within the scope of the ordinary course of business of the partnership as regards third persons without notice. The latter may rightfully assume that the contracting partner was duly authorized to contract for and in behalf of the firm and that he would not ordinarily act to the prejudice of his co- partners. Also, the records fail to disclose that Goquiolay made any opposition to the sale of the partnership realty to Sycip and Lee. On the contrary, it appears that he only interposed his objections after the deed of conveyance was executed and approved by the probate court, and consequently, his opposition came too late to be effective (ii) Admission or representation made by any partner concerning partnership affairs is evidence against the partnership (iii) Notice to any partner of any matter relating to partnership affairs, and the knowledge of the acting in the particular matter, acquired while a partner or then present to his mind, and the knowledge of any other partner who reasonably could and should have communicated it to the acting partner, operate as notice to or knowledge of the partnership, except in the case of fraud on the partnership, committed by or with the consent of that partner (iv) Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of co-partners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act. (v) The partnership is bound to make good the loss: (1) Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and (2) Where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership. d. Mutual obligation of Partners (i) Partners shall render on demand true and full information of all things affecting the partnership to any partner or the legal representative of any deceased partner or of any partner under legal disability. 5. Fiduciary Duties a. Duty of Diligence: For damages caused to the business
* Every partner is responsible to the partnership for damages suffered by it through his fault. * he cannot compensate them with the profits and benefits which he may have earned for the partnership by his industry. * However, the courts may equitably lessen this responsibility if through the partner's extraordinary efforts in other activities of the partnership, unusual profits have been realized. b. Duty to account: Full accounting to the partnership for partnership transactions * Every partner must account to the partnership for any benefit and hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the (FCL) formation, conduct, or liquidation of the partnership or from any use by him of its property. c. Duty of Loyalty: * The capitalist partners cannot engage for their own account in any operation which is of the kind of business in which the partnership is engaged, unless there is a stipulation to the contrary. * Any capitalist partner violating this prohibition shall bring to the common funds any profits accruing to him from his transactions ,and shall personally bear all the losses.
OLAGUER vs PURUGGANAN
FACTS: Alleges that he was the owner of 60,000 share of stocks (worth 600k), employed as EVP Business day Corporation, President of Business day Info System and Services &Business day Marketing Corp. Active in the political opposition against Marcos together with respondents Raul Locsin and Enrique Joaquin. Locsin, Joaquin, and Hector Holifea had an unwritten agreement that, in the event that Eduardo was arrested, they would support the Eduardos family by the continued payment of his salary. Executed a Special Power of Attorney on 5/26/79 appointing Locsin, Joaquin and Hofilea for the purpose of selling or transferring petitioners shares of stock with Business day. During trial, Eduardo testified that he agreed to execute the SPA in order to cancel his shares of stock, even before they are sold, for the purpose of concealing that he was a stockholder of Business day, in the event of a military crackdown against the opposition. Parties acknowledged the SPA before respondent Emilio Purugganan,Jr., who was then the Corporate Secretary of Business day, and at the same time, a notary public for Quezon City. By the time he was released from prison 6 years later, he was no longer a shareholder in the said bank. According to the respondents, they were just doing what was accorded in the SPA, given that the price of theirs plummeted below market value because of the stigma brought about by Olaguer being a very prominent oppositionist.
ISSUE: Whether absence as mentioned in SPA should be understood as that of NCC 381.
RULING: NO. If it were, then the very existence of that SPA would be rendered nugatory. Olaguer has to be a minor or insane for that SPA to have function. An SPA has to be construed strictly but its provision has to be construed as to its existence, i.e. understood in a way that will give more power/ function to that SPA. Since the said SPA executed by Olaguer gave powers to the respondents to actually dispose of his share, he cannot therefore assail such now. And even if the said contract is assailable, it was already ratified by the reception of the amount 600,000 by Olaguers wife and in- laws from 1980-1982.
BRAVO-GUERRERO vs. BRAVO
FACTS: Spouses Mauricio Bravo ("Mauricio") and Simona Andaya Bravo ("Simona") owned two parcels of land ("Properties") located along Evangelista Street, Makati City, Metro Manila. They have three children - Roland, Cesar and Lily, all surnamed Bravo. Cesar died without issue. Lily Bravo married David Diaz, and had a son, David B. Diaz, Jr. ("David Jr."). Roland had six children, namely, Lily Elizabeth Bravo-Guerrero ("Elizabeth"), Edward Bravo ("Edward"), Roland Bravo, Jr. ("Roland Jr."), Senia Bravo, Benjamin Mauricio Bravo, and their half-sister, Ofelia Bravo ("Ofelia"). Simona executed a General Power of Attorney ("GPA") on 17 June 1966 appointing Mauricio asher attorney-in-fact. In the GPA, Simona authorized Mauricio to "mortgage or otherwise hypothecate, sell, assign and dispose of any and all of my property, real, personal or mixed, of any kind whatsoever and whosesoever situated, or any interest therein xxx." Mauricio subsequently mortgaged the Properties to the Philippine National Bank (PNB) and Development Bank of the Philippines (DBP) for P10,000 and P5,000, respectively. On 25 October 1970, Mauricio executed a Deed of Sale with Assumption of Real EstateMortgage ("Deed of Sale") conveying the Properties to "Roland A. Bravo, Ofelia A. Bravo and Elizabeth Bravo" ("vendees"). However, the Deed of Sale was not annotated on TCT Nos.58999 and 59000. Neither was it presented to PNB and DBP. The mortgage loans and the receipts for loan payments issued by PNB and DBP continued to be in Mauricios name even after his death on 20 November 1973. Simona died in 1977. On 23 June 1997, Edward, represented by his wife, Fatima Bravo, filed an action for the judicial partition of the Properties. Edward claimed that he and the other grandchildren of Mauricio and Simona are co-owners of the Properties by succession. Despite this, petitioners refused to share with him the possession and rental income of the Properties.
ISSUE: Whether Simona validly appointed Mauricio as her attorney- in-fact to dispose the properties in question.
DECISION: The SC also agrees with the trial court that Simona authorized Mauricio to dispose of the Properties when she executed the GPA. True, Article 1878 requires a special power of attorney for an agent to execute a contract that transfers the ownership of an immovable. However, the Court has clarified that Article 1878 refers to the nature of the authorization, not to its form. Even if a document is titled as a general power of attorney, the requirement of a special power of attorney is met if there is a clear mandate from the principal specifically authorizing the performance of the act.
In Veloso v. Court of Appeals, the Court explained that a general power of attorney could contain a special power to sell that satisfies the requirement of Article 1878, thus: While it is true that it was denominated as a general power of attorney, a perusal thereof revealed that it stated an authority to sell, to wit: "2. To buy or sell, hire or lease, mortgage or otherwise hypothecate lands, tenements and hereditaments or other forms of real property, more specifically TCT No. 49138, upon such terms and conditions and under such covenants as my said attorney shall deem fit and proper." Thus, there was no need to execute a separate and special power of attorney since the general power of attorney had expressly authorized the agent or attorney in fact the power to sell the subject property. The special power of attorney can be included in the general power when it is specified therein the act or transaction for which the special power is required. In this case, Simona expressly authorized Mauricio in the GPA to "sell, assign and dispose of any and all of my property, real, personal or mixed, of any kind whatsoever and wheresoever situated, or any interest therein xxx" as well as to "act as my general representative and agent, with full authority to buy, sell, negotiate and contract for me and in my behalf." Taken together, these provisions constitute a clear and specific mandate to Mauricio to sell the Properties. Even if it is called a "general power of attorney," the specific provisions in the GPA are sufficient for the purposes of Article 1878. These provisions in the GPA likewise indicate that Simona consented to the sale of the Properties.
JESUS M. GOZUN, petitioner,vs. JOSE TEOFILO T. MERCADO a.k.a. DON PEPITO MERCADO, respondent.
FACTS: In the local elections of 1995, respondent vied for the gubernatorial post in Pampanga. Upon respondents request, petitioner, owner of JMG Publishing House, a printing shop located in San Fernando, Pampanga, submitted to respondent draft samples and price quotation of campaign materials. By petitioners claim, respondents wife had told him that respondent already approved his price quotation and that he could start printing the campaign materials, hence, he did print campaign materials like posters bearing respondents photograph, leaflets containing the slate of party candidates, sample ballots, poll watcher identification cards, and stickers. Given the urgency and limited time to do the job order, petitioner availed of the services and facilities of Metro Angeles Printing and of St. Joseph Printing Press, owned by his daughter Jennifer Gozun and mother Epifania Macalino Gozun, respectively. Meanwhile, on March 31, 1995, respondents sister -in-law, Lilian Soriano (Lilian) obtained from petitioner "cash advance" of P253, 000 allegedly for the allowances of poll watchers who were attending a seminar and for other related expenses. Lilian acknowledged on petitioners 1995 diary receipt of the amount.
ISSUE: W/N Lilian R. Soriano was authorized by the respondent to receive the cash advance from the petitioner in the amount of P253,000.00.
Held: By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. Contracts entered into in the name of another person by one who has been given no authority or legal representation or who has acted beyond his powers are classified as unauthorized contracts and are declared unenforceable, unless they are ratified. Generally, the agency may be oral, unless the law requires a specific form. However, a special power of attorney is necessary for an agent to, as in this case, borrow money, unless it be urgent and indispensable for the preservation of the things which are under administration. Since nothing in this case involves the preservation of things under administration; a determination of whether Soriano had the special authority to borrow money on behalf of respondent is in order. It is a general rule in the law of agency that, 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. It is not enough merely that the
ESTATE OF LINO OLAGUER VS. ONGJOCO
Facts: The plaintiffs are the legitimate children of the spouses Olaguer. Lino Olaguer died so Special Proceedings for probate of will was filed and Defendant Olivia P. Olaguer was appointed as administrator pursuant to the will. In the order of the probate court some properties of the estate were authorized to be sold to pay obligations of the estate.A subdivision agreement was entered into on November 17, 1973, among Domingo Candelaria, Olivia P. Olaguer,Domingo O. de la Torre and Emiliano M. [Ongjoco]. On January 15, 1976, Jose A. Olaguer claiming to be the attorney-in-fact of his son Virgilio Olaguer under a general power of attorney, those lots sold to defendant Emiliano M. Ongjoco. Thus, they filed an action for the Annulment of Sales of Real Property and/or Cancellation of Titles by the CFI.
ISSUE: Whether or not respondent Ongjoco can be considered an innocent purchaser for value.
Ruling: The court hold that respondent Emiliano M. Ongjoco was in bad faith when he bought Lots Nos. 1 and 2 from Jose A.Olaguer, as the latter was not proven to be duly authorized to sell the said properties. However, respondent Ongjoco was an innocent purchaser for value with regard to Lots Nos. 76-D, 76-E, 76-F and 76-G since it was entirely proper for him torely on the duly notarized written power of attorney executed in favor of Jose A. Olaguer
Philippine Aluminum Wheels, Inc. vs FASGI Enterprises, Inc.
FACTS: In 1978, FASGI Enterprises Inc. (FASGI), a foreign corporation organized under the laws of California, USA, entered into a contract with Philippine Aluminum Wheels, Inc. (PAWI), a Philippine corporation, whereby the latter agrees to deliver 8,594 wheels to FASGI. FASGI received the wheels and so it paid PAWI $216,444.30. Later however, FASGI found out that the wheels are defective and did not comply with certain US standards. So in 1979, FASGI sued PAWI in a California court. In 1980, a settlement was reached but PAWI failed to comply with the terms of the agreement. A second agreement was made but PAWI was again remiss in its obligation. The agreement basically provides that PAWI shall return the purchase price in installment and conversely, FASGI shall return the wheel in installment. PAWI was only able to make two installments (which were actually made beyond the scheduled date). FASGI also returned the corresponding number of wheels. Eventually in 1982, FASGI sought the enforcement of the agreement and it received a favorable judgment from the California court. PAWI is then ordered to pay an equivalent of P252k plus damages but FASGI was not ordered to return the remaining wheels. PAWI was not able to comply with the court order in the US. So in 1983, FASGI filed a complaint for the enforcement of a foreign judgment with RTC-Makati. Hearings were made and in 1990, the trial judge ruled against FASGI on the ground that the foreign judgment is tainted with fraud because FASGI was not ordered to return the remaining wheels (unjust enrichment) and that PAWIs American lawyer entered into the agreements without the consent of PAWI. On appeal, the Court of Appeals reversed the trial court.
ISSUE: Whether or not the foreign judgment may be enforced here in the Philippines.
HELD: Yes. The judgment is valid. A valid judgment rendered by a foreign tribunal may be recognized insofar as the immediate parties and the underlying cause of action are concerned so long as it is convincingly shown that there has been an opportunity for a full and fair hearing before a court of competent jurisdiction; that trial upon regular proceedings has been conducted, following due citation or voluntary appearance of the defendant and under a system of jurisprudence likely to secure an impartial administration of justice; and that there is nothing to indicate either a prejudice in court and in the system of laws under which it is sitting or fraud in procuring the judgment. A foreign judgment is presumed to be valid and binding in the country from which it comes, until a contrary showing, on the basis of a presumption of regularity of proceedings and the giving of due notice in the foreign forum. In this case, PAWI was very well represented in the California court. PAWIs insistence that its American lawyer colluded with FASGI; that he entered into the compromise agreement without PAWIs authority is belied by the fact that PAWI initially complied with the agreement. It did not disclaim the agreement. It sent two installments (though belatedly) but failed to comply on the rest. It cannot now aver that the agreement is without its authority. Further, it is just but fair for the California court not to order FASGI to return the remaining wheels because of PAWIs arrears.
Ignacio Vicente vs Ambrosio Geraldez FACTS: In 1967, HI Cement Corporation was granted authority to operate mining facilities in Bulacan. However, the areas allowed for it to explore cover areas which were also being explored by Ignacio Vicente, Juan Bernabe, and Moises Angeles. And so a dispute arose between the three and HI Cement as neither side wanted to give up their mining claims over the disputed areas. Eventually, HI Cement filed a civil case against the three. During pre-trial, the possibility of an amicable settlement was explored where HI Cement offered to purchase the areas of claims of Vicente et al at the rate of P0.90 per square meter. Vicente et al however wanted P10.00 per square meter. In 1969, the lawyers of HI Cement agreed to enter into a compromise agreement with the three whereby commissioners shall be assigned by the court for the purpose of assessing the value of the disputed areas of claim. An assessment was subsequently made pursuant to the compromise agreement and the commissioners recommended a price rate of P15.00 per square meter. One of the lawyers of HI Cement, Atty. Francisco Ventura, then notified the Board of Directors of HI Cement for the approval of the compromise agreement. But the Board disapproved the compromise agreement hence Atty. Ventura filed a motion with the court to disregard the compromise agreement. Vicente et al naturally assailed the motion. Vicente et al insisted that the compromise agreement is binding because prior to entering into the compromise agreement, the three lawyers of HI Cement declared in open court that they are authorized to enter into a compromise agreement for HI Cement; that one of the lawyers of HI Cement, Atty. Florentino Cardenas, is an executive official of HI Cement; that Cardenas even nominated one of the commissioners; that such act ratified the compromise agreement even if it was not approved by the Board. HI Cement, in its defense, averred that the lawyers were not authorized and that in fact there was no special power of attorney executed in their favor for the purpose of entering into a compromise agreement. Judge Ambrosio Geraldez ruled in favor of HI Cement.
ISSUE: Whether or not a compromise agreement entered into by a lawyer purportedly in behalf of the corporation is valid without a written authority.
HELD: No. Corporations may compromise only in the form and with the requisites which may be necessary to alienate their property. Under the corporation law the power to compromise or settle claims in favor of or against the corporation is ordinarily and primarily committed to the Board of Directors but such power may be delegated. The delegation must be clearly shown for as a general rule an officer or agent of the corporation has no power to compromise or settle a claim by or against the corporation, except to the extent that such power is given to him either expressly or by reasonable implication from the circumstances. In the case at bar, there was no special power of attorney authorizing the three lawyers to enter into a compromise agreement. This is even if the lawyers declared in open court that they are authorized to do so by the corporation (in this case, the transcript of stenographic notes does not show that the lawyers indeed declare such in open court). The fact that Cardenas, an officer of HI Cement, acted in effecting the compromise agreement, i.e. nominating a commissioner, does not ratify the compromise agreement. There is no showing that Cardenas act binds HI Cement; no proof that he is authorized by the Board; no proof that there is a provision in the articles of incorporation of HI Cement that he can bind the corporation.
Caballero vs. Deiparine
FACTS: 1. This involves a dispute over a parcel of land and the acts committed by the plaintiff lawyer which were not intended by his client, the plaintiff. 2. That during the lifetime of Bucao she with her second husband acquired by joint purchase a parcel of land from the Talisay-Minglanilla Estate 3. That in 1932 Bucao and Tomas executed jointly a notarial instrument identified as Annex "B" wherein they acknowledged that Antonio Caballero had contributed the amount therein stated for the purchase of the property and they sold 1/4 of the lot to him; when the title to said lot was issued, VicentaBucao and Tomas Raga held it in trust for their co-owner. 4. That the portion mentioned as sold to plaintiff Antonio Caballero remained unsegregated from Lot 2072 and the deed of sale, Annex "B" of the Complaint; nor had it been registered in the Register of Deeds; but he, had been in occupation of a portion of this lot peacefully until the present. 5. Bucao sold her undivided 1/2 of the above parcel to her co-owner, Tomas Raga. 6. Defendants Olimpio Raga, Adriano Raga, Magdalena Raga and Tomas Raga executed an instrument known as "Declaration and confirmation of sale" without the participation of plaintiffs Antonio Caballero and Concordia Caballero, wherein they stated that they are the heirs of VicentaBucao of the 1/2 of the property to Tomas Raga, a certified true copy of which document is identified as Annex "E" in the Complaint. 7. Alma Deiparine acquired in good faith, with a just title and for a valuable consideration, the whole of Lot 2072 from Tomas Raga as per deed of absolute sale identified as Annex "C" in the complaint which cancelled Transfer Certificate of Title No. RT-2482 (T-17232) and the issuance in her name of Transfer Certificate of Title No. 9934 on April 1, 1963, a certified true copy of which is identified as Annex "D" in the complaint; 8. That defendant Alma Deiparine came to know only of Annex "B" when it was presented by plaintiff Antonio Caballero at the trial of an ejectment case filed by the former in the Municipal Court of Talisay. 9. This case was decided in favor of Antonio Caballero but the decision was appealed by Alma Deiparine to the Court of First Instance of Cebu which affirmed the decision for Caballero. The case is now in the Court of Appeals on appeal by Alma Deiparine. 10. Caballero and the defendant parties entered into a compromise agreement. And the lawyer of Caballero admitted to certain facts without the authority of his client, Caballero.
ISSUE: Is the compromise valid, considering that the lawyer admitted to facts which were not authorized by his client to make? No
RULING: 1. A reading of the stipulation of facts convinced the court that it is a compromise agreement of the parties. The stipulation concludes with this prayer: "WHEREFORE, it is most respectfully prayed that the foregoing Stipulation of Facts be approved and that a decision be handed down on the legal issues submitted on the basis of said Stipulation of Facts." Apparently it is intended to terminate the case. 2. Attorneys have authority to bind their clients in any case by any agreement in relation thereto made in writing, and in taking appeals, and in all matters of ordinary judicial procedure. But they cannot, without special authority, compromise their client's litigation, or receive anything in discharge of a client's claim but the full amount in cash 3. It may be true that during the pre-trial hearing held on February 3, 1968, the parties concerned agreed to execute a stipulation of facts but it does not mean that the respective counsels of the contending parties can prepare a stipulation of facts the contents of which is prejudicial to the interest of their clients and sign it themselves without the intervention of their clients. 4. Counsel for plaintiffs-appellants, Atty. Melecio C. Guba, agreed that defendant-appellee Alma Deiparine bought the land in question in good faith and for a valuable consideration; that during the lifetime of their mother Vicenta Bucao, she, with the conformity of her husband, sold her undivided of the land in question to her co-owner and son, Tomas Raga. 5. All these adverse facts were made the basis of the appealed decision against the plaintiffs. No further evidence was presented as there was no hearing. 6. The attorney for the plaintiffs in making such admission went beyond the scope of his authority as counsel and practically gave away the plaintiffs' case. The admission does not refer to a matter of judicial procedure related to the enforcement of the remedy. It related to the very subject matter of the cause of action, or to a matter on which the client alone can make the admission binding on him. 7. The broad implied or apparent powers of an attorney with respect to the conduct or control of litigation are, however, limited to matters which relate only to the procedure or remedy. 8. The employment of itself confers upon the attorney no implied or power or authority over the subject matter of the cause of action or defense; and, unless the attorney has expressly been granted authority with respect thereto, the power to deal with or surrender these matters is regarded as remaining exclusively in the client.
DUNGO v. LOPENA
FACTS: Anastacio Dungo and Rodrigo Gonzales purchased 3 parcels of land from Adriano Lopena and Rosa Ramos for the total price of P269, 804.00. P28.000.00 was given as down payment with the agreement that the balance of P241, 804.00 would be paid in 6 monthly installments. To secure the payment of the balance, the Dungo and Gonzales executed over the same parcels of land Deed of Real Estate Mortgage in favor of Lopena and Ramos. This deed was duly registered with the Office of the Register of Deeds Rizal, with the condition that failure of the vendees to pay any of the installments on their maturity dates shall automatically cause the entire unpaid balance to become due and demandable. Dungo and Gonzales defaulted on the 1st installment. Lopena and Ramos filed a complaint for the foreclosure of the real estate mortgage with the CFI of Rizal There were 2 other civil cases filed in the same lower court against the same defendants Dugo and Gonzales. The plaintiff in one was a certain Dionisio Lopena, and in the other case, the complainants were Bernardo Lopena and Maria de la Cruz. All 3 cases arose out of one transaction. In view of the identical nature of the cases, they were consolidated by the lower court into just one proceeding. This present decision refers solely to the interests and claim of Adriano Lopena against Anastacio Dugo alone. Before the cases could be tried, a compromise agreement was submitted to the lower court for approval. It was signed by Lopena and Ramos on one hand, and Gonzales, on the other. It was not signed by Dungo. However, Gonzales represented that his signature was for both himself and the Dungo. Moreover, Dugo's counsel of record, Atty. Chan, the same lawyer who signed and submitted for him the answer to the complaint, was present at the preparation of the compromise agreement and this counsel affixed his signature thereto. This compromise agreement was approved by the lower court on the same day it was submitted. Subsequently a so-called Tri-Party Agreement was drawn. The signatories to it were Dugo and Gonzales as debtors, Lopena and Ramos as creditors, and, one Emma R. Santos as payor. When Dugo and Gonzales failed to pay the balance, Lopena and Ramos filed a Motion for the Sale of Mortgaged Property. Although this last motion was filed ex parte, Dugo and Gonzales were notified of it by the lower court. Neither of them filed any opposition thereto. The lower court granted the above motion and ordered the sale of the mortgaged property. The 3 parcels of land were sold by the Sheriff at a public auction where at herein petitioners, together with the plaintiffs of the other two cases won as the highest bidders. The said sheriff's sale was later confirmed by the lower court. Before confirming the sale, the lower court gave due notice of the motion for the confirmation to the herein petitioner who filed no opposition therefore. Dugo filed a motion to set aside all the proceedings on the ground that the compromise agreement was void ab initio with respect to him because he did not sign the same. Consequently, he argued, all subsequent proceedings under and by virtue of the compromise agreement, including the foreclosure sale, were void and null as regards him. This motion to set aside was denied by the lower court Dugo filed a Notice of Appeal from the order approving the foreclosure sale, as well as the order denying his motion to set aside. The approval of the record on appeal however, was opposed by the respondent spouses who claimed that the judgment was not appealable having been rendered by virtue of the compromise agreement. The opposition was contained in a motion to dismiss the appeal. The lower court dismissed the appeal.
ISSUES/HELD A. Was the compromise agreement, the Order of the same dateapproving the same, and, all the proceedings subsequent thereto, valid or void insofar as Dungo is concerned? YES Dugo - the Compromise Agreement was void ab initio and could have no effect whatsoever against him because he did not sign the same. Furthermore, as it was void, all the proceedings subsequent to its execution, including the Order approving it, were similarly void and could not result to anything adverse to his interest. It is true that a compromise is, in itself, a contract. ART. 2028. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced. Moreover, under Art. 1878 of the Civil Code, a third person cannot bind another to a compromise agreement unless he, the third person, has obtained a special power of attorney for that purpose from the party intended to be bound. Although the Civil Code expressly requires a special power of attorney in order that one may compromise an interest of another; it is neither accurate nor correct to conclude that its absence renders the compromise agreement void. In such a case, the compromise is merely unenforceable. It must be governed by the rules and the law on contracts. ART. 1403. The following contracts are unenforceable, unless they are ratified: Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers; B. WON Dugo had ratified the compromise agreement. YES The ratification of the compromise agreement was conclusively established by the Tri-Party Agreement. It is to be noted that the compromise agreement was submitted to and approved by the lower court. Now, the Tri-Party Agreement referred itself to that order. Rivero v. Rivero - When it appears that the client, on becoming aware the compromise and the judgment thereon, fails to repudiate promptly the action of his attorney, he will not afterwards be heard to contest its validity This Court has not overlooked the fact that which indeed Dugo was not a signatory to the compromise agreement, the principal provision of the said instrument was for his benefit. Originally, Dugo's obligation matured and became demandable on October 10, 1959. However, the compromise agreement extended the date of maturity to June 30, 1960.More than anything the compromise agreement operated to benefit of Dungo because it afforded him more time and opportunity to fulfill his monetary obligations under the contract. If only for this reason, this Court believes that the herein petitioner should not be heard to repudiate the said agreement. The compromise agreement stated "that, should the defendants fail to pay the said mortgage indebtedness, judgment of foreclosure shall thereafter be entered against the said defendants:" Beyond doubt, this was ratified by the Tri-Party Agreement when it covenanted that - If the MAYOR defaults or fails to pay anyone of the installments in the manner stated above, the MAYOR and the DEBTOR hereby permit the CREDITOR to execute the order of sale referred to above (the Judgment of Foreclosure), and they (PAYOR and DEBTOR) hereby waive any and all objections or oppositions to the propriety of the public auction sale and to the confirmation of the sale to be made by the Court. Dugo - even assuming that the compromise agreement was valid, it nevertheless could not be enforced against him because it has been novated by the Tri-Party Agreement which brought in a third party, Santos, who assumed the mortgaged obligation of Dungo. Novation by presumption has never been favored. To be sustained, it need be established that the old and new contracts are incompatible in all points, or that the will to novate appears by express agreement of the parties or in acts of similar import. An obligation to pay a sum of money is not novated, in a new instrument wherein the old is ratified, by changing only the term of payment and adding other obligations not incompatible with the old one or wherein the old contract is merely supplemented by the new one Dungo claims that when a third party, Santos, came in and assumed the mortgaged obligation, novation resulted thereby inasmuch as a new debtor was substituted in place of the original one. In this kind of novation, however, it is not enough that the juridical relation of the parties to the original contract is extended to a third person; it is necessary that the old debtor be released from the obligation and the third person or new debtor take his place in the new relation. Without such release, there is no novation; the third person who has assumed the obligation of the debtor merely becomes a co- debtor or surety. If there is no agreement as to solidarity, the first and the new debtors are considered obligation jointly. There was no such release of the original debtor in the Tri- Party Agreement. It is a very common thing in the business affairs for a stranger to a contract to assume its obligations; while this may have the effect of adding to the number of persons liable, it does not necessarily imply the extinguishment of the liability of the first debtor). The mere fact that the creditor receives a guaranty or accepts payments from a third person who has agreed to assume the obligation, when there is no agreement that the first debtor shall be released from responsibility, do not constitute a novation, and the creditor can still enforce the obligation against the original debtor . Tri-Party Agreement was an instrument intended to render effective the compromise agreement. It merely complemented and ratified the same. That a third person was involved in it is inconsequential. Nowhere in the new agreement may the release of Dungo be even inferred.
PELAYO VS PEREZ, G.R NO. 141323 JUNE 8,2005
FACTS: David Pelayo sold two parcels of agricultural land located in Panabo to Melki Perez on January 1988 And the sale is evidenced by a deed of Absolute Sale and Loreza Pelayo, wife of David and another one whose signature is illegible witnessed the execution of the deed. Mrs. Pelayo signed only the third space in the space provided for the witness, Perez asked Loreza to sign on the first and second pages but the latter refused as a result, Mr. Perez instituted an action for specific performance and Perez countered that the lots were given to him by defendant Pelayo in consideration of his services as his attorney-in fact to make the necessary representation and negotiation with the illegal occupants- defendants in the ejectment case. Defendant Pelayo said that the deed was without the consent of Mrs. Perez and invoked Art 166of the Civil Code to support his argument.
ISSUE: Did Mrs. Pelayo express her consent in the deed of Sale executed by Mr. Pelayo?
HELD: The consent need not be expressed. It can be implied. In the present case, although it appears on the face of the deed of sale that Lorenza signed only as an instrumental witness, circumstances leading to the execution of said document point to the fact that Lorenza was fully aware of the sale of their conjugal property and consented to the sale. The petition of Mr. and Mrs. Pelayo was denied.
St. Marys Farm, Inc. v. Prima Real Properties
Facts: St. Marys was the registered owner of an originally 25,598 sqm of land in Las Pinas under TCT S- 1648. In compliance with a final court decision in another civil case, St. Marys passed and approved in 1988 a board resolution authorizing defendant Rodolfo Agana to cede to T.S. Cruz Subdivision 4,000 sqm of the abovementioned land. Agana did not return to plaintiff the said title. Instead, allegedly forged a board resolution of St. Marys authorizing Agana to sell the remaining 21,598 sqm of land. This board resolution was duly notarized. Agana was also with a Special Power of Attorney when it dealt with T.S. Cruz and Prima Real Properties. Eventually, a deed of absolute sale was signed by Agana and Prima Real Properties transferring ownership of the land from St. Marys to Prima. Prima effected the cancellation of TCT S-1648 in the name of St. Marys and another TCT T-6175 in its name was issued by the Registry of deeds, Villanueva. Prima purchased from T.S. Cruz Subdivision the 4,000 sqm portion of the land. St. Marys filed an action for rescission of the sale and the reconveyance of the property.
According to St. Marys: 1. Sale of the realty entered into between Agana and Prima is null and void for lack of authority on the part of Agana to sell the property. 2. The board resolution allegedly granting Agana the authority to sell in behalf of the company, as certified by Corp. Secretary Agcaoili is a forgery as no board meeting was held on June 27, 1988; the said document was merely presented to the notary public for notarization without Atty. Agcaoili appearing before him. 3. Consequently, the deed of absolute sale was void for being a result of a fraudulent transaction. Prima contends: 1. It acted in good faith when it relied solely on the face of the authorization of Agana and paid in full the purchase price of P2,567,760.00 making it a buyer in good faitgh and for value. 2. Even assuming that the authorization of Agana was forged, St. Marys, through its president, accepted and received part of the purchase price knowing fully well the same to be the proceeds of the sale of the property, St. Marys is now estopped from asking for rescission.
FIRST ISSUE: 1. Whether or not Prima was a buyer in bad faith
HELD: No, Prima was a buyer in good faith and for value. On the basis of the board resolution, Prima had every reason to rely on Aganas authority to sell the land. A buyer for value and in good faith is one who buys property of another, without notice that some other person has a right or interest in such property and pays full and fair price for the same, at the same time of such purchase, or before he has notice of the said claim or interest. To prove good faith, a buyer of registered and titled land need only show that he relied on the face of the title of the property. Sufficient that the following conditions concur: a. The seller is the registered owner of the land b. Owner has possession of the land c. At the time of the sale, the buyer was not aware of any claim or interest of some other person in the property, or of any defect or restriction in the title of the seller or in his capacity to convey title to the property All the three conditions are present in the case. 1. Prima exerted efforts to verify the true background of the subject land 2. Agana presented to Prima the notarized board resolution, separate Certification by St. Marys president authorizing Agana to sell the land, and a TCT of the property
SECOND ISSUE: Whether or not Agana was authorized to sell the subject property
HELD: Yes, Agana had the authority to sell the subject property by virtue of the notarized board resolution and the Special Power of Attorney. RATIO: The document under scrutiny is a special power of attorney that is duly notarized. It is a public document where the notarial acknowledgement is prima facie evidence of the fact of its due execution. A buyer presented with such a document would have no choice between knowing and finding out whether a forger lurks beneath the signature on it. The notarial acknowledgment has removed that choice from him replacing it with a presumption sanctioned by law that the affiant appeared before the notary public and acknowledged that he executed the document, understood its import and signed it. The buyer is given the luxury to rely on the presumption of regularity of a duly notarized SPA.
Prima also relied on the confirmation and certification of the Register of Deeds of Las Pinas and Mr. T.S. Cruz. When Agana first sold the 4,000 sqm portion to T.S. Cruz, he showed a similar authorization by the petitioner which was also signed by the corporate secretary, Atty. Agcaoili. Agana acted as St. Marys authorized agent and had full authority to bind the company in that first transaction with Cruz.
The board resolution also negates the assertion by St. Marys that Aganas authority was only limited to negotiate and not to sell. The resolution further averred that Agana was authorized and empowered to sign any and all documents, instruments, papers or writings which may be required and necessary for this purpose to bind the corporation in this undertaking. The certification of St. Marys president also attests to this fact. With this, Agana, undeniably had the authority to cede the subject property, carrying with it all the concomitant powers necessary to implement said transaction.
Hodges v. Salas and Salas
Facts: On September 2, 1923, the defendants executed a power of attorney in favor of their brother-in-law Felix S. Yulo to enable him to obtain a loan and secure it with a mortgage on the real property described in transfer certificate of title No. 3335. The power of attorney was registered in the registry of deeds of the Province of Occidental Negros. Acting under said power of attorney, Felix S. Yulo, on March 27, 1926, obtained a loan of P28,000 from the plaintiff, binding his principals jointly and severally, to pay it within ten (10) years, together with interest thereon at 12 per cent per annum payable annually in advance, to which effect he signed a promissory note for said amount and executed a deed of mortgage of the real property. It was stated in the deed that in case the defendants failed to pay the stipulated interest and the taxes on the real property mortgaged and if the plaintiff were compelled to bring an action to recover his credit, said defendants would be obliged to pay 10 per cent more on the unpaid capital, as fees for the plaintiff's attorneys. The mortgage so constituted was registered in the registry of deeds of the Province of Occidental Negros and noted on the back of the transfer certificate of title. The defendants failed to pay at maturity the interest stipulated which should have been paid one year inadvance. Plaintiff therefore brought an action for foreclosure of the mortgage. The trial court ordered in favor of the defendants and held that the loan and the mortgage were illegal.
Issue: Whether or not the loan obtained and the mortgage executed by Yulo was valid and therefore defendants are bound to pay?
Ruling: Yes. The loan obtained and the mortgage executed by Yulo was valid and therefore defendants are bound to pay for it. By virtue of the authority conferred by the defendants by executing a power of attorney, agent Yulo was authorized to borrow money and invest it as he wished, without being obliged to apply it necessarily for the benefit of his principals.
PNB vs. STA. MARIA
FACTS: In this appeal certified to this Court by the Court of Appeals as involving purely legal issues, we hold that a special power of attorney to mortgage real estate is limited to such authority to mortgage and does not bind the grantor personally to other obligations contracted by the grantee, in the absence of any ratification or other similar act that would estop the grantor from questioning or disowning such other obligations contracted by the grantee. Plaintiff bank filed this action on February 10, 1961 against defendant Maximo Sta. Maria and his six brothers and sisters, defendants-appellants, Valeriana, Emeteria, Teofilo, Quintin, Rosario and Leonila, all surnamed Sta. Maria, and the Associated Insurance & Surety Co., Inc. as surety, for the collection of certain amounts representing unpaid balances on two agricultural sugar crop loans due allegedly from defendants. The said sugar crop loans were obtained by defendant Maximo Sta. Maria from plaintiff bank under a special power of attorney, executed in his favor by his six brothers and sisters, defendants-appellants herein, to mortgage a 16-odd hectare parcel of land, jointly owned by all of them. In addition, Valeriana Sta. Maria alone also executed in favor of her brother, Maximo, a special power of attorney to borrow money and mortgage any real estate owned by her. By virtue of the two above powers, Maximo Sta. Maria applied for two separate crop loans, for the 1952-1953 and 1953-1954 crop years, with plaintiff bank, one in the amount of P15,000.00, of which only the sum of P13,216.11 was actually extended by plaintiff, and the other in the amount of P23,000.00, of which only the sum of P12,427.57 was actually extended by plaintiff. As security for the two loans, Maximo Sta. Maria executed in his own name in favor of plaintiff bank two chattel mortgages on the standing crops, guaranteed by surety bonds for the full authorized amounts of the loans executed by the Associated Insurance & Surety Co., Inc. as surety with Maximo Sta. Maria as principal. The records of the crop loan application further disclose that among the securities given by Maximo for the loans were a "2nd mortgage on 25.3023 Has. of sugar land, including sugar quota rights therein" including, the parcel of land jointly owned by Maximo and his six brothers and sisters herein for the 1952-1953 crop loan, with the notation that the bank already held a first mortgage on the same properties for the 1951-1952 crop loan of Maximo, and a 3rd mortgage on the same properties for the 1953-1954 crop loan. The trial court rendered judgment in favor of plaintiff and against defendants: condemning the defendant Maximo R. Sta. Maria and his co-defendants Valeriana, Quintin, Rosario, Emeteria, Teofilo, and Leonila all surnamed Sta. Maria and the Associated Insurance and Surety Company, Inc., jointly and severally, to pay the plaintiff, the Philippine National Bank, Del Carmen Branch the sum of P8,500.72 and P14,299.79 . Defendant Maximo Sta. Maria and his surety, defendant Associated Insurance & Surety Co., Inc. who did not resist the action, did not appeal the judgment. This appeals been taken by his six brothers and sisters, defendants-appellants who reiterate in their brief their main contention in their answer to the complaint that under this special power of attorney, they had not given their brother, Maximo, the authority to borrow money but only to mortgage the real estate jointly owned by them; and that if they are liable at all, their liability should not go beyond the value of the property which they had authorized to be given as security for the loans obtained by Maximo. In their answer, defendants- appellants had further contended that they did not benefit whatsoever from the loans, and that the plaintiff bank's only recourse against them is to foreclose on the property which they had authorized Maximo to mortgage.
ISSUE: Whether the 6 brothers and sisters are liable for the loan obtained by Maximo.
RULING: The authority granted by defendants-appellants (except Valeriana) unto their brother, Maximo, was merely to mortgage the property jointly owned by them. They did not grant Maximo any authority to contract for any loans in their names and behalf. Maximo alone, with Valeriana who authorized him to borrow money, must answer for said loans and the other defendants-appellants' only liability is that the real estate authorized by them to be mortgaged would be subject to foreclosure and sale to respond for the obligations contracted by Maximo. But they cannot be held personally liable for the payment of such obligations, as erroneously held by the trial court. It is not unusual in family and business circles that one would allow his property or an undivided share in real estate to be mortgaged by another as security, either as an accommodation or for valuable consideration, but the grant of such authority does not extend to assuming personal liability, much less solidary liability, for any loan secured by the grantee in the absence of express authority so given by the grantor. The outcome might be different if there had been an express ratification of the loans by defendants-appellants or if it had been shown that they had been benefited by the crop loans so as to put them in estoppel. Quintin Sta. Maria testified that he and his co-defendants executed the authority to mortgage "to accommodate (my) brother Dr. Maximo Sta. Maria ... and because he is my brother, I signed it to accommodate him as security for whatever he may apply as loan. Only for that land, we gave him as, security" and that "we brothers did not receive any centavo as benefit." The record further shows plaintiff bank itself admitted during the trial that defendants-appellants "did not profit from the loan" and that they "did not receive any money (the loan proceeds) from (Maximo)." No estoppel, therefore, can be claimed by plaintiff as against defendants- appellants. Valeriana Sta. Maria's liability to plaintiff. Valeriana stands liable not merely on the mortgage of her share in the property, but also for the loans which Maximo had obtained from plaintiff bank, since she had expressly granted Maximo the authority to incur such loans. The Court hold that Valeriana's liability for the loans secured by Maximo is not joint and several or solidary as adjudged by the trial court, but only joint, pursuant to the provisions of Article 1207 of the Civil Code that "the concurrence ... of two or more debtors in one and the same obligation does not imply that ... each one of the (debtors) is bound to render entire compliance with the prestation. There is a solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity." It should be noted that in the additional special power of attorney, executed by Valeriana, she did not grant Maximo the authority to bind her solidarity with him on any loans he might secure thereunder. WHEREFORE, the judgment of the trial court against defendants-appellants Emeteria, Teofilo, Quintin, Rosario and Leonila, all surnamed Sta. Maria is hereby reversed and set aside, with costs in both instances against plaintiff. The judgment against defendant-appellant Valeriana Sta. Maria is modified in that her liability is held to be joint and not solidary.
RURAL BANK OF CALOOCAN, INC. and JOSE O. DESIDERIO, JR., petitioners, vs. THE COURT OF APPEALS and MAXIMA CASTRO, respondents.
FACTS: Maxima Castro, accompanied by Severino Valencia, went to the Rural Bank of Caloocan to apply for a loan. Valencia arranged everything about the loan with the bank. He supplied to the latter the personal data required for Castro's loan application. After the bank approved the loan for the amount of P3,000.00, Castro, accompanied by the Valencia spouses, signed a promissory note corresponding to her loan in favor of the bank. On the same day, the Valencia spouses obtained from the bank an equal amount of loan for P3,000.00. They signed another promissory note (Exhibit "2") corresponding to their loan in favor of the bank and had Castro affixed thereon her signature as co-maker. Both loans were secured by a real-estate mortgage on Castro's house and lot. Later, the sheriff of Manila sent a notice to Castro, saying that her property would be sold at public auction to satisfy the obligation covering the two promissory notes plus interest and attorney's fees. Upon request by Castro and the Valencias and with conformity of the bank, the auction sale was postponed, but was nevertheless auctioned at a later date. Castro claimed that she is a 70-year old widow who cannot read and write in English. According to her, she has only finished second grade. She needed money in the amount of P3,000.00 to invest in the business of the defendant spouses Valencia, who accompanied her to the bank to secure a loan of P3,000.00. While at the bank, an employee handed to her several forms already prepared which she was asked to sign, with no one explaining to her the nature and contents of the documents. She also alleged that it was only when she received the letter from the sheriff that she learned that the mortgage contract which was an encumbrance on her property was for P6.000.00 and not for P3,000.00 and that she was made to sign as co-maker of the promissory note without her being informed. Castro filed a suit against petitioners contending that thru mistake on her part or fraud on the part of Valencias she was induced to sign as co-maker of a promissory note and to constitute a mortgage on her house and lot to secure the questioned note. At the time of filing her complaint, respondent Castro deposited the amount of P3,383.00 with the court a quo in full payment of her personal loan plus interest. Castro prayed for: (1) the annulment as far as she is concerned of the promissory note (Exhibit "2") and mortgage (Exhibit "6") insofar as it exceeds P3,000.00; and (2) for the discharge of her personal obligation with the bank by reason of a deposit of P3,383.00 with the court a quo upon the filing of her complaint.
ISSUE: Whether or not respondent court correctly affirmed the lower court in declaring the promissory note (Exhibit 2) invalid insofar as they affect respondent Castro vis-a-vis petitioner bank, and the mortgage contract (Exhibit 6) valid up to the amount of P3,000.00 only.
HELD: Yes.
RATIO: While the Valencias defrauded Castro by making her sign the promissory note and the mortgage contract, they also misrepresented to the bank Castro's personal qualifications in order to secure its consent to the loan. Thus, as a result of the fraud upon Castro and the misrepresentation to the bank inflicted by the Valencias both Castro and the bank committed mistake in giving their consents to the contracts. In other words, substantial mistake vitiated their consents given. For if Castro had been aware of what she signed and the bank of the true qualifications of the loan applicants, it is evident that they would not have given their consents to the contracts. Article 1342 of the Civil Code which provides: Art. 1342. Misrepresentation by a third person does not vitiate consent, unless such misrepresentation has created substantial mistake and the same is mutual. We cannot declare the promissory note valid between the bank and Castro and the mortgage contract binding on Castro beyond the amount of P3,000.00, for while the contracts may not be invalidated insofar as they affect the bank and Castro on the ground of fraud because the bank was not a participant thereto, such may however be invalidated on the ground of substantial mistake mutually committed by them as a consequence of the fraud and misrepresentation inflicted by the Valencias. Thus, in the case of Hill vs. Veloso, this Court declared that a contract may be annulled on the ground of vitiated consent if deceit by a third person, even without connivance or complicity with one of the contracting parties, resulted in mutual error on the part of the parties to the contract. The fraud particularly averred in the complaint, having been proven, is deemed sufficient basis for the declaration of the promissory note invalid insofar as it affects Castro vis-a-vis the bank, and the mortgage contract valid only up to the amount of P3,000.00.
BA Finance Corporation v. Court of Appeals, G.R. No. 94566 July 3, 1992
Facts: Spouses Manuel and Lilia Cuady obtained from Supercars, Inc. bought a Ford Escort 1300, four-door sedan in installments. To secure the faithful and prompt compliance of the obligation under the said promissory note, the Cuady spouses constituted a chattel mortgage on the aforementioned motor vehicle. Supercars, Inc. assigned the promissory note, together with the chattel mortgage, to B.A. Finance Corporation. The Cuadys made partial payment leaving an un paid balance.In addition thereto, the Cuadys owe B.A. Finance .B.A. Finance Corporation, as the assignee of the mortgage lien obtained the renewal of the insurance coverage over the aforementioned motor vehicle for the with Zenith Insurance Corporation, when the Cuadys failed to renew said insurance coverage themselves. Under the terms and conditions of the said insurance coverage, any loss under the policy shall be payable to the B.A. Finance Corporation.
The motor vehicle figured in an accident and was badly damaged. The unfortunate happening was reported to the B.A. Finance Corporation and to the insurer, Zenith Insurance Corporation. The Cuadys asked the B.A. Finance Corporation to consider the same as a total loss, and to claim from the insurer the face value of the car insurance policy and apply the same to the payment of their remaining account and give them the surplus thereof, if any. But instead of heeding the request of the Cuadys, B.A. Finance Corporation prevailed upon the former to just have the car repaired. Not long thereafter, however, the car bogged down. The Cuadys wrote B.A. Finance Corporation requesting the latter to pursue their prior instruction of enforcing the total loss provision in the insurance coverage. When B.A. Finance Corporation did not respond favorably to their request, the Cuadys stopped paying their monthly installments on the promissory note. In view of the failure of the Cuadys to pay the remaining installments on the note, B.A. Finance Corporation sued them.
B.A. Finance Corporation contended that even if it failed to enforce the total loss provision in the insurance policy of the motor vehicle subject of the chattel mortgage, said failure does not operate to extinguish the unpaid balance on the promissory note, considering that the circumstances obtaining in the case at bar do not fall under Article 1231 of the Civil Code relative to the modes of extinguishment of obligations.
Issue: Whether or not BA Finance can still collect on the deficiency of the Chattel Mortgage.
Held: In granting B.A. Finance Corporation the aforementioned powers and prerogatives, the Cuady spouses created in the formers favor an agency. Thus, under Article 1884 of the Civil Code of the Philippines, B.A. Finance Corporation is bound by its acceptance to carry out the agency, and is liable for damages which, through its non- performance, the Cuadys, the principal in the case at bar, may suffer; in such case, the assignee of the mortgage agreement is bound by the same stipulation and if the assignee failed to file and prosecute the insurance claim when the car was damaged totally, the mortgagor is relieved from his obligation to pay as he suffered a loss because of the failure of the mortgagee to file the claim.
Under the deed of chattel mortgage, B.A. Finance Corporation was constituted attorney-in-fact with full power and authority to file, follow-up, prosecute, compromise or settle insurance claims; to sign execute and deliver the corresponding papers, receipts and documents to the Insurance Company as may be necessary to prove the claim, and to collect from the latter the proceeds of insurance to the extent of its interests, in the event that the mortgaged car suffers any loss or damage.
Director of Public Works vs. Sing Juco, 53 Phil. 205 (1929)
FACTS: The Director of Public Works and Sing Juco together with Mariano de la Rama, Gonzalo Mariano Tanboontien and Sing Bengco, owners of a land located at Point Llorente, at the mouth of Iloilo River, near Iloilo City agreed to execute the governments plan for extensive harbor improvements. They signed a contract on January 8, 1924 wherein they signified to the following: The Bureau of Public Works (BPW) will dredge within the area and will deposit the agreed materials on Lot No. 1359. Owners will pay an amount of Php 0.20 to Php 70.00 per cubic meter in 5 annual installments and failure to pay any installment, the whole amount thereafter to accrue. BPW required a bond of Php 150,000.00 and Mariano de la Rama signed the said bond under the name Casa Viuda de Tan Toco. The dredging operation was conducted but the no payment was received by the BPW. The Director of BPW instituted a case for the recovery of the amount due to the government and to enforce a real lien upon the property. On defense, Viuda de Tan Toco said that de la Rama signed without authority.
ISSUE: Whether or not Viuda de Tan Toco is not liable for the act done by de la Rama?
HELD: NO. The Court ruled that the power of attorney granted to de la Rama does not give him the power to bind a principal by a contract of suretyship. In article 1827 of the Civil Code, it is declared that guaranty shall not be presumed; it must be expressed and cannot be extended beyond its specified limits.
BPI v.s. De Coster 47 Phil. 594 (1925)
FACTS: The Bank of the Philippine Islands (BPI) filed a complaint on March 10, 1924 against Gabriela Andrea de Coster y Roxas, her husband Jean M. Poizat and their partnership J.M. Poizat & Co. for failure to deliver a mortgage on a real property in Manila. The Court of First Instance (CFI) of Manila rendered (Civil Case No. 25218) that the defendants (de Coster, et.al.) be jointly and severally liable for Php 292,000 with an interest of 9% per annum and other damages. BPI filed later for the immediate possession of the property and sell the same according to the Chattel Mortgage Law. On May 3, 1924, the defendants failed to reply nor appear thus declared on default. Then on June 24, 1924 the Court rendered an opinion that the property should be sold and the proceeds should be used for the satisfaction of respective judgments.
August 26, 1924 de Coster filed a suit to absolve her from the liability and to request for the reopening of the case because: (1) She resided in Paris from 1908 to April 30, 1924 and was not notified even by her husband regarding the case; (2) Her husband executed the mortgage transactions without her consent.
ISSUE: Whether or not the transactions entered by Poizat, as an agent of his wife valid?
HELD: NO. Paragraph 5 of the power of attorney authorizes the husband for in the name of his wife to loan or borrow any sums of money or fungible things, etc. This should be construed to mean that the husband had power only to his wifes money and not to borrow money for or on account of his wife as her agent and attorney-in-fact. That does not carry with it or imply that he had the legal right to make his wife liable as a surety for the preexisting debt of a third person.
PHILIPPINE SUGAR ESTATES DEVELOPMENT CO., vs. POIZAT
FACTS: 1. Appellant, Doa Gabriela Andrea de Coster, executed to and in favor of her husband, Juan M.Poizat, a general power of attorney. It authorized him to do "in her name, place and stead, and making use of her rights and actions"; to loan or borrow any amount of cash under the conditions he may deemed convenient, executing and signing private and public document and making these transactions with or without mortgage. 2. Poizat obtained from the plaintiff a credit for the sum of 10,000 Pounds Sterling to be drawn on the "Banco Espaol del Rio de la Plata. 3. To secure payment he executed a mortgage upon the real property of his wife. 4. Plaintiff then brought an action against the defendant for failure to pay, to for lose the mortgage. The trial court's decision issued an order directing the sale of the mortgaged property to satisfy the judgment. Consequently, the property was sold to the plaintiff for P100,000.00 5. Appellant personally appeared and objected to the confirmation of the sale. She alleged that the mortgage in question was illegally executed thus null and void, because the agent of the defendant was not authorized to execute it. That the plaintiff was aware of such fact and that the mortgage was executed to secure a loan, which was not made to this defendant or for her benefit but was made to him personally. Such objections were overruled, which prompted the appellant to appeal.
ISSUE: Whether the act of defendant Poizant, in his capacity as attorney in fact, binds her wife?
HELD: No. The mortgage is declared null and void ab initio. The sale is set aside.
RULING: Juan Poizat may have had the authority to borrow money and mortgage the real property of his wife, but the law specifically provided how and in what manner it must be done. The law requires that a power of attorney to mortgage or sell real property should be executed with all the formalities required in a deed. In this case it was not exercised. His personal signature, standing alone, does not bind his principal. The deed in its face does not purport to be the deed of the principal, made and signed by him in his name and as his deed. The mortgage in question was held to be executed by him and him only thus it is not binding to his wife.
RURAL BANK OF BOMBON INC. vs. COURT OF APPEALS
FACTS: 1. On January 12, 1981, Ederlinda M. Gallardo, married to Daniel Manzo, executed a special power of attorney in favor of Rufina S. Aquino authorizing him: - To secure a loan from any institution for any amount or mortgage the property at Las Pinas, Rizal 2. On August 26, 1981, a Deed of Real Estate Mortgage was executed by Rufino S. Aquino in favor of the Rural Bank of Bombon (Camarines Sur), Inc. The property was secured for a loan in the total sum of Three Hundred Fifty Thousand Pesos only (P350,000.00), plus interest at the rate of fourteen (14%) per annum. 3. Spouses Gallardo filed an action against Rufino Aquino and Rural Bank. They alleged that Aquino mortgaged the property to pay for his personal loans, from the same Bank. - The trial court temporarily restrained the Rural Bank "from enforcing the real estate mortgage and from foreclosing it either judicially or extra judicially until further orders from the court. 4. Aquino, in his answer, alleged that the spouses allowed him to mortgage the property and use the use the proceeds thereof to compensate for the pre-existing obligation of P350,000 that the spouse owed him. 5. The trial court lifted the TRO against the bank and ordered the foreclosure proceeding against the mortgaged property. The Spouses Gallardo appealed to the Court of Appeals (CA). The CA reversed the trial court and held that Rufino Aquino had no authority to mortgage the land. Thus, this appeal against the decision.
ISSUE: Whether or not the Deed of Real Estate Mortgageexecuted by Rufino S. Aquinoin favor of the Rural Bank of Bombon (Cam. Sur), Inc. is with authority, thus valid? NO, it was without authority.
RULING: Agent who signs a Deed of Mortgage in his name alone does not validly bind the owner of the real estate mortgaged. 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. The petitioner misapplied Art. 1883. The above provision of the Civil Code relied upon by the petitioner Bank, is 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, we hold that Gallardo's property is not liable on the real estate mortgage.
Valmonte v. CA
Facts: Petitioner Lourdes A. Valmonte is a foreign resident. Petitioners Lourdes and Alfredo are husband and wife both residents of 90222 Carkeek Drive South Seattle, Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a member of the Philippine bar, however, practices his profession in the Philippines, commuting for this purpose between his residence in the state of Washington and Manila, where he holds office at S-304 Gedisco Centre, 1564 A. Mabini, Ermita, Manila. Private respondent Rosita Dimalanta, who is the sister of petitioner filed an action for partition against former and her husband. She alleged that, the plaintiff is of legal age, a widow and is at present a resident of 14823 Conway Road, Chesterfield, Missouri, U.S.A., while the defendants are spouses but, for purposes of this complaint may be served with summons at Gedisco Center, Unit 304, 1564 A. Mabini St., Ermita, Manila where defendant Alfredo D. Valmonte as defendant Lourdes Arreola Valmontes spouse holds office and where he can be found. He husband was also her counsel, who has a law office in the Philippines. The summons were served on her husband. Petitioner in a letter, referred private respondents counsel to her husband as the party to whom all communications intended for her should be sent. Service of summons was then made upon petitioner Alfredo at his office in Manila. Alfredo D. Valmonte accepted his summons, but not the one for Lourdes, on the ground that he was not authorized to accept the process on her behalf. Accordingly the process server left without leaving a copy of the summons and complaint for petitioner Lourdes A. Valmonte. Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this reason private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte entered a special appearance in behalf of his wife and opposed the private respondents motion. RTC denied the MR of respondents. CA declared petitioner Lourdes in default. Said decision was received by Alfredo hence this petition.
Issue: Whether or not petitioner Lourdes A. Valmonte was validly served with summons.
Held: NO. There was no valid service of summons on Lourdes. 1. The action herein is in the nature of an action quasi in rem. Such an action is essentially for the purpose of affecting the defendants interest in a specific property and not to render a judgment against him. As petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of summons on her must be in accordance with Rule 14, 17. Such service, to be effective outside the Philippines, must be made either (1) by personal service; (2) by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any other manner which the court may deem sufficient. 2. In the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done by means of any of the first two modes. This mode of service, like the first two, must be made outside the Philippines, such as through the Philippine Embassy in the foreign country where the defendant resides. The service of summons on petitioner Alfredo D. Valmonte was not made upon the order of the court as required by Rule 14, 17 and certainly was not a mode deemed sufficient by the court which in fact refused to consider the service to be valid and on that basis declare petitioner Lourdes A. Valmonte in default for her failure to file an answer. 3. Secondly, the service in the attempted manner on petitioner was not made upon prior leave of the trial court as required also in Rule 14, 17. As provided in 19, such leave must be applied for by motion in writing, supported by affidavit of the plaintiff or some person on his behalf and setting forth the grounds for the application. 4. Finally, and most importantly, because there was no order granting such leave, petitioner Lourdes was not given ample time to file her Answer which, according to the rules, shall be not less than sixty (60) days after notice.