Prepared by: Rikki Daniele Louis A.

Dela Paz

AGENCY WEEK 4 (OBLIGATIONS OF AN AGENT)

1. Lim Tiu v. Ruiz y Rementeria, 15 Phil 367
P/P: LIM TIU, LIM SUNTIAN and LIM KAENG JO, operating under the name of "Lim Juco y
Compaia
R/D: RUIZ Y REMENTERIA, a concern operating under the name of "La Isla de Cuba,"
Pon: Johnson, J.
DOCTRINE: When an agent acts in his own name the principal shall have no action against
the persons with whom the agent has contracted, nor the said persons against the principal.
FACTS:
Plaintiffs/Petitioners LIM TIU commenced an action against the Defendant/Respondent
Ruiz y Rementaria ALLEGING that the former sold merchandise (no mention of what
kind) to the defendants amounting to Php 1,043 and that the amount went UNPAID.
Defendants offered a general DENIAL; they paid the merchandise to a certain
DOMINGO TIM BUN LIU (and not to the plaintiffs)
UNDISPUTED FACT: DOMINGO Tim Bun Liu purchased all or nearly all of the goods
which he sold to the defendants, from the plaintiffs.
Lower court sided with defendants, for having purchase the goods in good faith, from
DOMINGO TIM LIU.
ISSUE: Whether or not plaintiffs/petitioners can validly claim that the defendants knew that
DOMINGO acted as an agent for the former.
HELD: NO.

It appears that the defendants had been buying merchandise from Domingo Tim Bun
Liu for a period covering several months, and paying for said merchandise in
exchange, and from time to time settling their accounts by the defendants paying to
the said Domingo Tim Bun Liu the difference, if any, in his favor, and by Domingo
paying to the defendants the difference of the accounts, if there was found to be due
them any balance on such settlements.
There is no proof that Domingo ever notified the defendants that he was acting as
the agent of the plaintiffs. Neither does the proof show that the plaintiffs ever notified
the defendants that Domingo Tim Bun Liu was acting as their agent in selling the
merchandise in question.
It being established by a preponderance of the evidence that Domingo Tim Bun Liu
acted in his own name selling the merchandise to the defendants, and that the
defendants fully believed that they were dealing with the said Domingo Tim Bun Liu,
without any knowledge of the fact that he was the agent of the plaintiffs, and having
paid him in full for the merchandise purchased, they are not liable to the
plaintiffs, for said merchandise, even though it be admitted that Domingo
Tim Bun Liu was in fact the agent of the plaintiffs in selling the
merchandise in question.
Said article 246 provides that: "When an agent transacts business in his own name, it
shall not be necessary for him to state who is the principal, and he shall be directly
liable, as if the business were for his own account, to the persons with whom he
transacts the same, said persons not having any right of action against the principal,
nor the latter against the former, the liabilities of the principal and the agent to each
other reserved."

Prepared by: Rikki Daniele Louis A. Dela Paz

DISPOSITIVE: PETITION DISMISSED. Judgment of lower court favoring Ruiz y Rementeria

affirmed.

***
2. Awad v. Filma Mercantile Co., 49 Phil 816
DOCTRINE: When the agent transacts business in his own name, it shall not be necessary for
him to state who is the principal and he shall be directly liable, as if the business were for
his own account, to the persons with whom he transacts the same, said persons not
having any right of action against the principal, nor the latter against the former, the
liabilities of the principal and of the agent to each other always being reserved.
FACTS:
The plaintiff, Awad & Co., delivered certain merchandise (blankets and shirts) of the
invoice value of P11,140 to Chua Lioc, a merchant operating under the name of Hang
Chua Co. in Manila.
Representing himself as being the owner of the merchandise, Chua Lioc, on
September 8, 1924, sold it to the defendant for the sum of P12,155.60.
He (CHUAL LIOK) owed the Philippine Manufacturing Co., the sum of P3,480, which
the defendant agreed to pay, and was also indebted to the defendant itself in the
sum of P2,017.98. The total amount of the two debts, P5,497.98, was deducted from
the purchase price, leaving a balance of P6,657.52 which the defendant
promised to pay to Chua Lioc on or before October 9, 1924
The merchandise so purchased on September 9, was delivered to the defendant, who
immediately offered it for sale.
Three days later D. J. Awad, the representative of the plaintiff in the Philippine
Islands; having ascertained that the goods entrusted to Chua Lioc was being offered
for sale by the defendant, obtained authorization from Chua Lioc to collect the
sum of P11,707 from said defendant and informed the latter's treasurer of
the facts above set forth.
DJ Awad wrote a letter to the defendants telling the latter that the payment should be
made to them. Defendants refused and countered that they could ONLY PAY THE
BALANCE to CHUA LIOK and no one else.
Philippine Trust Company, brought an action, civil case No. 26934, against Chua Lioc
for the recovery of the sum of P1,036.36 and under a writ of attachment garnished
the balance due Chua Lioc from the defendant.
In turn, plaintiffs filed a collection suit against the defendants to recover the balance
for the merchandise.
Lower Court decided that defendants had the right to retain the balance.
ISSUE: Can the plaintiff validly claim the balance? NO
HELD: NO.
Defendants brought the merchandise in good faith and without any knowledge
whether of the person from whom or the condition under which the said merchandise
had been acquired by Chua Lioc or Hang Chuan Co
The law applicable to the case is well settled. Article 246 of the Code of Commerce
reads as follows:
When the agent transacts business in his own name, it shall not be necessary
for him to state who is the principal and he shall be directly liable, as if the
business were for his own account, to the persons with whom he transacts the

Prepared by: Rikki Daniele Louis A. Dela Paz

same, said persons not having any right of action against the principal, nor
the latter against the former, the liabilities of the principal and of the agent to
each other always being reserved.
DISPOSITIVE: Petition dismissed. Appealed judgment is in accordance with the law and the
facts and is affirmed.
***
3. Wing Kee Compradoring Co. v. Bark Monongahela, 44 Phil 464
DOCTRINE: That when the agents buy in their own names, but really for the account of their
principal, the seller has an option to look to either for payment
FACTS:
From March 16, 1921, and ending with August 16, 1921, plaintiff Wing Kee
Compradoring Company furnished various supplies to the Bark Monongahela.
//sidenote: Bark means small boat
Most of the bills for these goods are made out against the "Admiral Line, S.S.
Monongahela." All are considered by the master and the first steward. It appears,
therefore, that the plaintiff was looking to the Admiral Line for payment.
Demands were made against Admiral Line, in which the Court noted suggesting that
Admiral Line WAS THE operating AGENT of Bark Monongahela.
On August 21, 1921, Admiral Line published a notice in the Manila Daily Bulletin
asserting that they are NOT RESPONSIBLE for any indebtedness incurred by the BARK
MONONGAHELA. It appears that on or before August 4, 1921, Admiral Line has
ceased to be the agent for the Monongahela. Nonetheless, supplies were still
delivered to Monongahela even after this date.
Plaintiffs sought to recover payments for the goods, merchandise, furnished to the
Bark Monongahela through ADMIRAL LINE, the ships agent.
HELD: Can the plaintiffs recover payments from Admiral Line? YES. BUT ONLY UP UNTIL THE
TERMINATION OF THE AGENCY.

The owner of a vessel and the agent shall be civilly liable for the acts of the captain
and for the obligations contracted by the latter to repair, equip, and provision the
vessel, provided the creditor proves that the amount claimed was invested therein.
By agent (in this case) is understood the person entrusted with the
provisioning of a vessel, or who represents her (the ship) in the port in
which she happens to be.
That when the agents buy in their own names, but really for the account of their
principal, the seller has an option to look to either for payment, unless (1)
he trusted the agent exclusively; or (2) by the usage and understanding of the
business the agent only is held; or (3) unless the special circumstances of the case
show that only the agent was intended to be bound and the seller knew it or was
chargeable with knowledge of it. In this case, the plaintiff has chosen to collect from
the AGENT, ADMIRAL LINE.
The defendant claims that the AGENCY HAS CEASED; BUT IF WE FOLLOW THIS IDEA:
Every agent for a vessel could thus avoid responsibility pursuant to article 568 of the
Code of Commerce, by giving up its agency when threatened with suit to enforce the
obligations of third parties. Moreover, the bills were presented when the
Admiral Line was yet the agent.

DISPOSITIVE: Petition granted: judgment is reversed, and the plaintiff shall have and recover
from the defendant, the Admiral Line, the sum of P16,526.29, without interest and costs.

Prepared by: Rikki Daniele Louis A. Dela Paz

***
4. National Bank v. Agudelo y Gonzaga, 58 Phil 655
DOCTRINE: When an agent negotiates a loan in his personal capacity and executes
a promissory note under his own signature, without express authority from his
principal, giving as security therefor real estate belonging to the latter, also in his own
name and not in the name and representation of the said principal, the obligation do
constructed by him is personal and does not bind his aforesaid principal.
FACTS:
Paz Agudelo y Gonzaga executed a special power of attorney in favor her nephew,
Mauro A. Garrucho broad enough in scope to enable him to sell, alienate and
mortgage in the manner and form he might deem convenient (only covering LOTS 61
and 207)
Amparo Garrucho executed a special power of attorney in favor of her brother, the
same Mauro A. Garrucho to sell, alienate, mortgage or encumber all her real estate
properties in Occidental Negros (including LOT 878)
IMPORTANT: Nothing in the aforesaid powers of attorney expressly authorized Mauro
A. Garrucho to contract any loan nor to constitute a mortgage on the properties
belonging to the respective principals, to secure his obligations.
Mauro Garrucho mortgaged LOT 878 in favor of plaintiff NATIONAL BANK to secure
loans, credits, etc. not exceeding 6000 which he might obtain from the
plaintiff entity; he executed a promissory note.
Mauro also mortgaged LOTS 61 and 207 to the plaintiff to secure the same possible
loans, credits, etc not exceeding 16000; he executed a promissory note.
In connection of the credits, loans, and commercial overdrafts amounting to P21,000
which had been granted him, Mauro A. Garrucho, on the said date July 15, 1922,
executed the promissory note, Exhibit B, for P21,000 as a novation of the former
promissory notes for P6,000 and P16,000, respectively.
MAURO DEFAULTED.
Eventually, Amparo A. Garrucho sold lot No. 878 to Paz Agudelo y Gonzaga.
Lower Court ordered PAZ AGUDELO y GONZAGA to pay plaintiff National Bank for the
debts incurred by Mauro.
ISSUE: Is PAZ AGUDELO y GONZAGA liable for the debts of MAURO? NO.
HELD:

Aside from the phrases "attorney in fact of his sister, Amparo A. Garrucho, as
evidenced by the power of attorney attached hereto" and "attorney in fact of Paz
Agudelo y Gonzaga" written after the name of Mauro A. Garrucho in the mortgage
deeds, Exhibits G. and J, respectively, there is nothing in the said mortgage
deeds to show that Mauro A. Garrucho is attorney in fact of Amparo A.

Prepared by: Rikki Daniele Louis A. Dela Paz

Garrucho and of Paz Agudelo y Gonzaga, and that he obtained the loans
mentioned in the aforesaid mortgage deeds and constituted said mortgages as
security for the payment of said loans, for the account and at the request of said
Amparo A. Garrucho and Paz Agudelo y Gonzaga.
The above-quoted phrases which simply described his legal personality, did not mean
that Mauro A. Garrucho obtained the said loans and constituted the mortgages in
question for the account, and at the request, of his principals
From the titles as well as from the signatures therein, Mauro A. Garrucho, appears to
have acted in his personal capacity. In the aforesaid mortgage deeds, Mauro A.
Garrucho, in his capacity as mortgage debtor, appointed the mortgage creditor
Philippine National Bank as his attorney in fact so that it might take actual and full
possession of the mortgaged properties by means of force in case of violation of any
of the conditions stipulated in the respective mortgage contracts.
If Mauro A. Garrucho acted in his capacity as mere attorney in fact of Amparo A.
Garrucho and of Paz Agudelo y Gonzaga, he could not delegate his power, in view of
the legal principle of "delegata potestas delegare non potest" (a delegated power
cannot be delegated), inasmuch as there is nothing in the records to show that he
has been expressly authorized to do so.
Intention of the contracting parties; its appreciation. In order that the intention
may prevail, it is necessary that the question of interpretation be raised, either
because the words used appear to be contrary thereto, or by the existence of overt
acts opposed to such words, in which the intention of the contracting parties is made
manifest.
Furthermore, the records do not show that the loan obtained by Mauro A. Garrucho,
evidenced by the promissory note, Exhibit B, was for his principal Paz Agudelo y
Gonzaga. The special power of attorney, Exhibit K, does not authorize Mauro A.
Garrucho to constitute a mortgage on the real estate of his principal to secure his
personal obligations. Therefore, in doing so by virtue of the document, Exhibit C, he
exceeded the scope if his authority and his principal is not liable for his acts. (2
Corpus Juris, p. 651; article 1714, Civil Code.)
However, Paz Agudelo y Gonzaga in an affidavit dated January 15, 1926 (Exhibit AA),
and in a letter dated January 16, 1926 (Exhibit Z), gave her consent to the lien on lot
No. 878 ->>> Therefore, the only liability of the defendant-appellant Paz Agudelo y
Gonzaga is that which arises from the aforesaid acknowledgment, but only with
respect to the lien and not to the principal obligation secured by the mortgage
acknowledged by her to have been constituted on said lot No. 878 of the cadastral
survey of Murcia, Occidental Negros. Such liability is not direct but a subsidiary one.

DISPOSITIVE: Wherefore, it is hereby held that the liability constructed by the aforesaid
defendant-appellant Paz Agudelo y Gonzaga is merely subsidiary to that of Mauro A.
Garrucho, limited lot No. 878 of the cadastral survey of Murcia, Occidental Negros, described
in Torrens title No. 2415.
*However, inasmuch as the principal obligator, Mauro A. Garrucho, has been absolved from
the complaint and the plaintiff- appellee has not appealed from the judgment absolving him,
the law does not afford any remedy whereby Paz Agudelo y Gonzaga may be required to
comply with the said subsidiary obligation in view of the legal maxim that the accessory
follows the principal. Wherefore, the defendant herein should also be absolved from the
complaint which is hereby dismissed, with the costs against the appellee.

Prepared by: Rikki Daniele Louis A. Dela Paz

Case no. 5

LORETO LORCA, plaintiff-appellant, vs. JOSE S. DINEROS, defendantappellee.

G.R. No. L-10919
February 28, 1958

FACTS
The defendant Dineros as Deputy Sheriff and in the name of the Sheriff sold
at public auction to Jose Bermejo and Rosario Suero the property,
disregarding the plaintiffs (Lorca) claim of ownership. This suit for damages
is the result of said auction sale. Defendant, in his answer, denied liability,
pointing out, that he had merely acted for and on behalf of Provincial Sheriff,
Cipriano Cabaluna. The plaintiff insists that the defendant should have been
required to give an adequate personal bond in case he is sued for damages,
pursuant to Sec 334 of Revised Admin Code.
ISSUE/S
Whether the above provision of admin code is applicable in this case.
DECISION
The said provision applies where the deputy acts in his own name or is guilty
of malfeasance or he exceeded his limits as an agent of the provincial sheriff.
In this case, the defendant Dineros acted all the time in the name of the exofficio provincial chief of Iloilo.
DOCTRINE:

Case No. 6

Prepared by: Rikki Daniele Louis A. Dela Paz

JOAQUIN T. ORTEGA, plaintiff-appellee, vs.

BAUANG FARMERS COOPERATIVE MARKETING
ASSOCIATION, defendant-appellant.
G.R. No. L-13547
December 29, 1959

FACTS:
The plaintiff Ortega sold to defendant Bauang FACOMA 2,643 kilos of Virginia
leaf tobacco for P7,136.10. The defendant paid plaintiff leaving a balance of
P3,136.10, which the defendant refused to pay despite repeated demands.
The defendant reasoned that it acted only as an agent of ACCFA, its principal,
which was impleaded as a third-party defendant. Later, ACCFA was stricken
out as a third party.
As the facts were unclosed, it turned out that there was a memorandum of
agreement between ACCFA and FACOMA but was subsequently revoked on
march 28, 1956. The plaintiff was not informed or given notice about the
existing agency between ACCFA and FACOMA.
ISSUE:
Whether defendant Bauang FACOMA is liable to plaintiff Ortega for the
unpaid balance since he failed to disclose the fact that it acted only as an
agent of ACCFA.

DECISION:
Although the attention of the plaintiff was not called to the existence of
agency between FACOMA and ACCFA, there is reason to believe that the
plaintiff actually knew that agency. The tobacco leaf was purchased not on
account of the Bauang FACOMA, but actually for the ACCFA, which is the

Prepared by: Rikki Daniele Louis A. Dela Paz

agency of the Government charged with the purchase of Virginia leaf

tobacco, in the implementation of the policy of the Government to buy all
Virginia leaf tobacco grown locally to foster the tobacco industry. FACOMA is
not engaged in buy and sell business, but rather is concerned mainly in the
marketing of the agricultural produce of the farmers.
Further, in another civil case which have been filed ahead of the present
case, wherein the plaintiff us included, serves as a notice to the plaintiff.
The court agrees with FACOMA. The case was remanded to the trial court for
further proceedings.
DOCTRINE:

Case No. 7
RURAL BANK OF BOMBON (CAMARINES SUR), INC., petitioner, vs.
HON. COURT OF APPEALS, EDERLINDA M. GALLARDO, DANIEL
MANZO and RUFINO S. AQUINO, respondents.
G.R. No. 95703 August 3, 1992
FACTS
Gallardo authorized Aquino through a special power of attorney to secure a
loan from any bank or lending institution for any amount or otherwise
mortgage her property.
Aquino executed a Deed of Real Estate Mortgage amounting to P350,000
plus 14% annual interest in favor of the Rural Bank.
Gallardo and husband Manzo filed an action against Aquino and the Bank
because the property was mortgaged to pay loans from the Bank solely for
Aquinos personal use; the mortgagor in the deed was Aquino instead of
Gallardo; Aquino appointed the Bank as attorney in fact, and in case of
judicial foreclosure as receiver with corresponding power to sell and that

Prepared by: Rikki Daniele Louis A. Dela Paz

although without any express authority from Gallardo, Aquino waived

Gallardo's rights under Section 12, Rule 39, of the Rules of Court and the
proper venue of the foreclosure suit.
Aquino answered that Gallardo authorized him to mortgage her property to a
bank so that he could use the proceeds to liquidate her obligation of
P350,000 to him. Of late, however, she asked him to pay the Bank but
Aquino asked for payment to him of moral damages and lawyer's fees.
The Bank moved to dismiss the complaint and filed counter-claims for
damages and expenses. It also filed a crossclaim against Aquino for
P350,000 with interest, other bank charges and damages if the mortgage be
declared unauthorized.
The Bank also filed a complaint against Gallardo and Aquino for "Foreclosure
of Mortgage" in RTC Makati. On motion of the plaintiff, the foreclosure case
and the annulment case were consolidated.

ISSUE/S
Whether the Deed of Real Estate Mortgage was authorized, valid, and
enforceable against Gallardo.
DECISION
The Deed of Real Estate Mortgage was void since the special power of
attorney clearly shows the extent of authority given to Aquino. Also, a
mortgage on real property executed by an agent must be made, signed and
sealed in the name of the principal, otherwise, it will bind the agent only. It
was very clear that Aquino signed himself as the mortgagor with statin that
his signature is for and in behalf of Gallardo. He also issued three promissory
notes, each were personally signed by him (Aquino). The bank cannot deny
that the deed of mortgage stipulated that the amount obgtained form the
loans shall be used or applied only for fishpond (bangus and sugpo
production).
DOCTRINE:
Agent who signs a Deed of Mortgage in his name alone does not validly bind
the owner of the mortgaged estate.

Prepared by: Rikki Daniele Louis A. Dela Paz

Case No. 8
JESUS M. GOZUN, petitioner, vs. JOSE TEOFILO T. MERCADO a.k.a.
DON PEPITO MERCADO, respondent.
G.R. No. 167812
December 19, 2006
FACTS
Upon respondents request, the petitioner, owner of JMG Publishing House,
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. He printed them and 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, respondents sister-in-law, Lilian Soriano 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.
Petitioner later sent respondent a Statement of Account in the total amount
of P2,177,906 for printing and for the cash advance. Respondents wife
partially paid P1,000,000 to petitioner who issued a receipt.
Respondent failed to settle the balance of his account to petitioner and thus
filed a complaint against the respondent.
The respondent denied entering into any contract for the printing of
campaign materials or for obtaining a cash advance. He alleged that the
various campaign materials delivered to him were represented as donations

Prepared by: Rikki Daniele Louis A. Dela Paz

from his family, friends and political supporters. He added that all contracts
involving his personal expenses were coursed through and signed by him to
ensure compliance with pertinent election laws.
When confronted with the official receipt issued to his wife acknowledging
her payment to JMG Publishing House of the amount of P1,000,000,
respondent claimed that it was his first time to see the receipt, albeit he
belatedly came to know from his wife and his campaign manager that the
P1,000,000 represented "compensation [to petitioner] who helped a lot in
the campaign as a gesture of goodwill."
Acknowledging that petitioner is engaged in the printing business,
respondent explained that he sometimes discussed with petitioner strategies
relating to his candidacy, he (petitioner) having actively volunteered to help
in his campaign; that his wife was not authorized to enter into a contract
with petitioner regarding campaign materials as she knew her limitations;
that he no longer questioned the P1,000,000 his wife gave petitioner as he
thought that it was just proper to compensate him for a job well done; and
that he came to know about petitioners claim against him only after
receiving a copy of the complaint, which surprised him because he knew fully
well that the campaign materials were donations.
Finally, respondent, disclaiming knowledge of the Comelec rule that if a
campaign material is donated, it must be so stated on its face,
acknowledged that nothing of that sort was written on all the materials made
by petitioner.
ISSUE/S
Whether Lilian R. Soriano was authorized by the respondent to receive the
cash advance from the petitioner in the amount of P253,000.00.
DECISION
A special power of attorney is necessary for an agent to borrow money
unless it be urgent or 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. The rule states that if the special authority is not written, then it
must be duly established by evidence. In this case, the petitioner failed to
state whether the loan was made on or on behalf of the respondent or his
wife. The note presented by the petitioner to support his claim (which is
signed by Soriano) inferred nothing with connecting the defendant. Clearly,
Soriano was not authorized by the respondent to receive cash advance from
the petitioner.

Prepared by: Rikki Daniele Louis A. Dela Paz

DOCTRINE:
A special power of attorney is necessary for an agent to borrow money
unless it be urgent or indispensable for the preservation of the things which
are under administration.

Prepared by: Rikki Daniele Louis A. Dela Paz

9.)
VICENTE SY-JUCO and CIPRIANA VIARDO, plaintiffs-appellants,
vs.
SANTIAGO V. SY-JUCO, defendant-appellant.

Doctrine: When an agent bought property in his own name but with the use of the money of his principal, the agent is bound to
transfer to the principal all the rights which the agent acquired.
Facts: In 1902 the defendant was appointed by the plaintiffs administrator of their property and acted as such until June 30, 1916,
when his authority was cancelled. The plaintiffs are defendant's father and mother who allege that during his administration the
defendant acquired the property claimed in the complaint in his capacity as plaintiffs' administrator with their money and for their
benefit.
The properties involved in this case are the following:
-

launch Malabon
casco No. 2584
automobile No. 2060

The lower court rendered judgment in favor of the plaintiffs ordering defendant to return the properties involved. Not satisfied with the
decision, both parties appealed. Hence this petition.
One of the contentions of the defendant is that he bought the launch Malabon in his own name even though the money he used
belong to the plaintiffs. He mentioned the case of Martinez v. Martinez wherein the same situation happened.
Issue/s: W/N the defendant should have the right over the Launch?
Held: No, he should not have the right.
The court stated that the difference in the Martinez case and the case at bar is that in the Martinez case the defendant was not an
agent. In the case at bar the defendant is an agent being an appointed administrator. The defendant is bound to transfer to the
plaintiffs all the rights which he acquired.
The court also mentioned that Article 1717 of the old civil code that, when an agency acts in his own name, the principal shall have
no right of action against the person with whom the agent has contracted, cases involving things belonging to the principal are
excepted. According to this exception, when things belonging to the principal are dealt with the agent is bound to the principal
although he does not assume the character of such agent and appears acting in his own name. The agent's apparent
representation yields to the principal's true representation and that, in reality and in effect, the contract must be
considered as entered into between the principal and the third person.
Dispositive Portion: From the foregoing considerations, we affirm the judgment appealed from in all its parts except in so far as
the casco No. 2545 is concerned, and as to this we declare that, it having been sold by the plaintiffs to the defendant, the latter is
absolved. No special findings as to costs. So ordered.

Prepared by: Rikki Daniele Louis A. Dela Paz

10.)
NATIONAL FOOD AUTHORITY, (NFA), petitioner,
vs.
INTERMEDIATE APPELLATE COURT, SUPERIOR (SG) SHIPPING CORPORATION, respondents.

Doctrine: The agent's apparent representation yields to the principal's true representation and that, in reality and in effect, the
contract must be considered as entered into between the principal and the third person. Corollarily, if the principal can be obliged to
perform his duties under the contract, then it can also demand the enforcement of its rights arising from the contract.
Facts: Gil Medalla, a commission agent of the private respondent, entered in to a contract for hire of ship(Ships name: MV Sea
Runner) with petitioner NFA(then named National Grains Authority(NGA)). Under the said contract Medalla obligated to transport on
the "MV Sea Runner" 8,550 sacks of rice belonging to defendant National Grains Authority from the port of San Jose, Occidental
Mindoro, to Malabon, Metro Manila.
Upon completion of the delivery of rice at its destination, private respondent, wrote a letter requesting petitioner NFA demanding the
amount stated in the contract. However, NFA on informed plaintiff that it could not grant its request because the contract to transport
the rice was entered into by NFA and Medalla who did not disclose that he was acting as a mere agent of private respondent. NFA is
claiming that it already paid Medalla the sum of P25,974.90, for freight services in connection with the shipment of 8,550 sacks of
rice.
Private respondent wrote to Medalla demanding that he turn over to plaintiff the amount of P27,000.00 paid to him by NFA. Medalla,
however, "ignored the demand."
This led to private respondent filing this present action for the collection of the sum from NFA. The trial court held NFA jointly and
severally liable with Medalla. The appellate court affirmed the judgment of the lower court, hence, this appeal.
NFA is contending that it is not liable under the exception to the rule (Art. 1883) since it had no knowledge of the fact of agency
between private respondent and Medalla at the time when the contract was entered into between them (NFA and Medalla).
Petitioner submits that "An undisclosed principal cannot maintain an action upon a contract made by his agent unless such principal
was disclosed in such contract. One who deals with an agent acquires no right against the undisclosed principal."
Issue/s: Are the lower courts correct in holding petitioner NFA liable?
Held: Yes, the lower courts were correct.
It is an undisputed fact that Gil Medalla was a commission agent of respondent Superior Shipping Corporation which owned the
vessel "MV Sea Runner" that transported the sacks of rice belonging to petitioner NFA. The agent's apparent representation yields
to the principal's true representation and that, in reality and in effect, the contract must be considered as entered into between the
principal and the third person. Corollarily, if the principal can be obliged to perform his duties under the contract, then it can also
demand the enforcement of its rights arising from the contract.
Dispositive Portion: WHEREFORE, PREMISES CONSIDERED, the petition is hereby DENIED and the appealed decision is
hereby AFFIRMED.

Prepared by: Rikki Daniele Louis A. Dela Paz

11.)
BA FINANCE CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS and TRADERS ROYAL BANK, respondents.

Doctrine: The representation of one who acts as agent cannot by itself serve as proof of his authority to act as agent or of the
extent of his authority as agent.
Facts: The Gaytano spouses, doing business under the name Gebbs International, applied for and was granted a loan with
respondent Traders Royal Bank in the amount of P60,000.00. Philip Wong as credit administrator of BA Finance Corporation for and
in behalf of the said corporation, undertook to guarantee the loan of the Gaytano spouses.
Partial payments were made on the loan leaving an unpaid balance in the amount of P85,807.25. Since the Gaytano spouses
refused to pay their obligation, respondent bank filed with the trial court complaint for sum of money against the Gaytano spouses
and BA Finance Corporation as alternative defendant. BA Finance Corporation raised the defense of lack of authority of its credit
administrator to bind the corporation.
The trial court rendered a judgment in favor Traders Royal Bank ordering the Gaytano spouses to pay the debt. Not satisfied with the
decision, Traders Royal Bank appealed the judgment to the CA asking that BA Finance Corporation should also be held liable. The
CA modified the judgment making BA Finance Corporation Liable.
Petitioner contends that it should not be made liable under the letter-guaranty because petitioner had no knowledge or notice of such
letter-guaranty issued by Philip Wong, which was not supported by evidence of any audit report or record of such transaction in the
office files.
Issues: Is the CA correct in holding the petitioner liable?
Held: NO, it was not.
The court held that Philip Wong was an assumed agent when he issued the said letter guaranty. It is a settled rule that persons
dealing with an assumed agent, whether the assumed agency be a general or special one are bound at their peril, if they would hold
the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is
controverted, the burden of proof is upon them to establish it. Hence, the burden is on respondent bank to satisfactorily prove that
the credit administrator with whom they transacted acted within the authority given to him by his principal, petitioner corporation. The
only evidence presented by respondent bank was the testimony of Philip Wong, credit administrator, who testified that he had
authority to issue guarantees as can be deduced from the wording of the memorandum given to him by petitioner corporation on his
lending authority.
Respondent's contends that the phrase "contingent commitment" set forth in the memorandum means guarantees. Although Wong
was clearly authorized to approve loans even up to P350,000.00 without any security requirement, which is far above the amount
subject of the guaranty in the amount of P60,000.00, nothing in the said memorandum expressly vests on the credit administrator
power to issue guarantees. Contingent Commitment does not mean guaranty. It has been held that a power of attorney or authority
of an agent should not be inferred from the use of vague or general words. Guaranty is not presumed, it must be expressed and
cannot be extended beyond its specified limits.
The sole allegation of the credit administrator in the absence of any other proof that he is authorized to bind petitioner in a contract
of guaranty with third persons should not be given weight. The representation of one who acts as agent cannot by itself serve as

Prepared by: Rikki Daniele Louis A. Dela Paz

proof of his authority to act as agent or of the extent of his authority as agent. Wong's testimony that he had entered into similar
transactions of guaranty in the past for and in behalf of the petitioner, lacks credence due to his failure to show documents or
records of the alleged past transactions.
Dispositive portion: ACCORDINGLY, the petition is GRANTED and the assailed decision of the respondent appellate court dated
March 13, 1990 is hereby REVERSED and SET ASIDE and another one is rendered dismissing the complaint for sum of money
against BA Finance Corporation.

Prepared by: Rikki Daniele Louis A. Dela Paz

12)
COSMIC LUMBER CORPORATION, petitioner,
vs.
COURT OF APPEALS and ISIDRO PEREZ, respondents.

Doctrine: 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 shall be 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.
Facts: COSMIC LUMBER CORPORATION through its General Manager executed on 28 January 1985 a Special Power of Attorney
appointing Paz G. Villamil-Estrada as attorney-in-fact authorizing Villamil-Estrada to initiate, institute and file any court action for the
ejectment of third persons and/or squatters on the subject property, and for this purpose, to appear at the pre-trial conference and
enter into any stipulation of facts and/or compromise agreement so far as it shall protect the rights and interest of the corporation in
the aforementioned property.
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 No. 443 ocupied by Perez. Subsequently, Villamil-Estrada entered into a Compromise
Agreement with respondent Perez. In the compromise agreement, Villamil-Estrada agreed to sell the subject portion of land to Perez
for P26,640.00 computed at P80.00/square meter. The Compromise Agreement was approved by the trial court and judgment was
rendered in accordance therewith.
Although 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 petitioner to produce the owners duplicate copy of Title No. 37649 needed to segregate from Lot No. 443 the portion
sold by the attorney-in-fact, Paz G. Villamil-Estrada, to private respondent under the compromise agreement. Perez filed a complaint
to revive the judgment.
Petitioner asserts that it was only when the summons for the revival of judgment was served upon it that it came to know of the
compromise agreement entered into between Paz G. Villamil-Estrada and respondent Isidro Perez upon which the trial court based
its decision. Upon learning of the fraudulent transaction, petitioner sought annulment of the decision of the trial court before
respondent Court of Appeals on the ground that the compromise agreement was void because petitioner did not authorize VillamilEstrada to sell the property and they did not receive the amount paid by Perez. CA dismissed the petitioners complaint.
Petitioner argues that the decision of the trial court is void because the compromise agreement upon which it was based is void.
Attorney-in-fact Villamil-Estrada did not possess the authority to sell or was she armed with a Board Resolution authorizing the sale
of its property. She was merely empowered to enter into a compromise agreement in the recovery suit she was authorized to file
against persons squatting on Lot No. 443, such authority being expressly confined to the ejectment of third persons or squatters of
lot 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.
Issue/s: Should the judgment based on the compromise agreement be valid?
Held: No, the compromise agreement is void, hence the judgment has no leg to stand on.
The authority granted Villamil-Estrada under the special power of attorney was explicit and exclusionary. Nowhere in this
authorization was Villamil-Estrada granted expressly or impliedly any power to sell the subject property nor a portion thereof.

Prepared by: Rikki Daniele Louis A. Dela Paz

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. 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 shall be void. It is therefore clear that by selling to
respondent Perez a portion of petitioners land through a compromise agreement, Villamil-Estrada acted without or in obvious
authority. The sale ipso jure is consequently void. So is the compromise agreement. This being the case, the judgment based
thereon is necessarily void.
There is also the fact that petitioner did not know the existence of the compromise agreement prior to the summons of the action for
revival of judgment filed by Perez. Petitioner was deceived and betrayed by its attorney-in-fact. Villamil-Estrada deliberately
concealed from petitioner, her principal, that a compromise agreement had been forged with the end-result that a portion of
petitioners property was sold to Perez. Thus completely kept unaware of its agents artifice, petitioner was not accorded even a
fighting chance to repudiate the settlement so much so that the judgment based thereon became final and executory. 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. Indeed, the basic tenets of agency rest on the highest
considerations of justice, equity and fair play, and an agent will not be permitted to pervert his authority to his own personal
advantage, and his act in secret hostility to the interests of his principal transcends the power afforded him.
Dispositive Portion: WHEREFORE, the petition is GRANTED. The decision and resolution of respondent Court of Appeals dated
29 October 1993 and 10 March 1994, respectively, as well as the decision of the Regional Trial Court of Dagupan City in Civil Case
No. D-7750 dated 27 November 1985, are NULLIFIED and SET ASIDE. The Compromise Agreement entered into between
Attorney-in-fact Paz G. Villamil-Estrada and respondent Isidro Perez is declared VOID. This is without prejudice to the right of
petitioner to pursue its complaint against private respondent Isidro Perez in Civil Case No. D-7750 for the recovery of possession of
a portion of Lot No. 443.

Prepared by: Rikki Daniele Louis A. Dela Paz

Prepared by: Rikki Daniele Louis A. Dela Paz

PNB VS CA --- nasa isang laptop ko di ko matransfer bigyan ko kayo printed copy sa
room.
US vs REYES
DOCTRINE: the right to a commission does not make one a joint owner with a right
to money collected, but establishes the relation of principal and agent.
FACTS: Lower court found Domingo Reyes guilty of estafa
R.B blackman, a surveyor living in pangasinan, and accused also lives in the same
place. Blackman employed Reyes to collect certain amounts due from 12 individuals
for Blackmans work.
The total amount to be collected by Reyes is 860php.
Reyes succeeded in collecting 540php.
Reyes delivered to Blackman the amount of 368php.
He retained the balance of 172php.
The agreement between them is oral.
Blackman claims that he agreed to pay Reyes a commission of 10%. Reyes claims
that he was to receive a commission of 20%.
Trial court ruled : in favor of Blackman, 10% lang ang matatanggap ni Reyes
ISSUE: WON Reyes is guilty of estafa?
HELD: yes
RATIO: it will be noticed that if we accept the statements of Blackman, (10%), Reyes
was entitled to 10% of 540 which is 54 deducting from 172 which is 118 as
misappropriated.
On the other hand, if Reyes argument is correct, 20% of 860 is 172.
SC said that conceding that Reyes is entitled to 20%, the basis of computation must
be the total amount of collected money which is 540.
Also, the right to receive commission did not make Reyes as a joint owner with
Blackman so as to entitle him told out any sum he chose.
Also, under the oral contract of agency, reyes was bound to pay to the principal all
that he had received by virtue of the agency.
Also, since the agency was terminated, the agent was under the obligation to return
over to the principal the amount collected minus his commission.

Prepared by: Rikki Daniele Louis A. Dela Paz

JUDGEMENT OF THE TRIAL COURT IS HEREBY AFFIRMED.

Guzman vs CA
DOCTRINE: agent acquiring possession of a property on behalf of a principal is
considered as juridical possession.
FACTS: Guzman, a travelling sales agent of New Life commercial left Manila with 45
cases of different assortments of La Tondeiia wine in a truck.
Truck was driven by Andres Buenaventura with Federico Cabacungan as washing
(helper)
Along the route, Guzman made sales and when they reached Cagayan about 3pm,
Guzman had in his possession 4,873 pesos.
They parked their truck at sambrano station.
When they retired for the night, driver and guzman occupied the drivers
compartment, guzman took the upper deck.
Helper slept in the body of the truck were the wines were kept.
There was a wall between the body of the truck and drivers compartment.
In the morning, Guzman told the driver that he lost the amount of 2.8k and his
firearm license.
On the way home, they were met by a tax collector and policeman Mariano David
who told Guzman to execute an affidavit regarding theft.
Before guzman left, he entrusted to the driver the amount of 1630 and check for
403 under proper receipt for delivery to the manager Enrique Go.
The driver delivered the money to Enrique Go.
Go reported to the Philippine constabulary.
When guzman was questioned, he stated that only 3pesos was left remained in his
possession.
iSSUE: WON defendant is guilty of theft?
RATIO: NO
HELD: guzman claims that he committed estafa and not theft because his
possession was juridical.

Prepared by: Rikki Daniele Louis A. Dela Paz

Since he was a travelling sales agent, he has juridical possession and therefore,
estafa is the proper crime.
An agent compared to a teller, can even assert as against his own principal, an
independent, autonomous right to retain the money received in consequence of the
agency; as when the principal fails to reimburse him for advances he has made, and
indemnify him for damages suffered without his fault.
NEXT ISSUE: WON the information for qualified theft alleges sufficient facts to sutain
a conviction of estafa?
HELD: NO
RATI: essential element of estafa is that the money or goods misappropriated or
converted by the accused to the prejudice of another was received by him in trust
or on commission or for administration or under any obligation involving the duty to
make delivery of, or to retain the same.
NO allegation appears in the above information, therefore guzman cannot be held
guilty of estafa.
WHEREFORE the decision appealed from is reversed, and appellant Joaquin Guzman
acquitted of the crime of qualified theft. Appellant should however be held in
custody pending the filing of another information against him for estafa under
article 315.

Prepared by: Rikki Daniele Louis A. Dela Paz

Chua burce vs CA
DOCTRINE: the possession of a person not an agent is only material possession
FACTS: (appeal by certiorari finding chua burce guilty of estafa)
Ramon Rocamora, Manager of Metropolitan Bank calapan branch, requested
Fructuoso Penaflor, assistant cashier to conduct a physical bundle count of the case
inside the vault.
During the initial count, they discovered a shortage of 15 bundles of 100 pesos
denominated bills totalling 150,000.
The next day, a re-verification was done, still, there was a shortage.
The bank initiated 4 investigations. All of these investigations concluded that there
was a shortage and the person primarily liable is the banks cash custodian CHUA
BURCE.
The bank terminated chua burces services.
Metrobank filed a civil case to recover the money, prior to the filing of answer in the
civil case, a criminal case for estafa was filed.
BOTH civil and criminal case were raffled.
Chua burce moved for the suspension of the criminal case on the ground of the
existence of prejudicial question. Appellate court ruled that there was no prejudicial
question.
Chua burce plead not guilty.
The parties agreed to adopt their respective evidence in the civil case as their
respective evidence in the criminal case.
TC convict - ca affirmed- (nag voluntary surrender siya so may mitigating in case
tanungin ni sir)
ISSUE: WON chua burce is guilty of estafa?
HELD: NO

Prepared by: Rikki Daniele Louis A. Dela Paz

RATIO: OSG contends:
Petitioner was the cash custodian who was directly responsible and accountable for
the cash in vault.
2nd: the other persons who had access to the vault never used the duplicate keys to
open the safety deposit boxes and the cash safe. In fact the duplicates were still in
their sealed envelopes.
3rd alterations and superimposition on the cash in vault summary sheet were
made by petitioner to cover the shortage.
(eto na ung discussion sa estafa)
1st element of estafa is absent.
when the money, goods, or any other personal property is received by the offender
from the offended party (1) in trust or (2) on commission or (3) for administration,
the offender acquires both material and juridical possession of the thing received.
Juridical possession means a possession which gives the transferee a right over the
thing which the transferee may set up even against the owner.
The possession of the herein accused is same as a bank teller which is material
possession, hence theft should be the proper crime to be imputed.
WHEREFORE, the petition is hereby granted and petitioner is ACQUITTED of the
crime of estafa.

Prepared by: Rikki Daniele Louis A. Dela Paz

Murao vs people
Doctrine: Feredicos right to a commission does not make private complainant Federico a joint
owner of the money , but merely establishes the relation of agent and principal.
Facts:
> Petitioner Pablito Murao is the sole owner of Lorna Murao Industrial Commercial Enterprises
(LMICE), a company engaged in the business of selling and refilling fire extinguishers while
Petitioner Nelio Huertazuela is the Branch Manager of LMICE in Puerto Princesa City, Palawan.

> Petitioner Murao and private complainant Chito Federico entered into a Dealership Agreement
for the marketing, distribution, and refilling of fire extinguishers within Puerto Princesa City. They
had certain conditions that were not followed, so the Dealership agreement did not push
through.

>nonetheless, Federico was was still allowed to act as a sales agent for LMICE commission
from the sales.

>There was an issue as to how much was the commission in their agreement. Murao claimed it
was 30% of the sales while Federico said it was 50%.

>Federicos first sale was with land bank. The next was with the City government of Puerta
Princesa for the refill of 202 fire extinguishers. There were two purchase orders for this.

>As payment for the first order, petitioner Huertaleza claimed the payment check and deposited
it under the account of LMICE with PCI Bank.

>Federico went to Huertaleza at the LMICE branch office claiming his 50% commission.
Huertaleza refused because of the disagreement as to the amount that should be paid.

>Aggrieved, Federico filed a case against Murao and Huertaleza.

Prepared by: Rikki Daniele Louis A. Dela Paz

RTC and CA: Murao and Huetaleza are guilty of estafa for satisfying the requisites for Article
315 1(b) which states:

ART. 315. Swindling (estafa). Any person who shall defraud another by any of the
means mentioned hereinbelow . . .
1. With unfaithfulness or abuse of confidence, namely:
(a)
(b) By misappropriating or converting, to the prejudice of another, money, goods, or any
other personal property received by the offender in trust or on commission, or for
administration, or under any other obligation involving the duty to make delivery of or to
return the same, even though such obligation be totally or partially guaranteed by a
bond; or by denying having received such money, goods, or other property; . . .

Issue: whether the requisites for estafa are present

Held: NO. there were 2 elements lacking , namely, that the personal property was received in
trust and that there was misappropriation.

Ratio:
>There is an absence of two essential elements of the crime of estafa by misappropriation or
conversion under Article 315(1)(b) of the Revised Penal Code, namely: (1) That money, goods
or other personal property be received by the offender in trust, or on commission, or for
administration, or under any other obligation involving the duty to make delivery of, or to return,
the same; and (2) That there be a misappropriation or conversion of such money or property by
the offender.
RTC and the Court of Appeals erred in believing that Federico, due to his right to commission,
already owned 50% of the amount paid by the City Government of Puerto Princesa to LMICE so
that the collection and deposit of the said check by petitioners under the account of LMICE
constituted misappropriation or conversion of private complainant Federicos commission.

The element that money received by the offender in trust, or on commission, or for
administration, or under any other obligation involving the duty to make delivery is

Prepared by: Rikki Daniele Louis A. Dela Paz

lacking.Feredicos right to a commission does not make private complainant Federico a joint
owner of the money , but merely establishes the relation of agent and principal. It is unequivocal
that an agency existed between LMICE and private complainant Federico. In fact, he was
authorized to act as a sales agent. He can only negotiate for or in behal of LMICE for the refill
and delivery of fire extinguishers.

>This is evident from the fact that when negotiations where a success,Federico prepared the
docmentations. Also, purchase orders and receipt where in the name of LMICE. It was LMICE
who did the refilling of the extinguishers.

> All profits gained by an agent in the execution of his agency should belong to the
principal.This is why the check was to the order of LMICE. When Huertaleza deposited the
check, he was merely collecting what rightfully belonged to LMICE. Private complainant
Federico may claim commission based on his right to just compensation,but not as the
automatic owner of the 50% portion of the said payment.
>RTCs justification that petitioner still had obligation involving the duty to make delivery of his
commission is erroneous. The phrase "or any other obligation involving the duty to make
delivery of, or to return the same" refers to contracts of bailment, such as, contract of lease of
personal property, contract of deposit, and commodatum, wherein juridical possession of the
thing was transferred and wherein the latter is obligated to return the same thing. Here, there
was no juridical possession transfered

>the element That there be a misappropriation or conversion of such money or property by the
offender is also lacking. Conversion or misappropriation is the disposing of peoperty of another
w/o right. Here, petitioners had the right because they own the money.
Disposition: Decision reversed and petitioners acquitted.

United States vs Kiene

Facts:
Kiene,defendant, is an insurance agent of China Mutual Life Insurance Co.,his employer.

There was paid to him for the acct. of his employer 1.5k pesos which eh failed to return

Prepared by: Rikki Daniele Louis A. Dela Paz

RTC convicted him of estafa

Kienes contention:
1
2

There was a failure of the prosecution to establish the existence of a duty or obligation
imposed on the defendant to turn over his principal the funds which he is charged with
appropriating to his own use (element of estafa).
Trial court erroneuously admittted a document purported to be a contract of agency
signed by defendant

Issue: w/n there is an obligation of the defendant to deliver the funds in question to his
employers

Held:
Yes. Article 1720

Ratio:
The obligation of the defendant to deliver the funds in question to his employers is determined
by the provision of article 1720 of the Civil Code, which is as follows:
Every agent is bound to give an account of his transactions and to pay to the principal all
that he may have received by virtue of the agency, even though what has been received
is not owed to the principal.
The existence of the agency and the collection of the funds on account of the principal having
been established, the obligation to deliver these funds to the principal must be held to have
been imposed upon the agent by virtue of the contract of agency.
Xtra facts(baka tanungin): there was a letter written by defendant wherein he admitted the
collection of certain funds on account of his principal

In Re H.V. Bamberger

Prepared by: Rikki Daniele Louis A. Dela Paz

Doctrine:
The findings quoted are amply supported by the evidence.Attorneys are bound to promptly
account to their clients for money or property received by them as such, and the fact that an
attorney has a lien for fees on money in his hands does not relieve him from liability. (6 C. J.,
Facts:
This is a decision of the Supreme Court anent the disbarment pf H.V. Bamberger instituted by
his client and plaintiff in the case of S.M. Berger vs De Lavera.
It was proved that
1

Bamberger took possession of personal property both unattached and attached by the
sheriff

He disposed of tin cans of Canned peas and one case of ketchup by selling them.

He collected from the debtors of defendant therein

He was ordered to render an immediate accounting with he didnt w/o reasonable cause

He has not rendered an accounting nor was willing to send the mone collected at any
time

Issue: whether or not he should be suspended

Held:Yes. For 6 months
Ratio:
The findings quoted are amply supported by the evidence.Attorneys are bound to promptly
account to their clients for money or property received by them as such, and the fact that an
attorney has a lien for fees on money in his hands does not relieve him from liability. (6 C. J.,
693.) Notwithstanding repeated demands on the part of his client, the defendant has for several
years failed to render an accounting of the money received by him on behalf of his client and the
excuses offered for his failure to do so are so inadequate as to merit no consideration. The
respondent is clearly guilty of professional misconduct in falling to account to S. M. Berger & Co.
for money received by him as attorney for the latter.
Disposition: suspended from practicing law for 6 mo.

Prepared by: Rikki Daniele Louis A. Dela Paz

Serona vs Court of appeals

Doctrine
The law on agency in our jurisdiction allows the appointment by an agent of a substitute or subagent in the absence of an express agreement to the contrary between the agent and the
principa
Facts:
Quilitan,complainant, delivered pieces of jewelry to Serona,petitioner, to be sold on commission
basis. It was agreed that within 30 days she will give the payment and any unsold jewelry. Upon
petitioners failure to pay, both parties executed an acknowledgement receipt of the jewelries.
Unknown to Quilatan,before the signing of the acknowledgement receipt, petitioner had
entrusted the jewelries to Labrador,sub agent, also to be sold on commission basis. Petitioner
wasnt able to collect payment from Labrador.Labrador said that she gave the jewelry to a
prospective buyer who absconded without paying. Because of this, petitioner failed to remit the
payment nor the unsold jewelry to Quilatan.
Quilatan file a case of estafa against petitioner.
RTC and CA: there was estafa
Issue: w/n the elements of estafa thru misappropriation or conversion [article 315 par 1(b)] are
present.
Held- no. the element of misappropriation or conversion is lacking.
Ratio:
Petitioner didnt ipso facto commit the crime of estafa bydelivering the jewelry to the sub agent
for sale on a commission basis.The law on agency in our jurisdiction allows the appointment by
an agent of a substitute or sub-agent in the absence of an express agreement to the contrary
between the agent and the principal.In the case at bar, the appointment of Labrador as
petitioners sub-agent was not expressly prohibited by Quilatan, as the acknowledgment receipt,
Exhibit B, does not contain any such limitation.Thus, it cannot be said that petitioners act of

Prepared by: Rikki Daniele Louis A. Dela Paz

entrusting the jewelry to Labrador is characterized by abuse of confidence because such an act
was legally sanctioned.
The essence of estafa under Article 315, par. 1(b) is the appropriation or conversion of money.
The words convert or misappropriate connote a devoting to a purpose or use different from
that agreed upon. It is an attempt to dispose of the property of another without right.21
there is no conversion since the pieces of jewelry were not devoted to a purpose or use different
from that agreed upon.it was established that the inability of petitioner as agent to comply with
her duty isthe failure of Labrador to abide by her agreement with petitioner. the pieces of jewelry
were given by petitioner to Labrador to achieve the very same end for which they were delivered
to her in the first place. There was no deviation from the purpose
It cannot be said that petitioner misappropriated the jewelry or delivered them to Labrador
"without right." No limitation was imposed on how petitioner was to effect the sale, it is also
consistent with usual practice for the seller to necessarily part with the valuables in order to find
a buyer and allow inspection of the items for sale.

Prepared by: Rikki Daniele Louis A. Dela Paz

21.)
CORAZON L. ESCUETA, assisted by her husband EDGAR ESCUETA, IGNACIO E. RUBIO, THE HEIRS OF LUZ R. BALOLOY,
namely, ALEJANDRINO R. BALOLOY and BAYANI R. BALOLOY, Petitioners,
vs.
RUFINA LIM, Respondent.
Doctrine: Article. 1892 provides that the agent may appoint a substitute if the principal has not prohibited him from doing so,
although such agent shall be responsible for the acts of the substitute when he was not given the power to appoint one.
Facts: Respondent Rufina Lim filed an action to remove cloud on, or quiet title to, real property, with preliminary injunction and
issuance of [a hold-departure order] from the Philippines against Ignacio Rubio. Respondent amended her complaint to include
specific performance and damages. She alleged that she bought the hereditary shares consisting of 10 lots of Rubio and the heirs of
Luz Baloloy and that a contract of sale was executed in her favour. Allegedly, said vendors received a downpayment or earnest
money of P102,169.86 and P450,000. Also, it was agreed in the contract of sale that the vendors would secure certificates of title
covering their respective hereditary shares; that the balance of the purchase price would be paid to each heir upon presentation of
their individual certificates of title; and that Rubio and the heirs of Baloloy refused to receive the other half of the down payment and
refuse to deliver to the respondents the certificates of title covering his share on the two lots.
As to petitioner Corazon Escueta, in spite of her knowledge that the disputed lots have already been sold by Ignacio Rubio to
respondent, it is alleged that a simulated deed of sale involving said lots was effected by Ignacio Rubio in her favor and that the
simulated deed of sale by Rubio to Escueta has raised doubts and clouds over respondents title.
In their separate amended answers, petitioners denied the material allegations of the complaint and alleged inter alia the following:
The heirs of Baloloy said that respondent has no cause of action, because the subject contract of sale has no more force and effect
as far as the Baloloys are concerned, since they have withdrawn their offer to sell for the reason that respondent failed to pay the
balance of the purchase price as orally promised on or before May 1, 1990.
As for Rubio and Escueta, they said that respondent has no cause of action because Rubio has not entered into a contract of sale
with her; that he has appointed his daughter Patricia Llamas to be his attorney-in-fact and not in favor of Virgiania Laygo- Lim who
was the one who represented him in the sale of the disputed lots in favor of respondent; that the P100,000 respondent claimed he
received as down payment for the lots is a simple transaction by way of a loan with Lim.
The trial court ruled in favour of Lim, and so did the CA. Now, petitioners are alleging that the CA erred, considering that the CA did
not consider the circumstances surrounding petitioners failure to appear at the pre-trial and to file the petition for relief on time. As to
the failure to appear at the pre-trial, there was fraud, accident and/or excusable neglect, because petitioner Bayani was in the United
States. There was no service of the notice of pre-trial or order. Furthermore, petitioner Alejandrino was not clothed with a power of
attorney to appear on behalf of Bayani at the pre-trial conference.
Second, petitioners allege that the sale by Virginia to respondent is not binding Virginia was not authorized to transact business in
his behalf pertaining to the property. The Special Power of Attorney was constituted in favor of Llamas, and the latter was not
empowered to designate a substitute attorney-in-fact. Llamas even disowned her signature appearing on the "Joint Special Power of
Attorney," which constituted Virginia as her true and lawful attorney-in-fact in selling Rubios properties.
Issue/s: W/N the contract of sale between petitioner and respondent is valid.
Held: YES, valid.

Prepared by: Rikki Daniele Louis A. Dela Paz

1. No fraud, accident, mistake, or excusable negligence exists in order that the petition for relief may be granted. Article. 1892
provides that the agent may appoint a substitute if the principal has not prohibited him from doing so, although such agent shall be
responsible for the acts of the substitute when he was not given the power to appoint one.
2. Applying the above-quoted provision to the special power of attorney executed by Ignacio Rubio in favor of his daughter Patricia
Llamas, it is clear that she is not prohibited from appointing a substitute. By authorizing Virginia Lim to sell the subject properties,
Patricia merely acted within the limits of the authority given by her father, but she will have to be "responsible for the acts of the subagent," among which is precisely the sale of the subject properties in favor of respondent.
3. Even assuming that Virginia Lim has no authority to sell the subject properties, the contract she executed in favor of respondent is
not void, but simply unenforceable, under the second paragraph of Article 1317 of the Civil Code which provides that a contract
entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall
be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is
revoked by the other contracting party.
Applying this to the case at bar: Rubio is now estopped since he accepted and encashed the check. Such acts constitute ratification
and produce the effects of an express power of agency. The same applies to the Baloloy heirs.
4. Indeed, Virginia Lim and respondent have entered into a contract of sale. Not only has the title to the subject properties passed to
the latter upon delivery of the thing sold, but there is also no stipulation in the contract that states the ownership is to be reserved in
or "retained by the vendor until full payment of the price."
Other Doctrines:
1. As regards the pre-trial: The notices of pre-trial had been sent to both the Baloloys and their former counsel of record. Not having
raised the ground of lack of a special power of attorney in their motion, they are now deemed to have waived it. For lack of
representation at the pre-trial, Bayani Baloloy was properly declared in default.
2. All the elements of a valid contract of sale under Article 1458 of the Civil Code are present, such as: (1) consent or meeting of the
minds; (2) determinate subject matter; and (3) price certain in money or its equivalent. Ignacio Rubio, the Baloloys, and their co-heirs
sold their hereditary shares for a price certain to which respondent agreed to buy and pay for the subject properties. The offer and
the acceptance are concurrent, since the minds of the contracting parties meet in the terms of the agreement.
In fact, earnest money has been given by respondent and it shall be considered as part of the price and as proof of the perfection of
the contract.
Dispositive Portion: WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. CV
No. 48282, dated. Consequently, Ignacio Rubio could no longer sell the subject properties to Corazon Escueta.
October 26, 1998 and January 11, 1999, respectively, are hereby AFFIRMED. Costs against petitioners.

Prepared by: Rikki Daniele Louis A. Dela Paz

22.)
QUINTIN DE BORJA, judicial administrator of the intestate estate of the deceased Marcelo de Borja,plaintiff-appellant,
vs.
FRANCISCO DE BORJA, defendant-appellant.

Doctrine: When an agent acts in his capacity as attorney-in-fact of the principal, and there being no evidence showing that he
converted the money entrusted to him to his own use, he is not liable for interest thereon.
Facts: Quentin de Borja, in his capacity as judicial administrator of the estate of the deceased Marcelo de Borja, instituted this
action of the Court of First Instance of Rizal, to recover from the Francisco de Borja the sum of P61,376.56 which, according to the
amended complaint, the said defendant owed the aforesaid deceased, for the certain sums of money loaned to and collected by him
from other persons with the obligation to render an accounting thereof to the said deceased.
The trial court reached the conclusion and held that, from his various causes of action, the plaintiff was entitled to recover the sum of
P33,218.86 from the defendant, and that, by way of counterclaim, the said defendant in turn was entitled to collect the sum of
P39,683 from the plaintiff, and rendered judgment in favor of the defendant in the sum of P6,464.14 with legal interest thereon from
the date of the counterclaim, with the costs. Both parties appealed therefrom.
Issues: Is Francisco de Borja liable for the interest of the sums of money laned and collected by him in behalf of his father?
Held: No. the defendant acted in his capacity as attorney-in-fact of his deceased father, and there being no evidence showing that
he converted the money entrusted to him to his own use, he is not liable for interest thereon, in accordance with the provisions of
article 1742 of the Old Civil Code.
Dispositive Portion: The judgment appealed from being, in our opinion, in accordance with the law and sufficiently supported by a
preponderance of the evidence presented therein, it is hereby affirmed, without special pronouncement as to the costs of this
instance. So ordered.

Prepared by: Rikki Daniele Louis A. Dela Paz