Araneta vs Paz Tuazon de Peterno and Jose Vidal

 Respondent Paz Tuazon de Paterno (Paz) is the owner of a 40,703 square

meters land in Sta. Mesa Manila which was subdivided in city lots.
 Jose Vidal, the other respondent, is the creditor of Paz where she obtained
several loans and secured by the said property.
 Subsequently, Paz decided to sell the entire property to the petitioner, Araneta.
 A day before the execution of the deed of absolute sale, Paz offered a check
from Araneta to settle her loan to release the mortgage. However, Vidal refused
to cancel the mortgage.
 Gregorio Araneta instituted the casse to compel Paz Tuazon to deliver to the
former a clear title of the lots.
 One of the objections made against the sale is that Jose Araneta was the
President of the petitioner and was also the agent of Paz Tuazon

Issue:

Whether or not there is a principal-agent relationship between Jose Araneta and Paz
Tuazon?

Held:

NO.

So the ban of paragraph 2 of article 1459 connotes the idea of trust and confidence; and
so where the relationship does not involve considerations of good faith and integrity the
prohibition should not and does not apply. To come under the prohibition, the agent
must be in a fiduciary with his principal.

Tested by this standard, Jose Araneta was not an agent within the meaning of article 1459. By
Exhibits 7 and 8 he was to be nothing more than a go-between or middleman between the
defendant and the purchaser, bringing them together to make the contract themselves. There
was no confidence to be betrayed. Jose Araneta was not authorize to make a binding contract
for the defendant. He was not to sell and he did not sell the defendant's property. He was to
look for a buyer and the owner herself was to make, and did make, the sale. He was not to fix
the price of the sale because the price had been already fixed in his commission. He was not to
make the terms of payment because these, too, were clearly specified in his commission. In
fine, Jose Araneta was left no power or discretion whatsoever, which he could abuse to his
advantage and to the owner's prejudice.