Bacaltos Coal Mines v.

CA

G.R. No. 114091 June 29, 1995

FACTS:
In an “Authorization,” petitioner Bacaltos authorized Savellon, to use the coal operating contract of Bacaltos Coal Mine of
which he is the proprietor, “For any legitimate purpose that it may serve” and particularly: (1) to acquire purchase orders; (2)
to engage in trading; (3) to collect all receivables due or in arrears; (4) to extend to any person or company by substitution
the same extent of authority that is granted to Rene Savellon; (5) in connection with the preceding paragraphs to execute and
sign documents, contracts, and other pertinent papers.

In 1988, a Trip Charter Party was executed between Bacaltos Coal Mines (represented by Savellon) and San Miguel. The
agreement was that For Php 650,000 to be paid within seven days after the execution of the contract, it "lets, demises" the
vessel to charterer SMC "For three round trips to Davao." The vessel was able to make only one trip, so SMC filed an action
for specific performance.

Petitioners alleged that Savellon was not their Chief Operating Officer and that the powers granted to him are only those
clearly expressed in the Authorization which do not include the power to enter into any contract with SMC.

ISSUE:

WON Savellon was duly authorized by the petitioners to enter into the Trip Charter Party.

RULING:

NO. The broadest scope of Savellon's authority is limited to the use of the coal operating contract and the clause cannot
contemplate any other power not included in the enumeration or which are unrelated either to the power to use the coal
operating contract or to those already enumerated. In short, while the clause allows some room for flexibility, it can
comprehend only additional prerogatives falling within the primary power and within the same class as those enumerated.
There is no evidence at all that Bacaltos Coal Mines as a coal mining company owns and operates vessels, and even if it
owned any such vessels, that it was allowed to charter or lease them. Also, the Authorization is not a general power of
attorney. It is a special power of attorney for it refers to a clear mandate specially authorizing the performance of a specific
power and of express acts subsumed therein.

Furthermore, had SMC exercised due diligence and prudence, it should have known in no time that there is absolutely
nothing on the Face of the Authorization that confers upon Savellon the authority to enter into any Trip Charter Party

Regina Dizon et al v. CA and Overland Express Lines, Inc.

G.R. No. 122544 January 28, 1999Martinez, J.
FACTS:

Overland Express Lines, Inc. entered into a Contract of Lease with Option to Buy with
petitionersinvolving a 1,755.80 square meter parcel of land situated at corner MacArthur Highway and South“H”
Street, Diliman, Quezon City. The term of the lease was for 1 year commencing from May 16,1974 up to May 15,
1975. During this period, Overland Express Lines was granted an option topurchase for the amount
of P3,000.00 per square meter. Thereafter, the lease shall be on a permonth basis with a monthly rental of
P3,000.00.

For failure of Overland Express Lines to pay the increased rental of P8,000.00 per month effective June 1976,
petitioners filed an action for ejectment against it. The lower court rendered judgmentordering Overland Express
Lines to vacate the leased premises and to pay the sum of P624,000.00representing rentals in arrears and/or as
damages in the form of reasonable compensation for theuse and occupation of the premises during the period of illegal detainer
from June 1976 to November1982 at the monthly rental of P8,000.00, less payments made, plus 12% interest per annum
fromNovember 18, 1976, the date of filing of the complaint, until fully paid, the
sum of P8,000.00 amonth starting December 1982, until Overland Express Lines fully vacates the premises, and
to payP20,000.00 as and by way of attorney’s fees.
ISSUE:
W ON Overland Express Lines actually paid the alleged P300,000.00 to Fidela Dizon,
a s representative (agent) of petitioners in consideration of the option
HELD:
No.

CA opined that the payment by Overland Express Lines of P300,000.00 as partial payment for theleased property,
which petitioners accepted (through Alice A. Dizon) and for which an official receiptwas issued, was the operative act
that gave rise to a perfected contract of sale, and that for failureof petitioners to deny receipt thereof, Overland
Express Lines can therefore assume that Alice A.Dizon, acting as agent of petitioners, was authorized by them to
receive the money in their behalf.CA went further by stating that in fact, what was entered into was a “conditional
contract of sale”wherein ownership over the leased property shall not pass to the Overland Express Lines until
it hasfully paid the purchase price. Since Overland Express Lines did not consign to the court the balanceof the
purchase price and continued to occupy the subject premises, it had the obligation to pay theamount of P1,700.00 in
monthly rentals until full payment of the purchase price.

In an attempt to resurrect the lapsed option, Overland Express Lines gave P300,000.00 to petitioners(thru Alice A. Dizon)
on the erroneous presumption that the said amount tendered would constitute aperfected contract of sale pursuant to the contract of
lease with option to buy. There was no validconsent by the petitioners (as co-owners of the leased premises) on the
supposed sale entered intoby Alice A. Dizon, as petitioners’ alleged agent, and Overland Express Lines. The basis
for agency isrepresentation and a person dealing with an agent is put upon inquiry and must discover upon hisperil
the authority of the agent. As provided in Article 1868 of the New Civil Code, there was noshowing
that petitioners consented to the act of Alice A. Dizon nor authorized her to act on theirbehalf with
regard to her transaction with private respondent. The most prudent thing privaterespondent should
have done was to ascertain the extent of the authority of Alice A. Dizon. Beingnegligent in this regard, private respondent
cannot seek relief on the basis of a supposed agency.

Every person dealing with an agent is put upon inquiry

a n d m u s t d i s c o v e r u p o n h i s p e r i l t h e authority of the agent. If he does not make such inquiry,
he is chargeable with knowledge of theagent’s authority, and his ignorance of that authority will not be
any excuse. Persons dealing with anassumed agency, whether the assumed agency be a general or special one, are
bound at their peril,if they would hold the principal, to ascertain not only the fact of the agency but also the nature
andextent of the authority, and in case either is controverted, the burden of proof is upon them
toestablish it.

d2015member
Mariano Diolosa & Alegria Villanueva-Diolosa v. CA and Quirino Baterna (as owner and proprietor of
QuinBaterna Realty)
(1984)Relova, J.
Facts:
Baterna is a licensed real estate broker. The spouses Biolosa owned the Villa Alegre subdivision.
June 20, 1968, they entered into an agreement: Baterna would be their exclusive sales agent to sell the lotsof the subdivision
“

until all the property is fully disposed.

”

Sept 27, 1986 (about 3 mos later) the spouses terminated the services of Baterna as because the remainingunsold lots were
reserved for their 6 grandkids. (there were 27 lots which remained unsold)
Now, Baterna is claiming that under the terms of their contract, he had unrevocable authority to sell the lotsuntil all were
disposed. The rescission of the contract contravenes their agreement. He also claims to beentitled to a commission on the lots
unsold because of the rescission.
The spouses argue that they are within their legal right to terminate the agency because they needed theundisposed lots for
the use of their family. They also say that Baterna has no legal right to a commission tounsold lots.
CFI dismissed.
CA says that notwithstanding NCC 1920 (that the principal may revoke the agency at will) spouses could notterminate the
agency agreement without paying damages.
o
The agency agreement expressly stipulated
“

until all the property as is fully disposed"

o
The testimony of a certain Roberto Malundo that Baterna agreed to the intention of Mrs. Diolosa to reserve some lots cannot
prevail over the clear terms of the agreement.
o
Wanting to reserve the lots for the grandkids is not a legal reason to rescind the agency agreement.(even if each kid would be
given one lot each, there would still be 21 lots available and the spouses have other lands that can be reserved for the kids)
Issue/Held:
Can the spouses terminate the agency without paying damages to Baterna, the real estate broker? NO .They have to pay
damages.
Ratio:
Under the contract, the spouses allowed the real estate broker to sell, cede, etc. until all lots are fully disposed. The authority to
sell is not extinguished until all lots are disposed.
When they revoked the contract, they became liable to the real estate broker for
damages for breach of contract
.
Since the agency agreement is a valid contract, it may only be rescinded on grounds specified in NCC 1381-82. ART. 1381.
The following contracts are rescissible:
(1) Those which are entered in to by guardians whenever the wards whom they represent suffer lesion bymore than
one-fourth of the value of the things which are the object thereof
(2) ;(2) Those agreed upon in representation of absentees, if the latter suffer the lesion stated in the precedingnumber;
(3) (3) Those undertaken in fraud of creditors when the latter cannot in any other name collect the claims duethem;(4)
(4) Those which refer to things under litigation if they have been entered into by the defendant without theknowledge and
approval of the litigants or of competent judicial authority;(5)
(5) All other contracts specially declared by law to be subject to rescission.
ART. 1382. Payments made in a state of insolvency for obligations to whose fulfillment the debtor could
notbe compelled at the time they were effected, are also rescissible.
In this case, not one of the grounds are present.
Petition denied.