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FACTS: Isabel Sugar Co. (ICSI) owned a piece of land which it was
leasing to a certain person who subleased it, in violation of their
lease contract, to various tenants. Urban expressed its interest
to purchase said land. Both parties entered into a contract to sell
(land was sold for P240M) which contains, among others, that the
last installment of payment shall be withheld by Urban if the
tenants were still present at the time of delivery.
Pena called ISCI Pres. and confirmed the transfer. Pena told
ISCI Pres. that because Urban now owns it, he will withdraw the
guards etc. from the premises. Pena then had a phone convo w
Borlongan (Pres of Urban). Pena asked authorization from
Borlongan to negotiate with the tenants. Pena said that he be
paid 10% of the purchase price (P24M). Borlongan accepted
provided that if Pena is not successful, he will not get the 10%.
Pena said that the agreement be put into writing. However, NO
MENTION OF THE 10% were mention in the written agreement.
HELD: NO. Article 1868 of the Civil Code provides: “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.” The requisites of agency
are as follows: consent of the parties, object is the execution of a
juridical act in relation to third parties, agent acts a
representative not for himself, agent acts w/in the scope of his
authority.
NOTE:
1. Common carriers – Loadmasters and Glodel are common
carriers thus they should have exercised extraordinary
diligence
2. Loadmasters and Glodel are solidarily liable to R&B Insurance
cos accordging to Art 2194 of the NCC “the responsibility of
two or more who are liable for a quasi-delict are solidary”
3. Glodel cannot collect from Loadmasters cos it did not file a
crossclaim.
BORDADOR v LUZ
HELD: NO. The evidence does not support that Brigida authorized
the acts of Deganos. The evidence also does not show that there
was an express or implied agency. The basis for agency is
representation. Here, there is no showing that Brigida consented
to the acts of Deganos or authorized him to act on her behalf,
much less with respect to the particular transactions involved.
The Bordadors were also negligent cos when they dealt with
Deganos, they did not ask for a written authority from Brigida. A
person dealing with an agent is put upon inquiry and must
discover upon his peril the authority of the agent.
FACTS:
Concepcion and Gerundia Rollos were sisters. They were co
owners of a parcel of land in Cebu. They executed an SPOA where
in they authorized their brother, Simon, to sell the land for them.
On March 5, 1955 Concepcion died. On September 12, 1955,
Simon sold the UNDIVIDED shares of the land to Felix Go Chan.
The administrator of Concepcion’s estate filed a case to annul
the sale and that the lot be reconveyed to Concepcion’s estate.
According to Felix Go Chan, the sale should be vaild w re to him
cos he did not know that Concpecion died. There was no Notice
of Death attached to the SPOA of Simon.
ISSUE: w/n the sale was valid despite the fact that the principal
died before the sale.
Exceptions:
1. If it has been constituted in the interest of the principal,
the agent or a 3 rd person who has accepted the
stipulation.
FACTS:
CA affirmed RTC
DOMINGO v DOMINGO
Vicente – Seller
Gregorio – broker
Oscar – Buyer
Amparo – Oscar’s wife
Purisima – sub-broker of Gregorio
FACTS:
Oscar told him that he was backing out on the sale because he
did not receive the money that he was supposed to receive from
his brother in the US. After some time, Gregorio sensed
something fishy because he had not heard from either Vicente or
Oscar in a while so he met with Oscar.
ISSUE:
W/N the failure on the part of Gregorio to disclose to Vicente the
payment to him by Oscar de Leon P1,000.00 as gift or "propina"
for having persuaded Vicente to reduce the purchase price from
P2.00 to P1.20 per square meter, constitutes fraud as to cause a
forfeiture of his commission on the sale price.
HELD:
Art. 1909. The agent is responsible not only for fraud but also for
negligence, which shall be judged with more less rigor by the
courts, according to whether the agency was or was not for a
compensation.
TAN v GULLAS
HELD: YES. Gullas failed to prove that petitioners were not the
efficient procuring cause. Pacana was not even presented in
court. The SPOA which allegedly grants his power was undated
and not notarized. A broker is a person whose occupation brings
the parties together in matters of trade, commerce or navigation.
Petitioners were authorized by Gullas to act as brokers. Although,
the agreement was non exclusive (this means that Gullas can
also grant the same authority to other agents), Gullas failed to
prove there were other agents. An AGENT receives compensation
by the consummation of the sale. On the other hand, a BROKER
receives compensation by merely bringing together the parties,
even if no sale was made.
MEDRANO v CA
The court held that if a broker is the procuring cause for the sale,
he is entitled to commission.
NOTE: 1. w/ re Medrano’s argument about “negotiation” it is not
a prerequisite that a broker negotiate with the potential buyer so
as to get his commission. It has been held in a number of cases
that the brokers can get their commission even if there was no
nego, never saw the customer, etc. In fact, they can still get
commission even if they just put up an ad – provided that this
was the procuring cause of the sale.
Glanville – Pres of EC
Delsax – Regional Dir of ESAC
Marquez – broker/agent
Lintonjua - buyer
2. NONE. Glanville and Co, expressly stated that they were acting
in behalf of ESAC (Lintonjuas should have known that they do not
have the authority)
NOTE: Req of Agency by Estoppel:
NOTE: 1. Con Air not liable for the acts of its agent cos Con Air
did not exercise control over Holiday’s employees and that it was
not negligent.
RALLOS v YANGCO
FACTS: Yangco owns a company which buy and sells tobacco leaf
products. On November 27, 1907, Yangco sent a letter to Rallos
telling the latter that he wants to do business with him. Via the
letter, Yangco introduced Florentino Collantes as his agent.
According to Yangco, Collantes is empowered by an SPOA to
perform all acts necessary to carry out his (Yangco’s) plans.
Thus, Rallos did business with Yangco thru his agent, Collantes.
In 1909, Rallos sent to Collantes 218 bundles of tobacco to be
sold on commission (2% commission). Collantes sold the tobacco
for ~P1700. His commission was ~P200. But instead of remitting
the P1500, he appropriated the money. Rallos then demanded
payment from Yangco. Yangco refused. He said that he had
already terminated their agency relationship BEFORE the goods
were deliveted to Collantes. According to him, Collantes was
acting personally and not as his agent. However, this fact was
not communicated to Rallos - no notice of the termination was
given to him.
LINTONJUA v FERANDEZ
Brokers of Fernandez – Alimario and Cisco
Rep. of owner – Fernandez
Buyers – Lintonjua bros
“My cousin and I have thereby changed our mind and that
the sale will no longer push through. .... In view thereof, I
regret to formally inform you that we are no longer selling
the property until the problems are fully settled.”
HELD: 1. NO. It was clear from the letter that Fernandez did not
agree on selling the land. When Fernandez used “changed our
minds”, she was referring to the fact of selling the property AT
ALL. Not selling the property to the bros.
Art 1878 states that an SPOA is needed to enter into any contract
by which the ownership of an immovable is transmitted or
acquired either gratuitously or for a valuable consideration, or to
create or convey real rights over immovable property or for any
other act of strict dominion. Any sale of real property by an agent
NOT IN WRITING is VOID.
Fernandez told the bros that she did not have any authority to sell
the land. The letter she sent was signed by her alone, without
any authority from the owners. Thus, the letter is not binding to
the owners.
AGGABAO v PARULAN
Elena – wife
Dionisio – husband
Atty. Parulan – Dionisio’s bro
Spouses Aggabao – buyers
FACTS: A real estate broker offered two lands in Paranaque to the
Aggabao Spouses which was owned by Elena and Dionisio, who
are separated in fact. They then met up with Elena. She showed
them: Original TCT of land 1, certified true copy of land 2 and
SPOA from her husband authorizing her to sell the land. The
Aggabao’s gave P20k as earnest money. The spouses then went
to the Register of Deeds to inquire re the lots. They found out
that Land 2 was mortgaged to a bank and that there was a court
order from Dionisio authorizing Elena to mortgage the land. The
court order was necessary cos the land is conjugal property.
When the spouses paid the balance, Elena did not give the
owner’s copy of land 1. She said that it was a relative in HK. The
spouses then found out that the copy was with Atty Parulan. Atty
Parulan was armed by an SPOA from Dionisio authorizing him to
sell the lands. He offered to give the TCT for 800k but the
spouses have already paid Elena. Dioniosio then filed a case to
nullify the sale base on Art 124 of the FC.
RTC and CA ruled for Dionisio (RTC determined that the Elena’s
SPOA was forged)
Spouses claim that Art 124 does not apply cos the spouses
were married before the FC thus the Civil Code should apply: Art
177 states that the contract was merely voidable (not void) and
maybe subject to ratification. And such ratification, according to
them, happened when Atty. Parulan made an offer to give the TCT
for 800k. (Agency)
HELD: 1. YES. The sale was made in 1991, which was after the
effectively of the FC. The FC also provides that it has a
retroactive effect provided that vested rights are not affected.
However, even if it was indeed under the old law, Atty. Parulan
could not have ratified the sale cos the authority given to him
was only to sell the land NOT to administer it . Atty Parulan had
no powers of admin, thus he cannot ratify the contract. Powers of
admin does not include power to encumber or dispose, which are
strict acts of ownership. An authority to dispose cannot proceed
from an authority to admin, and vice versa . The two powers may
only be exercised by an agent, following the laws on ageny.
2. NO. It is true that buyers can rely on the face of the TCT w/o
further inquiry. However, the question here is not the authenticity
of the land but the authenticity of the seller. Case law states that
buyers of conjugal property should exercise two kinds of
diligence: 1) Verify the validity of the title and 2) verify the
authority of the seller. Spouses did not do the latter.
VELOSO v CA
HELD: YES. The GPOA was valid and regular on its face. The fact
that it was notarized carries evidentiary weight that it was duly
executed. Even tho it was labeled as only a “General” Power of
Attorney, the sale was still valid cos it stated therein an
authority to sell. The courts said that even if the instrument is
captioned as a general power of attorney, but if it states a
specific power (such as the power to sell), then the intention is
to confer such power (not just administration). On the other hand,
even if it is captioned as a special power of attorney, but the
words are couched in a general manner, only powers of admin are
conferred. Essentially, what is controlling extent of the powers
contemplated. The Special power can be included in the general
power not necessary that it be in a separate document.
Escario is thus an innocent buyer in GF cos she just relied on the
GPOA
PINEDA v CA
HELD: 1. NO. The POA does not state in unequivocal terms that
Nuval has the authority to receive insurance proceeds. As stated
by the respondent himself, such POA were SPOAs. Thus, their
execution means the exclusion of any intent to grant a GPOA .
SPOAs are strictly construed. It would be highly imprudent to
construe the POAs to include insurance proceeds – especially
since the normal insurance practice is that payments are just
COURSED THRU the and not paid to the employers (PMSI in this
case).
2. YES. Nuval is the agent of Insular life. It has been held that the
employer is the agent of the insurer. An agency relationship is
based upon consent by one person and that another shall act in
his behalf and subject to his control. Such a situation is present
in the employer-insurer relationship: The insurer directs the
performance of the employer's administrative acts, and if these
duties are not undertaken properly, the insurer is in a position to
exercise more constricted control over the employer's conduct.
As regards an employee-employer relationship (the employer
cannot be the agent of the employee) , there is no control cos the
employee has no knowledge or control re employer’s handling of
the policy. Thus, Insular acted negligently when it just relied on
the POA of Nuvali.
FACTS: SS Pioneer Moon arrived in Manila. Its cargo was 200 rolls
of Carbonized machine rolls. It discharged its cargo to the BoC as
arrastre operator. When the machine rolls reached the consignee,
it was damaged. The consignee claimed P2600 damage from
BoC, USL (owner of SS Pioneer Moon) and Home Insurance. Only
Home Insurance paid the damages. It asked BoC and USL for
reimbursement. Both denied. Home Insurance filed a cagose. At
pre trial, only counsel for Home Insurance was present. He said
that, tho he had no written authority to compromise, his client
gave him verbal authority to enter into a compromise. Court
dismissed the case.
Sec 2 Rule 20 of the New Rules of Court states that a party who
does not appear at pre trial may be considered in default. This
shows the purpose of the rules to compel the parties to attend
the pre trial and reach a compromise. Court is given the
discretion to dismiss the case if Plaintiff does not appear. In the
said case, only the lawyer appeared - Home Insurance or any its
rep did not appear. Although the lawyer said he had a verbal
authority to compromise, the Rules state that a “special
authority” is needed. Tho it is not stated that it be in writing, it
must be more than the lawyer’s own assertion. Authority to
compromise cannot be lightly presumed.
Facts
Action for annulment of Sales of Real Property and/or
Cancellation of titles in favor of Ongjoco
The heirs of Lino Olaguer wanted to annul the sale of the
properties belonging to the Estate. They allege that the
properties sold to ESTANISLAO Olaguer were void for being
absolutely simulated or fictitious
RTC:
Ruled in favor of plaintiffs – sale of lots to Pastor Bacani
and Estanislao Olaguer were absolutely simulated for lack
of consideration. Approval of court did not make a void sale
valid
RTC also ruled that Ongjoco cannot claim good faith
because it protects only those who purchased from
registered owners. Having bought only from an agent, it was
his responsibility to investigate on the principal’s title and
agent’s authority.
CA:
RTC Decision was MODIFIED: Sales of properties to Ongjoco
are VALID while the rest are still null and void.
Why did it become valid? CA ruled that when the sale of
property is made through an agent, buyer need not
investigate the principal’s title. Law merely requires that
the agent’s authority be in writing.
HELD:
1. For Lots Nos. 1 & 2 – Ongjoco was in BAD FAITH
The power of attorney purportedly issued by Virgilio
authorizing Jose Olaguer to sell the lots to Ongjoco was
never presented in court.
ISSUE: w/n there is a perfected CoS and w/n Roy had the
authority to sell
HELD: NO. Roy and Metro Drug did not have the authority to sell.
Roy was merely a contact person. Law provides that if a sale of
real property or interest therein is via an agent, it must be in
writing, otherwise it is void. The absence of such authority can
be determined from the letter F.P Holdings sent to Metro Drug. In
the letter, F.P. Holdings asked Metro Drug to ASSIST them to look
for buyers. The final evaluation and acceptance shall be made
only by F.P. Holdings.
PINEDA v CA
Banez then found out that the title was already in Pineda’s name
via a Deed of Sale (Banez’ sig was forged).
COSMIC LUMBER v CA
HELD: YES. VE did not have authority. The SPOA did not say that
VE could sell the land. VE could enter into a compromise
agreement… but only FOR THE PURPOSE of evicting the
squatters. The compromise agreement is qualified by “so far as it
will protect the rights and the interests of the Crop.” When a sale
of land or an interest therein is via an agent, it must be in
writing, otherwise it is void. An SPOA is needed to enter into a
contract by which ownership of an immovable is transferred or
acquired.
ISSUE: w/n the sale was valid and w/n Orense can be compelled.
HELD: YES. Even though the sale was void at the beginning (cos
Duran had no written authority), Orense ratified it when he said
that he consented to the sale. It would be unjust if Orense would
not abide by his admission. Orense’s ratification produced the
express authorization to make a sale. It cured the lack of written
authority as required by law. Therefore, the principal is bound to
abide by the consequences of his agency as though it had
actually been given in writing
NOTE: 1. The right of action for nullification that could have been
brought became legally extinguished from the moment the
contract was validly confirmed and ratified.
RTC dismissed Roque Jr’s complaint. It said that even tho the
Donation is valid, it still has to be registered for it to bind 3 rd
parties. The DoD was registered only after the CoL.
Third After the original CoL expired, Chua Bok and Vicente R.
De Reynes (Herrerra’s lawyer) entered into a new CoL for a term
of 5 years and with an option to repurchase. When the lease
expired, Chua Bok and his heirs continued to occupy the land
until 1978 (they continued to pay rentals).
Heirs of Chua Bok claimed that the sale to Spouses Go was void
cos it violated their right of option to buy as stated in their CoL.
They also said that there is tacit renewal on their contract of
lease.
HELD: NO. The CoL (the third contract) between Chua Bok and
Herrarra was unenforceable. The CoL was entered by the lawyer
of Herrerra and not Herrerra herself. The lawyer did not have an
SPOA authorizing him to enter into such a lease. Law states that
an SPOA is needed for the leasing of real property to another
person for more than one year.
BA FINANCE v CA
BRITISH AIRWAYS v CA
FACTS:
Pacific engage in the buying and selling of stocks through
their broker, EIB Securities. In the course of its business, Pacific
Rehouse obtained 60,000,000 shares of stock of Kuok Properties
(hereafter ‘KPP’), these were obtained at the average price of
P0.22 a share. Similarly, Petitioner has also been able to obtain
roughly 32,000,000 shares of stock of DM Consunji Inc. (hereafter
‘DMCI’), half through EIB, and the other half through Westlink
Global Equities. These were purchased at the average share
price of P0.38 per share.
Thereafter, Pacific and EIB entered into an agreement to
sell the 60 million shares of KPP to any party, for a price of P0.14
per share, subject to the option that within 30 days, Pacific may
buy back the KPP shares at the price of P0.18 per share. The
collateral for this transaction was the very KPP shares
themselves. This is where the problem occurred. Pacific believed
it had an ‘option’ to redeem the shares, whereas EIB believed it
was obligated to redeem the shares.
The period for redemption having expired, the parties once
more agreed to an extension of the period, because Pacific was
undecided over whether it wanted to exercise its right of
redemption. Pacific eventually decided not to redeem the shares.
Pacific also did not give any buy/back instructions to EIB.
Nevertheless, and unknown to Pacific , EIB sold, w/o authority, its
32 million DMCI shares at a price of P0.24 per share, and
thereafter applied the proceeds thereto in order to repurchase
the KPP shares.
According to EIB, they sold the shares pursuant to Section
7 of the Securities Dealing and Accounts Agreement (SDAA)
any property of Pacific under the custody of EIB has a lien on it;
such that EIB may dispose of it on order to discharge any
obligations Pacific has with EIB.
According to Pacific, Sec 7 is NA cos the shares were sold
not to answer for Pacific’s obligation to EIB but for its obligation
to the buyers of the KPP shares.
ISSUE: w/n EIB can invoke Sec 7 of the SDA to justify the selling
of the DMCI shares.
CERVANTES v CA
ISSUE: w/n the acts of the PAL agents extended the validity of
the tickets.
HELD: NO. First, the PAL agents did not have authority to extend
the validity of the tickets. Second, Cervantes knew that the PAL
agents did not have authority. The facts show that before
Cervantes left for the US, he called PAL’s Legal Dept re:
extension of the ticket. The Legal Dept told him that he had to
make a written request for extension addressed to the PAL office
in the Philippines. The Court said that this is tantamount to the
fact that Cervantes was fully aware that the PAL agents did not
have authority to extend the tickets. Only the Legal Dept, via a
written request, has the authority. Thus he could not use their
confirmation to his advantage. Art 1898 states that the acts of an
agent beyond the scope of his authority do not bind the principal,
unless the latter ratifies the same expressly or impliedly.
Furthermore, when the third person (Cervantes) knows that the
agent (the two PAL agents) was acting beyond his power or
authority, the principal cannot be held liable for the acts of the
agent. If the said third person is aware of such limits of authority,
he is to blame, and is not entitled to recover damages from the
agent, unless the latter undertook to secure the principal’s
ratification.
GOZUN v MERCADO
HELD: NO. The court said that an agency may be oral unless the
law requires a specific form. An SPOA refers to the nature of
authorization and not its form it may be written or oral. What is
important is that it must be express. However, if it is oral, it must
be duly established by evidence. Agency Law states that an
SPOA is needed for an agent to borrow money unless it is urgent
and indispensible for the preservation of the things under
administration. In the receipt, it shows there that Lila Soriano
received the amount in behalf of “Annie Mercado”. Thus, court
said that the receipt failed to reflect the fact that Don Pepito was
connected with the transaction. Lila Soriano signed the receipt
alone – w/o any indication that she was representing Don Pepito.
Thus, she bound herself in her own personal capacity. She is not
an agent of anyone. There is also no showing that the money was
urgent and indispensible for the preservation of things. 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 agent was in fact authorized to make
the mortgage, if he has not acted in the name of the principal.
SAZON v VASQUEZ-MENANCIO
FACTS: VM lives in the US. In 1979, she gave Sazon the power to
administer her properties. VM said that the properties were all
generating income. Sazon said that the properties were not
generating income – and if there were any income, it was
insufficient to cover the operating costs. Over the course of the
administration, VM said that Sazon never rendered any
accounting w re the fruits and income of her properties. VM even
said that Sazon keeps the income. VM also said that she made
repeated demands to Sazon to render an accounting. However,
according to Sazon said she sent five (or four) letters to Sazon re
the accounting. Sazon said that VM never answered her letters.
Thus, in 1997, VM revoked the agency of Sazon.
HERNANDEZ v HERNANDEZ