Agency Digestshgfgfdd w Notes

7/28/2019 Agency Digestshgfgfdd w Notes

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AGENCY DIGESTS

URBAN BANK v PENA

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 varioustenants. Urban expressed its interest to purchase said land. Both parties enteredinto 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 werestill present at the time of delivery.

Because of this, ISCI ordered Pena, a director of ISCI, to take possessionof the said land and secure it from the tenants after the lease contract hasexpired, and that he will be reimbursed for any expenses he may incur toaccomplish the same such as costs for legal action and for employing securityguards. Upon the expiry of the lease, Pena did the same but was however faced

with resistance form the tenants: death threats, violence, etc. Pena filed and gota TRO to prevent the tenants from returning. However, the TRO wassubsequently recalled because the land was now under the name of Urban,hence Pena had no more authority to maintain the TRO for he was an agent ofISCI not Urban.

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 thepremises. Pena then had a phone convo w Borlongan (Pres of Urban). Penaasked authorization from Borlongan to negotiate with the tenants. Pena said thathe 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 agreementbe put into writing. However, NO MENTION OF THE 10% were mention in thewritten agreement.

Eventually, Pena was able to relocate the tenants. Urban occupied theproperty and installed its own guards. Pena made several attempts to contactUrban but the officers would not take his call, hence, this case.

Urban denies that it constituted Pena as their agent and contends that it shouldbe ISCI that should reimburse Pena because he was their employee.

RTC there was a contract of agencyCA no agency

ISSUE: w/n Pena is entitled to compensation


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HELD: YES. In a contract of agency, agents bind themselves to render someservice or to do something in representation or on behalf of the principal, with theconsent or authority of the latter. The basis of the civil law relationship of agencyis representation, the elements of which include the following: (a) the relationshipis established by the parties consent, express or implied; (b) the object is the

execution of a juridical act in relation to a third person; (c) agents act asrepresentatives and not for themselves; and (d) agents act within the scope oftheir authority.

Whether or not an agency has been created is determined by the fact thatone is representing and acting for another. The law makes no presumptionof agency; proving its existence, nature and extent is incumbent upon theperson alleging it.

Based on the evidence on records and the proceedings below, the Courtconcludes that Urban Bank constituted Atty. Pea as its agent to secure

possession of the Pasay property. This conclusion, however, is not determinativeof the basis of the amount of payment that must be made to him by the bank.The context in which the agency was created lays the basis for the amount ofcompensation Atty. Pea is entitled to.

2. The evidence does not support that conversation between Pena and ISCIregarding the 10% compensation took place. Only the letter of authority that itfaxed Pena binds Urban.

However, this does not mean that Pena is not entitled to compensation. Agencyis presumed to be for compensation. Unless the con trary intent is show n, aperson w ho acts as an agent does so with the expectat ion of payment

according to the agreement and to the services rendered or resul ts

effected.

The SC found that the agency of Pea comprised of services ordinarilyperformed by a lawyer who is tasked with the job of ensuring clean possessionby the owner of a property, therefore, the measure of what he is entitled to will bebased on the legal services rendered. Lawyering is not a business; it is aprofession in which duty to public service, not money, is the primaryconsideration. 24M is unconscionable. SC awarded him 5M.

Loadmasters Custom Services Inc v Glodel Brokerage


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FACTS: R&B Insurance issued an insurance policy in favor of Columbia tosecure its cargo of cathodes against ALL RISKS. The cathodes will be deliveredvia boat from Leyte to Manila. Columbia then engaged the services of Glodel tounload the cargo from the boats. Glodel in turn, engaged the services ofLoadmasters to bring the cargoes to Valenzuela and Bulacan. The cargoes

were then divided equally (6/truck). However, only 5 trucks reached Bulucan.The missing truck was found but the cathodes were missing. Columbia thenclaimed insurance from R&B (~P1.9M). R&B then filed a case against Glodel andLoadmasters for reimbursement.

RTC: Glodel liableCA: Loadmasters is an agent of Glodel so hes liab le as well

ISSUE: w/n Loadmasters is an agent.

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 representationor on behalf of another, with the consent or authority of the latter. The requisitesof 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.

The basis of agency is Representation. Loadmasters neverrepresented Glodel. Neither was it given any authority to do so.

Principal There must be an actual intention or an intentioninferable on the to appoint an agent.Agent There must be an intention to accept the appointment

Such mutual intention was not present in this case.

NOTE:1. Common carriers Loadmasters and Glodel are common carriers thus they

should have exercised extraordinary diligence2. 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 areliable for a quasi-delict are solidary

3. Glodel cannot collect from Loadmasters cos it did not file a crossclaim.

BORDADOR v LUZ

FACTS: Spouses Bordador were engaged in the jewelry business. RespondentBrigida Luz was their regular customer. On several occasions, Narcisco


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Deganos(Luz bro) got jewelry from the spouses store. This was evidenced by17 receipts. 11 of the receipts stated that the jewels were received by a niece ofBrigida while the last 6 were received for Brigida herself. Deganos was supposedto sell them and give the proceeds to the Bordadors. Deganos only remittedP53K.

Bordadors filed a case in the barangay wherein Deganos and Brigisaexecuted a compromise agreement stating that Deganos will pay.

When Deganos did not pay, Bordadors filed a Civil case in the RTC 4 years after filing the civil case, Bordadors filed a case of Estafa

against the bro and sis

In the civil case, Bordadors claim that Deganos is an agent of Brigida, thus,the latter is solidarily liable with him.

Petitioners: He is an agent cos Brigida sent several letters stating thatshe acknowledges her obligation. But court said that the obligation was for her

own obligation, not DeganosRespondents: Deganos insisted that he acted alone. Brigida said hewas not her agent.

Trial Court ruled that it was the Bordadors themselves which indicatedin the receipts that the jewels were for the niece and Brigida

ISSUE: w/n Deganos is an agent of Brigida.

HELD: NO. The evidence does not support that Brigida authorized the acts ofDeganos. The evidence also does not show that there was an express or impliedagency. The basis for agency is representation. Here, there is no showingthat Brigida consented to the acts of Deganos or authorized him to act onher behalf, much less with respect to the particular transactions involved .The Bordadors were also negligent cos when they dealt with Deganos, they didnot ask for a written authority from Brigida. A perso n deal ing w ith an agent isput upo n inqui ry and m ust discover upon h is per il the author i ty of the

agent.

NOTE: 1. Re the estafa case Petitioners said that the CA should have awaitedthe decision of the estafa case. SC said NO. Bases on Art 33 of the NCC incases involving alleged fraudulent acts, a civil action for damages, entirelyseparate and distinct from the criminal action, may be brought by the injuredparty. Such civil action shall proceed independently of the criminal prosecutionand shall require only a preponderance of evidence. [Civil and criminal canproceed independently].

RALLOS v FELIX GO CHAN

FACTS:


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Concepcion and Gerundia Rollos were sisters. They were co owners of a parcelof 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. OnSeptember 12, 1955, Simon sold the UNDIVIDED shares of the land to Felix GoChan. The administrator of Concepcions estate filed a case to annul the sale

and that the lot be reconveyed to Concepcions estate. According to Felix GoChan, the sale should be vaild w re to him cos he did not know that Concpeciondied. 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 thesale.

HELD: SALE NOT VALID. According to our NCC, no one can contract in thename of another, w/o being authorized by the latter or he has by law, a right torepresent him. Agency is personal, representative and derivative in nature.The authority of the agent emanates from the powers granted by the principal

his act is the act of the principal when done in the scope of his authority. Thus:

General Rule: the death of either the Principal of the Agent ext theAgency.

Exceptions:1. If it has been constituted in the interest of the principal, the agent or a

3rd person who has accepted the stipulation.

2. The agent acted w/o knowledge of the death of the principal AND thethird person who dealt w the agent is in GF (must concur)

Exception 1 does not apply there was no interest in the SPOAException 2 does not apply Simon knew the death of Concepcion when hesold the land to Felix.

NOTE: 1. Re Felix GF defense the law distinguishes between REVOCATIONBY ACT OF PRINCIPAL and REVOCATION BY LAW. In the former, it must becommunicated to be effective. In the latter (such as DEATH), it is instantaneouslyeffective.

EUROTECH INDUSTRIAL TECH INC. v CUIZON

ERwin Store ownerEDwin Sales manager


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FACTS: Eurotech is engaged in the importation and distribution of Europeanproducts. Impact Systems is one of its customer. Impact Systems is owned byErwin. The sales manager is Edwin. Impact Systems ordered 1 sludge pumpfrom Eurotech wherein they paid a dp of P50k. When the pump arrived Eurotechrefused to release it pending full payment. Thus, EDWIN and another person

executed a Deed of Assignment of Receivables wherein they will assign theirreceivabes (from Toledo Corp) to Eurotech. This will serve as payment. Eurotechgave them the pump. Despite the Deed of Assignment, Impact Systemscontinued to collect the receivables from Toledo. Eurotech demanded thatImpact Sytems pay the balance. When the latter did not, Eurotech filed a case.EDWIN filed a motion stating that he is NOT a party in interest cos he wasmerely an AGENT of Impact. According to Eurotech, when ERWIN collectedthe receivables he repudiatedthe power of EDWIN to sign the Deed ofAssignment. Because EDWIN did not notify this to Eurotech, he exceed hisauthority, thus, should be liable.

ISSUE: w/n EDWIN is liable

HELD: NO.

General Rule: Agent is not personally liable to the party to whom hecontracts. (Principal is liable)

Except: 1. When he expressly binds himself to the obligation2. exceeds his authority.

(Agent is liable)

The Deed of Assignment states that EDWIN signed it in his capacity as SalesManager. The powers of an agent acting as a MANAGER is unique cos it hasbroad powers in the absence of any contrary agreement, the agent-managermay enter into contracts that he deems reasonably necessary or n ecessaryto

protect the interest of his principal. In said case, the sludge pump was necessaryfor the business. Thus, EDWINs participation in the Deed of Assignment wasreasonably necessary so that Impact Systems can get the sludge pump. EDWINwas merely acting to protect the interest of his principal, thus, he did notexceed his authority.

ORIENT AIR SERVICE v CA

FACTS:

American Airlines authorized Orient Air to act as its exclusive general salesagent w/in the Philippines for the sale of air passenger transportation.Amerincan Air terminated the agreement cos Orient Air did not remit the net


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proceeds of the Sales of Jan-March. According to Orient Air, it was AmericanAirlines who in fact owned them money. American Airlines still owed them abalance of unpaid commission. It also contended that the actions taken byAmerican Air in termination the agreement were untenable resulting to prejudiceto its business interest. The main issue is the right of Orient Air to the 3%

overriding commission. According to American Air, the commission is basedonly on ticked sales. According to Orient Air, the commission is based on thetotal revenue cos Orient Air has been designated as the exclusive general salesagent of American Air.

RTC Orient Air is entitled to the total revenue commission orders American Air to reinstate Orient Air as its Sales Agent

CA affirmed RTC

ISSUE: (for Agency purposes) w/n the order of the court to reinstate Orient Air

was proper.

HELD: NO. The contract of Agency is a contract where in a person binds himselfto render some service or to do something in behalf or in representation ofanother with the CONSENT or AUTHORITY of the latter. Thus, there can only bea contract of agency if there is consent from the principal it cannot becompelled by law or court order.

NOTE: 1. W re first issue The agreement b/w AA and OA states that OA isentitled to 2 commissions: 7-8% based on AA tickets and a 3% overridecommission based on ticket stock of other air carriers sold by such carriers.Thus, to limit the sales of the 3% override commission to AA ticket stocks onlyand NOT include TOTAL REVENUE would remove the dist inct ionbetween thetwo provisions. The Court held that such conclusion is absurd cos it would leadto the enactment of a meaningless provision. Thus, the 3% overridecommission is based on the TOTAL REVENUE OA won (hindi ako surekung tama intindi ko sa part na to. Labo eh... haha)

DOMINGO v DOMINGO

Vicente SellerGregorio brokerOscar BuyerAmparoOscars wifePurisima sub-broker of Gregorio

FACTS:


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Vicente granted Gregorio, a real estate broker, the exclusive agency to sell hislot with a commission of 5% of the total price, if sold by Vicente within the 30-day duration of the agency or if sold by Vicente within 3 months from thetermination of the agency to a purchaser whom Gregorio presented during

the 30-day duration.

Gregorio authorized Purisima to look for a buyer in consideration for half of the5% commission.

Oscar, found by Gregorio, offered to buy the land at a price lower than P2.00 /sqm. Vicente, through Gregorio, asked if he could raise it. Oscar raised the offerto P1.20 / sqm and they agreed. Oscar paid P2,000 as earnest money to showthat he will pay. Vicente gave Gregorio P300 in the meantime. Pursuant to hispromise, Oscar gave Gregorio P1,000 as a gift for succeeding in lowering theprice from P2.00 to P1.20 / sqm, this was not disclosed by Gregorio to

Vicente.

Oscar told him that he was backing out on the sale because he did not receivethe money that he was supposed to receive from his brother in the US. Aftersome time, Gregorio sensed something fishy because he had not heard fromeither Vicente or Oscar in a while so he met with Oscar.

As it eventually turned out, Gregorio discovered that Vicente had already soldthe property to Oscar and that he offered Oscar an even lower price if hewould agree to cut off Gregorio from the transaction.Upon knowing this,he demanded the payment of his commission form Vicente who said that he wasnot entitled to the commission because he sold not to Oscar, but to Oscars wife,Amparo.

ISSUE:W/N the failure on the part of Gregorio to disclose to Vicente the payment to himby Oscar de Leon P1,000.00 as gift or "propina" for having persuaded Vicente toreduce the purchase price from P2.00 to P1.20 per square meter, constitutesfraud as to cause a forfeiture of his commission on the sale price yes

HELD:

1. The duties and liabilities of a broker to his employer are essentially thosewhich an agent owes to his principal:

Art. 1891. Every agent is bound to render an account of his transactions and todeliver to the principal whatever he may have received by virtue of the agency,even though it may not be owing to the principal. Every stipulation exempting theagent from the obligation to render an account shall be void.


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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 whetherthe agency was or was not for a compensation.

The aforecited provisions demand the utmost good faith, fidelity, honesty,candor and fairness on the part of the agent, the real estate broker in thiscase, to his principal, the vendor. The law imposes upon the agent the absoluteobligation to make a ful l disclosu reor complete account to his principal of all histransactions and other material facts relevant to the agency, so much so that thelaw as amended does not countenance any stipulation exempting the agent fromsuch an obligation and considers such an exemption as void. The duty of anagent is likened to that of a trustee.

Hence, an agent who takes a secret profit in the nature of a bonus, gratuity orpersonal benefit from the vendee, without revealing the same to his principal, the

vendor, is guilty of a breach of his loyalty to the principal and forfeits his right tocollect the commission from his principal, even if the principal does not suffer anyinjury by reason of such breach of fidelity, or that he obtained better results orthat the agency is a gratuitous one, or that usage or custom allows it; becausethe rule is to prevent the possibility of any wrong, not to remedy or repair anactual damage.

NOTE: 1. Where a principal has paid an agent or broker a commission w/oknowledge that the latter has been unfaithful, the principal may recover back thecommission paid, since an agent or broker who has been unfaithful is not entitledto any compensation UNLESS ratified.

General Rule: Every agent is bound to render an account of his transactions (Art189)

Except: a. if the agent acted only as a middlemanb. if agent informed the principal

2. Teofilo Purisima, the sub-agent of Gregorio Domingo, can only recover fromGregorio Domingo

SCHIMD & OBERLY Inc. v RJL MARTINEZ

FACTS: RJL Martinez owns a fishing company. RJL wished to buy electricgenerators. Schimd is a supplier of such. The companies engaged in twotransactions:


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First transaction 3 generators were sold directly by Schimd. The 3generators came from its stockroom

Second transanction this involved 12 Nagato brand generators. In thiscase, RJL bought the generators from the Nagato company (in Japan) via a letterof credit. Schimd merely transmitted RJL orders to Nagato. Nagato shipped the

generators DIRECTLY to RJL. Schimd received a commission for its efforts.

The 15 generators then broke down. Nagato sent two technicians. They foundout that the generators should only run at 4volts (the label said 5v). Schimdreplaced 3 generators at once. RJL sent 3 to Japan for replacement. Theremaining 9 were not replaced. Nagato informed Schimd that the latter repair the9 generators to be charged to Nagato. Schimd refused. RJL then demanded thatSchimd replace the 9 generatods. Shimd refused claiming that it was not theseller. According to Schimd it was just a contract of indent. RJL claimed itwas a con tract of Sale

ISSUE: 1. W/n Schimd was an indentor or vendor2. if Schimd was an indentor, can he still be liable (NEGO)

HELD: 1. Schimd was an INDENTOR. The essence of a contract of sale is thetransfer of ownership in consideration of a price paid or promised. On the otherhand, there is no statutory description of indent. However, JD states that anindent is similar to a middleman an indentor may be best desctibed a personwho acts as a middleman in a contract between a foreign supplier and a localsupplier. In an indent transaction, there are three parties the buyer, theindentor and the suppier who is usually a foreign company. Schimd was not avendor but merely an indentor in the 2nd transaction. The only participation ofSchimd was to act as middleman between RJL and Nagato. In fact, in thedocument, it was stated that the 12 generators were ordered through indentorder.

2. NO. Because an indentor is in someways an agent of the two parties,Schimd may be liable IFhe bound himself to the goods.As an agent, he isbou nd to u ndertake some of the obl igat ions of the pr incipal (such as to

warrant the generators). Court found that Schimd DID NOT expressly state thatit warranted the generators. RJL could not even produce documents of theTerms and Conditions of the supposed warrant.

TAN v GULLAS

FACTS: Spouses Gullas owned a parcel of land. They executed an SPOA infavor of petitioners authorizing them to be brokers for the land. The agreementwas for a period of one month only and it was non-exclusive. Eventually,petitioners found a buyer in the form of the Sisters of Mary. They brought the


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Sisters to the office of Gullas wherein the Sisters expressed they want to buy theproperty. In fact, the sisters bought the property for P20M. Petitioners then wentto Gullas to get their fee. Gullas refused to pay them claming that there were notresponsible for getting the Sisters of Mary. Another agent (Pacana) was theresponsible. Petitioners filed a case with the RTC. They claimed that there were

the eff ic ient procur ing caus e. Gullas claimed that Pacana was the cause andhe was already paid his fee.

ISSUE: w/n petitioners should be paid.

HELD: YES. Gullas failed to prove that they were not the efficient procuringcause. Pacana was not even presented in court. The SPOA which allegedlygrants his power was undated and not notarized. A broker is a person whoseoccupation brings the parties together in matters of trade, commerce ornavigation. Petitioners were authorized by Gullas to act as brockers. 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 theother hand, a BROKER receives compensation by merely bringing together theparties, even if no sale was made.

MEDRANO v CA

Medrano bank manager/sellerFlor & Borbon brokersMr. Lee - buyer

FACTS: Medrano was chairman of a rural bank. The bank had a mango orchardwhich it wants to sell. Medrano contacted his cousin, Flor, to look for a buyer. Anasspciate of Flor Borbon informed them that a Mr. Lee from Makati is lookingfor a mango orchard. Borbon then instructed Flor to tell Medrano to execute aletter authorizing them (Flor and Borbon) to negotiate the sale of the property.The first ocular inspection failed to push thru cos of the weather. Then, Leesuddenly called Borbon and told her that he was on his way to Lipa to check onanother property and if he can see the mango orchard. Borbon asked Lee tomeet up with Medranos daughter and an officer of the bank. Two days later,Borbon asked how the inspection went. Lee said that the mangoes lookedsickly and that he will first get an agriculturist. Three weeks later, Borbon again


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called Lee. Lee told her that he already bought the orchard. Lee was surprisedthat Borbon did not receive any commission. Borbon went to Medrano to claimher commission. Medrano gave her a measly P5K (haha). Medrano claimesthat the Letter of Authority is not binding and that they are not entitled to acommission cos they did not negotiate the sale.

ISSUE: 1. w/n the letter is binding2. w/n Borond and co are entitled to commission

HELD: 1. YES. The letter is the contract between the parties. Medrano signedthe letter in behalf of the bank.

2. YES. Borbon and Flor were the procuring cause of the sale. Based onthe testimonies, if it were not for Borbon and co, the sale would not be possible:

Lee found out about the orchard via Borbon and co Lee called Borbon that he wants to see the orchard (this shows that

Borbon was his only contact) a rep of the bank testified that no ads were made and that the bank didnot entertain other offers

The court held that if a broker is the procuring cause for the sale, he isentitled to commission.

NOTE: 1. w/ re Medranos argument about negotiation it is not aprerequisite that a broker negotiate with the potential buyer so as to get hiscommission. It has been held in a number of cases that the brokers can get theircommission even if there was no nego, never saw the customer, etc. In fact, theycan still get commission even if they just put up an ad provided that this wasthe procuring cause of the sale.

LITONJUA Jr., v ETERNIT CORP

Glanville Pres of ECDelsax Regional Dir of ESACMarquez broker/agentLintonjua - buyer

FACTS: Eternit Corp manufactures roofing materials and pipe products. 90% ofits stocks were owned by ESAC, a company in Belguim. Glanville was thePresident of EC while Delsaux was the Regional Director of ESAC. Both theiroffices are in Belguim. Due to the deteriorating political condition in thePhilippines, ESAC wanted to sell its land. ESAC instructucted Adams (a memberof ECs board) to dispose of the land. Marquez offered them to the Litonjuabrothers (Eduardo and Antonio) of Litonjua & Company Inc for P27million onSept 12, 1986, subject to negotiation. The Litonjuas countered with a P20millioncash offer. Marquez told Glanville, who told Delsaux on Oct 28, 1986, but there


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was no response. On Feb 12, 1987, Delsaux responded by telex stating thatbased on the "Belgian/Swiss decision", the final offer was US$1million andP2.5million. Marquez sent the telex to the Litonjuas, who accepted the proposal.The Litonjuas deposited US$1million to Security Bank. However, given that thepolitical situation was improving, Glanville informed Marquez that the sale would

not push through, followed by a letter stating that the board members of ECdecided not to sell the properties. Delsaux also sent a letter stating that the salewould not push through. The Litonjuas wrote EC demanding damages onaccount of the aborted sale, which EC rejected. They then filed for specificperformance and damages against EC (which became Eterton Multi-ResourcesCorporation), claiming, among others, that Marquez was a broker and not anagent, so no written authority was required; that there was an agency by estoppelwhen Marquez was given apparent authority to sell; and that a contract of salewas perfected. RTC and CA rejected the complaints, hence this petition.

ISSUE: 1. w/n Marquez was authorized as a broker/agent2. w/n there is Agency by Estoppel

HELD: 1. NO. An agency may be expressed or implied from the act of theprincipal, from his silence or lack of action, or his failure to repudiate the agencyknowing that another person is acting on his behalf without authority. Acceptanceby the agent may be expressed, or implied from his acts, which carry out theagency, or from his silence or inaction according to the circumstances. Agencymay be oral unless the law requires a specific form. However, to create orconvey real rights over immovable property via an agent, it is necessarythat it is written. Thus, when a s ale of piece of land is v ia an agent, i tshou ld be in wr i t ing otherwise it is void. The Lintonjas failed to produce such

written instrument coming from the Board of EC. The Board of Directors of ECdid not authorize Marquez, Glanvill or Delsauz as its agents. According to theCorp Code, corporations are controlled by its Board and can only act whenauthorized by such. Absent such authority, acts by an individual director is void,unless ratified. In the case, Marquez Adams and Glanville Delsaux ESAC. Even if ESAC controlled 90% of the shares of EC, the authority of theBoard of EC is a condition sine qua non.

The Litonjuas could not have feigned ignorance. A person dealing with an agentshould not blindly trust such agent. Such person should not act negligently. Heshould ascertain whether the agent acts w/in the bounds of the authority given by

the principal

2. NONE. Glanville and Co, expressly stated that they were acting in behalf ofESAC (Lintonjuas should have known that they do not have the authority)

NOTE: Req of Agency by Estoppel:

1. Principal manifestoed a rep of As authority or knowingly allowed A to


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assume such authority

2. 3rd person GF relied upon such rep3. 3rd person changed his position to his detriment cos of the rep.

SPOUSES VILLORIA v CONTINENTLAL AIR

FACTS: While in the US the Spouses Villoria approached Holiday Travel costhey wanted to purchases tickets from San Diego to Newark. Margaret Mager,the travel agent told them that all Amtrak trains are full. Thus, the couple boughttwo round trip tickets. The Spouses then want to book an earlier flight. Mager toldthem that all flights Continental Air flights are full so she booked them withFrontier Air. Since Frontier Air is much more expensive, the Spouses asked for a

refund. Mager denied since the tickets are non-refundable. The Spouses thenwent to a Greyhound station nearby where they found out there were stillAmtrack tickets available. The Spouses purchased two tickets. Afterwards, theyconfronted Mager. They told her that her misrepresentation misled them intobuying Continental Air tickets. They asked for a refund which Mager denied.Back in the Philppines, the Spouses Continental Air and told them about Magersmisrepresentation. They then asked for a refund. Continental Air denied theirrequest. Instead, Con Air said that they can use their tickets to purchase othertickets. But when they Spouses wanted to buy tickets going to LA, it was denied.The Spouses filed a complaint demanding a refund and other damages.

RTC granted in favor of the Spouses. Ruled that Holiday Inn is an agent ofCon AirCA Reversed RTC. Holiday is not an agent. What happened was a contract ofsale (not agency) cos Holiday Travel buys the tickets from Con Air then sells it tothe customers.

ISSUE: w/n the contract is of sale or of agency

HELD: AGENCY. All the elements of agency are present:

First and Second elements are present Con Air did not deny that it indeed

entered into an agreement with Holdiay, where in Holiday would enter intocontracts of carriage with third persons on Con Airs behalfThird element is present Holiday acted as a mere rep. It was Con Air thatis bound by the contract of carriage, not Holiday.Fourth element present Con Air did not say that Holiday exceeded itsauthority.

Con Air consistently maintains the validity of the contract of carriage that Holiday


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entered on its behalf. In fact, when the Spouses told them that they bought thetickets from Holdiay, Con Air did not deny that Holiday is its agent. Con air is alsoestopped cos the Spouses acted on Con Airs representation that Holiday is itsagent. According to Art 1869, agency may be express, or implied from the actsof the principal, from his silence or lack of action, or his failure to repudiate the

agency, knowing that another person is acting on his behalf without authority.

It is not a contract of sale cos ownership and control of the tickers are nottransferred to Holiday. Also, it is Con Air that is bound by the contract of carriagenot Holiday. The main difference between agency and contract of sale is thetransfer of ownership:

Sale the delivery effects a relinquishment of title, control and ownershipAgency principal retains ownership and control, agency merely acts on hisbehalf and instructions.

NOTE: 1. Con Air not liable for the acts of its agent cos Con Air did not exercisecontrol over Holidays employees and that it was not negligent.

RALLOS v YANGCO

FACTS: Yangco owns a company which buy and sells tobacco leaf products. OnNovember 27, 1907, Yangco sent a letter to Rallos telling the latter that he wantsto do business with him. Via the letter, Yangco introduced Florentino Collantes ashis agent. According to Yangco, Collantes is empowered by an SPOA to performall acts necessary to carry out his (Yangcos) plans. Thus, Rallos did businesswith Yangco thru his agent, Collantes. In 1909, Rallos sent to Collantes 218bundles of tobacco to be sold on commission (2% commission). Collantes soldthe tobacco for ~P1700. His commission was ~P200. But instead of remitting theP1500, he appropriated the money. Rallos then demanded payment fromYangco. Yangco refused. He said that he had already terminated their agencyrelationship BEFORE the goods were deliveted to Collantes. According to him,Collantes was acting personally and not as his agent. However, this fact was notcommunicated to Rallos - no notice of the termination was given to him.

ISSUE: w/n Yangco is liable.

HELD: YES. Yangco advertised Collantes as his agent. Thus, it was his duty toinform Rallos that the agency is terminated. Failing to do so, he is liable forwhatever goods Rallos, without negligence and in good faith, sent toCollantes.

NOTE: 1. Knowledge of termination may be ACTUAL or CONSTRUCTIVE.


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LINTONJUA v FERANDEZ

Brokers of Fernandez Alimario and CiscoRep. of owner Fernandez

Buyers Lintonjua bros

FACTS: Lintonjuas Version - Two brokers, Alimario and Cisco, offered for salea parcel of land to the Lintonjua bros. They said that Fernendez, therepresentative of the owners, authorized them to look for a buyer. All of them metin the bros office in Mandaluyong wherein they agreed to buy the land at P150/sqmeter. They also agreed that the owners would shoulder the tax and otherexpenses. They agreed to meet up again on December 8 to finalize the sale. Itwas on this date that Fernandez would bring a written authority from the ownersauthorizing her to sell the land. On the said date, only Cisco showed up. He saidthat Fernandez was not able to go cos of some problem with the tenants. After a

few weeks, the bros wrote Fernandez and demanded that she sell them the land.Fernandez replied that: 1) She did not agree that the owners would shoulder thetax expenses, etc. 2) They did not agree to sign the Deed of Sale on December 8and 3) Cos of some problem with the tenants, she informed his brokers to tell theLintonjuas that the sale will not push thru. The bros filed in court for specificperformance. According to them there was a contract of sale based on her letter:

My cousin and I have therebychanged our mindand that the sale willno longerpush through. .... In view thereof, I regret to formally inform youthat we are no lon ger sel ling the prop ertyuntil the problems are fullysettled.

Fernandez Version: She asked Alimario to look for buyers on a best offerbasis. And when she met up with the bros, she merely wanted to hear theiroffer. She could not have bound the owners to the sale cos she has no writtenauthority to sell the land. After the meeting, she found out that there weretenants in the land thus she could not get the clearance. Also, her cousin (coowner) would not agree on the P150/sq meter price. Thus, she informed Alimarioand Cisco to relay to the bros the situation. There was also no earnest moneypaid by the bros.

ISSUE:1. w/n there is a contract of sale.2. w/n contract falls w/in the stature of frauds

HELD: 1. NO. It was clear from the letter that Fernandez did not agree on sellingthe land. When Fernandez used changed our minds, she was referring to thefact of selling the property AT ALL. Not selling the property to the bros. Also,there was no evidence that Fernadez had a WRITTEN authority, from the


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owners, to sell the land. Art 1878 states that an SPOA is needed to enter intoany contract by which the ownership of an immovable is transmitted oracquired either gratuitously or for a valuable consideration, or to create orconvey real rights over immovable property or for any other act of strictdominion. 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. Theletter she sent was signed by her alone, without any authority from the owners.Thus, the letter is not binding to the owners.

2. NO. It presupposes the existence of a perfected contract of sale. Also, it mustbe signed by the said party or his agent duly authorized in writing.

AGGABAO v PARULAN

Elena wifeDionisio husbandAtty. ParulanDionisios broSpouses Aggabao buyers

FACTS: A real estate broker offered two lands in Paranaque to the Aggabao

owned by Elena and Dionasio, who are separated in fact. They then met upElena. She showed them: Original TCT of land 1, certified true copy of land 2 andSPOA from her husband authorizing her to sell the land. The Aggabaos gaveP20k as earnest money. The spouses then went to the Register of Deeds toinquire re the lots. They found out that Land 2 was mortgaged to a bank and thatthere was a court orderd from Dionisio authorizing Elena to mortgage the land.The court order was necessary cos the land is conjugal property. When thespouses paid the balance, Elena did not give the owners copy of land 1. Shesaid that it was a relative in HK. The spouses then found out that the copy waswith Atty Parulan. Atty Parulan was armed by an SPOA from Dionisio authorizinghim to sell the lands. He offered to give the TCT for 800k but the spouses havealready paid Elena. Dioniosio then filed a case to nullify the sale base on Art 124of the FC.

RTC and CA ruled for Dionisio (RTC determined that the Elenas SPOA wasforged)

Spouses claim that Art 124 does not apply cos the spouses were marriedbefore the FC thus the Civil Code should apply. Art 177 states that the contract


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was merely voidable (not void) and maybe subject to ratification. And suchratification, according to them, happened when Atty. Parulan made an offer togive the TCT for 800k. (Agency)

Spouses contend they are good faith buyers

Spouses contend that Veloso Doctrine should apply thus sale valid even ifSPOA forged.

ISSUE: 1. w/n Art 124 of the FC applies2. w/n they are GF buyers3. w/n the Veloso Doctrine applies (Veloso v Ca)

HELD: 1. YES. The sale was made in 1991, which was after the effectively of theFC. The FC also provides that it has a retroactive effect provided that vestedrights 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 wasonly to sell the land NOT to administer it. Atty Parulan had no powers ofadmin, thus he cannot ratify the contract. Powers of admin does not includepower to encumber or dispose, which are strict acts of ownership. An authority todispose cannot proceed from an authority to admin, and vice versa. The twopowers 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 authenticityof the seller. Case law states that buyers of conjugal property should exercisetwo kinds of diligence: 1) Verify the validity of the title and 2) verify the authorityof the seller. Spouses did not do the latter.

3. NO. Veloso NA cos the property there belonged to the exclusive prop of thehusband. The land in this case is part of the conjugal property.

NOTE: 1. Art 124 of the FC The administration and enjoyment of the conjugalpartnership property shall belong to both spouses jointly xxx In the event that onespouse is incapacitated or otherwise unable to participate in the administration ofthe conjugal properties, the other spouse may assume sole powers ofadministration. These powers do not include disposition or encumbrance withoutauthority of the court or the written consent of the other spouse. In the absenceof such authority or consent, the disposition or encumbrance shall be

VOID.

DOMINION INSURANCE CORP v CA

FACTS: Guevarra is an agent of Dominion Insurance Corp. He paid severalclaims out of his own pocket. He filed a case with the RTC to seekreimbursement.


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ISSUE: 1. w/n he acted w/in his authority as an agent.2. w/n he should be reimbursed.

HELD: 1. NO. Even tho the document has the word special, Insurance Corponly gave general agency to Guevarra. If the agency agreement is couched in

general terms, it is only limited to acts of administration. In the case, Guevarrapaid the claims out of his own funds. Such act requires a SPOA as stated in Art1878 (1) of the NCC: SPOAs are needed to make payments not usuallyconsidered as acts of admin. Since an SPOA is needed to make the payments,he exceeded his authority.

2. YES/NO. If we follow the rules of agency, Guevarra should not be reimbursed.According to 1918 (1) of the NCC: the principal is not liable for expenses incurredby the agent if the agent acted in contravention of the principals instructionsunless the principal wants to avail himself of the benefits. In the case, theagreement was explicit that the claims should be paid out of a revolving fund in

Guevarras possession. However, he should be reimbursed base on naturalobligaitons. To rule otherwise would be unjust enrichment.

VELOSO v CA

Veloso owner of land, husbandIrma seller, wifeEscario - buyer

FACTS: Veloso owns a land in Tondo, Manila. Such land is under his name andis not part of the conjugal property of their family. He then found out that his titlewas cancelled and new one was issued in the name of Escario. Veloso claimedthat he was in possession of the title but when his wife left the country, he foundout it was missing. When he went to the Reg of Deeds, he found out that his soldthe land and it was supported by a GPOA. Veloso claimed that he did notauthorize the sale and that he did not issue any GPOA. He claims that the GPOAwas forged and that his signature was falsified (He showed bank documents toprove that his signature was different). Veloso filed for a petition to declare thesale as void. Escario said that she is a buyer in good faith. She just relied on theface of the GPOA hence sale should be valid.

ISSUE: w/n the sale is valid.

HELD: YES. The GPOA was valid and regular on its face. The fact that it wasnotarized carries evidentiary weight that it was duly executed. Even tho it waslabeled as only a General Power of Attorney, the sale was still valid cos itstated therein an authority to sell. The courts said that even if the instrument iscaptioned as a general power of attorney, but if it states a specific power (suchas the power to sell), then the intention is to confer such power. On the other


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hand, even if it is captioned as a special power of attorney, but the words arecouched in a general manner, only powers of admin are conferred. Essentially,what is controlling extent of the powers contemplated. Escario is thus aninnocent buyer in GF cos she just relied on the GPOA

NOTE: 1. Veloso failed to prove fraud cos he just presented signatures claimingthey are different from the sigs in the GPOA Fraud must be proved by clearand convincing evidence.2. Equitable Estoppel where one or two persons will be injured by the loss, theperson who made the loss possible will bear the loss. this was applied cosalthough Veloso admitted that he possessed the only copy of the TCT, his wifewas able to acquire one. Such possession was deemed as a conclusive authorityfrom Veloso to the Reg of Deeds to issue a new TCT.

PINEDA v CA

FACTS: Prime Marine Services INC got a group insurance policy from InsularLife. During the effectivity of the policy, 6 employees of PMSI died in a shipaccident. The families of the victims went to Capt. Nuval for help in claiming thebenefits. Nuval agreed. The families executed an POA authorizing Nuval tofollow up, demand, serve for their benefit indemnities of sums of money duethem relative to the sinking of the ship. Unknown to them, Nuval used the SPOAto claim the group insurance policy from Insular life. He deposited them in hisown account. When the families found out that their deceased members have aninsurance policy, they went to Insular to claim them. Insular said that they alreadydelivered the payments to Nuval. Insular said that the POA authorizing Nuvalwere sufficient. The written authority is specifically authorizes Nuval to claim anysum of money pertaining to the sinking of the ship. There is also nothing in thelaw that requires a SPOA to claim insurance.

ISSUE: 1. w/n the POA authorizes Nuval to claim the insurance proceeds.2. w/n Insular is bound by the acts of Nuval, its agent.

HELD: 1. NO. The POA does not state in unequivocal terms that Nuval has theauthority to receive insurance proceeds. As stated by the respondent himself,such POA were SPOAs. Thus, their execution means the exclusion of any intentto grant a GPOA. SPOAs are strictly construed. It would be highly imprudent toconstrue the POAs to include insurance proceeds especially since the normalinsurance practice is that payments are just COURSED THRU the and not paidto the employers (PMSI in this case).

2. YES. Nuval is the agent of Insular life. It has been held that the employer is theagent of the insurer. An agency relationship is based upon consent by oneperson 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


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directs the performance of the employer's administrative acts, and if these dutiesare not undertaken properly, the insurer is in a position to exercise moreconstricted control over the employer's conduct. As regards an employee-employer relationship, there is no control cos the employee has no knowledge orcontrol re employers handling of the policy. Thus, Insular acted negligently when

it just relied on the POA of Nuvali.

NOTE: 1. Group insurance policy a single insurance covering numerousindividuals. Payments are coursed thru the employer. It can be contributory(employees help pay for the premiums, to be deducted from their salaries) ornon-contributory (employer pays 100% of the premium).

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