Professional Documents
Culture Documents
Page |1
PART I
A. DEFINITION OF AGENCY- Article 1868
defines the contract of agency:
Article 1868. 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.
PURPOSE
ELEMENTS OF AGENCY
(according to the Courts decision in Rallos vs
Felix Go Chan)
a. There is consent, express or implied,
of the parties to establish the
relationship;
b. The object is the execution of a
juridical act in relation to a third
person;
c. The agent acts as a representative
and not for himself; and
d. The agent acts within the scope of
his authority.
CONSENT ----to say there is consent
to enter into an agency, there
must be intent to enter in the
relationship
The intention of the parties is important in
determining the existence of agency.
is
1. Authority to act.
By legal fiction, the agent
becomes the principal, authorized
to perform all acts which the latter
would have him do. (Orient Air
Services v. CA)
The actual or real absence of the
principal is converted into his
legal or juridical presence.
(Eurotech vs. Cuison)
The principal becomes liable for
obligations contracted by the
agent provided that the act is
within the authority of the agent.
(Prudential Bank vs. CA)
AGENCY REVEIWER..Page |2
2. Agent not real party-in-interest
Since the agent is a mere
extension of the personality of the
principal, he is not a party to the
contract with the third person.
The liability of the third party is to
the principal and not to the agent.
own
exclusive
benefit, he is not
really acting for the
principal but is
really acting for
himself.
4. Bad faith of the agent is bad faith of the
principal.
Distinguished General Agency from Agency
couched in general terms.
Article 1876, Civil Code: General
agency comprises all the business of the
principal.
Article 1877, CC: An Agency couched in
general terms comprises only acts of
administration, even if the principal
should state that she withholds no power
or that the agent may execute such acts
as he may consider appropriate, or
eventhough the agency should authorize
a general and unlimited management.
AGENCY REVEIWER..Page |3
Respondents filed a writ of preliminary
injunction and/or temporary restraining order
against the petitioners. The Executive Judge of
the Trial Court of Makati issued a 72-hour
temporary restraining order.
Respondent contends that their contract
is with PNB-IFL and that PNB is just a mere
attorney-in-fact and does not have the authority
to foreclose and compute the interests.
ISSUE:
Whether or not PNB as an agent of PNBIFL has the full authority with the mortgage
properties and computation of interests?
HELD:
No, In a foreclosure of a mortgage
undertaken by an attorney-in-fact, the validity of
a loan contract cannot be raised against said
agent, as the matter is solely between the
principal and the other party to the contract; An
agent not a party to a contract of loan has no
power to re-compute the interest rates set forth
in the contract.
The contract questioned is one entered
into between respondent and PNB-IFL, not PNB.
In their complaint, respondents admit that
petitioner is a mere attorney-in-fact for the PNBIFL with full power and authority to, inter alia,
foreclose on the properties mortgaged to secure
their loan obligations with PNB-IFL. In other
words,herein petitioner is an agent with limited
authority and specific duties under a special
power of attorney incorporated in the real estate
mortgage. It is not privy to the loan contracts
entered into by respondents and PNB-IFL. The
issue of the validity of the loan contracts is a
matter between PNB-IFL, the petitioners
principal and theparty to the loan contracts, and
the respondents. Yet, despite the recognition
that petitioner is a mere agent, the respondents
in their complaint prayed that the petitioner PNB
be ordered to re-compute the rescheduling of
the interest to be paid by them in accordance
with the termsand conditions in the documents
evidencing the credit facilities and crediting the
amount previously paid to PNB by herein
respondents. Clearly, petitioner not being a party
to the contract has no power to re-compute the
interest rates set forth in the contract.
Respondents,therefore, do not have any cause
of action against petitioner.
AGENCY REVEIWER..Page |4
Caram Jr. filed his answer alleging that he has
no knowledge or information about the previous
encumbrances, transactions, and alienations in
favor of plaintiff until the filing of the complaints.
RTC favored Laureta and ordered the nullity of
the deed of sale of the land to Caram. CA
affirmed RTC decision.
Caram assails the finding of the trial court that
the second sale of the property was made
through his representatives, Irespe and Atty.
Aportadera. He argues that Pedro Irespe was
acting merely as a broker or intermediary with
the specific task and duty to pay Mata the sum
of P1,000.00 for the latter's property and to see
to it that the requisite deed of sale covering the
purchase was properly executed by Marcos
Mata; and that the other alleged representative,
Atty. Aportadera, merely acted as a notary public
in the execution of the deed of sale.
The petitioner also contends that he cannot be
considered to have acted in bad faith because
there is no direct proof showing that Irespe and
Aportadera, his alleged agents, had knowledge
of the first sale to Laureta.
ISSUE:
1.) Whether or not Irespe and Atty, Aportadera
acted as agents of Caram?
2.) Whether or not bad faith of agent is bad faith
of principal?
HELD:
1.) Yes. Irespe and Atty. Aportadera are agents
of Caram.
The facts of record show that Mata, the vendor,
and Caram, the second vendee had never met.
During the trial, Marcos Mata testified that he
knows Atty. Aportadera but did not know
Caram. Thus, the sale of the property could
have
only
been
through
Caram's
representatives, Irespe and Aportadera. The
petitioner, in his answer, admitted that Atty.
AGENCY REVEIWER..Page |5
The RTC rendered its decision making
petitioner liable to repay Guevarra. On appeal,
the trial court decision was affirmed.
ISSUE:
Whether Gueverra acted within
his authority as agent of petitioner
HELD:
The Special Power of Attorney would
show that the parties intended to enter into a
principal-agent relationship but despite the word
special in the title of the document, the
contents reveal that what was constituted was
actually a general agency. The Court in
examining the language of the SPA found that it
was comprehensive enough to cover all the
business of the principal. A general power
permits the agent to do all acts for which the law
does not require a special power and contents I
the document did not require a special power of
attorney
In this case, although the agency
covered all of the business of the principal it was
couched in general terms which meant that his
authority was limited only to acts of
administration. The payment of claims, being an
act of strict dominion, requires a special power
of attorney (Art.1878). Thus, although he was a
general agent, he was not authorized to pay the
claims.
Under 1918 of CC, the principal will not be liable
for the expenses incurred by the agent who
acted in contravention of the formers instruction.
Fortunately for the agent, although he acted
beyond his authority, the Court allowed him to
recover the amounts he advanced on the basis
of 1246.
Veloso vs CA
ISSUE:
FACTS:
HELD:
AGENCY REVEIWER..Page |6
Yes, the sale of the subject property is valid. The
Supreme Court held that an examination of the
records showed that the assailed power of
attorney was valid and regular on its face. It was
notarized and as such, it carries the evidentiary
weight conferred upon it with respect to its due
execution. While it is true that it was
denominated as a general power of attorney, a
perusal thereof revealed that it stated an
authority to sell. Respondent Aglaloma relied on
the power of attorney presented by petitioner's
wife, Irma. Being the wife of the owner and
having with her the title of the property, there
was no reason for the private respondent not to
believe, in her authority. Thus, having had no
inkling on any irregularity and having no
participation thereof, private respondent was a
buyer in good faith. It has been consistently held
that a purchaser in good faith is one who buys
property of another, without notice that some
other person has a right to, or interest in such
property and pays a full and fair price for the
same, at the time of such purchase, or before he
has notice of the claim or interest of some other
person in the property. Besides, the records of
this case disclosed that the plaintiff is not
entirely free from blame. He admitted that he is
the sole person who has access to the TCT and
other documents appertaining thereto. However,
the fact remains that the Certificate of Title, as
well as other documents necessary for the
transfer of title were in the possession of
plaintiffs wife, Irma L. Veloso, consequently
leaving no doubt or any suspicion on the part of
the defendant as to her authority. Under Section
55 of Act 496, as amended, Irmas possession
and production of the Certificate of Title to
defendant operated as conclusive authority from
the plaintiff to the Register of Deeds to enter a
new certificate.
ANASTACIO G. DUGO, petitioner vs.
ADRIANO LOPENA, ROSA RAMOS and HON.
ANDRES, Judge of the Court of First
Instance of Rizal
G.R. No. L-18377, December 29, 1962
Facts:
Petitioner AnastacioDugo and one
Rodrigo S. Gonzales purchased three
parcels of land from the respondents
Adriano Lopena and Rosa Ramos. Down
payment was given with the agreement
that the balance would be paid in
installments.
To secure the payment of the balance,
the vendees executed over the same
three parcels of land Deed of Real Estate
Mortgage in favor of the respondents
with the condition that failure of the
vendees to pay any of the installments
on
their
maturity
dates
shall
automatically cause the entire unpaid
balance
to
become
due
and
demandable.
The vendees defaulted on the first
installment. It resulted then that the
vendors filed a complaint for the
foreclosure of the aforementioned real
estate mortgage with the Court of First
Instance of Rizal, the Honorable Judge
Andres Reyes presiding.
Meanwhile, there were two other civil
cases filed in the same lower court
against
the
same
defendants
AnastacioDugo
and
Rodrigo
S.
Gonzales. Both complaints involved the
same cause of action as that of the
respondents. As a matter of fact all three
cases arose out of one transaction. In
view of the identical nature of the three
cases, they were consolidated by the
lower court into just one proceeding.
Before the cases could be tried, a
compromise agreement was submitted to
the lower court for approval. It was
signed by the respondents on one hand,
and Rodrigo S. Gonzales, on the other. It
was not signed by the herein petitioner.
However,
Rodrigo
S.
Gonzales
represented that his signature was for
both himself and the petitioner.
Moreover, AnastacioDugos counsel of
record, Atty. Manuel O. Chan, the same
AGENCY REVEIWER..Page |7
lawyer who signed and submitted for him
the answer to the complaint, was present
at the preparation of the compromise
agreement and this counsel affixed his
signature thereto.
In the compromise agreement, the
plaintiffs have agreed to give the
defendants up to June 30, 1960 to pay
the
mortgage
indebtedness.
This
compromise agreement was approved
by the lower court on the same day it
was submitted, June 15, 1960.
Subsequently, a so-called Tri-Party
Agreement was drawn. The signatories
to it were AnastacioDugo and Rodrigio
S. Gonzales as debtors, Adriano Lopena
and Rosa Ramos as creditors, and, one
Emma R. Santos as payor. The
stipulations of the Tri-Party Agreement
provide the following, among others:
AGENCY REVEIWER..Page |8
Article 2028 of the Civil Code provides
that a compromise is a contract whereby
the parties, by making reciprocal
concessions, avoid a litigation or put an
end to one already commenced.
AGENCY REVEIWER..Page |9
Consequently,the lawyers of HI Cement
agreed to enter into a compromise agreement
with the three whereby commissioners shall be
assigned by the court for the purpose of
assessing the value of the disputed areas of
claim. After the assessment was made, the
commissioners recommended a price rate of
P15.00 per square meter. However the Board of
Directors of HI Cement disapproved the said
compromise agreement. Consequently , Atty.
Ventura, lawyer of HI Cement, filed a motion
with the court to disregard the compromise
agreement.
The petitioners questioned the motion filed by
Atty. Ventura. Petitioners
insisted that the
compromise agreement is binding because prior
to entering into the compromise agreement, the
three lawyers of HI Cement declared in open
court that they are authorized to enter into a
compromise agreement for HI Cement; that one
of the lawyers of HI Cement, Atty. Florentino
Cardenas, is an executive official of HI Cement.
They also emphasized that being an executive
official means that such act ratified the
compromise agreement even if it was not
approved by the Board. On the other side, HI
Cement contended that the lawyers were not
authorized and that in fact there was no special
power of attorney executed in their favor for the
purpose of entering into a compromise
agreement
The trial court dismissed the complaint of the
petitioners and ruled in favor of HI Cement.
ISSUE:
Whether or not a compromise
agreement entered into by a lawyer
purportedly
in
behalf
of
the
corporation is valid without a written
authority.
HELD:
No, a compromise agreement entered
into by a lawyer purportedly in behalf
A G E N C Y R E V E I W E R . . P a g e | 10
ever made such a representation. In any event,
assuming arguendo that they did, such a selfserving assertion cannot properly be the basis
for the conclusion that the respondent
corporation had in fact authorized its lawyers to
compromise the litigation.
It having been found by the trial court that "the
counsel for the plaintiff entered into the
compromise agreement without the written
authority of his client and the latter did not ratify,
on the contrary it repudiated and disowned the
same ...", We therefore declare that the orders
of the court a quo subject of these two petitions,
have not been issued in excess of its
jurisdictional authority or in grave abuse of its
discretion.
No
The authority granted to Villamil-Estrada
under the special power of attorney was explicit
and exclusionary: for her to institute any action
in court to eject all persons found on lots number
9127 and 443 so that Cosmic Lumber could take
material possession thereof and for this
purpose, to appear at the pre-trial and enter into
any stipulation of facts and/or compromise
agreement but only insofar as this was
protective of the rights and interests of Cosmic
Lumber in the property
Nowhere in this authorization was
Villamil-Estrada granted expressly or impliedly
any power to sell the subject property nor a
portion thereof
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.
In the context of special investiture of
powers to Villamil-Estrada, alienation by sale of
an immovable certainly cannot be deemed
protective of the right of Cosmic Lumber to
physically possess the same, more so when the
land was being sold for a price of P80/sqm , very
much less than its assessed value of P250/sqm
and considering further that plaintiff never
received the proceeds of the sale
A G E N C Y R E V E I W E R . . P a g e | 11
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 should be void. Thus, the
authority of an agent to execute a contract for
the sale of real estate must be conferred in
writing and must give him specific authority,
either to conduct the general business of the
principal or to execute a binding contract
containing terms and conditions which are in the
contract he did execute
For the principal to confer the right upon
an agent to sell real estate, a power of attorney
must so express the powers of the agent in clear
and unmistakable language
It is therefore clear that by selling to
Perez a portion of Cosmic Lumbers land
through a compromise agreement, VillamilEstrada acted without or in obvious authority.
The sale ipso jure is consequently void and so is
the compromise agreement. This being the
case, the judgment based thereon is necessarily
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
Mercado vs. Allied Banking Corporation
Facts
The petitioners are heirs of Perla Mercado. Perla
instituted a Special Power of Attorney (SPA) in
favor of her husband, Julian, giving him authority
as her agent. Later, on the strength of the SPA,
Julian obtained two loans from Allied Banking
Corp. secured by real estate mortgage (REM) of
the same property. Julian defaulted on his loan
obligations so the bank initiated foreclosure
proceedings on the subject property where the
bank was the highest bidder.
Later, petitioners filed with the RTC an action for
the annulment of the REM over the subject
property, saying that it was not covered by the
SPA and that said SPA no longer had force and
effect at the time the loan was contracted.
A G E N C Y R E V E I W E R . . P a g e | 12
Issue:
Whether or not Gabriela de Coster y Roxas is
liable fo the mortgage executed by her agenthusband Jean Poizat.
ISSUE:
WON the agent had the implied
authority to indorse checks received in payment.
FACTS:
This is a case where 132 checks
made out in the name of the Insular Drug Co.,
Inc., were brought to the branch office of the
Philippine National Bank in Iloilo by Foerster, a
salesman of the drug company, Foerster's wife,
and Foerster's clerk.
A G E N C Y R E V E I W E R . . P a g e | 13
withdrawn from the bank, it passed to the drug
company which thus suffered no loss.
Ruling: Yes.
The
loan
obtained and the
mortgage executed
by
Yulo
was valid and therefore defendants are bound to
pay for it. By virtue of the authority conferred by
the defendants by executing a power of attorney,
agent Yulo was authorized to borrow money and
invest it as he wished, without being obliged to
apply it necessarily for the benefit of his
principals.
A G E N C Y R E V E I W E R . . P a g e | 14
November 20, 1973 followed by Simona in 1977.
Respondents herein moved for the judicial
partition of the Properties however the petitioner
refuses with the respondents the possession
and rental income of the Properties. The
complaint was amended to include the
annulment of the Deed of Sale.
The RTC ruled to the validity of the Sale,
However on appeal the CA reversed said
Decision. Hence this petition
Issue: Whether or not the General Power of
Attorney did not authorize Mauricio to sell the
property. (Agency issue only)
Ruling:
Yes, Mauricio was granted with such authority.
Article 1878 requires a special power of attorney
for an agent to execute a contract that transfers
the ownership of an immovable. However, the
Court has clarified that Article 1878 refers to the
nature of the authorization, not to its form. Even
if a document is titled as a general power of
attorney, the requirement of a special power of
attorney is met if there is a clear mandate from
the principal specifically authorizing the
performance of the act.
Simona authorized Mauricio to mortgage or
otherwise hypothecate, sell, x x x
II. ESTABLISHING AGENCY
A G E N C Y R E V E I W E R . . P a g e | 15
Secretary of the Company where Jose Gana
was the Director and Treasurer, for the
extension of the validity of their tickets,
which were due to expire on 8 May 1971.
Teresita enlisted the help of Lee Ella Manager of
the Philippine Travel Bureau, who used to
handle travel arrangements for the personnel of
the Sta. Clara Lumber Company. Ella sent the
tickets to Cesar Rillo, Office Manager of AIR
FRANCE. The tickets were returned to Ella who
was informed that extension was not possible
unless the fare differentials resulting from the
increase in fares triggered by an increase of the
exchange rate of the US dollar to the Philippine
peso and the increased travel tax were first paid.
Ella then returned the tickets to Teresita and
informed her of the impossibility of extension.
Despite repeated warnings by Ella, The GANAS
departed from Manila in the afternoon of 7 May
1971 on board AIR FRANCE to Osaka Japan.
There is no question with respect to this leg of
the trip.
However, for the Osaka/Tokyo flight on 17 May
1971, Japan Airlines refused to honor the tickets
because of their expiration, and the GANAS had
to purchase new tickets. They encountered the
same difficulty with respect to their return trip to
Manila as AIR FRANCE also refused to honor
their tickets. They were able to return only after
pre-payment in Manila, through their relatives, of
the readjusted rates.
Issue:
Whether or not the notice of the agent Ella of the
rejection of the request for extension of the
validity of the plane tickets, also notice to the
principal.
Held:
YES. The GANAS cannot defend by contending
lack of knowledge of those rules since the
evidence bears out that Teresita, who handled
travel arrangements for the GANAS, was duly
informed by travel agent Ella of the advice of
Reno, the Office Manager of Air France, that the
tickets in question could not be extended
beyond the period of their validity without paying
the fare differentials and additional travel taxes
brought about by the increased fare rate and
travel taxes.
A G E N C Y R E V E I W E R . . P a g e | 16
and exclusionary: for her to institute any action
in court to eject all persons found on lots number
9127 and 443 so that Cosmic Lumber could take
material possession thereof and for this
purpose, to appear at the pre-trial and enter into
any stipulation of facts and/or compromise
agreement but only insofar as this was
protective of the rights and interests of Cosmic
Lumber in the property.
Nowhere in this authorization was VillamilEstrada granted expressly or impliedly any
power to sell the subject property nor a portion
thereof. 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. In the context of special
investiture of powers to Villamil-Estrada,
alienation by sale of an immovable certainly
cannot be deemed protective of the right of
Cosmic Lumber to physically possess the same,
more so when the land was being sold for a
price of P80/sqm , very much less than its
assessed value of P250/sqm and considering
further that plaintiff never received the proceeds
of the sale.
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
should be void. Thus, the authority of an agent
to execute a contract for the sale of real estate
must be conferred in writing and must give him
specific authority, either to conduct the general
business of the principal or to execute a binding
contract containing terms and conditions which
are in the contract he did execute or the
principal to confer the right upon an agent to sell
real estate, a power of attorney must so express
the powers of the agent in clear and
unmistakable language.
A G E N C Y R E V E I W E R . . P a g e | 17
co-petitioner Ernesto as to the sale of the
subject parcels of land. Thus, the Contract to
Sell, although signed on the margin by the five
petitioners, is not sufficient to confer authority on
petitioner Ernesto to act as their agent in selling
their shares in the propertiesin question.
However, despite petitioner Ernestos lack of
written authority from the five petitioners to sell
their shares in the subject parcels of land, the
supposed Contract to Sell remains valid and
binding upon the latter. As can be clearly
gleaned from the contract itself, it is not
onlypetitioner Ernesto who signed the said
Contract to Sell; the other five petitioners also
personally affixed their signatures thereon.
Therefore, a written authority is no longer
necessary in order to sell their shares in the
subject parcels of land because, by affixing their
signatures on the Contract to Sell, they were
notselling their shares through an agent but,
rather, they were selling the same directly and in
their own right.
ESTABLISHING AGENCY- 2. WRITTEN- b.
EFFECT
AF REALTY vs. DIESELMAN
FACTS:
Dieselman Freight Service Co. (Dieselman for
brevity) is a domestic corporation and a
registered owner of a parcel of commercial lot.
Manuel C. Cruz, Jr., a member of the board of
directors of Dieselman, issued a letter
denominated as "Authority To Sell Real
Estate" to Cristeta N. Polintan, a real estate
broker of the CNP Real Estate Brokerage. Cruz,
Jr. authorized Polintan "to look for a
buyer/buyers and negotiate the sale" of the
lot. Cruz, Jr. has no written authority
from Dieselman to sell the lot.
In turn, Cristeta Polintan,
through a
letter, authorized Felicisima ("Mimi") Noble to
sell the same lot.
Felicisima Noble then offered for sale the
property to AF Realty & Development, Inc. (AF
A G E N C Y R E V E I W E R . . P a g e | 18
Whether or not Cruz is an agent of Dieselman,
despite the fact that he has no written authority
to sell or negotiate the sale of the lot
HELD:
NO. Cruz is not an agent of Dieselman.
In the instant case, it is undisputed that
respondent Cruz, Jr. has no written authority
from the board of directors of respondent
Dieselman to sell or to negotiate the sale of the
lot, much less to appoint other persons for the
same purpose. Respondent Cruz, Jr.s lack of
such authority precludes him from conferring
any authority to Polintan involving the subject
realty. Necessarily, neither could Polintan
authorize
Felicisima
Noble. Clearly,
the
collective acts of respondent Cruz, Jr., Polintan
and Noble cannot bind Dieselman in the
purported contract of sale.
Petitioner AF Realty maintains that the sale of
land by an unauthorized agent may be ratified
where, as here, there is acceptance of the
benefits involved. In this case the receipt by
respondent Cruz, Jr. from AF Realty of the
partial payment of the lot effectively binds
respondent Dieselman.
The Court disagreed.
Involved in this case is a sale of land through an
agent. Thus, the law on agency under the Civil
Code takes precedence. This is well stressed
in Yao Ka Sin Trading vs. Court of Appeals:
Since a corporation, such as the private
respondent, can act only through its officers and
agents, all acts within the powers of said
corporation may be performed by agents of its
selection; and, except so far as limitations or
restrictions may be imposed by special charter,
by-law, or statutory provisions, the same general
principles of law which govern the relation of
agency for a natural person govern the officer or
agent of a corporation, of whatever status or
rank, in respect to his power to act for the
corporation; and
agents
when
once
appointed, or members acting in their stead, are
subject to the same rules, liabilities, and
incapacities as are agents of individuals and
private persons. (Emphasis supplied)
Pertinently, Article 1874 of the same Code
provides:
ART. 1874. When a sale of piece of land or any
interest
therein
is through
an
agent,
the authority of
the
latter shall be
in
writing; otherwise, the
sale
shall
be
void. (Emphasis supplied)
Considering that respondent Cruz, Jr., Cristeta
Polintan and Felicisima Ranullo were not
authorized by respondent Dieselman to sell its
lot, the supposed contract is void. Being a void
contract, it is not susceptible of ratification.
Pahubad v CA
FACTS:
Sps.Pedro San Agustin and Agatona
Genil owned a 246-sqm parcel of land and they
died intestate, survived by their 8 children:
Eufemia, Raul, Ferdinand, Zenaida, Milagros,
Minerva, Isabelita and Virgilio. In 1992, Eufemia,
Ferdinand and Raul executed a Deed of
Absolute Sale of Undivided Shares conveying in
favor of Pahuds their respective shares from the
lot they inherited from their deceased parents for
P525K. Eufemia also signed the deed on behalf
of her sister Isabelita on the basis of a special
power of attorney and also for Milagros, Minerva
and Zenaida but without their apparent
authority. The deed of sale was also not
authorized. The Pahuds paid P35,792.31 to the
Los Banos Rural Bank where the subject
property was mortgaged. The bank issued a
release of mortgage and turned over the owners
copy of the OCT to the Pahuds. The Pahuds
made more payments to Eufemia and her coheirs drafted an extra-judicial settlement of
estate to facilitate the transfer of the title to the
Pahuds, Virgilio refused to sign it.
A G E N C Y R E V E I W E R . . P a g e | 19
In 1993, Virgilios co-heirs filed a
complaint for judicial partition. In the course of
the proceedings, a Compromise Agreement was
signed by 7 of the co-heirs agreeing to sell their
undivided shares tto Virgilio for P700K. it was
not approved by the trial court because Atty.
Dimetrio Hilbero, lawyer of Eufemia, refused to
sign the agreement because he knew of the
previous sale to the Pahuds.
Later, Eufemia acknowledged having
received P700K from Virgilio, who then sold the
entire property to spouses Belarmino sometime
in 1994. The Belarminos immediately constricted
a building on the subject property. The Pahuds
immediately confronted Eufemia who confirmed
to them that Virgilio had sold the property to the
Belrminos. Aggrieved, the Pahuds filed a
complaint in intervention in the pending case for
judicial partition.
ISSUE:
Whether the sale in favor of the
Pahuds made by Eufemia in behalf of her coheirs is valid
HELD:
The absence of a written authority to sell
a piece of land is ipso jure, void, to protect the
interest of an unsuspecting owner from being
prejudiced by the unwarranted act of the other.
Based on the foregoing, the Court ruled
that the sale with respect to the 3/8 portion,
representing the shares of Zenaida, Milagros,
and Minerva, is void because Eufemia could not
dispose of the interest of her co-heirs in the said
lot absent any written authority from the latter, as
explicitly required by law.
However, the Court upheld the validity of
the sale on the basis of the common law
principle of estoppel.
***the Court held the validity of the sale for the
following reasons: a) the admission of the heirs
regarding the sale of 7/8 of the property to the
Pahuds (during the preliminary conference); b)
A G E N C Y R E V E I W E R . . P a g e | 20
the agents/realtors was not in writing, the sale is
void and not merely unenforceable.
Issue:
WON there was already a perfected contract of
sale of the parcels of land that would in effect
make the respondents in default and therefore
liable for damages?
Ruling:
None. Respondents maintain that Glanville,
Delsaux and Marquez had no authority from the
stockholders of EC and its Board of Directors to
offer the properties for sale to the petitioners.
Petitioners assert that there was no need for a
written authority from the Board of Directors of
EC for Marquez to validly act as broker. As
broker, Marquez was not an ordinary agent
because his only job as a broker was to look for
a buyer and to bring together the parties to the
transaction. He was not authorized to sell the
properties; hence, petitioners argue, Article 1874
of the New Civil Code does not apply.
A corporation is a juridical person separate and
distinct from its stockholders and is not affected
by the personal rights, obligations and
transactions of the latter. It may act only through
its board of directors or, when authorized by its
board resolution, through its officers or agents.
The general principles of agency govern the
relation between the corporation and its officers
or agents, subject to the articles of incorporation,
by-laws, or relevant provisions of law. Agency
may be oral unless the law requires a specific
form. However, to create or convey real rights
over immovable property, a special power of
attorney is necessary. Thus, when a sale of a
piece of land or any portion thereof is
through an agent, the authority of the latter
shall be in writing, otherwise, the sale shall
be void. In this case, the petitioners failed to
adduce in evidence any resolution of the Board
of Directors of EC empowering Marquez,
Glanville or Delsaux as its agents, to sell, let
alone offer for sale, for and in its behalf, the
A G E N C Y R E V E I W E R . . P a g e | 21
VILLAFLOR, DR. ROSA UY, DR. JOEL
ENRIQUEZ, DR. PERPETUA LACSON,
DR. NOE ESPINOLA, and NURSE J.
DUMLAO, respondents.
G.R. No. 142625, December 19, 2006
Facts:
Pregnant with her fourth child, Corazon
Nogales (Corazon), who was then 37
years old, was under the exclusive
prenatal care of Dr. Oscar Estrada (Dr.
Estrada) beginning on her fourth month
of pregnancy. While Corazon was on her
last trimester of pregnancy, Dr. Estrada
noted an increase in her blood pressure
and development of leg edema indicating
preeclampsia, which is a dangerous
complication of pregnancy.
Around midnight of May 25, 1976,
Corazon started to experience mild labor
pains prompting Corazon and Rogelio
Nogases (Spouses Nogales) to see Dr.
Estrada at his home. After examining
Corazon, Dr. Estrada advised her
immediate admission for the Capitol
Medical Center (CMC).
Corazon was admitted at the CMC after
the staff nurse noted the written
admission request of Dr. Estrada. Upon
Corazons admission at the CMC,
Rogelio Nogales (Rogelio) executed and
signed the Consent on Admission and
Agreement and Admission Agreement.
Corazon was then brought to the labor
room of the CMC.
After various medical procedures and the
baby came out, Corazon become to
manifest moderate vaginal bleeding
which rapidly became profuse. On the
other hand, Rogelio was made to sign
Consent to Operation for hysterectomy.
However, Corazon died.
Petitioners filed a complaint for damages
with the Regional Trial Court of Manila
against CMC, Dr. Estrada, Dr. Villaflor,
Dr. Uy, Dr. Enriquez, Dr. Lacson, Dr.
Espinola, and a certain Nurse J. Dumlao
for the death of Corazon. Petitioners
A G E N C Y R E V E I W E R . . P a g e | 22
Petitioners claim that CMC is vicariously
liable for Dr. Estradas negligence based
on Article 2180 in relation Article 2176 of
the Civil Code. These provisions
pertinently state:
Article 2180. The obligation imposed
Article 2176 is demandable not only
ones own acts or omissions, but also
those of persons for whom one
responsible.
by
for
for
is
xxxx
xxxx
A G E N C Y R E V E I W E R . . P a g e | 23
privileges at CMC, such fact alone did
not make him an employee of CMC.
CMC merely allowed Dr. Estrada to use
its facilities when Corazon was about to
give birth, which CMC considered an
emergency.
Considering
these
circumstances, Dr. Estrada is not an
employee of CMC, but an independent
contractor.
In general, a hospital is not liable for the
negligence of an independent contractorphysician. There is, however, an
exception to this principle. The hospital
may be liable if the physician is the
"ostensible" agent of the hospital.This
exception is also known as the "doctrine
of apparent authority."
The doctrine of apparent authority
essentially involves two factors to
determine the liability of an independentcontractor physician.
The first factor focuses on the hospital's
manifestations
and
is
sometimes
described as an inquiry whether the
hospital acted in a manner which would
lead a reasonable person to conclude
that the individual who was alleged to be
negligent was an employee or agent of
the hospital. In this regard, the hospital
need not make express representations
to the patient that the treating physician
is an employee of the hospital; rather a
representation may be general and
implied.
The doctrine of apparent authority is a
species of the doctrine of estoppel.
Article 1431 of the Civil Code provides
that "[t]hrough estoppel, an admission or
representation is rendered conclusive
upon the person making it, and cannot
be denied or disproved as against the
person relying thereon." Estoppel rests
on this rule: "Whenever a party has, by
his own declaration, act, or omission,
intentionally and deliberately led another
to believe a particular thing true, and to
act upon such belief, he cannot, in any
litigation arising out of such declaration,
act or omission, be permitted to falsify it."
A G E N C Y R E V E I W E R . . P a g e | 24
conduct of the hospital or its agent,
consistent with ordinary care and
prudence.
The records show that the Spouses
Nogales relied upon a perceived
employment relationship with CMC in
accepting Dr. Estrada's services. Rogelio
testified that he and his wife specifically
chose Dr. Estrada to handle Corazon's
delivery not only because of their friend's
recommendation, but more importantly
because of Dr. Estrada's "connection
with a reputable hospital, the [CMC]." In
other words, Dr. Estrada's relationship
with CMC played a significant role in the
Spouses Nogales' decision in accepting
Dr.
Estrada's
services
as
the
obstetrician-gynecologist for Corazon's
delivery. Moreover, as earlier stated,
there is no showing that before and
during Corazon's confinement at CMC,
the Spouses Nogales knew or should
have known that Dr. Estrada was not an
employee of CMC.
Further, the Spouses Nogales looked to
CMC to provide the best medical care
and support services for Corazon's
delivery. The Court notes that prior to
Corazon's fourth pregnancy, she used to
give birth inside a clinic. Considering
Corazon's age then, the Spouses
Nogales decided to have their fourth
child delivered at CMC, which Rogelio
regarded one of the best hospitals at the
time. This is precisely because the
Spouses Nogales feared that Corazon
might experience complications during
her delivery which would be better
addressed and treated in a modern and
big hospital such as CMC. Moreover,
Rogelio's
consent
in
Corazon's
hysterectomy to be performed by a
different physician, namely Dr. Espinola,
is a clear indication of Rogelio's
confidence in CMC's surgical staff.
Thus, the Court finds respondent Capitol
Medical Center vicariously liable for the
negligence of Dr. Oscar Estrada.
A G E N C Y R E V E I W E R . . P a g e | 25
time were not granted in full, instead of informing
the real reason to Ley, Abcede assured that the
former will not incur any liability. However, when
the Tektite Building was almost complete and
LCDC requested the release of the P36M
escalation price, PRHC did not reply. PRHC
refused to pay the LCDC because they alleged
that the latter incurred delay it did not heed the
agreement regarding the escalation of contract
price.
LCDC filed a Complaint before the RTC to
recovered the amount, which ruled in its favor.
PRHC filed a Notice of Appeal. The Court of
Appeals (CA) reversed the RTC decision.
ISSUE:
Whether or not the signed letter of Abcede,
could bind PRHC to the escalation
agreement with LCDC.
HELD:
Yes, the signed letter of Abcede, could
bind PRHC to the escalation agreement with
LCDC.
In Yao Ka Sin Trading v. Court of Appeals, et
al,.43 this Court discussed the applicable rules on
the doctrine of apparent authority, to wit:
The rule is of course settled that "[a]lthough an
officer or agent acts without, or in excess of, his
actual authority if he acts within the scope of an
apparent authority with which the corporation
has clothed him by holding him out or permitting
him to appear as having such authority, the
corporation is bound thereby in favor of a person
who deals with him in good faith in reliance on
such apparent authority, as where an officer is
allowed to exercise a particular authority with
respect to the business, or a particular branch of
it, continuously and publicly, for a considerable
time." Also, "if a private corporation intentionally
or negligently clothes its officers or agents with
apparent power to perform acts for it, the
corporation will be estopped to deny that such
apparent authority is real, as to innocent third
persons dealing in good faith with such officers
or agents." 44
A G E N C Y R E V E I W E R . . P a g e | 26
proof to the contrary.
DETAILED FACTS:
Antonio Brimo, informed the Danon, that
he (Brimo) desired to sell his factory, the Holland
American Oil Co., for the sum of P1,200,000
Brimo agreed and promised to pay to the
Danon commission of 5% provided the latter
could sell said factory for that amount3.
A G E N C Y R E V E I W E R . . P a g e | 27
No definite period of time was fixed
within which the Danon should effect the sale. It
seems that another broker, Sellner, was also
negotiating thesale, or trying to find a purchaser
for the same property and that the plaintiff was
informed of the fact either by Brimo himself or by
someone else;at least, it is probable that the
plaintiff was aware that he was not alone in
the field, and his whole effort was to forestall his
competitor by being the first to find a purchaser
and effect the sale.
Immediately after having an interview
with Mr. Brimo, Danon went to see Mr. Mauro
Prieto, president of the Santa Ana Oil Mill, a
corporation,and offered to sell to him the
defendant's property at P1,200,000.
The said corporation was at that time in
need of such a factory, and Mr. Prieto,instructed
the manager, Samuel E. Kane, to see Mr. Brimo
and ascertain whether he really wanted to sell
said factory, and, if so, to get permissionfrom
him to inspect the premises. Mr. Kane inspected
the factory and, presumably, made a favorable
report to Mr. Prieto. The latter asked for
anappointment with Mr. Brimo to perfect the
negotiation. In the meantime Sellner, the other
broker referred to, had found a purchaser for the
same property, who ultimately bought it for
P1,300,000.
For that reason Mr. Prieto, the would be
purchaser found by the plaintiff, never came to
seeMr. Brimo to perfect the proposed
negotiation.
ISSUE:
Whether Danon as broker was
theProcuring Causeof Sale? NO
Whether
Danon
is
entitled
to
Compensation -NO
HELD:
The most that can be said as to what the
plaintiff had accomplished is, that he had found
a person who might have bought the defendant's
factory.The evidence does not show that the
Santa Ana Oil Mill had definitely decided to buy
the property at the fixed price of P1,200,000.
A G E N C Y R E V E I W E R . . P a g e | 28
defectof title in the ownership of the seller,
some unremoved incumbrance, some defect
which is the fault of the latter, then the
broker does not losehis commissions.
But this limitation is not even an
exception to the general rule affecting the
broker's right for it goes on the ground that
thebroker has done his duty, that he has brought
buyer and seller to an agreement, but that the
contract is not consummated and fails though
theafter-fault of the seller.
One other principle applicable: Where no
time for the continuance of the contract is fixed
by its terms either party is at liberty to terminate
it at will ,subject only to the ordinary
requirements of good faith. Usually the broker is
entitled to a fair and reasonable opportunity to
perform his obligation, subject of course to the
right of the seller to sell independently. But
having been granted him, the right of the
principal to terminate his authority is absolute
and unrestricted, except only that he may not do
it in bad faith.
Although the present plaintiff could
probably have effected the sale,he is not
entitled to the commissions agreed upon
because he had no intervention whatever in,
and much sale in question. It must be borne
in mind that
no definite periodwas fixed by the defendant
within which theplaintiff might effect the sale of
its factory. Nor was the plaintiff given by the
defendant the exclusive agency of such sale.
Therefore, the plaintiff cannot complaint
of the defendant's conduct in selling the property
through another agent before the plaintiff's
efforts were crowned with success."One who
has employed a broker can himself sell the
property to a purchaser whom he has procured,
without any aid from the broker."
DISPOSITIVE:
For the foregoing reasons the judgment
appealed from is hereby revoked and the
defendant is hereby absolved from all liability
underthe plaintiff's complaint, with costs in both
instances against the plaintiff. So ordered
Tan vs Gullas
Facts
Respondents Spouses Gullas executed a
Special Power of Attorney (SPA) authorizing
petitioners Tan, a real estate broker, and his
associates to negotiate for the sale of a parcel of
land. The SPA was exclusive and effective for
one month.
Petitioners accompanied Sisters of Mary who
were interested in the property. The property
was sold, but when the petitioners went to claim
their commission, the respondents refused to
pay, saying it was another group of agents who
were responsible for the sale of the land to the
Sisters of Mary.
Petitioners filed a case against respondents,
saying they were the efficient procuring cause of
the consummation of the sale. Respondents
countered, saying that they were not the efficient
procuring cause the sale, but another group
instead.
Issue
Whether petitioners
commission.
are
entitled
to
their
Held
Yes. An agent receives a commission upon the
successful conclusion of a sale. On the other
hand, a broker earns his pay merely by bringing
the buyer and the seller together, even if no sale
is eventually made." Clearly, therefore,
petitioners, as brokers, should be entitled to the
commission whether or not the sale of the
property subject matter of the contract was
concluded through their efforts.
A G E N C Y R E V E I W E R . . P a g e | 29
FACTS:Philippine Health-Care Providers, Inc.
(Maxicare) formally appointed Estrada as its
General Agent evidenced by a letter-agreement
dated February 16, 1991 granting him a
commission. Maxicare had a "franchising
system" in dealing with its agents whereby an
agent had to first secure permission from to list a
prospective company as client. MERALCO
account was included as corporate accounts
applied by Estrada. Estrada submitted proposals
and made representations to the officers of
MERALCO regarding the MAXICARE Plan but
MERALCO directly negotiated with MAXICARE
from December 1, 1991 to November 30, 1992
and was renewed twice for a term of 3 years
each March 24, 1992: Estrada through counsel
demanded his commission for the MERALCO
account and 9 other accounts but it was denied
by MAXICARE because he was not given a go
signal to intervene in the negotiations for the
terms and conditions. RTC ruled that Maxicare
liable for breach of contract and ordered it to pay
Estrada actual damages in the amount
equivalent to 10% of P20,169,335 representing
her commission for Meralco. CA affirmed in toto.
ISSUE: Whether or not Estrada as broker
should be paid his commission for the Maxicare
Plans subscribed by Meralco.
HELD: Yes. Both courts were one in the
conclusion that Maxicare successfully landed
the Meralco account for the sale of healthcare
plans only by virtue of Estradas involvement
and participation in the negotiations. Maxicares
contention that Estrada may only claim
commissions from membership dues which she
has collected and remitted to Maxicare as
expressly provided for in the letter-agreement
does not convince us. It is readily apparent that
Maxicare is attempting to evade payment of the
commission which rightfully belongs to Estrada
as the broker who brought the parties together.
The only reason Estrada was not able to
participate in the collection and remittance of
premium dues to Maxicare was because she
was prevented from doing so by the acts of
Maxicare, its officers, and employees. Even a
cursory reading of the Complaint and all the
pleadings filed thereafter before the RTC, CA,
and this Court, readily show that Estrada does
not concede, at any point, that her negotiations
with Meralco failed. strada is entitled to 10% of
CARLOS
SANCHEZ,
petitioner,
vs.
MEDICARD
PHILIPPINES,
INC.,
DR.
NICANOR
MONTOYA
and
CARLOS
EJERCITO, respondents.
A G E N C Y R E V E I W E R . . P a g e | 30
FACTS:
Sanchez
is an agent
of
MEDICARD
with
commission
based
compensation. MEDICARD entered into a
contract with UNILAB thru the petitioners
efforts, as a result, MEDICARD paid petitioner
his commission.
MEDICARD proposed an increase in
premium, but UNILAB rejected this proposal.
MEDICARD then requested the petitioner to
reduce his commission should the contract be
renewed, but petitioner disagreed.
MEDICARD decided to directly negotiate
with UNILAB to facilitate the renewal of contract
thus revoking its agency contract with the
petitioner.
ISSUE:
WON the petitioner, as an
agent, is entitled for a commission due to the
renewal of contract.
HELD:
No. It is dictum that in order for
an agent to be entitled to a commission, he must
be the procuring cause of the sale, which simply
means that the measures employed by him and
the efforts he exerted must result in a sale.
In other words, an agent receives
his commission only upon the successful
conclusion of a sale. Conversely, it follows that
where his efforts are unsuccessful, or there was
no effort on his part, he is not entitled to a
commission.
A G E N C Y R E V E I W E R . . P a g e | 31
February 8, 1994. Under the Agency Agreement,
Ybaez authorized Saban to look for a buyer of
the lot for Two Hundred Thousand Pesos
(P200,000.00) and to mark up the selling price
to include the amounts needed for payment of
taxes, transfer of title and other expenses
incident to the sale, as well as Sabans
commission for the sale.
A G E N C Y R E V E I W E R . . P a g e | 32
efforts were somehow instrumental in bringing
the parties together and finally consummating
the sale. By reason of equity, he is awarded a
sum of money for his efforts.
Manotoc vs CA
G.R. No. 94753. April 7, 1993.
Facts:
Petitioners is the owner of a certain parcel of
land and building which were formerly leased by
the City of Manila and used by the Claro M.
Recto High School. By means of a letter 5 dated
July 5, 1966, petitioner authorized herein private
respondent Salvador Saligumba to negotiate
with the City of Manila the sale of the
aforementioned property. In the same writing,
petitioner agreed to pay private respondent a
(5%) commission in the event the sale is finally
consummated and paid.
Held:
Yes, the private respondent is entitled to the 5%
agents commission. The Court ruled that when
there is a close, proximate and causal
connection between the agent's efforts and labor
and the principal's sale of his property, the agent
is entitled to a commission. The Court agreed
that the City of Manila ultimately became the
purchaser of petitioner's property mainly through
the efforts of private respondent. Without
discounting the fact that when Municipal
Ordinance No. 6603 was signed by the City
Mayor on May 17, 1968, private respondent's
authority had already expired, it is to be noted
that the ordinance was approved on April 26,
1968 when private respondent's authorization
was still in force. Moreover, the approval by the
City Mayor came only three days after the
expiration of private respondent's authority. It is
also worth emphasizing that from the records,
the only party given a written authority by
petitioner to negotiate the sale from July 5, 1966
to May 14, 1968 was private respondent.
A G E N C Y R E V E I W E R . . P a g e | 33
previously mortgaged by MMC to Caltex, and
the mortgage in favor of DBP was entered on
their titles as a second mortgage. The account
of the Marinduque Mining Corp., with the DBP
was later transferred to the Assets Privatization
Trust (APT).
Caltex foreclosed the mortgage due to the
nonpayment of MMC. APT on the other hand
offered for sale to the public through DBP its
right of redemption on said two lots by public
bidding. DBP subsequently retrieved the
account from APT and redeemed said lots from
Caltex . A public bidding for the sale of the two
lots was held and the warehouse lot was sold to
Charges Realty Corp . The office building lot
was later sold by DBP to a different buyer. After
the aforesaid sale, Unilad Resources sent two
letters to DBP asking for the payment of its
broker's fee in instrumenting the sale of its
warehouse lot to Charges Realty Corp. Unilad
filed a case to recover from DBP the broker's
fee.
The Trial Court ordered DBP to pay the brokers
fee to the petitioner. On appeal, the Court of
Appeals reversed the judgment of the lower
court.
Issue: WON there is a contract of agency
between DBP and Unilad in the sale of
warehouse lot.
Held: No. There is no contract of agency,
express or implied. The petitioner was never
able to secure the required accreditation from
respondent DBP to transact business on behalf
of the latter. It was always made clear to
petitioner that only accredited brokers may look
for buyers on behalf of respondent DBP. The
contract of Agency is one founded on mutual
consent: the principal agrees to be bound by the
acts of the agent and the latter in turn consents
to render service on behalf or in representation
of the principal.
Domingo vs. Domingo
A G E N C Y R E V E I W E R . . P a g e | 34
commission because he sold the property not to
Gregorio's buyer, Oscar but to another buyer,
Amparo.
ISSUE:
Whether or not Gregorio Domingo
forfeited his right to get his commission due to
the secrecy he did during the transaction?
HELD:
Yes. The obligation of an agent
according to Articles 1891 and 1909 of the Civil
Code demand the utmost good faith, fidelity,
honesty, candor and fairness on the part of the
agent to is principal. The agent has an absolute
obligation to make a full disclosure or complete
account to his principal of all his transactions
and other material facts relevant to the agency,
so much so that the law as amended does not
countenance any stipulation exempting the
agent from such an obligation and considers
such an exemption as void.
An agent who takes a secret profit in the
nature of a bonus, gratuity or personal benefit
from the vendee, without revealing the same to
bis principal is guilty of a breach of his loyalty to
the latter and forfeits his right to collect the
commission that may be due him, even if the
principal does not suffer any injury by reason of
such breach of fidelity, or that he obtained better
results or that the agency is a gratuitous one, or
that usage or custom allows it; because the rule
is to prevent the possibility of any wrong, not to
remedy or repair an actual damage.
A G E N C Y R E V E I W E R . . P a g e | 35
NO. Faustino Mercado cannot delegate his
agency to his nephew Antonio Baltazar.
For one, petitioners principal, Faustino
Mercado, is an agent himself and as such
cannot further delegate his agency to another.
Otherwise put, an agent cannot delegate to
another
the
same
agency. The
legal
maxim potestas delegata non delegare potest; a
power once delegated cannot be re-delegated,
while applied primarily in political law to the
exercise of legislative power, is a principle of
agency.
For another, a re-delegation of the agency would
be detrimental to the principal as the second
agent has no privity of contract with the
former. In the instant case, petitioner has no
privity of contract with Paciencia Regala, owner
of the fishpond and principal of Faustino
Mercado.
Moreover, while the Civil Code under Article
1892 allows the agent to appoint a substitute,
such is not the situation in the instant case. The
SPA clearly delegates the agency to petitioner to
pursue the case and not merely as a
substitute. Besides, it is clear in the aforecited
Article that what is allowed is a substitute and
not a delegation of the agency.
Clearly, petitioner is neither a real party in
interest with regard to the agrarian case, nor is
he a real party in interest in the criminal
proceedings conducted by the Ombudsman as
elevated to the Sandiganbayan. He is not a
party who will be benefited or injured by the
results of both cases.
Serona v People
FACTS:
Leonida Quilatan delivered pieces of
jewelry to Virgie Serona to be sold on
commission basis. By oral agreement of the
parties, Serona was to remit payment or return
the pieces of jewelry to Quilatan if not sold within
HELD: No.
The law on agency in our jurisdiction
allows the appointment by an agent of a
substitute or sub-agent in the absence of
express agreement to the contrary between the
agent and the principal.
In the case at bar, the appointment of
Labrador was not expressly prohibited by
Quilatan, as the acknowledgement receipt does
not contain any such limitation. Neither does it
appear that petitioner was verbally forbidden by
Quilatan from passing on the jewelry to another
person before the acknowledgement receipt was
executed or at any other time.
Notably, Labrador testified that she
obligated herself to sell the jewelry in behalf of
the petitioner also on commission basis or to
return the same if not sold. In other words, the
pieces of jewelry were given by the petitioner to
Labrador to achieve the very same end for
which they were delivered to her in the first
A G E N C Y R E V E I W E R . . P a g e | 36
place. Consequently, there is no conversion
since the pieces of jewelry were not devoted to a
purpose or use different from that agreed upon.
Part III - B
Specific Obligations of Agent to Principal
1. To carry out the agency in accordance with its
terms (Art. 1884)
2. To answer the damages which is through his
non-performance the principal may suffer.
3. To finish the business already begun on the
death of the principal, should delay detail any
danger
4. To observe the diligence of the good father of
a family in the custody and preservation of the
goods forwarded to him by the owner in case he
declines an agency, until an agent is appointed.
(Art. 1885)
5. To advance the necessary funds should there
be a stipulation to that effect (Art. 1886)
6. To act in accordance with the instructions of
the principal (Art. 1887)
7. Not to carry out its agency if its execution
would manifestly result in loss or damage to the
principal (Art. 1888)
8. To answer for damages should he refer in
case of conflict, his own interests to those of the
principal (Art.1889)
9. Not to loan to himself without the consent of
the principal where he has been authorized to
lend at interest (Art. 1890)
10. To render an account of his transactions and
to deliver to the principal whatever he may have
received by virtue of the agency (art.1891)
11. To distinguish goods by countermarks and
designate the merchandise respective belonging
to each principal, in the case of a commission
agent who handles goods of the same kind and
mark, which belong to different owners. (Art.
1904)
12. To responsible in certain cases for the acts
of substitute appointed by him (Art. 1892)
13. To pay interest on funds he has applied to
his own use (Art. 1896)
14. To inform the principal, where an authorized
sale of credit has been made, of such sale (Art.
1906)
15. To bear the risk of collection, should he
receive also on sale, a guarantee commission
(Art. 1907)
A G E N C Y R E V E I W E R . . P a g e | 37
latters failure to eject the squatters within the
three-month period agreed upon in the said
deed. RECCI rejected the demand of WHI, so
WHI filed a case for Specific Performance and
Damages in the RTC. The lower court ruled in
favor of WHI. But the CA reversed the RTC
decision and dismissed the complaint. The CA
ruled that, under the resolution of the Board of
Directors of RECCI, Roxas was merely
authorized to sell the first lot, but not to grant
right of way in favor of the WHI over a portion of
the second lot, or to grant an option to the
petitioner to buy a portion thereof.
Issue:
WON whether the respondent company is
bound by the provisions in the deed of absolute
sale granting to the petitioner beneficial use and
a right of way over a portion of the adjacent lot?
Ruling:
NO. Generally, the acts of the corporate officers
within the scope of their authority are binding on
the corporation. However, under Article 1910 of
the New Civil Code, acts done by such officers
beyond the scope of their authority cannot bind
the corporation unless it has ratified such acts
expressly or tacitly, or is estopped from denying
them. Thus, contracts entered into by corporate
officers beyond the scope of authority are
unenforceable against the corporation unless
ratified by the corporation. Evidently, Roxas was
not specifically authorized under the said
resolution to grant a right of way in favor of the
petitioner on a portion of Lot No. 491-A-3-B-1 or
to agree to sell to the petitioner a portion thereof.
The authority of Roxas, under the resolution, to
sell Lot No. 491-A-3-B-2 covered by TCT No.
78086 did not include the authority to sell a
portion of the adjacent lot, Lot No. 491-A-3-B-1,
or to create or convey real rights thereon.
Neither may such authority be implied from the
authority granted to Roxas to sell Lot No. 491-A3-B-2 to the petitioner on such terms and
conditions which he deems most reasonable
A G E N C Y R E V E I W E R . . P a g e | 38
However, chain of events happened that
deter NACOCO from fulfilling these
contracts. Four devastating typhoons
visited the Philippines. Coconut trees
throughout
the
country
suffered
extensive damage. Copra production
decreased. Prices spiralled. Warehouses
were destroyed. Cash requirements
doubled. Deprivation of export facilities
increased the time necessary to
accumulate shiploads of copra. Quick
turnovers became impossible, financing
a problem.
When it became clear that contracts
would be unprofitable, Kalaw submitted
them to the Board for approval. When
the Board membership was completed, a
meeting was then held wherein Kalaw
made a full disclosure of the situation,
apprised the Board of the impending
heavy losses. Not long thereafter, the
Board met again with Kalaw, Bocar,
Garcia and Moll in attendance. They
unanimously approved the contracts
hereinbefore enumerated.
As was to be expected, NACOCO but
partially performed the contracts.
The buyers threatened damaged suits.
Some of the claims were settled.
However, one buyer, Louis Dreyfus &
Co., (Overseas) Ltd., did in fact sue
before the Court of First Instance of
Manila, upon claims as follows: For the
undelivered copra under the July 30
contract (Civil Case 4459); P287,028.00;
for the balance on the August 14 contract
(Civil Case 4398), P75,098.63; for that
per the September 12 contract reduced
to judgment (Civil Case 4322, appealed
to the Court in L-2829), P447,908.40.
These cases culminated in an out-ofcourt amicable settlement when the
Kalaw management was already out.
The corporation thereunder paid Dreyfus
P567,024.52 representing 70% of the
total claims. With particular reference to
the Dreyfus claims, NACOCO put up the
defenses that: (1) the contracts were
void because Louis Dresfus& Co.
sum
up
to
A G E N C Y R E V E I W E R . . P a g e | 39
authorization of the Board of Directors
are valid corporate acts.
Held:
Yes, contracts of Kalaw, general
manager, without formal authorization of
the Board of Directors are valid corporate
acts.
Plaintiff leans heavily on NACOCO's
corporate by-laws which recite that as
amongst the duties of the general
manager is to perform or execute on
behalf of the Corporation upon prior
approval of the Board, all contracts
necessary and essential to the proper
accomplishment
for
which
the
Corporation was organized.
On other hand, a rule that has gained
acceptance through the years is that a
corporate officer intrusted with the
general management and control of its
business, has implied authority to make
any contract or do any other act which is
necessary or appropriate to the conduct
of the ordinary business of the
corporation. As such officer, he may,
without any special authority from the
Board of Directors perform all acts of an
ordinary nature, which by usage or
necessity are incident to his office, and
may bind the corporation by contracts in
matters arising in the usual course of
business.
Long before the disputed contracts came
into being, Kalaw contracted by himself
alone as general manager for forward
sales of copra which is entering into
sales agreement even though the goods
are not yet in the hands of seller. During
that period, from those copra sales,
NACOCO reaped a gross profit. These
previous contract it should be stressed,
were signed by Kalaw without prior
authority from the board. Said contracts
were known all along to the board
members. Nothing was said by them.
The aforesaid contracts stand to prove
one thing: Obviously, NACOCO board
met the difficulties attendant to forward
A G E N C Y R E V E I W E R . . P a g e | 40
SAN JUAN STRUCTURAL AND STEEL
FABRICATORS, INC., petitioner,
vs.
COURT OF APPEALS, MOTORICH SALES
CORPORATION, NENITA LEE GRUENBERG,
ACL DEVELOPMENT CORP. and JNM
REALTY AND DEVELOPMENT CORP.,
respondents.
FACTS:
Petitioner entered into an agreement with
private respondent for the transfer of a parcel of
land. Petitioner then paid the unt f P100,000, for
down payment and the balance to be paid on or
before Consequently, Mr.Co, president of San
Juan, wrote a letter course through Motorich's
broker requesting for a computation of the
balance to be paid. March 2, 1989: San Juan
was ready with the amount corresponding to the
balance, covered by Metrobank Cashier's
Check, payable to Motorich.
The parties were supposed to meet in the
office of San Juan but Motorich's treasurer,
Nenita Lee Gruenberg, did not appear. In that
event, respondent refused to execute the
Transfer of Rights/Deed of Assignment which is
necessary to transfer the certificate of title.
Petitioner eventually learned that ACL and
respondent company entered into a Deed of
Absolute Sale regarding the same land. This
event, led Petitioner to file a complaint against
respondents. Motorich, in its defense, argued
that it is not bound by the acts of its treasurer,
Nenita, since her act in contracting with San
Juan was not authorized by the corporate board.
The RTC ruled in favor of the respondens and
affirmed by the Court of Appeals.
ISSUE:
Whether or not the act of corporate treasurer
bound the Board of Directors of the
company.
HELD:
A G E N C Y R E V E I W E R . . P a g e | 41
had the burden of proving that Nenita Gruenberg
was in fact authorized to represent and bind
Motorich in the transaction. Petitioner failed to
discharge this burden. Its offer of evidence
before the trial court contained no proof of such
authority. 16 It has not shown any provision of
said respondent's articles of incorporation,
bylaws or board resolution to prove that Nenita
Gruenberg possessed such power.
That Nenita Gruenberg is the treasurer of
Motorich does not free petitioner from the
responsibility of ascertaining the extent of her
authority to represent the corporation. Petitioner
cannot assume that she, by virtue of her
position, was authorized to sell the property of
the corporation. Selling is obviously foreign to a
corporate treasurer's function, which generally
has been described as "to receive and keep the
funds of the corporation, and to disburse them in
accordance with the authority given him by the
board or the properly authorized officers." 17
Neither was such real estate sale shown to be
a normal business activity of Motorich. The
primary purpose of Motorich is marketing,
distribution, export and import in relation to a
18
general
merchandising
business.
Unmistakably, its treasurer is not cloaked with
actual or apparent authority to buy or sell real
property, an activity which falls way beyond the
scope of her general authority.
In this case, there is a clear absence of proof
that Motorich ever authorized Nenita Gruenberg,
or made it appear to any third person that she
had the authority, to sell its land or to receive the
earnest money. Neither was there any proof that
Motorich ratified, expressly or impliedly, the
contract. Petitioner rests its argument on the
receipt which, however, does not prove the fact
of ratification. The document is a hand-written
one, not a corporate receipt, and it bears only
Nenita Gruenberg's signature. Certainly, this
document alone does not prove that her acts
were authorized or ratified by Motorich.
FRANCISCO VS GSIS
Facts:
A G E N C Y R E V E I W E R . . P a g e | 42
acceptance of three other subsequent
remittances from plaintiff, constitutes in itself a
binding ratification of the original agreement.
British Airways vs. CA
Facts
Mahtani decided to visit his relatives in Bombay,
India, but British Airways (BA) had no direct
flights from Manila to Bombay. He had to take a
flight to Hongkong via Philippine Airlines (PAL),
and upon arrival in Hongkong, take a connecting
flight to Bombay on BA. His luggage however,
which was supposed to be transferred PAL to BA
flight bound for Bombay, was missing.
Mahtani filed a case against BA, while the latter
passed the fault to PAL saying that the nontransfer of the luggage was due to its late arrival
leaving hardly any time to transfer the luggage
to BA. PAL on the other hand, disclaimed any
liability, arguing that there was adequate time to
transfer the luggage to BA.
Issue
Whether PAL is liable for damages
Held
Yes. PAL, in transporting Mahtani from Manila to
Hongkong acted as the agent of BA. It is awellsettled rule that an agent is also responsible for
any negligence in the performance of its
function and is liable for damages which the
principal may suffer by reason of its negligent
act.
A G E N C Y R E V E I W E R . . P a g e | 43
suffered by the plaintiffs in the former action in
dismissing that proceeding, and it is immaterial
that no benefit may have accrued either to the
principal or his guarantor.
Murao v. People
G.R. No. 141485. June 30, 2005.*
PABLITO
MURAO
and
NELIO
HUERTAZUELA, petitioners, vs. PEOPLE OF
THE PHILIPPINES, respondent.
FACTS:
Murao is an owner of a company
engaged in a business of selling and refilling fire
extinguishers with several branches including
Palawan and Huertazuela is the branch
manager. Murao and Federico entered into a
Dealership Agreement for the marketing,
distribution and refilling within Puerto Princessa.
A G E N C Y R E V E I W E R . . P a g e | 44
of brand new fire extinguishers or for the refill of
empty tanks, evidently, the business belonged to
LMICE. Consequently, payments made by
clients for the fire extinguishers pertained to
LMICE. When petitioner Huertazuela, as the
Branch Manager of LMICE in Puerto Princesa
City, with the permission of petitioner Murao, the
sole proprietor of LMICE, personally picked up
Check No. 611437 from the City Government of
Puerto Princesa, and deposited the same under
the Current Account of LMICE with PCIBank, he
was merely collecting what rightfully belonged to
LMICE. Indeed, Check No. 611437 named
LMICE as the lone payee.
. METROBANK VS. CA
warrants
had
been
cleared
and
that
with it?
C. Liability of agents
to
have
been
indorsed
by
their
indorser.
The
warrants
were
When solidary.
A G E N C Y R E V E I W E R . . P a g e | 45
negligence of his fellow agents, except in the
latter case when the fellow agents acted beyond
the scope of their authority.
In excess of Authority
DBP vs. CA
Facts: Juan Dans, together with his wife
Candida, his son and daughter-in-law, applied
for a loan of P500,000.00 with the Development
Bank of the Philippines (DBP).
. As the principal mortgagor, Dans, then 76
years of age, was advised by DBP to obtain a
mortgage redemption insurance (MRI) with the
DBP Mortgage Redemption Insurance Pool
(DBP MRI Pool).
A loan, in the reduced amount of P300,000.00,
was approved by DBP on August 4, 1987 and
released on August 11, 1987. From the
proceeds of the loan, DBP deducted the amount
of P1,476.00 as payment for the MRI premium.
On August 15, 1987, Dans accomplished and
submitted the "MRI Application for Insurance"
and the "Health Statement for DBP MRI Pool.
On September 3, 1987, Dans died of cardiac
arrest. The DBP, upon notice, relayed this
information to the DBP MRI Pool. On September
23, 1987, the DBP MRI Pool notified DBP that
Dans was not eligible for MRI coverage, being
over the acceptance age limit of 60 years at the
time of application.
On February 10, 1989, respondent Estate,
through Candida Dans as administratrix, filed a
complaint with the Regional Trial Court, Branch
I, Basilan, against DBP and the insurance pool
for "Collection of Sum of Money with Damages.
The trial court rendered a decision in favor of
respondent Estate and against DBP. The DBP
MRI Pool, however, was absolved from liability,
after the trial court found no privity of contract
between it and the deceased. On appeal the CA
affirmed in toto the decision of the trial court.
Issue:
Whether or not DBP exceeded its
authority as agent of DBP MRI Pool.
Ruling: Yes, DBP exceeded its authority.
As explained by the SC, In dealing with Dans,
DBP was wearing two legal hats: the first as a
lender, and the second as an insurance agent.
The DBP is not authorized to accept applications
for MRI when its clients are more than 60 years
of age (Exh. "1-Pool"). Knowing all the while that
Dans was ineligible for MRI coverage because
of his advanced age, DBP exceeded the scope
of its authority when it accepted Dan's
application for MRI by collecting the insurance
premium, and deducting its agent's commission
and service fee.
The liability of an agent who exceeds the scope
of his authority depends upon whether the third
person is aware of the limits of the agent's
powers. There is no showing that Dans knew of
the limitation on DBP's authority to solicit
applications for MRI.
If the third person dealing with an agent is
unaware of the limits of the authority conferred
by the principal on the agent and he (third
person) has been deceived by the nondisclosure thereof by the agent, then the latter is
liable for damages to him
BEAUMONT V PRIETO G.R NO 8988 MARCH
30 1916
FACTS: Borck wanted to purchase Legardas
property and was negotiating with the latters
agent, Valdes. Since there was a violation of the
agreement, particularly failure to deliver
pertinent documents, Borck filed a complaint
against Valdes and Legarda. Valdes claimed that
he should not be included for he was merely an
agent.
ISSUE: Whether or not Valdes can be included
in the complaint.
HELD: Yes, Valdes can be included in the
complaint. Since the Civil Code merely states
A G E N C Y R E V E I W E R . . P a g e | 46
that a person who contracts with an agent has
cause of action against the principal but is silent
to whether or not the agent may be included in
the suit, such agent may be included.
D. SPECIAL OBLIGATION OF COMMISSION
AGENTS
Art. 1903. The commission agent shall be
responsible for the goods received by him in
the terms and conditions and as described in
the consignment, unless upon receiving
them he should make a written statement of
the damage and deterioration suffered by the
same. (n)
A factor or commission agent is on whose
business is to receive and sell goods for a
commission (also called factorage) and who is
entrusted by the principal with the possession of
goods to be sold, and usually selling in his own
name.
Art. 1904. The commission agent who
handles goods of the same kind and mark,
which belong to different owners, shall
distinguish them by countermarks, and
designate the merchandise respectively
belonging to each principal. (n)
OBLIGATION OF COMMISSION AGENT
HANDLING GOODS OF SAME KIND AND
MARK
The provision explains itself. The evident
purpose is to prevent any possible confusion or
deception. He may not comingle the goods
without authority.
An agent is also under a duty not to mingle his
principals property with his own or to deal with
his principals property in a way which would
make it appear to be his own property.
Ordinarily, the agent must hold the property only
in the name of the principal. Where he violates
that duty by mingling the property with his own,
he becomes a debtor of the principal and liable
A G E N C Y R E V E I W E R . . P a g e | 47
Again, the agent shall be entitled to the benefits
arising from the credit sale. The principal may
also choose to ratify the sale on credit with all its
resulting benefits and risks.
Art. 1907. Should the commission agent
receive on a sale, in addition to the ordinary
commission, another called a guarantee
commission, he shall bear the risk of
collection and shall pay the principal the
proceeds of the sale on the same terms
agreed upon with the purchaser. (n)
with
Obligations
scope of
1881-1882,
b. Ratified Acts
Third persons cannot set up the fact
that the agent has exceeded his
powers if the principal has ratified, or
has signified his willingness to ratify
the agents acts. (Art. 1901)
A G E N C Y R E V E I W E R . . P a g e | 48
o
Prieto vs. CA
G.R. No. 158597
June 18, 2012
PETITIONER: MARCOS V. PRIETO
Respondents: The Hon. Court of Appeals
(Former Ninth Division), Hon. Rose Mary R.
Molina-Alim, In her Capacity as Pairing Judge
of Branch 67 of the RTC, First Judicial Region,
Buang, LaUnion, Far East Bank and Trust
Company, now the Bank of the Philippine
Islands, through Atty.Edilberto B. Tenefrancia,
and spouses Antonio and Monette Prieto
Facts:
The petitioner/plaintiff Marcos V. Prieto with his
spouse and Susan Prieto executed a Special
Power of Attorney (SPA) to spouses Antonio and
Monette Prieto to use their real property in La
Union. The real property with the Transfer
Certificate of Title (TCT) No. T-40223was used
as collateral for a loan of P 5,000,000 from Far
Eastern Bank and Trust Company (FEBTC). The
defendants spouses Antonio and Monette Prieto
obtained the load evidenced by promissory
notes and real estate mortgage contracts were i
n the name of the defendants, whichlater on was
extra-judicially foreclosed by FEBTC because of
the defendant failed to pay their loans.
The petitioner/plaintiff Marcos Prieto filed
Temporary Restraining Order (TRO) against the
bank with the RTC, which was granted,
A G E N C Y R E V E I W E R . . P a g e | 49
act performed on his behalf by another without a
uthority. The substance of ratification is theconfir
mation after the act, amounting to a substitute
for a prior authority.
The court held that the petitioner/plaintiff was a
lawyer that he is aware of the import and
consequences of the letter of acknowledgment.
It is not a contract of adhesion for
the petitioner/plaintiff is not the weaker party bec
ause he is fully aware of the meaning of every p
hrase and letter of the letter of acknowledgment
as well as the legal effect of his confirmation
of the act of his agent.
Thus, the court affirms the decision of the CA.
A G E N C Y R E V E I W E R . . P a g e | 50
authority, the agent becomes personally liable
for the damage. But even when the agent
exceeds his authority, the principal is still
solidarily liable together with the agent if the
principal allowed the agent to act as though
the agent had full powers. In other words, the
acts of an agent beyond the scope of his
authority do not bind the principal, unless the
principal ratifies them, expressly or
impliedly.Ratification in agency is the
adoption or confirmation by one person of
an act performed on his behalf by another
without authority.
Filipinas Life cannot profess ignorance of
Valles acts. Even if Valles representations were
beyond his authority as a debit/insurance agent,
Filipinas Life thru Alcantara and Apetrior
expressly and knowingly ratified Valles acts.
It cannot even be denied that Filipinas Life
benefited from the investments deposited by
Valle in the account of Filipinas Life. Filipinas
Life had clothed Valle with apparent authority;
hence, it is now estopped to deny said authority.
Innocent third persons should not be prejudiced
if the principal failed to adopt the needed
measures to prevent misrepresentation, much
more so if the principal ratified his agents acts
beyond the latters authority. The act of the
agent is considered that of the principal itself.
Qui per aliumfacit per seipsumfacerevidetur. He
who does a thing by an agent is considered as
doing it himself. WHEREFORE, petition was
DENIED
A G E N C Y R E V E I W E R . . P a g e | 51
affirmed the decision of the trial court. Hence,
the present petition for review.
ISSUES:
1. Whether or not there was a contract of
agency between Baluyot and MMPCI?
2. Whether or not MMPCI should be liable for
Baluyots act?
HELD:
1.
2.
A G E N C Y R E V E I W E R . . P a g e | 52
FACTS:
A G E N C Y R E V E I W E R . . P a g e | 53
ISSUE:
Whether or not the petitioner is
bound by the deed of sale executed by the bank
manager without prior authority of the board of
directors of the rural banking corporation?
HELD: YES.
As ruled in Board of Liquidators v. Kalaw:
Settled jurisprudence has it that where
similar acts have been approved by the directors
as a matter of general practice, custom, and
policy, the general manager may bind the
company without formal authorization of the
board of directors.
As already observed, it is familiar
doctrine that if a corporation knowingly permits
one of its officers, or any other agent, to do acts
within the scope of an apparent authority, and
thus holds him out to the public as possessing
power to do those acts, the corporation will, as
against anyone who has in good faith dealt with
the corporation through such agent, be estopped
from denying his authority.
Unquestionably, petitioner has authorized
Tena to enter into the Deed of Sale. Accordingly,
it has a clear legal duty to issue the board
resolution sought by respondent's. Having
authorized her to sell the property, it behooves
the bank to confirm the Deed of Sale so that the
buyers may enjoy its full use.
A G E N C Y R E V E I W E R . . P a g e | 54
implied that it had ratified the unauthorized acts
of its agent, Roberto Roxas.
G.R. No. 88539 October 26, 1993
KUE CUISON vs. THE COURT OF APPEALS
and VALIANT INVESTMENT ASSOCIATES
Facts:
1. Petitioner (Kue Cuison) is a sole
proprietorship engaged in the purchase
and sale of newsprint, bond paper and
scrap. On the other hand, the private
respondent
(Valiant
Investment
Associates) is a partnership.
2. It was alleged that the private respondent
delivered various kinds of paper products
amounting to P297,487.30 to Lilian Tan
of LT Trading pursuant to orders of
petitioner's manager, Tiu Huy Tiac. Lilian
Tan paid for the merchandise by issuing
several checks payable to cash at the
specific request of Tiu Huy Tiac. In turn,
Tiac issued nine (9) postdated checks to
private respondent as payment for the
paper products.
3. After the said checks were later
dishonored by the drawee bank, the
private
respondent
made
several
demands upon petitioner to pay for the
merchandise in question, claiming that
Tiu Huy Tiac was duly authorized as the
manager of his Binondo office. However,
petitioner denied any involvement in the
transaction and refused to pay private
respondent.
4. Private respondent filed an action
against petitioner for the collection of
P297,487.30. After due hearing, the trial
court dismissed the complaint against
petitioner for lack of merit. On appeal,
however, the decision of the trial court
was reversed by the Court of Appeals
(CA) ordering petitioner to pay private
respondent, among others, the sum of
P297,482.30 with interest.
5. The petitioner filed to the Supreme Court
a petition for review which assails the
decision
of
the
respondent
CA
contending that the CA erred: (a) in
finding Tiu Huy Tiac as petitioners agent;
(b) in finding petitioner liable for an
obligation undisputedly belonging to Tiu
Huy Tiac, and (c) in reversing the wellfounded decision of the trial court.
Issue: Whether or not Tiu Huy Tiac possessed
the required authority from petitioner sufficient to
hold the latter liable for the disputed transaction.
Ruling: Yes. The Court denied the petition for
lack of merit.
It is evident from the records that by his own
acts and admission, the petitioner held out Tiu
Huy Tiac to the public as the manager of his
store.
Therefore,
by
petitioner's
own
representations and manifestations, Tiu Huy
Tiac became an agent of petitioner by estoppel,
an admission or representation is rendered
conclusive upon the person making it, and
cannot be denied or disproved as against the
person relying thereon (Article 1431, Civil Code
of the Philippines). A party cannot be allowed to
go back on his own acts and representations to
the prejudice of the other party who, in good
faith, relied upon them (Philippine National Bank
v. Intermediate Appellate Court, et al., 189
SCRA 680 [1990]).
Taken in this light, petitioner is liable for the
transaction entered into by Tiu Huy Tiac on his
behalf. Thus, even when the agent has
exceeded his authority, the principal is solidarily
liable with the agent if the former allowed the
latter to act as though he had full powers (Article
1911 Civil Code), as in the case at bar.
Finally, although it may appear that Tiu Huy Tiac
defrauded his principal (petitioner) in not turning
over the proceeds of the transaction to the latter,
such fact cannot in any way relieve nor
exonerate petitioner of his liability to private
respondent. For it is an equitable maxim that as
between two innocent parties, the one who
made it possible for the wrong to be done should
be the one to bear the resulting loss (Francisco
vs. Government Service Insurance System, 7
SCRA 577 [1963]).
A G E N C Y R E V E I W E R . . P a g e | 55
G.R. No. 166044 June 18, 2012
COUNTRY
BANKERS
INSURANCE
CORPORATION (CBIC) vs. KEPPEL CEBU
SHIPYARD, UNIMARINE SHIPPING LINES,
INC.,
PAUL
RODRIGUEZ,
PETER
RODRIGUEZ, ALBERT HONTANOSAS, and
BETHOVEN QUINAIN
Facts:
1. On January 27, 1992, Unimarine, a
corporation engaged in the shipping
industry, contracted the services of Cebu
Shipyard, for dry docking and ship repair
works on its vessel, the M/V Pacific
Fortune.
2. In compliance with the agreement,
Unimarine secured a surety bond in favor
of Cebu Shipyard from CBIC through the
latters agent, Bethoven Quinain. The
expiration of this surety bond was
extended
through
endorsement.
Unimarine also obtained another bond
from Plaridel Surety and Insurance Co.
3. Unimarine failed to settle its account
despite repeated demands of Cebu
Shipyard which caused the latter to
inform the sureties, CBIC and Plaridel, of
Unimarines nonpayment and to ask
them to fulfill their obligations as sureties.
However, even the sureties failed to
discharge their obligations.
4. Cebu Shipyard filed a complaint before
the Regional Trial Court (RTC) against
Unimarine, CBIC, and Plaridel.
5. The RTC applied Articles 1900 and 1911
of the Civil Code in holding CBIC liable
for the surety bond. It held that CBIC
could not be allowed to disclaim liability
because Quinains actions were within
the terms of the SPA given to him.
6. On appeal, CBIC claimed that the RTC
erred in enforcing its liability on the
surety bond as it was issued in excess of
Quinains authority. Moreover, CBIC
averred, its liability under such surety
had been extinguished by reasons of
novation, payment, and prescription.
CBIC also questioned the RTCs order,
holding it jointly and severally liable with
Unimarine and Plaridel for a sum larger
than the face value of the surety bond
and why the RTC did not hold Quinain
liable to indemnify CBIC for whatever
A G E N C Y R E V E I W E R . . P a g e | 56
he was granted. However, contrary to what the
RTC held, the SPA accorded to Quinain clearly
states the limits of his authority and particularly
provides that in case of surety bonds, it can only
be issued in favor of the Department of Public
Works and Highways, the National Power
Corporation, and other government agencies;
furthermore, the amount of the surety bond is
limited to P500,000.00. This Court finds that the
terms of the foregoing contract specifically
provided for the extent and scope of Quinains
authority, and Quinain has indeed exceeded
them.
Article 1911, on the other hand, is based on the
principle of estoppel, which is necessary for the
protection of third persons. It states that the
principal is solidarily liable with the agent even
when the latter has exceeded his authority, if the
principal allowed him to act as though he had full
powers. However, for an agency by estoppel to
exist, the following must be established:
1.
The
principal
manifested
a
representation of the agents authority or
knowingly allowed the agent to assume
such authority;
2. The third person, in good faith, relied
upon such representation; and
3. Relying upon such representation,
such third person has changed his
position to his detriment.68
CBIC not only clearly stated the limits of its
agents powers in their contracts, it even
stamped its surety bonds with the restrictions, in
order to alert the concerned parties. Moreover,
its company procedures, such as reporting
requirements, show that it has designed a
system to monitor the insurance contracts
issued by its agents. CBIC cannot be faulted for
Quinains deliberate failure to notify it of his
transactions with Unimarine. The settled rule is
that, persons dealing with an assumed agent are
bound at their peril. To hold the principal liable,
they are burdened to ascertain not only the fact
of agency but also the nature and extent of
authority. In the case, the petitioners failed to
discharge their burden; hence, petitioners are
not entitled to damages from respondent.
Mr. Perez - Topics missing
A G E N C Y R E V E I W E R . . P a g e | 57
ISSUE: W/N petitioner's property is liable to PNB
for the loans contracted by Parangan by virtue of
the special power of attorney.
HELD: YES, the mortgages can be enforced
against petitioner. It is admitted that petitioner is
the owner of the parcel of land mortgaged to
PNB on five (5) occasions by virtue of the
Special Powers of Attorney executed by
petitioner in favor of Parangan. Petitioner argues
that the last three mortgages were void for lack
of authority. She totally failed to consider that
said Special Powers of Attorney are a continuing
one and absent a valid revocation duly furnished
to the mortgagee, the same continues to have
force and effect as against third persons who
had no knowledge of such lack of authority.
Article 1921 of the Civil Code provides:
Art. 1921. If the agency has been entrusted for
the purpose of contracting with specified
persons, its revocation shall not prejudice the
latter if they were not given notice thereof. The
Special Power of Attorney executed by petitioner
in favor of Parangan duly authorized the latter to
represent and act on behalf of the former.
Having done so, petitioner clothed Parangan
with authority to deal with PNB on her behalf
and in the absence of any proof that the bank
had knowledge that the last three loans were
without the express authority of petitioner, it
cannot be prejudiced thereby. As far as third
persons are concerned, an act is deemed to
have been performed within the scope of the
agent's authority if such is within the terms of the
power of attorney as written even if the agent
has in fact exceeded the limits of his authority
according to the understanding between the
principal and the agent. The Special Power of
Attorney particularly provides that the same is
good not only for the principal loan but also for
subsequent commercial, industrial, agricultural
loan or credit accommodation that the attorneyin-fact may obtain and until the power of
attorney is revoked in a public instrument and a
copy of which is furnished to PNB. Even when
A G E N C Y R E V E I W E R . . P a g e | 58
Exceptions:
When the agency is created not only
for the interest of the principal but
also for the interests of third persons
When the agency is created for the
mutual interest of both the principal
and the agent.
A G E N C Y R E V E I W E R . . P a g e | 59
The power of attorney executed by Tiburcio del
Rosario in favor of Primitivo Abad does not
create an agency coupled with an interest nor
does it clothe the agency with an irrevocable
character. A mere statement in the power of
attorney that it is coupled with an interest is not
enough.
Such must be stated in the power of attorney.
The fact that Tiburcio del Rosario, the principal,
had mortgaged the improvements of the parcel
of land to Primitivo Abad, the agent, is not such
an interest as could render irrevocable the
power of attorney executed by the principal in
favor of the agent.
A G E N C Y R E V E I W E R . . P a g e | 60
is that the termination by them of the General
Agency Agreement was tainted with bad faith.
Hence, if a principal acts in bad faith and with
abuse of right in terminating the agency, then he
is liable in damages.
REPUBLIC VS. EVANGELISTA
G.R. No. 156015. August 11, 2005
466 SCRA 544
FACTS:
Private respondent Legaspi is the owner
of a land located in Bigte, Norzagaray, Bulacan.
In November 1999, petitioner Calimlim, head of
the Intelligence Service of the Armed Forces of
the Philippines and the Presidential Security
Group, entered into a Memorandum of
Agreement (MOA) with one Ciriaco Reyes. The
MOA granted Reyes a permit to hunt for
treasure in the land. Petitioner Diciano as
witness. Reyes, together with petitioners,
started, digging, tunneling and blasting works on
the said land of Legaspi. Calimlim assigned
about 80 military personnel to guard the area
and encamp thereon to intimidate Legaspi and
other occupants of the area from going near the
subject land.
On February 15, 2000, Legaspi executed
a special power of attorney (SPA) appointing his
nephew, private respondent Gutierrez, as his
attorney-in-fact. Gutierrez was given the power
to deal with the treasure hunting activities on
Legaspis land and to file charges against those
who mayenter it without the latters authority.
Legaspi agreed to give Gutierrez 40% of the
treasure that may be found in the land.
On February 29, 2000, Gutierrez filed a
case for damages and injunction against
petitioners for illegally entering Legaspis land.
He hired the legal services of Atty.
HomobonoAdaza. Their contract provided that
as legal fees, Atty. Adaza shall be entitled to
30% of Legaspis share in whatever treasure
may be found in the land. In addition, Gutierrez
agreed to pay Atty. Adaza P5,000.00 as
appearance fee per court hearing and defray all
expenses for the cost of the litigation. Upon the
filing of the complaint, then Executive Judge
Perlita J. TriaTirona issued a 72-hour temporary
restraining order (TRO) against petitioners. The
case was subsequently raffled to the RTC of
Quezon City, Branch 223, then presided by
public
respondent
Judge
Victorino
P.
A G E N C Y R E V E I W E R . . P a g e | 61
irrevocable at the sole will of the principal
Legaspi. When an agency is constituted as a
clause in a bilateral contract, that is, when the
agency is inserted in another agreement, the
agency ceases to be revocable at the pleasure
of the principal as the agency shall now follow
the condition of the bilateral agreement.
Consequently, the Deed of Revocation executed
by Legaspi has no effect. The authority of
Gutierrez to file and continue with the
prosecution of the case at bar is unaffected.
A contract of agency is generally
revocable as it is a personal contract of
representation based on trust and confidence
reposed by the principal on his agent.Art.
1868 of the Civil Code provides that by the
contract of agency, an agent binds himself to
render some service or do something in
representation or on behalf of another, known as
the principal, with the consent or authority of the
latter. A contract of agency is generally
revocable as it is a personal contract of
representation based on trust and confidence
reposed by the principal on his agent. As the
power of the agent to act depends on the will
and license of the principal he represents, the
power of the agent ceases when the will or
permission is withdrawn by the principal. Thus,
generally, the agency may be revoked by the
principal at will.
The impugned Orders of the trial court in
Civil Case No. Q-00-40115, dated March 23 and
April 4, 2000, are AFFIRMED. The presiding
judge of the Regional Trial Court of Quezon City
to whom Civil Case No. Q-00-40115 was
assigned is directed to proceed with dispatch in
hearing the main case for damages. No
pronouncement as to costs.
CALEONGCO vs. CLAPAROLS
Reyes, JBL, J. (1964)
Caleongco plaintiff-appellant
Claparols defendant-appellee
FACTS:
Eduardo L. Claparols, operated a factory for the
manufacture of nails in Talisay, Occidental
Negros, under the style of "Claparols Steel &
Nail Plant". The raw material, nail wire, was
imported from foreign sources, specially from
Belgium; and Claparols had a regular dollar
A G E N C Y R E V E I W E R . . P a g e | 62
(Caleongco and Kho To) plan to acquire
ownership of the factory.
5. He surreptitiously disposed the Yates band
resaw machine in favor of
his cousins lumber yard.
Claparols managed to settle matters with the
bank. He also decided to revoke the power of
attorney and inform Caleongco of such by
registered mail. He also dismissed Caleongco
as assistant manager of the plant.
Caleongco filed suit against Claparols for breach
of contract and damages. He argued that
Claparols had no legal power to revoke the
power of attorney because it was coupled with
an interest.
ISSUE:
WON Caleongco was correct in his contention
that the power of attorney was made to protect
his interest and that Claparols did not have legal
power to revoke the power of attorney because
it was coupled with an interest.
HELD:
NO. This point cannot be sustained.
The financing agreement itself already contained
clauses for the protection of appellant's interest,
and did not call for the execution of any power of
attorney in favor of Coleongco. But granting
appellant's view, it must not be forgotten that a
power of attorney can be made irrevocable by
contract only in the sense that the principal may
not recall it at his pleasure; but coupled with
interest or not, the authority certainly can be
revoked for a just cause, such as when the
attorney-in-fact betrays the interest of the
principal, as happened in this case.
It is not open to serious doubt that the
irrevocability of the power of attorney may not be
used to shield the perpetration of acts in bad
faith, breach of confidence, or betrayal of trust,
by the agent for that would amount to holding
that a power coupled with an interest authorizes
the agent to commit frauds against the principal.
A G E N C Y R E V E I W E R . . P a g e | 63
Valera vs Velasco
HELD: No.
FACTS:
A G E N C Y R E V E I W E R . . P a g e | 64
both as against the asserted
principal and the third persons
interested in the transaction in
which he or she is engaged.
The question of whether an
agency has been created is
ordinarily a question which may
be established in the same way
as any other fact, either by direct
or
circumstantial
evidence;
Though that fact or extent of
authority of the agents may not,
as a general rule, be established
from the declarations of the
agents alone, if one professes to
act as agent for another, she may
be estopped to deny her agency
both as against the asserted
principal and the third persons
interested in the transaction in
which he or she is engaged.
The
important
characteristic
feature of an agency relationship
which distinguishes it from similar
contracts or relations is the
agents power to bring about
business relations between his
principal and third persons. This
power is perhaps the most
distinctive mark of the agent, as
contrasted with others who act in
representative capacities but are
not agents.
2. The Element of Control
AGENCY
An agent acts only for
his principal
An agents power to
bind the principal is
subject to the latterss
control
An agent does not
assume personal
liability if he acts
within the scope of his
authority.
PARTNERSHIP
A partner acts for the
other partners, the
partnership and himself
A partners power to
bind his co-partners is
not subject to their
control
A partner is personally
liable with all his
property, after
exhaustion of the
partnership properties
A G E N C Y R E V E I W E R . . P a g e | 65
An agent is not
entitled to profits, only
compensation
A partner is entitled to a
share in the profits of
the partnership
Tourist
World
Service.
A G E N C Y R E V E I W E R . . P a g e | 66
4% in commissions from airline bookings, the
remaining 3% going to Tourist World. Unlike an
employee then, who earns a fixed salary usually,
she earned compensation in fluctuating amounts
depending on her booking successes.
AGENCY
BASIS
PURPOSE
AUTHORIZED
ACTS
DISCRETION
PARTIES
basis is
representation
Execution of a
juridical act in
relation to a third
person
The agent is
destined to
execute juridical
acts (Creation,
modification or
extinction of
relations with
third parties)
Agent exercises
discretionary
powers
3 parties:
principal, agent
and the 3rd
LEASE OF
SERVICE
Basis is
employment
Execution of a
piece of work
or rendering of
service
Lease of
services
contemplate
only material
acts.
Lessor
ordinarily
performs only
ministerial
functions.
2 parties:
Lessor and
lessee
A G E N C Y R E V E I W E R . . P a g e | 67
person with
whom the agent
contracts
A G E N C Y R E V E I W E R . . P a g e | 68
COMMERCIAL CASUALTY INSURANCE CO.,
SALVADOR SlSON, PORFIRIO DE LA
FUENTE and THE COURT OF APPEALS (First
Division), respondents.
FACTS:
A car was brought to Shell for car
wash and greasing services. The operator of the
station, having agreed to do service upon
payment of P8.00, the car was placed on the
hydraulic lifter under the direction of the
personnel of the station.
ISSUE:
WON the operator acted
as an agent and not an independent contractor.
HELD:
Yes, the operator is an agent of
the company and not an independent contractor.
Quiroga vs Parsons
G.R. No. L-11491
Subject: Sales
Doctrine: Contract of Agency to Sell vs
Contract of Sale
Facts: On Jan 24, 1911, plaintiff and the
respondent entered into a contract making
the latter an agent of the former. The
contract stipulates that Don Andres Quiroga,
here in petitioner, grants exclusive rights to
sell his beds in the Visayan region to J.
Parsons. The contract only stipulates that
J.Parsons should pay Quiroga within 6
months upon the delivery of beds.
Quiroga files a case against Parsons for
allegedly violating the following stipulations:
not to sell the beds at higher prices than
A G E N C Y R E V E I W E R . . P a g e | 69
those of the invoices; to have an open
establishment in Iloilo; itself to conduct the
agency; to keep the beds on public
exhibition, and to pay for the advertisement
expenses for the same; and to order the
beds by the dozen and in no other manner.
With the exception of the obligation on the
part of the defendant to order the beds by
the dozen and in no other manner, none of
the obligations imputed to the defendant in
the two causes of action are expressly set
forth in the contract. But the plaintiff alleged
that the defendant was his agent for the sale
of his beds in Iloilo, and that said obligations
are implied in a contract of commercial
agency. The whole question, therefore,
reduced itself to a determination as to
whether the defendant, by reason of the
contract hereinbefore transcribed, was a
purchaser or an agent of the plaintiff for the
sale of his beds.
Issue: Whether the contract is a contract of
agency or of sale.
Held: In order to classify a contract, due
attention must be given to its essential
clauses. In the contract in question, what
was essential, as constituting its cause and
subject matter, is that the plaintiff was to
furnish the defendant with the beds which
the latter might order, at the price stipulated,
and that the defendant was to pay the price
in the manner stipulated. Payment was to be
made at the end of sixty days, or before, at
the plaintiffs request, or in cash, if the
defendant so preferred, and in these last two
cases an additional discount was to be
allowed for prompt payment. These are
precisely the essential features of a contract
of purchase and sale. There was the
obligation on the part of the plaintiff to
supply the beds, and, on the part of the
defendant, to pay their price. These features
exclude the legal conception of an agency or
order to sell whereby the mandatory or agent
received the thing to sell it, and does not pay
its price, but delivers to the principal the
price he obtains from the sale of the thing to
a third person, and if he does not succeed in
selling it, he returns it. By virtue of the
contract between the plaintiff and the
defendant, the latter, on receiving the beds,
FACTS:
American Rubber Company sold its rubber
products locally and as prescribed by the
Commissioners regulation, the company
declared the same for tax purposes in which
the Commissioner accordingly assessed.
The company paid under protest the
corresponding sales taxes thereon, claiming
exemption under Section 188b of the Tax
Code, and subsequently claimed refund.
With the Commissioner refusing to do so,
the case was brought before the Court of Tax
Appeals, which upheld the Commissioners
stand that the company is not entitled to
recover the sales tax that had been
separately billed to its customers, and paid
by the latter.
ISSUE:
A G E N C Y R E V E I W E R . . P a g e | 70
Whether plaintiff is or is not entitled to
recover the sales tax paid by it, but passed
on to and paid by the buyers of its products
RULING:
Refund is proper. The sales tax is by law
imposed directly, not on the thing sold, but
on the act (sale) of the manufacturer,
producer or importer who is exclusively
made liable for its time payment. There is no
proof that the tax paid by plaintiff is the very
money paid by its customers. Where the tax
money paid by the plaintiff came from is
really no concern of the Government.
Anyway, once recovered, the plaintiff must
hold the refund taxes in trust for the
individual
purchasers
who
advanced
payment thereof, and whose names must
appear in plaintiffs records.
It would need to tend to perpetuate illegal
taxation; for the individual customers to
whom the tax is ultimately shifted will
ordinarily not care to sue for its recovery, in
view of the small amount paid by each and
the high cost of litigation for the reclaiming
of an illegal tax. Insofar, therefore, as it
favors the imposition, collection and
retention of illegal taxes, and encourages a
multiplicity of suits, the tax courts ruling
under appeal violates morals and public
policy.
Ker and Co. Ltd. vs. Lingad
FACTS: Ker and Co. Ltd. was assessed by then
Commissioner of Internal Revenue Domingo the
sum of P 20,273.33 as the commercial brokers
percentage tax, surcharge and compromise
penalty.
There was a request on the part of Ker
for the cancellation of such assessment which
request was turned down. As a result, it filed a
petition for review in the Court of Tax Appeals.
A G E N C Y R E V E I W E R . . P a g e | 71
not suffice to yield thatconclusion that it is
anindependent merchant if thecontrol over
thegoods for resale of goods consignedin
pervasive incharacter.
Thus, SC rejected Kers petition to reverse
decision of CTA.
PUYAT VS. ARCO AMUSEMENT
FACTS:
The petitioner is an exclusive agent of Starr
Piano Company, a provider of cinematographer
equipment and machinery. Arco, manager of a
corporation in the business of operating
cinematographs, and Puyat agreed that the
Puyat
would
obtain
Starr-manufactured
equipment (sound systems) for Arco in
exchange for the price of the equipment plus
10% commission and other expenses. The
equipment was delivered. However, Arco later
discovered that Puyat had charged Arco the list
price (SRP of the manufacturing compnany) and
not the net price. Apparently, Puyat as an agent
of Starr, obtained a 25% discount. Arco sued for
the reimbursement of the difference between the
list price and the purchase price, claiming that
Puyat was acting as Arcos agent when Puyat
purchased the equipment for them and that
Puyat had committed fraud against them.
ISSUE: Whether or not there is a contact of
agency between Puyat and Arco.
HELD: No, there is no contact of agency
between Puyat and Arco. There was a contract
of purchase and sales as can be construed from
the terms of the contract and the letters of
acceptance of the equipment price sent by Arco
to Puyat. In the contract, Arco agreed to
purchase from the seller the equipment at the
prices indicated. The contract is the law between
the parties, what does not appear on its face
should be regarded merely as dealers talk. The
stipulated commission was only an additional
price which the buyer bound itself to pay. Also,
to hold the petitioner an agent of the respondent
A G E N C Y R E V E I W E R . . P a g e | 72
lost in transit, and were never delivered to Chua
Ngo.
Chua Ngo filed a suit to recover the
corresponding price he had paid in advance.
Universal Trading Company refused to pay,
alleging it merely acted as agent of Chua
Ngo in purchasing the oranges. Chua Ngo
maintains he bought the oranges from Universal
Trading Company, and, therefore, is entitled to
the return of the price corresponding to the
undelivered fruit.
Issue:
Did Universal Trading Company merely agree to
buy for and on behalf of Chua Ngo the 300
boxes of oranges, or did it agree to selland
soldthe oranges to Chua Ngo?
Held:
The circumstances of record sufficiently
indicate a sale.
1. no commission was paid.
2. "if balance is not paid within 48 hours of
notification, merchandise may be resold by the
Universal Trading Company and the deposit
forfeited." "Resold" implies the goods had been
sold to Chua Ngo. And forfeiture of the deposit is
incompatible with a contract of agency.
3.Wherein oranges were quoted at $6.30 per
box, Universal Trading placed an order for
purchase of the same with Gabuardi Company
at $6 per box. If Universal Trading Company
was agent of Chua Ngo, it could not properly do
that. Inasmuch as good f aith is to be presumed,
we must hold that Universal Trading acted thus
because it was not acting as agent of Chua Ngo,
but as independent purchaser from Gabuardi
Company.
4. Fourth, the defendant charged the plaintiff the
sum of P218.87 for 3 percent sales tax,
thereby implying that their transaction was a
sale.
5.Fifth, if the purchase of the oranges had been
made on behalf of Chua Ngo, all claims for
losses thereof against the insurance company
and against the shipping company should have
been assigned to Chua Ngo.
SIDLACAN, ZHY
Agency distinguished from brokerage
A G E N C Y R E V E I W E R . . P a g e | 73
14, 1993, he filed a complaint for specific
performance and damages against BMW to
compel it to continue the exclusive dealership.
ISSUE: WON petitioner Alfred Hahn is the agent
or distributor in the Philippines of private
respondent BMW
HELD: Alfred Hahn is an agent of BMW. The
Supreme Court held that agency is shown when
Hahn claimed he took orders for BMW cars and
transmits them to BMW. Then BMW fixes the
down payment and pricing charges and will
notify Hahn of the scheduled production month
for the orders, and reconfirm the orders by
signing and returning to Hahn the acceptance
sheets.
The payment is made by the buyer directly to
BMW. Title to cars purchased passed directly to
the buyer and Hahn never paid for the purchase
price of BMW cars sold in the Philippines. Hahn
was credited with a commission equal to 14% of
the purchase price upon the invoicing of a
vehicle order by BMW. Upon confirmation in
writing that the vehicles had been registered in
the Philippines and serviced by him, Hahn
received an additional 3% of the full purchase
price. Hahn performed after-sale services,
including, warranty services. for which he
received reimbursement from BMW. All orders
were on invoices and forms of BMW.
Moreover, the Court distinguished an agent from
a broker. The court ruled that an agent receives
a commission upon the successful conclusion of
a sale. On the other hand, a broker earns his
pay merely by bringing the buyer and the seller
together, even if no sale is eventually made.
A G E N C Y R E V E I W E R . . P a g e | 74
matter of the contract was concluded through
their efforts.