II.

Digests

Borja, Sr. vs. Sulyap, Inc. 399 SCRA 601 (2003)

FACTS: Basilio Borja, Sr. as lessor, and Sulyap, Inc., as lessee, entered into a contract of lease involving
a one-storey office building owned by Borja located at New Manila, Quezon City. Pursuant to the lease,
Sulyap, Inc. paid, among others, advance rentals, association dues and deposit for electrical and
telephone expenses. Upon the expiration of their lease contract, Sulyap demanded the return of the said
advance rentals, dues and deposit but Borja refused to do so. Thus, Sulyap filed with the RTC of QC a
complaint for sum of money against Borja. Subsequently, the parties entered into and submitted to the
trial court a Compromise Agreement stating that Borja is bound to pay the amounts P30,575 and
P50,000 and in case any amount due is not paid within the period stated in this agreement shall earn 2%
interest per month until fully paid plus 25% attorneys fees of the amount collectible and that writ of
execution shall be issued as a matter of right.

Petitioner, however, failed to pay the amounts stated in the judicial compromise. Sulyap filed a writ of
execution against Borja. The Trial Court granted the writ. Borja motioned to quash the writ by stating that
his failure to pay the amounts within the agreed period was due to Sulyaps fault; therefore, the penalty
clause should not be imposed

Borja filed another motion praying for the quashal of the writ of execution and modification of the decision.
This time, he contended that there was fraud in the execution of the compromise agreement. He claimed
that 3 sets of compromise agreement were submitted for his approval. Among them, he allegedly chose
and signed the compromise agreement which contained no stipulation as to the payment of 2% monthly
interest and 25% attorneys fees in case of default in payment. He alleged that his former counsel, Atty.
Leonardo Cruz, who assisted him in entering into the said agreement, removed the page of the genuine
compromise agreement where he affixed his signature and fraudulently attached the same to the
compromise agreement submitted to the court in order to make it appear that he agreed to the penalty
clause embodied therein.

Sulyap presented Atty. Cruz as witness, who declared that the petitioner gave his consent to the inclusion
of the penalty clause of 2% monthly interest and 25% attorneys fees in the compromise agreement. He
added that the compromise agreement approved by the court was in fact signed by the petitioner inside
the courtroom before the same was submitted for approval. Atty. Cruz stressed that the penalty clause of
2% interest per month until full payment of the amount due, plus 25% thereof as attorneys fees, in case
of default in payment, was actually chosen by the petitioner.

The trial court ruled in favour of Sulyap because it gave credence to the testimony of Atty. Cruz and even
noted that it was more than one year from receipt of the judgment on compromise on October 25, 1995,
when he questioned the inclusion of the penalty clause in the approved compromise agreement despite
several opportunities to raise said objection.

ISSUE: Whether Borja is bound by the penalty clause in the compromise agreement.

HELD: YES. While a judicial compromise may be annulled or modified on the ground of vitiated consent
or forgery, we find that the testimony of the petitioner failed to establish the attendance of fraud in the
instant case. No evidence was presented by petitioner other than his bare allegation that his former
counsel fraudulently attached the page of the genuine compromise agreement where he affixed his
signature to the compromise agreement submitted to the court.

Petitioner cannot feign ignorance of the existence of the penalty clause in the compromise agreement
approved by the court. When he received the judgment reproducing the full text of the compromise
agreement, to February 19, 1997, he never raised the issue of the fraudulent inclusion of the penalty
clause in their agreement. We note that petitioner is a doctor of medicine. He must have read and
understood the contents of the judgment on compromise. In fact, on November 13, 1995, he filed, without
the assistance of counsel, a motion praying that the amounts of P50,000.00 and 37,575.00 be withheld
from his total obligation and instead be applied to the expenses for the repair of the leased premises
which was allegedly vandalized by the private respondent

Even assuming that Atty. Leonardo Cruz exceeded his authority in inserting the penalty clause, the status
of the said clause is not void but merely voidable, i.e., capable of being ratified.17 Indeed, petitioners
failure to question the inclusion of the 2% monthly interest and 25% attorneys fees in the judicial
compromise despite several opportunities to do so was tantamount to ratification. Hence, he is estopped
from assailing the validity thereof.

Finally, we find no merit in petitioner's contention that the compromise agreement should be annulled
because Atty. Cruz, who assisted him in entering into such agreement, was then an employee of the
Quezon City government, and is thus prohibited from engaging in the private practice of his profession.
Suffice it to state that the isolated assistance provided by Atty. Cruz to the petitioner in entering into a
compromise agreement does not constitute a prohibited "private practice" of law by a public official.
"Private practice" of a profession, specifically the law profession does not pertain to an isolated court
appearance; rather, it contemplates a succession of acts of the same nature habitually or customarily
holding ones self to the public as a lawyer. Such was never established in the instant case.

Uy v. CA

Facts:

Petitioners William Uy and Rodel Roxas are agents authorized to sell 8 parcels of land. Petitioners
offered to sell the land to NHA for a housing project. On February 14, 1989, NHA passed a resolution
approving the acquisition of said lands, and pursuant to this the parties executed Deeds of Absolute Sale.
However, only 5 out of 8 lands were paid for by NHA because of a report from DENR that the remaining
area is located at an active landslide area and are therefore not conducive for housing. On November 22,
1991, NHA issued a resolution canceling the sale of the remaining lands and offered P1.225 million to the
landowners as daos perjuicios. On March 9, 1992, petitioners filed a complaint for damages against
NHA and its general manager Robert Balao. The RTC declared the cancellation to be justified, but
awarded the amount offered by NHA. The Court of Appeals affirmed the decision, but deleted the award.

Issues:

(1) Whether the petitioners are real parties in interest

Held:

(1) Petitioners claim that they lodged the complaint not in behalf of their principals but in their own
name as agents directly damaged by the termination of the contract. Petitioners in this case
purportedly brought the action for damages in their own name and in their own behalf. An action
shall be prosecuted in the name of the party who, by the substantive law, has the right sought to
be enforced. Petitioners are not parties to the contract of sale between their principals and NHA.
They are mere agents of the owners of the land subject of the sale. As agents, they only render
some service or do something in representation or on behalf of their principals. The rendering of
such service did not make them parties to the contracts of sale executed in behalf of the latter.
Since a contract may be violated only by the parties thereto as against each other, the real
parties-in-interest, either as plaintiff or defendant, in an action upon that contract must, generally,
either be parties to said contract. Petitioners have not shown that they are assignees of their
principals to the subject contracts. While they alleged that they made advances and that they
suffered loss of commissions, they have not established any agreement granting them "the right
to receive payment and out of the proceeds to reimburse [themselves] for advances and
commissions before turning the balance over to the principal[s].
Laureano T. Angeles vs. Philippine National Railways (PNR) and Rodolfo Flores,August 31, 2006
G.R. No. 150128

Facts:

Respondent Philippine National Railways (PNR) informed a certain GaudencioRomualdez(Romualdez,

hereinafter) that it has accepted the latters offer to buythe PNRsscrap/unserviceable rails located in Del
Carmen and Lubao, Pampanga at P1,300.00 andP2,100.00 per metric ton, respectively, for the total
amount of P96,600.00. Romualdez paid thepurchase price and addressed a letter to Atty. CiprianoDizon,
PNRs Acting Purchasing Agent.The letter authorized LIZETTE R. WIJANCOto be his (Romualdez) lawful
representative in thewithdrawal of the scrap/unserviceable rails awarded to him. Furthermore, the original
copy of the award which indicates the waiver of rights, interest and participation in favor of Lizetter
R.Wijanco was also given.The Lizette R. Wijanco was petitioner's now deceased wife. That very same
day, Lizetterequested the PNR to transfer the location of withdrawal for the reason that
thescrap/unserviceable rails located in Del Carmen and Lubao, Pampanga were not ready for
hauling.The PNR granted said request and allowed Lizette to withdraw scrap/unserviceable railsin
Murcia, Capas and San Miguel, Tarlac instead. However, PNR subsequently suspended thewithdrawal in
view of what it considered as documentary discrepancies coupled by reportedpilferages of over
P500,000.00 worth of PNR scrap properties in Tarlac.Consequently, thespouses Angeles demanded the
refund of the amount of P96,000.00. The PNR, however,refused to pay, alleging that as per delivery
receipt duly signed by Lizette, 54.658 metric tons of unserviceable rails had already been withdrawn. The
spouses Angeles filed suit against thePNR for specific performance and damages before the Regional
Trial Court. Lizette W. Angelespassed away and was substituted by her heirs, among whom is her
husband, herein petitioner Laureno T. Angeles.The trial court, on the postulate that the spouses Angeles
are not the real parties-in-interest,rendered judgment dismissing their complaint for lack of cause of
action. As held by the court,Lizette was merely a representative of Romualdez in the withdrawal of scrap
or unserviceablerails awarded to him and not an assignee to the latter's rights with respect to the
award.Petitioner appealed with the Court of Appeals which dismissed the appeal and affirmed that of the
trial court.

Issue:

Whether or not the CA erred in affirming the trial court's holding that petitioner and his spouse,as plaintiffs
a quo, had no cause of action as they were not the real parties-in-interest in thiscase.

Held:

No.The CAs conclusion, affirmatory of that of the trial court, is that Lizette was not an assignee,but
merely an agent whose authority was limited to the withdrawal of the scrap rails, hence,without
personality to sue.Where agency exists, the third party's (in this case, PNR's) liability ona contract is to
the principal and not to the agent and the relationship of the third party to theprincipal is the same as that
in a contract in which there is no agent. Normally, the agent hasneither rights nor liabilities as against the
third party. He cannot thus sue or be sued on thecontract. Since a contract may be violated only by the
parties thereto as against each other, thereal party-in-interest, either as plaintiff or defendant in an action
upon that contract must,generally, be a contracting party.The legal situation is, however, different where
an agent is constituted as an assignee. In such acase, the agent may, in his own behalf, sue on a
contract made for his principal, as an assigneeof such contract. The rulerequiring every action to be
prosecuted in the name of the real party-in-interest recognizes the assignment of rights of action and also
recognizesthat when one hasa right assigned to him, he is then the real party-in-interest and may
maintain an action uponsuch claim or right.
Pineda v. CA

PMSI obtained a group insurance policy for its sailors. 6 of the sailors, during the effectivity of the policy,
perished while the ship sank in Morocco. The families of the victims then wanted to claim the benefits of
the insurance. Hence, under the advice of Nuval, the president of PMSI, they executed a special power of
attorney authorizing Capt. Nuval to, "follow up, ask, demand, collect and receive" for their benefit the
indemnities.

Insular drew against its account 6 checks, four for P200,00.00 each, one for P50,000.00 and another for
P40,00.00, payable to the order the families. The checks were given to PMSI. Nuval, the PMSI president,
pocketed the amounts in his bank account.

When the families went to insular to get the benefits, their request was denied because Insular claimed
that the checks were already given to PMSI.

The families filed a petition with the Insurance Commission. They won and Insular was ordered to pay
them 500 a day until the amount was furnished to them. The insurance Commission held that the special
powers of attorney executed by complainants do not contain in unequivocal and clear terms authority to
Nuval to obtain and receive from respondent company insurance proceeds arising from the death of the
seaman-insured; also, that Insular Life did not convincingly refuted the claim of Mrs. Alarcon that neither
she nor her husband executed a special power of authority in favor of Capt. Nuval and that it did not
observe Sec 180(3), when it released the benefits due to the minor children of Ayo and Lontok, when the
said complainants did notpost a bond as required-

Insular Life appealed to the CA. CA modified the decision of the Insurance Commission, eliminating the
award to the minor children.

Hence, this petition by the beneficiary families.

Issues:

1. WON Insular Life should still be liable to the complainants when they relied on the special powers of
attorney, which Capt. Nuval presented as documents, when they released the checks to the latter.

2. WON Insular Life should be liable to the complainants when they released the check in favor of Ayo
and Lontok, even if no bond was posted as required.

Held: Yes to both. Petition granted.

Ratio:

1. The special powers of attorney "do not contain in unequivocal and clear terms authority to Capt. Nuval
to obtain, receive, receipt from respondent company insurance proceeds arising from the death of the
seaman-insured.

Insular Life knew that a power of attorney in favor of Capt. Nuval for the collection and receipt of such
proceeds was a deviation from its practice with respect to group policies.

They gave the proceeds to the policyholder instead of the beneficiaries themselves. Even the Isnular rep
admitted that he gave the checks to the policyholder.
Insular Life recognized Capt. Nuval as the attorney-in-fact of the petitioners. However, it acted
imprudently and negligently in the premises by relying without question on the special power of attorney.

Strong vs. Repide- third persons deal with agents at their peril and are bound to inquire as to the extent of
the power of the agent with whom they contract.

Harry E. Keller Electric Co. vs. Rodriguez- The person dealing with an agent must also act with ordinary
prudence and reasonable diligence. Obviously, if he knows or has good reason to believe that the agent
is exceeding his authority, he cannot claim protection the party dealing with him may not shut his eyes
to the real state of the case, but should either refuse to deal with the agent at all, or should ascertain from
the principal the true condition of affairs.

Insular delivered the checks to a party not the agent of the beneficiaries.

2. Art. 225. The father and the mother shall jointly exercise legal guardianship over the property of their
unemancipated common child without the necessity of a court appointment. In case of disagreement, the
father's decision shall prevail, unless there is judicial order to the contrary.

Where the market value of the property or the annual income of the child exceeds P50,000, the parent
concerned shall be required to furnish a bond in such amount as the court may determine, but not less
than ten per centum (10%) of the value of the property or annual income, to guarantee the performance
of the obligations prescribed for general guardians.

If the market value of the property or the annual income of the child exceeds P50,000.00, a bond has to
be posted by the parents concerned to guarantee the performance of the obligations of a general
guardian.

On group insurance :

Group insurance is essentially a single insurance contract that provides coverage for many individuals,
particularly for the employees of one employer.

There is a master agreement issued to an employer. The employer acts as the collector of the dues and
premiums. Disbursement of insurance payments by the employer is also one of his duties.

They require an employee to pay a portion of the premium, which the employer deducts from wages while
the remainder is paid by the employer. This is known as a contributory plan as compared to a non-
contributory plan where the premiums are solely paid by the employer.

Although the employer may be the policyholder, the insurance is actually for the benefit of the employee.
In a non-contributory plan, the payment by the employer of the entire premium is a part of the total
compensation paid for the services of the employee.

The primary aim of group insurance is to provide the employer with a means of procuring insurance
protection for his employees at a low cost and thereby retain their loyalty and efficiency.

III. DIGESTS

Panlilio vs. Citibank, N.A.

(G.R. No. 156335 November 28, 2007)

Facts:
Spouses Raul and Amalia Panlilio's initial intention was to invest money in a Citibank product which had a
high interest but since it was not available, they put their PhP1,000,000.00 in asavings account instead.
More than a month later, petitioners placed another amount of PhP2,134,635.87 in the Citibanks Long-
Term Commercial Paper (LTCP), a debt instrumentthat paid a high interest, issued by the corporation
Camella and Palmera Homes (C&PHomes). Months after signing with the debt instrument and after
receiving interests,petitioners contested the investment contract and demanded that the respondent bank
toreturn their investment money. This happened when newspaper reports came out that C&PHomes'
stock had plunged in value.

Issues:

1. Whether the investment contract creates a trusteeship or agency.

2. Whether the respondent is under the obligation to return the investment money of the petitioners.

Held:

Having bound themselves under the contract of agency, petitioners as principals in anagency relationship
are solely obliged to observe the solemnity of the transaction enteredinto by the agent on their behalf,
absent any proof that the latter acted beyond its authority.Concomitant to this obligation is that the
principal also assumes the risks that may arise fromthe transaction. Indeed, as in the instant case, bank
regulations prohibit banks fromguaranteeing profits or the principal in an investment management
account.

CUISON vs. CA and Valiant G.R. No. 88539October 26, 1993

FACTS: Kue Cuison is a sole proprietorship engaged in the purchase and sale of newsprint, bond paper
and scrap.

Valiant Investment Associates delivered various kinds of paper products to a certain Tan. The deliveries
were made by Valiant pursuant to orders allegedly placed by Tiac who was then employed in the Binondo
office of petitioner. Upon delivery, Tan paid for the merchandise by issuing several checks payable to
cash at the specific request of Tiac. In turn, Tiac issued nine (9) postdated checks to Valiant as payment
for the paper products. Unfortunately, sad checks were later dishonored by the drawee bank.

Thereafter, Valiant made several demands upon petitioner to pay for the merchandise in question,
claiming that Tiac was duly authorized by petitioner as the manager of his Binondo office, to enter into the
questioned transactions with Valiant and Tan. Petitioner denied any involvement in the transaction
entered into by Tiac and refused to pay Valiant.

Left with no recourse, private respondent filed an action against petitioner for the collection of sum of
money representing the price of the merchandise. 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
modified, but was in effect reversed by the CA. CA ordered petitioner to pay Valiant with the sum plus
interest, AF and costs.

ISSUE: WON Tiac possessed the required authority from petitioner sufficient to hold the latter liable for
the disputed transaction

HELD: YES

As to the merits of the case, it is a well-established rule that one who clothes another with apparent
authority as his agent and holds him out to the public as such cannot be permitted to deny the authority of
such person to act as his agent, to the prejudice of innocent third parties dealing with such person in good
faith and in the honest belief that he is what he appears to be

It matters not whether the representations are intentional or merely negligent so long as innocent, third
persons relied upon such representations in good faith and for value. Article 1911 of the Civil Code
provides:

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.

The above-quoted article is new. It is intended to protect the rights of innocent persons. In such a
situation, both the principal and the agent may be considered as joint tortfeasors whose liability is joint
and solidary.

It is evident from the records that by his own acts and admission, petitioner held out Tiac to the public as
the manager of his store in Binondo. More particularly, petitioner explicitly introduced to Villanueva,
Valiants manager, as his (petitioners) branch manager as testified to by Villanueva. Secondly, Tan, who
has been doing business with petitioner for quite a while, also testified that she knew Tiac to be the
manager of the Binondo branch. Even petitioner admitted his close relationship with Tiu Huy Tiac when
he said that they are like brothers There was thus no reason for anybody especially those transacting
business with petitioner to even doubt the authority of Tiac as his manager in the Binondo branch.

Tiac, therefore, by petitioners own representations and manifestations, 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. Taken in this light,. petitioner is liable for the transaction
entered into by 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 fact as though he had full powers (Article
1911 Civil Code), as in the case at bar.

Finally, although it may appear that 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.

THE MANILA REMNANT CO., INC vs. THE HONORABLE COURT OF APPEALS, OSCAR
VENTANILLA, JR. and CARMEN GLORIA DIAZ

FACTS:

Petitioner Manila Remnant Co., Inc. is the owns parcels of land situated in Quezon City and
constituting the Capital Homes Subdivision Nos. I and II. Manila Remnant and A.U. Valencia & Co. Inc.
entered into a contract entitled "Confirmation of Land Development and Sales Contract" to formalize a
prior verbal agreement whereby A.U. Valencia and Co., Inc. was to develop the aforesaid subdivision for
a consideration of 15.5% commision. At that time the President of both A.U. Valencia and Co. Inc. and
Manila Remnant Co., Inc. was Artemio U. Valencia. Manila Remnant thru A.U. Valencia and Co. executed
two "contracts to sell" covering Lots 1 and 2 of Block 17 in favor of Oscar C. Ventanilla and Carmen
Gloria Diaz. Ten days after the signing of the contracts with the Ventanillas, Artemio U. Valencia, without
the knowledge of the Ventanilla couple, sold Lots 1 and 2 of Block 17 again, to Carlos Crisostomo, one of
his sales agents without any consideration. Artemio Valencia then transmitted the fictitious Crisostomo
contracts to Manila Remnant while he kept in his files the contracts to sell in favor of the Ventanillas. All
the amounts paid by the Ventanillas were deposited in Valencia's bank account. Upon orders of Artemio
Valencia, the monthly payments of the Ventanillas were remitted to Manila Remnant as payments of
Crisostomo for which the former issued receipts in favor of Crisostomo.

General Manager Karl Landahl, wrote Artemio Valencia informing him that Manila Remnant was
terminating its existing collection agreement with his firm on account of the considerable amount of
discrepancies and irregularities. As a consequence, Artemio Valencia was removed as President by the
Board of Directors of Manila Remnant. Therefore, Valencia stopped transmitting Ventanilla's monthly
installments. A.U. Valencia and Co. sued Manila Remnant to impugn the abrogation of their agency
agreement. The court ordered all lot buyers to deposit their monthly amortizations with the court. But A.U.
Valencia and Co. wrote the Ventanillas that it was still authorized by the court to collect the monthly
amortizations and requested them to continue remitting their amortizations with the assurance that said
payments would be deposited later in court.

Thereafter, the trial court issued an order prohibiting A.U. Valencia and Co. from collecting the monthly
installments. Valencia complied with the court's order of submitting the list of all his clients but said list
excluded the name of the Ventanillas. Manila Remnant caused the publication in the Times Journal of a
notice cancelling the contracts to sell of some lot buyers. To prevent the effective cancellation of their
contracts, Artemio Valencia filed a complaint for specific performance with damages against Manila
Remnant

The Ventanillas, believing that they had already remitted enough money went directly to Manila Remnant
and offered to pay the entire outstanding balance of the purchase price. Unfortunately, they discovered
from Gloria Caballes that their names did not appear in the records of A.U. Valencia and Co. as lot
buyers. Also, Manila Remnant refused the offer of the Ventanillas to pay for the remainder of the contract
price. The Ventanillas then commenced an action for specific performance, annulment of deeds and
damages against Manila Remnant, A.U. Valencia and Co. and Carlos Crisostomo.

The trial court found that Manila Remnant could have not been dragged into this suit without the
fraudulent manipulations of Valencia. Subsequently, Manila Remnant and A.U. Valencia and Co. elevated
the lower court's decision to the Court of Appeals through separate appeals. On October 13, 1987, the
Appellate Court affirmed in toto the decision of the lower court. Reconsideration sought by petitioner
Manila Remnant was denied, hence the instant petition.

ISSUE:

Whether or not petitioner Manila Remnant should be held solidarily liable together with A.U.
Valencia and Co. and Carlos Crisostomo for the payment of moral, exemplary damages and attorney's
fees in favor of the Ventanillas

HELD:
 YES. In the case at bar, the Valencia realty firm had clearly overstepped the bounds of its
authority as agent and for that matter, even the law when it undertook the double sale of the
disputed lots. Such being the case, the principal, Manila Remnant, would have been in the clear pursuant
to Article 1897 of the Civil Code which states that "(t)he agent who acts as such is not personally liable to
that party with whom he contracts, unless he expressly binds himself or exceeds the limits of his authority
without giving such party sufficient notice of his powers." However, the unique relationship existing
between the principal and the agent at the time of the dual sale must be underscored. Bear in mind that
the president then of both firms was Artemio U. Valencia, the individual directly responsible for the sale
scam. Hence, despite the fact that the double sale was beyond the power of the agent, Manila Remnant
as principal was chargeable with the knowledge or constructive notice of that fact and not having done
anything to correct such an irregularity was deemed to have ratified the same. More in point, we find that
by the principle of estoppel, Manila Remnant is deemed to have allowed its agent to act as though it had
plenary powers.

Article 1911 of the Civil Code provides: "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." In such a situation, both the principal and the agent may be considered as joint feasors whose
liability is joint and solidary (Verzosa vs. Lim, 45 Phil. 416). In essence, therefore, the basis for Manila
Remnant's solidary liability is estoppel which, in turn, is rooted in the principal's neglectfulness in failing to
properly supervise and control the affairs of its agent and to adopt the needed measures to prevent
further misrepresentation. As a consequence, Manila Remnant is considered estopped from pleading the
truth that it had no direct hand in the deception employed by its agent. That the principal might not have
had actual knowledge of the agent's misdeed is of no moment.

IV. DIGEST

Narciso Lopez Manzano gave a general power-of-attorney to his son,Angel L. Manzano on the 9th
of February, 1910, and on the 25th of March a second general power-of-attorney to his wife, Josefa
Samson.

Manzano was the owner of a half interest in a small steamer, the

SanNicolas

, the other half being owned by Ocejo, Perez & Co., with whomthere was a partnership agreement to run
the steamer for a few years.

When this period expired Ocejo, Perez & Co demanded that Manzanobuy or sell.
As he did not want to sell at the price offered and could not buy, JuanGarcia bought the half interest held
by Ocejo, Perez & Co.

Angel L. Manzano, acting under his power-of-attorney, sold in July,1911, the other half of the boat to the
plaintiff, but as Garcia is aSpaniard and could not register the boat in his name at the CustomHouse, the
boat was registered in the name of Agustin Garcia, a son of the plaintiff, who at that time, July 2d, 1913,
was a minor about twentyyears old.

Agustin Garcia shortly thereafter died, leaving his parents as his heirsat law, and as such heirs plaintiff's
wife was made a party.

Angel L. Manzano, by virtue of the power-of-attorney from his father,Narciso L. Manzano, executed a
contract by which Juan Garcia agreed

AJAMINCHAJANZKRIZELPACOVIENYEN

How is AGENCY Extinguished?

to extend a credit to Narciso L. Manzano in the sum of P12,000, and thiscredit was used by the house of
Manzano.

To secure it a mortgage was given in the same document on threeparcels of land in Atimonan, with their
improvements. The registrationof this mortgage was refused by the registrar.

Josefa Samson y San Pedro was named administratrix of the propertyof Narciso L. Manzano, and
commissioners were duly appointed, andnotice was published, and no claims having been presented
against theestate to the commissioners, they so reported to the court on the 7th of December, 1914.
Court of First Instance ordered the partition of the property amongst the heirs of Narciso L. Manzano.

Plaintiff filed his action to foreclose the so-called mortgage.

Argument of Defendants:

that Garcia taking advantage of the youth and inexperience of Angel L.Manzano falsely and maliciously
made him believe that he hadauthority under the power-of-attorney from his father to sell the half interest
in the

San Nicolas

, and that he did so

That Angel L. Manzano had no authority to sell the interest in thesteamer, but that since the date of said
sale, July, 1912, (1911?) theplaintiff had illegally appropriated all rents and profits of the boat tohis own
use, which amount to P30,000 per year, after paying for allrepairs, etc.

Issue 1:

WON

the power-of-attorney to the wife revoked the one to theson, in accordance with article 1735 of the Civil
code (Article 1735 of theCivil code is as follows: The appointment of a new agent for the samebusiness
produces a revocation of the previous agency from the day onwhich notice was given to the

former agent, excepting the provisions of thenext preceding article

Held:

There is no proof in the record that the first agent, the son, knew of the power-of-attorney to his mother. It
was necessary under the law forthe defendants, in order to establish their counterclaim, to prove that
theson had notice of the second power-of-attorney. They have not done so,and it must be considered that
Angel L. Manzano was acting under a validpower-of-attorney from his father which had not been legally
revoked onthe date of the sale of the half interest in the steamer to the plaintiff's son,which half interest
was legally inherited by the plaintiffs.

Issue 2:
WON the sale of the boat by Angel L. Manzano was authorized

Argument of defendants:

the power-of-attorney under which Angel L.Manzano acted, even if a valid power, did not authorize the
sale of theboat, and they want it back it with one-half of the profits derived from itsuse by the plaintiff.

Held: T

he authorization is so complete that it carries with it full authorityto sell the one-half interest in the boat
which was then owned by NarcisoL. Manzano.

Ratio:

The power does not expressly state that the agent may

sell theboat

, but a power so full and complete authoring the sale of real property, must necessarily carry with it the
right to sell a half interest in a smallboat. The record further shows the sale was necessary in order to get
money or a credit without which it would be impossible to continue thebusiness which was being
conducted in the name of Narciso L. Manzanoand for his benefit