JOSE BORDADOR and LYDIA BORDADOR, petitioners, vs. BRIGIDA D. LUZ, ERNESTO M. LUZ and NARCISO DEGANOS, respondents.

FACTS: Petitioners were engaged in the business of purchase and sale of jewelry and respondent Brigida D. Luzwas their regular customer. On several occasions, respondent NarcisoDeganos, the brother of Brigida D. Luz, received several pieces of gold and jewelry from petitioners amounting to P382,816.00. These items and their prices were indicated in seventeen receipts covering the same. Eleven of the receipts stated that they were received for a certain Evelyn Aquino, a niece of Deganos, and the remaining six indicated that they were received for Brigida D. Luz. Deganos neither paid the balance of the sales proceeds, nor did he return any unsold item to petitioners. The total of his unpaid account to petitioners, including interest, reached the sum of P725,463.98. Petitioners eventually filed a complaint in the barangay court to recover said amount. In the barangay proceedings, Deganos obligated himself to pay petitioners, on installment basis, the balance of his account plus interest thereon. However, he failed to comply with his aforestated undertakings. Hence,petitioners instituted Civil Case against Deganos and Brigida D. Luz for recovery of a sum of money and damages, with an application for preliminary attachment. Deganos admitted that he had an unpaid obligation to petitioners, he claimed that the same was only in the sum of P382,816.00 and not P725,463.98. He further asserted that it was he alone who was involved in the transaction with the petitioners; that he neither acted as agent for nor was he authorized to act as an agent by Brigida D. LuzBrigida, on her part, denied that she had anything to do with the transactions. She claimed that she never authorized Deganos to receive any item of jewelry in her behalf and neither did she actually receive any of the articles in question. After trial, the court below found that only Deganos was liable to petitioners for the amount and damages claimed. The trial court also found that it was petitioner Lydia Bordador who indicated in the receipts that the items were received by Deganos for Evelyn Aquino and Brigida D. Luz. Said court was persuaded that Brigida D. Luz was behind Deganos, but because there was no memorandum to this effect, the agreement between the parties was unenforceable under the Statute of Frauds. Absent the required memorandum or any written document connecting the respondent Luz spouses with the subject receipts, or authorizing Deganos to act on their behalf, the alleged agreement between petitioners and Brigida D. Luz was unenforceable. ISSUE: Whether or not herein respondent spouses are liable to petitioners for the latters claim for money and damages despite the fact that the evidence does not show that they signed any of the subject receipts or authorized Deganos to receive the items of jewelry on their behalf. HELD:

Petitioners claim is speciously unmeritorious. It should be emphasized that neither the trial court nor the appellate court categorically stated that there was such a contractual relation between these two respondents. The trial court merely said that if there was such an agency existing between them, the same is unenforceable as the contract would fall under the Statute of Frauds which requires the presentation of a note or memorandum thereof in order to be enforceable in court. What was finally proven as a matter of fact is that there was no such contract between Brigida D. Luz and NarcisoDeganos, executed or partially executed, and no delivery of any of the items subject of this case was ever made to the former. Art. 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 The evidence does not support the theory of petitioners that Deganos was an agent of Brigida D. Luz and that the latter should consequently be held solidarily liable with Deganos in his obligation to petitioners. While the quoted statement in the findings of fact of the assailed appellate decision mentioned that Deganos ostensibly acted as an agent of Brigida, the actual conclusion and ruling of the Court of Appeals categorically stated that, (Brigida Luz) never authorized her brother (Deganos) to act for and in her behalf in any transaction with Petitioners x xx. It is clear, therefore, that even assuming arguendo that Deganos acted as an agent of Brigida, the latter never authorized him to act on her behalf with regard to the transactions subject of this case. It was grossly and inexcusably negligent of petitioners to entrust to Deganos, not once or twice but on at least six occasions as evidenced by six receipts, several pieces of jewelry of substantial value without requiring a written authorization from his alleged principal. A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. Regina Dizon et al v. CA and Overland Express Lines, Inc. G.R. No. 122544 January 28, 1999Martinez, J. BACKGROUND: Two consolidated petitions were filed before us seeking to set aside and annul the decisions and resolutions of respondent Court of Appeals. What seemed to be a simple ejectment suit was juxtaposed with procedural intricacies which finally found its way to this Court. FACTS: Overland Express Lines, Inc. entered into a Contract of Lease with Option to Buy with petitioners involving a 1,755.80 square meter parcel of land situated at corner MacArthur Highway and SouthH Street, Diliman, Quezon City. The term of the lease was for 1 year commencing from May 16,1974 up to May 15, 1975. During this period, Overland Express Lines was granted an option topurchase for the amount of P3,000.00 per square meter. Thereafter, the lease shall be on a permonth basis with a monthly rental of P3,000.00. For failure of Overland Express Lines to pay the increased rental of P8,000.00 per month effective June 1976, petitioners filed an action

for ejectment against it. The lower court rendered judgmentordering Overland Express Lines to vacate the leased premises and to pay the sum of P624,000.00representing rentals in arrears and/or as damages in the form of reasonable compensation for theuse and occupation of the premises during the period of illegal detainer from June 1976 to November1982 at the monthly rental of P8,000.00, less payments made, plus 12% interest per annum fromNovember 18, 1976, the date of filing of the complaint, until fully paid, the sum of P8,000.00 amonth starting December 1982, until Overland Express Lines fully vacates the premises, and to payP20,000.00 as and by way of attorneys fees. ISSUE: WON Overland Express Lines actually paid the alle g e d P 3 0 0 , 0 0 0 . 0 0 t o F i d e l a D i z o n , a s representative (agent) of petitioners in consideration of the option HELD: No. CA opined that the payment by Overland Express Lines of P300,000.00 as partial payment for theleased property, which petitioners accepted (through Alice A. Dizon) and for which an official receiptwas issued, was the operative act that gave rise to a perfected contract of sale, and that for failureof petitioners to deny receipt thereof, Overland Express Lines can therefore assume that Alice A.Dizon, acting as agent of petitioners, was authorized by them to receive the money in their behalf.CA went further by stating that in fact, what was entered into was a conditional contract of salewherein ownership over the leased property shall not pass to the Overland Express Lines until it hasfully paid the purchase price. Since Overland Express Lines did not consign to the court the balanceof the purchase price and continued to occupy the subject premises, it had the obligation to pay theamount of P1,700.00 in monthly rentals until full payment of the purchase price. In an attempt to resurrect the lapsed option, Overland Express Lines gave P300,000.00 to petitioners(thru Alice A. Dizon) on the erroneous presumption that the said amount tendered would constitute aperfected contract of sale pursuant to the contract of lease with option to buy. There was no validconsent by the petitioners (as co-owners of the leased premises) on the supposed sale entered intoby Alice A. Dizon, as petitioners alleged agent, and Overland Express Lines. The basis for agency isrepresentation and a person dealing with an agent is put upon inquiry and must discover upon hisperil the authority of the agent. As provided in Article 1868 of the New Civil Code, there was noshowing that petitioners consented to the act of Alice A. Dizon nor authorized her to act on theirbehalf with regard to her transaction with private respondent. The most prudent thing privaterespondent should have done was to ascertain the extent of the authority of Alice A. Dizon. Beingnegligent in this regard, private respondent cannot seek relief on the basis of a supposed agency. Every person dealing with an agent is put upon inquiry

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

June 19, 2000 VICTORIAS MILLING vs. COURT OF APPEALS CORPORATION, respondents.

CO., and

INC., petitioner, SUGAR

CONSOLIDATED

Facts: St. Therese Merchandising (hereafter STM) regularly bought sugar from petitioner Victorias Milling Co., Inc. In the course of their dealings, petitioner issued several Shipping List/Delivery Receipts to STM as proof of purchases. Among these was SLDR No. 1214M, which gave rise to the instant case. SLDR No. 1214M covers 25,000 bags of sugar. The transaction it covered was a "direct sale." Thereafter, STM sold to private respondent Consolidated Sugar Corporation (CSC) its rights in SLDR No. 1214M. That same day, CSC wrote petitioner that it had been authorized by STM to withdraw the sugar covered by the SLDR. However, after 2,000 bags had been released, petitioner refused to allow further withdrawals of sugar. CSC thus inquired when it would be allowed to withdraw the remaining 23,000 bags. In its reply, petitioner said that it could not allow any further withdrawals of sugar because STM had already withdrawn all the sugar covered by the cleared checks. Petitioner also noted that CSC had represented itself to be STM's agent as it had withdrawn the 2,000 bags "for and in behalf" of STM. As a result, CSC filed a complaint for specific performance. Petitioner's primary defense a quo was that it was an unpaid seller for the 23,000 bags. Since STM had already drawn in full all the sugar corresponding to the amount of its cleared checks, it could no longer authorize further delivery of sugar to CSC. Petitioner also contended that it had no privity of contract with CSC. Furthermore, the SLDRs prescribed delivery of the sugar to the party specified therein and did not authorize the transfer of said party's rights and interests. The Trial Court rendered its judgment favoring the private respondent CSC. The appellate court affirmed said decision but modified the costs against petitioner. Issue: Whether or not CSC was an agent of STM and hence, estopped to sue upon SLDR No. 1214M as an assignee. Held: No. It is clear from Article 1868 that the basis of agency is representation. One factor which most clearly distinguishes agency from other legal concepts is control; one person - the agent - agrees to act under the control or direction of another - the principal That the authorization given to CSC contained the phrase "for and in our (STM's) behalf" did not establish an agency. Ultimately, what is decisive is the intention of the parties. That no agency was meant to

be established by the CSC and STM is clearly shown by CSC's communication to petitioner that SLDR No. 1214M had been "sold and endorsed" to it. The use of the words "sold and endorsed" means that STM and CSC intended a contract of sale, and not an agency. Hence, CSC was not STM's agent and could independently sue petitioner, and not required to include STM as Co-plaintiff in its case. LINTONJUA vs. ETERNIT CORPORATION The Eternit Corporation (EC) is a corporation duly organized and registered under Philippine laws engaged in the manufacture of roofing materials and pipe products. Jack Glanville is its President. Its manufacturing operations were conducted on eight parcels of land. (90%) percent of the shares of stocks of EC were owned by Eteroutremer S.A. Corporation (ESAC), a corporation organized and registered under the laws of Belgium. Claude Frederick Delsaux was the Regional Director for Asia of ESAC. Both had their offices in Belgium. In 1986, ESAC grew concerned about the political situation in the Philippines and wanted to stop its operations in the country. ESAC instructed Michael Adams, a member of ECs Board of Directors, to dispose of the 8 parcels of land. Adams engaged the services of realtor/broker Lauro G. Marquez so that the properties could be offered for sale to prospective buyers. Marquez thereafter offered the land to Eduardo B. Litonjua, Jr. of the Litonjua & Company, Inc. In a Letter Marquez declared that he was authorized to sell the properties for P27M. Litonjua offered to buy the property for P20M. Marquez apprised Glanville of offer and relayed the same to Delsaux. Delsaux said that based on the "Belgian/Swiss decision," the final offer was "US$1,000,000.00 and P2,500,000.00 to cover all existing obligations prior to final liquidation." Litonjua accepted the counterproposal of Delsaux, and deposited the amount of US$1M with the Security Bank & Trust Company and drafted an Escrow Agreement to expedite the sale. Meanwhile, Cory Aquino became President and the political situation in the Philippines improved. Glanville and Delsaux told Marquez that their respective groups decided not to proceed with the sale. When apprised of this development, Litonjua, through counsel, wrote EC, demanding payment for damages they had suffered on account of the aborted sale. EC, however, rejected their demand. The Litonjuas then filed a complaint for specific performance and damages against EC. They emphasize that they acted in good faith. They aver the fact that since ESAC owns 90% of the shares of stock of respondent EC, a formal resolution of the Board of Directors would be a mere ceremonial formality. What is important, petitioners maintain, is that Marquez was able to communicate the offer of respondent EC and the petitioners acceptance thereof. There was no time that they acted without the knowledge of respondents. In fact, respondent EC never repudiated the acts of Glanville, Marquez and Delsaux. In their answer to the complaint, EC and ESAC alleged that since Eteroutremer was not doing business in the Philippines, it cannot be subject to the jurisdiction of Philippine courts; the Board and stockholders of EC never approved any resolution to sell subject properties nor authorized Marquez to sell the same.

The Trial Court (TC) dismissed the complaint. It declared that since the authority of the agents/realtors was not in writing, the sale is void and not merely unenforceable, and as such, could not have been ratified by the principal. In any event, such ratification cannot be given any retroactive effect. Plaintiffs could not assume that defendants had agreed to sell the property without a clear authorization from the corporation concerned, that is, through resolutions of the Board of Directors and stockholders. The trial court also pointed out that the supposed sale involves substantially all the assets of defendant EC which would result in the eventual total cessation of its operation. CA: affirmed TC. The CA ruled that Marquez, who was a real estate broker, was a special agent within the purview of Article 1874 of the New Civil Code. Under Section 23 of the Corporation Code, he needed a special authority from ECs board of directors to bind such corporation to the sale of its properties. Delsaux, who was merely the representative of ESAC, had no authority to bind the latter. The CA pointed out that Delsaux was not even a member of the board of directors of EC. ISSUE#1: WON petitioners had established that EC had contracted Adams, Glanville and Delsaux or Marquez as its agent to sell the land NO HELD: It was the duty of the petitioners to prove that respondent EC had decided to sell its properties and that it had empowered Adams, Glanville and Delsaux or Marquez to offer the properties for sale to prospective buyers and to accept any counter-offer. They likewise failed to prove that their counter-offer had been accepted by respondent EC, through Glanville and Delsaux. It must be stressed that when specific performance is sought of a contract made with an agent, the agency must be established by clear, certain and specific proof. Based on the Corporation Code, a corporation is a juridical person separate and distinct from its members or 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 either by its by-laws or by its board resolution, through its officers or agents in the normal course of business. 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. A corporation may sell or convey its real properties, subject to the limitations prescribed by law. The property of a corporation, however, is not the property of the stockholders or members, and as such, may not be sold without express authority from the board of directors. Physical acts, like the offering of the properties of the corporation for sale, or the acceptance of a counter-offer of prospective buyers of such properties and the execution of the deed of sale covering such property, can be performed by the corporation only by officers or agents duly authorized for the purpose by corporate by-laws or by specific acts of the board of directors. Absent such valid delegation/authorization, the rule is that the declarations of an individual director relating to the affairs of the corporation, but not in the course of, or connected with, the performance of authorized duties of such director, are not binding on the corporation. While a corporation may appoint agents to negotiate for the sale of its real properties, the final say will have to be with the board of directors

through its officers and agents as authorized by a board resolution or by its by-laws. An unauthorized act of an officer of the corporation is not binding on it unless the latter ratifies the same expressly or impliedly by its board of directors. Any sale of real property of a corporation by a person purporting to be an agent thereof but without written authority from the corporation is null and void. The declarations of the agent alone are generally insufficient to establish the fact or extent of his/her authority. Consent of both principal and agent is necessary to create an agency. The principal must intend that the agent shall act for him; the agent must intend to accept the authority and act on it, and the intention of the parties must find expression either in words or conduct between them. An agency may be expressed or implied. 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 as plaintiffs below, failed to adduce in evidence any resolution of the Board of Directors of respondent EC empowering Marquez, Glanville or Delsaux as its agents, to sell, let alone offer for sale, for and in its behalf, the eight parcels of land owned by respondent EC including the improvements thereon. The offer of Delsaux emanated only from the "Belgian/Swiss decision," and not the entire management or Board of Directors of respondent ESAC. While it is true that petitioners accepted the counter-offer of respondent ESAC, respondent EC was not a party to the transaction between them; hence, EC was not bound by such acceptance. Glanville, Adams and Delseaux acted for and in behalf of respondent ESAC, and not as duly authorized agents of respondent EC; a board resolution evincing the grant of such authority is needed to bind EC to any agreement regarding the sale of the subject properties. Such board resolution is not a mere formality but is a condition sine qua non to bind respondent EC. Admittedly, respondent ESAC owned 90% of the shares of stocks of respondent EC; however, the mere fact that a corporation owns a majority of the shares of stocks of another, or even all of such shares of stocks, taken alone, will not justify their being treated as one corporation. It bears stressing that in an agent-principal relationship, the personality of the principal is extended through the facility of the agent. In so doing, the agent, by legal fiction, becomes the principal, authorized to perform all acts which the latter would have him do. Such a relationship can only be effected with the consent of the principal, which must not, in any way, be compelled by law or by any court. The petitioners cannot feign ignorance of the absence of any regular and valid authority of respondent EC empowering Adams, Glanville or Delsaux to offer the properties for sale and to sell the said properties to the petitioners. A person dealing with a known agent is not authorized, under any circumstances, blindly to trust the agents; statements as to the extent of his powers; such person must not act negligently but must use reasonable diligence and prudence to ascertain whether the agent acts within the scope of his authority. The settled rule is that, persons dealing with an assumed agent are bound at their peril, and if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority,

and in case either is controverted, the burden of proof is upon them to prove it. In this case, the petitioners failed to discharge their burden; hence, petitioners are not entitled to damages from respondent EC. It appears that Marquez acted not only as real estate broker for the petitioners but also as their agent. As gleaned from the letter of Marquez to Glanville, on February 26, 1987, he confirmed, for and in behalf of the petitioners, that the latter had accepted such offer to sell the land and the improvements thereon. However, we agree with the ruling of the appellate court that Marquez had no authority to bind respondent EC to sell the subject properties. A real estate broker is one who negotiates the sale of real properties. His business, generally speaking, is only to find a purchaser who is willing to buy the land upon terms fixed by the owner. He has no authority to bind the principal by signing a contract of sale. Indeed, an authority to find a purchaser of real property does not include an authority to sell. ISSUE#2: WON EC is estopped to deny the existence of a principalagency relationship between it and Glanville or Delsaux NO. HELD: For an agency by estoppel to exist, the following must be established: (1) the principal manifested a representation of the agents authority or knowlingly allowed the agent to assume such authority; (2) the third person, in good faith, relied upon such representation; (3) relying upon such representation, such third person has changed his position to his detriment. An agency by estoppel, which is similar to the doctrine of apparent authority, requires proof of reliance upon the representations, and that, in turn, needs proof that the representations predated the action taken in reliance. Such proof is lacking in this case. In their communications to the petitioners, Glanville and Delsaux positively and unequivocally declared that they were acting for and in behalf of respondent ESAC. Neither may respondent EC be deemed to have ratified the transactions between the petitioners and respondent ESAC, through Glanville, Delsaux and Marquez. The transactions and the various communications inter se were never submitted to the Board of Directors of respondent EC for ratification. Peititon denied. Dominion Insurance Corp. v CA (GEN) FACTS: Rodolfo Guevara claimed to have advanced P156,473.90 in his capacity as a manager of Dominion Insurance Corp. to satisfy certain claims files by the petitioners clients. He then instituted a com plaint for sum of money against the petitioner. The petitioner denied any liability to plaintiff and asserted a counterclaim of 249,672.53, representing premium that Guevarra failed to pay. The RTC rules in favor of the Guevarra and ordered the petitioner to pay him the sum he claims. The CA affirmed the decision of the PTC. ISSUE: WON Guevarra acted within his authority as agent for petitioner? HELD: No. The Special Power of Attorney entered into by petitioner and Guevarra would show that they intended t o enter into a principal -agent relationship. Despite the word special in the document, the contents reveal that what was constituted was actually a general agency. The agency compromises all the business of the principal but couched

in general terms; hence it is limited only to acts of administration. Thus, the general agency constituted does not warrant the payment or settlement of claims as they specifically require a Special Power of Attorney as provided by Art 1878 of the Civil Code. But as provided b y the Memorandum of Management Agreement, Guevarra was authorized to pay the claim but the payment shall come from the revolving fund or collection in his possession. Having deviated from the instructions of the principal, the expenses that Guevarra incurr ed in the settlement of the claims of the insured may not be reimbursed from Dominion in Accordance with Art 1918 of the Civil Code. Nevertheless, under Art 1236, to the extent that the obligation of the petitioner has been extinguished, Guevarra may deman d for reimbursement from his principal.

First Issue: The De Castros argue that Artigos complaint should have been dismissed for failure to implead all the co-owners of the two lots. The De Castros contentions are devoid of legal basis. GR: An indispensable party is one whose interest will be affected by the courts action in the litigation, and without whom no final determination of the case can be had. The joinder of indispensable parties is mandatory and courts cannot proceed without their presence. EXC: Art. 1915. If two or more persons have appointed an agent for a common transaction or undertaking, they shall be solidarily liable to the agent for all the consequences of the agency. There is no dispute that Constante appointed Artigo in a handwritten note to sell the properties of the De Castros at a 5 percent commission. Constante signed the note as owner and as representative of the other co-owners. Under this note, a contract of agency was clearly constituted between Constante and Artigo. When the law expressly provides for solidarity of the obligation, as in the liability of co-principals in a contract of agency, each obligor may be compelled to pay the entire obligation. The agent may recover the whole compensation from any one of the co-principals, as in this case. Art. 1216. The creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully collected. Solidarity does not make a solidary obligor an indispensable party in a suit filed by the creditor. Second Issue:

[G.R. No. 115838. July 18, 2002] CONSTANTE AMOR DE CASTRO and CORAZON AMOR DE CASTRO, petitioners, vs. COURT OF APPEALS and FRANCISCO ARTIGO, respondents.

The Antecedent Facts Constante and Corazon (De Castros for brevity) were co-owners of four (4) lots (There were 2 other co-owners but Constante acted as a representative of the co-owners). In a letter dated January 24, 1984, Artigo was authorized by Constante to act as real estate broker in the sale of these properties, five percent (5%) of which will be given to the agent as commission. It was Artigo who first found Times Transit Corporation as prospective buyer which desired to buy two (2) lots only. Eventually, sometime in May of 1985, the sale of the 2 lots was consummated. Artigo received P48,893.76 as commission. Artigo apparently felt short changed because according to him, his total commission should be P352,500.00 which is five percent (5%) of the agreed price of P7,050,000.00 paid by Times Transit Corporation to the De Castros for the two (2) lots, and that it was he who introduced the buyer to them and unceasingly facilitated the negotiation which ultimately led to the consummation of the sale. Hence, he sued below to collect the balance of P303,606.24 after having received P48,893.76 in advance. The Court of Appeals ruled in favor of Artigo, affirmed the decision of the trial court. Hence, the instant petition. ISSUE 1. 2. 3. WON the complaint merits dismissal for failure to implead other co-owners as indispensable parties. NO!!! WON Artigos claim has been extinguished by full payment, waiver or abandonment. NO!!! WON the determination of the purchase price was made in violation of the Rules on Evidence. NO!!!

a. Full Payment The De Castros claim that Artigo was fully paid on June 14, 1985, that is, Artigo was given his proportionate share and no longer entitled to any balance. According to them, Artigo was just one of the agents involved in the sale and entitled to a proportionate share in the commission. They assert that Artigo did absolutely nothing during the second negotiation but to sign as a witness in the deed of sale. A contract of agency which is not contrary to law, public order, public policy, morals or good custom is a valid contract, and constitutes the law between the parties. The contract of agency entered into by Constante with Artigo is the law between them and both are bound to comply with its terms and conditions in good faith. The mere fact that other agents intervened in the consummation of the sale and were paid their respective commissions cannot vary the terms of the contract of agency granting Artigo a 5 percent commission based on the selling price. The trial court to observe: The alleged `second group of agents came into the picture only during the so-called `second negotiation and it is amusing to note that these (sic) second group, prominent among whom are Atty. Del Castillo and Ms. Prudencio, happened to be employees of Times Transit, the buyer of the properties. And their efforts were limited to convincing

HELD

Constante to part away with the properties because the redemption period of the foreclosed properties is around the corner, so to speak. To accept Constantes version of the story is to open the floodgates of fraud and deceit. A seller could always pretend rejection of the offer and wait for some time for others to renew it who are much willing to accept a commission far less than the original broker. The immorality in the instant case easily presents itself if one has to consider that the alleged `second group are the employees of the buyer, Times Transit and they have not bettered the offer secured by Mr. Artigo for P7 million. b. Waiver The De Castros also contend that Artigos inaction as well as failure to protest estops him from recovering more than what was actually paid him. The De Castros cite Article 1235 of the Civil Code which reads: Art. 1235. When the obligee accepts the performance, knowing its incompleteness and irregularity, and without expressing any protest or objection, the obligation is deemed fully complied with. The De Castros reliance on Article 1235 of the Civil Code is misplaced. Artigos acceptance of partial payment of his commission neither amounts to a waiver of the balance nor puts him in estoppel. This is the import of Article 1235 which was explained in this wise: The word accept, as used in Article 1235 of the Civil Code, means to take as satisfactory or sufficient, or agree to an incomplete or irregular performance. Hence, the mere receipt of a partial payment is not equivalent to the required acceptance of performance as would extinguish the whole obligation. c. Abandonment The De Castros further argue that laches should apply because Artigo did not file his complaint in court until four years later. Hence, Artigos claim for the balance of his commission is barred by laches. Actions upon a written contract, such as a contract of agency, must be brought within ten years from the time the right of action accrues. The Court has ruled, a delay within the prescriptive period is sanctioned by law and is not considered to be a delay that would bar relief. Laches is recourse in equity. Equity, however, is applied only in the absence, never in contravention, of statutory law. Thus, laches, cannot, as a rule, be used to abate a collection suit filed within the prescriptive period mandated by the Civil Code. Third Issue: Whether the actual purchase price was P7.05 Million as found by the trial court and affirmed by the Court of Appeals, or P3.6 Million as claimed by the De Castros, is a question of fact and not of law. Inevitably, this calls for an inquiry into the facts and evidence on record. This we cannot do. In petitions for review on certiorari as a mode of appeal under Rule 45, a petitioner can only raise questions of law. We find no reason to depart from this principle. The trial and appellate courts are in a much better position to evaluate properly the evidence. Hence, we find no other recourse but to affirm their finding on the actual purchase price.

WHEREFORE, the petition is denied for lack of merit. The Decision of the Court of Appeals is AFFIRMED in toto. SO ORDERED. 8. MANILA MEMORIAL PARK CEMETERY, INC. (MMPCI) v. LINSANGAN Nature: Petition for Review under Rule 45 of the ROC FACTS: Florencia Baluyot, an Agency Mgr. of MMPCI offered to Atty. Pedro Linsangan a lot at the Holy Cross Memorial Park owned by MMPCI for P95,000. The lot's former owner was not interested on the lot anymore and so agreed to sell the lot after he has been reimbursed. Atty. Linsangan agreed to the offer, gave Baluyot the reimbursement that would be given to the former owner and down payment that would be paid to MMCPI, with Baluyot only handing him handwritten and typewritten receipts (not O. R.). However, instead of the old contract with the old owner reformed so that Atty. Linsangan would become the new owner of the lot, Baluyot offered a new contract covering the same lot. Atty. Linsangan protested, but Baluyot assured him that Atty. Linsangan would still be paying P95,000 instead of the P132,250 price under the new contract. Baluyot even executed a document confirming the previous arrangement between her and Atty. Linsangan so that even if the purchase price under the new contract has increased, Atty. Linsangan would still be paying the old purchase price. He signed the new contract with MMPCI and tendered payment in checks in accordance with the old agreement between him and Baluyot. It turns out that MMPCI was not aware of the arrangement, and that Baluyot was only authorized under her Agency Mgt. contract to solicit and remit to MMPCI offers to purchase interment spaces belonging to and sold by MMPCI. So, even if Atty. Linsangan had cmplied with the agreed payment, MMPCI cancelled the new contract for non-payment of arrearages. Atty. Linsangan filed complaint for Breach of Contract and Damages against Baluyot and MMPCI. The lower court held that Baluyot was an agent of MMPCI and the latter was estopped from denying the agency after having received and encashed the checks issued by Atty. Linsangan and given it by Baluyot. The CA affirmed the lower court's decision plus Baluyot's authority was conferred upon her by habit and custom. ISSUES: 1. WON the SC could review the findings of fact of CA. 2. WON Baluyot was an agent of MMPCI. 3. WON MMPCI was bound by the contract procured by Atty. Linsangan and solicited by Baluyot. 4. WON MMPCI was estopped from denying liability to Atty. Linsangan. RULING: 1. YES. The findings of fact of CA may be reviewed for having valid grounds as held by the SC.

2. YES. Baluyot was an agent of MMPCI, having represented the interest of the latter, and having been allowed by MMPCI to represent it in her dealings with its clients/prospective buyers. 3. NO. Baluyot acted in excess of the authority granted to her by MMPCI. The original agreement between her and Atty. Linsangan was unknown to MMPCI and thus, MMPCI was not bound by their agreement. As far as they were concerned, the contract price was P132,250 and not P95,000. As for the ratification, there was no estoppel. 4. NO. There is no indication that MMPCI let the public nor Atty. Linsangan to believe that Baluyot had the authority to alter the standard contracts of the company. Neither is there any showing that prior to signing of the new contract, MMPCI had any knowledge of Baluyot's commitment to Atty. Linsangan. WHEREFORE, the instant petition is GRANTED. Eurotech Industrial Technologies, Inc. v. Edwin Cuizon and Erwin Cuizon G.R. No. 167552 April 23, 2007 FACTS: Eurotech is engaged in the business of importation and distribution of various European industrial equipment. It has as one of its customers Impact Systems Sales which is a sole proprietorship owned by Erwin Cuizon. Eurotech sold to Impact Systems various products allegedly amounting to P91,338.00. Cuizons sought to buy from Eurotech 1 unit of sludge pump valued at P250,000.00 with Cuizons making a down payment of P50,000.00. When the sludge pump arrived from the United Kingdom, Eurotech refused to deliver the same to Cuizons without their having fully settled their indebtedness to Eurotech. Thus, Edwin Cuizon and Alberto de Jesus, general manager of Eurotech, executed a Deed of Assignment of receivables in favor of Eurotech. Cuizons, despite the existence of the Deed of Assignment, proceeded to collect from Toledo Power Company the amount of P365,135.29. Eurotech made several demands upon Cuizons to pay their obligations. As a result, Cuizons were able to make partial payments to Eurotech. Cuizons total obligations stood at P295,000.00 excluding interests and attorneys fees. Edwin Cuizon alleged that he is not a real party in interest in this case. According to him, he was acting as mere agent of his principal, which was the Impact Systems, in his transaction with Eurotech and the latter was very much aware of this fact. ISSUE: WON Edwin exceeded his authority when he signed the Deed of Assignment thereby binding himself personally to pay the obligations to Eurotech. NO

Rationale: Edwin insists that he was a mere agent of Impact Systems which is owned by Erwin and that his status as such is known even to Eurotech as it is alleged in the Complaint that he is being sued in his capacity as the sales manager of the said business venture. Likewise, Edwin points to the Deed of Assignment which clearly states that he was acting as a representative of Impact Systems in said transaction. Art. 1897. The agent who acts as such is not personally liable to the 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. In a contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another with the latters consent. Its purpose is to extend the personality of the principal or the party for whom another acts and from whom he or she derives the authority to act. The basis of agency is representation, that is, the agent acts for and on behalf of the principal on matters within the scope of his authority and said acts have the same legal effect as if they were personally executed by the principal. The elements of the contract of agency are: (1) consent, express or implied, of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for himself; (4) the agent acts within the scope of his authority. An agent, who acts as such, is not personally liable to the party with whom he contracts. There are 2instances when an agent becomes personally liable to a third person. The first is when he expressly binds himself to the obligation and the second is when he exceeds his authority. In the last instance, the agent can be held liable if he does not give the third party sufficient notice of his powers. Edwin does not fall within any of the exceptions contained in Art. 1897. In the absence of an agreement to the contrary, a managing agent may enter into any contracts that he deems reasonably necessary or requisite for the protection of the interests of his principal entrusted to his management. Edwin Cuizon acted well-within his authority when he signed the Deed of Assignment. Eurotech refused to deliver the 1 unit of sludge pump unless it received, in full, the payment for Impact Systems indebtedness. Impact Systems desperately needed the sludge pump for its business since after it paid the amount of P50,000.00 as downpayment it still persisted in negotiating with Eurotech which culminated in the execution of the Deed of Assignment of its receivables from Toledo Power Company. The significant amount of time spent on the negotiation for the sale of the sludge pump underscores Impact Systems perseverance to get hold of the s aid equipment. Edwins participation in the Deed of Assignment was reasonably necessary or was required in order for him to protect the business of his principal.

Republic vs Evangelista Facts: In Nov. 1999, Calimlimm, Chief of the Intelligence Service of the Armed Forces of the Philippines (ISAFP) and the Presidential Security Group(PSG), representing the Republic of the Philippines, entered into a Memorandum of Agreement with one Ciriaco Reyes to hunt for treasure in a land in Bigte, Norzagaray, Bulacan owned by Dante Legaspi. Reyes, together with petitioners, started, digging, tunneling and blasting works on the said land of Legaspi. Calimlim also allegedly 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, Gutierrez, as his attorney-in-fact. Gutierrez was given by Legaspi, the power to manage the treasure hunting activities in the subject land; to file any case against anyone who enters the land without authority from Legaspi; to engage the services of lawyers to carry out the agency; and, to dig for any treasure within the land and enter into agreements relative thereto. It was likewise agreed upon that Gutierrez shall be entitled to 40% of whatever treasure may be found in the land. Pursuant to this authority and to protect Legaspis land from the alleged illegal entry of petitioners, agent Gutierrez hired the services of Atty. Adaza to prosecute the case for damages and injunction against petitioners (case filed at RTC of Quezon City). As payment for legal services, Gutierrez agreed to assign to Atty. Adaza 30% of Legaspis share in whatever treasure may be recovered in the subject land. 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. At the RTC: Upon the filing of the complaint, then Executive Judge Perlita J. Tria Tirona issued a 72-hour temporary restraining order (TRO) against petitioners. The case was subsequently raffled to Judge Evangelista who issued another 72-hour TRO. Petitioner-Republic (represented by Calimlim) filed a Motion to Dismiss contending: 1. There is no real party-in-interest as the SPA of Gutierrez to bring the suit was already revoked by Legaspi, as evidenced by a Deed of Revocation. 2. Gutierrez failed to establish that the alleged armed men guarding the area were acting on orders of petitioners. Gutierrezs defense: the unilateral revocation is invalid as his agency is coupled with interest. Motion to Dismiss and for Inhibition were both denied. The trial court granted writ of preliminary injunction on the following grounds: (1) the diggings and blastings appear to have been made on the land of Legaspi, hence, there is an urgent need to maintain the status quo to prevent serious damage to Legaspis land; and, (2) the SPA granted to Gutierrez continues to be valid. At the the Court of Appeals: decision of RTC affirmed Issue:

Whether or not the contract of agency between Legaspi and Gutierrez has been effectively revoked. Ruling: Negative. Generally, the agency may be revoked by the principal at will. However, an exception to the revocability of a contract of agency is when it is coupled with interest, i.e., if a bilateral contract depends upon the agency. The reason for its irrevocability is because the agency becomes part of another obligation or agreement. It is not solely the rights of the principal but also that of the agent and third persons which are affected. Hence, the law provides that in such cases, the agency cannot be revoked at the sole will of the principal. In the case at bar, the agency granted by Legaspi to Gutierrez is coupled with interest as a bilateral contract depends on it. It is clear that the treasure that may be found in the land is the subject matter of the agency; that under the SPA, Gutierrez can enter into contract for the legal services of Atty. Adaza; and, thus Gutierrez and Atty. Adaza have an interest in the subject matter of the agency, i.e., in the treasures that may be found in the land. This bilateral contract depends on the agency and thus renders it as one coupled with interest, 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. The Supreme Court also held that Evangelista had sufficient basis to issue the writ of preliminary injunction to preserve the rights and interests of private respondents Legaspi and Gutierrez. There is no discernible pattern of bias on the rulings of the respondent judge. Nevertheless, the inhibition of respondent judge in hearing the case for damages has become moot and academic in view of the latters death during the pendency of the case. The main case for damages shall now be heard and tried before another judge. Dispositive portion: IN VIEW WHEREOF, 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.