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G.R. No. 145817 October 19, 2011 URBAN BANK, INC, Petitioner, vs. MAGDALENO M. E!A, Respondent.

"AC#$% Magdaleno Pea, a lawyer, was formerly a stockholder, director and corporate secretary of Isabel Sugar ompany, Inc. !IS I". IS I owned a parcel of land and leased it. #efore the e$piration of the lease contract, IS I informed the lessee and his tenants that the lease would no longer be renewed because the land will be sold. IS I and %rban #ank e$ecuted a ontract to Sell. IS I then instructed Pea, to act as its agent and handle the eviction of the tenants. &he lessee left, but the unauthori'ed sub(tenants refused to leave. Pea had the gates of the property closed and he also posted security guards)services for which he advanced payments. *espite this, the sub(tenants would force open the gates, and proceed to carry on with their businesses. Pea then filed a complaint with the R& , which issued a &R+. ,t the time the complaint was filed, a new title to the land had already been issued in the name of %rban #ank. -hen information reached the .udge that the land had already been transferred by IS I to %rban #ank, the trial court recalled the &R+ and issued a break(open order for the property. Pea immediately contacted IS I/s president and told him that he would be recalling the security guards he had posted to secure the property. &he IS I President asked him to suspend the withdrawal of the posted guards, so that IS I could get in touch first with %rban #ank. Pea also called %rban #ank/s President. &he President allegedly assured him that the bank was going to retain his services, and that the he should not give up possession of the sub.ect land. &hereafter, Pea, in representation of %rban #ank, filed a separate complaint with the R& (Makati ity, to en.oin the tenants from entering property. &he R& (Makati ity issued a &R+. -hile the 0nd complaint was pending, Pea made efforts to settle the issue of possession with the sub( tenants. &he sub(tenants eventually agreed to stay off the property for a total consideration of PhP1.2M. Pea advanced the payment for the full and final settlement of their claims against %rban #ank. Pea formally informed %rban #ank that it could already take possession of the property. &here was however no mention of the compensation due and owed to him for the services he had rendered. &he bank subse3uently took actual possession of the property and installed its own guards at the premises. Pea filed a complaint with R& demanding from %rban #ank the payment of the 145 compensation and attorney/s fees allegedly promised to him by %rban #ank/s President. %rban #ank argued that it was IS I, the original owners of the property, that had engaged the services of Pea in securing the premises6 and, conse3uently, they could not be held liable for the e$penses Pea had incurred. &he R& ruled in favor of Pea because if found there has a contract of agency created. +n appeal, it reversed R& s/ decision and ordered %rban #ank to pay Pea reasonable compensation for his service. Pea appealed on certiorari. I$$UE% -78 Pena is entitled to payment for the services he rendered as agent of %rban #ank and -78 there e$ist a contract of agency. &ELD% 9es. RA#IO% Pea should be paid for services rendered under the agency relationship that e$isted between him and %rban #ank based on the civil law principle against un.ust enrichment, and not on the basis of the purported oral contract. In a contract of agency, agents bind themselves to render some service or to do something in representation or on behalf of the principal, with the consent or authority of the latter. &he basis of the civil law relationship of agency is representation, the elements of which include the following: !a" the relationship is established by the parties/ consent, e$press or implied6 !b" the ob.ect is the e$ecution of a .uridical act in relation to a third person6 !c" agents act as representatives and not for themselves6 and !d" agents act within the scope of their authority. -hether or not an agency has been created is determined by the fact that one is representing and acting for another. &he law makes no presumption of agency6 proving its e$istence, nature and e$tent is incumbent upon the person alleging it. &he ourt concludes that %rban #ank constituted ,tty. Pea as its agent to secure possession of the property. &his conclusion, however, is not determinative of the basis of the amount of payment that must be made to him by the bank. &he conte$t in which the agency was created lays the basis for the amount of compensation ,tty. Pea is entitled to. Petitioner(respondent bank confirmed his engagement !a" ;to hold and maintain possession< of the property6 !b" ;to protect the same from former tenants, occupants or any other person who are threatening to return to the said property and7or interfere with your possession of the said property for and in our behalf<6 and !c" to represent the bank in any instituted court action intended to prevent any intruder from entering or staying in the premises.

&hese three e$press directives of petitioner(respondent bank/s admits of no other construction than that a specific and special authority was given to Pea to act on behalf of the bank. In any case, the subse3uent actions of %rban #ank resulted in the ratification of Pea/s authority as an agent acting on its behalf and by ratification, even an unauthori'ed act of an agent becomes an authori'ed act of the principal. ,gency is presumed to be for compensation. #ut because in this case we find no evidence that %rban #ank agreed to pay Pea a specific amount or percentage of amount for his services, we turn to the principle against un.ust enrichment and on the basis of quantum meruit. =awyering is not a business6 it is a profession in which duty to public service, not money, is the primary consideration. &he principle of quantum meruit applies if lawyers are employed without a price agreed upon for their services, in which case they would be entitled to receive what they merit for their services, or as much as they have earned.

DOMINION IN$URANCE '. CA DOC#RINE% -hen a special power of attorney is re3uired for the agent to do a certain act, the agent, in the performance of such act, must comply with the specifications embodied in the special power of attorney giving him authority to do such. >or e$ample, here, a special power of attorney was needed for ?uevarra to settle the claims of *ominion/s clients. ,nd for this purpose, there was a memorandum. @owever, the memorandum stated that ?uevarra was to settle the claims using the money in a revolving fund. ?uevarra did not comply with this, so the e$penses ?uevarra incurred in the settlement of the claims of the insured may not be reimbursed from *ominion, at least under the law of agency. "AC#$% Rodolfo ?uevarra instituted a civil case for the recovery of a sum of money against *ominion Insurance. @e sought to recover P12A,BCD.E4, which he claimed to have advanced in his capacity as manager of *ominion to satisfy claims filed by *ominion/s clients. *ominion denied any liability to ?uevarra and asserted a counterclaim for premiums allegedly unremitted by the latter. &he pre(trial conference never pushed through despite being scheduled and postponed nine times over the course of si$ months. >inally, the case was called again for pre(trial and *ominion and counsel failed to show up. &he trial court declared *ominion in default and denied any reconsideration. +n the merits of the case, the R& ruled that *ominion was to pay ?uevarra the P12A,BCD.E4 claimed as the total amount advanced by the latter in the payment of the claims of *ominion/s clients. &he , affirmed. I$$UE$%(ON G)e*+rr+ +cte, -.t/.0 /.1 +)t/or.t2 +1 +3e0t 4or Do5.0.o0 &ELD: NO. , perusal of the ;Special Power of ,ttorney< would show that *ominion and ?uevarra intended to enter into a principal(agent relationship. *espite the word ;special,< the contents of the document reveal that what was constituted was a general agency. &he agency comprises all the business of the principal, but, couched in general terms, is limited only to acts of administration. , general power permits the agent to do all acts for which the law does not re3uire a special power. ,rt. 1FCF enumerates the instances when a special power of attorney is re3uired, including !1" to make such payments as are not usually considered as acts of administration6 !12" any other act of strict dominion. &he payment of claims is not an act of administration. &he settlement of claims is not included among the acts enumerated in the Special Power of ,ttorney, neither is it of a character similar to the acts enumerated therein. , special power of attorney would have been re3uired before ?uevarra could settle the insurance claims of the insured. ?uevarra/s authority to settle claims is embodied in the Memorandum of Management ,greement which enumerated the scope of ?uevarra /s duties and responsibilities. @owever, the Memorandum showed the instruction of *ominion that payment of claims shall come from a revolving fund. @aving deviated from the instructions of the principal, the e$penses that ?uevarra incurred in the settlement of the claims of the insured may not be reimbursed from *ominion. Note 603 7)1t .0 c+1e% @owever, while the law on agency prohibits ?uevarra from obtaining reimbursement, his right to recovery may still be .ustified under the general law on +bligations and ontracts, particularly, ,rt. 10DA I n this case, when the risk insured against occurred, *ominion/s liability as insurer arose. &his obligation was e$tinguished when ?uevarra paid such claims. &hus, to the e$tent that the obligation of *ominion had been e$tinguished. respondent ?uevarra may demand for reimbursement from his principal.

G.R. No. 179448

9+0)+r2 10, 2011

LOADMA$#ER$ CU$#OM$ $ER'ICE$, INC., Petitioner, vs. GLODEL BROKERAGE COR ORA#ION +0, R:B IN$URANCE COR ORA#ION, Respondents. #&E "AC#$: RG# Insurance issued insurance policy in favor of olumbia for the shipment of 1D0 bundles of electric copper cathodes against all risks. &he cargoes were shipped and arrived in Manila. olumbia engaged the services of ?lodel for the release and withdrawal of the cargoes from the pier and the subse3uent delivery to its warehouses7plants. ?lodel, in turn, engaged the services of =oadmasters for the use of its delivery trucks to transport the cargoes to olumbia/s warehouses7plants. &he goods were loaded on board twelve !10" trucks owned by =oadmasters. Si$ !A" truckloads were to be delivered to #alagtas, #ulacan, while the other si$ !A" truckloads were destined for =awang #ato, Halen'uela ity. &he cargoes in si$ truckloads for =awang #ato were duly delivered in olumbia/s warehouses there. +f the si$ !A" trucks en route to #alagtas, #ulacan, however, only five !2" reached the destination. +ne !1" truck, failed to deliver its cargo. #ecause of this incident, olumbia filed with RG# Insurance a claim for insurance indemnity. ,fter the re3uisite investigation and ad.ustment, RG# Insurance paid olumbia the amount of insurance indemnity. RG# Insurance, thereafter, filed a complaint for damages against both =oadmasters and ?lodel before the Manila RTC. It sought reimbursement of the amount it had paid to olumbia for the loss of the sub.ect cargo. It claimed that it had been subrogated Ito the right of the consignee to recover from the party7parties who may be held legally liable for the loss.I !May or may not isulat na para hnd mahaba haha" &he R& rendered a decision in favor of RG# Insurance and dismissed =oadmasters counterclaim. #oth RG# Insurance and ?lodel appealed the R& decision to the ,. &he , rendered that =oadmasters is likewise held liable to appellant ?lodel for the insurance indemnity appellant ?lodel has been held liable to appellant RG# Insurance orporation considering that appellee is an agent of appellant ?lodel. @ence, =oadmasters filed petition for review on certiorari to the S . I$$UE$% (ON Lo+,5+1ter1 be 6e3+662 co01.,ere, +1 +0 A3e0t o4 re1;o0,e0t G6o,e6< &e6,: &he ourt clarifies that there e$ists no principal(agent relationship between ?lodel and =oadmasters. ,rticle 1FAF of the ivil ode provides: I#y 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.I &he elements of a contract of agency are: !1" consent, e$press or implied, of the parties to establish the relationship6 !0" the ob.ect is the e$ecution of a .uridical act in relation to a third person6 !D" the agent acts as a representative and not for himself6 !B" the agent acts within the scope of his authority. =oadmasters never represented ?lodel. 8either was it ever authori'ed to make such representation. It is a settled rule that the basis for 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 e$ecuted by the principal. +n the part of the principal, there must be an actual intention to appoint or an intention naturally inferable from his words or actions, while on the part of the agent, there must be an intention to accept the appointment and act on it. Such mutual intent is not obtaining in this case.