LIWANAG vs WORKMEN'S COMPENSATION COMMISSION

G.R. No. L-12164

Facts: Appellants Benito Liwanag and Maria Liwanag Reyes are co-owners of Liwanag Auto Supply, a
commercial guard who while in line of duty, was skilled by criminal hands. His widow Ciriaca Vda. de
Balderama and minor children Genara, Carlos and Leogardo, all surnamed Balderama, filed a claim for
compensation with the Workmen's Compensation Commission which was granted.
In appealing the case to the Supreme Court, appellants do not question the right of appellees to
compensation nor the amount awarded. They only claim that, under the Workmen's Compensation Act, the
compensation is divisible, hence the commission erred in ordering appellants to pay jointly and severally the
amount awarded. They argue that there is nothing in the compensation Act which provides that the obligation
of an employer arising from compensable injury or death of an employee should be solidary obligation, the
same should have been specifically provided, and that, in absence of such clear provision, the responsibility
of appellants should not be solidary but merely joint.

Issue: Whether the obligation to pay would be jointly or solidary.

Held: the liability of the partners in a partnership is not solidary; but the law governing the liability of partners is
not applicable to the case at bar wherein a claim for compensation by dependents of an employee who died in
line of duty is involved. And although the Workmen's Compensation Act does not contain any provision
expressly declaring solidary obligation of business partners like the herein appellants, there are other
provisions of law from which it could be gathered that their liability must be solidary.
The provisions of the new Civil Code taken together with those of Section 2 of the Workmen's Compensation
Act, reasonably indicate that in compensation cases, the liability of business partners, like appellants, should
be solidary; otherwise, the right of the employee may be defeated, or at least crippled. If the responsibility of
appellants were to be merely joint and solidary, and one of them happens to be insolvent, the amount
awarded to the appellees would only be partially satisfied, which is evidently contrary to the intent and
purposes of the Act. In the previous cases we have already held that the Workmen's Compensation Act
should be construed fairly, reasonably and liberally in favor of and for the benefit of the employee and his
dependents; that all doubts as to the right of compensation resolved in his favor; and that it should be
interpreted to promote its purpose. Accordingly, the present controversy should be decided in favor of the
appellees.

Guidote v. Borja

G.R. No. L-28920

Facts: Maximo Guidote and Narciso Santos formed in 1918 a partnership business under the name of Taller
Sinukuan, in which Santos was the capitalist partner and Guidote was the industrial partner. Santos died in
1920. Guidote failed to liquidate the affairs of the partnership and to render an account thereof to Borja, the
administratrix of Santos estate.
Guidote brought an action against Borja to recover a sum of money, a part of which was alleged to be the net
profits from the business due Guidote, and the rest of the sum consisting of advances allegedly made by
Guidote. Borja admitted the partnerships existence and prayed that Guidote be ordered to render an
accounting.After trial, the court dismissed Guidotes complaint and absolved Borja. Guidote was ordered to
render a full and complete accounting, verified by vouchers, of the partnership business.
Guidote rendered an account prepared by one Tomas Alfonso, a public accountant. Numerous
objections were presented by Borja. The court disapproved the account and ordered that Borja submit an
accounting from the date of the commencement of the partnership up to the time the business was closed.
Borja presented an account and liquidation prepared by a public accountant, Santiago A. Lindaya,
showing a balance of P29k~ in Borjas [Santos estate] favor. The trial court judge said that the testimonies of
these witnesses are unreliable. The court gave credence to the conclusions reached by the public
accountants presented by Borja. Guidote was ordered to pay Borja.
Issue:Whether petitioner should render the accounting.

Held: The appealed judgment was affirmed.

In the case of Wahl vs. Donaldson Sim & Co. (5 Phil., 11, 14), it was held that the death of one of the partners
dissolves the partnership, but that the liquidation of its affairs is by law intrusted, not to the executors of the
deceased partner, but to the surviving partners or the liquidators appointed by them (citing article 229 of the
Code of Commerce and secs. 664 and 665 of the Code of Civil Procedure). The same rule is laid down by the
Supreme Court of Spain in sentence of October 12, 1870.
The rule for the conduct of a surviving partner is thus stated in 20 R. C. L., 1003:
In equity surviving partners are treated as trustees of the representatives of the deceased partner, in
regard to the interest of the deceased partner in the firm. As a consequence of this trusteeship,
surviving partners are held in their dealings with the firm assets and the representatives of the
deceased to that nicety of dealing and that strictness of accountability required of and incident to the
position of one occupying a confidential relation. It is the duty of surviving partners to render an
account of the performance of their trust to the personal representatives of the deceased partner, and
to pay over to them the share of such deceased member in the surplus of firm property, whether it
consists of real or personal assets.

THE SHELL COMPANY OF THE PHILIPPINES, LTD., vs. FIREMEN'S INSURANCE COMPANY
G.R. No. L-8169

January 29, 1957

FACTS: This case is about an action for recovery of sum of money, based on the alleged negligence of the
defendants. A car was brought to a Shell gasoline station owned by Dela Fuente for washing and greasing.
The car was placed on a hydraulic lifter for greasing. As some parts of the car couldnt be reached by the
greaseman, the lifter was lowered. Unfortunately, for unknown reasons (probably due to mechanical failure or
human error), while the lifter was being lowered, the car swung and fell from the platform. Said car was
insured against loss or damage by Firemen's Insurance Company of Newark, New Jersey, and Commercial
Casualty Insurance Company jointly for the sum of P10,000. The insurance companies after paying the sum
of P1,651.38 for the damage and charging the balance of P100.00 to Salvador Sison, in accordance with the
terms of the insurance contract, filed this action together with said Salvador Sison for the recovery of the total
amount of the damage from the defendants on the ground of negligence.

ISSUE: Whether Dela Fuente is merely an agent of petitioner.

HELD: Yes. De la Fuente was the operator of the station "by grace" of the Defendant Company which could
and did remove him as it pleased; that all the equipments needed to operate the station was owned by the
Defendant Company which took charge of their proper care and maintenance, despite the fact that they were
loaned to him; that the Defendant company did not leave the fixing of price for gasoline to De la Fuente; That
the service station belonged to the company and bore its trade name and the operator sold only the products
of the company; that the equipment used by the operator belonged to the company and were just loaned to
the operator and the company took charge of their repair and maintenance.
As the act of the agent or his employees acting within the scope of his authority is the act of the principal, the
breach of the undertaking by the agent is one for which the principal is answerable. The latter was negligent
and the company must answer for the negligent act of its mechanic which was the cause of the fall of the car
from the hydraulic lifter.

VICTORIAS MILLING CO., INC. vs. CA,

G.R. No. 117356,

June 19, 2000

FACTS:St. Therese Merchandising (STM) regularly bought sugar from petitioner Victorias Milling Co., Inc.,
(VMC). In the course of their dealings, petitioner issued several Shipping List/Delivery Receipts (SLDRs) to
STM as proof of purchases. Among these was SLDR No. 1214M, which gave rise to the instant case. On
October 25, 1989, STM sold to private respondent Consolidated Sugar Corporation (CSC) its rights in SLDR
No. 1214M for P 14,750,000.00. That same day, CSC wrote petitioner that it had been authorized by STM to
withdraw the sugar covered by SLDR No. 1214M. Enclosed in the letter were a copy of SLDR No. 1214M and
a letter of authority from STM authorizing CSC "to withdraw for and in our behalf the refined sugar covered by
Shipping List/Delivery Receipt-Refined Sugar (SDR) No. 1214 dated October 16, 1989 in the total quantity of
25,000 bags."
Private respondent CSC surrendered SLDR No. 1214M to the petitioner's NAWACO warehouse and was
allowed to withdraw sugar. However, after 2,000 bags had been released, petitioner refused to allow further
withdrawals of sugar against SLDR No. 1214M. On January 31, 1990, petitioner told CSC that it could not
allow any further withdrawals of sugar against SLDR No. 1214M because STM had already withdrawn all the
sugar covered by the cleared checks. CSC sent petitioner a letter demanding the release of the balance of
23,000 bags. Petitioner noted that CSC had represented itself to be STM's agent as it had withdrawn the
2,000 bags against SLDR No. 1214M "for and in behalf" of STM.
On April 27, 1990, 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. Petitioner explained
that the SLDRs, which it had issued, were not documents of title, but mere delivery receipts issued pursuant
to a series of transactions entered into between it and STM. 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. Petitioner
heavily relied upon STM's letter of authority allowing CSC to withdraw sugar against SLDR No. 1214M to
show that the latter was STM's agent.
ISSUE:Whether or not CSC was an agent of STM.
Held:CSC was not STM's agent and could independently sue petitioner. It is clear from Article 1868 that the
basis of agency is representation. On the part of the principal, there must be an actual intention to appoint or
an intention naturally inferable from his words or actions; and on the part of the agent, there must be an
intention to accept the appointment and act on it, and in the absence of such intent, there is generally no
agency. 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. Indeed, the very word
"agency" has come to connote control by the principal. The control factor, more than any other, has caused
the courts to put contracts between principal and agent in a separate category.
In the instant case, it appears plain that private respondent CSC was a buyer of the SLDFR form, and not an
agent of STM. Private respondent CSC was not subject to STM's control. The question of whether a contract
is one of sale or agency depends on the intention of the parties as gathered from the whole scope and effect
of the language employed. 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.

Tuazon vs. Heirs of Bartolome Ramos

G.R. No. 156262

Facts:
Respondents alleged that between the period of May 2, 1988 and June 5, 1988, spouses Leonilo and Maria
Tuazon purchased a total of 8,326 cavans of rice from the deceased Bartolome Ramos [predecessor-ininterest of respondents]. That of this quantity,only4,437 cavans have been paid for so far, leaving unpaid
3,889 cavans valued at P1,211,919.00. In payment therefor, the spouses Tuazon issued several checks.
But when these checks were encashed, all of the checks bounced due to insufficiency of funds. Respondents
advanced that before issuing said checks, spouses Tuazon already knew that they had no available fund to
support the checks, and they failed to provide for the payment of these despite repeated demands made on
them. Respondents averred that because spouses Tuazon anticipated that they would be sued, they
conspired with the other defendants to defraud them as creditors by executing fictitious sales of their
properties.
Defendants denied having purchased rice from Bartolome Ramos. They alleged that it was Magdalena
Ramos, wife of said deceased, who owned and traded the merchandise and Maria Tuazon was merely her
agent. They argued that it was Evangeline Santos who was the buyer of the rice and issued the checks to
Maria Tuazon as payments therefor. In good faith, the checks were received by petitioner from Evangeline
Santos and turned over to Ramos without knowing that these were not funded. And it is for this reason that
petitioners have been insisting on the inclusion of Evangeline Santos as an indispensable party, and her noninclusion was a fatal error.
Issue: Whether or not the Honorable Court of Appeals erred in ruling that petitioners are not agents of the
respondents.
Held: This Court finds no reversible error in the findings of the courts a quo that petitioners were the rice
buyers themselves; they were not mere agents of respondents in their rice dealership. The question of
whether a contract is one of sale or of agency depends on the intention of the parties.
In a contract of agency, one binds oneself to render some service or to do something in representation or on
behalf of another, with the latters consent or authority.[9] The following are the elements of agency: (1) the
parties consent, express or implied, to establish the relationship; (2) the object, which is the execution of a
juridical act in relation to a third person; (3) the representation, by which the one who acts as an agent does
so, not for oneself, but as a representative; (4) the limitation that the agent acts within the scope of his or her
authority. As the basis of agency is representation, there must be, on the part of the principal, an actual
intention to appoint, an intention naturally inferable from the principals words or actions. In the same manner,
there must be an intention on the part of the agent to accept the appointment and act upon it. Absent such
mutual intent, there is generally no agency.
The declarations of agents alone are generally insufficient to establish the fact or extent of their authority.The
law makes no presumption of agency; proving its existence, nature and extent is incumbent upon the person
alleging it.In the present case, petitioners raise the fact of agency as an affirmative defense, yet fail to prove
its existence.

The Court notes that petitioners, on their own behalf, sued Evangeline Santos for collection of the amounts
represented by the bounced checks, in a separate civil case that they sought to be consolidated with the
current one. If, as they claim, they were mere agents of respondents, petitioners should have brought the suit
against Santos for and on behalf of their alleged principal, in accordance with Section 2 of Rule 3 of the Rules
on Civil Procedure.Their filing a suit against her in their own names negates their claim that they acted as
mere agents in selling the rice obtained from Bartolome Ramos.