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AGENCY (Obieta) DIGESTS by Sham Zaragoza

ARTICLES 1868-1872 rather by a 3rd party or stranger not in the employ of his
employer may recover said damages against his employer
1. DE LA CRUZ V NORTHERN THEATRIAL ENTERPRISES
Ruling: No
FACTS:
The Northern Theatrical Enterprises, a domestic corporation Although the employer has a moral obligation to give employee
opearated a movie house in Laoag, Ilocos Norte and among legal assistance to aid the latter in his case, he has no legal
the persons employed by it was plaintiff De La Cruz, hired as obligation to do so.
special guard whose duties were to guard the main entrance of
the cine, to maintain peace and order and to report the If the employer is not legally obliged to give legal assistance to
commission of disorder within the premises employee and provide him with a lawyer, naturally said
employee may not recover the amount he may have paid a
As such guard, he carried a revolver lawyer hired by him.

One Benjamin Martin wanted to crash the gate or entrance of Damages suffered by plaintiff by reason of expenses incurred
the movie house. Infuriated by the refusal of plaintiff to let him by him in remunerating his lawyer is not caused by his act of
in without first providing himself with a ticket, Martin attacked shooting to death the gate crasher but rather by filing the
him with a bolo charge of homicide which made it necessary for him to defend
himself with the aid of counsel.
Plaintiff defended himself until he was cornered, at which
moment to save himself, he shot gate crasher resulting in Had no criminal charge against him, there would have been no
latters death expenses incurred or damages suffered.

Plaintiff was charged with homicide but was acquitted of 2. KER AND CO, LTD V. LINGAD
charge after trial. In both criminal cases against him, he
employed a lawyer to defend him FACTS:
Ker and Co, Ltd. was assessed by then Commissioner of
He then demanded from NLE reimbursement of expenses but Internal Revenue Domingo the sum of P 20,272.33 as the
was refused thus filed present action against the company and commercial brokers percentage tax, surcharge and
t3 members of its Board of Directors to recover not only the compromise penalty.
amounts he had paid his lawyers but also moral damages said
to have been suffered due to his worry, neglect of his interests There was a request on the part of Ker for the cancellation of
and his family as well in the supervision of the cultivation of his such assessment which request was turned down
land, a total of P 15,000.
As a result, it filed a petition for review with Court of Tax
CFI rejected plaintiffs theory that he was an agent of the Appeals
company and that he had no cause of action and dismissed
the complaint CTA: Ker taxable except as to the compromise penalty of
P500, the amount due from it being fixed at P19,772.33
ISSUE:
W/N Plaintiff De la Cruz is considered as an agent of the Such liability arose from a contract of Ker with the United
corporation and as such entitled to reimbursement for States Rubber International. The former being referred to as
expenses incurred in conncection with agency the distributor and the latter specifically designated as the
company
RULING: No, Plaintiff is mere employee
The contract was to apply to transactions between the former
The relationship between the movie corporation and plaintiff and Ker, as distributor from July 1, 1948 to continue in force
was not that of principal and agent because the principle of until terminated by either party giving to the other 60 days
representation as a characteristic of agency was in no way notice
involved.
The shipments would cover products for consumption in
Plaintiff was not employed to represent corporation in its Cebu, Bohol, Leyte Samar, Jolo, Negros Oriental and
dealings with 3rd parties Mindanao except province of Davao, Ker as distributor being
precluded from disposing such products elsewhere than in the
Plaintiff is a mere employee hired to perform a certain specific above places unless written consent would first be obtained
duty or task, that of acting as a special guard and staying at from the company
the main entrance of the movie house to stop gate crashers
and to maintain peace and order within the premises. Ker as distributor is required to exert every effort to have the
shipment of the products in the maximum quantity and to
Sub issue (relevant to Agency): W/N an employee or servant promote in every way the sale sale thereof.
who in line of duty and while in the performance of the task
assigned to him, performs an act which eventually results in his Crucial stipulation: The company shall from time to time
incurring in expenses caused not directly by his master or consign to Ker and Ker will receive, accept and/hold upon
employer or by reason of his performance of his duty, but consignment the products specified under the terms of this

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AGENCY (Obieta) DIGESTS by Sham Zaragoza

agreement in such quantities as in the judgment of company When Escandor didnt get any word from Orbeta after 3 days,
may be necessary she herself inquired in writing from Rubberworld about her offer
of sale of a fire truck. She then sent a revised price quotation
It is further agreed that this agreement does not constitute Ker some ten days laeter.
the agent or legal representative of the company for any
purpose whatsoever in the meantime, Orbeta sold to other individuals some of
Escanodors fire extinguishers, receiving traveling expenses in
ISSUE: connection therewith as well as the corresponding
W/N the relationship thus created is one of vendor and vendee commissions and after that he then dropped out of sight.
(contract of sale) or of broker and principal (contract of agency)
About 7 months afterwards, Escandor herself finally concluded
RULING: a contract with Rubberworld for the latters purchase of a fire
Broker and principal- contract of agency truck

By taking the contractual stipulations as a whole and not just Orbeta suddenly reappeared an asked for his commission for
the disclaimer, it would seem that the contract between them is the sale of the fire truck to Rubberworld to which Escandor
a contract of agency refused, saying that he had had nothing to do with the offer,
negotiation and consummation of the sale
The CTA, in considering such stipulations provided in the
contract, concluded that all these circumstances are Orbeta then filed a complaint against Escandor with the
irreconcilably antagonistic to the idea of an independent Ministry of Labor which ruled in his favor. It was affirmed by the
merchant National Labor Relations Commission on appeal taken by
Escandor
CTA: upon analysis of the whole, together with actual conduct
of the parties thereto, that the relationship between them is one ISSUE:
of brokerage or agency W/N Orbeta is an agent of Guardex Enterprises thus entitled to
sales commission
National Internal Revenue Code: defined Commercial broker
as all persons, other than importer, manufacturers, producers RULING: No
or bona fide employees who, for compensation or profit, sell or
bring about sales or purchase of merchandise for other The claim that she gave verbal authority to Orbeta to offer to a
persons or bring proposed buyers and sellers together and fire truck to Rubberworld was belied from the fact that months
also includes commission merchants such as Ker in this case prior to Orbetas approaching Escandor, the latter already had
made a written offer of a fire truck to Rubberworld. All that she
The mere disclaimer in a contract that an entity like Ker is not consented to was for Orbeta to follow up that pending offer. It
the agent or legal representative for any purpose whatsoever seems fairly evident that the representation allowance of
does not suffice to yield the conclusion that it is an P250 was meant to cover the expenses for the follow up
independent merchant if the control over the goods for resale offered by Orbeta-an ambiguous fact which does not of itself
of goods consigned is pervasive in character suggest the creation of an agency and is not at all inconsistent
with the theory of its absence in this case.
Thus, SC rejected Kers petition to reverse decision of CTA
Even if Orbeta is considered to have been Escandors agent
3. GUARDEX ENTERPRISES V NLRC for the time he was supposed to follow up the offer to sell,
such agency would have been deemed revoked upon the
FACTS: resumption of direct negotiations between Escandor and
Escandor-engaged, under the name and style of Guardex Rubberworld, Orbeta having in the meantime abandoned all
Enterprises in (a) manufacture and sale of fire-fighting efforts (if indeed any were exerted) to secure the deal in
equipment such as fire extinguishers, fire hose cabinets and Escandors behalf.
related products, and (b) occasionally, the building or
fabrication of fire trucks No jurisdiction for Labor Arbiter or NLRC in dealing with this
case since jurisiction vested in tehm by the Labor Code
Junbee Orbeta- a freelance salesman extends generally speaking only to cases arising from
employer-employee relationship.
Orbeta somehow learned that Escandor had offered to
fabricate a fire truck for Rubberworld )Phil) inc thus he wrote 4. ORIENT AIR SERVCES AND HOTEL REPRESENTATIVES
Escandor inquiring about the amount of commission for the V CA
sale of a fire truck. Escandor replied saying that it was P15,000
per unit FACTS:
American Airlines, inc, an air carrier offering passenger and air
4 days later, Orbeta offered to look after Escandors pending cargo transportation in the Phils, and Orient Air Services and
proposal to sell a fire truck to Rubberworld, ans asked for P250 Hotel Representatives entered into a General Sales Agency
as representation expenses to which Escandor agreed and Agreement whereby the former authorized the latter to act as
gave him the money its exclusive general sales agent within the Phils for the sale of
air passenger transportation

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AGENCY (Obieta) DIGESTS by Sham Zaragoza

Some of the pertinent provisions are: commission of 3% of tariff fares and charges for all sales of
passenger transportation over American Air services.
Orient Air Services shall perform these services:
The second type of commissions would accrue for sales of
a. solict and promote passenger traffic for the services of American Air services made not on its ticket stocket but on the
American and if necessary, employ staff competen and ticket stock of other air carriers sold by such carriers or other
sufficient to do so authorized ticketing facilities or travel agents.

b. provide and maintain a suitable area in its place of business In addition, it is clear from the records that American Air was
to be used exclusively for the transaction of the business of the party responsible for the preparation of the Agreement.
American Consequently, any ambiguity in this contract of adhesion is to
be taken contra proferentem construed against the party
c. arrange for distribution of Americans timetables, tariffs and who cause the ambiguity and could have avoided it by the
promotional material to sales agents nad the general public in exercise of a little more care.
the assigned territory
5. BORDADOR V LUZ
d. service and supervise sales agents in the assigned territory
including if required by American the control of remittances and FACTS:
commissions retained Petitioners were engaged in the business of purchase and sale
of jewelry and respondent Brigida Luz, also known as Aida
e. hold out a passenger reservation facility to sales agents and Luz, was their regular customer.
general public in the assigned territory
On several occasions, respondent Deganos, brother of Luz,
Alleging that Orient Air had reneged on its obligations under received several pieces of gold and jewelry from petitioners
the Agreement by failing to remit the net proceeds of sale in amounting to P382, 816. These items and their prices were
the amount of US $ 254,400, American Air by itself undertook indicated in seventeen receipts covering the same. 11 of the
the collection of the proceeds of tickets sold originally by Orient receipts stated that they were received for a certain Aquino, a
Air and terminated forthwith the Agreement niece of Deganos, and the remaining 6 receipts indicated that
they were received for Luz.
American Air instituted suit against Orient Air for Accounting
with Preliminary Attachment or Garnishment, Mandatory Deganos was supposed to sell the items at a profit and
Injunction and Restraining Order averring the basis for the thereafter remit the proceeds and return the unsold items to
termination of the Agreement as well as Orient Airs previous Bordador. Deganos remitted only the sum of P53, 207. He
record of failures to promptly settle past outstanding refunds neither paid the balance of the sales proceeds, nor did he
of which there were available funds in the possession of the return any unsold item to petitioners.
Orient Air to the damage and prejudice of American Air
The total of his unpaid account to Bordador, including interest,
TC ruled in favor of Orient Air to which the Intermediate reached the sum of P725, 463.98. Petitioners eventually filed a
Appelalate Court (now CA) affirmed TCs decision with complaint in the barangay court against Deganos to recover
modifications with respect to monetary awards granted. said amount.

ISSUE: W/N Orient Air is entitled to the 3% overriding In the barangay proceedings, Luz, who was not impleaded in
commission the caes, appeared as a witness for Deganos and ultimately,
she and her husband, together with Deganos signed a
RULING: Yes compromise agreement with petitioners.

It is a well settled principle that in the interpretation of a In that compromise agreement, Deganos obligated himself to
contract, the entirety thereof must be taken into consideration pay petitioners, on installment basis , the balance of his
to ascertain the meaning of its provisions. The various account plus interest thereon. However, he failed to comply
stipulations in the contract must be read together to give effect with his aforestated undertakings.
to all
Petitioners instituted a complaint for recovery of sum of money
The Agreement, when interpreted in accordance with the and damages, with an application for preliminary attachment
foregoing principles, entitles Orient Air to the 3% against Deganos and Luz.
overriding commission based on total revenue or as referred to
by the parties, total flown revenues. Deganos and Luz was also charged with estafa

As the designated General Sales Agent of American Air, Orient During the trial of the civil cae, petitioners claimed that
Air was responsible for the promotion and marketing of Deganos acted as agent of Luz when received the subject
American Airs services for air passenger transportation and items of jewelry, and because he failed to pay for the same,
the solicitation of sales therefor. In return for such efforts and Luz, as principal, and her spouse are solidarily liable with him
services, Orient Air was to be paid commissions of 2 kinds:
first, a sales agency commission, ranging from 7 to 8% of tariff Trial court ruled that only Deganos was liable to Bordador for
fares and charges from sales by Orient Air when made on the amount and damages claimed. It held that while Luz did
American Air ticket stock; and second, an overriding have transactions with petitioners in the past, the items
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involved were already paid for and all that Luz owed Bordador la Pena y Gomiz, according to the power of attorey executed in
was the sum or P21, 483 representing interest on the principal his favor
account which she had previously paid for.
Hidalgo, as such agent, collected the rents and income from
CA affirmed TCs decision said properties, amounting to P50, 244, which sum, collected
in partial amounts and on different dates, he should have
ISSUE: deposited, in accordance with the verbal agreement between
W/N Luz are liable to petitioners for the latters claim for money the deceased and himself in the general treasury of the
and damages in the sum of P725,463.98, plus interests and Spanish Government at an interest of 5% per annum, which
attorneys fees, despite the fact that the evidence does not interest on accrual was likewise to be deposited in order that it
show that they signed any of the subject receipts or authorized also might bear interest; that Hidalgo did not remit or pay to
Deganos to receive the items of jewelry on their behalf Gomiz, during his lifetime, nor to any representative of the said
Gomiz, the sum aforestated nor any part thereof with the sole
RULING: No exception of P1,289.03, nor has he deposited the unpaid
Evidence does not support the theory of Bordador that balance of said sum in the treasury, according to agreement,
Deganos was an agent of Luz and that the latter should wherefore he has become liable to his principal and to the
consequently be held solidarily liable with Deganos in his administrator for the said sum, together with its interest
obligation to petitioners. amounting to P72,548.24

The basis for agency is representation. Here, there is no The court ruled in favor of De la Pena and said that Hidalgo, as
showing that Luz consented to the acts of Deganos or administrator of the estate of deceased Gomiz, actually owed
authorized him to act on her behalf, much less with respect to De la Pena
the particular transactions involved.
ISSUE: W/N Hidalgo is considered an agent of Gomiz and as
It was grossly and inexcusably negligent of petitioner to entrust such must reimburse present administrator, De la Pena
to Deganos, not once or twice but on at least six occasions as
evidenced by 6 receipts, several pieces of jewelry of RULING: No
substantial value without requiring a written authorization from Gomiz, before embarking for Spain, executed before a notary a
his alleged principal. power of attorney in favor of Hidalgo as his agent and that he
should represent him and administer various properties he
A person dealing with an agent is put upon inquiry and must owned and possessed in Manila.
discover upon his peril the authority of the agent.
After Hidalgo occupied the position of agent and administrator
Records show that neither an express nor an implied agency of De la Pena y Gomizs property for several years, the former
was proven to have existed between Deganos and Luz. wrote to the latter requesting him to designate a person who
Evidently, Bordador who were negligent in their transactions might substitute him in his said position in the event of his
with Deganos cannot seek relief from the effects of their being obliged to absent himself from these Islannds
negligence by conjuring a supposed agency relation between
the two respondents where no evidence supports such claim From the procedure followed by the agent, Hidalgo, it is
logically inferred that he had definitely renounced his agency
6. DE LA PENA V HIDALGO and that the agency was duly terminated according to the
provisions of art 1782
FACTS:
De la Pena y de Ramon and De Ramon, in her own behalf and Although the word Renounce was not employed in
as the legal guardian of her son Roberto De la Pena, filed in connection with the agency executed in his favor, yet when the
the CFI a written complaint against Hidalgos agent informs his principal that for reasons of health and by
medical advice he is about to depart from the place where he
De La Pena y de Ramon, as the judicial administrator of the is exercising his trust and where the property subject to his
estate of the deceased De la Pena y Gomiz, with the consent administration is situated, abandons the property, turns it over
of the court filed a second amended complaint prosecuting his to a third party, and transmits to his principal a general
action solely against Frederico Hidalgo statement which summarizes and embraces all the balances of
his accounts since he began to exercise his agency to the date
CFI ruled in favor of plainiff-administrator for the sum of P13, when he ceased to hold his trust, it then reasonable and just to
606.19 and legal interest from the date of the filing of the conclude that the said agent expressly and definitely
complaint and the costs of the trial. renounced his agency.

De la Pena y Ramon filed a third amended complaint with the 7. GUTIERREZ HERMANOS V ORENSE
permission of the court alleging, among other things, as a first
cause of action, when Frederico Hidalgo had possession of FACTS:
and administered the following properties to wit, 1 house and Duran, a nephew of Orense, with the latters knowledge and
lot; at Calle San Luis; another house and lot at Calle Cortada; consent, executed before a notary a public instrument whereby
another house and lot at Calle San Luis, and a fenced lot on he sold and conveyed to plaintiff company for P1,500 the said
the same street, all of the district of Ermita, and another house property
and lot at Calle Looban de Paco, belonging to his principal, De

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The vendor, Duran reserving to himself the right to repurchase owner upon his stating under oath to the judge that he himself
it for the same price within a period of 4 years from the date of consented to his nephews making the said sale
said instrument
8. JOHNLO TRADING CO V FLORES
That plaintiff company had not entered into possession of the
purchased property, owing to its continued occupancy by FACTS:
Orense and his nephew, Duran by virtue of a contract of lease M.B. Florentino & Co, Ltd, filed with the CFI of La Union
executed by the plaintiff to Duran against Johnlo Trading Company and Lipsett Pacific
Corporation a case for the collection of the sum of P14,304.19
said instrument of sale was publicly and freely confirmed and and damages in the sum of P10,000.
ratified by Orense in a verbal declaration made by him
collaterally, plaintiff alleged that Johnlo had transferred to
that, in order to perfect the title to the said property, the plaintiff Lipsett all its equipment and properties in the Philippines with
had to demand of Orense that he execute in legal form a deed intent to defraud its creditors and, as said Johnlo has no other
of conveyance of the property, but that the defendant Orense property in the Phils to pay its indebtedness, it prayed that said
refused to do so, without any justifiable cause or reason properties be attached.

This suit involves the validity and efficacy of the sale under Motion for attachment was granted but was later amended at
right of redemption of a parcel of land and a masonry house the request of the plaintiff, upon its finding that all of the said
with a nipa hut erected thereon, effected by Duran, a nephew properties had been transferred to other persons and the
of the owner of the property, Orense for the sum of P1,500 by proceeds of the sale deposited with the National City Bank of
means of a notarial instrument New York

After the lapse of 4 years stipulated for the redemption, Orense Consequentlym the deposit in the amount of P25,000 was
refused to deliver the property to the purchaser, the firm of garnished in compliance with the order of the court
Gutierrez Hermanos and to pay the rental thereof at the rate of
P30 per month for its use and occupation when the period for Johnlo Company is a joint venture organized by 2 foreign
its repurchase terminated. corporations to engage soley in the demilitarization of
ammunition at Rosario, La Union, and Bauan, Batangas, under
Counsel for the firm filed a complaint praying, among other a direct contract with our Government wherein as a special
remedies, that Orense be compelled to execute a deed for the concession, it was not required to register with the Bureau of
transfer and conveyance to the plaintiff company of all the Commerce nor to obtain a license to do business in the Phils
right, title and interest which Orense had in the property sold, as required by law because the business to be undertaken was
and to pay the same the rental of the property single and isolated
because of that concession, it was not also required to
ISSUE: W/N Duran, nephew of the owner of the property, designate any agent in the Phils upon whom legal process may
Orense, is an agent and was authorized to sell the land in favor be served under the law in cases of litigation
of petititioner
However, the summons for Johnlo Company in this case was
RULING: Yes served on Charles Balcoff upon the claim that he is its
Reecords in this case shows that Orense did give his consent representative in the Phils.
in order that his nephew, Duran might sell the property in
question to company and that he did thereafter confirm and as no one appeared in behalf of Johnlo, the court, upon
ratify the sale by means of a public instrument executed before petition of the plaintiff declared said company in default
a notary
after being informed that it was declared in default, Johnlo
It having been proven at the trial that Orense gave his consent Company, through counsel, filed motion for recon and prayed
to the said sale, it follows that he conferred verbal, or at least for the setting aside of said order upon the ground that Balcoff,
implied, power of agency upon his nephew Duran who not being its agent nor representative, the Court had not yet
accepted it in the same way by selling the said property acquired jurisdiction over its person, and therefore, the period
for filing its answer had not yet commenced to run
The principal must therefore fulfill all the obligations contracted
by the agent, who acted within the scope of his authority ISSUE: W/N Balcoff is deemed not just a counsel but also an
agent of Johnlo Company
Even if consent was granted subsequently to the sale, it is
unquestionable that Orense, the owner of the property, RULING: yes, both counsel and agent/representative
approved the action of his nephew, who in this acted as the It may be stated that an attorney cannot, without authority to
manager of his uncles business and Orenses ratification do so, accept service of process which commences action
produced the effect of an express authorization to make the against his client
said sale
As a general rule, an attorney-at-law has no authority merely
The sale of the said property made by Duran to the company by virtue of his general employment as such to waive or admit
was indeed null and void in the beginning, but afterwards service for his client of original process by which the court for
become perfectly valid and cured of the defect of nullity it bore the first time acquires jurisdiction of the client
at its execution by the confirmation solemnly made by the said
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The record is not quite clear that Balcoff acted merely as deal with such agent, it was the duty of Yangco on the
counsel in his relation to Johnlo. There is proof to show that he termination of the relationship of the principal and agent to give
acted in a representative capacity in and outside of court, so due and timely notice thereof to Rallos.
much so that he undertook to settle claims that had been filed
against it Failing to do so, he is responsible to them for whatever goods
may been in good faith and without negligence sent to the
The service made upon him of the summons intended for agent without knowledge, actual or constructive, of the
Johnlo can be deemed sufficient in contemplation of law to termination of such relationship
bind his client, Johnlo upon the theory that, as the only person
in the Phils charged with the duty of settling claims against it, 2. B. H. MACKE ET AL V JOSE CAMPS
he must be presumed, to communicate to his client the service
made upon him of any process that may result in a judgment FACTS:
and execution that may deprive it of its property and the B. H. Macke and W.H. Chandler, partners doing business
probabilities are, under such circumstances, that the under thee firm name of Macke, Chandler And Company,
corporation will be duly informed of the pendency of the suit allege that during the months of February and March 1905,
they sold to Jose Camps and delivered at his place of
Balcoff acted in this case not merely as counsel of Johnlo business, known as the :Washington Caf, various bills of
Company but also as its representative in the settlement of goods amounting to P351.50; that Camps has only paid on
claims account of said goods the sum of P174; that there is still due
them on account of said goods the sum of P177.50
ARTICLES 1873-1877
Plaintiffs made demand for the payment from defendant and
1. RALLOS V YANGCO that the latter failed and refused to pay the said balance or any
part of it
FACTS:
Yangco sent Rallos a letter inviting the latter to be the Macke, one of the plaintiffs, testified that on the order of one
consignor in buying and selling leaf tobacco and other native Ricardo Flores, who represented himself to be the agent of
products. Terms and conditions were also contained in the Jose Camps, he shipped the said goods to the defendant at
letter. the Washington Caf; that Flores (agent) later acknowledged
the receipt of the said goods and made various payments
Accepting the invitation, Rallos proceeded to do a considerable thereon amounting in all to P174; that believes that Flores is
business with Yangco trhough the said Collantes, as his factor, still the agent of Camps; and that when he went to the
sending to him as agent for Yangco a good deal of produce to Washington Caf for the purpose of collecting his bill he found
be sold on commission. Flores, in the absence of Camps, apparently in charge of the
business and claiming to be the business manager of Camps,
Rallos sent to the said Collantes, as agent for Yangco, 218 said business being that of a hotel with a bar and restaurant
bundles of tobacco in the leaf to be sold on commission, as annexed.
had been other produce previously.
A written contract was introduced as evidence, from which it
The said Collantes received said tobacco and sold it for the appears that one Galmes, the former of Washington Caf
sum of P1,744. The charges for such sale were P206.96, subrented the building wherein the business was conducted, to
leaving in the hands of said Collantes the sum of 1,537.08 Camps for 1 year for the purpose of carrying on that business,
belonging to Rallos. This sum was, apparently, converted to his Camps obligating himself not to sublet or subrent the building
own use by said agent. or the business without the consent of the said Galmes.

It appears, however, that prior to the sending of said tobacco This contract was signed by Camps and the name of Ricardo
Yangco had severed his relations with Collantes and that the Flores as a witness and attached thereon is an inventory of the
latter was no longer acting as his factor. This fact was not furniture and fittings which also is signed by Camps with the
known to Rallos; and it is conceded in the case that no notice word sublessee below the name, and at the foot of this
of any kind was given by Yangco of the termination of the inventory the word received followed by the name Ricardo
relations between Yangco and his agent, Collantes. Flores with the words managing agent immediately following
his name.
Yangco thus refused to pay the said sum upon demand of
Rallos, placing such refusal upon the ground that at the time ISSUE: W/N Ricardol Flores was the agent of Camps
the said tobacco was received and sold by Collantes, he was
acting personally and not as agent of Yangco. Ruling: Yes
Evidence is sufficient to sustain a finding that Flores is the
ISSUE: W/N Collantes is an agent of Yangco. If so, Yangco as agent of Camps in the management of the bar of the
principal must refund to Rallos the said sum brought by the Washington Caf with authority to bind Camps, his principal,
sale of the produce for the payment of the goods

RULING: Yes The contract sufficiently establishes the fact that Camps was
Yangco, as principal is liable. Having advertised the fact that the owner of the business and of the bar, and the title of
Collantes was his agent and having given special notice to managing agent attached to the signature of Flores which
Rallos of that fact, and having given them a special invitation to appears on that contract, together with the fact that at the time
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the purchases were made, Flores was apparently in charge of contract between Rio and Yu Tec for the sale and purchase of
the business performing the duties usually intrusted to a the real property
managing agent leave little room for doubt that he was there as
the authorized agent of Camps. Exhibit B (letter giving authority to J. Molina as agent of Yu Tec
and if the latter shall not take advantage of selling it within the
Agency by Estoppel --- One who clothes another with apparent time given, the authority given shall be cancelled) is nothing
authority as his agent, and holds him out to the public as such, more than an authority to sell
can not be permitted to deny the authority of such person to
act as his agent, to the prejudice of innocent third persons While Exhibit B might be construed as fixing the price of the
dealing with such person in good faith and in the honest belief sale of the parcel of land, it does not specify the terms and
that he is what he appears to be. conditions upon which the sale was to be made
Since Exhibit B already expired, that fact would destroy the
Estoppel---- Whenever a party has, by his own declaration, act legal force and effect of Exhibit C (specified and defined the
or omission, intentionally and deliberately led another to terms and conditions of any sale made by Molina
believe a particular thing true, and to act upon such belief, he
can not, in any litigation arising out of such declaration, act, or In the absence of a renewal or extension in writing signed by
omission be permitted to falsify; and unless the contrary the party to be charged or its agent, Molina had no authority to
appears, the authority of the agent must be presumed to sell the property upon any terms and conditions after the
include all the necessary and usual means of carrying his stipulated period.
agency into effect.
4. GUTIERREZ HERMANOS V ORENSE
3. RIO Y OLABARRIETA AND MOLINA V YU TEC & CO.
FACTS:
FACTS: Orense had been the owner of a parcel of land, with the
Plaintiff, Rio is a copartnernership organized and existing building and improvements thereon situated in the pueblo of
under the laws of the Phil Islands. The defendant, Yu Tec and Albay, and had been registered under his name
Co is a domestic corporation and the defendant, Calvin is of
age and a resident of Manila Jose Duran, a nephew of Orense, with the latters knowledge
and consent, executed before a notary a public instrument
Rio alleges that Yu Tec & Co, which was then a limited whereby he sold and conveyed to Gutierrez Hermanos, for P
partnership, authorized its agent, J.V. Molina to find a 1,500 the aforementioned property with Duran having the right
purchaser or a lessee of a tract of land belonging to it located to repurchase for the same price within 4 years
on Calle Velasquez, Tondo, Manila.
Plaintiff had not entered into possession of the land since it is
Within the time given the agent found a purchaser in the name being occupied by Orense and Duran, by virtue of a contract of
of plaintiff (Rio) which offered to purchase the land for the sum lease executed by plaintiff to Duran
of P 40,000 and that Mollina, its agent, made known its offer to
the respondent company which refused to accept it Said instrument of sale of property, executed by Duran was
publicly and freely confirmed and ratified by Orense in a verbal
Yu Tec offered to sell the land for P42,000 instead, of which declaration made by him to the effect that the instrument was
P7,000 was to be paid on the signing of the contract, and the executed by his nephew with his knowledge and consent
balance Riwithin two years, with interest of 8% and the
remaining P25,000 at the end of the second year, all to be In order to perfect the title to said property, plaintiff had to
secured by a first mortgage demand Orense that he execute in legal form a deed of
conveyance of the parcel of land but the latter refused to do so,
Rio accepted the offer but Yu Tec company made several without any justifiable cause or reason, and he should be
excuses and refused to carry out the agreement compelled to execute said deed because his nephew is
notoriously insolvent and cannot reimburse plaintiff company
That defendant, Calvin, with full knowledge of the facts and for the price of sale which he received
within the specified period, fraudulently conspiring with Yu Tec,
entered into a contract by which he purchased the property Duran failed to exercise his right of repurchase and Orense
from the company. also refused to deliver the property and to pay rental thereof

By reason thereof, Rio suffered damages in the sum of ISSUE: 1. W/N the sale executed by Duran, nephew of
P12,000 and prays that the sale to Calvin be declared null and Orense, in favor of that Orense publicly ratified and confirmed
void, and ordering company to comply with the contract and to the said sale
execute a deed to Rio and to pay damages of P12,000 2. W/N a contract of agency, express or implied was
present in this case
ISSUE: W/N the contract of purchase and sale of real property
is void unless the authority of the agent be in writing and RULING: YES TO BOTH
subscribed by the party sought to be charged Evidence shows that Orense did give his consent in order that
his nephew, Duran might sell the property to plaintiff company
RULING: Yes and that he did confirm and ratify the sale by means of public
Molina, the agent, could not enforce the specific performance instrument executed before a notary
of Exhibit B. There is no evidence in the record of any written
7
AGENCY (Obieta) DIGESTS by Sham Zaragoza

It follows that Orense conferred verbal, or at least implied,


power of agency upon his nephew Duran, who accepted it in Meanwhile, Nicolasa executed and delivered to Rabot a deed
the same way by selling the said property purporting to convey to him the parcel of land

The principal must fulfill all the obligations contracted by the ISSUE: W/N the authority conferred on Nicolasa by the letter
agent, who acted within the scope of his authority was sufficient to enable her to bind her brother of the sale
made in favor of Rabot
Even if said consent was granted subsequently to the sale, it is
questionable that Orense, the owner of the property, approved RULING: Yes
the action of his nephew, who in this case acted as the As a matter of formality, a power of attorney to convey real
manager of his uncles business and Orenses ratification property ought to appear in a public document, just as any
produced the effects of an express authorization to make the other instrument intended to transmit or convey an interest in
said sale such property ought to appear in a public document

A contract executed in the name of another by one who has Art. 1713 of the Civil Code requires that the authority to
neither his authorization nor legal representation shall be void, alienate land shall be contained in an express mandate
unless it should be ratified by the person in whose name it was
executed before being revoked by the other contracting party Subsection 5 of section 335 of Code of Civil Procedure say
that the authority of the agent must be in writing and
The sale of the said property made by Duran to Gutierrez subscribed by the party to be charged
Hermanos was indeed null and void from the beginning, but
afterwards became perfectly valid and cured of the defect of SC: the authority expressed in the letter is a sufficient
nullity it bore at its execution by the confirmation solemnly compliancw tih both requirements
made by the said owner upon his stating under oath to the
judge that he himself consented to his nephews making the The purpose in giving a power of attorney is to substitute the
said sale mind and hand of the agent for the mind and hand of the
principal; and if the character and extent of the power is so
5. JIMENEZ V RABOT defined as to leave no doubt as to the limits within which the
agent is authorized to act, and he acts within those limits, the
FACTS: principal cannot question the validity of his act
Gregorio Jimenez filed this action to recover from Rabot, a
parcel of land situated in Alaminos, Pangasinan The general rule here applicable is that the description must be
sufficiently definite to identify the land either from the recitals of
The property in question, together with two other parcels in the the contract or deed or from external facts referred to in the
same locality originally belonged to Jimenez, having been document, thereby enabling one to determine the identity of
assigned to him as one of the heirs in the division of the estate the land and if the description is uncertain on its face or is
of his father shown to be applicable with equal plausibility to more than one
tract, it is insufficient.
It further appears that while Gregorio Jimenez was staying at
Vigan, Ilocos Sur, his property in Alaminos was confided by
him to the care of his elder sister Nicolasa Jimenez. 6. COSMIC LUMBER CORPORATION V CA

He wrote his sister a letter from Vigan in which he informed her FACTS
that he was pressed for money and requested her to sell one Cosmic Corporation, through its General Manager executed a
of his parcels of land and send him the money in order that he Special Power of Attorney appointing Paz G. Villamil-Estrada
might pay his debts. The letter contains no description of the as attorney-in-fact to initiate, institute and file any court action
land to be sold other than is indicated in the words one of my for the ejectment of third persons and/or squatters of the entire
parcels of land. lot 9127 and 443 for the said squatters to remove their houses
and vacate the premises in order that the corporation may take
Acting upon this letter, Nicolasa approached Rabot and the material possession of the entire lot
latter agreed to buy the property for the sum of P500. P250
was paid at once, with the understanding that a deed of Paz G. Villamil Estrada, by virtue of her power of attorney,
conveyance would be executed when the balance should be instituted an action for the ejectment of private respondent
paid. Isidro Perez and recover the possession of a portion of lot 443
before the RTC
Nicolasa admits having received this payment but there is no
evidence that she sent it to her brother Estrada entered into a Compromise Agreement with Perez, the
terms and conditions such as:
After one year, Gregorio Jimenez went back to Alaminos and In order for Perez to buy the said lot he is presently
demanded that his sister surrender the piece of land to him, it occupying, he has to pay to plaintiff through Estada
being then in her possession. the sum of P26,640 computed at P80/square meter
and that Cosmic Lumber recognizes ownership and
She refused upon some pretext or other to do so and as a possession of Perez by virtue of this compromise
result, plaintiff instituted an action to recover the land from her agreement over said portion of 333 sqm of lot 443
control and whatever expenses of subdivision, registration
8
AGENCY (Obieta) DIGESTS by Sham Zaragoza

and other incidental expenses shall be shouldered by When an agent is engaged in the perpetration of a fraud upon
Perez his principal for his own exclusive benefit, he is not really
acting for the principal but is really acting for himself, entirely
although the agreement was approved by the trial court and outside the scope of his agency
the decision became final and executory it was not executed
within the 5 year period from date of its finality allegedly due to 7. RAET V CA
the failure of Cosmic Lumber to produce the owners duplicate
copy of title needed to segregate from lot 443 the portion sold FACTS:
by the attorney-in-fact, Paz Estrada to Perez under the Petitioners Cesar and Elviira Raet (the spouses Raet) and
compromise agreement petitioners Rex and Edna Mitra (Spouses Mitra) negotiated
with Amparo Gatus concerning the possibility of bu*ying the
ISSUE: W/N there is a contract of agency between Cosmic rights of the latter to certain units at the Las Villas de Sto. Nino
Lumber, principal and Paz Estrada, agent thus binding the Subdivision in Meycauyan, Bulacan.
principal over the compromise agreement made by the agent
to a third person, Perez in selling the portion of the said This subdivision ws developed by private respondent Phil Ville
property Development and Housing Corporation (PVDHC) primarily for
parties qualified to obtain loans from the Government Service
RULING: No Insurance System (GSIS).
The authority granted Villamil-Estrada under the special power
of attorney was explicit and exclusionary: for her to institute Spouses Raet and Spouses Mira paid Gatus the total amounts
any action in court to eject all persons found on lots number of P40,000 and P35,000 respectively for which they were
9127 and 443 so that Cosmic Lumber could take material issued receipts by Gatus in her own name
possession thereof and for this purpose, to appear at the pre-
trial and enter into any stipulation of facts and/or compromise Both spouses applied directly with PVDHC for the purchase of
agreement but only insofar as this was protective of the rights units in the said subdivision. As they were not GSIS members,
and interests of Cosmic Lumber in the property they looked for members who could act as accommodation
parties by allowing them to use their policies. PVDHC would
Nowhere in this authorization was Villamil-Estrada granted process the applications for the purchase of the units upon the
expressly or impliedly any power to sell the subject property approval by the GSIS of petitioners loan application
nor a portion thereof
Spouses Raet presented GSIS policy of Ernesto Casidsid,
Neither can a conferment of the power to sell be validly while the spouses Mitra that of Dena Lim. The former paid
inferred from the specific authority to enter into a compromise P32,653 while the latter paid P27,000 to PVDHC on the
agreement because of the explicit limitation fixed by the understanding that these accounts would be credited to the
grantor that the compromise entered into shall only be so far purchase prices of the units which will be determined after the
as it shall protect the rights and interest of the corporation in approval of their loan applications with the GSIS.
the aforementioned lots.
Spouses Raet were allowed to occupy the unit built on Lot 4,
In the context of special investiture of powers to Villamil- Block 67, Phase 4A of the subdivision while Spouses Mitra
Estrada, alienation by sale of an immovable certainly cannot were given the unit on Lot 7, Block 61, Phase 4A thereof
be deemed protective of the right of Cosmic Lumber to
physically possess the same, more so when the land was GSIS, however, disapproved the loan applications of both
being sold for a price of P80/sqm , very much less than its spouses. They were advised by PVDHC to seek other sources
assessed value of P250/sqm and considering further that of financing but were still allowed to remain in the said
plaintiff never received the proceeds of the sale premises

When the sale of a piece of land or any interest thereon is Failure of both spouses to raise money, PVDHC demanded
through an agent, the authority of the latter shall be in writing; them to vacate the units they were occupying and ejectment
otherwise, the sale should be void. Thus, the authority of an cases were filed against them
agent to execute a contract for the sale of real estate must be
conferred in writing and must give him specific authority, either ISSUE: W/N there were perfected contracts of sale between
to conduct the general business of the principal or to execute a petitioners and private respondent PVDHC involving the units
binding contract containing terms and conditions which are in in question
the contract he did execute
RULING: No
For the principal to confer the right upon an agent to sell real SC: Parties in this case had not reached any agreement with
estate, a power of attorney must so express the powers of the regard to the sale of the units in question
agent in clear and unmistakable language
Records do not show the total costs of the units in question
It is therefore clear that by selling to Perez a portion of Cosmic and the payment schemes therefore. The figures referred to by
Lumbers land through a compromise agreement, Villamil- both spouses were mere estimates given to them by Gatus.
Estrada acted without or in obvious authority. The sale ipso The parties transactions thus, lacked the requisites ressential
jure is consequently void and so is the compromise agreement. for the perfection of contracts
This being the case, the judgment based thereon is necessarily
void
9
AGENCY (Obieta) DIGESTS by Sham Zaragoza

Both spouses dealt with Gatus who was not the agent of
PVDHC. The criminal case for estafa against her was For some reason or another and despite demand, F.P.
dismissed because it was found out that she never HOLDINGS refused to execute the corresponding deed of sale
represeneted herself to be an agent of PVDHC in favor of City-Lite of the front lot of the property

Both spouses knew from the beginning that Gatus was Trial court ruled in favor of City-Lite ordering F.P. HOLDINGS to
negotiating with them in her own behalf and not as an agent of execute a deed of sale of the property in favor of the former for
PVDHC the total consideration of P55,056,250 payable as follows: P15
M as downpayment to be payable immediately upon execution
There is thus no basis for the finding of HLURB Arbiter that of the deed of sale and the balance within 6 months from
Gatus was the agent of PVDHC with respect to the downpayment without interest
transactions in question
CA reversed TCs decision
Since PVDHC had no knowledge of the figures Gatus gave to
both spouses as estimates of the costs of the units, it could not ISSUE: W/N there was a perfected contract of sale between
have ratified the same at the time the latter applied for the City-Lite and respondent F.P. HOLDINGS because of a lack of
purchase of the units. PVDHC was to enter into agreements definite agreement on the manner of paying the purchase price
concerning subject units with both spouses only upon approval and that Metro Drug and Meldin Al G. Roy were not authorized
of their loan applications with GSIS which failed to materialize to sell the property to City-Lite, and that the authority of Roy
was only limited to that of mere liaison or contact person
There are no written contracts to evidence the alleged sales. If
both spouses and PVDHC had indeed entered into contracts RULING: No, Roy mere contact person
involving said units, it is rather strange that contracts of such Art. 1874 of NCC: When the sale of a piece of land or any
importance have not been reduced in writing interest therein is through an agent, the authority of the latter
shall be in writing, otherwise, the sale shal be void.
8. CITY-LITE REALTY CORPORATION V CA
The absence of authority to sell can be determined from the
FACTS written memorandum issued by respondent F.P. HOLDINGS
Private Respondent F.P. Holdings and Realty Corporation (F.P. President requesting Metro Drugs assistance in finding buyers
Holdings), formerly the Sparta Holdings Inc, was the registered for the property
owner of a parcel of land situated along E. Rodriguez Avenue,
Quezon City also known as the Violago Property or the San Memorandum indicates that Meldin G. Roy and/or Metro Drug
Lorenzo Ruiz Commercial Center, with an area of 71,754 sqm was only to assist F.P. Holdings in looking for buyers and
referring to them possible prospects whom they were
The property was offered for sale to the general public through supposed to endorse to F.P. Holdings.
the circulation of a sales brochure containing the description of
the property and the asking price of P6,250/sqm with terms of But the final evaluation, appraisal and acceptance of the
payment negotiable. In addition, brokers commission was 2% transaction could be made only by F.P. Holdings. In other
of selling price, net of withholding taxes and other charges. words, Roy and/or Metro Drug was only a contact person with
Contact person was Meldin Al G. Roy, Metro Drug Inc. no authority to conclude a sale of the property

The front portion consisting of 9,192 sqm is the subject of this Roy and/or Metro Drug was a mere broker and Roy/s only job
litigation was to bring parties the parties together for a possible
transaction
Al G. Roy sent a sales brochure, together with the location plan
and copy of the TCT to Atty. Gelacio Mamaril, a practicing SC: for lack of a written authority to sell the Violago Property
lawyer and a licensed real estate broker. Mamaril passed in on the part of Roy and/or Metro Drug, the sale should be as it
turn passed on these documents to Antonio Teng, Executive is declared null and void
Vice President, and Atty Victor Villanueva, Legal Counsel of
City-Lite 9. SIMMIE V H. BRODEK

City-Lite conveyed its interest to purchase a portion or one-half FACTS:


(1/2) of the front lot of the Violago Property Apparently, Roy Simmie filed an action against Brodek to recover the sum of
subsequently informed City-Lites representative that it would 1,350 pesos for services performed by the former for Brodek in
take time to subdivide the lot and F.P. HOLDINGS was not the purchase of a interest in the launch called Fred L. Dorr.
receptive to the purchase of only half of the front lot
Evidence shows that Brodek was the owner of interest in the
Atty. Mamaril wrote Metro Drug (Al G. Roy) expressing City- said launch prior to the time of the alleged contract and that
Lites desire to buy the entire front lot of the subject property one A.J. Washburn was the owner of the other half.
instead of only half thereof provided the asking price of
P6,250/sqm was reduced and that payment be in installment Simmie claims that he entered into a contract with Brodek by
for a certain period the terms of which he was to purchase the half interest owned
The parties reached an agreement and Roy agreed to sell the by said Washburn for a sum not to exceed 3,500 pesos.
property to City-Lite provided only the latter submit its
acceptance in writing to the terms and conditions of the sale
10
AGENCY (Obieta) DIGESTS by Sham Zaragoza

He further claims that he was to receive for such services a


sum equal to the difference between 3,500 pesos and As to the second cause, the court held that the plaintiff did not
whatever sum less than that amount for which he could have any source of income that could produce him such a
purchase the said launch large sum of money as that invested in the construction of the
house; and the fact that the deceased had more than the
He further claims that by virtue of this agreement he entered necessary amount to build the house
into a contract with the said Washburn to pay to the latter the
sum of 2,150 pesos and that there was due from Brodek to him ISSUE: W/N there was a contract of agency between plaintiff
the difference between 3,500 pesos and 2,150 pesos, or the and respondent entitling the former compensation for services
sum of 1,350 pesos rendered in favor of the latter

Inferior court ruled in favor the plaintiff, Simmie RULING: NO


Plaintiff insists that, as his services as agent of the deceased
ISSUE: W/N there was a contract of agency between Brodek M Larena having been rendered, an obligaton to compensate
and Simmie, the latter to purchase the said launch for the them must necessarily arise.
principal, Brodek
The trial court held that the compensation for the services of
RULING: YES the plaintiff was the gratuitous use and occupation of some of
Where Brodek enters into a contract through his authorized the houses of said deceased by plaintiff and his family
agent Dorr, with Simmie to purchase property, agreeing to pay
a fixed price for such property, allowing Simmie, a sum equal If it were true that the plaintiff and the deceased had an
to the difference between this fixed price and whatever sum understanding to the effect that plaintiff was to receive
less than that for which Simmie is able to purchase the compensation aside from the use and occupation of the
property, and Simmie has completed the contract of sale and houses of the deceased, it cannot be explained how the
there is nothing left to be done except the payment of the said plaintiff could have rendered services as he did for 8 years
property, and then Brodek closes said contract without the without receiving and claiming any compensation from the
intervention of Simmie, the former is liable to the latter for an deceased.
amount equal to the difference between the actual purchase
price of said property and the which Brodek agreed to pay for
the same

10. AGUNA V. LARENA

FACTS:
This action is brought to recover the sum of P29,600 on two
causes against the administrator of the estate of the deceased
Mariano Larena

Upon his first cause of action, plaintiff claims the sum of


P9,600, the alleged value of services rendered by him to said
deceased as his agent in charge of the deceaseds houses
situated in Manila

Under the second cause of action, plaintiff alleges that one of


the buildings belonging to the deceased and described in his
complaint was built by him with the consent of the deceased,
and for that reason he is entitled to recover the sum disbursed
by him in its construction, amounting to P20,000

Evidence shows that plaintiff rendered services to the


deceased, consisting in the collection of the rents due from the
tenants occupying the deceaseds houses in Manila and
attending to the repair of said houses when necessary. He also
took such steps as were necessary to enforce the payment of
rents and all that was required to protect the interests of the
deceased in connection with said houses

Evidence also shows that at the time he rendered his services,


he did not receive any compensation, however it is a fact that
during said period, plaintiff occupied a house belonging to the
deceased without paying any rent at all
Upon the first cause of action, the trial court held that the
compensation for services of plaintiff was the gratuitous use
and occupation of some of the houses of the deceased by the
plaintiff and his family
11