ORIENT AIR SERVCES AND HOTEL
REPRESENTATIVES V CA
FACTS:
American Airlines, inc, an air carrier offering
passenger and air cargo transportation in the Phils,
and Orient Air Services and Hotel Representatives
entered into a General Sales Agency Agreement
whereby the former authorized the latter to act as its
exclusive general sales agent within the Phils for the
sale of air passenger transportation.
Some of the pertinent provisions are:
Orient Air Services shall perform these services:
a. solict and promote passenger traffic for the services
of American and if necessary, employ staff competen
and sufficient to do so
b. provide and maintain a suitable area in its place of
business to be used exclusively for the transaction of
the business of American
c. arrange for distribution of Americans timetables,
tariffs and promotional material to sales agents and the
general public in the assigned territory
d. service and supervise sales agents in the assigned
territory including if required by American the control
of remittances and commissions retained
e. hold out a passenger reservation facility to sales
agents and general public in the assigned territory
Alleging that Orient Air had reneged on its obligations
under the Agreement by failing to remit the net
proceeds of sale in the amount of US $ 254,400,
American Air by itself undertook the collection of the
proceeds of tickets sold originally by Orient Air and
terminated forthwith the Agreement
American Air instituted suit against Orient Air for
Accounting with Preliminary Attachment or
Garnishment, Mandatory Injunction and Restraining
Order averring the basis for the termination of the
Agreement as well as Orient Airs previous record of
failures to promptly settle past outstanding refunds
of which there were available funds in the possession
of the Orient Air to the damage and prejudice of
American Air
TC ruled in favor of Orient Air to which the
Intermediate Appellate Court (now CA) affirmed TCs
decision with modifications with respect to monetary
awards granted.
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ISSUE:
W/N Orient Air is entitled to the 3% overriding
commission
RULING:
Yes
It is a well settled principle that in the interpretation of
a contract, the entirety thereof must be taken into
consideration to ascertain the meaning of its
provisions. The various stipulations in the contract
must be read together to give effect to all
The Agreement, when interpreted in accordance with
the foregoing principles, entitles Orient Air to the 3%
overriding commission based on total revenue or as
referred to by the parties, total flown revenues.
As the designated General Sales Agent of American
Air, Orient Air was responsible for the promotion and
marketing of American Airs services for air passenger
transportation and the solicitation of sales therefor. In
return for such efforts and services, Orient Air was to
be paid commissions of 2 kinds: first, a sales agency
commission, ranging from 7 to 8% of tariff fares and
charges from sales by Orient Air when made on
American Air ticket stock; and second, an overriding
commission of 3% of tariff fares and charges for all
sales of passenger transportation over American Air
services.
The second type of commissions would accrue for
sales of American Air services made not on its ticket
stocked but on the ticket stock of other air carriers sold
by such carriers or other authorized ticketing facilities
or travel agents.
In addition, it is clear from the records that American
Air was the party responsible for the preparation of
the Agreement. Consequently, any ambiguity in this
contract of adhesion is to be taken contra
proferentem construed against the party who cause
the ambiguity and could have avoided it by the
exercise of a little more care.
DE LA PENA V HIDALGO
FACTS:
De la Pena y de Ramon and De Ramon, in her own
behalf and as the legal guardian of her son Roberto De
la Pena, filed in the CFI a written complaint against
Hidalgos
De La Pena y de Ramon, as the judicial administrator
of the estate of the deceased De la Pena y Gomiz, with
the consent of the court filed a second amended
complaint prosecuting his action solely against
Frederico Hidalgo
CFI ruled in favor of plaintiff-administrator for the
sum of P13, 606.19 and legal interest from the date of
the filing of the complaint and the costs of the trial.
De la Pena y Ramon filed a third amended complaint
with the permission of the court alleging, among other
things, as a first cause of action, when Frederico
Hidalgo had possession of and administered the
following properties to wit, 1 house and lot; at Calle
San Luis; another house and lot at Calle Cortada;
another house and lot at Calle San Luis, and a fenced
lot on the same street, all of the district of Ermita, and
another house and lot at Calle Looban de Paco,
belonging to his principal, Dela Pena y Gomiz,
according to the power of attorey executed in his favor
Hidalgo, as such agent, collected the rents and income
from said properties, amounting to P50, 244, which
sum, collected in partial amounts and on different
dates, he should have deposited, in accordance with
the verbal agreement between the deceased and
himself in the general treasury of the Spanish
Government at an interest of 5% per annum, which
interest on accrual was likewise to be deposited in
order that it also might bear interest; that Hidalgo did
not remit or pay to Gomiz, during his lifetime, nor to
any representative of the said Gomiz, the sum
aforestated nor any part thereof with the sole
exception of P1,289.03, nor has he deposited the
unpaid balance of said sum in the treasury, according
to agreement, wherefore he has become liable to his
principal and to the administrator for the said sum,
together with its interest amounting to P72,548.24
The court ruled in favor of De la Pena and said that
Hidalgo, as administrator of the estate of deceased
Gomiz, actually owed De la Pena
ISSUE:
W/N Hidalgo is considered an agent of Gomiz and as
such must reimburse present administrator, De la Pena
RULING:
No
Gomiz, before embarking for Spain, executed before a
notary a power of attorney in favor of Hidalgo as his
agent and that he should represent him and administer
various properties he owned and possessed in Manila.
Page | 2
After Hidalgo occupied the position of agent and
administrator of De la Pena y Gomizs property for
several years, the former wrote to the latter requesting
him to designate a person who might substitute him in
his said position in the event of his being obliged to
absent himself from these Islannds
From the procedure followed by the agent, Hidalgo, it
is logically inferred that he had definitely renounced
his agency and that the agency was duly terminated
according to the provisions of art 1782
Although the word Renounce was not employed in
connection with the agency executed in his favor, yet
when the agent informs his principal that for reasons
of health and by medical advice he is about to depart
from the place where he is exercising his trust and
where the property subject to his administration is
situated, abandons the property, turns it over to a third
party, and transmits to his principal a general
statement which summarizes and embraces all the
balances of his accounts since he began to exercise his
agency to the date when he ceased to hold his trust, it
then reasonable and just to conclude that the said
agent expressly and definitely renounced his agency.
RALLOS V YANGCO
FACTS:
Yangco sent Rallos a letter inviting the latter to be the
consignor in buying and selling leaf tobacco and other
native products. Terms and conditions were also
contained in the letter.
Accepting the invitation, Rallos proceeded to do a
considerable business with Yangco trhough the said
Collantes, as his factor, sending to him as agent for
Yangco a good deal of produce to be sold on
commission.
Rallos sent to the said Collantes, as agent for Yangco,
218 bundles of tobacco in the leaf to be sold on
commission, as had been other produce previously.
The said Collantes received said tobacco and sold it for
the sum of P1,744. The charges for such sale were
P206.96, leaving in the hands of said Collantes the sum
of 1,537.08 belonging to Rallos. This sum was,
apparently, converted to his own use by said agent.
It appears, however, that prior to the sending of said
tobacco Yangco had severed his relations with
Collantes and that the latter was no longer acting as his
factor. This fact was not known to Rallos; and it is
conceded in the case that no notice of any kind was
given by Yangco of the termination of the relations
between Yangco and his agent, Collantes.
Yangco thus refused to pay the said sum upon demand
of Rallos, placing such refusal upon the ground that at
the time the said tobacco was received and sold by
Collantes, he was acting personally and not as agent of
Yangco.
ISSUE:
W/N Collantes is an agent of Yangco. If so, Yangco as
principal must refund to Rallos the said sum brought
by the sale of the produce
RULING:
Yes
Yangco, as principal is liable. Having advertised the
fact that Collantes was his agent and having given
special notice to Rallos of that fact, and having given
them a special invitation to deal with such agent, it
was the duty of Yangco on the termination of the
relationship of the principal and agent to give due and
timely notice thereof to Rallos.
Failing to do so, he is responsible to them for whatever
goods may be in good faith and without negligence
sent to the agent without knowledge, actual or
constructive, of the termination of such relationship.
B. H. MACKE ET AL V JOSE CAMPS
FACTS:
B. H. Macke and W.H. Chandler, partners doing
business under the firm name of Macke, Chandler And
Company, allege that during the months of February
and March 1905, they sold to Jose Camps and
delivered at his place of business, known as the
:Washington Caf, various bills of goods amounting
to P351.50; that Camps has only paid on account of
said goods the sum of P174; that there is still due them
on account of said goods the sum of P177.50
Plaintiffs made demand for the payment from
defendant and that the latter failed and refused to pay
the said balance or any part of it
Macke, one of the plaintiffs, testified that on the order
of one Ricardo Flores, who represented himself to be
the agent of Jose Camps, he shipped the said goods to
the defendant at the Washington Caf; that Flores
(agent) later acknowledged the receipt of the said
Page | 3
goods and made various payments thereon amounting
in all to P174; that believes that Flores is still the agent
of Camps; and that when he went to the Washington
Caf for the purpose of collecting his bill he found
Flores, in the absence of Camps, apparently in charge
of the business and claiming to be the business
manager of Camps, said business being that of a hotel
with a bar and restaurant annexed.
A written contract was introduced as evidence, from
which it appears that one Galmes, the former of
Washington Caf subrented the building wherein
the business was conducted, to Camps for 1 year for
the purpose of carrying on that business, Camps
obligating himself not to sublet or subrent the building
or the business without the consent of the said Galmes.
This contract was signed by Camps and the name of
Ricardo Flores as a witness and attached thereon is an
inventory of the furniture and fittings which also is
signed by Camps with the word sublessee below the
name, and at the foot of this inventory the word
received followed by the name Ricardo Flores
with the words managing agent immediately
following his name.
ISSUE:
W/N Ricardol Flores was the agent of Camps
Ruling:
Yes
Evidence is sufficient to sustain a finding that Flores is
the agent of Camps in the management of the bar of
the Washington Caf with authority to bind Camps,
his principal, for the payment of the goods
The contract sufficiently establishes the fact that
Camps was the owner of the business and of the bar,
and the title of managing agent attached to the
signature of Flores which appears on that contract,
together with the fact that at the time the purchases
were made, Flores was apparently in charge of the
business performing the duties usually intrusted to a
managing agent leave little room for doubt that he was
there as the authorized agent of Camps.
Agency by Estoppel --- One who clothes another with
apparent authority as his agent, and holds him out to
the public as such, cannot be permitted to deny the
authority of such person to act as his agent, to the
prejudice of innocent third persons dealing with such
person in good faith and in the honest belief that he is
what he appears to be.
Estoppel---- Whenever a party has, by his own
declaration, act or omission, intentionally and
deliberately led another to believe a particular thing
true, and to act upon such belief, he cannot, in any
litigation arising out of such declaration, act, or
omission be permitted to falsify; and unless the
contrary appears, the authority of the agent must be
presumed to include all the necessary and usual means
of carrying his agency into effect.
RALLOS v FELIX GO CHAN & REALTY COPR.,
Munoz-Palma
Plaintiff: Ramon Rallos
Defendant: Felix Go Chan & Sons Realty Corporation
Facts:
Concepcion and Gerundia Rallos were sisters and
registered co-owners of the parcel of land in issue.
They executed a special power of attorney in favor of
their brother, Simeon Rallos, authorizing himto sell
such land for and in their behalf. After Concepcion
died, Simeon Rallos sold the undivided shares of his
sisters Concepcion and Gerundia to Felix Go Chan &
Sons Realty Corporation for the sum of P10,686.90.
New TCTs were issued to the latter.
Petitioner Ramon Rallos, administrator of the Intestate
Estate of Concepcion filed a complaint praying (1) that
the sale of the undivided share of the deceased
Concepcion Rallos in lot 5983 be unenforceable,
andsaid share be reconveyed to her estate; (2) that the
Certificate of 'title issued in the name of Felix Go Chan
& Sons Realty Corporation be cancelled and another
title be issued in the names of the corporation and the
"Intestate estate of Concepcion Rallos" in equal
undivided and (3) that plaintiff be indemnified by way
of attorney's fees and payment of costs of suit.
Issue:
Whether or not the sale fell within the exception to the
general rule that death extinguishes the authority of
the agent.
Held/Ratio:
Yes the sale is void. The court held that no one may
contract in the name of another without being
authorized by the latter, or unless he has by law a right
to represent him (Art. 1317 of the Civil Code). Simons
authority as agent was extinguished upon
Concolacions death. The sale did not fall under the
exceptions to the general rule that death ipso jure
extinguishes the authority of the agent. Art. 1930
inapplicable since SPA in favor of Simon Rallos was
not coupled with interest and Art. 1931 inapplicable
Page | 4
because Rallos knew of principal Concepcions death.
For Art 1931 to apply, both requirements must be
present.
Laws on agency, the terms of which are clear and
unmistakable leaving no room for an interpretation
contrary to its tenor, should apply, the law provides
that death of the principal ipso jure extinguishes the
authority of the agent to sell rendering the sale to a
third person in good faith unenforceable unless at the
agent had no knowledge of the principals death at
that time (exception under Art. 1931)
Dispositive: CA Decision reversed, CFI decision
affirmed. Sale was null and void.
(Court discussed relevant principles first)
Relationship of Agency (concept arising from
principles under Art 1317 and 1403)- one party, caged
the principal (mandante), authorizes another, called
the agent (mandatario), to act for and in his behalf in
transactions with third persons.
-derivative in nature, power emanating from principal
-agents acts are acts of the principal
Essential Elements:
(1) there is 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 agents acts as a representative and not for
himself, and
(4) the agent acts within the scope of his authority.
Extinguishment
o Generally: among others, By the death, civil
interdiction, insanity or insolvency of the
principal or of the agent
- death of the principal effects instantaneous and
absolute revocation of the authority of the agent
Exceptions:
(Art. 1930) if it has been constituted in the common
interest of the latter and of the agent, or in the interest
of a third person who has accepted the stipulation in
his favor.
(Art. 1931) agent acted without knowledge of the
principals death and that the third person was in good
faith (both these reqs should be present.
AIR FRANCE vs CA
FACTS:
The Ganas purchased from AIR FRANCE
through Imperial Travels 9) "open-dated" air
 passage tickets for the
Manila/Osaka/Tokyo/Manila route. The tickets
were valid until May 8, 1971.
Sometime in January 1971, Jose Gana sought
assistance of Teresita Manucdoc for the the
extension of the validity of the tickets. Teresita
enlisted the help of Lee Ella. Ella sent the
tickets to Cesar Rillo, Office Manager of Air
France.
The tickets were returned to Ella who was
informed that extension was not possible
unless the fare differentials resulting from the
increase in fares, triggered by an increase of
the exchange rate of the US dollar to the
Philippine peso and the increased travel tax
were first paid. Ella then returned the tickets
to Teresita and informed her of the
impossibility of extension.
The Ganas had scheduled their departure on
May 7, 1971, day before the expiry.
Teresita requested Ella to arrange the
revalidation of the tickets. Ella warned Teresita
that although the tickets could be used by the
GANAS if they left on 7 May 1971, the tickets
would no longer be valid for the rest of their
trip because the tickets would then have
expired on 8 May 1971. Teresita replied that it
will be up to the GANAS to make the
arrangements. So Ella on his own, attached to
the tickets validating stickers for the
Osaka/Tokyo flight
Notwithstanding the warnings, Ganas
departed from Manila. However, for the
Osaka/Tokyo flight, JAL refused to honor the
tickets because of their expiration. Same
difficulty wrt their return trip to Manila as Air
France also refused to honor the tickets
So upon their return, the Ganas commenced
an action for damages arising from Breach of
Contract of carriage
AIR FRANCE
o Ganas brought upon themselves the
predicament they found themselves in
o Ellas affixing of validating stickers on
the tickets without the knowledge and
consent of Air France violated airline
tariff rules and regulation and was
beyond the scope of his authority as a
travel agent
o It was not guilty of any fraudulent
conduct or bad faith
TC- in favor of Air France- dismissed the
complaint
CA- reversed TC
Page | 5
ISSUE: WON Air France should be held liable.
HELD: NO
Tickets are valid only for 1 yr- passenger must
undertake the final portion of his journey by
departing from the last point at which he has
made a voluntary stop- since tickets were
already expired, Air France cannot be faulted
for breach of contract
The Ganas cannot defend by contending lack
of knowledge of those rules since the evidence
bears out that Teresita, who handled travel
arrangements for the GANAS, was duly
informed by travel agent Ella of the advice of
Reno, the Office Manager of Air France, that
the tickets in question could not be extended
beyond the period of their validity without
paying the fare differentials and additional
travel taxes brought about by the increased
fare rate and travel taxes
Teresita was the AGENT of the GANAS and
notice to her of the rejection of the request for
extension of the validity of the tickets was
notice to the GANAS, her principals
The validating sticker for the Osaka/Tokyo
flight, without clearing the same with Air
France was certainly in contravention of IATA
rules although as he had explained, he did so
upon Teresitas assurance that for the onward
flight, the Ganas would make other
arrangements.
ALBALADEJO Y CIA vs The PHILIPPINE
REFINING CO., as successor to The Visayan
Refining Co.,
FACTS:
1918- Albaladejo y Cia (ltd part-engaged in
buying and selling) and Visayan Refining
(corp-engaged in manufacturing of oil)
entered into a contract whereby Albaladejoy
binds itself to sell to Visayan, all the copra
purchased by it- contract: 1yr
Due to the agreement- Albaladejo bought
copra extensively for Visayan. At the end of 1
yr, both parties continued the existing
agreement by tacit consent
1920- Visayan closed down its factory at Opon
Cebu and withdrew from the copra market
Because of the large requirements of Visayan,
Albaladejo extended its business that during
the course of the next 2-3 years, it established
some 20 agencies or sub-agencies
After the Visayan had ceased to buy copra,
their accounts were liquidated. It appeared
that per the last account rendered, a balance of
 P288 in favor of Visayan was shown
Albaladejo expressed its approval of the said
account- no dissatisfaction was expressed by
Albaladejo until 6 wks after when it filed a
case
2 CoA:
1. Negligent failure of Visayan to provide
opportune transportation for the copra
collected by the plaintiff allegedly, it suffered
the diminishment of weight
2. Recovery of the amount expended by plaintiff
in maintaining and extending its organization.
It is alleged that the extension of the business
was due to the repeated assurances of Visayan
that it would soon resume its business
TC: not negligent wrt 1st CoA but ordered
Visayan to pay 30% of the costs wrt 2nd CoA
ALBALADEJO: contract between the plaintif
and the Visayan Refining Co. created the
relation of principal and agent between the
parties, and the reliance is placed upon
article 1729 of the Civil Code which requires
the principal to indemnify the agent for
damages incurred in carrying out the agency
HELD: according to CoA
1. NO NEGLIGENCE
TC judge carefully examined the movements
of the fleet of boats maintained by Visayan and
found that Visayan had used reasonable
promptitude in its efforts to get the copra from
the places where it had been deposited for
shipment.
Shrinkage was extremely moderate and this
fact goes to show that there was no undue
delay on the part of the Visayan
As per agreement, copra should be paid for
according to its weight upon arrival at Opon
regardless of its weight when first purchased
2. NOT ENTITLED TO RECOVER
Careful examination of the evidence, series of
letters of Visayan to Albaladejo, convincing
enough to support the ruling that supposed
liability does not exist
The correspondence sufficiently shows on its
face that there was no intention on the part of
the company to lay a basis for contractual
liability of any sort; and the plaintiff must
have understood the letters in that light.
3. NO PRINCIPAL-AGENT RELATIONSHIP
It is true that the Visayan Refining Co. made
the plaintiff one of its instruments for the
collection of copra; but it is clear that in
making its purchases from the producers the
Page | 6
plaintiff was buying upon its own account and
that when it turned over the copra to the
Visayan Refining Co., pursuant to that
agreement, a second sale was effected.
In paragraph three of the contract it is declared
that during the continuance of this contract the
Visayan Refining Co. would not appoint any
other agent for the purchase of copra in
Legaspi; and this gives rise indirectly to the
inference that the plaintiff was considered its
buying agent. But the use of this term in one
clause of the contract cannot dominate the real
nature of the agreement as revealed in other
clauses, no less than in the caption of the
agreement itself
In some letters, the term agents were used but
But this designation was evidently used for
convenience; and it is very clear that in its
activities as a buyer the plaintiff was acting
upon its own account and not as agents, in the
legal sense, of the Visayan Refining Co. The
title to all of the copra purchased by the
plaintiff undoubtedly remained in it until it
was delivered by way of subsequent sale to
said company.
THOMAS vs PINEDA
FACTS:
It appears that in 1931, Thomas bought the bar
and restaurant known as Silver Dollar Caf at
Plaza Sta Cruz.
He employed Pineda as a bartender-promoted
to cashier and manager
During Japanese occupation, to prevent the
business and its property from falling into
enemy hands, Thomas made a fictitious sale to
Pineda fictitious sale was admitted by both
parties; 2nd agreement (secret) stating that the
sale was fictitious
Original building was destroyed by fire-
Pineda was able to remove some furniture and
a considerable qty of stocks to a place of
safety-bar was opened on Calle Bambang-after
4 months it was transferred to the original
location
Thomas brought a CPA for the purpose of
examining the books- Pineda threatened
Thomas with a gun if they persisted in their
purpose. So Thomas filed a case and set up
another bar with the same name on Echague St
1st CoA- Thomas sought to compel an
ACCOUNTING of Pinedas operations during
the time he was in control of the bar
 o Pineda claims that there was a 3rd
verbal agreement, the import of which
was that he was to operate the
business with no liability other than to
turn over to the plaintiff as the
plaintiff would find it after the war
2nd CoA: ownership of Silver Dollar Caf trade
name it appears that Pineda registered the
business as his own
HELD:
1st CoA - valid
o Little or no weight can be attached to
Pinedas assertion.As sole manager
with full power to do as his fancies
dictated, the defendant could strip the
business naked of all its stocks,
leaving the plaintiff holding the bag,
as it were, when the defendant's
management was terminated. Unless
Thomas was willing to give away his
property and its profits, no man in his
right senses would have given his
manager an outright license such as
the defendant claims to have gotten
from his employer
o The conclusion thus seems clear that
the defendant owes the plaintiff an
accounting of his management of the
plaintiff's business during the
occupation. The exact legal character
of the defendant's relation to the
plaintiff matters not a bit. It was
enough to show, and it had been
shown, that he had been entrusted
with the possession and management
of the plaintiff's business and property
for the owner's benefit and had not
made an accounting.
o It was error for the court below to
declare at this stage of the proceeding,
on the basis of defendant's incomplete
and indefinite evidence, that there
were no surplus profits
o Monies and foodstuffs which the
defendant said he had supplied the
plaintiff and his daughters during the
war are appropriate items to be
considered on taking account
o Upon plaintiffs release from the
internment camp, he lost no time in
looking for a site where he could open
a saloon
o The use of the old name suggested
that the business was in fact an
Page | 7
extension and continuation of the
Silver Dollar Caf
o Upon the reopening of the bar in the
original place- lease was in the name
of Thomas; calling cards saying
Thomas is the proprietor == defendant
was only a manager
nd
2 CoA- Thomas is the owner of the trade
name
o In the fictitious bill of sale Pineda
acknowledged Thomas ownership of
the business
o Business cards: Thomas is the
proprietor
o No abandonment because when
Thomas set up a new saloon it used
the same name
o The most that can be said is that the
the plaintiff instructed Pineda to
renew the registration of the trade-
name and the defendant understood
the instruction as permission to make
the registration in his favor
o As legal proposition and in good
conscience, the defendants registration
of the trade name Silver Dollar Cafe
must be deemed to have been affected
for the benefit of its owner of whom
he was a mere trustee or employee.
o "The relations of an agent to his
principal are fiduciary and it is an
elementary and very old rule that in
regard to property forming the
subject matter of the agency, he is
estopped from acquiring or asserting
a title adverse to that of principal.
His position is analogous to that of a
trustee and he cannot consistently,
with the principles of good faith, be
allowed to create in himself an
interest in opposition to that of his
principal or cestui que trust. A
receiver, trustee, attorney, agent or
any other person occupying fiduciary
relations respecting property or
persons utterly disabled from
acquiring for his own benefit the
property committed to his custody
for management.
o The rule stands on the moral
obligation to refrain from placing
one's self in position which ordinarily
excite conflicts between self-interest at
the expense of one's integrity and duty
 to another, by making it possible to
profit by yielding to temptation
PALMA vs CRISTOBAL
FACTS:
Teatro Arco approached Gonzalo Puyat &
Sons. It was agreed between the parties that
the latter would, on behalf of the plaintiff,
order sound reproducing equipment from the
Starr Piano Company and that the plaintiff
would pay the defendant, in addition to the
price of the equipment, a 10 per cent
commission, plus all expenses, such as, freight,
insurance, banking charges, cables, etc
Teatro was able to buy 2 equipment for $1,700
and $1,600 (bought the next yr)
About 3 yrs later, in connection with a civil
case filed against Gonzalo, the officials of Arco
discovered that the price quoted to them by
the defendant with regard to their two orders
mentioned was not the net price but rather the
list price, and that the defendants had
obtained a discount from the Starr Piano
Company
They sought to obtain a reduction from the
defendant or rather a reimbursement, and
failing in this they brought the present action.
TC: contract between the parties was one of
outright PURCHASE AND SALE
CA: relation between the parties was that of
AGENT AND PRINCIPAL; even if it was
purchase and sale, Gonzalo was guilty of
fraud in concealing the true price
ISSUE: what is the nature of the contract between the
parties
HELD: PURCHASE AND SALE
Citing TC judge, Court said that "whatever
unforeseen events might have taken place
unfavorable to the defendant (petitioner), such
as change in prices, mistake in their quotation,
loss of the goods not covered by insurance or
failure of the Starr Piano Company to properly
fill the orders as per specifications, the plaintiff
(respondent) might still legally hold the
defendant (petitioner) to the prices fixed of
$1,700 and $1,600." This is incompatible with
the pretended relation of agency between the
petitioner and the respondent, because in
agency, the agent is exempted from all liability
in the discharge of his commission provided
he acts in accordance with the instructions
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received from his principal (section 254, Code
of Commerce), and the principal must
indemnify the agent for all damages which the
latter may incur in carrying out the agency
without fault or imprudence on his part
(article 1729, Civil Code).
The provision on 10% commission is only an
additional price which the respondent bound
itself to pay, and which stipulation is not
incompatible with the contract of purchase
and sale
To hold the petitioner an agent of the
respondent in the purchase of equipment
and machinery from the Starr Piano
Company of Richmond, Indiana, is
incompatible with the admitted fact that the
petitioner is the exclusive agent of the same
company in the Philippines. It is out of the
ordinary for one to be the agent of both the
vendor and the purchaser
The petitioner as vendor is not bound to
reimburse the respondent as vendee for any
difference between the cost price and the sales
price which represents the profit realized by
the vendor out of the transaction. This is the
very essence of commerce
The twenty-five per cent (25%) discount
granted by the Starr piano Company to the
petitioner is available only to the latter as the
former's exclusive agent in the Philippines.
The respondent could not have secured this
discount from the Starr Piano Company and
neither was the petitioner willing to waive that
discount in favor of the respondent.
Gonzalo was not duty bound to reveal the
private arrangement it had with the Starr
Piano Company relative to such discount
It is well known that local dealers acting as
agents of foreign manufacturers, aside from
obtaining a discount from the home office,
sometimes add to the list price when they
resell to local purchasers. It was apparently to
guard against an exorbitant additional price
that the respondent sought to limit it to 10 per
cent, and the respondent is estopped from
questioning that additional price.
VALERA vs VELASCO
FACTS:
By virtue of the powers of attorney executed
by the Valera, the Velasco was appointed
attorney-in-fact of the said Valera with
authority to manage his property in the
Philippines, consisting of the usufruct of a real
 property located of Echague Street, City of
Manila
The liquidation of accounts revealed that the
Valera owed the defendant P1,100, and as
misunderstanding arose between them, the
Velasco brought suit against the Valera
TC: in favor of agent Velasco; sheriff levied
upon Valeras right of usufruct, sold it at
public auction and adjudicated it to Velasco in
payment of all his claim
Valera sold his right of redemption to Eduardo
Hernandez- Hernandez conveyed the same
right of redemption to Valera himself-but then
another person Salvador Vallejo, who had an
execution upon a judgment against the
plaintiff rendered in another case, levied upon
said right of redemption- right of redemption
sold to Vallejo and was definitely adjudicated
to him. Later, he transferred the said right of
redemption to Velasco (so ung right of
redemption nauwi kay Velasco so in effect the
title was consolidated in his name, ergo the
agent got the title to the right of usufruct to the
aforementioned property)
ISSUE: WON the agency was terminated
HELD: YES:
Art 1732. Agency is terminated by: a)
revocation, b)withdrawal of agent, c)death,
interdiction, bankruptcy, or insolvency of the
principal or of the agent
A1736. An agent may withdraw by giving
notice to principal. If principal suffer any
damage, agent must indemnify him unless the
agents reason should be the impossibility of
continuing to act as such without serious
detriment to himself
Cited syllabus of De la Pena vs Hidalgo
(weird!) renouncing agency-agent about to
depart because of health & medical reasons
The misunderstanding between the plaintiff
and the defendant over the payment of the
balance of P1,000 due the latter more than
prove the breach of the juridical relation
between them; for, although the agent has not
expressly told his principal that he
renounced the agency, yet neither dignity nor
decorum permits the latter to continue
representing a person who has adopted such
an antagonistic attitude towards him
When the agent filed a complaint against his
principal for recovery of a sum of money
arising from the liquidation of the accounts
between them in connection with the agency,
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Federico Valera could not have understood
otherwise than that Miguel Velasco renounced
the agency; because his act was more
expressive than words and could not have
caused any doubt.
In order to terminate their relations by virtue
of the agency the defendant, as agent,
rendered his final account on March 31, 1923
to the plaintiff, as principal.
Briefly, then, the fact that an agent institutes
an action against his principal for the
recovery of the balance in his favor resulting
from the liquidation of the accounts between
them arising from the agency, and renders
and final account of his operations, is
equivalent to an express renunciation of the
agency, and terminates the juridical relation
between them.
Hence, the said agent's purchase of the
aforesaid principal's right of usufruct at public
auction held by virtue of an execution issued
upon the judgment rendered in favor of the
former and against the latter, is valid and legal
Moreover, the defendant-appellee, Miguel
Velasco, having acquired Federico Valera's
right of redemption from Salvador Vallejo,
who had acquired it at public auction by
virtue of a writ of execution issued upon the
judgment obtained by the said Vallejo against
the said Valera, the latter lost all right to said
usufruct.
Neither did the trial court err in not ordering
Miguel Velasco to render a liquidation of
accounts from March 31, 1923, inasmuch as he
had acquired the rights of the plaintiff by
purchase at the execution sale, and as
purchaser, he was entitled to receive the rents
from the date of the sale until the date of the
repurchase, considering them as part of the
redemption price; but not having exercised the
right repurchase during the legal period, and
the title of the repurchaser having become
absolute, the latter did not have to account for
said rents.
CUI vs CUI
FACTS:
Quo warranto (action for the usurpation of a
public office, position or franchise)-
administrator of the Hospicio de San Jose de
Barili (charitable institution-indigent invalids)
Initial management Don Pedro and Donya
Benigna. Pedro and Benigna Benigna
 Mauricio Cui and Dionisio Jakosalem
Teodoro Cui (son of Mauricio)
Plantiff Jesus and Defendant Antonio are
brothers (sons of one of the nephews of the
spouses)
Teodoro-resigned in favor of Antonio
pursuant to a convenio Jesus had no prior
notice of the convenio or of his brother;s
assumption of the position
Another person- Romulo Cui- grandson of
another nephew of the spouses-also claims a
right to the same office
Jesus holds the degree of Bachelor of laws-UST
but failed the bar
Antonio- was a member of the bar- disbarred
for immorality and unprofessional conduct
-reinstated 2 wks prior to his assumption of
the position.
ISSUE: what is the meaning of the term titulo de
abogado
HELD: (Antonio won)
The term "titulo de abogado" means not mere
possession of the academic degree of Bachelor
of Laws but membership in the Bar after due
admission thereto, qualifying one for the
practice of law
In Spanish the word "titulo" is defined as
"testimonies o instrumento dado para ejercer
un empleo, dignidad o profesion" and the
word "abogado," as follows: "Perito en el
derecho positivo que se dedica a defender en
juicio, por escrito o de palabra, los derechos o
intereses de los litigantes, y tambien a dar
dictmen sobre las cuestiones o puntos legales
que se le consultan.
A Bachelor's degree alone, conferred by a law
school upon completion of certain academic
requirements, does not entitle its holder to
exercise the legal profession. The English
equivalent of "abogado" is lawyer or attorney-
at-law. This term has a fixed and general
signification, and has reference to that class of
persons who are by license officers of the
courts, empowered to appear, prosecute and
defend, and upon whom peculiar duties,
responsibilities and liabilities are devolved by
law as a consequence.
In this jurisdiction admission to the Bar and to
the practice of law is under the authority of the
Supreme Court; requires passing the Bar
examinations, taking the lawyer's oath and
receiving a certificate from the Clerk of Court
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Antonios reinstatement is recognition of his
moral rehabilitation, upon proof no less than
that required for his admission to the Bar in
the first place. When the defendant was
restored to the roll of lawyers the restrictions
and disabilities resulting from his previous
disbarment were wiped out
This action must fail on one other ground: it is
already barred by lapse of time amounting the
prescription or laches 9filed more than 1 yr
after the right of Jesus to hold the office arose.
ALLIED FREE WORKERS' UNION (PLUM) vs
COMPAIA MARITIMA
FACTS:
MARITIMA is a local corporation engaged in
the shipping business; AFWU is duly
registered legitimate labor organization
MARITIMA, through Teves, entered into
a CONTRACT with AFWU;
MARITIMA hereby engage the services of the
Allied Free Workers' Union to do and perform
all the work of stevedoring and arrastre
services of all its vessels or boats calling in the
port of Iligan City; MARITIMA shall not be
liable for the payment of the services rendered
by the Allied Free Workers' Union; same is
payable by the owners and consignees of
cargoes,
During the first month AFWU rendered
satisfactory service, subsequently, former
complained to the latter of unsatisfactory and
inefficient service by the laborers doing the
arrastre and stevedoring work
AFWU presented to MARITIMA a written
proposal5 for a collective bargaining
agreement
MARITIMA answered, alleging lack of
employer-employee relationship between the
parties.
MARITIMA informed AFWU of the
termination of the CONTRACT because of the
inefficient service rendered by the latter which
had adversely affected its business
AFWU charged MARITIMAwith ULP
MARITIMA filed an action9 to rescind
the CONTRACT , enjoin AFWU members from
doing arrastre and stevedoring work in
connection with its, vessels, and for recovery
of damages against AFWUand its officers
CFI: ordered the rescission of the contract
Complaint for ULP-dismissed
 AFWU: citing jurisprudence, claims that it can
be considered a mere agent of MARITIMA

ISSUE:
1. WON there was EER
2. WON AFWU is an agent of MARITIMA
3. WON termination of contract was done in BF

HELD:
1. NO
4-fold test not present (POWER: hire, dismiss,
pay wages, Control- means and results)
Under the law the duty to bargain collectively
arises only between the "employer" and its
"employees". Where neither party is an
"employer" nor an "employee" of the other, no
such duty would exist. Needless to add, where
there is no duty to bargain collectively the
refusal to bargain violates no right.
AFWU independent contractor of
MARITIMA
AFWU is the employer of the laborers
2. NO
Suffice it to say on this point that an agent can
not represent two conflicting interests that are
diametrically opposed. And that the cases
sought to be relied upon did not involve
representatives of opposing interests.
3. NO
Evidence is clear that Teves, in representation
of the principal, the respondent
Compaia MARITIMA, has also acted, in good
faith in implementing the provisions of their
existent CONTRACT (Exhibit "A"), and when
he advised the union of the rescission of the
said CONTRACT effective August 31, 1954, he
did so in the concept that the employer firm
may so terminate their contract pursuant to
paragraph 4 of Exhibit "A" which at the time
was the law controlling between them
Termination was due to the unsatisfactory
service of the union laborers
There was a showing that the laborers
employed by the union were inefficient in
performing their jobs, and the business of the
respondent company in Iligan City suffered
adversely during the year 1954; and this was
due to the fact that respondents' vessels were
forced to leave cargoes behind in order not to
disrupt the schedule of departures. The Union
laborers were slow in loading and/or
unloading freight from which the respondent
Compaia MARITIMA secured its income
and/or profits

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