Sevilla v. CA (REG)
An agency that has been created for mutual interest, of the agent and the
1998
FACTS: Tourist World Service, Inc. (TWS) leased the premises belonging to Noguera
for the formers use as a branch office. Petitioner Sevilla held herself solidarily liable
with the party of the part for the prompt payment of the monthly rental. When the
branch office was opened, it was run by Sevilla payable to TWS by any airline. For
any fare brought in on the efforts of Sevilla, 4% was to go to Lina Sevilla and 3% was
to be withheld by the TWS. Sevilla was paid no salaries. She even shared in the
expenses of maintaining the office, paid for the salary of an office secretary and other
sundry expenses.
Later Tourist World considered closing down its office because of business losses
and news that Sevilla was then connected with a rival firm. Thus, an employee of
TWS went to the branch and padlocked its premises. Sevilla filed a complaint
claiming damages brought about by TWSs revocation of their relationship.
ISSUE:
1) WON Sevilla was just an employee of TWS, and as such was bound by the acts
of her employer. (NO)
2) WON Sevilla was an agent of TWS and thus entitled to damages because TWS
revoked such relationship. (YES)
HELD:
1. Sevilla was not subject to control by the private respondent TWS either as to the
result of the enterprise or as to the means used in connection therewith.
! Under the contract of lease covering the Tourist Worlds Ermita office, she had
bound herself in solidum as and for rental payments. A true employee cannot be
made to part with his own money in pursuance of his employer's business, or
otherwise, assume any liability thereof.
! Sevilla was not under the control of TWS "as to the means used." Sevilla in
pursuing the business, obviously relied on her own gifts and capabilities.
! She was not in the company's payroll. For her efforts, she retained 4% in
commissions from airline bookings, the remaining 3% going to Tourist World.
Unlike an employee then, who earns a fixed salary usually, she earned
compensation in fluctuating amounts depending on her booking successes.
2. Sevilla solicited airline fares, but she did so for and on behalf of her principal,
Tourist World Service, Inc. As compensation, she received 4% of the proceeds in
the concept of commissions.
!
principal cannot be revoked at will. Sevilla is abona fide travel agent herself, and
as such, she had acquired an interest in the business entrusted to her. Moreover,
she had assumed a personal obligation for the operation thereof, holding herself
solidarily liable for the payment of rentals. She continued the business, using her
own name, after Tourist World had stopped further operations. Her interest,
obviously, is not to the commissions she earned as a result of her business
transactions, but one that extends to the very subject matter of the power of
management delegated to her.
Fressel v Mariano Uy Chaco Sons & Co. (ABBY)
March 3, 1916
Trent, J.
FACTS: Merritt undertook and agreed with the defendant to build for the defendant a
costly edifice in the city of Manila at the corner of Calle Rosario and Plaza del Padre
Moraga. In the contract it was agreed between the parties thereto, that Uy Chaco at
any time, upon certain contingencies, before the completion of said edifice could take
possession of said edifice in the course of construction and of all the materials in and
about said premises acquired by Merritt for the construction of said edifice.Fressel
delivered to Merritt at the said edifice in the course of construction certain materials of
the value of P1,381.21Uy Chaco took possession of the incomplete edifice in course
of construction together with all the materials on said premises including the materials
delivered. Neither Meritt nor Uy Chaco paid for the materials even after extrajudicial
demand. The appellants insist that the above quoted allegations show that Merritt
acted as the agent of the defendant in purchasing the materials in question and that
the defendant, by taking over and using such materials, accepted and ratified the
purchase, thereby obligating itself to pay for the same.
Victoria Milling v CA, supra
1. Knowledge of agent imputed to principal
Art. 1821. Notice t o an y partn er o f any matter r elating to p artnership affairs, and the
knowledge of the partner acting in the particular matter, acquired while a partner or
then present to his mind, and the knowledge of any other partner who reasonably
could and should have communicated it to the acting partner, operate as notice to or
knowledge of the partnership, except in the case of fraud on the partnership,
committed by or with the consent of that partner.
A. Article 1869
Art. 186 9. Agen cy may be express, or implie d from the acts of the principal, from his
silence or lack of action, or his failure to repudiate the agency, knowing that another
person is acting on his behalf without authority.
1. Oral, express
2. Implied
a. acts or conduct of principal
ISSUE: Fressels allegation That in pursuance of the contract between Merritt and
the defendant, Merritt acted as the agent for defendant in the acquisition of the
materials from plaintiffs. W/N Meritt acted as an agent for Uy Chaco and Sons
Held: NO. Meritt is an independent contractor. Where one party to a contract was
authorized to do work according to his own method and without being subject to the
other partys control, except as to the result of the work, he is an independent
contractor and not an agent.
The fact that "the defendant entered into a contract with one E. Merritt, where by the
said Merritt undertook and agreed with the defendant to build for the defendant a
costly edifice" shows that Merritt was authorized to do the work according to his own
method and without being subject to the defendant's control, except as to the result of
the work. He could purchase his materials and supplies from whom he pleased and at
such prices as he desired to pay. Again, the allegations that the "plaintiffs delivered
the Merritt . . . . certain materials (the materials in question) of the value of P1,381.21,
. . . . which price Merritt agreed to pay," show that there were no contractual relations
whatever between the sellers and the defendant. The mere fact that Merritt and the
defendant had stipulated in their building contract that the latter could, "upon certain
contingencies," take possession of the incompleted building and all materials on the
ground, did not change Merritt from an independent contractor to an agent. In the
absence of a statute creating what is known as mechanics' liens, the owner of a
building is not liable for the value of materials purchased by an independent
contractor either as such owner or as the assignee of the contractor.
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FACTS:
This case is about an action for recovery of sum of money, based on the alleged negligence of
the defendants.
A car was brought to a Shell gasoline station owned by Dela Fuente for washing and greasing.
The car was placed on a hydraulic lifter for greasing. As some parts of the car couldnt be
reached by the greaseman, the lifter was lowered. Unfortunately, for unknown reasons
(probably due to mechanical failure or human error), while the lifter was being lowered, the
car swung and fell from the platform. Said car was insured against loss or damage by
Firemen's Insurance Company of Newark, New Jersey, and Commercial Casualty Insurance
Company jointly for the sum of P10,000. The insurance companies after paying the sum
of P1,651.38 for the damage and charging the balance of P100.00 to Salvador Sison, in
accordance with the terms of the insurance contract, filed this action together with said
Salvador Sison for the recovery of the total amount of the damage from the defendants on the
ground of negligence.
ISSUE:
WON Dela Fuente is merely an agent of Shell Co.
HELD:
Yes. De la Fuente was the operator of the station "by grace" of the Defendant Company which
could and did remove him as it pleased; that all the equipments needed to operate the station
was owned by the Defendant Company which took charge of their proper care and
maintenance, despite the fact that they were loaned to him; that the Defendant company did
not leave the fixing of price for gasoline to De la Fuente; That the service station belonged to
the company and bore its trade name and the operator sold only the products of the company;
that the equipment used by the operator belonged to the company and were just loaned to the
operator and the company took charge of their repair and maintenance.
As the act of the agent or his employees acting within the scope of his authority is the act of
the principal, the breach of the undertaking by the agent is one for which the principal is
answerable. The latter was negligent and the company must answer for the negligent act of its
mechanic which was the cause of the fall of the car from the hydraulic lifter.
MANILA MEMORIAL PARK CEMETERY, INC. V. LINSANGAN
G.R. No. 94050
TINGA, November 21. 1991
NATURE
Petition for Review under Rule 45 of the ROC
FACTS
-Florencia Baluyot, an Agency Manager of MMPCI, offered to Atty. Pedro Linsangan a lot at the Holy
Cross Memorial Park owned by MMPCI for P95,000. The lots former owner was not interested on the lot
anymore and so agreed to sell the lot after he has been reimbursed. Atty. Linsangan agreed to the offer,
gave Baluyot the reimbursement that would be given to the former owner and down payment that would
be paid to MMPCI, with Baluyot only handing him handwritten and typewritten receipts (not O.R.).
-However, instead of the old contract with the old owner reformed so that Atty. Linsangan would become
the new owner of the lot, Baluyot offered a new contract covering the same lot. Atty. Linsangan
protested, but Baluyot assured him that that Atty. Linsangan would still be paying P95,000 instead of the
P132,250 price under the new contract. Baluyot even executed a document confirming the previous
arrangement between her and Atty. Linsangan so that even if the purchase price under the new contract
has increased, Atty. Linsangan would still be paying the old purchase price. Atty. Linsangan signed the
new contract with MMPCI and tendered payment in checks in accordance with the old agreement
between him and Baluyot.
-It turns out that MMPCI was not aware of the arrangement between Baluyot and Atty. Linsangan, and
that Baluyot was only authorized under her Agency Management contract tosolicitand remit to
MMPCI offers to purchase interment spaces belonging to and sold by MMPCI. So, even if Atty.
Linsangan had complied with the agreed payment, MMPCI cancelled the new contract for non-payment
of arrearages.
-Atty. Linsangan filed complaint for Breach of Contract and Damages against Baluyot and MMPCI.
LC: Baluyot was an agent of MMPCI; MMPCI was estopped from denying the agency after having
received and encashed the checks issued by Atty. Linsangan and given it by Baluyot.
CA: affirmed LC + Baluyots authority was conferred upon her by habit and custom
ISSUES
1. WON the SC could review the findings of fact of CA
2. WON Baluyot was an agent of MMPCI
3. WON MMPCI was bound by the contract procured by Atty. Linsangan and solicited by Baluyot
4. WON MMPCI was estopped from denying liability to Atty. Linsangan
HELD
1. YES
Ratio. There are instances when the findings of fact of the trial court and/or Court of Appeals may be
reviewed by the Supreme Court, such as (1) when the conclusion is a finding grounded entirely on
speculation, surmises and conjectures; (2) when the inference made is manifestly mistaken, absurd or
impossible; (3) where there is a grave abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in
making its findings, went beyond the issues of the case and the same is contrary to the admissions of
both appellant and appellee; (7) when the findings are contrary to those of the trial court; (8) when the
findings of fact are conclusions without citation of specific evidence on which they are based; (9) when
the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by
the respondents; and (10) the findings of fact of the Court of Appeals are premised on the supposed
absence of evidence and contradicted by the evidence on record.
Reasoning.Baluyot was an agent of MMPCI, having represented the interest of the latter, and having
been allowed by MMPCI to represent it in her dealings with its clients/prospective buyers.
3. NO
Ratio. The acts of the agent beyond the scope of his authority do not bind the principal unless the latter
ratifies the same. It also bears emphasis that when the third person knows that the agent was acting
beyond his power or authority, the principal cannot be held liable for the acts of the agent. If the said
third person was aware of such limits of authority, he is to blame and is not entitled to recover damages
from the agent, unless the latter undertook to secure the principals ratification.
-on RATIFICATION: Ratificationin agency is the adoption or confirmation by one person of an act
performed on his behalf by another without authority. The substance of the doctrine is confirmation after
conduct, amounting to a substitute for a prior authority. Ordinarily, the principal must have full knowledge
at the time of ratification of all the material facts and circumstances relating to the unauthorized act of the
person who assumed to act as agent. Thus, if material facts were suppressed or unknown, there can be
no valid ratification and this regardless of the purpose or lack thereof in concealing such facts and
regardless of the parties between whom the question of ratification may arise. Nevertheless, this
principle does not apply if the principals ignorance of the material facts and circumstances was willful, or
that the principal chooses to act in ignorance of the facts. However, in the absence of circumstances
putting a reasonably prudent man on inquiry, ratification cannot be implied as against the principal who is
ignorant of the facts.
Reasoning.Baluyot acted in excess of the authority granted to her by MMPCI. The srcinal agreement
between her and Atty. Linsangan was unknown to MMPCI and thus, MMPCI was not bound by their
agreement. As far as they were concerned, the contract price was P132,250 and not P95, 000. As for
the ratification, see estoppel.
4. NO.
Ratio. The essential elements of estoppel are (i) conduct of a party amounting to false representation
or concealment of material facts or at least calculated to convey the impression that the facts are
otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (ii) intent,
or at least expectation, that this conduct shall be acted upon by, or at least influence, the other party; and
(iii) knowledge, actual or constructive, of the real facts.
-One who claims the benefit of an estoppel on the ground that he has been misled by the
representations of another must not have been misled through his own want of reasonable care and
circumspection.
-Estoppel must be intentional and unequivocal, for when misapplied, it can easily become a most
convenient and effective means of injustice.
Reasoning.There is no indication that MMPCI let the public nor Atty. Linsangan to believe that Baluyot

2. YES had the authority

to signing to alter
of the new the standard
contract, contracts
MMPCI had of the company.
any knowledge Neither
of Baluyots is there any
commitment showing
to Atty. that prior
Linsangan.
Ratio. By the contract of agency, a person binds himself to render some service or to do something in
representation or on behalf of another, with the consent or authority of the latter. Thus, theelements of GR No. 156262
agency are (i) consent, express or implied, of the parties to establish the relationship; (ii) the object is TITLE: Maria Tuazon, Alejandro Tuazon, Melencio Tuazon, Spouses Anastacio and
the execution of a juridical act in relation to a third person; (iii) the agent acts as a representative and not Mary Buenaventura, petitioners vs. Heirs of Bartolome Ramos, defendant
for himself; and (iv) the agent acts within the scope of his authority. NATURE OF ACTION:Petition for Review
PONENTE:Panganiban, J.

FACTS:
This case arose from failure of the petitioners to pay the respondents
predecessor-in-interest ( deceased Bartolome Ramos). The check in issue
was indorsed by the petitioner (Tuazon) in favor of the said predecessor.
The petitioners Leonilo and Maria (Tuazon) purchased 8,326 cavans of rice
from Bartolome Ramos. Only 4,437 cavans were paid leaving unpaid 3,889
cavans with value of P 1,211,919.00. In payment, the spouses issued
several checks.
The checks bounced due to insufficiency of funds.
Side of the Petitioner:
Denied the purchase of rice from Bartolome and alleged that it was
Magdalena Ramos (his wife) owned and traded the merchandise. They also
alleged that Maria Tuazon was merely Magdalenas agent.
They argued that Evangeline Santos (the one who issued the checks) was
the buyer of the rice, and the checks were merely turned over by Maria to
Bartolome, without knowing that these were not funded. They argued that
they were mere agents and should not be held answerable.
They alleged that Santos should be primarily liable to Ramos because she
was the one who had purchased the merchandise from Bartolome as
evidenced by the checks that had been drawn in her name.
The petitioners also alleged that their personal properties were sold because
they were meeting financial difficulties and they were valued in good faith.
Side of the Defendant:
The Tuazons already knew that they had no available funds to support the
checks, and anticipated that they will be sued. Thus, they executed fictitious
sales of their properties (residential house and lot and a Toyota)
RTC Ruling:
In favor of the plaintiffs (Bartolome) and against the defendants (Tuazon),
ordering the defendants to pay the plaintiffs as follows:
o 1,750,050.00 + interest; 50,000.00 attorneys fees; 20,000.00 moral
damages; and pay the cost of suit.
CA Ruling:
Appeal is DISMISSED and the decision is AFFIRMED.
ISSUES:
1. WON Maria Tuazon was considered as an agent of Bartolome Ramos
2. Won Evangeline Santos was an indispensable party
HELD:
No.
The declarations of agents alone are generally insufficient to establish the
fact or extent of their authority. The law makes no presumption of agency;
proving its nature and extent is incumbent upon the person alleging it. The
petitioners raise the fact of agency as an affirmative defense, yet fail to prove
its existence.
Their filing a suit against her in their own names negates their claim that they
acted as mere agents in selling the rice obtained from Bartolome Ramos.
No.
There is no privity of contract between the respondents and Santos. Maria
Tuazon indorsed the questioned checks in favor of the respondent, as
indorser, in case the checks were dishonored, she would pay the
corresponding amount. After an instrument is dishonored by nonpayment,
indorsers cease to be merely secondarily liable; they become principal
debtors whose liability becomes identical to that of the srcinal obligor.
DOCTRINE:
In a contract of agency
, one binds oneself to render some service or to do
something in representation or on behalf of another, with the latters consent
or authority.
The following are the elements of agency:
o (1) the parties consent, express or implied, to establish the
relationship;
o (2) the object, which is the execution of a juridical act in relation to a
third person;
o (3) the representation, by which the one who acts as an agent does
so, not for oneself, but as a representative;
o (4) the limitation that the agent acts within the scope of his or her
authority.
As the basis of agency is representation, there must be, on the part of the
principal, an actual intention to appoint, an intention naturally inferable from
the principals words or actions. In the same manner, there must be an
intention on the part of the agent to accept the appointment and act upon it.
Absent such mutual in tent, there is gen erally no agency.
-Even assuming that Atty. Linsangan was misled by MMPCIs actuations, he still cannot invoke the
principle of estoppel, as he was clearly negligent in his dealings with Baluyot, and could have easily
determined, had he only been cautious and prudent, whether said agent was clothed with the authority to
change the terms of the principals written contract.
Disposition.WHEREFORE, the instant petition is GRANTED. The Decisi on of the Court of Appeals
dated 22 June 2001 and its Resolution dated 12 December 2001 in CA- G.R. CV No. 49802, as well as
the Decision in Civil Case No. 88-1253 of the Regional Trial Court, Makati City Branch 57, are hereby
REVERSED and SET ASIDE. The Complaint in Civil Case No. 88-1253 is DISMISSED for lack of cause
of action. No pronouncement as to costs.
Quiroga vs Parsons
G.R. No. L-11491
Subject:Sales
Doctrine: Contract of Agency to Sell vs Contract of Sale
Facts:On Jan 24, 1911, plaintiff and the respondent entered into a contract making the latter
an agent of the former. The contract stipulates that Don Andres Quiroga, here in petitioner,
grants exclusive rights to sell his beds in the Visayan region to J. Parsons. The contract only
stipulates that J.Parsons should pay Quiroga within 6 months upon the delivery of beds.
Quiroga files a case against Parsons for allegedly violating the following stipulations: not to
sell the beds at higher prices than those of the invoices; to have an open establishment in
Iloilo; itself to conduct the agency; to keep the beds on public exhibition, and to pay for the
advertisement expenses for the same; and to order the beds by the dozen and in no other
manner. With the exception of the obligation on the part of the defendant to order the beds by
the dozen and in no other manner, none of the obligations imputed to the defendant in the two
causes of action are expressly set forth in the contract. But the plaintiff alleged that the
defendant was his agent for the sale of his beds in Iloilo, and that said obligations are implied
in a contract of commercial agency. The whole question, therefore, reduced itself to a
determination as to whether the defendant, by reason of the contract hereinbefore transcribed,
was a purchaser or an agent of the plaintiff for the sale of his beds.
Issue: Whether the contract is a contract of agency or of sale.
Held: In order to classify a contract, due attention must be given to its essential clauses. In the
contract in question, what was essential, as constituting its cause and subject matter, is that the
plaintiff was to furnish the defendant with the beds which the latter might order, at the price
stipulated, and that the defendant was to pay the price in the manner stipulated. Payment was
to be made at the end of sixty days, or before, at the plaintiffs request, or in cash, if the
defendant so preferred, and in these last two cases an additional discount was to be allowed for
prompt payment. These are precisely the essential features of a contract of purchase and sale.
There was the obligation on the part of the plaintiff to supply the beds, and, on the part of the
defendant, to pay their price. T hese features exclude the legal conception of an agency or order
to sell whereby the mandatory or agent received the thing to sell it, and does not pay its price,
but delivers to the principal the price he obtains from the sale of the thing to a third person,
and if he does not succeed in selling it, he returns it. By virtue of the contract between the
plaintiff and the defendant, the latter, on receiving the beds, was necessarily obliged to pay
their price within the term fixed, without any other consideration and regardless as to whether
he had or had not sold the beds.
In respect to the defendants obligation to order by the dozen, the only one expressly imposed
by the contract, the effect of its breach would only entitle the plaintiff to disregard the orders
which the defendant might place under other conditions; but if the plaintiff consents to fill
them, he waives his right and cannot complain for having acted thus at his own free will.
For the foregoing reasons, we are of opinion that the contract by and between the plaintiff and
the defendant was one of purchase and sale, and that the obligations the breach of which is
alleged as a cause of action are not imposed upon the defendant, either by agreement or by
law.
Ker & Co., Ltd. Vs. Lingad
L- 20871 April 30, 1971
Ponente: Fernando, J.
(Ria)
Doctrine: Distinguish from contract of sale: the price paid in the transfer of an agreement or
title is the essence of sale. If such transfer puts the transferee in the attitude of an owner and
makes him liable to the transferor as a debtor for an agreed price it is a contract of sale. The
essence of agency to sell is the delivery to an agent not as his property but as the property of
the principal who remains the owner and had the right to control sales, fix price and terms and
demand proceeds.
Facts:Petitioner was assessed by then Commissioner of Internal Revenue Melencio R.
Domigno the sum of 20, 272.33 as the commercial brokers percentage tax, surcharge and
compromise penalty from July 1, 1949- December 31, 1953. Petitioner requested its
cancellation but such request was turned down. When the CTA reviewed it, it held the
petitioner liable except for compromise penalty amounting to 500. The total liability now is
19, 772.33.
Such liability arose from the contract of the petitioner with United States Rubber International.
The petitioner is the distributor of the products of the said company. The shipment would
cover products for consumption in Cebu, Bohol, Leyte, Samar, Jolo, Negros and Mindanao
except Davao. Petitioner was precluded from selling in other those mentioned places unless
they secured consent to the company. There was a stipulation in the contract whereby the said
company shall from time to tome consign to the distributor and the distributor will receive,
accept and or hold upon consignment the products specified under the terms of this agreement
in such quantities and in the judgment of the company may be successful in the solicitation
and maintenance of business. All goods in consignment shall remain with the company until
sold by petitioner but all sales made by the petitioner shall be in his name. it was further
agreed that the contract does not constitute the petitioner the agent of the company for any
purpose. The petitioner did have the right to assume authority that will bind the company.
However under the stipulation in the contract the distributor can only sell it within the
stipulated limits, that it merely receives, accepts and holds upon consignment the products
which will remain in the custody of the company, that distributor shall promote the products,
that the sales are subject to the approval of the company, that the company may ask for
inventory any time and that after the termination of the agreement all goods held on
consignment by petitioner for the account of the company until their disposition is provided by
the latter.
Issue: Whether or not the contract between Ker & Co. and United States Rubber International
was that of an agency?
Holding: Yes, all the circumstances are irreconcilably antagonistic to the idea of an
independent merchant. Since the company retained ownership of the goods, even as it
delivered possession unto the dealer for resale to customers and terms of which were subject to
the companys control, the relation between t he company and the dealer is one of agency.
Distinguish from contract of sale: the price paid in the transfer of an agreement or title is the
essence of sale. If such transfer puts the transferee in the attitude of an owner and makes him
liable to the transferor as a debtor for an agreed price it is a contract of sale. The essence of
agency to sell is the delivery to an agent not as his property but as the property of the principal
who remains the owner and had the right to control sales, fix price and terms and demand
proceeds.
GONZALO PUYAT AND SONS, INC. V ARCO AMUSEMENT COMPANY
FACTS:
Arco Amusement was engaged in the business of operating cinematographs. Gonzalo Puyat &
Sons Inc (GPS) was the exclusive agent in the Philippines for the Starr Piano Company.
Desiring to equip its cinematograph with sound reproducing devices, Arco approached GPS.
After some negotiations, it was agreed between the parties that GPS would order sound
reproducing equipment from Starr Piano Company and that Ar co would pay GPS, in addition
to the price of the equipment, a 10% commission, plus all expenses such as freight, insurance,
etc. When GPS inquired Starr Piano the price (without discount) of the equipment, the latter
quoted such at $1,700. Being agreeable to the price (plus 10% commission plus all other
expenses), Arco formally authorized the order. The following year, both parties agreed for
another order of sound reproducing equipment on the same terms as the first at $1,600 plus
10% plus all other expenses.
Three years later, Arco discovered that the prices quoted to them by GPS with regard to their
first 2 orders mentioned were not the net prices, but rather the list price, and that it had
obtained a discount from Starr Piano. Moreover, Arco alleged that the equipments were
overpriced. Thus, being its agent, GPS had to reimburse the excess amount it received from
Arco.
ISSUE:
W/N there was a contract of agency, not of sale
HELD:
The letters containing Arco's acceptance of the prices for the equipment are clear in their terms
and admit no other interpretation that the prices are fixed and determinate. While the letters
state that GPS was to receive a 10% commission, this does not necessarily mean that it is an
agent of Arco, as this provision is only an additional price which it bound itself to pay, and
which stipulation is not incompatible with the contract of sale. The facts and circumstances
show that Arco entered into a contract of sale with GPS, the exclusive agent of Starr Piano. As
such, it is not duty bound to reveal the private arrangement it had with Starr Piano relative to
the 25% discount. Being the exclusive agent of Starr, Arco could not have secured this
discount with Starr and neither is GPS willing to waive the discount for Arco. Thus, GPS is
not bound to reimburse Arco for any difference between the cost price and the sales price,
which represents the profit realized by GPS out of the transaction.
Chua Ngo v. Universal Trading Co., Inc
In Chua Ngo v. Universal Trading Co., Inc ., 87 Phil. 331 (1950), where a local
importing company was contracted to purchase from the United States
several boxes of oranges, most of which were lost in transit, the purchaser
sought to recover the advance purchased price paid, which were refused by
the local importing company on the ground that it merely imported the
oranges as agent of the purchaser for which it could not be held liable for
their loss in transit. The Court, in reviewing the terms and conditions of the
agreement between the parties, held that the arrangement was a sale rather
than a contract of agency to purchase on the following grounds: (a) no
commission was paid by the purchaser to the local importing company; (b)
the local importing company was given the option to resell the oranges if
the balance of the purchase price was not paid within 48 hours from
notification, which clearly implies that the local importing company did in fact
sell the oranges to the purchaser; (c) the local importing company placed
order for the oranges a lower the price agreed upon with the purchaser which
it could not properly do if indeed it were merely acting as an agent; (d) the
local importing company charged the purchaser with a sales tax, showing that
the arrangement was indeed a sale; and (e) when the losses occurred, the
local importing company made claims against the insurance company in its
own name, indicating that he imported the oranges as his own products, and
not merely as agent of the local purchaser.
ALBERTO V. REYES, ET AL. v. RURAL BANK OF SAN MIGUEL (BULACAN), INC.ET.
AL,. G.R. No. 154499, February 27, 2004
COMMAND RESPONSIBILITY;HEAD OF A DEPARTMENT OR A SUPERIOR OFFICER SHALL
NOT BE CIVILLY LIABLE FOR THE WRONGFUL ACTS.OMISSION OF DUTY, NEGLIGENCE
FOR MISFEASANCE OF HIS SUBORDINATE.UNLESS HE HAS ACTUALLY AUTHORIZE BY
WRITTEN ORDER OF THE SPECIFIC ACT OR MISCONDUCT COMPLAINED OF
Facts:
In a letter dated May 19,1999, addressed to then BSP Governor Singson, RBSMI
charge the petitioner with violation of RA No. 6713 ( code of Conduct and Ethical
Standards for Public Officials and Employees). The Monetary Board (MB) of the BSP
created an Ad Hoc Committee to investigate the matter.
The ensuing investigation disclosed that sometime in September 1996, RBSMI, which
had a history of major violations/exceptions dating back to 1995, underwent
periodic examination by the BSP. The examination team headed by Principio noted
serious 20 exceptions/violations and deficiencies of RBSMI.
Through Resolution No. 96, the MB required RBSMI to submit within 15 days a
written explanation with respect to the findings of the examiner. It also directed
the Department of Rural Banks DRB), to verify, monitor and report to the Deputy
Governor, Supervision and Examination Sector (SES) on the findings noted, until the
same shall have been corrected.
Meanwhile on June 13,1997, the MB approved Resolution No. 724 ordering RBSMI to
correct the major exceptions noted within 30 days from receipt of the advice, and
to remit to the BSP the amount of P2,538,483.00 as fines and penalties for incurring
deficiencies in reserves against deposit liabilities.
More than a year after, however, the RBSMI asked for a reconsideration of MB
Resolution No. 724 insofar as the imposition of fine amounting to P
P2,538,483.00.On January 21, 1999, the MB adopted Resolution No. 71, authorizing
the conditional reversal of sixty of the dispute on the findings on reserve
deficiency. Subsequently, on April 7, 1999, the MB approved the interim reversal of
the entire amount of the penalty pending the outcome of the study on the legal
and factual basis for the imposition of the penalty.
The above incidents, particularly the alleged brokering by Reyes and the
petitioners unsupported recommendation to impose a penalty of P2,538,483.00
for legal reserve deficiency, prompted the respondent to file the letter-complaint
charging the petitioners with unprofessionalism.
In the Decision if March 14,2003, this Court found Deputy Governor Reyes and
Director Domo-ong liable for violation of the standards of professionalism
prescribed by RA 6713in that they used the distressed financial condition of
respondent RBSMI as the subject of a case study in one of the BSP seminars and did
the brokering of the sale of RBSMI. The Court modified the decision of the CA by
reducing the penalty imposed from the a fine equivalent to six monthssalary to a
fine of 2 months salary for Reyes and one month salary for Domo-ong.
The court exonerated petitioner Proncipio of the Administrative charges. The
exoneration is subject to RBSMIs Motion for Partial Reconsideration.
Issue: Whether or not the Superior officer shall not be civilly liable for the wrongful
acts, omissions of duty, negligence or misfeasance of his subordinate officer.
Held: The immunity of public officers from liability for nonfeasance, negligence or
omissions of duty of their official subordinate and even for the latters misfeasance
or positive wrong rests, according to MECHEM, upon obvious considerations of
public policy, the necessities of the public service and the perplexities and
embarrassments of a contrary doctrine. These official subordinates are themselves
public officers though of an inferior grade, and therefore directly liable in the cases
in which any public officer is liable, for their own misdeeds or defaults.
Under the Admin Code of 1987, which provides that head of a department or a
superior officer shall not be civilly liable for the wrongful acts, omissions of duty,
negligence, misfeasance of his subordinates, unless he has actually authorized by
written order the specific act or misconduct complained of.
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MANUEL B. TAN, GREGG M. TECSON and ALEXANDER SALDAA, petitioners, vs.

EDUARDO R. GULLAS and NORMA S. GULLAS, respondents.
G.R. No. 143978 December 3, 2002

Facts: Respondents, were the registered owners of a parcel of land, they executed a
special power of attorney authorizing petitioners Tan, a licensed real estate broker, and his

associates Tecson and Saldaa, to negotiate for the sale of the land, at a commission of 3% of
the gross price. Tan contacted the Sisters of Mary of Banneaux, Inc. (hereafter, Sisters of
Mary), a religious organization interested in acquiring a property. The Sisters, who had
already seen and inspected the land, found the same suitable for their purpose and expressed
their desire to buy it. However, they requested that the selling price be reduced. Respondents
agreed to sell the property to the Sisters of Mary. Petitioners went to see respondents who
refused to pay the brokers fee and alleged that another group of agents was responsible for the
sale of land to the Sisters of Mary. Petitioners filed a complaint against the defendants for
recovery of their brokers fee. They alleged that they were the efficient procuring cause in
bringing about t he sale of the, but that their efforts in consummating the sale were frustrated
by the respondents who, in evident bad faith, malice and in order to evade payment of brokers
fee, dealt directly with the buyer whom petitioners introduced to them.

Issues:(1) Whether or not the petitioners are entitled to the brokerage commission.
(2) An agent distinguished from a broker.

Rulings: (1) The records show that petitioner Tan is a licensed real estate broker,
and other petitioners his associates. "Broker" as "one who is engaged, for others, on a
commission, negotiating contracts relative to property with the custody of which he has no
concern; the negotiator between other parties, never acting in his own name but in the name of
those who employed him. x x x a broker is one whose occupation is to bring the parties
together, in matters of trade, commerce or navigation." The petitioners were responsible for
the introduction of the representatives of the Sisters of Mary to respondent.

(2) There was no dispute as to the role that petitioners played in the transaction. "An
agent receives a commission upon the successful conclusion of a sale. On the other hand, a
broker earns his pay merely by bringing the buyer and the seller together, even if no sale is