Jocelyn B. Doles vs. Ma. Aura Tina Angeles
CA and Consolidated Sugar Corporation
G.R. No. 149353. June 26, 2006.
Facts:
Petitioner executed a Deed of Absolute Sale ceding a parcel of land in favor of respondent to satisfy the alleged
indebtedness of the former in the amount of P405,430.00. Since the said land was mortgaged to the National Home
Mortgage Finance Corporation, they further agreed that respondent assume the remaining balance of the loan.
Learning that the petitioner still has arrearages, respondent demanded that the arrearages be paid first. Petitioner did
not heed, thus a case was filed by the respondent.
In answer, the petitioner alleged that sale was void for lack of consideration and that she was not indebted to the
respondent as she only referred her friends to respondent whom she knew to be engaged in the business of lending
money in exchange for personal checks through her capitalist Arsenio Pua. Further petitioner contended that since the
respondent is also an agent, she does not have the capacity to sue her.
It is an admitted fact by both petitioner and defendant, based on their testimonies, that respondent knew that the
money will be used by the friends of the petitioner; that the respondent was merely representing Arsenio Pua; and
that before the supposed friends of the petitioner defaulted in payment, each issued their personal checks in the name
of Arsenio Pua for the payment of their debt.
Issue/s:
Whether or not petitioner and respondent were acting on their personal capacity or as mere agents.
Ruling:
The question whether an agency has been created is ordinarily a question which may be established in the same was
as any other fact, either by direct or circumstantial evidence. Agency may be implied from the words and conduct of
the parties and the circumstances of the particular case. Though the fact or extent of authority of the agents may not,
as a general rule, be established from the declarations of the agents alone, if one frofessed to act as agent for another,
she may be stopped to deny her agency both as against the asserted principal and the third persons interested in the
transaction in which he or she is engaged.
In this case, petitioner knew that the financier of the respondent is Pua, and respondent knew that the borrowers are
friends of petitioner. It is sufficient that petitioner disclosed to respondent that the former was acting in behalf of her
principals, her friends. For an agency to arise, it is not necessary that the principal personally encounter the third
person with whom the agent interacts.
Here, both petitioner and respondent have undeniably disclosed to each other that they are representing someone
else and so both of them are estopped to deny the same.
That both parties acted as mere agents is shown by the undisputed fact that the friends of the petitioner issued checks
in payment of the loan in the name of Arsenio Pua.
Victoria Milling Co., Inc. v.
G.R. No. 117356 June 19, 2000
Quisumbing, J.
FACTS:
St. Therese Merchandising regularly bought sugar from Victorias Milling Co., Inc. In the course of their dealings,
Victorias Milling issued several Shipping List/Delivery Receipts (SLDRs) to St. Therese Merchandising as proof of
purchases. Among these was SLDR No. 1214M which covers 25,000 bags of sugar. Each bag contained 50 kilograms
and priced at P638.00 per bag. The transaction it covered was a direct sale.
On October 25, 1989, St. Therese Merchandising sold to Consolidated Sugar Corp. its rights in SLDR No. 1214M for
P14,750,000.00. Consolidated Sugar Corp. issued checks in payment. That same day, Consolidated Sugar Corp. wrote
Victorias Milling that it had been authorized by St. Therese Merchandising to withdraw the sugar covered by SLDR No.
1214M.
Consolidated Sugar Corp. surrendered SLDR No. 1214M to Victorias Milling’s NAWACO warehouse and was allowed to
withdraw sugar. However, after 2,000 bags had been released, Victorias Milling refused to allow further withdrawals
of sugar against SLDR No. 1214M because, according to it, St. Therese Merchandising had already withdrawn all the
sugar covered by the cleared checks.
ISSUE: WON the contract was one of agency or sale
HELD: Sale.
Victorias Milling heavily relies upon St. Therese Merchandising’s letter of authority allowing Consolidated Sugar Corp.
to withdraw sugar against SLDR No. 1214M to show that the latter was St. Therese Merchandising’s agent. The
pertinent portion of said letter reads: “This is to authorize Consolidated Sugar Corporation or its representative to
withdraw for and in our behalf (stress supplied) the refined sugar covered by Shipping List/Delivery Receipt = Refined
Sugar (SDR) No. 1214 dated October 16, 1989 in the total quantity of 25, 000 bags.”
Art. 1868. 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.
The basis of agency is representation. On the part of the principal, there must be an actual intention to appoint or an
intention naturally inferable from his words or actions; and on the part of the agent, there must be an intention to
accept the appointment and act on it, and in the absence of such intent, there is generally no agency. One factor
which most clearly distinguishes agency from other legal concepts is control; one person - the agent - agrees to act
under the control or direction of another - the principal.
Victorias Milling failed to sufficiently establish the existence of an agency relation between Consolidated Sugar Corp.
and St. Therese Merchandising. The fact alone that it (St. Therese Merchandising) had authorized withdrawal of sugar
by Consolidated Sugar Corp. “for and in our (St. Therese Merchandising’s) behalf” should not be eyed as pointing to
the existence of an agency relation. Further, Consolidated Sugar Corp. has shown that the 25,000 bags of sugar
covered by the SLDR No. 1214M were sold and transferred by St. Therese Merchandising to it. A conclusion that there
was a valid sale and transfer to Consolidated Sugar Corp. may, therefore, be made thus capacitating Consolidated
Sugar Corp. to sue in its own name, without need of joining its imputed principal St. Therese Merchandising as co-
plaintiff.
Consolidated Sugar Corp. was a buyer of the SLDFR form, and not an agent of STM. Consolidated Sugar Corp. was
not subject to St. Therese Merchandising’s control. That no agency was meant to be established by the Consolidated
Sugar Corp. and STM is clearly shown by Consolidated Sugar Corp.’s communication to petitioner that SLDR No. 1214M
had been “sold and endorsed” to it.27 The use of the words “sold and endorsed” means that St. Therese Merchandising
and Consolidated Sugar Corp. intended a contract of sale, and not an agency.
Laureano T. Angeles vs. Philippine National Railways (PNR) and Rodolfo Flores, August 31, 2006 G.R.
No. 150128
Facts:
Respondent Philippine National Railways (PNR) informed a certain GaudencioRomualdez (Romualdez, hereinafter) that
it has accepted the latter’s offer to buythe PNR’s scrap/unserviceable rails located in Del Carmen and Lubao, Pampanga
at P1,300.00 and P2,100.00 per metric ton, respectively, for the total amount of P96,600.00. Romualdez paid the
purchase price and addressed a letter to Atty. CiprianoDizon, PNR’s Acting Purchasing Agent. The letter authorized
LIZETTE R. WIJANCOto be his (Romualdez) lawful representative in the withdrawal of the scrap/unserviceable rails
awarded to him. Furthermore, the original copy of the award which indicates the waiver of rights, interest and
participation in favor of Lizetter R. Wijanco was also given.
The Lizette R. Wijanco was petitioner's now deceased wife. That very same day, Lizette requested the PNR to transfer
the location of withdrawal for the reason that the scrap/unserviceable rails located in Del Carmen and Lubao,
Pampanga were not ready for hauling.The PNR granted said request and allowed Lizette to withdraw
scrap/unserviceable rails in Murcia, Capas and San Miguel, Tarlac instead. However, PNR subsequently suspended the
withdrawal in view of what it considered as documentary discrepancies coupled by reported pilferages of over
P500,000.00 worth of PNR scrap properties in Tarlac.Consequently, the spouses Angeles demanded the refund of the
amount of P96,000.00. The PNR, however, refused to pay, alleging that as per delivery receipt duly signed by Lizette,
54.658 metric tons of unserviceable rails had already been withdrawn. The spouses Angeles filed suit against the PNR
for specific performance and damages before the Regional Trial Court. Lizette W. Angeles passed away and was
substituted by her heirs, among whom is her husband, herein petitioner Laureno T. Angeles.
The trial court, on the postulate that the spouses Angeles are not the real parties-in-interest, rendered judgment
dismissing their complaint for lack of cause of action. As held by the court, Lizette was merely a representative of
Romualdez in the withdrawal of scrap or unserviceable rails awarded to him and not an assignee to the latter's rights
with respect to the award. Petitioner appealed with the Court of Appeals which dismissed the appeal and affirmed that
of the trial court.
Issue:
Whether or not the CA erred in affirming the trial court's holding that petitioner and his spouse, as plaintiffs a quo,
had no cause of action as they were not the real parties-in-interest in this case.
Held:
No.The CA’s conclusion, affirmatory of that of the trial court, is that Lizette was not an assignee, but merely an agent
whose authority was limited to the withdrawal of the scrap rails, hence, without personality to sue.Where agency
exists, the third party's (in this case, PNR's) liability on a contract is to the principal and not to the agent and the
relationship of the third party to the principal is the same as that in a contract in which there is no agent. Normally,
the agent has neither rights nor liabilities as against the third party. He cannot thus sue or be sued on the contract.
Since a contract may be violated only by the parties thereto as against each other, the real party-in-interest, either as
plaintiff or defendant in an action upon that contract must, generally, be a contracting party.
The legal situation is, however, different where an agent is constituted as an assignee. In such a case, the agent may,
in his own behalf, sue on a contract made for his principal, as an assignee of such contract. The rulerequiring every
action to be prosecuted in the name of the real party-in-interest recognizes the assignment of rights of action and also
recognizesthat when one has a right assigned to him, he is then the real party-in-interest and may maintain an action
upon such claim or right.
WHEREFORE, the petition is DENIED and the assailed decision of the CA is AFFIRMED.Costs against the petitioner.
PURITA PAHUD, SOLEDAD PAHUD, and IAN LEE CASTILLA (represented by Mother and Attorney-in-Fact
VIRGINIA CASTILLA), Petitioners,
vs.
COURT OF APPEALS, SPOUSES ISAGANI BELARMINO and LETICIA OCAMPO, EUFEMIA SAN AGUSTIN-
MAGSINO, ZENAIDA SAN AGUSTIN-McCRAE, MILAGROS SAN AGUSTIN-FORTMAN, MINERVA SAN
AGUSTIN-ATKINSON, FERDINAND SAN AGUSTIN, RAUL SAN AGUSTIN, ISABELITA SAN AGUSTIN-
LUSTENBERGER and VIRGILIO SAN AGUSTIN, Respondents.
-spouses Pedro San Agustin and Agatona Genil were able to acquire a 246-square meter parcel of land situated in
Barangay Anos,
- Both died intestate, survived by their eight (8) children: respondents Eufemia, Raul, Ferdinand, Zenaida, Milagros,
Minerva, Isabelita and Virgilio.
-1992, Eufemia, Ferdinand and Raul executed a Deed of Absolute Sale of Undivided Shares5 conveying in favor of
petitioners (the Pahuds, for brevity) their respective shares from the lot they inherited from their deceased parents
for P525,000.00- Eufemia also signed the deed on behalf of her four (4) other co-heirs, namely: Isabelita on the basis
of a special power of attorney executed on September 28, 1991 and also for Milagros, Minerva, and Zenaida but
without their apparent written authority.8 The deed of sale was also not notarized.
- When Eufemia and her co-heirs drafted an extra-judicial settlement of estate to facilitate the transfer of the title to
the Pahuds, Virgilio refused to sign it.15
-Virgilio’s co-heirs filed a complaint16 for judicial partition of the subject property before the RTC
In the course of the proceedings for judicial partition, a Compromise Agreement17 was signed with seven
(7) of the co-heirs agreeing to sell their undivided shares to Virgilio for P700,000.00.
-The trial court did however, not approve compromise agreement. Eufemia and her six (6) co-heirs, refused
to sign the agreement because he knew of the previous sale made to the Pahuds.18lawphil.net
-On December 1, 1994, Eufemia acknowledged having received P700,000.00 from Virgilio.
Virgilio then sold the entire property to spouses Isagani Belarmino and Leticia Ocampo (Belarminos)
-Belarminos immediately constructed a building on the subject property.
-Pahuds immediately confronted Eufemia who confirmed to them that Virgilio had sold the property to the Belarminos.
-Pahuds filed a complaint in intervention21 in the pending case for judicial partition.1avvphil
After trial, the RTC upheld the validity of the sale to petitioners
-sale of the 7/8 portion of the property cover
-declaring the defendant Virgilio San Agustin and the Third-Party defendants spouses Isagani and Leticia
Belarmino as in bad faith in buying the portion of the property already sold by the plaintiffs
respondents appealed the decision to the CA arguing, in the main, that the sale made by Eufemia for and on behalf
of her other co-heirs to the Pahuds should have been declared void and inexistent for want of a written auth
-REVERSED and SET ASIDE, and a new one entered, as follows:
Declaring the sale of appellant Virgilio San Agustin to appellants spouses, Isagani and Leticia Belarmino[,] as valid
and binding
Issue: The status of the sale of the subject property by Eufemia and her co-heirs to the Pahuds
Article 1874 of the Civil Code plainly provides:
Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall
be in writing; otherwise, the sale shall be void.
Also, under Article 1878,25 a special power of attorney is necessary for an agent to enter into a contract by which the
ownership of an immovable property is transmitted or acquired, either gratuitously or for a valuable consideration.
A special power of attorney is necessary to enter into any contract by which the ownership of an immovable is
transmitted or acquired either gratuitously or for a valuable consideration
For the principal to confer the right upon an agent to sell real estate, a power of attorney must so express the powers
of the agent in clear and unmistakable language
Based on the foregoing, it is not difficult to conclude, in principle, that the sale made by Eufemia, Isabelita and her
two brothers to the Pahuds sometime in 1992 should be valid only with respect to the 4/8 portion of the subject
property. The sale with respect to the 3/8 portion, representing the shares of Zenaida, Milagros, and Minerva, is void
because Eufemia could not dispose of the interest of her co-heirs in the said lot absent any written authority from the
latter, as explicitly required by law. This was, in fact, the ruling of the CA.
While the sale with respect to the 3/8 portion is void by express provision of law and not susceptible to ratification,31 we
nevertheless uphold its validity on the basis of the common law principle of estoppel.
Art. 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and
cannot be denied or disproved as against the person relying thereon.
True, at the time of the sale to the Pahuds, Eufemia was not armed with the requisite special power of attorney to
dispose of the 3/8 portion of the property.
however, they admitted that they had indeed sold 7/8 of the property to the Pahuds sometime in 1992.33 Thus, the
previous denial was superseded, if not accordingly amended, by their subsequent admission.
hey opted to remain silent and left the task of raising the validity of the sale as an issue to their co-heir, Virgilio, who
is not privy to the said transaction
By their continued silence, Zenaida, Milagros and Minerva have caused the Pahuds to believe that they have indeed
clothed Eufemia with the authority to transact on their behalf. Clearly, the three co-heirs are now estopped from
impugning the validity of the sale from assailing the authority of Eufemia to enter into such transaction.
Belaraminos cannot argued that they purchased the property in good faith.
WHEREFORE, premises considered, the April 23, 2003 Decision of the Court of Appeals as well as its October 8, 2003
Resolution in CA-G.R. CV No. 59426, are REVERSED and SET ASIDE.
sale made by respondent Virgilio San Agustin to respondent spouses Isagani Belarmino and Leticia Ocampo is valid
only with respect to the 1/8 portion of the subject property
1 The essential elements of agency are: (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 agent acts as a representative and not
for himself, and (4) the agent acts within the scope of his authority.
SPOUSES FERNANDO & LOURDES VILORIA
vs. CONTINENTAL AIRLINES, INC. (CAI), GR No. 188288 (16 January 2012)
FACTS
Fernando agreed to buy airline tickets on board CAI after Margaret Mager of Holiday Travel (HT) agency informed him
that there were no available seats at Amtrak. Subsequently, Fernando requested Mager to reschedule their flight.
Mager informed him that flights to Newark, New Jersey, USA via CAI were fully booked and offered the alternative
flight via Frontier Air. Since alternative flight would be more costly and would mean traveling by night, Fernando opted
to request for a refund. Mager denied his request as said tickets were non-refundable. When Fernando saw an Amtrak
station nearby, he made inquiries and was told that there were seats available anytime. Fernando confronted Mager
with the Amtrak tickets, telling her that she had misled them into buying CAI tickets by misrepresenting that Amtrak
was already fully booked. Fernando reiterated his demand for a refund but Mager denied it.
Fernando sent a letter to CAI demanding a refund. Continental Micronesia denied his request and advised him that he
may take said tickets to any CAI ticketing location for re-issuance of new tickets. When Fernando went to CAI’s
ticketing office to have the tickets replaced by a single round trip ticket to Los Angeles under his name, he was
informed that Lourdes’ ticket was non-transferable, thus, cannot be used for the purchase of a ticket in his favor.
Sps. Viloria filed a complaint against CAI. CAI interposed, among other things, that it should not be liable for Mager’s
acts because she was not a CAI employee. Citing Articles 1868 and 1869 of the Civil Code, RTC-Antipolo City ruled
that Mager was CAI’s agent, hence, bound by her bad faith and misrepresentation.
On appeal, the Court of Appeals (CA) reversed RTC-Antipolo City’s decision and ruled that CAI cannot be held liable
for Mager’s act in the absence of any proof that a principal-agent relationship existed between CAI and HT, as the
contract was not an agency but that of a sale. Hence, this petition.
ISSUE
Whether or not a principal-agent relationship existed between CAI and Holiday Travel; and assuming that an agency
relationship existed between the two, would CAI be bound by the acts of HT’s agents and employees such as Mager?
HELD
Yes. SC ruled that there was principal-agent relationship because all the elements of an agency1 existed between CAI
and HT. The first and second elements were present as CAI did not deny that it concluded an agreement with HT,
whereby the latter would enter into contracts of carriage with third persons on CAI’s behalf. The third element was
present as it was undisputed that HT merely acted in a representative capacity and it was CAI and not HT who was
bound by the contracts of carriage entered into by the latter on its behalf. The fourth element was also present
considering that CAI had not made any allegation that HT exceeded the authority that was granted to it. In fact, CAI
Agency is basically personal, representative, and derivative in nature. The authority of the agent to act emanates from the
powers granted to him by his principal; his act is the act of the principal if done within the scope of the authority. Qui facit
per alium facit se. "He who acts through another acts himself." As categorically provided under Article 1869 of the Civil
Code, "[a]gency may be express, or implied 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."
consistently maintained validity of the contracts of carriage that HT executed with Sps. Viloria and that Mager was not
guilty of fraudulent misrepresentation.
SC, as early as 1970, had already formulated the guidelines that would aid in differentiating the two contracts. In
Commissioner of Internal Revenue v. Constantino, SC extrapolated that the primordial differentiating consideration
between the two contracts is the transfer of ownership or title over the property subject of the contract. In an agency,
the principal retains ownership and control over the property and the agent merely acts on the principal’s behalf and
under his instructions in furtherance of the objectives for which the agency was established. On the other hand, the
contract is clearly a sale if the parties intended that the delivery of the property will effect a relinquishment of title,
control and ownership in such a way that the recipient may do with the property as he pleases. That the principal is
bound by all the obligations contracted by the agent within the scope of the authority granted to him is clearly provided
under Article 1910 of the Civil Code and this constitutes the very notion of agency.
As to the subsequent issue on whether or not CAI would be bound by the acts of HT’s agents, SC mentioned that an
examination of its pronouncements in China Air Lines, Ltd. v. Court of Appeals, et al. [264 Phil 15 (1990)] will reveal
that an airline company is not completely exonerated from any liability for the tort committed by its agent’s employees.
A prior determination of the nature of the passenger’s cause of action is necessary. If the passenger’s cause of action
against the airline company is premised on culpa aquiliana or quasi-delict for a tort committed by the employee of the
airline company’s agent, there must be an independent showing that the airline company was at fault or negligent or
has contributed to the negligence or tortuous conduct committed by the employee of its agent. The mere fact that the
employee of the airline company’s agent has committed a tort is not sufficient to hold the airline company liable. There
is no vinculum juris between the airline company and its agent’s employees and the contractual relationship between
the airline company and its agent does not operate to create a juridical tie between the airline company and its agent’s
employees. Article 2180 of the Civil Code does not make the principal vicariously liable for the tort committed by its
agent’s employees and the principal-agency relationship per se does not make the principal a party to such tort; hence,
the need to prove the principal’s own fault or negligence.
On the other hand, if the passenger’s cause of action for damages against the airline company is based on contractual
breach or culpa contractual, it is not necessary that there be evidence of the airline company’s fault or negligence. As
SC stated in China Air Lines, "in an action based on a breach of contract of carriage, the aggrieved party does not
have to prove that the common carrier was at fault or was negligent. All that he has to prove is the existence of the
contract and the fact of its non-performance by the carrier."
SC denied the petition.
G.R. No. 144805 June 8, 2006
LINTONJUA, JR. vs. ETERNIT CORPORATION
Facts: The Eternit Corporation (EC) manufactures roofing materials and pipe products. Ninety (90%) percent of the
shares of stocks of EC were owned by Eteroutremer S.A. Corporation (ESAC), a corporation registered under the laws
of Belgium. Glanville was the General Manager and President of EC, while Delsaux was the Regional Director for Asia
of ESAC. In 1986, because of the political situation in the Philippines the management of ESAC wanted to stop its
operations and to dispose the land in Mandaluyong City. They engaged the services of realtor/broker Lauro G. Marquez.
Marquez thereafter offered the land to Eduardo B. Litonjua, Jr. for P27,000,000.00. Litonjua counter offered
P20,000,000.00 cash. Marquez apprised Glanville & Delsaux of the offer. Delsaux sent a telex stating that, based on
the "Belgian/Swiss decision," the final offer was "US$1,000,000.00 and P2,500,000.00. The Litonjua brothers deposited
US$1,000,000.00 with the Security Bank & Trust Company, and drafted an Escrow Agreement to expedite the sale.
Meanwhile, with the assumption of Corazon C. Aquino as President, the political situation improved. Marquez received
a letter from Delsaux that the ESAC Regional Office decided not to proceed with the sale. When informed of this, the
Litonjuas, filed a complaint for specific performance and payment for damages on account of the aborted sale. Both
the trial court and appellate court rendered judgment in favor of defendants and dismissed the complaint.
The lower court declared that since the authority of the agents/realtors was not in writing, the sale is void and not
merely unenforceable.
Issue: WON the appellate court committed grave error of law in holding that Marquez needed a written authority from
respondent ETERNIT before the sale can be perfected.
Held: Respondents maintain that Glanville, Delsaux and Marquez had no authority from the stockholders of EC and its
Board of Directors to offer the properties for sale to the petitioners.
Petitioners assert that there was no need for a written authority from the Board of Directors of EC for Marquez to
validly act as broker. As broker, Marquez was not an ordinary agent because his only job as a broker was to look for
a buyer and to bring together the parties to the transaction. He was not authorized to sell the properties; hence,
petitioners argue, Article 1874 of the New Civil Code does not apply.
A corporation is a juridical person separate and distinct from its stockholders and is not affected by the personal rights,
obligations and transactions of the latter. It may act only through its board of directors or, when authorized by its
board resolution, through its officers or agents. The general principles of agency govern the relation between the
corporation and its officers or agents, subject to the articles of incorporation, by-laws, or relevant provisions of law.
Agency may be oral unless the law requires a specific form. However, to create or convey real rights over immovable
property, a special power of attorney is necessary. Thus, when a sale of a piece of land or any portion thereof is
through an agent, the authority of the latter shall be in writing, otherwise, the sale shall be void.
In this case, the petitioners failed to adduce in evidence any resolution of the Board of Directors of EC empowering
Marquez, Glanville or Delsaux as its agents, to sell, let alone offer for sale, for and in its behalf, the eight parcels of
land owned by it.
Moreover, the evidence of petitioners shows that Adams and Glanville acted on the authority of Delsaux, who, in turn,
acted on the authority of ESAC, through its Committee for Asia, and the Belgian/Swiss component of the management
of ESAC. The offer of Delsaux emanated only from the "Belgian/Swiss decision," and not the entire management or
Board of Directors of ESAC. While it is true that petitioners accepted the counter-offer of ESAC, EC was not a party to
the transaction between them; hence, EC was not bound by such acceptance. Decision of the lower court is affirmed.