A Compilation of all Cases for Agency Systems in said transaction. Art. 1897.
The agent who
Case: Eurotech Industrial Technologies, Inc. vs Cuizon
FACTS:
Eurotech is engaged in the business of
importation and distribution of various European
industrial equipment. It has as one of its customers
Impact Systems Sales which is a sole proprietorship
ownedby Erwin Cuizon. Eurotech sold to Impact Systems
various products allegedly amounting to P91, 338. 00.
Cuizons sought to buy from Eurotech 1 unit of sludge
pump valued at P250, 000. 00 with Cuizons making a
down payment of P50, 000. 00. When the sludge pump
arrived from the United Kingdom, Eurotech refused to
deliver the same to Cuizons without their having fully
settled their indebtedness to Eurotech. Thus, Edwin
Cuizon and Alberto de Jesus, general manager of
Eurotech, executed a Deed of Assignment of receivables
in favor of Eurotech Cuizons, despite the existence of the
Deed of Assignment, proceeded to collect from Toledo
Power Company the amount of P365,135.29. Eurotech
made several demands upon Cuizons to pay their
obligations. As a result, Cuizons were able to make
partial payments to Eurotech. Cuizons’ total obligations
stood at P295,000.00 excluding interests and attorney’s
fees. Edwin Cuizon alleged that he is not a real party in
interest in this case. According to him, he was acting as
mere agent of his principal, which was the Impact
Systems, in his transaction with Eurotech and the latter
was very much aware of this fact.
ISSUE:
WON Edwin exceeded his authority when he signed the
Deed of Assignment thereby binding himself personally
to pay the obligations to Eurotech
HELD:
No. Edwin insists that he was a mere agent of Impact
Systems which is owned by Erwin and that his status as
such is known even to Eurotech as it is alleged in the
Complaint that he is being sued in his capacity as the
sales manager of the said business venture. Likewise,
Edwin points to the Deed of Assignment which clearly
states that he was acting as a representative of Impact
acts as such is not personally liable to the party with
whom he contracts, unless he expressly binds himself or
exceeds the limits of his authority without giving such
party sufficient notice of his powers. In a contract of
agency, a person binds himself to render some service or
to do something in representation or on behalf of
another with the latter’s consent. Its purpose is to
extend the personality of the principal or the party for
whom another acts and from whom he or she derives
the authority to act. The basis of agency is
representation, that is, the agent acts for and on behalf
of the principal on matters within the scope of his
authority and said acts have the same legal effect as if
they were personally executed by the principal elements
of the contract of agency: (1) 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; (4) the agent acts within the scope of his
authority. An agent, who acts as such, is not personally
liable to the party with whom he contracts. There are
2instances when an agent becomes personally liable to a
third person. The first is when he expressly binds himself
to the obligation and the second is when he exceeds his
authority. In the last instance, the agent can be held
liable if he does not give the third party sufficient notice
of his powers. Edwin does not fall within any of the
exceptions contained in Art. 1897. In the absence of an
agreement to the contrary, a managing agent may enter
into any contracts that he deems reasonably necessary
or requisite for the protection of the interests of his
principal entrusted to his management. Edwin Cuizon
acted well-within his authority when he signed the Deed
of Assignment. Eurotech refused to deliver the 1 unit of
sludge pump unless it received, in full, the payment for
Impact Systems’ indebtedness. Impact Systems
desperately needed the sludge pump for its business
sinc eafter it paid the amount of P50,000.00 as down
payment it still persisted in negotiating with Eurotech
which culminated in the execution of the Deed of
Assignment of its receivables from Toledo Power
Company. The significant amount of time spent on the
negotiation for the sale of the sludge pump underscores
Impact Systems' perseverance to get hold of the said
equipment. Edwin's participation in the Deed of
Assignment was reasonably necessary or was required n
order for him to protect the business of his principal.
Case: Orient Air Services &Hotel Representatives vs 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. solicit
and promote passenger traffic for the services of
American and if necessary, employ staff competent 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.
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 stocket 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.
Case: Litonjua vs Eternit Corp.
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.
forP27,000,000.00. 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 andP2,500,000.00. 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 notin writing, the
sale is void and not merely unenforceable
Issue:Whether or not Marquez, Glanville, and Delsaux
were authorized by respondent EC to act as its agents
relative to the sale of the properties of respondent EC
Ruling:
NO. A corporation is a juridical person separate and
distinct from its members or 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 either by its by-
laws or by its board resolution, through its officers or
agents in the normal course of business. 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.
While a corporation may appoint agents to negotiate for
the sale of its real properties, the final say will have to be
with the board of directors through its officers and
agents as authorized by a board resolution or by its by-
laws. An unauthorized act of an officer of the
corporation is not binding on it unless the latter ratifies
the same expressly or impliedly by its board of directors.
Any sale of real property of a corporation by a person
purporting to be an agent thereof but without written
authority from the corporation is null and void. The
declarations of the agent alone are generally insufficient
to establish the fact or extent of his/her authority.
Case: Doles v Angeles | 492 SCRA 607 | 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: Whether or not petitioner and respondent were
acting on their personal capacity or as mere agents.
Ruling:
The question of whether an agency has been created is
ordinarily a question which may be established in the
same way as any other fact, either by direct or
circumstantial evidence. Though that 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 professes to act as agent for another, she may be
estopped 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 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 whom she referred to respondent.
For an agency to arise, it is not necessary that the
principal personally encounter the third person with
whom the agent interacts. The law in fact contemplates,
and to a great degree, impersonal dealings where the
principal need not personally know or meet the third
person with whom her agent transacts: precisely, the
purpose of agency is to extend the personality of the
principal through the facility of the agent. If the
principals do not actually and personally know each
other, such ignorance does not affect their juridical
standing as agents.
Case: Air France vs. Court of Appeals, 126 SCRA 448
(1983)
Facts:
Sometime in, February 1970, the late Jose Gana
and Family purchased from petitioner through Imperial
Travels 9 “open dated” passage tickets for the
Manila/Osaka/Tokyo/ Manila route. On, April 1970,
petitioner exchanged or substituted the tickets with
other tickets for the same route. The aforesaid tickets
were valid until May 8, 1971.
Jose Gana sought for extension of the validity of
the tickets which were due to expire on May 1971 to the
Office Manager of petitioner. The tickets were returned
and was informed that the extension is impossible. The
Ganas departed on May 7, notwithstanding that the
tickets will no longer be valid on May 8, 1971.
On May 17, Japan Airlines refused to honor their
tickets because they had expired and the Ganas had to
purchase new tickets, at their return trip to Manila
petitioner likewise refuse their tickets. They were only
able to return after repayment in Manila by their
relatives.
The Ganas commenced before the court of
Manila Civil case for damage arising from breach of
contract; petitioner alleged that the Ganas brought upon
themselves the predicament and assume the
consequential risks and petitioner was not guilty of bad
faith or any fraudaulent act. On appeal Jose Ganas, died
The CA ruled in favor of the Ganas with moral damages
amounting to Php 90,000. Hence this petition.
Issue: Whether or not, under the environmental milieu
the GANAS have made out a case for breach of contract
of carriage entitling them to an award of damages.
Ruling: No, the CA erred in ruling. Pursuant to tariff rules
and regulations of the International Air Transportation
Association (IATA),
"The passenger must undertake the final portion
of his journey by departing from the last point at which
he has made a voluntary stop before the expiry of this
limit (parag. 3.1.2. ) ... That is the time allowed a
passenger to begin and to complete his trip (parags. 3.2
and 3.3.). ... A ticket can no longer be used for travel if
its validity has expired before the passenger completes
his trip (parag. 3.5.1.) ... To complete the trip, the
passenger must purchase a new ticket for the remaining
portion of the journey"
The conclusion is inevitable that the GANAS
brought upon themselves the predicament they were in
for having insisted on using tickets that were due to
expire in an effort, perhaps, to beat the deadline and in
the thought that by commencing the trip the day before
the expiry date, they could complete the trip even
thereafter. It should be recalled that AIR FRANCE was
even unaware of the validating SAS and JAL. stickers that
Ella had affixed spuriously. Consequently, Japan Air Lines
and AIR FRANCE merely acted within their contractual
rights when they dishonored the tickets on the
remaining segments of the trip and when AIR FRANCE
demanded payment of the adjusted fare rates and travel
taxes for the Tokyo/Manila flight.
Case: INLAND REALTY V. CA, G.R. No. 76969, June 9,
1997
FACTS: Petitioner Inland Realty Investment Service, Inc.
(Inland Realty) is a corporation engaged in the real
estate business and brokerages. Respondent Gregorio
Araneta Inc. granted Inland Realty the authority to sell
on a first come first serve basis the total holdings of
Gregorio Araneta Inc. equivalent to 98% or 9,800 shares
of stock at P1, 500 per share for 30 days.
Inland Realty finally sold the 9,800 shares of stock in
Architects’ Bldg., Inc. to Stanford Microsystems, Inc. for
P13.5M. Thereafter, Inland Realty sent a demand letter
to Gregorio Araneta Inc., for the payment of their 5%
broker’s commission (P675,000), which was declined by
respondent, claiming that after their authority to sell
expired thirty (30) days from December 2, 1975,
petitioners were no longer privy to the consummation of
the sale.
ISSUE: Whether or not Inland Realty is entitled for the
5% broker’s commission.
RULING: NO. The Court ruled that since Inland Realty
was not the efficient procuring cause in bringing about
the sale on July 8, 1977, therefore it is not entitled to the
5% broker’s commission. During the subsistence of its
authority to sell, Inland hand nothing to show the they
performed substantial acts that proximately and
causatively led to the consummation of the sale to
Stanford of Araneta, Inc.’s 9,800 shares in Architect’s
Inland Realty failed in selling said shares under the terms
and conditions set out by Araneta, Inc.; it did nothing but
submit Stanford’s name as prospective buyer.
The lapse of more than one year and five months
between the expiration of the petitioner’s authority to
sell and the consummation of the sale to Stanford shows
the petitioner’s non-participation in the crucial events
leading to the consummation of said sale, i.e., the
negotiations to convince Stanford to sell at Araneta,
Inc.’s asking price, the finalization of the terms and
conditions of the sale, the drafting of the deed of sale,
the processing of the pertinent documents and the
delivery of the shares of stock to Stanford.
MANOTOK BROTHERS, INC. v CA, GR 94753, 7 Apr 1993
FACTS:
The petitioner is the owner of a parcel of land
and building. The petitioner authorized Salvador
Saligumba within 180 days to negotiate with the City of
Manila the sale of the aforementioned property for
410,000.00, and that Saligumba would receive a 5%
commission in the event the sale is finally consummated
and paid. An Ordinance was approved on 26 April 1968
and was signed by the City Mayor appropriating
P410.816.00 to purchase the property 183 days after the
authorization of Saligumba. Notwithstanding the
realization of the sale, private respondent never
received any commission, which should have amounted
to P20,554.50. This was due to the refusal of petitioner
to pay private respondent said amount as the former
does not recognize the latter's role as agent in the
transaction.
ISSUE: Is Saligumba entitled to his commission?
RULING: In an earlier case, this Court ruled that when
there is a close, proximate and causal connection
between the agent's efforts and labor and the principal's
sale of his property, the agent is entitled to a
commission. We agree with respondent Court that the
City of Manila ultimately became the purchaser of
petitioner's property mainly through the efforts of
private respondent. Without discounting the fact that
when Municipal Ordinance No. 6603 was signed by the
City Mayor on May 17, 1968, private respondent's
authority had already expired, it is to be noted that the
ordinance was approved on April 26, 1968 when private
respondent's authorization was still in force. Moreover,
the approval by the City Mayor came only three days
after the expiration of private respondent's authority. It
is also worth emphasizing that from the records, the
only party given a written authority by petitioner to Issue: Whether or not there was a contract of agency
negotiate the sale from July 5, 1966 to May 14, 1968 between lines and spaces interior center and
was private respondent. respondent (Tri-Realty).

Ruling: No. There is a dearth of evidence to show that

the case at bar is an open-and-shut case of agency
Case: Amon Trading Corp. vs. Court of Appeals, 477 SCRA between private respondent and Lines & Spaces. Neither
552 (2005) Eleanor Sanchez nor Lines & Spaces was an agent for
private respondent, but rather a supplier for the latter’s
Facts:
cement needs. The Civil Code defines a contract of
Respondent Tri-realty a developer and agency as follows:
contractor had difficulty purchasing cements needed for
Art. 1868. By the contract of agency, a person binds
its project, as represented by Sanchez of Lines and
himself to render some service or to do something in
Spaces, respondent was able to purchase 6.050 bags of
representation or on behalf of another, with the consent
cement from petitioner and 6,000 from Juliana
or authority of the latter.
marketing, the former’s sister company.
In a bevy of cases such as the avuncular case of Victorias
Respondents, through Sanchez paid through 2
Milling Co., Inc. v. Court of Appeals, the Court decreed
Manager’s checks payable to Amon Trading and Juliana
from Article 1868 that the basis of agency is
marketing. Respondent also paid to Lines & Spaces in
representation.
consideration of the facilitation of the orders and
certainty of delivery of the same to the private . . . On the part of the principal, there must be an actual
respondent in consideration of the facilitation of the intention to appoint or an intention naturally inferable
orders and certainty of delivery of the same to the from his words or actions and on the part of the agent,
private respondent. there must be an intention to accept the appointment
and act on it, and in the absence of such intent, there is
During the period of 1992 a total of 5,200 bags
generally no agency. One factor which most clearly
from Amon and Juliana weren’t delivered. Respondent
distinguishes agency from other legal concepts is
sent petitioners written demands but in reply,
control; one person - the agent - agrees to act under the
petitioners stated that they have already refunded the
control or direction of another - the principal. Indeed,
amount of undelivered bags of cement to Lines and
the very word "agency" has come to connote control by
Spaces per written instructions of Eleanor Sanchez.
the principal. The control factor, more than any other,
News reached that Sanchez had already fled abroad.
has caused the courts to put contracts between principal
Petitioners plead in defense lack of right or and agent in a separate category.
cause of action, alleging that private respondent had no
The fact that the deliveries were made at the
privity of contract with them as it was Lines &
construction sites of private respondent does not by
Spaces/Tri-Realty, through Mrs. Sanchez, that ordered or
itself raise suspicion that petitioners were delivering for
purchased several bags of cement and paid the price
private respondent. There was no sufficient showing
thereof without informing them of any special
that petitioners knew that the delivery sites were that of
arrangement nor disclosing to them that Lines & Spaces
private respondent and for another thing, the deliveries
and respondent corporation are distinct and separate
were made by petitioners’ men who have no business
entities. Lines and Spaces in its defense raised that
nosing around their client’s affairs.
Sanchez was only an intermediary.

RTC found Line & Spaces solely liable and

absolved petitioners. Private Respondent Tri-Realty
partially appealed from the trial court’s decision
absolving Amon Trading Corporation and Juliana
Marketing of any liability to Tri-Realty.
Case: Republic vs. Evangelista, 466 SCRA 544 (2005) for its irrevocability is because the agency becomes part
of another obligation or agreement. It is not solely the
rights of the principal but also that of the agent and third
FACTS: persons which are affected. Hence, the law provides that
Legaspi is the owner of a land. Calimlim as then head of in such cases, the agency cannot be revoked at the sole
the Intelligence Service of the Armed Forces of the will of the principal.
Philippines and the Presidential Security Group, entered
In the case at bar, we agree with the finding of the trial
into a Memorandum of Agreement (MOA) with one
and appellate courts that the agency granted by Legaspi
Ciriaco Reyes; the MOA granted Reyes a permit to hunt
to Gutierrez is coupled with interest as a bilateral
for treasure in a land in Bulacan. Legaspi executed a
contract depends on it. It is clear from the records that
special power of attorney (SPA) appointing his nephew,
Gutierrez was given by Legaspi, inter alia, the power to
private respondent Gutierrez, as his attorney-in-fact.
manage the treasure hunting activities in the subject
Gutierrez was given the power to deal with the treasure
land; to file any case against anyone who enters the land
hunting activities on Legaspi’s land and to file charges
without authority from Legaspi; to engage the services
against those who may enter it without the latter’s
of lawyers to carry out the agency; and, to dig for any
authority.
treasure within the land and enter into agreements
Gutierrez filed a case for damages and injunction against relative thereto. It was likewise agreed upon that
petitioners for illegally entering Legaspi’s land. Gutierrez shall be entitled to 40% of whatever treasure
may be found in the land.
Legaspi agreed to give Gutierrez 40% of the treasure
that may be found in the land. Petitioners filed a Motion
to Dismiss contending: that there is no real party-in-
Equitable PCI-Bank vs. Ku, 355 SCRA 309 (2001)
interest as the SPA of Gutierrez to bring the suit was
already revoked as evidenced by a Deed of Revocation, FACTS:
among others. Petitioner instituted an action for against respondents
father Ku Giok Heng. Petitioner alleged that it allowed Ku
ISSUE: Giok Heng to remain in the property on the condition
that the latter pay rent. Ku Giok Hengs failure to pay rent
Whether the contract of agency between Legaspi and prompted the MeTC to seek his ejectment.
private respondent Gutierrez has been effectively
revoked by Legaspi. Equitable Bank filed its petition, contending that there
was no need to name respondent Rosita Ku as a party in
the action for ejectment since she was not a resident of
the premises nor was she in possession of the property.
HELD:
CA agrees.
Gutierrez was correct in contending that the unilateral
Respondent nevertheless claims that the petition is
revocation is invalid as his agency is coupled with
defective. The bank alleged in its petition that it received
interest.
a copy of the CA decision.A Certification issued by the
A contract of agency is generally revocable as it is a
Manila Central Post Office reveals, however, that the
personal contract of representation based on trust and
copy was duly delivered to and received by Joel Rosales
confidence reposed by the principal on his agent. As the
(Authorized Representative). Petitioners motion for
power of the agent to act depends on the will and
extension to file this petition was filed sixteen (16) days
license of the principal he represents, the power of the
from the petitioners receipt of the CA decision and one
agent ceases when the will or permission is withdrawn
(1) day beyond the reglementary period for filing the
by the principal. Thus, generally, the agency may be
petition for review.
revoked by the principal at will.
Petitioner however maintains its honest representation
However, an exception to the revocability of a contract
of having received [a copy of the decision]. Appended as
of agency is when it is coupled with interest, i.e., if a
Annex A to petitioners Reply is an Affidavit and executed
bilateral contract depends upon the agency. The reason
by Joel Rosales, who was mentioned in the Certification
as having received the decision.
ISSUE:
Was Joel Rosales the constituted agent of of Curato
Divina Mabilog Nedo Magturo Pagaduan Law Office?
HELD:
NO. An agency may be express but it may also be 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. Likewise, acceptance by the agent may also be
express, although it may also be implied from his acts
which carry out the agency, or from his silence or
inaction according to the circumstances. In this case,
Joel Rosales averred that [o]n occasions when I receive
mail matters for said law office, it is only to help them
receive their letters promptly, implying that counsel had
allowed the practice of Rosales receiving mail in behalf
of the former. There is no showing that counsel had
objected to this practice or took steps to put a stop to it.
The facts are, therefore, inadequate for the Court to
make a ruling in petitioners favor.
Case: British Airways v CA
FACTS:
Mahtani obtain the services of Mr Gunmar as his travel
planner who then purchased an airline ticket from
Bristish Airwarys bound to Bombay. However, there’s no
direct flight to Bombay, so the ticket was connecting
flight via Hongkong with PAL. When Mahtani arrived in
Bombay, his luggage was missing and upon inquiry from
BA representatives, he was told that it might have been
diverted to London. Back in the Philippines, he filed a
complaint for damages and attorney’s fees against BA
and Mr Gunmar. BA then filed a third-party complaint
against PAL. The trial court rendered its decision in favor
of Mahtani for the award of damages but the third party
complaint against PAL was dismissed and was affirmed
by CA.
ISSUE:
Whether or not the dismissal of the third party
complaint against PAL is correct and that BA will bear
the loss.
HELD:
No. Undeniably, for the loss of his luggage,
Mahtani is entitled to damages from BA, in view of their
contract of carriage. It’s worth observing that the
contract of air transportation was exclusively between
Mahtani and BA, the latter merely endorsing the Manila
to Hongkong leg of the formers journey to PAL, as its
subcontractor or agent. It is undisputed that PAL, in
transporting Mahtani from Manila to Hongkong acted as
the agent of BA. It is a well-settled rule that an agent is
also responsible for any negligence in the performance
of its function and is liable for damages which the
principal may suffer by reason of its negligent act.
Hence, the CA erred when it opined that BA, being the
principal, had no cause of action against PAL, its agent or
subcontractor. As both BA and PAL are members of IATA
(international Air Transport Association) wherein
member airlines are regarded as agents of each other in
the issuance of tickets and other matters pertaining to
their relationship. Therefore, in the instant case, the
contractual relationship between BA and PAL is one of
agency, the former being the principal, since it was the
one who issued the confirmed ticket, and the latter the
agent.
Case: Murao vs People, GR No. 141485, June 30, 2005
Facts:
Murao and private complainant Chito Federico entered
into a Dealership Agreement for the marketing,
distribution, and refilling of fire extinguishers. Federico,
as a dealer for LMICE, could obtain fire extinguishers
from LMICE at a 50% discount, provided that he sets up
his own sales force, acquires and issues his own sales
invoice, and posts a bond with LMICE as security for the
credit line extended to him by LMICE.
Private complainant Federico claimed that he was
entitled to a commission equivalent to 50% of the gross
sales he had made on behalf of LMICE,while petitioners
maintained that he should receive only 30% of the net
sales.Since private complainant Federico helped in
establishing the LMICE branch office in Puerto Princesa
City, he was to receive the same commission as the full-
time sales agents of LMICE, which was 30% of the net
sales.
Federico, on behalf of LMICE, subsequently facilitated a
transaction with the City Government of Puerto Princesa
for the refill of 202 fire extinguishers. Because of the
considerable cost, the City Government of Puerto
Princesa requested that the transaction be split into two
purchase orders, and the City Government of Puerto
Princesa shall pay for each of the purchase orders
separately.
The subject of this Petition is limited to the first
purchase order, for the refill of fire extinguishers. The
City Government of Puerto Princesa issued Check to
LMICE to pay for Purchase.Petitioner Huertazuela
claimed Check from the City Government of Puerto
Princesa and deposited it under the current account of
LMICE with PCIBank.
Private complainant Federico went to see petitioner
Huertazuela at the LMICE to demand for his commission
from the payment by the City Government of Puerto
Princesa. Petitioner Huertazuela, however, refused to
pay private complainant Federico his commission since
the two of them could not agree on the proper amount
thereof.
Issue: Whether the court erred when it uphold private
complainant's claim that he is entitled to a 50%
commission and he is a joint owner of the money.
Ruling:
Yes. his right to a commission does not make
private complainant Federico a joint owner of the
money but merely establishes the relation of agent and
principal.It is unequivocal that an agency existed
between LMICE and private complainant Federico.
Although private complainant Federico never had the
opportunity to operate as a dealer for LMICE under the
terms of the Dealership Agreement, he was allowed to
act as a sales agent for LMICE. He can negotiate for and
on behalf of LMICE for the refill and delivery of fire
extinguishers, which he, in fact, did on two occasions
with Landbank and with the City Government of Puerto
Princesa. Unlike the Dealership Agreement, however,
the agreement that private complainant Federico may
act as sales agent of LMICE was based on an oral
agreement.
All profits made and any advantage gained by an agent
in the execution of his agency should belong to the
principal.In the instant case, whether the transactions
negotiated by the sales agent were for the sale of brand
new fire extinguishers or for the refill of empty tanks,
evidently, the business belonged to LMICE.Private
complainant Federico may claim commission, allegedly
equivalent to 50% of the payment received by LMICE
from the City Government of Puerto Princesa, based on
his right to just compensation under his agency contract
with LMICE,but not as the automatic owner of the 50%
portion of the said payment.
NOTE:
Article 1868 of the Civil Code defines agency as a special
contract whereby 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.
Case: METROPOLITAN BANK & TRUST COMPANY VS.
COURT OF APPEALS
FACTS:
Eduardo Gomez opened an account with Golden Savings
and deposited over a period of two months 38 treasury
warrants. On various dates between June 25 and July 16,
1979, all these warrants were subsequently indorsed by
Gloria Castillo as Cashier of Golden Savings and
deposited to its Savings Account in Metrobank . They
were then sent for clearing by the branch office to the
principal office of Metrobank, which forwarded them to
the Bureau of Treasury for special clearing. More than
two weeks after the deposits, Gloria Castillo went to the
Calapan branch several times to ask whether the
warrants had been cleared. She was told to wait.
Accordingly, Gomez was meanwhile not allowed to
withdraw from his account. Later, however,
"exasperated" over Gloria's repeated inquiries and also
as an accommodation for a "valued client," the
petitioner says it finally decided to allow Golden Savings
to withdraw from the proceeds of the warrants.
According to Metrobank, the conditions on the deposit
slip clearly show that it was acting only as a collecting
agent for Golden Savings and give it the right to "charge
back to the depositor's account any amount previously
credited, whether or not such item is returned. This also
applies to checks ". . . which are unpaid due to
insufficiency of funds, forgery, unauthorized overdraft of
any other reason." It is claimed that the said conditions
are in the nature of contractual stipulations and became
binding on Golden Savings when Gloria Castillo, as its
Cashier, signed the deposit slips.
ISSUE:
Acting only as a collecting agent for Golden Savings, was
Metrobank acting only as a mere agent, thus cannot be
held liable to the principal?
HELD:
NO. Article 1909 of the Civil Code clearly
provides that “the agent is responsible not only for
fraud, but also for negligence, which shall be judged
'with more or less rigor by the courts, according to
whether the agency was or was not for a
compensation.” it was the clearance given by it that
assured Golden Savings it was already safe to allow
Gomez to withdraw the proceeds of the treasury
warrants he had deposited Metrobank misled Golden
Savings. There may have been no express clearance, as
Metrobank insists (although this is refuted by Golden
Savings) but in any case that clearance could be implied
from its allowing Golden Savings to withdraw from its
account not only once or even twice but three times.
Case: DBP v. CA, 231 SCRA 370, March 21, 1994
FACTS: Juan B. Dans applied for a loan of P500,000 with
DBP. Dans, 76 years of age was advised by DBP to obtain
a mortgage redemption insurance (MRI) with DBP MRI
pool. A loan in the reduced amount was approved and
released by DBP. From the proceeds of the loan, DBP
deducted the payment for the MRI premium. The MRI
premium of Dans, less the DBP service fee of 10%, was
credited by DBP to the savings account of DBP MRI-Pool.
Accordingly, the DBP MRI Pool was advised of the credit.
Dans died of cardiac arrest. DBP MRI Pool notified DBP
that Dans was not eligible for MRI coverage, being over
the acceptance age limit of 60 years at the time of
application. DBP apprised Candida Dans of the
disapproval of her late husband’s MRI application. DBP
offered to refund the premium which the deceased had
paid, but Candida Dans refused to accept the same
demanding payment of the face value of the MRI or an
amount equivalent of the loan. She, likewise, refused to
accept an ex gratia settlement which DBP later offered.
ISSUE: Whether or not the DBP MRI Pool should be held
liable on the ground that the contract was already
perfected?
RULING:
NO. The power to approve MRI application is
lodged with the DBP MRI Pool. The pool, however, did
not approve the application. There is also no showing
that it accepted the sum which DBP credited to its
account with full knowledge that it was payment for the
premium. There was as a result no perfected contract of
insurance, hence the DBP MRI Pool cannot be held liable
on a contract that does not exist.
In dealing with Dans, DBP was wearing 2 legal hats: the
first as a lender and the second as an insurance agent.
As an insurance agent, DBP made Dans go through the
motion of applying for said insurance, thereby leading
him and his family to believe that they had already
fulfilled all the requirements for the MRI and that the
issuance of their policy was forthcoming. DBP had full
knowledge that the application was never going to be
approved. The DBP is not authorized to accept
applications for MRI when its clients are more than 60
years of age. Knowing all the while that Dans was
ineligible for MRI coverage because of his advanced age,
DBP exceeded the scope of its authority when it
accepted Dan's application for MRI by collecting the
insurance premium, and deducting its agent's
commission and service fee.
Case: CERVANTES vs CA
Facts:
On March 27, 1989, the private respondent, Philippines
Air Lines, Inc. (PAL), issued to the herein petitioner,
Nicholas Cervantes (Cervantes), a round trip plane ticket
for Manila-Honolulu-Los Angeles-Honolulu-Manila,
which ticket expressly provided an expiry of date of one
year from issuance. The issuance of the said plane ticket
was in compliance with a Compromise Agreement
entered into between the contending parties in two
previous suits.
On March 23, 1990, four days before the expiry date of
subject ticket, the petitioner used it. Upon his arrival in
Los Angeles on the same day, he immediately booked his
Los Angeles-Manila return ticket with the PAL office, and
it was confirmed for the April 2, 1990 flight. Upon
learning that the same PAL plane would make a stop-
over in San Francisco, and considering that he would be
there on April 2, 1990, petitioner made arrangements
with PAL for him to board the flight in San Francisco
instead of boarding in Los Angeles. On April 2, 1990,
when the petitioner checked in at the PAL counter in San
Francisco, he was not allowed to board. The PAL
personnel concerned marked the following notation on
his ticket: TICKET NOT ACCEPTED DUE EXPIRATION OF
VALIDITY.
Aggrieved, petitioner Cervantes filed a Complaint for
Damages, for breach of contract.
Issue:
(1) Whether or not the act of the PAL agents in
confirming subject ticket extended the period of
validity of petitioners ticket.
Ruling:
Under Article 1898 of the New Civil Code, the
acts of an agent beyond the scope of his authority do
not bind the principal, unless the latter ratifies the same
expressly or impliedly. Furthermore, when the third
person (herein petitioner) knows that the agent was
acting beyond his power or authority, the principal
cannot be held liable for the acts of the agent. The
question on the validity of subject ticket can be resolved
in light of the ruling in the case of Lufthansa vs. Court of
Appeals. In ruling against the award of damages, the
Court held that the ticket constitute the contract
between the parties. It is axiomatic that when the terms
are clear and leave no doubt as to the intention of the
contracting parties, contracts are to be interpreted
according to their literal meaning.
If the said third person is 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. The plane ticket itself
provides that it is not valid after March 27, 1990. It is
also stipulated in paragraph 8 of their Conditions of
Contract.
(2) Whether or not the defense of lack of authority was
correctly ruled upon.
Ruling: The admission by Cervantes that he was told by
PALs legal counsel that he had to submit a letter
requesting for an extension of the validity of subject
tickets was tantamount to knowledge on his part that
the PAL employees had no authority to extend the
validity of subject tickets and only PALs legal counsel was
authorized to do so. However, notwithstanding PALs
failure to raise the defense of lack of authority of the
said PAL agents in its answer or in a motion to dismiss,
the omission was cured since the said issue was litigated
upon, as shown by the testimony of the petitioner in the
course of trial. Rule 10, Section 5 of the 1997 Rules of
Civil Procedure.
Thus, when evidence is presented by one party, with the
express or implied consent of the adverse party, as to
issues not alleged in the pleadings, judgment may be
rendered validly as regards the said issue, which shall be
treated as if they have been raised in the
pleadings. There is implied consent to the evidence thus
presented when the adverse party fails to object
thereto.
Case: Gold Mining Star v Lim-Jimena
FACTS:
Lincallo bound himself in writing to turn to
Victor Jimena 1/2 of the proceeds from all mining claims
which later included also the lands constituting the
same, and so as to bind thereby their heirs, assigns, or
legal representatives. Apparently, the mining rights over
part of the claims were assigned by Lincallo to Gold Star
Mining because the corporation paid a consideration of,
and as a quitclaim for, pre-war royalties. Several
occasions that mining claims were made subject matter
of contracts (assigning of interests, lease, etc) for
Lincallo’s own benefit alone without the slightest
intimation of Jimena's interests over the same. Jimena
then apprised and demanded from Gold Mining and
Marinduque Iron Mines for recognition and payment of
his share on the royalties but was ignored. Jimena
commenced a suit against Lincallo for recovery of his
advances and his one-half share in the royalties. Gold
Star Mining Co., Inc., and Marinduque Iron Mines, Inc.,
together with Tolentino(transferee of share from
Lincallo), were later joined as defendants. The TC issued
a writ of preliminary injunction restraining Gold Star
Mining and Marinduque Iron Mines from paying
royalties during the pendency of the case to Lincallo, his
assigns or legal representatives.TC rendered decision in
favor of Jimena which the CA affirmed.
ISSUE:
Whether or not Jimena has a cause of action
against Gold Star and Marinduque Iron Mines.
HELD:
Yes. It can be said that Lincallo, in transferring
the mining claims to Gold Star (without disclosing that
Jimena was a co-owner although Gold Star had
knowledge of the fact as shown by the proofs heretofore
mentioned) acted as Jimena's agent with respect to
Jimena's share of the claims. Under such conditions,
Jimena has an action against Gold Star, pursuant to
Article 1883, New Civil Code, which provides that the
principal may sue the person with whom the agent dealt
with in his (agent's) own name, when the transaction
"involves things belonging to the principal." By
sentencing Gold Star Mining Co., Inc., to pay, for the
account of Lincallo, the court merely endeavoured to
prevent its award from being rendered pro tanto
nugatory and ineffective, and thus make it conformable
to law and justice. That the questioned award was not
intended to be a penalty against appellant Gold Star
Mining Co., Inc., as shown by the provision to be
imputed to Lincallo's liability under this judgment. The
court thus left the way open for Gold Star Mining Co.,
Inc., to recover later the whole amount from Lincallo,
whether by direct action against him or by deducting it
from the royalties that may fall due under his 1951
contract with appellant.
Case: Dy Peh vs CIR, GR No. L-19375, May 21, 1969
Facts:
Petitioner was engaged in the business of
manufacturing and selling rubber shoes and allied
products in the city of Cebu, under the registered firm
name Victory Rubber Manufacturing.
The Bureau of Internal Revenue unearthed anomalies
committed in the office of the Treasurer of the city of
Cebu in connection with the payment of taxes by some
taxpayers, amongst them petitioner herein. As a result
the respondent assessed against, and demanded from
petitioner the payment. The investigation of the
anomalies disclosed that the amounts of the taxes
allegedly paid by him, as appearing in the original of
every official receipt he had in his possession, were
bigger than the amounts appearing in the corresponding
duplicate, triplicate and quadruplicate copies thereof
kept in the office of the City Treasurer of Cebu.
Chief of the Internal Revenue Division of the City
Treasurer's Office of Cebu, had allowed the wrongful
practice of permitting Tan Chuan Liong to prepare the
official receipts in connection with tax payments made
by him in behalf of his merchant clients and that it was
Tan Chuan Liong who applied a portion of the amounts
given to him by petitioner to pay tax obligations of other
taxpayers, also his clients, and that therefore petitioner's
recourse is against him.
Issue: Whether it was petitioner, in person, who made
the payment of his taxes herein involved, or it was his
aforesaid agent
Ruling:
The Trial Court established as a fact that
petitioner had employed Tan Chuan Liong as a business
agent in the matter of payment of his taxes. The
testimonies of Bartolome Baguio, Isidro Badana and
Lauro Abalos on this matter were corroborated by the
statement and report of NBI handwriting expert Felipe
Logan. That Tan Chuan Liong, as such petitioner's agent,
actually paid to the government less than the amounts
of the taxes due from petitioner is also fully proven by
their testimonies and the duplicate, triplicate and
quadruplicate copies of the official receipts which
appear upon their face to be genuine or authentic. The
same thing cannot be claimed for the official receipts in
question, because the lower court found that, as in the
case ofTiu Bon Sin vs. Collector etc., andYap Pe Giok vs.
Arañas, appellant employed the same business agent
who misappropriated a portion of the amounts
entrusted to him and paid less than what was due from
his principals. In plain words, the lower court expressed
the view that the official receipts in petitioner's hands
did not reflect the truth.
Case: MANILA MEMORIAL PARK CEMETERY v.
LINSANGAN
FACTS:
Florencia Baluyot offered Atty. Pedro L.
Linsangan a lot called Garden State at the Holy Cross
Memorial Park owned by petitioner (MMPCI). According
to Baluyot, a former owner of a memorial lot under
Contract No. 25012 was no longer interested in
acquiring the lot and had opted to sell his rights subject
to reimbursement of the amounts he already paid.
Baluyot reassured Atty. Linsangan that once
reimbursement is made to the former buyer, the
contract would be transferred to him. Atty. Linsangan
agreed and gave Baluyot P35,295.00 representing the
amount to be reimbursed to the original buyer and to
complete the down payment to MMPCI. Baluyot issued FACTS:
handwritten and typewritten receipts for these
Petitioner and her husband are the registered
payments. Baluyot verbally advised Atty. Linsangan that
owners of a parcel of land. Petitioner discontinued the
Contract No. 28660 was cancelled for reasons the latter
construction of the house because her husband failed to
could not explain, and presented to him another
send the necessary financial support. They then decided
proposal for the purchase of an equivalent property. He
to sell the land and Bacani volunteered to sell the same.
refused the new proposal and insisted that Baluyot and
The title was sent to Bacani but it was lost. For the
MMPCI honor their undertaking. For the alleged failure
reconstitution of title, petitioner sent Bacani all the
of MMPCI and Baluyot to conform to their agreement,
receipt for payment of real estate taxes. They then
Atty. Linsangan filed a Complaint for Breach of Contract
waited patiently but Bacani did not show up anymore.
and Damages against the former. For its part, MMPCI
When Norma visited the lot, she was surprised that a
alleged that Contract No. 28660 was cancelled
house was already being constructed and when she
conformably with the terms of the contract because of
went to the register of deeds, the reconstitution of title
non-payment of arrearages. MMPCI stated that Baluyot
was already cancelled and a deed of sale was already
was not an agent but an independent contractor, and as
signed in favor of Robles. Petitioner claimed that she did
such was not authorized to represent MMPCI or to use
not meet with the Robles and she did not sign any deed
its name except as to the extent expressly stated in the
of sale and she said that it was a forgery. Robles
Agency Manager Agreement.
however argued that they are buyer in good faith and
for value. They further alleged that Bacani introduced
ISSUE: Whether or not a contract of agency exists
them to supposed owners and respondents paid the full
between Baluyot and MMPCI.
price. Then sometime later, Robles contracted to sell the
lot in issue in favor of spouses Danilo and Herminigilda
RULING:
Deza for P250,000.00. When only P20,000.00 remained
NO. The acts of an agent beyond the scope of
unpaid, payment was stopped because of the letter
his authority do not bind the principal, unless he ratifies
received by Yolanda Robles that [petitioner] intends to
them, expressly or impliedly. Only the principal can
sue her. The RTC dismissed the complaint and the CA
ratify; the agent cannot ratify his own unauthorized acts.
saying that respondent is a purchaser in good faith and
Moreover, the principal must have knowledge of the
for value affirmed it. Petitioner contends that their
acts he is to ratify. No ratification can be implied in the
signature is forged and that forged deed is void and
instant case. Atty. Linsangan failed to show that MMPCI
conveys no title.
had knowledge of the arrangement. As far as MMPCI is
concerned, the contract price was P132,250.00, as ISSUE: Whether or not respondent is a purchaser in good
stated in the Offer to Purchase signed by Atty. Linsangan faith.
and MMPCI's authorized officer. Likewise, this Court
does not find favor in the Court of Appeals' findings that RULING:
"the authority of defendant Baluyot may not have been YES. A notarized instrument enjoys a prima facie
expressly conferred upon her; however, the same may presumption of authenticity and due execution. Clear
have been derived impliedly by habit or custom which and convincing evidence must be presented to
may have been an accepted practice in their company in overcome such legal presumption. Forgery cannot be
a long period of time." A perusal of the records of the presumed; hence, it was incumbent upon petitioner to
case fails to show any indication that there was such a prove it.
habit or custom in MMPCI that allows its agents to enter
into agreements for lower prices of its interment spaces, What surprises the Court is that a comparison of the
nor to assume a portion of the purchase price of the signature of appellant Norma Domingo in the Deed of
interment spaces sold at such lower price. No evidence Absolute Sale in favor of the appellees and the signature
was ever presented to this effect. in the verification of the complaint manifest a striking
similarity to the point that without any contrary proof, it
would be safe to conclude that said signatures were
Case: DOMINGO v. ROBLES, G.R. No. 153743, March 18, written by one and the same person. Sadly, appellant
2005
left that matter that way without introducing
counteracting evidence. Petitioner also failed to
convince the trial court that the person with whom
Respondent Yolanda Robles transacted was in fact not
Valentino Domingo. Except for her insistence that her
husband was out of the country, petitioner failed to
present any other clear and convincing evidence that
Valentino was not present at the time of the sale. Bare
allegations, unsubstantiated by evidence, are not
equivalent to proof.
Case: Maxicare v Estrada
Facts:
Maxicare is a domestic corporation in selling
health insurance plans. On September 15, 1990,
Maxicare allegedly engaged the services of Carmela
Estrada who was doing business under the name of
CARA HEALTH, Maxicare formally appointed Estrada as
its "General Agent," evidenced by a letter-agreement
dated February 16, 1991.
Estrada submitted proposals and made
representations to the officers of MERALCO regarding
the MAXICARE Plan but when MERALCO decided to
subscribe to the MAXICARE Plan, Maxicare directly
negotiated with MERALCO regarding the terms and
conditions of the agreement and left plaintiff-appellee
Estrada out of the discussions on the terms and
conditions. MERALCO eventually subscribed to the
MAXICARE Plan for medical coverage of its qualified
members.
Estrada, through counsel, demanded from
Maxicare that it be paid commissions for the MERALCO
account and nine (9) other accounts. In reply, Maxicare,
through counsel, denied Estrada’s claims for commission
for the MERALCO and other accounts because Maxicare
directly negotiated with MERALCO and the other
accounts(,) and that no agent was given the go signal to
intervene in the negotiations for the terms and
conditions and the signing of the service agreement with
MERALCO and the other accounts so that if ever
Maxicare was indebted to Estrada, it was only
commissions on the accounts of Overseas Freighters Co.
and Mr. Enrique Acosta, respectively.
After trial, the RTC found Maxicare liable for
breach of contract and ordered it to pay Estrada actual
damages representing her commission for the total
premiums paid by Meralco to Maxicare from the year
1991 to 1996, plus legal interest computed from the
filing of the complaint on March 18, 1993, and
attorney’s fees in the amount of P100,000.00. The CA
affirmed in toto. Hence, this petition.
Issue: Whether or not Estrada is entitled to commissions
for the premiums paid under the service agreement
between Meralco and Maxicare from 1991 to 1996.
Ruling:
Yes. Both courts were one in the conclusion that
Maxicare successfully landed the Meralco account for
the sale of healthcare plans only by virtue of Estrada’s
involvement and participation in the negotiations. At the
very least, Estrada penetrated the Meralco market,
initially closed to Maxicare, and laid the groundwork for
a business relationship. The only reason Estrada was not
able to participate in the collection and remittance of
premium dues to Maxicare was because she was
prevented from doing so by the acts of Maxicare, its
officers, and employees.
In Tan v. Gullas, we had occasion to define a
broker and distinguish it from an agent, thus:
[O]ne 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 the other
parties, never acting in his own name but in the
name of those who employed him. [A] broker is
one whose occupation is to bring the parties
together, in matter of trade, commerce or
navigation.
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 EVENTUALLY MADE.
In relation thereto, we have held that the term
"procuring cause" in describing a broker’s activity, refers
to a cause originating a series of events which, without
break in their continuity, result in the accomplishment of
the prime objective of the employment of the broker—
producing a purchaser ready, willing and able to buy on
the owner’s terms. o be regarded as the "procuring
cause" of a sale as to be entitled to a commission, a
broker’s efforts must have been the foundation on
which the negotiations resulting in a sale began. Verily,
Estrada was instrumental in the sale of the Maxicare
health plans to Meralco. Without her intervention, no
sale could have been consummated.
Case: DE CASTRO vs. COURT OF APPEALS
FACTS:
Artigo was authorized by Constante De Castro to
act as real estate broker in the sale of their properties
for the amount of P23,000,000.00, 5% of which will be
given to the agent as commission. It was Artigo who first
found Times Transit Corporation as prospective buyer.
Eventually, the sale of lots was consummated. Artigo
received from appellants P48,893.76 as commission.
Artigo contended that his total commission should be
P352,500.00 which is 5% of the agreed price of
P7,050,000.00. He sued petitioners Constante A. De
Castro and Corazon A. De Castro to collect the unpaid
balance of his brokers commission.
The De Castros argue that Artigos complaint should have
been dismissed for failure to implead all the co-owners
of the two lots. The De Castros claim that Artigo always
knew that the two lots were co-owned by Constante and
Corazon with their other siblings Jose and Carmela
whom Constante merely represented. The De Castros
contend that failure to implead such indispensable
parties is fatal to the complaint since Artigo, as agent of
all the four co-owners, would be paid with funds co-
owned by the four co-owners.
ISSUE: Is the complaint dismissible for failure to implead
as indispensable parties the other co-owners of the two
lots?
HELD:
No. Constante signed the note as owner and as
representative of the other co-owners. Under this note,
a contract of agency was clearly constituted between
Constante and Artigo. Whether Constante appointed
Artigo as agent, in Constante's individual or
representative capacity, or both, the De Castros cannot
seek the dismissal of the case for failure to implead the
other co-owners as indispensable parties. The De
Castros admit that the other co-owners are solidarily
liable under the contract of agency, citing Article 1915 of
the Civil Code. The solidary liability of the four co-
owners, however, militates against the De Castros
theory that the other co-owners should be impleaded as
indispensable parties. The rule in this article applies even
when the appointments were made by the principals in
separate acts, provided that they are for the same
transaction. The solidarity arises from the common
interest of the principals, and not from the act of
constituting the agency. By virtue of this solidarity, the
agent can recover from any principal the whole
compensation and indemnity owing to him by the
others.
Case: NELITA M. BACALING vs. FELOMINO MUYA
FACTS:
Petitioner Nelita M. Bacaling and her spouse Ramon
Bacaling were the owners of three parcels of land. The
landholding was subdivided into one hundred ten sub-
lots. The respondents clandestinely entered and
occupied the entire one hundred ten sub-lots and
grabbed exclusively for themselves the said landholding.
Eventually, Jose Juan Tong was able to buy from Nelita
Bacaling the subject one hundred ten sub-lots. To secure
performance of the contract of absolute sale and
facilitate the transfer of title of the lots to Jose Juan
Tong, Bacaling appointed him as her attorney-in-fact,
under an irrevocable special power of attorney.
Thereafter, petitioner Tong, together with Bacaling, filed
a petition for cancellation of the certificates of land
transfer against respondents. Before the petition was
resolved, Nelita Bacaling manifested to the appellate
court that she was revoking the irrevocable power of
attorney in favor of Jose Juan Tong and that she was
admitting the status of respondents as her tenants of
the one hundred ten sub-lots. She moved to
withdraw/dismiss the present petition on the ground
that the irrevocable power of attorney in favor of
petitioner Jose Juan Tong had been nullified by her and
that Tong consequently lacked the authority to appear
before this Court.
ISSUE: Does petitioner Tong have the requisite interest
to litigate this petition?

HELD:

Yes. Bacaling cannot revoke at her whim and

pleasure the irrevocable special power of attorney which
she had duly executed in favor of petitioner Jose Juan
Tong and duly acknowledged before a notary public. The
agency, to stress, is one coupled with interest which is
explicitly irrevocable since the deed of agency was
prepared and signed and/or accepted by petitioner Tong
and Bacaling with a view to completing the performance
of the contract of sale of the one hundred ten sub-lots. It
is for this reason that the mandate of the agency
constituted Tong as the real party in interest to remove
all clouds on the title of Bacaling and that, after all these
cases are resolved, to use the irrevocable special power
of attorney to ultimately cause and effect the transfer of
the aforesaid lots in the name of the vendees and
execute and deliver document/s or instrument of
whatever nature necessary to accomplish the foregoing
acts and deeds. The fiduciary relationship inherent in
ordinary contracts of agency is replaced by material
consideration which in the type of agency herein
established bars the removal or dismissal of petitioner
Tong as Bacalings attorney-in-fact on the ground of
alleged loss of trust and confidence.