JURISPRUDENCE

 
I. Nature, Forms, Kinds

 
1. Apex Mining VS SE Mindanao Gold Mining 492 SCRA 355

The elements of agency, to wit:

 
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 agents acts within the scope of his authority.
 
The elements of agency is a factual matter that needs to be established or proven by evidence . It must
likewise be emphasized that the evidence to prove this fact must be clear, positive and convincing.

SEM did not claim nor submit proof that it is the designated agent of MMC to represent the latter in its
business dealings or undertaking. SEM cannot therefore be considered an agent of MMC which can use
EP 133 and benefit from it. Since SEM is not an agent of MMC, it goes without saying that the
assignment or transfer of the permit in favor of SEM is null and void.
 
The concept of agency is distinct from assignment. In agency, the agent acts not on his own behalf
but on behalf of his principal. The assignment of MMC of EP 133 in favor of SEM did not make the
latter the former’s agent. It is a total abdication of MMC’s rights over the permit, thus making SEM the
permittee.
 
 
2. Orient Air VS CA, 197 SCRA 645
 
Agency is a 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.
 
In an agent-principal relationship, the personality of the principal is extended through the facility of
the agent. In so doing, the agent, by legal fiction, becomes the principal, authorized to perform all acts
which the latter would have him do.
 
Such a relationship can only be effected with the consent of the principal, which must not, in any way, be
compelled by law or any court. The Agreement itself between the parties states that “either party may
terminate the Agreement without cause by giving the other 30 days’ notice by letter, telegram, or cable.”
 
3. Rallos VS F. Go Chan & Sons, 18 SCRA 251
 
One may contract in the name of another without being authorized by latter, or unless he has by law a
right to represent him. A contract entered into in the name of another by one who has no authority or the
legal representation or who has acted beyond his powers, shall be unenforceable, unless it is ratified,
expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the
other contracting party.
 
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”.
 
the essential elements of agency, which 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 agents acts as a representative and not for himself, and (4) the agent acts within the scope of his
authority.
 
 The law provides that the death of the  principal ipso jure extinguishes the authority of the agent to
sell rendering the sale to a third person in good faith unenforceable, unless that agent had no
knowledge of the principal’s death at that time. Laureta's possession. If they failed to exercise the
ordinary care expected of a buyer of real estate they must suffer the consequences. The rule of caveat
emptor requires the purchaser to be aware of the supposed title of the vendor and one who buys without
checking the vendor's title takes all the risks and losses consequent to such failure.
 
4. Caram Jr. Laureta, 103 SCRA 7
 
The court found that the Attorneys Irespe and Aportadera had knowledge of the circumstances, and
knew that Mata's certificate of title together with other papers pertaining to the land was taken by soldiers
under the command of Col. Claro L. Laureta. Added to this is the fact that at the time of the second sale
Laureta was already in possession of the land. Irespe and Aportadera should have investigated the
nature.
 
Since Caram was a registrant in bad faith, the situation is as if there was no registration at all.
 
5. Air France VS CA, 126 SCRA 448
To all legal intents and purposes, Teresita was the agent of the GANAS and notice to her of the
rejection of the request for extension of the validity of the tickets was notice to the GANAS, her
principals.
 
GANAS cannot defend by contending lack of knowledge of those rules since the evidence bears out that
Teresita, who handled travel arrangements for the GANAS, was duly informed by travel agent Ella of the
advice of Reno, the Office Manager of Air France, that the tickets in question could not be extended
beyond the period of their validity without paying the fare differentials and additional travel taxes brought
about by the increased fare rate and travel taxes
 
6. Siy VS Tomlin, 824 SCRA 106
 
Under the Civil Code on agency, Article 1869, agency 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.
 
Siy constituted and appointed Ong as his agent to sell the vehicle, surrendering to the latter the vehicle,
all documents of title pertaining thereto, and a deed of sale signed in blank. Acting for and on petitioner's
behalf by virtue of the implied or oral agency, Ong was thus able to sell the vehicle to Chua, Siy thus
ceased to be the owner thereof.
 
7. BPI VS Laingo, 787 SCRA 541
 
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 impersonal dealing where the principal need not
personally know or meet the third person with whom the agent transacts: precisely, the purpose of
agency is to extend the personality of the principal through the facility of the agent.
 
When an agency relationship is established, the agent acts for the principal insofar as the world is
concerned. Consequently, the acts of the agent on behalf of principal within the scope of the
delegated authority have the same legal effect and consequence as thought the principal had
been the one so acting in the given situation.
 
There is rationale in the contract of agency, which flows from the “doctrine of representation”, that
notice to the agent is notice to the principal. In the present case, BPI was informed of Rhoezel’s death by
the latter’s family. Since BPI is the agent of FGU Insurance, then such notice of death to BPI is
considered notice to FGU Insurance.
 
8. Lim VS CA 251 SCRA 408
 
The issuance and delivery of the check must be to a person who takes it as a holder. Although Linton
sent a collector who received the checks from the Lims at their place of business, the checks were
actually issued and delivered to Linton in Navotas. The collector is not a holder or an agent, he was just
an employee.
 
9. Amon Trading VS CA., 477 SCRA 582
 
Neither Sanchez nor Lines & Spaces was an agent for Tri-Realty, but rather a supplier for the latter’s
cement needs. 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.
 
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. Indeed,
the very word “agency” has come to connote control by the principal. The control factor, more than any
other, has caused the courts to put contracts between principal and agent in a separate category.
 
10. Doles VS Angelea, 492 SCRA 607
 
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 professes 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.
 
11. Sunace VS NLRC, 480 SCRA 146
 
There was an implied revocation of its agency relationship with its foreign principal when, after the
termination of the original employment contract, the foreign principal directly negotiated with Divina and
entered into a new and separate employment contract in Taiwan.
 
Note that it is a basic principle in law that contracts bind only the parties who had entered into it, it cannot
favor or prejudice a third person.
 
12. Nielson VS Lepanto, 26 SCRA 540
 
Contract of lease vs Contract of agency
 
Article 1709 of the Old Civil Code, defining contract of agency, provides that "By the
contract of agency, one person binds himself to render some service or do something for the account or
at the request of another."
 
Article 1544, defining contract of lease of service, provides that "In a lease of work or services, one of the
parties binds himself to make or construct something or to render a service to the other for a price
certain." In both agency and lease of services one of the parties binds himself to render some service to
the other party.
 
Agency, however, is distinguished from lease of work or services in that the basis of agency is
representation, while in the lease of work or services the basis is employment. The lessor of
services does not represent his employer, while the agent represents his principal. Further, agency is a
preparatory contract, as agency "does not stop with the agency because the purpose is to enter into
other contracts." The most characteristic feature of an agency relationship is the agent's power to bring
about business relations between his principal and third persons.
 
"The agent is destined to execute juridical acts (creation, modification or extinction of relations with
third parties). Lease of services contemplate only material (non-juridical) acts." Herein, the principal
and paramount undertaking of Nielson under the management contract was the operation and
development of the mine and the operation of the mill. All the other undertakings mentioned in the
contract are necessary or incidental to the principal undertaking — these other undertakings being
dependent upon the work on the development of the mine and the operation of the mill. In the
performance of this principal undertaking Nielson was not in any way executing juridical acts for Lepanto,
destined to create, modify or extinguish business relations between them.
 
13. Africa VS Caltex, 16 SCRA 448
 
Agent vs independent contractor
 
To determine the nature of a contract, courts do not have or are not bound to rely upon the name or
title given it by the contracting parties, should thereby a controversy as to what they really had
intended to enter into, but the way the contracting parties do or perform their respective obligations
stipulated or agreed upon may be shown and inquired into, and should such performance conflict with the
name or title given the contract by the parties, the former must prevail over the latter.
 
The written contract was apparently drawn for the purpose of creating the apparent relationship of
employer and independent contractor, and of avoiding liability for the negligence of the employees about
the station; but the company was not satisfied to allow such relationship to exist.
 
 
14. Reyes VS RB of San Miguel, 424 SCRA 135

Petitioners, particularly petitioner Reyes, are faulted with the careless handling of confidential and vital
information regarding the financial status of RBSMI. It is indeed unfortunate that information regarding the
financial needs of RBSMI came to the knowledge of the media. We realize that a bank’s lifeline depends
largely on the trust and confidence accorded to it by its depositors and the public in general. However, too
many possibilities exist on how word got to the press.

-Nor can respondent Reyes escape administrative liability for the charge of having displayed undue
interest in brokering the sale of petitioner RBSM. In a number of occasions, such an interest readily
surfaced. . . . If anything else, Reyes’ actuations smack of unprofessionalism as he had concerned
himself with transactions that had nothing to do with his official function as BSP Deputy Governor. Nor is it
correct to say that respondent Alberto V. Reyes did no brokering simply because he was not paid for
his efforts. As rightly argued by petitioner, there is no law which defines brokering in terms of
payment thereof. To our mind, it suffices that respondent Reyes introduced and brought the parties
together to try to hammer o u t a sale of RBSMI. After all, a broker’s duty is mainly to bring the
prospective buyers and sellers togeth

15. Abacus Securities VS Ampil, 483 SCRA 315

SEC. 23. Margin Requirements.

(b) It shall be unlawful for any member of an exchange or any broker or dealer, directly or indirectly, to
extend or maintain credit or arrange for the extension or maintenance of credit to or for any customer
(1) On any security other than an exempted security, in contravention of the rules and regulations which
the Commission shall prescribe under subsection (a) of this Section;
(2) Without collateral or on any collateral other than securities, except (i) to maintain a credit initially
extended in conformity with the rules and regulations of the Commission and (ii) in cases where the
extension or maintenance of credit is not for the purpose of... purchasing or carrying securities or of
evading or circumventing the provisions of subparagraph (1) of this subsection.

16. Hahn VS CA, 266 SCRA 537

DOING BUSINESS
The phrase includes "appointing representatives or distributors in the Philippines" but not when the
representative or distributor "transacts business in its name and for its own account."

(f) "Doing business" shall be any act or combination of acts, enumerated in Article 44 of the Code. In
particular, "doing business" includes:

(1) . . . A foreign firm which does business through middlemen acting in their own names, such as
indentors, commercial brokers or commission merchants, shall not be deemed doing business in the
Philippines. But such indentors, commercial brokers or commission merchants shall be the ones deemed
to be doing business in the Philippines

whether petitioner Alfred Hahn is the agent or distributor in the Philippines of private respondent BMW. If
he is, BMW may be considered doing business in the Philippines and the trial court acquired jurisdiction
over it (BMW) by virtue of the service of summons on the Department of Trade and Industry. Otherwise, if
Hahn is not the agent of BMW but an independent dealer, albeit of BMW cars and products, BMW, a
foreign corporation, is not considered doing business in the Philippines within the meaning of the Foreign
Investments Act of 1991 and the IRR, and the trial court did not acquire jurisdiction over it (BMW).

SC: arrangement shows an agency. 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. The fact that Hahn invested his own money to put up these service centers
and showrooms does not necessarily prove that he is not an agent of BMW. For as already noted, there
are facts in the record which suggest that BMW exercised control over Hahn's activities as a dealer and
made regular inspections of Hahn's premises to enforce compliance with BMW standards and
specifications

17. Conde VS CA, 119 SCRA 245

 
if, as alleged, petitioner exerted no effort to procure the signature of Pio Altera after he had recovered
from his illness, neither did the Alteras repudiate the deed that their son-in-law had signed. Thus, an
implied agency must be held to have been created from their silence or lack of action, or their
failure to repudiate the agency. (Art. 1869, Civil Code.) Also, the equitable principle of laches brought
about by private respondent's inaction and neglect for 24 years, loom in petitioner's favor. Judgment of
the Court of Appeals is reversed and set aside, and petitioner is declared owner of the disputed property.
 
18. Uytengsu VS Baduel, 477 SCRA 621
 
The relation of attorney and client is in many respects one of agency and the general rules of ordinary
agency apply to such relation. The extent of authority of a lawyer, when acting on behalf of his client
outside of court, is measured by the same test as that which is applied to an ordinary agent. Such being
the case, even respondent himself can acquire the certificates of title and other documents without need
of an SPA from complainant and his co-heirs.
 
19. J. Phil Marine Inc VS NLRC, 561 SCRA 675
 
The relation of attorney and client is in many respects one of agency, and the general rules of agency
apply to such relation. The acts of an agent are deemed the acts of the principal only if the agent
acts within the scope of his authority. The circumstances of this case indicate that respondent’s
counsel is acting beyond the scope of his authority in questioning the compromise agreement. That a
client has undoubtedly the right to compromise a suit without the intervention of his lawyer cannot be
gainsaid, the only qualification being that if such compromise is entered into with the intent of defrauding
the lawyer of the fees justly due him, the compromise must be subject to the said fees.
 
20. Professional Services Inc. VS CA, 611 SCRA 282
 
PSI is liable to the Aganas, not under the principle of respondeat superior for lack of evidence of an
employment relationship with Dr. Ampil but under the principle of ostensible agency for the negligence of
Dr. Ampil and, pro hac vice, under the principle of corporate negligence for its failure to perform its duties
as a hospital.
 
Even though no employment relationship exists, when it is shown that the hospital holds out to the patient
that the doctor is its agent, the hospital may still be vicariously liable under Article 2176 in relation to
Article 1431[36] and Article 1869[37] of the Civil Code or the principle of apparent authority.
 
Moreover, regardless of its relationship with the doctor, the hospital may be held directly liable to the
patient for its own negligence or failure to follow established standard of conduct to which it should
conform as a Corporation
 
PSI is vicariously liable for the negligence of Dr. Ampil as its ostensible agent. The ruling is also unique to
this case, for the liability of PSI arose from an implied agency with Dr. Ampil and an admitted corporate
duty to Natividad.

I. Obligations of the Agent

 
1. British Airways VS CA, 285 SCRA 450
 
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. contractual relationship between
BA and PAL is one of agency, the former being the principal, since it was the one which issued the
confirmed ticket, and
the latter the agent.
 
2. PNB VS Manila Surety, 14 SCRA 776
 
The Court of Appeals did not hold the bank answerable for negligence in failing to collect from the
principal debtor but for its negligence in collecting the sum due to the debtor from the Bureau of Public
Works, contrary to its duty as holder of an exclusive and irrevocable power of attorney to make such
collections, since an agent is required to act with care of a good father of a family and becomes
liable for the damages which the principal may suffer through his non Performance
 
Even if the assignment with power of attorney from the principal debtor were considered as more
additional security, by allowing the assigned funds to be exhausted without notifying the surety, the Bank
deprived the former of any possibility of recoursing against that security. The Bank exonerated the surety,
pursuant to Art. 2080 0f the Civil Code.
 
3. Domingo VS Domingo, 42 SCRA 131
 
The duties and liabilities of a broker to his employer are essentially those which an agent owes to his
principal. The law imposes upon the agent the absolute obligation to make a full disclosure or
complete account to his principal of all his transactions and other material facts relevant to the
agency, so much so that the law as amended does not countenance any stipulation exempting the
agent from such an obligation and considers such an exemption as void. The duty of an agent is
likened to that of a trustee. This is not a technical or arbitrary rule but a rule founded on the highest and
truest principle of morality as well as of the strictest justice.
 
NOTE: An agent who takes a secret profit in the nature of a bonus, gratuity or personal benefit
from the vendee, without revealing the same to his principal, the vendor, is guilty of a breach of
his loyalty to the principal and forfeits his right to collect the commission from his principal, even
if the principal does not suffer any injury by reason of such breach of fidelity, or that he obtained
better results or that the agency is a gratuitous one, or usage or custom allows it; because the rule
is to prevent the possibility of any wrong, not to remedy or repair an actual damage. By taking such profit
or bonus or gift or propina from the vendee, the agent thereby assumes a position wholly inconsistent with
that of being an agent for his principal, who has a right to treat him, insofar as his commission is
concerned, as if no agency had existed. The fact that the principal may have been benefited by the
valuable services of the said agent does not exculpate the agent who has only himself to blame for such a
result by reason of his treachery or perfidy.
 
 
4. Murao VS People, 462 SCRA 366
 
It is unequivocal that an agency existed between LMICE and private complainant Federico. 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."
 
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 As a sales agent, private complainant Federico
entered into negotiations with prospective clients for and on behalf of his principal, LMICE.
 
5. Escueta VS Lim, 512 SCRA 411
 
The sale by Virginia to respondent (Lim) is not binding. Petitioner Rubio did not authorize Virginia to
transact business in his behalf pertaining to the property. The Special Power of Attorney was constituted
in favor of Llamas, and the latter was not empowered to designate a substitute attorney-in-fact. Llamas
even disowned her signature appearing on the "Joint Special Power of Attorney," which constituted
Virginia as her true and lawful attorney-in-fact in selling Rubio’s properties.
 
Respondent should ascertain not only the fact of agency, but also the nature and extent of the
former’s authority. Besides, Virginia exceeded the authority for failing to comply with her obligations
under the "Joint Special Power of Attorney."
 
Article 1892 of the Civil Code provides:
Art. 1892. The agent may appoint a substitute if the principal has not prohibited him from doing so; but he
shall be responsible for the acts of the substitute:
 
(1) When he was not given the power to appoint one.
 
Applying the above-quoted provision to the special power of attorney executed by Ignacio Rubio in favor
of his daughter Patricia Llamas, it is clear that she is not prohibited from appointing a substitute. By
authorizing Virginia Lim to sell the subject properties, Patricia merely acted within the limits of the
authority given by her father, but she will have to be "responsible for the acts of the sub-agent," among
which is precisely the sale of the subject properties in favor of respondent.
 
Even assuming that Virginia Lim has no authority to sell the subject properties, the contract she executed
in favor of respondent is not void, but simply unenforceable, under the second paragraph of Article
1317 of the Civil Code
 
6. Caoile VS CA, 226 SCRA 658
 
7. NPC VS National Merchandising, 117 SCRA 789
 
The NPC counter-argues that Namerco should’ have advised the NPC of the
limitations on its authority to negotiate the sale.
 
We agree with the trial court that Namerco is liable for damages because under article 1897 of the Civil
Code the agent who exceeds the limits of his authority without giving the party with whom he contracts
sufficient notice of his powers is personally liable to such party.
 
Manresa says that the agent who exceeds the limits of his authority is personally liable and the third
person who contracts with the agent in such a case would be defrauded if he would not be allowed to sue
the agent.
 
 article 1403 refers to the unenforceability of the contract against the principal. In the instant case, the
contract containing the stipulation for liquidated damages is not being enforced against it principal but
against the agent and its surety. It is being enforced against the agent because article 1807 implies that
the agent who acts in excess of his authority is personally liable to the party with whom he contracted.
And that rule is complemented by article 1898 of the Civil Code which provides that "if the agent contracts
in the name of the principal, exceeding the scope of his authority, and the principal does not ratify the
contract, it shall be void if the party with whom the agent contracted is aware of the limits of the powers
granted by the principal."
 
8. Eurotech VS Cuizon, 521 SCRA 584
 
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. The underlying principle of the
contract of agency is to accomplish results by using the services of others – to do a great variety of
things like selling, buying, manufacturing, and transporting. 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. It is said that 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.
 
The powers of an agent are particularly broad in the case of one acting as a general agent or manager; 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.
 
9. Bacaltos Coal Mines VS CA, 245 SCRA 460
Every person dealing with an agent is put upon in inquiry and must discover upon his peril the
authority of the agent. If he does not make such inquiry, he is chargeable with knowledge of the
agent’s authority, and his own ignorance will not be any excuse. Persons dealing with an
assumed agent, whether the assumed agency be a general or special one, are bound at their peril,
if they would hold the principal, to ascertain not only the fact of the agency but also the nature
and extent of the authority, and in case either is controverted, the burden of proof is upon them to
establish it.
 
A third person dealing with a known agent may not act negligently with regard to the extent of the agent’s
authority or blindly trust the agent’s statements in such respect. Rather, he must use reasonable diligence
and prudence to ascertain whether the agent is acting and dealing with him within the scope of his
powers. The mere opinion of an agent as to the extent of his powers, or his mere assumption of
authority without foundation, will not bind the principal
 
10. Metrobank VS CA, 194 SCRA 169
 
In stressing that it was acting only as a collecting agent for Golden Savings, Metrobank seems to be
suggesting that as a mere agent it cannot be liable to the principal. This is not exactly true. On the
contrary Art. 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.

III. Obligations of the Principal

 
1. Domingo VS Robles, 453 SCRA 812
 
Notarized instrument enjoys a prima facie presumption of authenticity and due execution. Clear and
convincing evidence must be presented to overcome such legal presumption. Forgery cannot be
presumed.
 
The sale was admittedly made with the aid of Bacani, petitioner's agent, who had with him the original of
the owner's duplicate Certificate of Title to the property, free from any liens or encumbrances. The
signatures of Spouses Domingo, the registered owners, appear on the Deed of Absolute Sale. Petitioner's
husband met with Respondent Yolanda Robles and received payment for the property.
 
2. LKKS Milling VS CA, 250 SCRA 523
 
3. RB of Milaor VS Ocfemia, 325 SCRA 994.
 
A bank is liable to innocent third persons where representation is made in the course of its normal
business by an agent like Manager Tena even though such agent is abusing her authority. Clearly,
persons dealing with her could not be blamed for believing that she was authorized to transact business
for and on behalf of the bank.
 
The bank is estopped from questioning the authority of the bank to enter into contract of sale. If a
corporation knowingly permits one of its officers or any other agent to act within the scope of an
apparent authority, it holds the agent out to the public as possessing the power to do those acts ;
thus, the corporation will, as against anyone who has in good faith dealt with it through such agent, be
estopped from denying the agent’s authority.
 
4. CAL VS Chiok, 407 SCRA 432
 
PAL acted as the carrying agent of CAL. In the same way that we ruled against British Airways and
Lufthansa in the aforementioned cases, we also rule that CAL cannot evade liability to respondent, even
though it may have been only a ticket issuer for the Hong Kong-Manila sector.
 
British Airways v. Court of Appeals was held liable, even when the breach of contract had occurred, not
on its own flight, but on that of another airline. The Decision followed our ruling in Lufthansa German
Airlines v. Court of Appeals, in which we had held that the obligation of the ticket-issuing airline remained
and did not cease, regardless of the fact that another airline had undertaken to carry the passengers to
one of their destinations.
 
5. Comtrust VS Republic Armored Car, 8 SCRA 425
the motion for reconsideration presents a copy of a power of attorney purportedly executed by Perez. It is
not expressly mentioned that this is the precise power of attorney that Ramon Racelis utilized to secure
the loans the collection of which is sought in these cases. But assuming arguendo that it is, the court finds
that the movant's contention has no merit. In accordance with the document, Racelis was
authorized to negotiate for a loan or various loans .. with other being institution, financing corporation,
insurance companies or investment corporations, in such sum or sums, aforesaid Attorney-in-fact Mr.
Ramon Racelis, may deem proper and convenient to my interests, ... and to execute any and all
documents he deems requisite and necessary in order to obtain such loans, always having in mind best
interest; ... The Court ruled that this general power of attorney to secure loans from any banking institute
was sufficient authority for Ramon Racelis to obtain the credits subject of the present suits.
 
6. Cuison VS CA, 227 SCRA 391
 
It is a well-established rule that one who clothes another with apparent authority as his agent and
holds him out to the public as such cannot be permitted to deny the authority of such person to
act as his agent, to the prejudice of innocent third parties dealing with such person in good faith
and in the honest belief that he is what he appears to be. It is intended to protect the rights of
innocent persons.
In such a situation, both the principal and the agent may be considered as joint tortfeasors whose liability
is joint and solidary. Tiu Huy Tiac, therefore, by petitioner's own representations and manifestations,
became an agent of petitioner by 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.
 
7. Ortigas Jr VS Lufthansa, 64 SCRA 610
 
under the so-called pool arrangement among different airline companies pursuant to the International Air
Transport Association (IATA) agreement of which Alitalia and Lufthansa are signatories, both companies
are constituted thereby as agents of each other in the issuing of tickets and other matters pertaining to
their relations with those who would need their services, and since there can be no question that on its
face, the annotations made by Alitalia on the ticket here in dispute cannot have any other meaning than
that the reservation of Ortigas for the Rome —
Hongkong flight was validated and confirmed.
 
 
8. Areola VS CA, 236 SCRA 643
 
Malapit’s fraudulent act of misappropriating the premiums paid by Areola is beyond doubt directly
imputable to r e s p o n d e n t i n s u r a n c e c o m p a n y. A corporation, such as Prudential, acts solely
thru its employees. The latter’s acts are
considered as its own for which it can be held to account.
 
Being Prudential’s branch manager, it is beyond doubt that he represented its interest and acted in its
behalf. His act of receiving premiums collected is well within the province of his authority.
 
Thus, his receipt of said premiums is receipt by Prudential., who, by provision of law, particularly under
Article 1910 of the Civil Code, is bound by the acts of its agent.
 
“Art. 1910. The principal must comply with
all the obligations which the agent may have
contracted within the scope of his authority.
As for any obligation wherein the agent has
exceeded his power, the principal is not
bound except when he ratifies it expressly or
tacitly.”
 
9. Manila Park VS Linsangan, 443 SCRA 377
The acts of an agent beyond the scope of his authority do not bind the principal, unless he ratifies
them, expressly or impliedly. Only the principal can ratify; the agent cannot ratify his own
unauthorized acts. Moreover, the principal must have knowledge of the acts he is to ratify. Atty.
Linsangan failed to show that MMPCI had knowledge of the arrangement.
 
10. De Castro VS CA, 384 SCRA 607
 
Art. 1915. If two or more persons have appointed an agent for a common transaction or undertaking, they
shall be solidarily liable to the agent for all the consequences of the agency. 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.
 
When the law expressly provides for solidarity of the obligation, as in the liability of co-principals in a
contract of agency, each obligor may be compelled to pay the entire obligation. The agent may recover
the whole compensation from any of the co-principals, as in this case.
 
A contract of agency which is not contrary to law, public order, public policy, morals or good customs is a
valid contract, and constitutes the law between the parties. The contract of agency entered into by
Constante with Artigo is the law between them and both are bound to comply with its terms and
conditions in good faith. The mere fact that “other agents” intervened in the consummation of the sale and
were paid their respective commissions cannot vary the terms of the contract of agency granting Artigo a
5 percent commission based on the selling price

I. Extinguishment
 
1. Laviña VS CA, 171 SCRA 691
 
Civil Law; Agency; A dead client has no personality and cannot be represented by an attorney.·Carmen’s
death likewise divested Attorney Laviña of authority to represent her as counsel. A dead client has no
personality and cannot be represented by an attorney (Barrameda vs. Barbara, 90 Phil. 718, 723; Caisip
vs. Hon. Cabangon, 109 Phil. 150).
 
2. CMS Logging VS CA, 211 SCRA 374
 
Civil Law; Agency; Principal may revoke a contract of agency at will and such
revocation may be express or implied and may be availed of even if the period fixed in the contract of
agency as not yet expired.·The principal may revoke a contract of agency at will, and such revocation
may be express, or implied, and may be availed of even if the period fixed in the contract of agency as not
yet expired.
As the principal has this absolute right to revoke the agency, the agent can not object thereto; neither may
he claim damages arising from such revocation, unless it is shown that such was done in order to evade
the payment of agentÊs commission.
 
Act of CMS selling its logs directly to several Japanese firms constituted an
implied revocation of the contract of agency under Article 1924 of the Civil Code.·In the case at bar, CMS
appointed DRACOR as its agent for the sale of its logs to Japanese firms. Yet, during the existence of the
contract of agency, DRACOR admitted that CMS sold its logs directly to several Japanese firms. This act
constituted an implied revocation of the contract of agency under Article 1924 of the Civil Code.
 
Damages; Generally, damages are not awarded to the agent for the revocation of the agency.·Since the
contract of agency was revoked by CMS when its sold its logs
to Japanese firms without the intervention of DRACOR, the latter is no longer entitled to its commission
from the proceeds of such sale and is not entitled to retain whatever moneys it may have received as its
commission for said transactions. Neither would DRACOR be entitled to collect damages from CMS,
since damages are generally not awarded to the agent for the revocation of the agency, and the case at
bar is not one falling under the exception mentioned, which is to evade the payment of the agentÊs
commission.
 
3. Sevilla VS CA, 160 SCRA 171
 
unlike simple grants of a power of attorney, the agency that we hereby declare to be compatible with the
intent of the parties, cannot be revoked at will. The reason is that it is one coupled with an interest,
the agency having been created for the mutual interest of the agent and the principal.
 
4. PNB VS IAC, 189 SCRA 680
 
Civil Law; Estoppel; A party may not go back on his own acts and representations to the prejudice of the
other party who relied upon them - We agree with the opinion of the appellate court that under the
doctrine of promissory estoppel enunciated in the case of Republic Flour Mills, Inc. vs. Central Bank, L-
23542, August 11, 1979, the act and assurance given by the PNB to Alcedo that we shall exclude the
aforementioned lot [Lot No. 1402] as a collateral of Leticia de la VinaSepe in our recommendation for her
1971-72 sugar crop loan. (p. 37, Rollo) is binding on the bank. Having given that assurance, the bank
may not turn around and do the exact opposite of what it said it would not do.
 
Agency; Special Power of Attorney; The revocation of a special power of attorney, although embodied in
a private writing, is valid and binding between the parties - While Article 1358 of the New Civil Code
requires that the revocation of Alcedo s Special Power ofAttorney to mortgage his property should appear
in a public instrument: x x x nevertheless, a revocation embodied in a private writing is valid and binding
between the parties
 
 
5. Lustan VS CA, 266 SCRA 683
 
Doctrine: Special Powers of Attorney are a continuing one and absent a valid revocation duly
furnished to the mortgagee, the same continues to have force and effect as against third persons
who had no knowledge of such lack of authority. Article 1921 of the Civil Code provides:
 
6. Santana-Cruz VS CA, 361 SCRA 520
 
Doctrine: A revocation of authority of Patrocinia Juanson-Cuizon as Attorney-in-
Fact of private respondents heirs of Valeriana Marilao, who are recognized as the real parties in interest
in this case, should not affect Atty. Raul A. Mora, who remains counsel of record of private respondents
absent a valid substitution of counsel. Atty. Raul A. Mora may not be presumed substituted by Atty. Julian
S. Yap
merely from the filing of a formal appearance by the latter. No substitution of counsel of record is
allowed unless the following essential requisites of a valid substitution of counsel concur: (1)
there must be a written request for substitution; (2) it must be filed with the written consent of the
client; (3) it must be with the written consent of the attorney to be substituted; and (4) in case the
consent of the attorney to be substituted cannot be obtained, there must be at least a proof of
notice that the motion for substitution was served on him in the manner prescribed by the Rules
of Court.
 
7. Bitte VS Jonas, 777 SCRA 489
 
Doctrine of Apparent of Authority: Acts and contracts of the agent within the apparent scope of the
authority conferred on him, although no actual authority to do such acts or has been beforehand
withdrawn, revoked or terminated, bind the principal.
 
Article 1924 of the New Civil Code, “an agency is revoked if the principal directly manages the business
entrusted to the agent, dealing directly with third persons.”
 
 
8. Sunace VS NLRC, 480 SCRA 146
 
DOCTRINE: There is an implied revocation of agency relationship when after the termination of
the original employment contract, the foreign principal directly negotiated with the employee and
entered into a new and separate contract.
 
Article 1924 of the New Civil Code states that the agency is revoked if the
Principal directly manages the business entrusted to the agent, dealing with third persons
 
9. Nasutra VS PNB, 396 DCRA 528
 
The relationship between NASUTRA/SRA and PNB when the former constituted the latter as its attorney-
in-fact is not a simple agency. NASUTRA/SRA has assigned and practically surrendered its rights in favor
of PNB for a substantial consideration. To reiterate, NASUTRA/SRA executed promissory notes in favor
of PNB every time it availed of the credit line. The agency established between The parties is one coupled
with interest which cannot be revoked or cancelled at will by any of the parties.
 
10. Coleongco VS Claparols, 10 SCRA 577
 
Article 1800, declares that the powers of a partner, appointed as manager,
in the articles of copartnership are irrevocable without just or lawful cause; and
an agent with power coupled with an interest can not stand on better ground than such a partner in so far
as irrevocability of the power is concerned. That the appellant Coleongco acted in badfaith towards his
principal Claparols is, on the record, unquestionable.