AGENCY DIGESTS URBAN BANK v PENA FACTS: Isabel Sugar Co.

(ICSI) owned a piece of land which it was leasing to a certain person who subleased it, in violation of their lease contract, to various tenants. Urban expressed its interest to purchase said land. Both parties entered into a contract to sell (land was sold for P240M) which contains, among others, that the last installment of payment shall be withheld by Urban if the tenants were still present at the time of delivery. Because of this, ISCI ordered Pena, a director of ISCI, to take possession of the said land and secure it from the tenants after the lease contract has expired, and that he will be reimbursed for any expenses he may incur to accomplish the same such as costs for legal action and for employing security guards. Upon the expiry of the lease, Pena did the same but was however faced with resistance form the tenants: death threats, violence, etc. Pena filed and got a TRO to prevent the tenants from returning. However, the TRO was subsequently recalled because the land was now under the name of Urban, hence Pena had no more authority to maintain the TRO for he was an agent of ISCI not Urban. Pena called ISCI Pres. and confirmed the transfer. Pena told ISCI Pres. that because Urban now owns it, he will withdraw the guards etc. from the premises. Pena then had a phone convo w Borlongan (Pres of Urban). Pena asked authorization from Borlongan to negotiate with the tenants. Pena said that he be paid 10% of the purchase price (P24M). Borlongan accepted provided that if Pena is not successful, he will not get the 10%. Pena said that the agreement be put into writing. However, NO MENTION OF THE 10% were mention in the written agreement. Eventually, Pena was able to relocate the tenants. Urban occupied the property and installed its own guards. Pena made several attempts to contact Urban but the officers would not take his call, hence, this case. Urban denies that it constituted Pena as their agent and contends that it should be ISCI that should reimburse Pena because he was their employee. RTC there was a contract of agency CA no agency

ISSUE: w/n Pena is entitled to compensation

HELD: YES. In a contract of agency, agents bind themselves to render some service or to do something in representation or on behalf of the principal, with the consent or authority of the latter. The basis of the civil law relationship of agency is representation, the elements of which include the following: (a) the relationship is established by the parties consent, express or implied; (b) the object is the execution of a juridical act in relation to a third person; (c) agents act as representatives and not for themselves; and (d) agents act within the scope of their authority. Whether or not an agency has been created is determined by the fact that one is representing and acting for another. The law makes no presumption of agency; proving its existence, nature and extent is incumbent upon the person alleging it. Based on the evidence on records and the proceedings below, the Court concludes that Urban Bank constituted Atty. Pea as its agent to secure possession of the Pasay property. This conclusion, however, is not determinative of the basis of the amount of payment that must be made to him by the bank. The context in which the agency was created lays the basis for the amount of compensation Atty. Pea is entitled to. 2. The evidence does not support that conversation between Pena and ISCI regarding the 10% compensation took place. Only the letter of authority that it faxed Pena binds Urban. However, this does not mean that Pena is not entitled to compensation. Agency is presumed to be for compensation. Unless the contrary intent is shown, a person who acts as an agent does so with the expectation of payment according to the agreement and to the services rendered or results effected. The SC found that the agency of Pea comprised of services ordinarily performed by a lawyer who is tasked with the job of ensuring clean possession by the owner of a property, therefore, the measure of what he is entitled to will be based on the legal services rendered. Lawyering is not a business; it is a profession in which duty to public service, not money, is the primary consideration. 24M is unconscionable. SC awarded him 5M.

Loadmasters Custom Services Inc v Glodel Brokerage

FACTS: R&B Insurance issued an insurance policy in favor of Columbia to secure its cargo of cathodes against ALL RISKS. The cathodes will be delivered via boat from Leyte to Manila. Columbia then engaged the services of Glodel to unload the cargo from the boats. Glodel in turn, engaged the services of Loadmasters to bring the cargoes to Valenzuela and Bulacan. The cargoes were then divided equally (6/truck). However, only 5 trucks reached Bulucan. The missing truck was found but the cathodes were missing. Columbia then claimed insurance from R&B (~P1.9M). R&B then filed a case against Glodel and Loadmasters for reimbursement. RTC: Glodel liable CA: Loadmasters is an agent of Glodel so hes liable as well ISSUE: w/n Loadmasters is an agent. HELD: NO. Article 1868 of the Civil Code provides: By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. The requisites of agency are as follows: consent of the parties, object is the execution of a juridical act in relation to third parties, agent acts a representative not for himself, agent acts w/in the scope of his authority. The basis of agency is Representation. Loadmasters never represented Glodel. Neither was it given any authority to do so. Principal There must be an actual intention or an intention inferable on the to appoint an agent. Agent There must be an intention to accept the appointment Such mutual intention was not present in this case. NOTE: 1. Common carriers Loadmasters and Glodel are common carriers thus they should have exercised extraordinary diligence 2. Loadmasters and Glodel are solidarily liable to R&B Insurance cos accordging to Art 2194 of the NCC the responsibility of two or more who are liable for a quasi-delict are solidary 3. Glodel cannot collect from Loadmasters cos it did not file a crossclaim.

BORDADOR v LUZ FACTS: Spouses Bordador were engaged in the jewelry business. Respondent Brigida Luz was their regular customer. On several occasions, Narcisco

Deganos (Luz bro) got jewelry from the spouses store. This was evidenced by 17 receipts. 11 of the receipts stated that the jewels were received by a niece of Brigida while the last 6 were received for Brigida herself. Deganos was supposed to sell them and give the proceeds to the Bordadors. Deganos only remitted P53K. Bordadors filed a case in the barangay wherein Deganos and Brigisa executed a compromise agreement stating that Deganos will pay. When Deganos did not pay, Bordadors filed a Civil case in the RTC 4 years after filing the civil case, Bordadors filed a case of Estafa against the bro and sis In the civil case, Bordadors claim that Deganos is an agent of Brigida, thus, the latter is solidarily liable with him. Petitioners: He is an agent cos Brigida sent several letters stating that she acknowledges her obligation. But court said that the obligation was for her own obligation, not Deganos Respondents: Deganos insisted that he acted alone. Brigida said he was not her agent. Trial Court ruled that it was the Bordadors themselves which indicated in the receipts that the jewels were for the niece and Brigida ISSUE: w/n Deganos is an agent of Brigida. HELD: NO. The evidence does not support that Brigida authorized the acts of Deganos. The evidence also does not show that there was an express or implied agency. The basis for agency is representation. Here, there is no showing that Brigida consented to the acts of Deganos or authorized him to act on her behalf, much less with respect to the particular transactions involved . The Bordadors were also negligent cos when they dealt with Deganos, they did not ask for a written authority from Brigida. A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. NOTE: 1. Re the estafa case Petitioners said that the CA should have awaited the decision of the estafa case. SC said NO. Bases on Art 33 of the NCC in cases involving alleged fraudulent acts, a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution and shall require only a preponderance of evidence. [Civil and criminal can proceed independently]. RALLOS v FELIX GO CHAN FACTS:

Concepcion and Gerundia Rollos were sisters. They were co owners of a parcel of land in Cebu. They executed an SPOA where in they authorized their brother, Simon, to sell the land for them. On March 5, 1955 Concepcion died. On September 12, 1955, Simon sold the UNDIVIDED shares of the land to Felix Go Chan. The administrator of Concepcions estate filed a case to annul the sale and that the lot be reconveyed to Concepcions estate. According to Felix Go Chan, the sale should be vaild w re to him cos he did not know that Concpecion died. There was no Notice of Death attached to the SPOA of Simon. ISSUE: w/n the sale was valid despite the fact that the principal died before the sale. HELD: SALE NOT VALID. According to our NCC, no one can contract in the name of another, w/o being authorized by the latter or he has by law, a right to represent him. Agency is personal, representative and derivative in nature. The authority of the agent emanates from the powers granted by the principal his act is the act of the principal when done in the scope of his authority. Thus: General Rule: the death of either the Principal of the Agent ext the Agency. Exceptions: 1. If it has been constituted in the interest of the principal, the agent or a 3rd person who has accepted the stipulation. 2. The agent acted w/o knowledge of the death of the principal AND the third person who dealt w the agent is in GF (must concur) Exception 1 does not apply there was no interest in the SPOA Exception 2 does not apply Simon knew the death of Concepcion when he sold the land to Felix. NOTE: 1. Re Felix GF defense the law distinguishes between REVOCATION BY ACT OF PRINCIPAL and REVOCATION BY LAW. In the former, it must be communicated to be effective. In the latter (such as DEATH), it is instantaneously effective.

EUROTECH INDUSTRIAL TECH INC. v CUIZON ERwin Store owner EDwin Sales manager

FACTS: Eurotech is engaged in the importation and distribution of European products. Impact Systems is one of its customer. Impact Systems is owned by Erwin. The sales manager is Edwin. Impact Systems ordered 1 sludge pump from Eurotech wherein they paid a dp of P50k. When the pump arrived Eurotech refused to release it pending full payment. Thus, EDWIN and another person executed a Deed of Assignment of Receivables wherein they will assign their receivabes (from Toledo Corp) to Eurotech. This will serve as payment. Eurotech gave them the pump. Despite the Deed of Assignment, Impact Systems continued to collect the receivables from Toledo. Eurotech demanded that Impact Sytems pay the balance. When the latter did not, Eurotech filed a case. EDWIN filed a motion stating that he is NOT a party in interest cos he was merely an AGENT of Impact. According to Eurotech, when ERWIN collected the receivables he repudiated the power of EDWIN to sign the Deed of Assignment. Because EDWIN did not notify this to Eurotech, he exceed his authority, thus, should be liable. ISSUE: w/n EDWIN is liable HELD: NO. General Rule: Agent is not personally liable to the party to whom he contracts. (Principal is liable) Except: 1. When he expressly binds himself to the obligation 2. exceeds his authority. (Agent is liable) The Deed of Assignment states that EDWIN signed it in his capacity as Sales Manager. The powers of an agent acting as a MANAGER is unique cos it has broad powers in the absence of any contrary agreement, the agent-manager may enter into contracts that he deems reasonably necessary or necessary to protect the interest of his principal. In said case, the sludge pump was necessary for the business. Thus, EDWINs participation in the Deed of Assignment was reasonably necessary so that Impact Systems can get the sludge pump. EDWIN was merely acting to protect the interest of his principal, thus, he did not exceed his authority.

ORIENT AIR SERVICE v CA FACTS: American Airlines authorized Orient Air to act as its exclusive general sales agent w/in the Philippines for the sale of air passenger transportation. Amerincan Air terminated the agreement cos Orient Air did not remit the net

proceeds of the Sales of Jan-March. According to Orient Air, it was American Airlines who in fact owned them money. American Airlines still owed them a balance of unpaid commission. It also contended that the actions taken by American Air in termination the agreement were untenable resulting to prejudice to its business interest. The main issue is the right of Orient Air to the 3% overriding commission. According to American Air, the commission is based only on ticked sales. According to Orient Air, the commission is based on the total revenue cos Orient Air has been designated as the exclusive general sales agent of American Air. RTC Orient Air is entitled to the total revenue commission orders American Air to reinstate Orient Air as its Sales Agent CA affirmed RTC ISSUE: (for Agency purposes) w/n the order of the court to reinstate Orient Air was proper. HELD: NO. The contract of Agency is a contract where in a person binds himself to render some service or to do something in behalf or in representation of another with the CONSENT or AUTHORITY of the latter. Thus, there can only be a contract of agency if there is consent from the principal it cannot be compelled by law or court order. NOTE: 1. W re first issue The agreement b/w AA and OA states that OA is entitled to 2 commissions: 7-8% based on AA tickets and a 3% override commission based on ticket stock of other air carriers sold by such carriers. Thus, to limit the sales of the 3% override commission to AA ticket stocks only and NOT include TOTAL REVENUE would remove the distinction between the two provisions. The Court held that such conclusion is absurd cos it would lead to the enactment of a meaningless provision. Thus, the 3% override commission is based on the TOTAL REVENUE OA won (hindi ako sure kung tama intindi ko sa part na to. Labo eh... haha)

DOMINGO v DOMINGO Vicente Seller Gregorio broker Oscar Buyer Amparo Oscars wife Purisima sub-broker of Gregorio FACTS:

Vicente granted Gregorio, a real estate broker, the exclusive agency to sell his lot with a commission of 5% of the total price, if sold by Vicente within the 30day duration of the agency or if sold by Vicente within 3 months from the termination of the agency to a purchaser whom Gregorio presented during the 30-day duration. Gregorio authorized Purisima to look for a buyer in consideration for half of the 5% commission. Oscar, found by Gregorio, offered to buy the land at a price lower than P2.00 / sqm. Vicente, through Gregorio, asked if he could raise it. Oscar raised the offer to P1.20 / sqm and they agreed. Oscar paid P2,000 as earnest money to show that he will pay. Vicente gave Gregorio P300 in the meantime. Pursuant to his promise, Oscar gave Gregorio P1,000 as a gift for succeeding in lowering the price from P2.00 to P1.20 / sqm, this was not disclosed by Gregorio to Vicente. Oscar told him that he was backing out on the sale because he did not receive the money that he was supposed to receive from his brother in the US. After some time, Gregorio sensed something fishy because he had not heard from either Vicente or Oscar in a while so he met with Oscar. As it eventually turned out, Gregorio discovered that Vicente had already sold the property to Oscar and that he offered Oscar an even lower price if he would agree to cut off Gregorio from the transaction. Upon knowing this, he demanded the payment of his commission form Vicente who said that he was not entitled to the commission because he sold not to Oscar, but to Oscars wife, Amparo.

ISSUE: W/N the failure on the part of Gregorio to disclose to Vicente the payment to him by Oscar de Leon P1,000.00 as gift or "propina" for having persuaded Vicente to reduce the purchase price from P2.00 to P1.20 per square meter, constitutes fraud as to cause a forfeiture of his commission on the sale price yes HELD: 1. The duties and liabilities of a broker to his employer are essentially those which an agent owes to his principal: Art. 1891. Every agent is bound to render an account of his transactions and to deliver to the principal whatever he may have received by virtue of the agency, even though it may not be owing to the principal. Every stipulation exempting the agent from the obligation to render an account shall be void.

Art. 1909. The agent is responsible not only for fraud but also for negligence, which shall be judged with more less rigor by the courts, according to whether the agency was or was not for a compensation. The aforecited provisions demand the utmost good faith, fidelity, honesty, candor and fairness on the part of the agent, the real estate broker in this case, to his principal, the vendor. 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. Hence, 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 that usage or custom allows it; because the rule is to prevent the possibility of any wrong, not to remedy or repair an actual damage. NOTE: 1. Where a principal has paid an agent or broker a commission w/o knowledge that the latter has been unfaithful, the principal may recover back the commission paid, since an agent or broker who has been unfaithful is not entitled to any compensation UNLESS ratified. General Rule: Every agent is bound to render an account of his transactions (Art 189) Except: a. if the agent acted only as a middleman b. if agent informed the principal 2. Teofilo Purisima, the sub-agent of Gregorio Domingo, can only recover from Gregorio Domingo

SCHIMD & OBERLY Inc. v RJL MARTINEZ FACTS: RJL Martinez owns a fishing company. RJL wished to buy electric generators. Schimd is a supplier of such. The companies engaged in two transactions:

First transaction 3 generators were sold directly by Schimd. The 3 generators came from its stockroom Second transanction this involved 12 Nagato brand generators. In this case, RJL bought the generators from the Nagato company (in Japan) via a letter of credit. Schimd merely transmitted RJL orders to Nagato. Nagato shipped the generators DIRECTLY to RJL. Schimd received a commission for its efforts. The 15 generators then broke down. Nagato sent two technicians. They found out that the generators should only run at 4volts (the label said 5v). Schimd replaced 3 generators at once. RJL sent 3 to Japan for replacement. The remaining 9 were not replaced. Nagato informed Schimd that the latter repair the 9 generators to be charged to Nagato. Schimd refused. RJL then demanded that Schimd replace the 9 generatods. Shimd refused claiming that it was not the seller. According to Schimd it was just a contract of indent. RJL claimed it was a contract of Sale ISSUE: 1. W/n Schimd was an indentor or vendor 2. if Schimd was an indentor, can he still be liable (NEGO) HELD: 1. Schimd was an INDENTOR. The essence of a contract of sale is the transfer of ownership in consideration of a price paid or promised. On the other hand, there is no statutory description of indent. However, JD states that an indent is similar to a middleman an indentor may be best desctibed a person who acts as a middleman in a contract between a foreign supplier and a local supplier. In an indent transaction, there are three parties the buyer, the indentor and the suppier who is usually a foreign company. Schimd was not a vendor but merely an indentor in the 2nd transaction. The only participation of Schimd was to act as middleman between RJL and Nagato. In fact, in the document, it was stated that the 12 generators were ordered through indent order. 2. NO. Because an indentor is in someways an agent of the two parties, Schimd may be liable IF he bound himself to the goods. As an agent, he is bound to undertake some of the obligations of the principal (such as to warrant the generators). Court found that Schimd DID NOT expressly state that it warranted the generators. RJL could not even produce documents of the Terms and Conditions of the supposed warrant.

TAN v GULLAS FACTS: Spouses Gullas owned a parcel of land. They executed an SPOA in favor of petitioners authorizing them to be brokers for the land. The agreement was for a period of one month only and it was non-exclusive. Eventually, petitioners found a buyer in the form of the Sisters of Mary. They brought the

Sisters to the office of Gullas wherein the Sisters expressed they want to buy the property. In fact, the sisters bought the property for P20M. Petitioners then went to Gullas to get their fee. Gullas refused to pay them claming that there were not responsible for getting the Sisters of Mary. Another agent (Pacana) was the responsible. Petitioners filed a case with the RTC. They claimed that there were the efficient procuring cause. Gullas claimed that Pacana was the cause and he was already paid his fee. ISSUE: w/n petitioners should be paid. HELD: YES. Gullas failed to prove that they were not the efficient procuring cause. Pacana was not even presented in court. The SPOA which allegedly grants his power was undated and not notarized. A broker is a person whose occupation brings the parties together in matters of trade, commerce or navigation. Petitioners were authorized by Gullas to act as brockers. Although, the agreement was non exclusive (this means that Gullas can also grant the same authority to other agents), Gullas failed to prove there were other agents. An AGENT receives compensation by the consummation of the sale. On the other hand, a BROKER receives compensation by merely bringing together the parties, even if no sale was made.

MEDRANO v CA Medrano bank manager/seller Flor & Borbon brokers Mr. Lee - buyer FACTS: Medrano was chairman of a rural bank. The bank had a mango orchard which it wants to sell. Medrano contacted his cousin, Flor, to look for a buyer. An asspciate of Flor Borbon informed them that a Mr. Lee from Makati is looking for a mango orchard. Borbon then instructed Flor to tell Medrano to execute a letter authorizing them (Flor and Borbon) to negotiate the sale of the property. The first ocular inspection failed to push thru cos of the weather. Then, Lee suddenly called Borbon and told her that he was on his way to Lipa to check on another property and if he can see the mango orchard. Borbon asked Lee to meet up with Medranos daughter and an officer of the bank. Two days later, Borbon asked how the inspection went. Lee said that the mangoes looked sickly and that he will first get an agriculturist. Three weeks later, Borbon again

called Lee. Lee told her that he already bought the orchard. Lee was surprised that Borbon did not receive any commission. Borbon went to Medrano to claim her commission. Medrano gave her a measly P5K (haha). Medrano claimes that the Letter of Authority is not binding and that they are not entitled to a commission cos they did not negotiate the sale. ISSUE: 1. w/n the letter is binding 2. w/n Borond and co are entitled to commission HELD: 1. YES. The letter is the contract between the parties. Medrano signed the letter in behalf of the bank. 2. YES. Borbon and Flor were the procuring cause of the sale. Based on the testimonies, if it were not for Borbon and co, the sale would not be possible : Lee found out about the orchard via Borbon and co Lee called Borbon that he wants to see the orchard (this shows that Borbon was his only contact) a rep of the bank testified that no ads were made and that the bank did not entertain other offers The court held that if a broker is the procuring cause for the sale, he is entitled to commission. NOTE: 1. w/ re Medranos argument about negotiation it is not a prerequisite that a broker negotiate with the potential buyer so as to get his commission. It has been held in a number of cases that the brokers can get their commission even if there was no nego, never saw the customer, etc. In fact, they can still get commission even if they just put up an ad provided that this was the procuring cause of the sale. LITONJUA Jr., v ETERNIT CORP Glanville Pres of EC Delsax Regional Dir of ESAC Marquez broker/agent Lintonjua - buyer FACTS: Eternit Corp manufactures roofing materials and pipe products. 90% of its stocks were owned by ESAC, a company in Belguim. Glanville was the President of EC while Delsaux was the Regional Director of ESAC. Both their offices are in Belguim. Due to the deteriorating political condition in the Philippines, ESAC wanted to sell its land. ESAC instructucted Adams (a member of ECs board) to dispose of the land. Marquez offered them to the Litonjua brothers (Eduardo and Antonio) of Litonjua & Company Inc for P27million on Sept 12, 1986, subject to negotiation. The Litonjuas countered with a P20million cash offer. Marquez told Glanville, who told Delsaux on Oct 28, 1986, but there

was no response. On Feb 12, 1987, Delsaux responded by telex stating that based on the "Belgian/Swiss decision", the final offer was US$1million and P2.5million. Marquez sent the telex to the Litonjuas, who accepted the proposal. The Litonjuas deposited US$1million to Security Bank. However, given that the political situation was improving, Glanville informed Marquez that the sale would not push through, followed by a letter stating that the board members of EC decided not to sell the properties. Delsaux also sent a letter stating that the sale would not push through. The Litonjuas wrote EC demanding damages on account of the aborted sale, which EC rejected. They then filed for specific performance and damages against EC (which became Eterton Multi-Resources Corporation), claiming, among others, that Marquez was a broker and not an agent, so no written authority was required; that there was an agency by estoppel when Marquez was given apparent authority to sell; and that a contract of sale was perfected. RTC and CA rejected the complaints, hence this petition. ISSUE: 1. w/n Marquez was authorized as a broker/agent 2. w/n there is Agency by Estoppel HELD: 1. NO. An agency may be expressed or implied from the act 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. Acceptance by the agent may be expressed, or implied from his acts, which carry out the agency, or from his silence or inaction according to the circumstances. Agency may be oral unless the law requires a specific form. However, to create or convey real rights over immovable property via an agent, it is necessary that it is written. Thus, when a sale of piece of land is via an agent, it should be in writing otherwise it is void. The Lintonjas failed to produce such written instrument coming from the Board of EC. The Board of Directors of EC did not authorize Marquez, Glanvill or Delsauz as its agents. According to the Corp Code, corporations are controlled by its Board and can only act when authorized by such. Absent such authority, acts by an individual director is void, unless ratified. In the case, Marquez Adams and Glanville Delsaux ESAC. Even if ESAC controlled 90% of the shares of EC, the authority of the Board of EC is a condition sine qua non. The Litonjuas could not have feigned ignorance. A person dealing with an agent should not blindly trust such agent. Such person should not act negligently. He should ascertain whether the agent acts w/in the bounds of the authority given by the principal 2. NONE. Glanville and Co, expressly stated that they were acting in behalf of ESAC (Lintonjuas should have known that they do not have the authority) NOTE: Req of Agency by Estoppel: 1. Principal manifestoed a rep of As authority or knowingly allowed A to

assume such authority 2. 3rd person GF relied upon such rep 3. 3rd person changed his position to his detriment cos of the rep.

SPOUSES VILLORIA v CONTINENTLAL AIR FACTS: While in the US the Spouses Villoria approached Holiday Travel cos they wanted to purchases tickets from San Diego to Newark. Margaret Mager, the travel agent told them that all Amtrak trains are full. Thus, the couple bought two round trip tickets. The Spouses then want to book an earlier flight. Mager told them that all flights Continental Air flights are full so she booked them with Frontier Air. Since Frontier Air is much more expensive, the Spouses asked for a refund. Mager denied since the tickets are non-refundable. The Spouses then went to a Greyhound station nearby where they found out there were still Amtrack tickets available. The Spouses purchased two tickets. Afterwards, they confronted Mager. They told her that her misrepresentation misled them into buying Continental Air tickets. They asked for a refund which Mager denied. Back in the Philppines, the Spouses Continental Air and told them about Magers misrepresentation. They then asked for a refund. Continental Air denied their request. Instead, Con Air said that they can use their tickets to purchase other tickets. But when they Spouses wanted to buy tickets going to LA, it was denied. The Spouses filed a complaint demanding a refund and other damages. RTC granted in favor of the Spouses. Ruled that Holiday Inn is an agent of Con Air CA Reversed RTC. Holiday is not an agent. What happened was a contract of sale (not agency) cos Holiday Travel buys the tickets from Con Air then sells it to the customers. ISSUE: w/n the contract is of sale or of agency HELD: AGENCY. All the elements of agency are present: First and Second elements are present Con Air did not deny that it indeed entered into an agreement with Holdiay, where in Holiday would enter into contracts of carriage with third persons on Con Airs behalf Third element is present Holiday acted as a mere rep. It was Con Air that is bound by the contract of carriage, not Holiday. Fourth element present Con Air did not say that Holiday exceeded its authority. Con Air consistently maintains the validity of the contract of carriage that Holiday

entered on its behalf. In fact, when the Spouses told them that they bought the tickets from Holdiay, Con Air did not deny that Holiday is its agent. Con air is also estopped cos the Spouses acted on Con Airs representati on that Holiday is its agent. According to Art 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. It is not a contract of sale cos ownership and control of the tickers are not transferred to Holiday. Also, it is Con Air that is bound by the contract of carriage not Holiday. The main difference between agency and contract of sale is the transfer of ownership: Sale the delivery effects a relinquishment of title, control and ownership Agency principal retains ownership and control, agency merely acts on his behalf and instructions. NOTE: 1. Con Air not liable for the acts of its agent cos Con Air did not exercise control over Holidays employees and that it was not negligent.

RALLOS v YANGCO FACTS: Yangco owns a company which buy and sells tobacco leaf products. On November 27, 1907, Yangco sent a letter to Rallos telling the latter that he wants to do business with him. Via the letter, Yangco introduced Florentino Collantes as his agent. According to Yangco, Collantes is empowered by an SPOA to perform all acts necessary to carry out his (Yangcos) plans. Thus, Rallos did business with Yangco thru his agent, Collantes. In 1909, Rallos sent to Collantes 218 bundles of tobacco to be sold on commission (2% commission). Collantes sold the tobacco for ~P1700. His commission was ~P200. But instead of remitting the P1500, he appropriated the money. Rallos then demanded payment from Yangco. Yangco refused. He said that he had already terminated their agency relationship BEFORE the goods were deliveted to Collantes. According to him, Collantes was acting personally and not as his agent. However, this fact was not communicated to Rallos - no notice of the termination was given to him. ISSUE: w/n Yangco is liable. HELD: YES. Yangco advertised Collantes as his agent. Thus, it was his duty to inform Rallos that the agency is terminated. Failing to do so, he is liable for whatever goods Rallos, without negligence and in good faith, sent to Collantes. NOTE: 1. Knowledge of termination may be ACTUAL or CONSTRUCTIVE.

LINTONJUA v FERANDEZ Brokers of Fernandez Alimario and Cisco Rep. of owner Fernandez Buyers Lintonjua bros FACTS: Lintonjuas Version - Two brokers, Alimario and Cisco, offered for sale a parcel of land to the Lintonjua bros. They said that Fernendez, the representative of the owners, authorized them to look for a buyer. All of them met in the bros office in Mandaluyong wherein they agreed to buy the land at P150/sq meter. They also agreed that the owners would shoulder the tax and other expenses. They agreed to meet up again on December 8 to finalize the sale. It was on this date that Fernandez would bring a written authority from the owners authorizing her to sell the land. On the said date, only Cisco showed up. He said that Fernandez was not able to go cos of some problem with the tenants. After a few weeks, the bros wrote Fernandez and demanded that she sell them the land. Fernandez replied that: 1) She did not agree that the owners would shoulder the tax expenses, etc. 2) They did not agree to sign the Deed of Sale on December 8 and 3) Cos of some problem with the tenants, she informed his brokers to tell the Lintonjuas that the sale will not push thru. The bros filed in court for specific performance. According to them there was a contract of sale based on her letter: My cousin and I have thereby changed our mind and that the sale will no longer push through. .... In view thereof, I regret to formally inform you that we are no longer selling the property until the problems are fully settled.

Fernandez Version: She asked Alimario to look for buyers on a best offer basis. And when she met up with the bros, she merely wanted to hear their offer. She could not have bound the owners to the sale cos she has no written authority to sell the land. After the meeting, she found out that there were tenants in the land thus she could not get the clearance. Also, her cousin (co owner) would not agree on the P150/sq meter price. Thus, she informed Alimario and Cisco to relay to the bros the situation. There was also no earnest money paid by the bros. ISSUE:1. w/n there is a contract of sale. 2. w/n contract falls w/in the stature of frauds HELD: 1. NO. It was clear from the letter that Fernandez did not agree on selling the land. When Fernandez used changed our minds, she was referring to the fact of selling the property AT ALL. Not selling the property to the bros. Also, there was no evidence that Fernadez had a WRITTEN authority, from the

owners, to sell the land. Art 1878 states that an SPOA is needed to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration, or to create or convey real rights over immovable property or for any other act of strict dominion. Any sale of real property by an agent NOT IN WRITING is VOID. Fernandez told the bros that she did not have any authority to sell the land. The letter she sent was signed by her alone, without any authority from the owners. Thus, the letter is not binding to the owners.

2. NO. It presupposes the existence of a perfected contract of sale. Also, it must be signed by the said party or his agent duly authorized in writing.

AGGABAO v PARULAN Elena wife Dionisio husband Atty. Parulan Dionisios bro Spouses Aggabao buyers FACTS: A real estate broker offered two lands in Paranaque to the Aggabao owned by Elena and Dionasio, who are separated in fact. They then met up Elena. She showed them: Original TCT of land 1, certified true copy of land 2 and SPOA from her husband authorizing her to sell the land. The Aggabaos gave P20k as earnest money. The spouses then went to the Register of Deeds to inquire re the lots. They found out that Land 2 was mortgaged to a bank and that there was a court orderd from Dionisio authorizing Elena to mortgage the land. The court order was necessary cos the land is conjugal property. When the spouses paid the balance, Elena did not give the owners copy of land 1. She said that it was a relative in HK. The spouses then found out that the copy was with Atty Parulan. Atty Parulan was armed by an SPOA from Dionisio authorizing him to sell the lands. He offered to give the TCT for 800k but the spouses have already paid Elena. Dioniosio then filed a case to nullify the sale base on Art 124 of the FC. RTC and CA ruled for Dionisio (RTC determined that the Elenas SPOA was forged) Spouses claim that Art 124 does not apply cos the spouses were married before the FC thus the Civil Code should apply. Art 177 states that the contract

was merely voidable (not void) and maybe subject to ratification. And such ratification, according to them, happened when Atty. Parulan made an offer to give the TCT for 800k. (Agency) Spouses contend they are good faith buyers Spouses contend that Veloso Doctrine should apply thus sale valid even if SPOA forged. ISSUE: 1. w/n Art 124 of the FC applies 2. w/n they are GF buyers 3. w/n the Veloso Doctrine applies (Veloso v Ca) HELD: 1. YES. The sale was made in 1991, which was after the effectively of the FC. The FC also provides that it has a retroactive effect provided that vested rights are not affected. However, even if it was indeed under the old law, Atty. Parulan could not have ratified the sale cos the authority given to him was only to sell the land NOT to administer it. Atty Parulan had no powers of admin, thus he cannot ratify the contract. Powers of admin does not include power to encumber or dispose, which are strict acts of ownership. An authority to dispose cannot proceed from an authority to admin, and vice versa. The two powers may only be exercised by an agent, following the laws on ageny. 2. NO. It is true that buyers can rely on the face of the TCT w/o further inquiry. However, the question here is not the authenticity of the land but the authenticity of the seller. Case law states that buyers of conjugal property should exercise two kinds of diligence: 1) Verify the validity of the title and 2) verify the authority of the seller. Spouses did not do the latter. 3. NO. Veloso NA cos the property there belonged to the exclusive prop of the husband. The land in this case is part of the conjugal property. NOTE: 1. Art 124 of the FC The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly xxx In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be VOID. DOMINION INSURANCE CORP v CA FACTS: Guevarra is an agent of Dominion Insurance Corp. He paid several claims out of his own pocket. He filed a case with the RTC to seek reimbursement.

ISSUE: 1. w/n he acted w/in his authority as an agent. 2. w/n he should be reimbursed. HELD: 1. NO. Even tho the document has the word special, Insurance Corp only gave general agency to Guevarra. If the agency agreement is couched in general terms, it is only limited to acts of administration. In the case, Guevarra paid the claims out of his own funds. Such act requires a SPOA as stated in Art 1878 (1) of the NCC: SPOAs are needed to make payments not usually considered as acts of admin. Since an SPOA is needed to make the payments, he exceeded his authority. 2. YES/NO. If we follow the rules of agency, Guevarra should not be reimbursed. According to 1918 (1) of the NCC: the principal is not liable for expenses incurred by the agent if the agent acted in contravention of the principals instructions unless the principal wants to avail himself of the benefits. In the case, the agreement was explicit that the claims should be paid out of a revolving fund in Guevarras possession. However, he should be reimbursed base on natural obligaitons. To rule otherwise would be unjust enrichment.

VELOSO v CA Veloso owner of land, husband Irma seller, wife Escario - buyer FACTS: Veloso owns a land in Tondo, Manila. Such land is under his name and is not part of the conjugal property of their family. He then found out that his title was cancelled and new one was issued in the name of Escario. Veloso claimed that he was in possession of the title but when his wife left the country, he found out it was missing. When he went to the Reg of Deeds, he found out that his sold the land and it was supported by a GPOA. Veloso claimed that he did not authorize the sale and that he did not issue any GPOA. He claims that the GPOA was forged and that his signature was falsified (He showed bank documents to prove that his signature was different). Veloso filed for a petition to declare the sale as void. Escario said that she is a buyer in good faith. She just relied on the face of the GPOA hence sale should be valid. ISSUE: w/n the sale is valid. HELD: YES. The GPOA was valid and regular on its face. The fact that it was notarized carries evidentiary weight that it was duly executed. Even tho it was labeled as only a General Power of Attorney, the sale was s till valid cos it stated therein an authority to sell. The courts said that even if the instrument is captioned as a general power of attorney, but if it states a specific power (such as the power to sell), then the intention is to confer such power. On the other

hand, even if it is captioned as a special power of attorney, but the words are couched in a general manner, only powers of admin are conferred. Essentially, what is controlling extent of the powers contemplated. Escario is thus an innocent buyer in GF cos she just relied on the GPOA NOTE: 1. Veloso failed to prove fraud cos he just presented signatures claiming they are different from the sigs in the GPOA Fraud must be proved by clear and convincing evidence. 2. Equitable Estoppel where one or two persons will be injured by the loss, the person who made the loss possible will bear the loss. this was applied cos although Veloso admitted that he possessed the only copy of the TCT, his wife was able to acquire one. Such possession was deemed as a conclusive authority from Veloso to the Reg of Deeds to issue a new TCT. PINEDA v CA FACTS: Prime Marine Services INC got a group insurance policy from Insular Life. During the effectivity of the policy, 6 employees of PMSI died in a ship accident. The families of the victims went to Capt. Nuval for help in claiming the benefits. Nuval agreed. The families executed an POA authorizing Nuval to follow up, demand, serve for their benefit indemnities of sums of money due them relative to the sinking of the ship. Unknown to them, Nuval used the SPOA to claim the group insurance policy from Insular life. He deposited them in his own account. When the families found out that their deceased members have an insurance policy, they went to Insular to claim them. Insular said that they already delivered the payments to Nuval. Insular said that the POA authorizing Nuval were sufficient. The written authority is specifically authorizes Nuval to claim any sum of money pertaining to the sinking of the ship. There is also nothing in the law that requires a SPOA to claim insurance. ISSUE: 1. w/n the POA authorizes Nuval to claim the insurance proceeds. 2. w/n Insular is bound by the acts of Nuval, its agent. HELD: 1. NO. The POA does not state in unequivocal terms that Nuval has the authority to receive insurance proceeds. As stated by the respondent himself, such POA were SPOAs. Thus, their execution means the exclusion of any intent to grant a GPOA. SPOAs are strictly construed. It would be highly imprudent to construe the POAs to include insurance proceeds especially since the normal insurance practice is that payments are just COURSED THRU the and not paid to the employers (PMSI in this case).

2. YES. Nuval is the agent of Insular life. It has been held that the employer is the agent of the insurer. An agency relationship is based upon consent by one person and that another shall act in his behalf and subject to his control . Such a situation is present in the employer-insurer relationship: The insurer

directs the performance of the employer's administrative acts, and if these duties are not undertaken properly, the insurer is in a position to exercise more constricted control over the employer's conduct. As regards an employeeemployer relationship, there is no control cos the employee has no knowledge or control re employers handling of the policy. Thus, Insular acted negligently when it just relied on the POA of Nuvali. NOTE: 1. Group insurance policy a single insurance covering numerous individuals. Payments are coursed thru the employer. It can be contributory (employees help pay for the premiums, to be deducted from their salaries) or non-contributory (employer pays 100% of the premium).