Professional Documents
Culture Documents
SUPREME COURT
Manila
EN BANC
G.R. No. L-30573 October 29, 1971
VICENTE M. DOMINGO, represented by his heirs, ANTONINA
RAYMUNDO VDA. DE DOMINGO, RICARDO, CESAR, AMELIA,
VICENTE JR., SALVADOR, IRENE and JOSELITO, all surnamed
DOMINGO, petitioners-appellants,
vs.
GREGORIO
M.
DOMINGO, respondent-appellee, TEOFILO
P.
PURISIMA, intervenor-respondent.
Teofilo Leonin for petitioners-appellants.
Osorio, Osorio & Osorio for respondent-appellee.
Teofilo P. Purisima in his own behalf as intervenor-respondent.
MAKASIAR, J.:
Petitioner-appellant Vicente M. Domingo, now deceased and
represented by his heirs, Antonina Raymundo vda. de Domingo,
Ricardo, Cesar, Amelia, Vicente Jr., Salvacion, Irene and Joselito, all
surnamed Domingo, sought the reversal of the majority decision
dated, March 12, 1969 of the Special Division of Five of the Court of
Appeals affirming the judgment of the trial court, which sentenced
the said Vicente M. Domingo to pay Gregorio M. Domingo P2,307.50
and the intervenor Teofilo P. Purisima P2,607.50 with interest on
both amounts from the date of the filing of the complaint, to pay
Gregorio Domingo P1,000.00 as moral and exemplary damages and
P500.00 as attorney's fees plus costs.
The following facts were found to be established by the majority of the
Special Division of Five of the Court of Appeals:
In a document Exhibit "A" executed on June 2, 1956, Vicente M.
Domingo granted Gregorio Domingo, a real estate broker, the
exclusive agency to sell his lot No. 883 of Piedad Estate with an area
of about 88,477 square meters at the rate of P2.00 per square meter
(or for P176,954.00) with a commission of 5% on the total price, if the
property is sold by Vicente or by anyone else during the 30-day
duration of the agency or if the property is sold by Vicente within
three months from the termination of the agency to apurchaser to
whom it was submitted by Gregorio during the continuance of the
agency with notice to Vicente. The said agency contract was in
triplicate, one copy was given to Vicente, while the original and
another copy were retained by Gregorio.
On June 3, 1956, Gregorio authorized the intervenor Teofilo P.
Purisima to look for a buyer, promising him one-half of the 5%
commission.
by reason of the sale; and (3) whether the award of legal interest,
moral and exemplary damages, attorney's fees and costs, was proper.
Unfortunately, the majority opinion penned by Justice Edilberto
Soriano and concurred in by Justice Juan Enriquez did not touch on
these issues which were extensively discussed by Justice Magno
Gatmaitan in his dissenting opinion. However, Justice Esguerra, in
his concurring opinion, affirmed that it does not constitute breach of
trust or fraud on the part of the broker and regarded same as merely
part of the whole process of bringing about the meeting of the minds
of the seller and the purchaser and that the commitment from the
prospect buyer that he would give a reward to Gregorio if he could
effect better terms for him from the seller, independent of his
legitimate commission, is not fraudulent, because the principal can
reject the terms offered by the prospective buyer if he believes that
such terms are onerous disadvantageous to him. On the other hand,
Justice Gatmaitan, with whom Justice Antonio Cafizares corner held
the view that such an act on the part of Gregorio was fraudulent and
constituted a breach of trust, which should deprive him of his right to
the commission.
The duties and liabilities of a broker to his employer are essentially
those which an agent owes to his principal. 1
Consequently, the decisive legal provisions are in found Articles 1891
and 1909 of the New Civil Code.
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.
xxx xxx xxx
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.
Article 1891 of the New Civil Code amends Article 17 of the old
Spanish Civil Code which provides that:
Art. 1720. Every agent is bound to give an account of
his transaction and to pay to the principal whatever he
may have received by virtue of the agency, even though
what he has received is not due to the principal.
The modification contained in the first paragraph Article 1891
consists in changing the phrase "to pay" to "to deliver", which latter
term is more comprehensive than the former.
Paragraph 2 of Article 1891 is a new addition designed to stress the
highest loyalty that is required to an agent condemning as void
any stipulation exempting the agent from the duty and liability
imposed on him in paragraph one thereof.
Article 1909 of the New Civil Code is essentially a reinstatement of
Article 1726 of the old Spanish Civil Code which reads thus:
Art. 1726. The agent is liable not only for fraud, but
also for negligence, which shall be judged with more or
less severity by the courts, according to whether the
agency was gratuitous or for a price or reward.
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. 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. 2
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. 3 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 hisprincipal, 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.
This Court has been consistent in the rigorous application of Article
1720 of the old Spanish Civil Code. Thus, for failure to deliver sums
of money paid to him as an insurance agent for the account of his
employer as required by said Article 1720, said insurance agent was
convicted estafa. 4 An administrator of an estate was likewise under
the same Article 1720 for failure to render an account of his
administration to the heirs unless the heirs consented thereto or are
estopped by having accepted the correctness of his account
previously rendered. 5
Because of his responsibility under the aforecited article 1720, an
agent is likewise liable for estafa for failure to deliver to his principal
transaction. Neither would the rule apply if the agent or broker had
informed the principal of the gift or bonus or profit he received from
the purchaser and his principal did not object therto. 11 Herein
defendant-appellee Gregorio Domingo was not merely a middleman of
the petitioner-appellant Vicente Domingo and the buyer Oscar de
Leon. He was the broker and agent of said petitioner-appellant only.
And therein petitioner-appellant was not aware of the gift of One
Thousand Pesos (P1,000.00) received by Gregorio Domingo from the
prospective buyer; much less did he consent to his agent's accepting
such a gift.
The fact that the buyer appearing in the deed of sale is Amparo Diaz,
the wife of Oscar de Leon, does not materially alter the situation;
because the transaction, to be valid, must necessarily be with the
consent of the husband Oscar de Leon, who is the administrator of
their conjugal assets including their house and lot at No. 40 Denver
Street, Cubao, Quezon City, which were given as part of and
constituted the down payment on, the purchase price of herein
petitioner-appellant's lot No. 883 of Piedad Estate. Hence, both in law
and in fact, it was still Oscar de Leon who was the buyer.
As a necessary consequence of such breach of trust, defendantappellee Gregorio Domingo must forfeit his right to the commission
and must return the part of the commission he received from his
principal.
Teofilo Purisima, the sub-agent of Gregorio Domingo, can only
recover from Gregorio Domingo his one-half share of whatever
amounts Gregorio Domingo received by virtue of the transaction as
his sub-agency contract was with Gregorio Domingo alone and not
with Vicente Domingo, who was not even aware of such sub-agency.
Since Gregorio Domingo received from Vicente Domingo and Oscar de
Leon respectively the amounts of Three Hundred Pesos (P300.00) and
One Thousand Pesos (P1,000.00) or a total of One Thousand Three
Hundred Pesos (P1,300.00), one-half of the same, which is Six
Hundred Fifty Pesos (P650.00), should be paid by Gregorio Domingo
to Teofilo Purisima.
Because Gregorio Domingo's clearly unfounded complaint caused
Vicente Domingo mental anguish and serious anxiety as well as
wounded feelings, petitioner-appellant Vicente Domingo should be
awarded moral damages in the reasonable amount of One Thousand
Pesos (P1,000.00) attorney's fees in the reasonable amount of One
Thousand Pesos (P1,000.00), considering that this case has been
pending for the last fifteen (15) years from its filing on October 3,
1956.
WHEREFORE, the judgment is hereby rendered, reversing the
decision of the Court of Appeals and directing defendant-appellee
Gregorio Domingo: (1) to pay to the heirs of Vicente Domingo the sum
of One Thousand Pesos (P1,000.00) as moral damages and One
principal or the party for whom another acts and from whom he or
she derives the authority to act.31 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.32 By this legal fiction, the actual or real absence of the
principal is converted into his legal or juridical presence qui facit
per alium facit per se.33
The elements of the contract of agency are: (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.34
In this case, the parties do not dispute the existence of the agency
relationship between respondents ERWIN as principal and EDWIN as
agent. The only cause of the present dispute is whether respondent
EDWIN exceeded his authority when he signed the Deed of
Assignment thereby binding himself personally to pay the obligations
to petitioner. Petitioner firmly believes that respondent EDWIN acted
beyond the authority granted by his principal and he should
therefore bear the effect of his deed pursuant to Article 1897 of the
New Civil Code.
We disagree.
Article 1897 reinforces the familiar doctrine that an agent, who acts
as such, is not personally liable to the party with whom he contracts.
The same provision, however, presents two instances 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. We hold that respondent EDWIN does not fall within any of
the exceptions contained in this provision.
The Deed of Assignment clearly states that respondent EDWIN signed
thereon as the sales manager of Impact Systems. As discussed
elsewhere, the position of manager is unique in that it presupposes
the grant of broad powers with which to conduct the business of the
principal, thus:
The powers of an agent are particularly broad in the case of one
acting as a general agent or manager; such a position presupposes a
degree of confidence reposed and investiture with liberal powers for
the exercise of judgment and discretion in transactions and concerns
which are incidental or appurtenant to the business entrusted to his
care and management. 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. x x x. 35
THIRD DIVISION
SORIAMONT
STEAMSHIP
AGENCIES, INC., and PATRICK
RONAS,
Petitioners,
- versus SPRINT TRANSPORT SERVICES,
INC., RICARDO CRUZ PAPA, doing
business under the style PAPA
TRANSPORT SERVICES,
Respondents.
Ordering [Soriamont and Ronas] to pay the cost of the suit. [6]
The rate of interest shall be increased to 12% per annum once this
decision becomes final and executory.
A.
This is to prove that they are authorizing their representative
to get from us a chassis unit.
Q.
A.
Sometime a representative bring to our office the letter or the
authorization or sometime thru fax, Sir.
Q.
A.
By fax, Sir.
Atty. Porciuncula:
Q.
Mr. Witness, as operation manager, are you aware of any
transactions between Sprint Transport Services, Inc. and the
defendant Soriamont Steamship Agencies, Inc.?
Q.
Is this standard operating procedure of Sprint Transport
Services, Inc.?
A.
Yes, Sir.
Q.
A.
Yes, Sir, if the trucking could not bring to our office the
original copy of the authorization they have to send us thru fax, but
the original copy of the authorization will be followed.
A.
Atty. Porciuncula:
Court:
Q.
Q.
Mr. Witness, I am showing to you two documents of
Soriamont Steamship Agencies, Inc. letter head with the headings
Authorization, are these the same withdrawal authority that you
mentioned awhile ago?
A.
The representative of Soriamont Steamship Agencies, Inc.,
Your Honor.
A.
Atty. Porciuncula:
Atty. Porciuncula:
Q.
A.
Q.
Will you kindly tell this Honorable Court what do you mean
by withdrawing the chassis units from your container yard?
Yes, Sir.
Court:
Mark them.
Witness:
xxxx
Before they can withdraw the chassis they have to present
withdrawal authority, Sir.
Atty. Porciuncula:
Q.
Way back Mr. Witness, who withdrew the chassis units 2-07
and 2-55?
A.
The representative of Soriamont Steamship Agencies, Inc., the
Papa Trucking, Sir.
Q.
Mr. Witness, could you tell this Honorable Court what an
outgoing Equipment Interchange Receipt means?
Q.
And are these trucking companies authorized to withdraw
these chassis units?
A.
This is a document proving that the representative of
Soriamont Steamship Agencies, Inc. really withdraw (sic) the chassis
units, Sir.
A.
Atty. Porciuncula:
Atty. Porciuncula:
Q.
Showing you again Mr. Witness, this authorization previously
marked as Exhibits JJ and KK, could you please go over the same
and tell this Honorable Court where states there that the trucking
companies which you mentioned awhile ago authorized to withdraw?
Q.
Going back Mr. Witness, you mentioned awhile ago that your
company issued outgoing Equipment Interchange Receipt?
A.
A.
Yes, Sir.
Atty. Porciuncula:
At this juncture, Your Honor, may we request that the Papa
trucking and Rebson trucking identified by the witness be bracketed
and mark as our Exhibits JJ-1 and KK-1, Your Honor.
Q.
Are there incoming Equipment Interchange Receipt Mr.
Witness?
A.
We have not made Incoming Equipment Interchange Receipt
with respect to Soriamont Steamship Agencies, Inc., Sir.
Q.
A.
Because they have not returned to us the two chassis units. [20]
Court:
Mark them. Are these documents have dates?
Atty. Porciuncula:
Yes, Your Honor, both documents are dated June 19, 1996.
Q.
A.
After they presented to us the withdrawal authority, we called
up Soriamont Steamship Agencies, Inc. to verify whether the one sent
to us through truck and the one sent to us through fax are one and
the same.
Q.
A.
Then after the verification whether it is true, then we asked
them to choose the chassis units then my checker would see to it
whether the chassis units are in good condition, then after that we
prepared the outgoing Equipment Interchange Receipt, Sir.
2.
When an obligation, not constituting a loan or forbearance of
money, is breached, an interest on the amount of damages awarded
may be imposed at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on unliquidated
claims or damages except when or until the demand can be
established with reasonable certainty. Accordingly, where the
demand is established with reasonable certainty, the interest shall
begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty cannot
be so reasonably established at the time the demand is made, the
interest shall begin to run only from the date the judgment of the
court is made (at which time the quantification of damages may be
deemed to have been reasonably ascertained). The actual base for
the computation of legal interest shall, in any case, be on the amount
finally adjudged.
3.
When the judgment of the court awarding a sum of money
becomes final and executory, the rate of legal interest, whether the
case falls under paragraph 1 or paragraph 2, above, shall be 12% per
annum from such finality until its satisfaction, this interim period
being deemed to be by then an equivalent to a forbearance of credit.
Consistent with the foregoing jurisprudence, and later on affirmed in
more recent cases,[24] when the judgment awarding a sum of money
becomes final and executory, the rate of legal interest shall be 12%
per annum from such finality until its satisfaction, this interim
period being deemed to be by then an equivalent of a forbearance of
credit. Thus, from the time the judgment becomes final until its full
satisfaction, the applicable rate of legal interest shall be twelve
percent (12%).
WHEREFORE, premises considered, the instant Petition for Review
on Certiorari is hereby DENIED.
The Decision dated 22 June
2006 and Resolution dated 7 September 2006of the Court of Appeals
in CA-G.R. CV No. 74987 are hereby AFFIRMED. Costs against
petitioner Soriamont Steamship Agencies, Inc.
SO ORDERED.
FIRST DIVISION
SECOND DIVISION
[G.R. No. 151319. November 22, 2004]
MANILA
MEMORIAL
PARK
CEMETERY,
INC., petitioner,
vs. PEDRO L. LINSANGAN, respondent.
DECISION
TINGA, J.:
For resolution in this case is a classic and interesting texbook
question in the law on agency.
This is a petition for review assailing the Decision[1] of the Court of
Appeals dated 22 June 2001, and its Resolution[2] dated 12 December
2001 in CA G.R. CV No. 49802 entitled Pedro L. Linsangan v. Manila
Memorial Cemetery, Inc. et al., finding Manila Memorial Park
Cemetery, Inc. (MMPCI) jointly and severally liable with Florencia C.
Baluyot to respondent Atty. Pedro L. Linsangan.
The facts of the case are as follows:
Sometime in 1984, 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. The contract was
for P95,000.00. 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
BaluyotP35,295.00 representing the amount to be reimbursed to the
original buyer and to complete the down payment to
MMPCI.[3] Baluyot issued handwritten and typewritten receipts for
these payments.[4]
Sometime in March 1985, Baluyot informed Atty. Linsangan that he
would be issued Contract No. 28660, a new contract covering the
subject lot in the name of the latter instead of old Contract No.
25012. Atty. Linsangan protested, but Baluyot assured him that he
would still be paying the old price of P95,000.00 with P19,838.00
credited
as
full
down
payment
leaving
a
balance
of
aboutP75,000.00.[5]
Subsequently, on 8 April 1985, Baluyot brought an Offer to Purchase
Lot No. A11 (15), Block 83, Garden Estate I denominated as Contract
No. 28660 and the Official Receipt No. 118912 dated 6 April 1985 for
the amount of P19,838.00. Contract No. 28660 has a listed price
of P132,250.00. Atty. Linsangan objected to the new contract price,
as the same was not the amount previously agreed upon. To convince
Atty. Linsangan, Baluyot executed a document [6] confirming that
while the contract price is P132,250.00, Atty. Linsangan would pay
only the original price of P95,000.00.
The document reads in part:
dealing with an agent is put upon inquiry and must discover upon
his peril the authority of the agent.[39] If he does not make such an
inquiry, he is chargeable with knowledge of the agents authority and
his ignorance of that authority will not be any excuse. [40]
As noted by one author, the ignorance of a person dealing with an
agent as to the scope of the latters authority is no excuse to such
person and the fault cannot be thrown upon the principal. [41]A person
dealing with an agent assumes the risk of lack of authority in the
agent. He cannot charge the principal by relying upon the agents
assumption of authority that proves to be unfounded. The principal,
on the other hand, may act on the presumption that third persons
dealing with his agent will not be negligent in failing to ascertain the
extent of his authority as well as the existence of his agency. [42]
In the instant case, it has not been established that Atty. Linsangan
even bothered to inquire whether Baluyot was authorized to agree to
terms contrary to those indicated in the written contract, much less
bind MMPCI by her commitment with respect to such agreements.
Even if Baluyot was Atty. Linsangans friend and known to be an
agent of MMPCI, her declarations and actions alone are not sufficient
to establish the fact or extent of her authority. [43] Atty. Linsangan as a
practicing lawyer for a relatively long period of time when he signed
the contract should have been put on guard when their agreement
was not reflected in the contract. More importantly, Atty. Linsangan
should have been alerted by the fact that Baluyot failed to effect the
transfer of rights earlier promised, and was unable to make good her
written commitment, nor convince MMPCI to assent thereto, as
evidenced by several attempts to induce him to enter into other
contracts for a higher consideration. As properly pointed out by
MMPCI, as a lawyer, a greater degree of caution should be expected of
Atty. Linsangan especially in dealings involving legal documents. He
did not even bother to ask for official receipts of his payments, nor
inquire from MMPCI directly to ascertain the real status of the
contract, blindly relying on the representations of Baluyot. A lawyer
by profession, he knew what he was doing when he signed the
written contract, knew the meaning and value of every word or
phrase used in the contract, and more importantly, knew the legal
effects which said document produced. He is bound to accept
responsibility for his negligence.
The trial and appellate courts found MMPCI liable based on
ratification and estoppel. For the trial court, MMPCIs acts of
accepting and encashing the checks issued by Atty. Linsangan as
well as allowing Baluyot to receive checks drawn in the name of
MMPCI confirm and ratify the contract of agency. On the other hand,
the Court of Appeals faulted MMPCI in failing to adopt measures to
prevent misrepresentation, and declared that in view of MMPCIs