Professional Documents
Culture Documents
Essential Elements:
(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.
Extinguishment
o Generally: among others, By the death, civil
interdiction, insanity or insolvency of the principal or
of the agent
- death of the principal effects instantaneous
and absolute revocation of the authority of
the agent
o Exceptions:
(Art. 1930) if it has been constituted in the
common interest of the latter and of the
agent, or in the interest of a third person who
has accepted the stipulation in his favor.
(Art. 1931) agent acted without knowledge
of the pricipals death and that the third
person was in good faith (both these reqs
should be present)
1214M, dated October 16, 1989, covers 25,000 bags of sugar. Each
bag contained 50 kg and priced at P638.00 per bag. The
transaction covered was a direct sale.
On October 25, 1989, STM sold to private respondent Consolidated
Sugar Corporation (CSC) its rights in the same SLDR for
P14,750,000.00. CSC issued checks in payment. That same day,
CSC wrote petitioner that it had been authorized by STM to
withdraw the sugar covered by the said SLDR. Enclosed in the letter
were a copy of SLDR No. 1214M and a letter of authority from STM
authorizing CSC to withdraw for and in our behalf the
refined sugar covered by the SLDR On Oct. 27, 1989, STM
issued checks to VMC as payment for 50,000 bags, covering SLDR
No. 1214M. CSC surrendered the SLDR No. 1214M and to VMCs
NAWACO Warehouse and was allowed to withdraw sugar. But only
2,000 bags had been released because VMC refused to release the
other 23,000 bags.
Therefore, CSC informed VMC that SLDR No. 1214M had been sold
and endorsed to it. But VMC replied that it could not allow any
further withdrawals of sugar against SLDR No. 1214M because STM
had already withdrawn all the sugar covered by the cleared checks.
VMC also claimed that CSC was only representing itself as STMs
agent as it had withdrawn the 2,000 bags against SLDR No. 1214M
for and in behalf of STM. Hence, CSC filed a complaint for specific
performance against Teresita Ng Sy (doing business under STM's
name) and VMC. However, the suit against Sy was discontinued
because later became a witness. RTC ruled in favor of CSC and
ordered VMC to deliver the 23,000 bags left. CA concurred. Hence
this appeal.
ISSUES: W/N CA erred in not ruling that CSC was an agent of STM
and hence, estopped to sue upon SLDR No. 1214M as assignee.
HELD: NO. CSC was not an agent of STM. VMC heavily relies on
STMs letter of authority that said CSC is authorized to withdraw
sugar for and in our behalf. It is clear from Art. 1868 that the:
basis of agency is representation. On the part of the principal, there
must be an actual intention to appoint or an intention naturally
inferable from his words or actions, and on the part of the agent,
there must be an intention to accept the appointment and act on it,
and in the absence of such intent, there is generally NO agency.
In answer, the petitioner alleged that sale was void for lack of
consideration and that she was not indebted to the respondent as
she only referred her friends to respondent whom she knew to be
engaged in the business of lending money in exchange for personal
checks through her capitalist Arsenio Pua. Further petitioner
contended that since the respondent is also an agent, she does not
have the capacity to sue her.
Issue/s:
Whether or not petitioner and respondent were acting on their
personal capacity or as mere agents.
Ruling:
The question whether an agency has been created is ordinarily a
question which may be established in the same was as any other
fact, either by direct or circumstantial evidence. Agency may be
implied from the words and conduct of the parties and the
circumstances of the particular case. Though the fact or extent of
authority of the agents may not, as a general rule, be established
from the declarations of the agents alone, if one professed to act as
agent for another, she may be stopped to deny her agency both as
against the asserted principal and the third persons interested in
the transaction in which he or she is engaged.
In this case, petitioner knew that the financier of the respondent is
Pua, and respondent knew that the borrowers are friends of
petitioner. It is sufficient that petitioner disclosed to respondent
that the former was acting in behalf of her principals, her friends.
For an agency to arise, it is not necessary that the principal
personally encounter the third person with whom the agent
interacts.
agent. The fact that "the defendant entered into a contract with
one E. Merritt, where by the said Merritt undertook and agreed with
the defendant to build for the defendant a costly edifice" shows
that Merritt was authorized to do the work according to his own
method and without being subject to the defendant's control,
except as to the result of the work. He could purchase his materials
and supplies from whom he pleased and at such prices as he
desired to pay. Again, the allegations that the "plaintiffs delivered
the Merritt . . . . certain materials (the materials in question) of the
value of P1,381.21, . . . . which price Merritt agreed to pay," show
that there were no contractual relations whatever between the
sellers and the defendant. The mere fact that Merritt and the
defendant had stipulated in their building contract that the latter
could, "upon certain contingencies," take possession of the
incompleted building and all materials on the ground, did not
change Merritt from an independent contractor to an agent. In the
absence of a statute creating what is known as mechanics' liens,
the owner of a building is not liable for the value of materials
purchased by an independent contractor either as such owner or as
the assignee of the contractor.
Agency vs Sale
Quiroga vs Parsons G.R. No. L-11491
Doctrine: Contract of Agency to Sell vs Contract of Sale
Facts: On Jan 24, 1911, plaintiff and the respondent entered into a
contract making the latter an agent of the former. The contract
stipulates that Don Andres Quiroga, here in petitioner, grants
exclusive rights to sell his beds in the Visayan region to J. Parsons.
The contract only stipulates that J.Parsons should pay Quiroga
within 6 months upon the delivery of beds.
Quiroga files a case against Parsons for allegedly violating the
following stipulations: not to sell the beds at higher prices than
those of the invoices; to have an open establishment in Iloilo; itself
to conduct the agency; to keep the beds on public exhibition, and
to pay for the advertisement expenses for the same; and to order
the beds by the dozen and in no other manner. With the exception
of the obligation on the part of the defendant to order the beds by
the dozen and in no other manner, none of the obligations imputed
to the defendant in the two causes of action are expressly set forth
in the contract. But the plaintiff alleged that the defendant was his
agent for the sale of his beds in Iloilo, and that said obligations are
implied in a contract of commercial agency. The whole question,
therefore, reduced itself to a determination as to whether the
defendant, by reason of the contract hereinbefore transcribed, was
a purchaser or an agent of the plaintiff for the sale of his beds.
Issue: Whether the contract is a contract of agency or of sale.
Held: In order to classify a contract, due attention must be given to
its essential clauses. In the contract in question, what was
essential, as constituting its cause and subject matter, is that the
plaintiff was to furnish the defendant with the beds which the latter
might order, at the price stipulated, and that the defendant was to
pay the price in the manner stipulated. Payment was to be made at
the end of sixty days, or before, at the plaintiffs request, or in cash,
if the defendant so preferred, and in these last two cases an
additional discount was to be allowed for prompt payment. These
are precisely the essential features of a contract of purchase and
sale. There was the obligation on the part of the plaintiff to supply
the beds, and, on the part of the defendant, to pay their price.
These features exclude the legal conception of an agency or order
to sell whereby the mandatory or agent received the thing to sell it,
and does not pay its price, but delivers to the principal the price he
obtains from the sale of the thing to a third person, and if he does
not succeed in selling it, he returns it. By virtue of the contract
between the plaintiff and the defendant, the latter, on receiving the
beds, was necessarily obliged to pay their price within the term
fixed, without any other consideration and regardless as to whether
he had or had not sold the beds.
In respect to the defendants obligation to order by the dozen, the
only one expressly imposed by the contract, the effect of its breach
would only entitle the plaintiff to disregard the orders which the
defendant might place under other conditions; but if the plaintiff
consents to fill them, he waives his right and cannot complain for
having acted thus at his own free will.
For the foregoing reasons, we are of opinion that the contract by
and between the plaintiff and the defendant was one of purchase
and sale, and that the obligations the breach of which is alleged as
The Supreme Court held that agency is shown when Hahn claimed
he took orders for BMW cars and transmits them to BMW. Then
BMW fixes the down payment and pricing charges and will notify
Hahn of the scheduled production month for the orders, and
reconfirm the orders by signing and returning to Hahn the
acceptance sheets.
The payment is made by the buyer directly to BMW. Title to cars
purchased passed directly to the buyer and Hahn never paid for the
purchase price of BMW cars sold in the Philippines. Hahn was
credited with a commission equal to 14% of the purchase price
upon the invoicing of a vehicle order by BMW. Upon confirmation in
writing that the vehicles had been registered in the Philippines and
serviced by him, Hahn received an additional 3% of the full
purchase price. Hahn performed after-sale services, including,
warranty services. for which he received reimbursement from BMW.
All orders were on invoices and forms of BMW.
Moreover, the Court distinguished an agent from a broker. The
court ruled that 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.
(Siasat v. IAC)
Where general words were employed in an agreement that no
restrictions were intended as to the manner the agency was to be
carried out or in the place where it was to be executed, a general
agency is constituted.
(Katigbak v. Tai Hing Co.)
The power of attorney given by the principal authorized the agent
to sell any kind of of realty that "might belong" to the principal. The
phrase "might belong" means that the authority given by the
principal referred not only to the property he had at the time the
power was conferred, but also to such as he might afterwards have
during the time the power of attorney was in force.
SIASAT v. IAC
139 SCRA 238October 10, 1985; Gutierrez, Jr.
FACTS
ly for the 30%commission due from the second delivery. The fact
that theNaciaceno demanded only the commission on the 2nd
delivery without reference to the alleged unpaid balancewhich was
only slightly less than the amount claimed canonly mean that the
commission on the first delivery wasalready fully paid, Considering
the sizeable sum involved,such an omission is too glaringly remiss
to be regarded as anoversight.
Moreover, the Naciaceno's authorization letter bears hersignature
with the handwritten words "Fully Paid", inscribedabove it.
The respondent contested her signature as a forgery,Handwriting
experts from two government agenciestestified on the matter.
While the experts testified in a civil case, the principles incriminal
cases involving forgery are applicable. Forgerycannot be presumed.
It must be proved. Borromeo v. Court of Appeals - Where the
evidence, as here, gives rise to twoprobabilities, one consistent
with the defendant's innocenceand another indicative of his guilt,
that which is favorable tothe accused should be considered. The
constitutionalpresumption of innocence continues until overthrown
byproof of guilt beyond reasonable doubt, which requiresmoral
certainty which convinces and satisfies the reason andconscience
of those who are to act upon it
Also Guevarra was instructed that the payment for the insured
must come from the revolving fund or collection in his possession,
Gueverra should not have paid the insured through his own
capacity. Under 1918 of civil code an agent who acted in
contravention of the principals instruction the principal will not be
liable for the expenses incurred by the agent.
covered by the SPA and that the said SPA, at the time the loan
obligations were contracted, no longer had force and effect since it
was previously revoked by Perla. In the absence of authority to do
so, the REM constituted by Julian over the subject property was null
and void; thus, petitioners likewise prayed that the subsequent
extra-judicial foreclosure proceedings and the auction sale of the
subject property be also nullified.
Issues: (1) Whether or not there was a valid mortgage constituted
over subject property.
(2) Whether or not there was a valid revovation of SPA.
(3) Construction of powers of attorney.
Rulings: (1) In the case at bar, it was Julian who obtained the loan
obligations from respondent which he secured with the mortgage of
the subject property. The property mortgaged was owned by his
wife, Perla, considered a third party to the loan obligations between
Julian and respondent. It was, thus, a situation recognized by the
last paragraph of Article 2085 of the Civil Code that third persons
who are not parties to the principal obligation may secure the latter
by pledging or mortgaging their own property. There is no question
therefore that Julian was vested with the power to mortgage the
pieces of property identified in the SPA, however, the subject
property was not among those enumerated therein. Julian was not
conferred by Perla with the authority to mortgage the subject
property under the terms of the SPA, the real estate mortgages
Julian executed over the said property are therefore unenforceable.
Hodges vs. Salas and Salas Agents powers are limited by the
stipulation in the PoA
Facts:
Salas and Salas executed a PoA in favor of Felix Yulo
authorizing the latter to obtain a loan in the Salas name and
mortgage a parcel of land owned by the Salas. This PoA was
registered in the RD.
Yulo obtained a loan from C.N. Hodges in the amount of 28k
and mortgaged the land of the Salas. The loan was in the name of
Salas and Salas, holding them solidarily liable.
The whole 28k was not delivered to the Yulo. Part of it was
applied to a separate loan obtained by Yulo from Hodges.
Po Ejap then sold the said land with its improvements to his
brother Po Tecsi for the sum of P10,000.
Nov 1926, Po Tecsi died and his son Po Sun Suy was
appointed administrator of Tecsi's estate in 1927.
As Po Tecsi had not paid a part of the rent due up to the time
of his death, and his son Sun Suy also, rent due from his father's
death until Katigbak sold the property to Sun Boo, Katigbak filed
this action for the recovery of the rent.
*Po Sun Suy and Po Ching are owners of the commercial firm Tai
Hing Co.
ISSUES:
WON Po Ejap cannot have sold the property (on behalf of Tecsi)
because the power was executed by Tecsi before Tecsi owned the
property
HELD:
HE CAN SELL
RATIO/RULING:
DISPOSITION:
1. Katigbak declared owner of property. (ang labo nito. He sold it
nga eh. Hahaha)
2. Katigbaks claim for the rents accrued and unpaid by Po Tecsin
before his death - must be presented to the committee on claims
and appraisal appointed in the intestate proceedings for the
settlement of the estate of said Po Tecsi;
3. the claim of Katigbak for the rents collected by Po Sun Suy, as
administrator of the property of the intestate estate of his father Po
FACTS:
Tan Sin An and Goquiolay entered into a general commercial
partnership under the partnership name Tan Sin An and Antonio
Goquiolay for the purpose of dealing in real estate. The agreement
lodged upon Tan Sin An the sole management of the partnership
affairs. The lifetime of the partnership was fixed at ten years and
the Articles of Co-partnership stipulated that in the event of death
of any of the partners before the expiration of the term, the
partnership will not be dissolved but will be continued by the heirs
or assigns of the deceased partner. But the partnership could be
dissolved upon mutual agreement in writing of the partners.
Goquiolay executed a GPA in favor of Tan Sin An. The plaintiff
partnership purchased 3 parcels of land which was mortgaged to
La Urbana as payment of P25,000. Another 46 parcels of land
were purchased by Tan Sin An in his individual capacity which he
assumed payment of a mortgage debt for P35K. A downpayment
and the amortization were advanced by Yutivo and Co. The two
obligations were consolidated in an instrument executed by the
partnership and Tan Sin An, whereby the entire 49 lots were
mortgaged in favor of Banco HipotecarioTan Sin An died leaving
his widow, Kong Chai Pin and four minor children. The widow
subsequently became the administratrix of the estate. Repeated
demands were made by Banco Hipotecario on the partnership and
on Tan Sin An. Defendant Sing Yee, upon request of defendant
Yutivo Sons , paid the remaining balance of the mortgage debt, the
mortgage was cancelled Yutivo Sons and Sing Yee filed their claim
in the intestate proceedings of Tan Sin An for advances, interest
52 SCRA
210 Business Organization Corporation Law
Delegation of Corporate Powers Compromise Agreement
HELD: No. Corporations may compromise only in the form and with
the requisites which may be necessary to alienate their property.
Under the corporation law the power to compromise or settle
claims in favor of or against the corporation is ordinarily and
primarily committed to the Board of Directors but such power may
be delegated. The delegation must be clearly shown for as a
general rule an officer or agent of the corporation has no power to
compromise or settle a claim by or against the corporation, except
to the extent that such power is given to him either expressly or by
reasonable implication from the circumstances. In the case at bar,
there was no special power of attorney authorizing the three
lawyers to enter into a compromise agreement. This is even if the
lawyers declared in open court that they are authorized to do so by
the corporation (in this case, the transcript of stenographic notes
does not show that the lawyers indeed declare such in open court).
The fact that Cardenas, an officer of HI Cement, acted in effecting
the compromise agreement, i.e. nominating a commissioner, does
not ratify the compromise agreement. There is no showing that
Cardenas act binds HI Cement; no proof that he is authorized by
the Board; no proof that there is a provision in the articles of
incorporation of HI Cement that he can bind the corporation.
Insular Drugs V. PNB (1933)
G.R. No. L-38816
November 3, 1933
Lessons Applicable: Liabilities of person who did not sign and
liability of an agent (Negotiable Instruments Law)
FACTS: Foerster formerly a salesman and collector of Insular Drug
Co., Inc (Insular) for the Islands of Panay and Negros
instructed to take the checks which came to his hands to the Iloilo
branch of the Chartered Bank of India, Australia and China and
deposit the amounts to the credit of the Insular
Instead, placed the checks in his personal account
the fact whether any fraud has intervened. No fraud in fact need be
shown, and no excuse will be heard from the trustee. It is to avoid
the necessity of any such inquiry that the rule takes so general a
form. The rule stands on the moral obligation to refrain from
placing one's self in positions which ordinarily excite conflicts
between self-interest and integrity. It seeks to remove the
temptation that might arise out of such a relation to serve one's
self-interest at the expense of one's integrity and duty to another,
by making it impossible to profit by yielding to temptation. It
applies universally to all who come within its principle.
Domingo v Domingo
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.
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 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
Beaumont vs Prieto
Araullo, J:
Facts: Benito Legarda owns a parcel of land known as the Nagtajan
Hacienda which he wanted to sell through his agent Benito
Valdez; who is also his attorney in fact. Negotiations as to the
purchase of land has been had between Benito Valdez and W.
Borck. However, the parties eventually had a misunderstanding as
to the three (3) month period which the agent Benito Valdez gave
to Borck. It is an option period to buy the property.
Issue: Whether the agreement between the parties constitutes a
mere offer to sell or an actual contract of option?
Held: There was not contract because there was no concurrence of
the offer and acceptance of the thing and the cause which are to
constitute a contract. An option is an accepted offer. It states the
The means employed by him and his efforts must result in the sale.
The duty assumed by the broker is to bring the minds of the buyer
and seller to an agreement for a sale, and the price and terms on
which it is to be made, and until that is done his right to
commissions does not accrue. It follows, that a broker is never
entitled to commissions for unsuccessful efforts. The risk of a
failure is wholly his. The reward comes only with his success. He
may have introduced to each other parties who otherwise would
have never met; he may have created impressions, which under
later and more favorable circumstances naturally lead to and
materially assist in the consummation of a sale; he may have
planted the very seed from which others reap the harvest; but all
that gives him no claim.
The failure therefore and its consequences were the risk of the
broker only. This however must be taken with one important and
necessary limitation. If the efforts of the broker are rendered a
failure by the fault of the employer; if capriciously he changes his
mind after the purchaser, ready and willing, and consenting to the
prescribed terms, is produced; or if the latter declines to complete
the contract because of some defect of title in the ownership of the
seller, some unremoved encumbrance, some defect which is the
fault of the latter, then the broker does not lose his commissions.
But this limitation is not even an exception to the general rule
affecting the broker's right for it goes on the ground that the broker
has done his duty, that he has brought buyer and seller to an
agreement, but that the contract is not consummated and fails
though the after-fault of the seller.
One other principle applicable: Where no time for the continuance
of the contract is fixed by its terms either party is at liberty to
terminate it at will,subject only to the ordinary requirements of
good faith. Usually the broker is entitled to a fair and reasonable
opportunity to perform his obligation, subject of course to the right
of the seller to sell independently. But having been granted him,
the right of the principal to terminate his authority is absolute and
unrestricted, except only that he may not do it in bad faith.
Although the present plaintiff could probably have effected the
sale, he is not entitled to the commissions agreed upon because he
had no intervention whatever in, and much sale in question. It must
be borne in mind that no definite period was fixed by the defendant
within which the plaintiff might effect the sale of its factory. Nor
procuring cause of the sale, which simply means that the measures
employed by him and the efforts he exerted must result in a sale.
Based on the facts, it may be recalled that through petitioner's
efforts, Medicard was able to enter into a Contract with Unilab, two
times, However before the expiration of the renewed contract,
Unilab rejected the proposal. Medicard then requested petitioner to
reduce his commission should the contract be renewed on its third
year, but he was obstinate. It is clear that since petitioner refused
to reduce his commission, Medicard directly negotiated with Unilab,
thus revoking its agency contract with petitioner. Such revocation is
authorized by Article 1924 of the Civil Code which provides: "The
agency is revoked if the principal directly manages the business
entrusted to the agent, dealing directly with third persons."
Moreover, as found by the lower courts, petitioner did not render
services to Medicard, his principal, to entitle him to a commission.
There is no indication from the records that he exerted any effort in
order that Unilab and Medicard, after the expiration of the Health
Care Program Contract, can renew it for the third time. In fact, his
refusal to reduce his commission constrained Medicard to negotiate
directly with Unilab. We find no reason in law or in equity to rule
that he is entitled to a commission.
Infante vs. Cunanan
G.R L- 5180 August 31, 1953
Bautista Angelo, J:
Facts: Infante was the owner of the land with a house built on it.
Cunanan and Mijares were contracted to sell the property from
which they would receive commission. Noche agreed to purchase
the lot but Infante informed C & M about her change of mind to sell
the lot and had them sign a document stating that their authority
to sell was already cancelled. Subsequently, Infante sold the lot &
house to Noche. Defendants herein demanded for their
commission. RTC ordered Infante to pay commission. CA affirmed.
Issue: Whether or not petitioner was duty bound to pay commission
notwithstanding that authority to sell has been cancelled.
Ruling: A principal may withdraw the authority given to an agent at
will. But respondents agreed to cancel the authority given to them
upon assurance by petitioner that should property be sold to
Noche, they would be given commission.
the sale of the school lot and building to the City of Manila. Private
respondent then went to Councilor Mariano Magsalin, the author of
the Ordinance which appropriated the money for the purchase of
said property, to present the project. He also went to the Assessor's
Office for appraisal of the value of the property. While these
transpired and his letters of authority expired, Rufino Manotok
always renewed the former's authorization until the last was given,
which was to remain in force until May 14, 1968. After securing the
report of the appraisal committee, he went to the City Mayor's
Office, which indorsed the matter to the Superintendent of City
Schools of Manila. The latter office approved the report and so
private respondent went back to the City Mayor's Office, which
thereafter indorsed the same to the Municipal Board for
appropriation. Subsequently, on April 26, 1968, Ordinance No. 6603
was passed by the Municipal Board for the appropriation of the sum
corresponding to the purchase price. Petitioner received the full
payment of the purchase price, but private respondent did not
receive a single centavo as commission.
8. Atty. Bisbal testified that Huelgas was aware of the fact the
Saligumba was working on the sale but he never offered to help in
the acquisition of the property.
9. The CFI remdered judgment in favor of Saligumba.
affirmed by the CA.
This was