AGENCY CASE DIGESTS SEPTEMBER 3

NO. 3: LIM PIN vs. SPOUSES CONCHITA LIAO TAN, et. al.
No. L-47740 20 July 1982
Petition to review the judgment of the City Court of Caloocan
Gutierrez, Jr., J.
Alleged Principal: Lim Pin
Alleged Agent: George Hung, son of petitioner; Atty. Pastor Mamaril, counsel of petitioner
Alleged Third Party: Liao Tan
FACTS:
George Hung, son of petitioner Lim Pin, agreed to a Compromise Agreement with
respondent spouses Liao Tan for the complaint filed by the latter.
Petitioner filed a motion for reconsideration on the following grounds:
o She never authorizes her son nor her counsel to enter into such Compromise
Agreement;
o That had she been present, she would not have acceded thereto.
Upon the finality of the decision of the court, a Writ of Execution was issued by the
court.
Hence, this petition -- petitioner argues that the Judge should have required a written
authority and power of attorney from her son and counsel, pursuant to Art. 1878 of
the Civil Code and Rule 138 of the Rules of Court.
ISSUE: Whether a written authority or power of attorney is necessary to enter into the
compromise agreement
HELD: No. Petition DENIED.
RATIO:
The Court held that the requirements of a special power of attorney contemplated in
Art. 1878 and Rule 138 refer to the nature of the authorization and not its form. The
requirements are met if there is a clear mandate from the principal specifically
authorizing the performance of the act.
Based on earlier jurisprudence (Strong vs. Gutierrez-Repide), the mandate shall be
express and may be either oral or written. Further, if the special authority is not
written, then it must be duly established by evidence.
In the present case, the records show that at the time petitioner was absent, the
court asked George Hung whether he had the authority of his mother to enter into a
compromise agreement, which was confirmed by the petitioners counsel (Atty.
Mamaril). Further, the court also observed that the petitioner could not decide on
anything without first consulting her son.
EXTRA: Compromise agreement was not null and void even if Hung or Mamaril acted without
authority. It would be unenforceable, capable of being ratified; which the petitioner did when
she filed an Ex-Parte Motion To Withdraw Deposits.

AGENCY CASE DIGESTS SEPTEMBER 3

NO. 9: AF REALTY & DEVELOPMENT, INC., et. al. vs. DIESELMAN SERVICES, CO., et.
al
G.R. 111448 16 January 2002
Petition for review on certiorari
Sandoval-Gutierrez, J.
Alleged Principal: Dieselman
Alleged Agent: Cruz, Jr.
Alleged Third Party: AF Realty
FACTS:
Respondent Dieselman is a registered owner of a parcel of a commercial lot.
Manuel C. Cruz Jr, a member of the board of directors of Dieselman & who had no
written authority from respondent, authorized Cristeta N. Polintan to look for buyer/s
and negotiate the sale of the lot.
Polintan then authorized Felicisima Noble to sell the same lot & offered it to petitioner
AF Realty at P3,000.00 per square meter.
Zenaida Ranullo, board member & vice-president, accepted the offer & issued a
check payable to the order of respondent (P300,000.00).
Polintan received the check & signed an Acknowledgement Receipt indicating that
the payment represents partial payment of the property.
AF Realty confirmed its intention to buy the lot, so Ranullo asked Polintan for the
board resolution of Dieselman authorizing the sale of the property.
But Polintan could only give the original copy of TCT, tax declaration & tax receipt, &
photocopy Articles of Incorporation of Dieselman.
Manuel F. Cruz, Sr., president of Dieselman, acknowledged the receipt of P300,000.00
as earnest money but required AF Realty to finalize the sale at P4,000.00 per
square meter. The latter replied that it has paid initial down payment and is willing to
pay the balance.
Cruz, Sr. terminated the offer & demanded the return of the title of the lot.
AF Realty claimed that there was a perfected contract of sale; and filed a case to the
RTC
But Dieselman had already executed a Deed of Absolute Sale of same property to
Midas.
RTC: there is a perfected contract of sale between Dieselman and AF Realty, which
bars Midas Motion for Leave to Intervene.
CA: reversed judgment of trial court, holding that Cruz, Jr. was not authorized in
writing by Dieselman to sell the subject property to AF Realty, and Deed of Absolute
Sale issued to Midas is valid.
ISSUE: Whether the sale of lot is valid
HELD: NO.
RATIO:
Section 23 of the Corporation Code expressly provides that the corporate powers of
all corporations shall be exercised by the board of directors. Just as a natural person
may authorize another to do certain acts in his behalf, so may the board of directors
of a corporation validly delegate some of its functions to individual officers or agents
appointed by it. Thus, contracts or acts of a corporation must be made either by the

AGENCY CASE DIGESTS SEPTEMBER 3

board of directors or by a corporate agent duly authorized by the board. Absent such
valid delegation/authorization, the rule is that the declarations of an individual
director relating to the affairs of the corporation, but not in the course of, or
connected with, the performance of authorized duties of such director, are held not
binding on the corporation.
Article 1874 of the Civil Code provides that in the sale of a land through an agent, the
authority of the latter shall be in writing; otherwise, the sale shall be void.
Since Cruz, Jr, Polintan and Noble were not authorized by respondent Dieselman to
sell its lot, the supposed contract is void; and as such not susceptible to ratification.
NO. 18:
YU KWAN BYUNG vs. PAGCOR
G.R. 163553 11 December 2009

Petition for review on certiorari

Carpio, J.
Alleged Principal: PAGCOR
Alleged Agent: ABS Corporation
Alleged Third Party: Yu Kwan Byung
FACTS:
PAGCOR is vested with the power to enter into contracts of every kind & for any
lawful purpose that pertains to business.
Pursuant to this power, it launched the Foreign Highroller Marketing Program
(Program), which aims to invite patrons from foreign countries to play at the dollar pit
of designated PAGCOR-operated casinos under specified terms & conditions & in
accordance with industry practice
Korean-based ABS Corporation, one of the international groups that availed of the
Program, agreed through a letter-agreement (Junket Agreement) to bring in foreign
players at the 5 designated tables at Casino Filipino.
Petitioner Yu Kwang Byung alleges that when he came to play at the Casino Filipino
he was able to accumulate gambling chips worth US$2.1M, and when he presented
them for encashment, PAGCOR refused.
Petitioner filed an action against PAGCOR seeking redemption of gambling chips
valued at US$2.1M, alleging that every time he would come to Manila, PAGCOR would
extend to him amenities deserving of a high roller.
PAGCOR filed a counterclaim; alleging that it was ABS Corporation who brought
petitioner in the country as a junket player, and is thus responsible for the gambling
chips.
RTC: dismissed both suits; ruling that under PAGCORs charter, PAGCOR has no
authority to lease any portion of the gambling tables to a private party like ABS
Corporation.
CA: affirmed.
ISSUE: Whether there is an implied agency between PAGCOR and ABS Corporation
HELD: No.
RATIO:
Art. 1869 of the NCC states that implied agency is derived 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.
Implied Agency, being an actual agency, is a fact to be proved by deductions or
inferences from other facts.
Apparent Authority is based on estoppel and can arise from:

AGENCY CASE DIGESTS SEPTEMBER 3

o
o

(1) the principal may knowingly permit the agent to hold himself out as having
such authority, and the principal becomes estopped to claim that the agent does
not have such authority;
(2) the principal may clothe the agent with the indicia of authority as to lead a
reasonably prudent person to believe that the agent actually has such authority.

Agency by Estoppel there is no agency at all, but the one assuming to act as agent
has apparent or ostensible, although not real, authority to represent another.
The law makes no presumption of agency and proving its existence, nature and
extent is incumbent upon the person alleging it. Whether or not an agency has been
created is a question to be determined by the fact that one represents and is acting
for another. On the part of the principal, there must be an actual intention to appoint
or an intention naturally inferable from his words or actions, while on the part of the
agent, there must be an intention to accept the appointment and act on it. Absent
such mutual intent, there is no agency. There is not implied agency in this case
because PAGCOR did not hold out to the public as the principal of ABS Corporation.