AGENCY (Obieta) DIGESTS by Sham Zaragoza

ARTICLES 1868-1872

Ker and Co, Ltd. was assessed by then Commissioner of Internal

Revenue Domingo the sum of P 20,272.33 as the commercial
brokers percentage tax, surcharge and compromise penalty.

1. DE LA CRUZ V NORTHERN THEATRIAL ENTERPRISES

FACTS:
The Northern Theatrical Enterprises, a domestic corporation
opearated a movie house in Laoag, Ilocos Norte and among the
persons employed by it was plaintiff De La Cruz, hired as special
guard whose duties were to guard the main entrance of the cine, to
maintain peace and order and to report the commission of disorder
within the premises

There was a request on the part of Ker for the cancellation of such
assessment which request was turned down

As such guard, he carried a revolver

Such liability arose from a contract of Ker with the United States
Rubber International. The former being referred to as the distributor
and the latter specifically designated as the company

As a result, it filed a petition for review with Court of Tax Appeals

CTA: Ker taxable except as to the compromise penalty of P500, the
amount due from it being fixed at P19,772.33

One Benjamin Martin wanted to crash the gate or entrance of the

movie house. Infuriated by the refusal of plaintiff to let him in
without first providing himself with a ticket, Martin attacked him
with a bolo

The contract was to apply to transactions between the former and

Ker, as distributor from July 1, 1948 to continue in force until
terminated by either party giving to the other 60 days notice

Plaintiff defended himself until he was cornered, at which moment to

save himself, he shot gate crasher resulting in latters death

The shipments would cover products for consumption in Cebu,

Bohol, Leyte Samar, Jolo, Negros Oriental and Mindanao except
province of Davao, Ker as distributor being precluded from disposing
such products elsewhere than in the above places unless written
consent would first be obtained from the company

Plaintiff was charged with homicide but was acquitted of charge after
trial. In both criminal cases against him, he employed a lawyer to
defend him
He then demanded from NLE reimbursement of expenses but was
refused thus filed present action against the company and t3 members
of its Board of Directors to recover not only the amounts he had paid
his lawyers but also moral damages said to have been suffered due to
his worry, neglect of his interests and his family as well in the
supervision of the cultivation of his land, a total of P 15,000.

Ker as distributor is required to exert every effort to have the

shipment of the products in the maximum quantity and to promote in
every way the sale sale thereof.
Crucial stipulation: The company shall from time to time consign to
Ker and Ker will receive, accept and/hold upon consignment the
products specified under the terms of this agreement in such
quantities as in the judgment of company may be necessary

CFI rejected plaintiffs theory that he was an agent of the company

and that he had no cause of action and dismissed the complaint

It is further agreed that this agreement does not constitute Ker the
agent or legal representative of the company for any purpose
whatsoever

ISSUE:
W/N Plaintiff De la Cruz is considered as an agent of the corporation
and as such entitled to reimbursement for expenses incurred in
conncection with agency

ISSUE:
W/N the relationship thus created is one of vendor and vendee
(contract of sale) or of broker and principal (contract of agency)

RULING: No, Plaintiff is mere employee

The relationship between the movie corporation and plaintiff was not
that of principal and agent because the principle of representation as a
characteristic of agency was in no way involved.

RULING:
Broker and principal- contract of agency
By taking the contractual stipulations as a whole and not just the
disclaimer, it would seem that the contract between them is a contract
of agency

Plaintiff was not employed to represent corporation in its dealings

with 3rd parties
Plaintiff is a mere employee hired to perform a certain specific duty
or task, that of acting as a special guard and staying at the main
entrance of the movie house to stop gate crashers and to maintain
peace and order within the premises.

The CTA, in considering such stipulations provided in the contract,

concluded that all these circumstances are irreconcilably antagonistic
to the idea of an independent merchant
CTA: upon analysis of the whole, together with actual conduct of the
parties thereto, that the relationship between them is one of brokerage
or agency

Sub issue (relevant to Agency): W/N an employee or servant who in

line of duty and while in the performance of the task assigned to him,
performs an act which eventually results in his incurring in expenses
caused not directly by his master or employer or by reason of his
performance of his duty, but rather by a 3 rd party or stranger not in the
employ of his employer may recover said damages against his
employer

National Internal Revenue Code: defined Commercial broker as all

persons, other than importer, manufacturers, producers or bona fide
employees who, for compensation or profit, sell or bring about sales
or purchase of merchandise for other persons or bring proposed
buyers and sellers together and also includes commission merchants
such as Ker in this case

Ruling: No
Although the employer has a moral obligation to give employee legal
assistance to aid the latter in his case, he has no legal obligation to do
so.

The mere disclaimer in a contract that an entity like Ker is not the
agent or legal representative for any purpose whatsoever does not
suffice to yield the conclusion that it is an independent merchant if
the control over the goods for resale of goods consigned is pervasive
in character

If the employer is not legally obliged to give legal assistance to

employee and provide him with a lawyer, naturally said employee
may not recover the amount he may have paid a lawyer hired by him.

Thus, SC rejected Kers petition to reverse decision of CTA

Damages suffered by plaintiff by reason of expenses incurred by him

in remunerating his lawyer is not caused by his act of shooting to
death the gate crasher but rather by filing the charge of homicide
which made it necessary for him to defend himself with the aid of
counsel.

3. GUARDEX ENTERPRISES V NLRC

FACTS:
Escandor-engaged, under the name and style of Guardex Enterprises
in (a) manufacture and sale of fire-fighting equipment such as fire
extinguishers, fire hose cabinets and related products, and (b)
occasionally, the building or fabrication of fire trucks

Had no criminal charge against him, there would have been no

expenses incurred or damages suffered.

Junbee Orbeta- a freelance salesman

2. KER AND CO, LTD V. LINGAD
Orbeta somehow learned that Escandor had offered to fabricate a fire
truck for Rubberworld )Phil) inc thus he wrote Escandor inquiring

FACTS:
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AGENCY (Obieta) DIGESTS by Sham Zaragoza

about the amount of commission for the sale of a fire truck. Escandor
replied saying that it was P15,000 per unit

e. hold out a passenger reservation facility to sales agents and general

public in the assigned territory

4 days later, Orbeta offered to look after Escandors pending proposal

to sell a fire truck to Rubberworld, ans asked for P250 as
representation expenses to which Escandor agreed and gave him the
money

Alleging that Orient Air had reneged on its obligations under the
Agreement by failing to remit the net proceeds of sale in the amount
of US $ 254,400, American Air by itself undertook the collection of
the proceeds of tickets sold originally by Orient Air and terminated
forthwith the Agreement

When Escandor didnt get any word from Orbeta after 3 days, she
herself inquired in writing from Rubberworld about her offer of sale
of a fire truck. She then sent a revised price quotation some ten days
laeter.

American Air instituted suit against Orient Air for Accounting with
Preliminary Attachment or Garnishment, Mandatory Injunction and
Restraining Order averring the basis for the termination of the
Agreement as well as Orient Airs previous record of failures to
promptly settle past outstanding refunds of which there were
available funds in the possession of the Orient Air to the damage and
prejudice of American Air

in the meantime, Orbeta sold to other individuals some of

Escanodors fire extinguishers, receiving traveling expenses in
connection therewith as well as the corresponding commissions and
after that he then dropped out of sight.

TC ruled in favor of Orient Air to which the Intermediate Appelalate

Court (now CA) affirmed TCs decision with modifications with
respect to monetary awards granted.

About 7 months afterwards, Escandor herself finally concluded a

contract with Rubberworld for the latters purchase of a fire truck
Orbeta suddenly reappeared an asked for his commission for the sale
of the fire truck to Rubberworld to which Escandor refused, saying
that he had had nothing to do with the offer, negotiation and
consummation of the sale

ISSUE: W/N Orient Air is entitled to the 3% overriding commission

RULING: Yes
It is a well settled principle that in the interpretation of a contract, the
entirety thereof must be taken into consideration to ascertain the
meaning of its provisions. The various stipulations in the contract
must be read together to give effect to all

Orbeta then filed a complaint against Escandor with the Ministry of

Labor which ruled in his favor. It was affirmed by the National Labor
Relations Commission on appeal taken by Escandor
ISSUE:
W/N Orbeta is an agent of Guardex Enterprises thus entitled to sales
commission

The Agreement, when interpreted in accordance with the foregoing

principles, entitles Orient Air to the 3% overriding commission
based on total revenue or as referred to by the parties, total flown
revenues.

RULING: No
As the designated General Sales Agent of American Air, Orient Air
was responsible for the promotion and marketing of American Airs
services for air passenger transportation and the solicitation of sales
therefor. In return for such efforts and services, Orient Air was to be
paid commissions of 2 kinds: first, a sales agency commission,
ranging from 7 to 8% of tariff fares and charges from sales by Orient
Air when made on American Air ticket stock; and second, an
overriding commission of 3% of tariff fares and charges for all sales
of passenger transportation over American Air services.

The claim that she gave verbal authority to Orbeta to offer to a fire
truck to Rubberworld was belied from the fact that months prior to
Orbetas approaching Escandor, the latter already had made a written
offer of a fire truck to Rubberworld. All that she consented to was for
Orbeta to follow up that pending offer. It seems fairly evident that
the representation allowance of P250 was meant to cover the
expenses for the follow up offered by Orbeta-an ambiguous fact
which does not of itself suggest the creation of an agency and is not
at all inconsistent with the theory of its absence in this case.

The second type of commissions would accrue for sales of American

Air services made not on its ticket stocket but on the ticket stock of
other air carriers sold by such carriers or other authorized ticketing
facilities or travel agents.

Even if Orbeta is considered to have been Escandors agent for the

time he was supposed to follow up the offer to sell, such agency
would have been deemed revoked upon the resumption of direct
negotiations between Escandor and Rubberworld, Orbeta having in
the meantime abandoned all efforts (if indeed any were exerted) to
secure the deal in Escandors behalf.

In addition, it is clear from the records that American Air was the
party responsible for the preparation of the Agreement. Consequently,
any ambiguity in this contract of adhesion is to be taken contra
proferentem construed against the party who cause the ambiguity
and could have avoided it by the exercise of a little more care.

No jurisdiction for Labor Arbiter or NLRC in dealing with this case

since jurisiction vested in tehm by the Labor Code extends generally
speaking only to cases arising from employer-employee relationship.

5. BORDADOR V LUZ
4. ORIENT AIR SERVCES AND HOTEL REPRESENTATIVES
V CA

FACTS:
Petitioners were engaged in the business of purchase and sale of
jewelry and respondent Brigida Luz, also known as Aida Luz, was
their regular customer.

FACTS:
American Airlines, inc, an air carrier offering passenger and air cargo
transportation in the Phils, and Orient Air Services and Hotel
Representatives entered into a General Sales Agency Agreement
whereby the former authorized the latter to act as its exclusive
general sales agent within the Phils for the sale of air passenger
transportation

On several occasions, respondent Deganos, brother of Luz, received

several pieces of gold and jewelry from petitioners amounting to
P382, 816. These items and their prices were indicated in seventeen
receipts covering the same. 11 of the receipts stated that they were
received for a certain Aquino, a niece of Deganos, and the remaining
6 receipts indicated that they were received for Luz.

Some of the pertinent provisions are:

Orient Air Services shall perform these services:

Deganos was supposed to sell the items at a profit and thereafter

remit the proceeds and return the unsold items to Bordador. Deganos
remitted only the sum of P53, 207. He neither paid the balance of the
sales proceeds, nor did he return any unsold item to petitioners.

a. solict and promote passenger traffic for the services of American

and if necessary, employ staff competen and sufficient to do so
b. provide and maintain a suitable area in its place of business to be
used exclusively for the transaction of the business of American

The total of his unpaid account to Bordador, including interest,

reached the sum of P725, 463.98. Petitioners eventually filed a
complaint in the barangay court against Deganos to recover said
amount.

c. arrange for distribution of Americans timetables, tariffs and

promotional material to sales agents nad the general public in the
assigned territory

In the barangay proceedings, Luz, who was not impleaded in the

caes, appeared as a witness for Deganos and ultimately, she and her
husband, together with Deganos signed a compromise agreement
with petitioners.

d. service and supervise sales agents in the assigned territory

including if required by American the control of remittances and
commissions retained
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AGENCY (Obieta) DIGESTS by Sham Zaragoza

In that compromise agreement, Deganos obligated himself to pay

petitioners, on installment basis , the balance of his account plus
interest thereon. However, he failed to comply with his aforestated
undertakings.

himself in the general treasury of the Spanish Government at an

interest of 5% per annum, which interest on accrual was likewise to
be deposited in order that it also might bear interest; that Hidalgo did
not remit or pay to Gomiz, during his lifetime, nor to any
representative of the said Gomiz, the sum aforestated nor any part
thereof with the sole exception of P1,289.03, nor has he deposited the
unpaid balance of said sum in the treasury, according to agreement,
wherefore he has become liable to his principal and to the
administrator for the said sum, together with its interest amounting to
P72,548.24

Petitioners instituted a complaint for recovery of sum of money and

damages, with an application for preliminary attachment against
Deganos and Luz.
Deganos and Luz was also charged with estafa
During the trial of the civil cae, petitioners claimed that Deganos
acted as agent of Luz when received the subject items of jewelry, and
because he failed to pay for the same, Luz, as principal, and her
spouse are solidarily liable with him

The court ruled in favor of De la Pena and said that Hidalgo, as

administrator of the estate of deceased Gomiz, actually owed De la
Pena
ISSUE: W/N Hidalgo is considered an agent of Gomiz and as such
must reimburse present administrator, De la Pena

Trial court ruled that only Deganos was liable to Bordador for the
amount and damages claimed. It held that while Luz did have
transactions with petitioners in the past, the items involved were
already paid for and all that Luz owed Bordador was the sum or P21,
483 representing interest on the principal account which she had
previously paid for.

RULING: No
Gomiz, before embarking for Spain, executed before a notary a
power of attorney in favor of Hidalgo as his agent and that he should
represent him and administer various properties he owned and
possessed in Manila.

CA affirmed TCs decision

After Hidalgo occupied the position of agent and administrator of De
la Pena y Gomizs property for several years, the former wrote to the
latter requesting him to designate a person who might substitute him
in his said position in the event of his being obliged to absent himself
from these Islannds

ISSUE:
W/N Luz are liable to petitioners for the latters claim for money and
damages in the sum of P725,463.98, plus interests and attorneys
fees, despite the fact that the evidence does not show that they signed
any of the subject receipts or authorized Deganos to receive the items
of jewelry on their behalf

From the procedure followed by the agent, Hidalgo, it is logically

inferred that he had definitely renounced his agency and that the
agency was duly terminated according to the provisions of art 1782

RULING: No
Evidence does not support the theory of Bordador that Deganos was
an agent of Luz and that the latter should consequently be held
solidarily liable with Deganos in his obligation to petitioners.

Although the word Renounce was not employed in connection with

the agency executed in his favor, yet when the agent informs his
principal that for reasons of health and by medical advice he is about
to depart from the place where he is exercising his trust and where
the property subject to his administration is situated, abandons the
property, turns it over to a third party, and transmits to his principal a
general statement which summarizes and embraces all the balances of
his accounts since he began to exercise his agency to the date when
he ceased to hold his trust, it then reasonable and just to conclude that
the said agent expressly and definitely renounced his agency.

The basis for agency is representation. Here, there is no showing that

Luz consented to the acts of Deganos or authorized him to act on her
behalf, much less with respect to the particular transactions involved.
It was grossly and inexcusably negligent of petitioner to entrust to
Deganos, not once or twice but on at least six occasions as evidenced
by 6 receipts, several pieces of jewelry of substantial value without
requiring a written authorization from his alleged principal.

7. GUTIERREZ HERMANOS V ORENSE

A person dealing with an agent is put upon inquiry and must discover
upon his peril the authority of the agent.

FACTS:
Duran, a nephew of Orense, with the latters knowledge and consent,
executed before a notary a public instrument whereby he sold and
conveyed to plaintiff company for P1,500 the said property

Records show that neither an express nor an implied agency was

proven to have existed between Deganos and Luz. Evidently,
Bordador who were negligent in their transactions with Deganos
cannot seek relief from the effects of their negligence by conjuring a
supposed agency relation between the two respondents where no
evidence supports such claim

The vendor, Duran reserving to himself the right to repurchase it for

the same price within a period of 4 years from the date of said
instrument

6. DE LA PENA V HIDALGO

That plaintiff company had not entered into possession of the

purchased property, owing to its continued occupancy by Orense and
his nephew, Duran by virtue of a contract of lease executed by the
plaintiff to Duran

FACTS:
De la Pena y de Ramon and De Ramon, in her own behalf and as the
legal guardian of her son Roberto De la Pena, filed in the CFI a
written complaint against Hidalgos

said instrument of sale was publicly and freely confirmed and ratified
by Orense in a verbal declaration made by him

De La Pena y de Ramon, as the judicial administrator of the estate of

the deceased De la Pena y Gomiz, with the consent of the court filed
a second amended complaint prosecuting his action solely against
Frederico Hidalgo

that, in order to perfect the title to the said property, the plaintiff had
to demand of Orense that he execute in legal form a deed of
conveyance of the property, but that the defendant Orense refused to
do so, without any justifiable cause or reason

CFI ruled in favor of plainiff-administrator for the sum of P13,

606.19 and legal interest from the date of the filing of the complaint
and the costs of the trial.

This suit involves the validity and efficacy of the sale under right of
redemption of a parcel of land and a masonry house with a nipa hut
erected thereon, effected by Duran, a nephew of the owner of the
property, Orense for the sum of P1,500 by means of a notarial
instrument

De la Pena y Ramon filed a third amended complaint with the

permission of the court alleging, among other things, as a first cause
of action, when Frederico Hidalgo had possession of and
administered the following properties to wit, 1 house and lot; at Calle
San Luis; another house and lot at Calle Cortada; another house and
lot at Calle San Luis, and a fenced lot on the same street, all of the
district of Ermita, and another house and lot at Calle Looban de Paco,
belonging to his principal, De la Pena y Gomiz, according to the
power of attorey executed in his favor

After the lapse of 4 years stipulated for the redemption, Orense

refused to deliver the property to the purchaser, the firm of Gutierrez
Hermanos and to pay the rental thereof at the rate of P30 per month
for its use and occupation when the period for its repurchase
terminated.
Counsel for the firm filed a complaint praying, among other
remedies, that Orense be compelled to execute a deed for the transfer
and conveyance to the plaintiff company of all the right, title and
interest which Orense had in the property sold, and to pay the same
the rental of the property

Hidalgo, as such agent, collected the rents and income from said
properties, amounting to P50, 244, which sum, collected in partial
amounts and on different dates, he should have deposited, in
accordance with the verbal agreement between the deceased and
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for his client of original process by which the court for the first time
acquires jurisdiction of the client

ISSUE: W/N Duran, nephew of the owner of the property, Orense, is

an agent and was authorized to sell the land in favor of petititioner

The record is not quite clear that Balcoff acted merely as counsel in
his relation to Johnlo. There is proof to show that he acted in a
representative capacity in and outside of court, so much so that he
undertook to settle claims that had been filed against it

RULING: Yes
Reecords in this case shows that Orense did give his consent in order
that his nephew, Duran might sell the property in question to
company and that he did thereafter confirm and ratify the sale by
means of a public instrument executed before a notary

The service made upon him of the summons intended for Johnlo can
be deemed sufficient in contemplation of law to bind his client,
Johnlo upon the theory that, as the only person in the Phils charged
with the duty of settling claims against it, he must be presumed, to
communicate to his client the service made upon him of any process
that may result in a judgment and execution that may deprive it of its
property and the probabilities are, under such circumstances, that the
corporation will be duly informed of the pendency of the suit

It having been proven at the trial that Orense gave his consent to the
said sale, it follows that he conferred verbal, or at least implied,
power of agency upon his nephew Duran who accepted it in the same
way by selling the said property
The principal must therefore fulfill all the obligations contracted by
the agent, who acted within the scope of his authority

Balcoff acted in this case not merely as counsel of Johnlo Company

but also as its representative in the settlement of claims

Even if consent was granted subsequently to the sale, it is

unquestionable that Orense, the owner of the property, approved the
action of his nephew, who in this acted as the manager of his uncles
business and Orenses ratification produced the effect of an express
authorization to make the said sale

ARTICLES 1873-1877
1. RALLOS V YANGCO

The sale of the said property made by Duran to the company was
indeed null and void in the beginning, but afterwards become
perfectly valid and cured of the defect of nullity it bore at its
execution by the confirmation solemnly made by the said owner upon
his stating under oath to the judge that he himself consented to his
nephews making the said sale

FACTS:
Yangco sent Rallos a letter inviting the latter to be the consignor in
buying and selling leaf tobacco and other native products. Terms and
conditions were also contained in the letter.
Accepting the invitation, Rallos proceeded to do a considerable
business with Yangco trhough the said Collantes, as his factor,
sending to him as agent for Yangco a good deal of produce to be sold
on commission.

8. JOHNLO TRADING CO V FLORES

FACTS:
M.B. Florentino & Co, Ltd, filed with the CFI of La Union against
Johnlo Trading Company and Lipsett Pacific Corporation a case for
the collection of the sum of P14,304.19 and damages in the sum of
P10,000.

Rallos sent to the said Collantes, as agent for Yangco, 218 bundles of
tobacco in the leaf to be sold on commission, as had been other
produce previously.
The said Collantes received said tobacco and sold it for the sum of
P1,744. The charges for such sale were P206.96, leaving in the hands
of said Collantes the sum of 1,537.08 belonging to Rallos. This sum
was, apparently, converted to his own use by said agent.

collaterally, plaintiff alleged that Johnlo had transferred to Lipsett all

its equipment and properties in the Philippines with intent to defraud
its creditors and, as said Johnlo has no other property in the Phils to
pay its indebtedness, it prayed that said properties be attached.

It appears, however, that prior to the sending of said tobacco Yangco

had severed his relations with Collantes and that the latter was no
longer acting as his factor. This fact was not known to Rallos; and it
is conceded in the case that no notice of any kind was given by
Yangco of the termination of the relations between Yangco and his
agent, Collantes.

Motion for attachment was granted but was later amended at the
request of the plaintiff, upon its finding that all of the said properties
had been transferred to other persons and the proceeds of the sale
deposited with the National City Bank of New York
Consequentlym the deposit in the amount of P25,000 was garnished
in compliance with the order of the court

Yangco thus refused to pay the said sum upon demand of Rallos,
placing such refusal upon the ground that at the time the said tobacco
was received and sold by Collantes, he was acting personally and not
as agent of Yangco.

Johnlo Company is a joint venture organized by 2 foreign

corporations to engage soley in the demilitarization of ammunition at
Rosario, La Union, and Bauan, Batangas, under a direct contract with
our Government wherein as a special concession, it was not required
to register with the Bureau of Commerce nor to obtain a license to do
business in the Phils as required by law because the business to be
undertaken was single and isolated
because of that concession, it was not also required to designate any
agent in the Phils upon whom legal process may be served under the
law in cases of litigation

ISSUE: W/N Collantes is an agent of Yangco. If so, Yangco as

principal must refund to Rallos the said sum brought by the sale of
the produce
RULING: Yes
Yangco, as principal is liable. Having advertised the fact that
Collantes was his agent and having given special notice to Rallos of
that fact, and having given them a special invitation to deal with such
agent, it was the duty of Yangco on the termination of the relationship
of the principal and agent to give due and timely notice thereof to
Rallos.

However, the summons for Johnlo Company in this case was served
on Charles Balcoff upon the claim that he is its representative in the
Phils.
as no one appeared in behalf of Johnlo, the court, upon petition of the
plaintiff declared said company in default

Failing to do so, he is responsible to them for whatever goods may

been in good faith and without negligence sent to the agent without
knowledge, actual or constructive, of the termination of such
relationship

after being informed that it was declared in default, Johnlo Company,

through counsel, filed motion for recon and prayed for the setting
aside of said order upon the ground that Balcoff, not being its agent
nor representative, the Court had not yet acquired jurisdiction over its
person, and therefore, the period for filing its answer had not yet
commenced to run

2. B. H. MACKE ET AL V JOSE CAMPS

FACTS:
B. H. Macke and W.H. Chandler, partners doing business under thee
firm name of Macke, Chandler And Company, allege that during the
months of February and March 1905, they sold to Jose Camps and
delivered at his place of business, known as the :Washington Caf,
various bills of goods amounting to P351.50; that Camps has only
paid on account of said goods the sum of P174; that there is still due
them on account of said goods the sum of P177.50

ISSUE: W/N Balcoff is deemed not just a counsel but also an agent
of Johnlo Company
RULING: yes, both counsel and agent/representative
It may be stated that an attorney cannot, without authority to do so,
accept service of process which commences action against his client

Plaintiffs made demand for the payment from defendant and that the
latter failed and refused to pay the said balance or any part of it

As a general rule, an attorney-at-law has no authority merely by

virtue of his general employment as such to waive or admit service
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Macke, one of the plaintiffs, testified that on the order of one Ricardo
Flores, who represented himself to be the agent of Jose Camps, he
shipped the said goods to the defendant at the Washington Caf; that
Flores (agent) later acknowledged the receipt of the said goods and
made various payments thereon amounting in all to P174; that
believes that Flores is still the agent of Camps; and that when he went
to the Washington Caf for the purpose of collecting his bill he found
Flores, in the absence of Camps, apparently in charge of the business
and claiming to be the business manager of Camps, said business
being that of a hotel with a bar and restaurant annexed.

By reason thereof, Rio suffered damages in the sum of P12,000 and

prays that the sale to Calvin be declared null and void, and ordering
company to comply with the contract and to execute a deed to Rio
and to pay damages of P12,000
ISSUE: W/N the contract of purchase and sale of real property is void
unless the authority of the agent be in writing and subscribed by the
party sought to be charged
RULING: Yes
Molina, the agent, could not enforce the specific performance of
Exhibit B. There is no evidence in the record of any written contract
between Rio and Yu Tec for the sale and purchase of the real property

A written contract was introduced as evidence, from which it appears

that one Galmes, the former of Washington Caf subrented the
building wherein the business was conducted, to Camps for 1 year for
the purpose of carrying on that business, Camps obligating himself
not to sublet or subrent the building or the business without the
consent of the said Galmes.

Exhibit B (letter giving authority to J. Molina as agent of Yu Tec and

if the latter shall not take advantage of selling it within the time
given, the authority given shall be cancelled) is nothing more than an
authority to sell

This contract was signed by Camps and the name of Ricardo Flores
as a witness and attached thereon is an inventory of the furniture and
fittings which also is signed by Camps with the word sublessee
below the name, and at the foot of this inventory the word received
followed by the name Ricardo Flores with the words managing
agent immediately following his name.

While Exhibit B might be construed as fixing the price of the sale of

the parcel of land, it does not specify the terms and conditions upon
which the sale was to be made
Since Exhibit B already expired, that fact would destroy the legal
force and effect of Exhibit C (specified and defined the terms and
conditions of any sale made by Molina

ISSUE: W/N Ricardol Flores was the agent of Camps

In the absence of a renewal or extension in writing signed by the
party to be charged or its agent, Molina had no authority to sell the
property upon any terms and conditions after the stipulated period.

Ruling: Yes
Evidence is sufficient to sustain a finding that Flores is the agent of
Camps in the management of the bar of the Washington Caf with
authority to bind Camps, his principal, for the payment of the goods

4. GUTIERREZ HERMANOS V ORENSE

The contract sufficiently establishes the fact that Camps was the
owner of the business and of the bar, and the title of managing
agent attached to the signature of Flores which appears on that
contract, together with the fact that at the time the purchases were
made, Flores was apparently in charge of the business performing the
duties usually intrusted to a managing agent leave little room for
doubt that he was there as the authorized agent of Camps.

FACTS:
Orense had been the owner of a parcel of land, with the building and
improvements thereon situated in the pueblo of Albay, and had been
registered under his name
Jose Duran, a nephew of Orense, with the latters knowledge and
consent, executed before a notary a public instrument whereby he
sold and conveyed to Gutierrez Hermanos, for P 1,500 the
aforementioned property with Duran having the right to repurchase
for the same price within 4 years

Agency by Estoppel --- One who clothes another with apparent

authority as his agent, and holds him out to the public as such, can
not be permitted to deny the authority of such person to act as his
agent, to the prejudice of innocent third persons dealing with such
person in good faith and in the honest belief that he is what he
appears to be.

Plaintiff had not entered into possession of the land since it is being
occupied by Orense and Duran, by virtue of a contract of lease
executed by plaintiff to Duran

Estoppel---- Whenever a party has, by his own declaration, act or

omission, intentionally and deliberately led another to believe a
particular thing true, and to act upon such belief, he can not, in any
litigation arising out of such declaration, act, or omission be
permitted to falsify; and unless the contrary appears, the authority of
the agent must be presumed to include all the necessary and usual
means of carrying his agency into effect.

Said instrument of sale of property, executed by Duran was publicly

and freely confirmed and ratified by Orense in a verbal declaration
made by him to the effect that the instrument was executed by his
nephew with his knowledge and consent
In order to perfect the title to said property, plaintiff had to demand
Orense that he execute in legal form a deed of conveyance of the
parcel of land but the latter refused to do so, without any justifiable
cause or reason, and he should be compelled to execute said deed
because his nephew is notoriously insolvent and cannot reimburse
plaintiff company for the price of sale which he received

3. RIO Y OLABARRIETA AND MOLINA V YU TEC & CO.

FACTS:
Plaintiff, Rio is a copartnernership organized and existing under the
laws of the Phil Islands. The defendant, Yu Tec and Co is a domestic
corporation and the defendant, Calvin is of age and a resident of
Manila

Duran failed to exercise his right of repurchase and Orense also

refused to deliver the property and to pay rental thereof
ISSUE: 1. W/N the sale executed by Duran, nephew of Orense, in
favor of that Orense publicly ratified and confirmed the said sale
2. W/N a contract of agency, express or implied was
present in this case

Rio alleges that Yu Tec & Co, which was then a limited partnership,
authorized its agent, J.V. Molina to find a purchaser or a lessee of a
tract of land belonging to it located on Calle Velasquez, Tondo,
Manila.

RULING: YES TO BOTH

Evidence shows that Orense did give his consent in order that his
nephew, Duran might sell the property to plaintiff company and that
he did confirm and ratify the sale by means of public instrument
executed before a notary

Within the time given the agent found a purchaser in the name of
plaintiff (Rio) which offered to purchase the land for the sum of P
40,000 and that Mollina, its agent, made known its offer to the
respondent company which refused to accept it
Yu Tec offered to sell the land for P42,000 instead, of which P7,000
was to be paid on the signing of the contract, and the balance
Riwithin two years, with interest of 8% and the remaining P25,000 at
the end of the second year, all to be secured by a first mortgage

It follows that Orense conferred verbal, or at least implied, power of

agency upon his nephew Duran, who accepted it in the same way by
selling the said property
The principal must fulfill all the obligations contracted by the agent,
who acted within the scope of his authority

Rio accepted the offer but Yu Tec company made several excuses and
refused to carry out the agreement

Even if said consent was granted subsequently to the sale, it is

questionable that Orense, the owner of the property, approved the
action of his nephew, who in this case acted as the manager of his
uncles business and Orenses ratification produced the effects of an
express authorization to make the said sale

That defendant, Calvin, with full knowledge of the facts and within
the specified period, fraudulently conspiring with Yu Tec, entered
into a contract by which he purchased the property from the
company.
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AGENCY (Obieta) DIGESTS by Sham Zaragoza

A contract executed in the name of another by one who has neither

his authorization nor legal representation shall be void, unless it
should be ratified by the person in whose name it was executed
before being revoked by the other contracting party

FACTS
Cosmic Corporation, through its General Manager executed a Special
Power of Attorney appointing Paz G. Villamil-Estrada as attorney-infact to initiate, institute and file any court action for the ejectment of
third persons and/or squatters of the entire lot 9127 and 443 for the
said squatters to remove their houses and vacate the premises in order
that the corporation may take material possession of the entire lot

The sale of the said property made by Duran to Gutierrez Hermanos

was indeed null and void from the beginning, but afterwards became
perfectly valid and cured of the defect of nullity it bore at its
execution by the confirmation solemnly made by the said owner upon
his stating under oath to the judge that he himself consented to his
nephews making the said sale

Paz G. Villamil Estrada, by virtue of her power of attorney, instituted

an action for the ejectment of private respondent Isidro Perez and
recover the possession of a portion of lot 443 before the RTC

5. JIMENEZ V RABOT
Estrada entered into a Compromise Agreement with Perez, the terms
and conditions such as:
In order for Perez to buy the said lot he is presently
occupying, he has to pay to plaintiff through Estada the
sum of P26,640 computed at P80/square meter and that
Cosmic Lumber recognizes ownership and possession of
Perez by virtue of this compromise agreement over said
portion of 333 sqm of lot 443 and whatever expenses of
subdivision, registration and other incidental expenses shall
be shouldered by Perez

FACTS:
Gregorio Jimenez filed this action to recover from Rabot, a parcel of
land situated in Alaminos, Pangasinan
The property in question, together with two other parcels in the same
locality originally belonged to Jimenez, having been assigned to him
as one of the heirs in the division of the estate of his father
It further appears that while Gregorio Jimenez was staying at Vigan,
Ilocos Sur, his property in Alaminos was confided by him to the care
of his elder sister Nicolasa Jimenez.

although the agreement was approved by the trial court and the
decision became final and executory it was not executed within the 5
year period from date of its finality allegedly due to the failure of
Cosmic Lumber to produce the owners duplicate copy of title needed
to segregate from lot 443 the portion sold by the attorney-in-fact, Paz
Estrada to Perez under the compromise agreement

He wrote his sister a letter from Vigan in which he informed her that
he was pressed for money and requested her to sell one of his parcels
of land and send him the money in order that he might pay his debts.
The letter contains no description of the land to be sold other than is
indicated in the words one of my parcels of land.

ISSUE: W/N there is a contract of agency between Cosmic Lumber,

principal and Paz Estrada, agent thus binding the principal over the
compromise agreement made by the agent to a third person, Perez in
selling the portion of the said property

Acting upon this letter, Nicolasa approached Rabot and the latter
agreed to buy the property for the sum of P500. P250 was paid at
once, with the understanding that a deed of conveyance would be
executed when the balance should be paid.

RULING: No
The authority granted Villamil-Estrada under the special power of
attorney was explicit and exclusionary: for her to institute any action
in court to eject all persons found on lots number 9127 and 443 so
that Cosmic Lumber could take material possession thereof and for
this purpose, to appear at the pre-trial and enter into any stipulation of
facts and/or compromise agreement but only insofar as this was
protective of the rights and interests of Cosmic Lumber in the
property

Nicolasa admits having received this payment but there is no

evidence that she sent it to her brother
After one year, Gregorio Jimenez went back to Alaminos and
demanded that his sister surrender the piece of land to him, it being
then in her possession.
She refused upon some pretext or other to do so and as a result,
plaintiff instituted an action to recover the land from her control

Nowhere in this authorization was Villamil-Estrada granted expressly

or impliedly any power to sell the subject property nor a portion
thereof

Meanwhile, Nicolasa executed and delivered to Rabot a deed

purporting to convey to him the parcel of land
ISSUE: W/N the authority conferred on Nicolasa by the letter was
sufficient to enable her to bind her brother of the sale made in favor
of Rabot

Neither can a conferment of the power to sell be validly inferred from

the specific authority to enter into a compromise agreement
because of the explicit limitation fixed by the grantor that the
compromise entered into shall only be so far as it shall protect the
rights and interest of the corporation in the aforementioned lots.

RULING: Yes
As a matter of formality, a power of attorney to convey real property
ought to appear in a public document, just as any other instrument
intended to transmit or convey an interest in such property ought to
appear in a public document

In the context of special investiture of powers to Villamil-Estrada,

alienation by sale of an immovable certainly cannot be deemed
protective of the right of Cosmic Lumber to physically possess the
same, more so when the land was being sold for a price of P80/sqm ,
very much less than its assessed value of P250/sqm and considering
further that plaintiff never received the proceeds of the sale

Art. 1713 of the Civil Code requires that the authority to alienate
land shall be contained in an express mandate
Subsection 5 of section 335 of Code of Civil Procedure say that the
authority of the agent must be in writing and subscribed by the party
to be charged

When the sale of a piece of land or any interest thereon is through an

agent, the authority of the latter shall be in writing; otherwise, the
sale should be void. Thus, the authority of an agent to execute a
contract for the sale of real estate must be conferred in writing and
must give him specific authority, either to conduct the general
business of the principal or to execute a binding contract containing
terms and conditions which are in the contract he did execute

SC: the authority expressed in the letter is a sufficient compliancw tih

both requirements
The purpose in giving a power of attorney is to substitute the mind
and hand of the agent for the mind and hand of the principal; and if
the character and extent of the power is so defined as to leave no
doubt as to the limits within which the agent is authorized to act, and
he acts within those limits, the principal cannot question the validity
of his act

For the principal to confer the right upon an agent to sell real estate, a
power of attorney must so express the powers of the agent in clear
and unmistakable language
It is therefore clear that by selling to Perez a portion of Cosmic
Lumbers land through a compromise agreement, Villamil-Estrada
acted without or in obvious authority. The sale ipso jure is
consequently void and so is the compromise agreement. This being
the case, the judgment based thereon is necessarily void
When an agent is engaged in the perpetration of a fraud upon his
principal for his own exclusive benefit, he is not really acting for the
principal but is really acting for himself, entirely outside the scope of
his agency

The general rule here applicable is that the description must be

sufficiently definite to identify the land either from the recitals of the
contract or deed or from external facts referred to in the document,
thereby enabling one to determine the identity of the land and if the
description is uncertain on its face or is shown to be applicable with
equal plausibility to more than one tract, it is insufficient.
6. COSMIC LUMBER CORPORATION V CA

7. RAET V CA
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AGENCY (Obieta) DIGESTS by Sham Zaragoza

Quezon City also known as the Violago Property or the San

Lorenzo Ruiz Commercial Center, with an area of 71,754 sqm

FACTS:
Petitioners Cesar and Elviira Raet (the spouses Raet) and petitioners
Rex and Edna Mitra (Spouses Mitra) negotiated with Amparo Gatus
concerning the possibility of bu*ying the rights of the latter to certain
units at the Las Villas de Sto. Nino Subdivision in Meycauyan,
Bulacan.

The property was offered for sale to the general public through the
circulation of a sales brochure containing the description of the
property and the asking price of P6,250/sqm with terms of payment
negotiable. In addition, brokers commission was 2% of selling price,
net of withholding taxes and other charges. Contact person was
Meldin Al G. Roy, Metro Drug Inc.

This subdivision ws developed by private respondent Phil Ville

Development and Housing Corporation (PVDHC) primarily for
parties qualified to obtain loans from the Government Service
Insurance System (GSIS).

The front portion consisting of 9,192 sqm is the subject of this

litigation

Spouses Raet and Spouses Mira paid Gatus the total amounts of
P40,000 and P35,000 respectively for which they were issued
receipts by Gatus in her own name

Al G. Roy sent a sales brochure, together with the location plan and
copy of the TCT to Atty. Gelacio Mamaril, a practicing lawyer and a
licensed real estate broker. Mamaril passed in turn passed on these
documents to Antonio Teng, Executive Vice President, and Atty
Victor Villanueva, Legal Counsel of City-Lite

Both spouses applied directly with PVDHC for the purchase of units
in the said subdivision. As they were not GSIS members, they looked
for members who could act as accommodation parties by allowing
them to use their policies. PVDHC would process the applications for
the purchase of the units upon the approval by the GSIS of
petitioners loan application

City-Lite conveyed its interest to purchase a portion or one-half (1/2)

of the front lot of the Violago Property Apparently, Roy
subsequently informed City-Lites representative that it would take
time to subdivide the lot and F.P. HOLDINGS was not receptive to
the purchase of only half of the front lot

Spouses Raet presented GSIS policy of Ernesto Casidsid, while the

spouses Mitra that of Dena Lim. The former paid P32,653 while the
latter paid P27,000 to PVDHC on the understanding that these
accounts would be credited to the purchase prices of the units which
will be determined after the approval of their loan applications with
the GSIS.

Atty. Mamaril wrote Metro Drug (Al G. Roy) expressing City-Lites

desire to buy the entire front lot of the subject property instead of
only half thereof provided the asking price of P6,250/sqm was
reduced and that payment be in installment for a certain period
The parties reached an agreement and Roy agreed to sell the property
to City-Lite provided only the latter submit its acceptance in writing
to the terms and conditions of the sale

Spouses Raet were allowed to occupy the unit built on Lot 4, Block
67, Phase 4A of the subdivision while Spouses Mitra were given the
unit on Lot 7, Block 61, Phase 4A thereof

For some reason or another and despite demand, F.P. HOLDINGS

refused to execute the corresponding deed of sale in favor of CityLite of the front lot of the property

GSIS, however, disapproved the loan applications of both spouses.

They were advised by PVDHC to seek other sources of financing but
were still allowed to remain in the said premises

Trial court ruled in favor of City-Lite ordering F.P. HOLDINGS to

execute a deed of sale of the property in favor of the former for the
total consideration of P55,056,250 payable as follows: P15 M as
downpayment to be payable immediately upon execution of the deed
of sale and the balance within 6 months from downpayment without
interest

Failure of both spouses to raise money, PVDHC demanded them to

vacate the units they were occupying and ejectment cases were filed
against them
ISSUE: W/N there were perfected contracts of sale between
petitioners and private respondent PVDHC involving the units in
question

CA reversed TCs decision

ISSUE: W/N there was a perfected contract of sale between City-Lite
and respondent F.P. HOLDINGS because of a lack of definite
agreement on the manner of paying the purchase price and that Metro
Drug and Meldin Al G. Roy were not authorized to sell the property
to City-Lite, and that the authority of Roy was only limited to that of
mere liaison or contact person

RULING: No
SC: Parties in this case had not reached any agreement with regard to
the sale of the units in question
Records do not show the total costs of the units in question and the
payment schemes therefore. The figures referred to by both spouses
were mere estimates given to them by Gatus. The parties transactions
thus, lacked the requisites ressential for the perfection of contracts

RULING: No, Roy mere contact person

Art. 1874 of NCC: When the sale of a piece of land or any interest
therein is through an agent, the authority of the latter shall be in
writing, otherwise, the sale shal be void.

Both spouses dealt with Gatus who was not the agent of PVDHC.
The criminal case for estafa against her was dismissed because it was
found out that she never represeneted herself to be an agent of
PVDHC

The absence of authority to sell can be determined from the written

memorandum issued by respondent F.P. HOLDINGS President
requesting Metro Drugs assistance in finding buyers for the property

Both spouses knew from the beginning that Gatus was negotiating
with them in her own behalf and not as an agent of PVDHC

Memorandum indicates that Meldin G. Roy and/or Metro Drug was

only to assist F.P. Holdings in looking for buyers and referring to
them possible prospects whom they were supposed to endorse to F.P.
Holdings.

There is thus no basis for the finding of HLURB Arbiter that Gatus
was the agent of PVDHC with respect to the transactions in question
Since PVDHC had no knowledge of the figures Gatus gave to both
spouses as estimates of the costs of the units, it could not have
ratified the same at the time the latter applied for the purchase of the
units. PVDHC was to enter into agreements concerning subject units
with both spouses only upon approval of their loan applications with
GSIS which failed to materialize

But the final evaluation, appraisal and acceptance of the transaction

could be made only by F.P. Holdings. In other words, Roy and/or
Metro Drug was only a contact person with no authority to conclude
a sale of the property
Roy and/or Metro Drug was a mere broker and Roy/s only job was to
bring parties the parties together for a possible transaction

There are no written contracts to evidence the alleged sales. If both

spouses and PVDHC had indeed entered into contracts involving said
units, it is rather strange that contracts of such importance have not
been reduced in writing

SC: for lack of a written authority to sell the Violago Property on

the part of Roy and/or Metro Drug, the sale should be as it is declared
null and void

8. CITY-LITE REALTY CORPORATION V CA

9. SIMMIE V H. BRODEK

FACTS
Private Respondent F.P. Holdings and Realty Corporation (F.P.
Holdings), formerly the Sparta Holdings Inc, was the registered
owner of a parcel of land situated along E. Rodriguez Avenue,

FACTS:
Simmie filed an action against Brodek to recover the sum of 1,350
pesos for services performed by the former for Brodek in the
purchase of a interest in the launch called Fred L. Dorr.
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AGENCY (Obieta) DIGESTS by Sham Zaragoza

Evidence shows that Brodek was the owner of interest in the said
launch prior to the time of the alleged contract and that one A.J.
Washburn was the owner of the other half.

The trial court held that the compensation for the services of the
plaintiff was the gratuitous use and occupation of some of the houses
of said deceased by plaintiff and his family

Simmie claims that he entered into a contract with Brodek by the

terms of which he was to purchase the half interest owned by said
Washburn for a sum not to exceed 3,500 pesos.

If it were true that the plaintiff and the deceased had an understanding
to the effect that plaintiff was to receive compensation aside from the
use and occupation of the houses of the deceased, it cannot be
explained how the plaintiff could have rendered services as he did for
8 years without receiving and claiming any compensation from the
deceased.

He further claims that he was to receive for such services a sum equal
to the difference between 3,500 pesos and whatever sum less than
that amount for which he could purchase the said launch
He further claims that by virtue of this agreement he entered into a
contract with the said Washburn to pay to the latter the sum of 2,150
pesos and that there was due from Brodek to him the difference
between 3,500 pesos and 2,150 pesos, or the sum of 1,350 pesos
Inferior court ruled in favor the plaintiff, Simmie
ISSUE: W/N there was a contract of agency between Brodek and
Simmie, the latter to purchase the said launch for the principal,
Brodek
RULING: YES
Where Brodek enters into a contract through his authorized agent
Dorr, with Simmie to purchase property, agreeing to pay a fixed price
for such property, allowing Simmie, a sum equal to the difference
between this fixed price and whatever sum less than that for which
Simmie is able to purchase the property, and Simmie has completed
the contract of sale and there is nothing left to be done except the
payment of the said property, and then Brodek closes said contract
without the intervention of Simmie, the former is liable to the latter
for an amount equal to the difference between the actual purchase
price of said property and the which Brodek agreed to pay for the
same
10. AGUNA V. LARENA
FACTS:
This action is brought to recover the sum of P29,600 on two causes
against the administrator of the estate of the deceased Mariano
Larena
Upon his first cause of action, plaintiff claims the sum of P9,600, the
alleged value of services rendered by him to said deceased as his
agent in charge of the deceaseds houses situated in Manila
Under the second cause of action, plaintiff alleges that one of the
buildings belonging to the deceased and described in his complaint
was built by him with the consent of the deceased, and for that reason
he is entitled to recover the sum disbursed by him in its construction,
amounting to P20,000
Evidence shows that plaintiff rendered services to the deceased,
consisting in the collection of the rents due from the tenants
occupying the deceaseds houses in Manila and attending to the repair
of said houses when necessary. He also took such steps as were
necessary to enforce the payment of rents and all that was required to
protect the interests of the deceased in connection with said houses
Evidence also shows that at the time he rendered his services, he did
not receive any compensation, however it is a fact that during said
period, plaintiff occupied a house belonging to the deceased without
paying any rent at all
Upon the first cause of action, the trial court held that the
compensation for services of plaintiff was the gratuitous use and
occupation of some of the houses of the deceased by the plaintiff and
his family
As to the second cause, the court held that the plaintiff did not have
any source of income that could produce him such a large sum of
money as that invested in the construction of the house; and the fact
that the deceased had more than the necessary amount to build the
house
ISSUE: W/N there was a contract of agency between plaintiff and
respondent entitling the former compensation for services rendered in
favor of the latter
RULING: NO
Plaintiff insists that, as his services as agent of the deceased M
Larena having been rendered, an obligaton to compensate them must
necessarily arise.