Professional Documents
Culture Documents
AGENCY
SECTION ONE. NATURE AND OBJECT OF AGENCY
1|Rallos v. Felix Go Chan & Sons Realty Corp.| G.R. No. L24332........ 3
2 | Bordador v. Luz | G.R. No.
130148.................................................................. 3
3 | Orient Air Services v. Court of Appeals | G.R. No.
76931 .......................... 5
4 | Eurotech Industrial Technologies, Inc. v. Cuizon | G.R. No.
167552........ 5
6 | Domingo v. Domingo | G.R. No. L30573..................................................... 6
7| Manotok Bros, Inc. vs. CA | GR No.
94753........................................... 7
8 | Inland Realty vs. CA | GR
76969............................. 8
9 | Tan vs. Gullas | G.R. No.
143978............................. 9
9 | Medrano vs. CA | GR No.
150678........................... 10
11 | Litonjua vs. Eternit Corp. | GR No.
144805............................................ 11
SECTION ONE
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.
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.
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.
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.
In the barangay proceedings, Luz, who was not
impleaded in the cases, appeared as a witness for Deganos
and ultimately, she and her husband, together with Deganos
signed a compromise agreement with petitioners.
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.
3. ORIENT
AIR
SERVICES
&
HOTEL
REPRESENTATIVES, vs.
COURT OF APPEALS and AMERICAN AIR-LINES
INCORPORATED, G.R. No. 76933, May 29, 1991
FACTS:
American Air, an air carrier ofering passenger and air
cargo transportation, entered into a General Sales Agency
Agreement with Orient Air, authorizing the latter to act as its
exclusive general sales agent for the sale of air passenger
transportation.
Orient air failed to remit the net proceeds of sales for
several months prompting American Air to undertake the
collection of the proceeds of tickets sold originally by
Orient Air and terminating their agreement. American air
instituted suit against Orient Air for the settlement of past
outstanding funds in possession of the latter. Orient Air
contended that because of the unpaid overriding
commissions it retained the sales proceeds before remitting
the balance to American Air. American Air contended that
the sale must be made by Orient Air and the sale must be
done with the use of American Air's ticket stocks in order for
it to be entitled to the overriding commission.
On the other hand, Orient Air contends that the
contractual stipulation of a 3% overriding commission covers
the total revenue of American Air and not merely that derived
from ticketed sales undertaken by Orient Air because it was
an exclusive General Sales Agent. CA held that Orient Air is
entitled to commissions and ordered American Airto reinstate
Orient Air as its General Sales Agent
ISSUE: 1. Whether
to commissions.
or
not
Orient Air
2. Whether CA is correct
reinstatement of Orient Air as an agent.
is
in
entitled
ordering
RULING:
1. Yes. Orient Air was entitled to an overriding
commission based on total flown revenue. American Air's
perception that Orient Air was remiss or in default of its
obligations under the Agreement was, in fact, a situation
where the latter acted in accordance with the Agreement
that of retaining from the sales proceeds its accrued
commissions before remitting the balance to American Air.
Since the latter was still obligated to Orient Air by way of
such commissions. Orient Air was clearly justified in
retaining and refusing to remit the sums claimed by
American Air. The latter's termination of the Agreement was,
therefore, without cause and basis, for which it should be
held liable to Orient Air.
2. No. CA in efect compels American Air to extend its
personality to Orient Air. Such would be violative of the
principles and essence of agency, defined by law as a
contract whereby "a person binds himself to render some
service or to do something in representation or on behalf
of another, WITH THE CONSENTOR AUTHORITY OF
THE LATTER. In an agent-principal relationship, the
personality of the principal is extended through the facility of
the agent. In so doing, the agent, by legal fiction, becomes
the principal, authorized to perform all acts which the latter
would have him do. Such a relationship can only be efected
with the consent of the principal, which must not, in any way,
be compelled by law or by any court.
4. EUROTECH INDUSTRIAL TECHNOLOGIES, INC.,
- versus EDWIN CUIZON and ERWIN CUIZON,
G.R. No. 167552 April 23, 2007
FACTS:
From January to April 1995, petitioner sold to Impact
Systems various products allegedly amounting to P91, 338.00
pesos. Subsequently, respondents sought to buy from
petitioner one unit of sludge pump valued at P250, 000.00
with respondents making a down payment of P50, 000.00.
When the sludge pump arrived from the United Kingdom,
petitioner refused to deliver the same to respondents without
their having fully settled their indebtedness to petitioner.
Thus, on 28 June 1995, respondent Edwin and Alberto de
Jesus, general manager of petitioner, executed a Deed of
Assignment of receivables in favor of petitioner. Impact
systems are owed by Erwin Cuizon.
Despite the existence of the Deed of Assignment,
respondents proceeded to collect from Toledo Power
Company the amount of P365, 135.29. Alarmed by this
development, petitioner made several demands upon
respondents to pay their obligations. As a result, respondents
were able to make partial payments to petitioner. On 7
October 1996, petitioner's counsel sent respondents a final
demand letter wherein it was stated that as of 11 June 1996,
respondents' total obligations stood at P295, 000.00
excluding interests and attorney's fees.
Because of
respondents' failure to abide by said final demand letter,
petitioner instituted a complaint for sum of money, damages,
1,000
given
to
Gregorio
as
propina
or
gift.
10
such
an
exemption
as
void.
11
12
13
14
consummated. They were the ones who set the sale of the
subject land in motion.
10.
Litonjua vs Etermit Corp. | GR No. 144805
452 SCRA 77 | 18 February 2005
FACTS:
The Eternit Corporation (EC) manufactures roofing
materials and pipe products. Ninety (90%) percent of the
shares of stocks of EC were owned by Eteroutremer S.A.
Corporation (ESAC), a corporation registered under the laws
of Belgium. Glanville was the General Manager and President
of EC, while Delsauxwas the Regional Director for Asia of
ESAC. In 1986, because of the political situation in the
Philippines the management of ESAC wanted to stop its
operations and to dispose the land in Mandaluyong City. They
engaged the services of realtor/broker Lauro G. Marquez.
Marquez thereafter ofered the land to Eduardo B. Litonjua,
Jr.
for
P27,000,000.00.
Litonjua
counter
ofered
P20,000,000.00 cash. Marquez apprisedGlanville & Delsaux
of the ofer. Delsaux sent a telex stating that, based on the
"Belgian/Swiss
decision,"
the
final
ofer
was
"US$1,000,000.00 andP2,500,000.00. The Litonjua brothers
deposited US$1,000,000.00 with the Security Bank & Trust
Company, and drafted an Escrow Agreement to expeditethe
sale.Meanwhile, with the assumption of Corazon C. Aquino as
President, the politicalsituation improved. Marquez received
a letter from Delsaux that the ESAC Regional Ofice decided
not to proceed with the sale. When informed of this, the
15
11.
Rallos vs Yangco G.R. No. 6906 (20 Phil
269) September 27, 1911 Justice Moreland
FACTS:
Defendant Yangco sent a letter to Plaintif Rallos on
November 27, 1907 ofering a consignment agreement. In
such letter, Yangco made known that he conferred upon
Florentino Collantes a public power of attorney notarized by
Mr.Perfecto Salas Rodriguez dated November 16, 1907 to
perform in his name and on his behalf all acts necessary for
carrying out his plans.
Accepting this invitation, the plaintifs proceeded to do
a considerable business with the defendant through the said
Collantes, as his factor, sending to him as agent for the
defendant a good deal of produce to be sold on commission.
Later, and in the month of February, 1909, the plaintifs sent
to the said Collantes, as agent for the defendant, 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 P1,537.08 belonging to the plaintifs.
This sum was apparently, converted to his own use by said
agent.
It appears, however, that prior to the sending of said
tobacco the defendant had severed his relations with
Collantes and that the latter was no longer acting as his
factor. This fact was not known to the plaintifs and it is
conceded in the case that no notice of any kind was given by
the defendant to the plaintifs of the termination of the
relations between the defendant and his agent. The
RULING:
Yes, Yangco is liable. Having advertised the fact that
Collantes was his agent and having given them a special
invitation to deal with such agent, it was the duty of the
defendant on the termination of the relationship of principal
and agent to give due and timely notice thereof to the
plaintifs. Failing to do so, he is responsible to them for
whatever goods may have been in good faith and without
negligence sent to the agent without knowledge, actual or
constructive, of the termination of such relationship.
12.
Litonjua vs Fernandez G.R. No. 148116
(427 SCRA 478) April 14, 2004 Justice Callejo
Sr.,
16
FACTS:
Sometime in September 1995, Mrs. Lourdes Alimario
and Agapito Fisico who worked as brokers, ofered to sell to
the petitioners, Antonio K. Litonjua and Aurelio K. Litonjua,
Jr., the parcels of land covered by TCT Nos. 36754 and
36766. The petitioners were shown a locator plan and copies
of the titles showing that the owners of the properties were
represented by Mary Mediatrix Fernandez and Gregorio T.
Eleosida, respectively. The brokers told the petitioners that
they were authorized by respondent Fernandez to ofer the
property for sale. The petitioners, thereafter, made two
ocular inspections of the property, in the course of which
they saw some people gathering coconuts.
In the afternoon of November 27, 1995, the petitioners
met with respondent Fernandez and the two brokers at the
petitioners ofice in Mandaluyong City. The petitioners and
respondent Fernandez agreed that the petitioners would buy
the property consisting of 36,742 square meters, for the
price of P150 per square meter, or the total sum of
P5,098,500. They also agreed that the owners would
shoulder the capital gains tax, transfer tax and the expenses
for the documentation of the sale. The petitioners and
respondent Fernandez also agreed to meet on December 8,
1995 to finalize the sale.
It was also agreed upon that on the said date,
respondent Fernandez would present a special power of
attorney executed by the owners of the property, authorizing
her to sell the property for and in their behalf, and to execute
a deed of absolute sale thereon. The petitioners would also
17
13.
Aggabao vs Parulan Jr.G.R. No. 165803
(629 SCRA 562) September 1, 2010 Justice
Bersamin
FACTS:
In January 1991, real estate broker Marta K. Atanacio
ofered the property to spouses Aggabao, who initially did not
show interest due to the rundown condition of the
improvements. But Atanacios persistence prevailed upon
them, so that on February 2, 1991, they and Atanacio met
with Ma. Elena at the site of the property.During their
meeting, Ma. Elena showed to them the owners original copy
of TCT No. 63376, a certified true copy of TCT No. 63377,
three tax declarations, and a copy of the special power of
attorney (SPA) dated January 7, 1991 executed by Dionisio,
authorizing Ma. Elena, to sell the property. Before the
meeting ended, they paid P20, 000.00 as earnest money, for
which Ma. Elena executed a handwritten Receipt of Earnest
Money, whereby the parties stipulated that: (a) they would
pay an additional payment of P130,000.00 on February
4,1991 (b) they would pay the balance of the bank loan of
the respondents amounting to P650,000.00 on or before
February 15, 1991 and (c) they would make the final
payment of P700,000.00 once Ma. Elena turned over the
property on March 31, 1991.
On March 18, 1991, the petitioners delivered the final
amount of P700,000.00 to Ma. Elena, who executed a deed of
absolute sale in their favor. However, Ma. Elena did not
turn over the owners duplicate copy of TCT No. 63376,
claiming that said copy was in the possession of a relative
who was then in Hongkong. She assured them that the
18
19
14.
Dominion Insurance Corp. vs CAG.R. No.
129919 (376 SCRA 239) February 6, 2002
Justice Pardo
FACTS:
On January 25, 1991, plaintif Rodolfo S. Guevarra
instituted Civil Case No. 8855 for sum of money against
defendant Dominion Insurance Corporation. Plaintif sought
to recover thereunder the sum of P156, 473.90 which he
claimed to have advanced in his capacity as manager of
defendant to satisfy certain claims filed by defendants
clients. In its traverse, defendant denied any liability to
plaintif and asserted a counterclaim for P249, 672.53,
representing premiums that plaintif allegedly failed to remit.
The terms of the agreement read:
That
we,
FIRST
CONTINENTAL
ASSURANCE
COMPANY, INC., a
corporation duly organized and
existing under and by virtue of the laws ofthe Republic
of
the Philippines, xxx represented by the undersigned as
Regional
Manager, xxx do hereby appoint RSG
Guevarra Insurance
Services represented by
Mr.
Rodolfo Guevarra xxx to be our Agency Manager in San Fdo.,
for our
place and stead, to do and perform the following
acts and things:
1. To conduct, sign, manager (sic), carry on and
transact Bonding and Insurance business as usually pertain
to a Agency Ofice, or FIRE, MARINE,
MOTOR
CAR,
PERSONAL ACCIDENT, and BONDING with the right, upon
our
20
21
RULING:
Yes. An examination of the records showed that the
assailed power of attorney was valid and regular on its face.
It was notarized and as such, it carries the evidentiary weight
conferred upon it with respect to its due execution. While it
is true that it was denominated as a general power of
attorney, a perusal thereof revealed that it stated an
authority to sell.
Thus, there was no need to execute a separate and
special power of attorney since the general power of attorney
had expressly authorized the agent or attorney in fact the
power to sell the subject property. The special power of
attorney can be included in the general power when it is
specified therein the act or transaction for which the special
power is required.
Whether the instrument be denominated as general
power of attorney or special power of attorney, what matters
is the extent of the power or powers contemplated upon the
agent or attorney in fact. If the power is couched in general
terms, then such power cannot go beyond acts of
administration. However, where the power to sell is specific,
it not being merely implied, much less couched in general
terms, there can not be any doubt that the attorney in fact
may execute a valid sale. An instrument may be captioned as
special power of attorney but if the powers granted are
couched in general terms without mentioning any specific
power to sell or mortgage or to do other specific acts of strict
dominion, then in that case only acts of administration may
be deemed conferred.
22
16.
Pineda vs CA G.R. No. 105562 (226 SCRA
754) September 27, 1993 Justice Davide Jr.
FACTS:
On 23 September 1983, Prime Marine Services, Inc., a
crewing/manning outfit, procured Group PoIicy No. G004694
from respondent-appellant Insular Life Assurance Co., Ltd. to
provide life insurance coverage to its sea-based employees
enrolled under the plan. On 17 February 1986, during the
efectivity of the policy, six covered employees of the PMSI
perished at sea when their vessel, M/V Nemos, a Greek cargo
vessel, sunk somewhere in El Jadida, Morocco. They were
survived by complainants-appellees, the beneficiaries under
the policy.
Following the tragic demise of their loved ones,
complainants-appellees sought to claim death benefits due
them and, for this purpose, they approached the President
and General Manager ofPMSI, Capt. Roberto Nuval. Capt.
Nuval evinced willingness to assist complainants-appellees to
recover Overseas Workers Welfare Administration (OWWA)
benefits from the POEA and to work for the increase of their
PANDIMAN and other benefits arising from the deaths of
their husbands/sons. They were thus made to execute, with
the exception of the spouses Alarcon, special powers of
attorney authorizing Capt. Nuval to, among others, "follow
up, ask, demand, collect and receive" for their benefit
indemnities of sums of money due them relative to the
sinking of M/V Nemos. By virtue of these written powers of
attorney, complainants-appellees were able to receive their
respective death benefits. Unknown to them, however, the
23
24
25
18.
HOME INSURANCE CO. VS. USL, GR L25593, 15 NOVEMBER 1967
FACTS:
Sometime in 1964, SS "Pioneer Moon" arrived in
Manila and discharged unto the custody of the Bureau of
Customs, as arrastre operator, two hundred (200) cartons of
carbonized adding machine rolls consigned to Burroughs,
Limited. When the cargo was delivered to the consignee,
however, several cartons were damaged.
The consignee claimed the P2,605.64 worth of damage
from the Bureau of Customs, the United Lines Company
owner of the vessel, and the Home Insurance Company which
had insured the cargo. The latter paid the claim and
demanded reimbursement from either arrastre operator or
the carrier.
When both rejected the claim, the Home Insurance Company
filed an action against the Republic of the Philippines, the
Bureau of Customs and the United States Lines, in the
alternative, for the recovery of P2,605.64, with interest plus
costs.
On the date set for pre-trial, only the counsel for the
plaintif appeared, who upon being asked for written
RULING:
YES. The lower court was correct in dismissing the
case. True, said counsel asserted that he had verbal authority
to compromise the case. The Rules, however, require, for
attorneys to compromise the litigation of their clients, a
special authority (Section 23, Rule 138, Rules of Court).
And while the same does not state that the special
authority be in writing, the court has every reason to expect,
that, if not in writing, the same be duly established by
evidence other than the self-serving assertion of counsel
himself that such authority was verbally given to him.
For, authority to compromise cannot lightly be
presumed. And if, with good reason, the judge is not satisfied
that said authority exists, as in this case, dismissal of the suit
for non-appearance of plaintif in pre-trial is sanctioned by
the Rules. The dismissal should therefore be sustained in
toto, with respect to all the defendants.
26
19.
ESTATE OF LIANO OLAGUER VS. ONGJOCO,
GR NO. 173312
26 AUGUST 2008
FACTS:
The plaintifs Sor Mary Edith Olaguer, Aurora O. de
Guzman, Clarissa O. Trinidad, Lina Olaguer and Ma. Linda O.
Montayre are the legitimate children of the spouses Lino
Olaguer and defendant Olivia P. Olaguer. Lino Olaguer died
on October 3, 1957 so Special Proceedings No. 528 for
probate of will was filed in the then Court of First Instance of
Albay. Defendant Olivia P. Olaguer was appointed as
administrator pursuant to the will. Later, defendant Eduardo
Olaguer was appointed as coadministrator. On October 15,
1959 defendant Olivia P. Olaguer got married to defendant
Jose A. Olaguer before the then Justice of the Peace of Sto.
Domingo (Libog) Albay. On January 24, 1965 they were
married in church.
In the order of the probate court dated April 4, 1961,
some properties of the estate were authorized to be sold to
pay obligations of the estate.
Relying upon the order, but without prior notice or
permission from the Probate Court, defendants Olivia P.
Olaguer and Eduardo Olaguer on November 1, 1965 sold to
Estanislao Olaguer 10 parcels of land. The sale to was
approved by the Probate Court on November 12, 1965.
On July 7, 1966, defendant Olivia P. Olaguer executed a
Special Power of Attorney in favor of defendant Jose A.
Olaguer, authorizing the latter to "sell, mortgage, assign,
transfer, endorse and deliver" of 6 properties.
27
28
29
30
RULING:
No. Article 1874 and Aritcle 1875 (5) explicitly require
a written authority when the sale of a piece of land is through
an agent, whether the sale is gratuitously or for a valuable
consideration.
Articles 1874 of the Civil Code provides: When a 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
shall be void.
Likewise, A1iicle 1878 paragraph 5 of the Civil Code
specifically mandates that the authority of the agent to sell a
real property must be conferred in writing, to wit:
Art. 1878. Special powers of attorney are necessary in the
following cases:
(5) To enter into any contract by which the ownership of an
immovable is transmitted or acquired either gratuitously or
for a valuable consideration;
Absent such authority in writing, the sale is null and
void.
In the case at bar, it is undisputed that the sale of the
subject lots to Spouses Bautista was void. Based on the
records, Nasino had no written authority from Spouses
Jalandoni to sell the subject lots. The testimony of Eliseo that
Nasino was empowered by a special power of attorney to sell
the subject lots was bereft of merit as the alleged special
power attorney was neither presented in co urt nor was it
referred to in the deeds of absolute sale. Bare allegations,
unsubstantiated by evidence, are not equivalent to proof
under the Rules of Court.
31
22.
GUTIERREZ HERMANOS VS. ORENSE, GR
NO. L-9188 04 DECEMBER 1914
FACTS:
On and before Februaru 14, 1907, Engracio Orense had
been the owner of a parcel of land in Guinobatan, Albay.
On February 14, 1907, Jose Duran, a nephew of Orense,
sold the property for P1,500 to Gutierrez Hermanos, with
Orenses knowledge and consent, executed before a notary a
public instrument. The said public instrument contained a
provision giving Duran the right to repurchase it for the same
price within a period of four years from the date of the said
instrument.
Orense continued occupying the land by virtue of a contract
of lease. After the lapse of four years, Gutierrez asked
Orense to deliver the property to the company and to pay
rentals for the use of the property.
Orense refused to do so. He claimed that the sale was
void because it was done without his authority and that he
did not authorize his nephew to enter into such contract.
During trial, Orense was presented as witness of the
defense. He states that the sale was done with his knowledge
and consent. Because of such testimony, it was ascertained
that he did give his nephew, Duran, authority to convey the
land. Duran was acquitted of criminal charges and the
company demanded that Orense execute the proper deed of
conveyance of the property.
32
23.
COSMIC LUMBER CORPORATION
and PEREZ,
G.R. No. 114311 November 29, 1996
vs.
CA
FACTS:
Cosmic Lumber Corporation through its General Manager
executed on 28 January1985 a Special Power of Attorney appointing
Paz G. Villamil-Estrada as attorney-in-fact among others to initiate,
institute and file any court action for the ejectment of third persons
and/or squatters of the entire lot 9127 and 443 and covered by TCT
Nos. 37648 and 37649, 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, and for this purpose, to
appear at the pre-trial conference and enter into any stipulation of
facts and or compromise agreement so far as it shall protect the
rights and interest of the corporation in the aforementioned lots.
On 11 March 1985, 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
No. 443.
On November 25, 1985 Villamil-Estrada entered into a
Compromise Agreement with
respondent Perez
and on November
27, 1985 the "Compromise Agreement"
was approved by the trial court and judgment was rendered in
accordance
the
terms.
Although the decision became final and executor, it was not executed
within the 5-year period from date of its finality allegedly due to the
failure of petitioner to produce the owner's duplicate copy of Title No.
37649 needed to segregate from Lot No. 443 which is the portion
sold by the attorney-in-fact, Paz G. Villamil-Estrada, to private
respondent under the compromise agreement. Thus on January 25,
1993 respondent filed a complaint to revive the judgment, docketed
33
as CivilCase No. D-10459 Petitioner asserts that it was only when the
summons in Civil Case No. D-10459 for the revival of judgment was
served upon it that it came to know of the compromise agreement
entered into between Paz G. Villamil-Estrada and respondent Isidro
Perez upon which the trial court based its decision of 26 July 1993 in
Civil Case No. D-7750. Forthwith, upon learning of the fraudulent
transaction, petitioner sought annulment of the decision of the trial
court before respondent Court of Appeals on the ground that the
compromise agreement was void.
34
24.
LUZ PINEDA, MARILOU MONTENEGRO,
VIRGINIA
ALARCON,
DINA
LORENA
AYO,
CELIA CALUMBAG and LUCIA LONTOK,vs.HON.
COURT OF APPEALS and THE INSULAR LIFE
ASSURANCE COMPANY, LIMITED.
FACTS:
This is an action for the payment of insurance claims
and prayer for administrative sanctions. Prime Marine
Services, Inc. (PMSI), a crewing/manning outfit, procured a
Group Policy from Insular Life Assurance Co., Ltd. to provide
life insurance coverage to its sea-based employees. During
the efectively of the policy, six covered employees perished
at sea when their vessel sunk.
They were survived by the complainants-appellees, the
beneficiaries under the policy. The beneficiaries, except the
spouses Alarcon, executed special powers of attorney
authorizing Capt. Nuval,President and General Manager of PMSI,
to , among others, followup, ask, demand, collect and receive for
theirbenefit indemnities of sums of money due them relative
to the sinking of the vessel.
By virtue of these written powers of attorney,
complainants-appellees were able to receive their respective
death benefits.
Unknown to them, however, PMSI, in its capacity as
employer and policyholder of the life insurance of its
deceased workers, filed with Insular Life formal claims for
and in behalf of the beneficiaries, through Capt. Nuval. On
the basis of the five special powers of attorney, Insular Life
drew against its account six (6) checks, four for P200,000.00
each, one for P50,000.00 and another for P40,000.00 payable
35
larger volume of sales, and at the same time the insurers own
administrative costs are markedly reduced.
The most persuasive rationale for adopting the view
that the employer acts as the agent of the insurer, however, is
that the employee has no knowledge of or control over the
employer's actions in handling the policy or its
administration. An agency relationship is based upon consent
by one person that another shall actin his behalf and be
subject to his control. It is clear from the evidence regarding
procedural techniques here that the insurer-employer
relationship meets this agency test with regard to the
administration of the policy, whereas that between the
employer and its employees fails to reflect true agency. The
insurer directs the performance of the employer's
administrative acts, and if these duties are not undertaken
properly the insurer is in a position to exercise more
constricted control over the employer's conduct.
InNeider vsContinental Assurance Company which was
cited inElfstromit was held that: the employer owes to the
employeethe duty of good faith and due carein attending to the
policy, and that the employer should make clear to
the employee anything required of him to keep the policy in
efect, and the time that the obligations are due. In its
position as administrator of the policy, we feel also that the
employer should be considered as the agent of the insurer,
andany omission of duty to the employee in its administration
should be attributable to the insurer
In the light of the above disquisitions and after an
examination of the facts of this case, we hold that PMSI,
through its President and General Manager, Capt. Nuval,
25.
Eduardo
Litonjua,
Jr.
and
Antonio
Litonjua
vs. Eternit Corp. (Eteroutremer, S.A. and Far
East Bank & Trust Co.G.R. No. 144805 June 8, 2006
FACTS:
Eternit Corp. is engaged in the
manufacture of roofingmaterials and pipe pro
d u c t s . I t s manufacturing operations were conducted on 8
parcels of land located in Mandaluyong City, covered by TCTs
with Far East Bank & Trust Company, as trustee. 90% of
the shares of stocks of Eternit Corp. were owned by
Eteroutremer S.A. Corporation (ESAC), a corporation
organized and registered under the laws of Belgium. Jack
Glanville, an Australian citizen, was the General Manager
and President of Eternit Corp., while Claude Frederick
Delsaux was the Regional Director for Asia of ESAC.
36
RULING:
No.A corporation is a juridical person separate and distinct
from its members or stockholders and is not afected by the
personal rights, obligations and transactions of the latter. It
may act only through its board of directors or, when
authorized either by its by-laws or by its board
resolution,
through
its
of icers
or agents in
the normal course of
business. The
general
37
38
39
could not dispose of the interest of her co-heirs in the said lot
absent any written authority from the latter, as required by
law.
27.
SallyYoshizaki, vs. Joy Training Center of
Aurora, Inc., G.R. No. 174978; July 31, 2013
FACTS:
Richard and Linda Johnson were members of Joy
Trainings Board of Trustees who sold the real properties, a
wrangler jeep, and other personal properties in favor of the
spouses Sally and Yoshio Yoshizaki.
Joy Training filed an action for cancellation of sales
alleging that the spouses Johnson is without the requisite
authority from the Board of Directors. The RTC ruled in favor
of the spouses Yoshizaki.
It found that Joy Training owned the real properties
and it authorized he spouses Johnson to sell the real
properties.
It recognized that there were only five actual members
of the board of trustees; consequently, a majority of the board
of trustees validly authorized the
It also ruled that the sale of personal properties was
valid because they were registered in the spouses Johnsons
name.
The CA upheld the RTCs jurisdiction over the case but
reversed its ruling with respect to the sale of real properties.
It also ruled that the resolution is void because it was not
approved by a majority of the board of trustees.
28.
CITY-LITE
REALTY
COURT OF APPEALS and
CORPORATION, vs.
F.P. HOLDINGS &
40
41
SECTION THREE
29.
BA Finance vs. CA GR No. 82040 (201 SCRA
157)27 August 1991
FACTS:
Private respondents Manuel Cuady and Lilia Cuady
acquired from Supercars, Inc. a credit of P39,574.80, which
covered the cost of a unit of four-door sedan, Ford Escort
1300 on July 15, 1977. A promissory note was executed by
private respondents in favor of Supercars, Inc., obligating
themselves to pay the latter or order the sum of P39,574.80,
inclusive of interest at 14% per annum, payable on monthly
installments of P1,098.00 starting August 16, 1977, and on
the 16th day of the next 35 months from September 16, 1977
until full payment thereof. It was also stipulated that a
penalty of P10.00 for every month of late installment will be
paid. To incur no delays in payment and secure compliance of
the obligation, said spouses constituted a chattel mortgage.
On July 25, 1977, the promissory note, together with
the chattel mortgage were assigned to B.A. Finance
Corporation. The Cuadys paid a total of P36,730.15 to the
B.A. Finance Corporation, thus leaving an unpaid balance of
P2,344.65 as of July 18, 1980. In addition thereto, the Cuadys
owe B.A. Finance Corporation P460.00 representing
penalties or surcharges for tardy monthly installments.
When the Cuadys failed to renew insurance coverage of
said motor vehicle, the B.A. Finance Corporation, as the
assignee of the mortgage, obtained the renewal of its
insurance coverage for the year 1980 with Zenith Insurance
Corporation. Under the terms and conditions of the said
insurance coverage, any loss under the policy shall be
payable to the B.A. Finance Corporation. On April 18, 1980,
the motor vehicle met an accident and was badly damaged. It
42
43
RULING:
Yes. The SC ruled in the afirmative.
Settled is the rule that an agent is also responsible for
the negligence in the performance of its function (Art. 1909
of the Civil Code) and is liable for the damages which the
principal may sufer by reason of its negligent act (Art. 1884
of the Civil Code).
BA is liable for the negligence of its agent, PAL. The
court observed that the contract of air transportation was
exclusively between the Mahtani and BA, the latter merely
endorsing the Manila to Hong Kong connecting flight to
Bombay with the PAL, acts as it agent. It is undeniable that in
transporting Mahtani from Manila to Hong Kong by PAL
acted as BAs agent. BA and PAL moreover, are members of
International Air Transport Association (IATA), wherein
member airlines are regarded as agents of each other in the
issuance of tickets and other matters pertaining to their
relationship. The contractual relationship between BA and
PAL is one of agency.
44
31.
CERVANTES VS CA, GR No. 125138 (304
SCRA 25), 02 MARCH 1999
FACTS:
Cervantes bought a round trip ticket for ManilaHonolulu-Los Angeles-Honolulu-Manila to PAL on March 27,
1989. This ticket expressly provides that 1 year from
issuance or until March 27, 1990 it will be expired. The ticket
was issued in compliance with a Compromise Agreement
entered between PAL and Cervantes. On March 3, 1990, 4
days before the expiry date, Cervantes used it. He arrived in
LA on the same day and immediately booked his return flight
ticket with the PALs ofice which was confirmed for April 2,
1990 flight. However, he learned that the same PAL plane
would make a stop-over in San Francisco, so he made
arrangements with PALs agent for him to board flight in San
Francisco instead of boarding in LA. Cervantes believed that
everything was set for his return to PH upon confirmation of
PALs agent. On said return date, when he checked in at PAL
counter, he was not allowed to board the arranged flight due
to the expiration of the validity of the ticket. PAL personel
made annotation on his ticket TICKET NOT ACCEPTED DUE
TO EXPIRATION OF THE VALIDITY. Aggrived, Cervantes
filed a complaint for damages for Breach of Contract of
Carriage. RTC dismissed the case which was upheld by the
CA.
ISSUE:WON the act of the PAL agents in confirming the
ticket of Cervantes extended the period of validity?
RULING:
45
Borja filed a motion for the quashal of said writ. But this
time, he contended that there was fraud in the execution of
the compromise agreement when he was assisted by Atty.
Leonardo Cruz, and that the agreement is void. Said
compromise agreement contained no stipulation as to the
payment of 2% monthly interest and 25% attorneys fee in
case of default in payment. He alleged that his former
counsel, Atty. Cruz, removed the page of the genuine
compromise agreement where he afixed his signature and
fraudulently attached the same to the compromise agreement
submitted to the court. So it could make appear that the
penalty clause embodied therein was consented.
Sulyap then presented Atty. Cruz as witness, who
declared that the petitioner gave his consent to the inclusion
of the penalty clause of 2% monthly interest and
25% attorneys fees in the compromise agreement. He added
that the compromise agreement approved by the court was in
fact signed by the petitioner inside the courtroom before the
same was submitted for approval. Atty. Cruz stressed that
the penalty clause of 2% interest per month until full
payment of the amount due, plus 25% thereof as attorneys
fees, in case of default in payment, was actually chosen
by the petitioner.
The trial court ruled in favored of Sulyap because it
gave credence to the testimony of Atty. Cruz and even noted
that it was more than one year from receipt of the
judgment on compromise when he questioned the inclusion
of the penalty clause in the approved compromise agreement
despite several opportunities to raise said objection.
ISSUE:WON the petitioner Borja is bound by the
penalty clause in the compromise agreement?
46
RULING:
YES. Borja is bound by the penalty clause in the
compromise agreement. While a judicial compromise may be
annulled or modified on the ground of vitiated consent or
forgery, we find that the testimony of the petitioner failed
to establish the attendance of fraud. No evidence was
presented by petitioner other than his bare allegation that his
former counsel fraudulently attached the page of the genuine
compromise agreement where he afixed his signature to
the compromise agreement submitted to the court.
Petitioner cannot feign ignorance of the existence of
the penalty clause in the compromise agreement approved by
the court. When he received the judgment reproducing the
full text of the compromise agreement he never raised the
issue of the fraudulent inclusion of the penalty clause in their
agreement. It was also noted that petitioner is a doctor of
medicine. He must have read and understood the contents of
the judgment on compromise. In fact he filed, without the
assistance of counsel, a motion praying that a certain amount
be withheld from his total obligation and instead be applied
to the expenses for the repair of the leased premises which
was allegedly vandalized by the private respondent
Even assuming that Atty. Leonardo Cruz exceeded his
authority in inserting the penalty clause, the status of the
said clause is not void but merely voidable, i.e., capable of
being ratified. Indeed, petitioners failure to question the
inclusion of the 2% monthly interest and 25% attorneys fees
in the judicial compromise despite several opportunities to do
33.
JESUS M. GOZUN VS. JOSE TEOFILO T.
MERCADO a.k.a.DON PEPITO MERCADO, GR No.
167812 (511 SCRA 305), 19 DECEMBER 2006
FACTS:
During the local elections of 1995, Don Pepito, the
respondent, vied for gubernatorial post in Pampanga.Upon
Gozuns request, the petitioner, owner of JMG Publishing
House, a printing shop locatedin San Fernando, Pampanga,
submitted to Don Pepito draft samples and price quotation
of campaign materials.By
petitioners
(Gozun) claim,
respondents wife had told him that respondent (Don Pepito)
already approved his pricequotation, and thus, Gozun could
start printing the campaign materials, hence, he did print
campaign materials like posters bearing respondents
photograph, leaflets
containing
the
slate
of
party
candidates,sample
ballots,poll
watcher
identification
cards,and stickers. However, petitioner availed of the
services and facilities of Metro Angeles Printing and of St.
Joseph Printing Press, owned by his daughter Jennifer Gozun
and mother Epifania Macalino Gozun, due to the urgency and
limited time to do said job order.
In the meantime, on March 31, 1995, respondents
sister-in-law, Lilian Soriano obtained from petitioner "cash
advance" of P253,000 purportedly for the allowances,
seminars and for other related expenses of poll watchers. It
47
48
35.
Sazon vs. Vasquez-Menancio | GR No. 192085
(666 SCRA 707) 22 February 2012 |Justice Sereno
FACTS:
Respondent Letecia Vasquez-Menancio, a US resident,
entrusted the management, care and preservation of several
of her nine (9) properties to petitioner Caridad Sazon.
Letecia claimed that the said lots were all productive, and all
the fruits and income accruing therefrom were apparently
received by Caridad. In contrast, Caridad alleged that several
of the properties do not produce any fruit nor generate any
income. She claimed that any supposed income derived
therefrom was not even suficient to answer for all the
expenses incurred to maintain them.
Letecia further averred that despite repeated demands,
Caridad failed to render a proper accounting and to remit the
owners share of the profits. Thus, sometime in October
1997, she filed a complaint against Carida praying that the
lower court will order her to render an accounting and remit
all the fruits and income the latter received from the
properties as administrator.
In her defense, Caridad averred that she can turn over the
possession of certain 3 lots because they were allegedly
subject of valid lease agreements. It appeared that when the
petitioner entered into these agreements, she acted within
her authority as Letecias agent.
In its decision, the RTC ruled in favour of Letecia, and the
same was afirmed by the CA.
ISSUE: Whether or not the agent fulfilled her
obligation in rendering the accounting of properties?
49
36.
Hernandez vs. Hernandez | GR 158576
SCRA 24 | 9 March 2011
645
FACTS
On 11 November 1993, the owners of the Hernandez
property, which includes petitioner Cornelia Hernandez,
executed a letter indicating: (1) respondent Cecilio
Hernandez as the representative of the owners of the land;
and (2) the compensation he gets in doing such job. Such
property was subject of an expropriation case for a DPWH
project. During the course of the expropriation proceedings,
an Order was issued by the RTC, Cecilio was appointed as
one of the commissioners in the expropriation case. On 18
October 1996, Cornelia, and her other co-owners who were
also signatories of the 11 November 1993 letter, executed an
irrevocable Special Power of Attorney (SPA) appointing
Cecilio Hernandez as their "true and lawful attorney" with
respect to the expropriation of the subject property. There
was no mention of the compensation scheme for Cecilio, the
attorney-in-fact. The just compensation for the condemned
properties was fixed subsequently, with Cornelias share
amounting to P7,321,500.00the amount a pro-indiviso owner
is to receive. At this point, Cecilios SPA was revoked by
Cornelia. On 7 February 2000, however, Cornelia received
from Cecilio a check amounting to P1,123,000.00. The check
was accompanied by a Receipt and Quitclaim document in
favor of Cecilio. In essence it states that: (1) the amount
received will be the share of Cornelia in the just
compensation paid by the government in the expropriated
property; (2) in consideration of the payment, it will release
and forever discharge Cecilio from any action, damages,
claims or demands; and (3) Cornelia will not institute any
50
FACTS:
Cosmic Corporation, through its General Manager
executed a Special Power of Attorney appointing Paz G.
Villamil-Estrada as attorney-in-fact 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
Paz G. Villamil Estrada, by virtue of her power of
attorney, instituted an action for the ejectment of private
RULING:
51
52
40.
SERONA VS CA, G.R. No. 130423. November
18, 2002.
FACTS:
RULING:
53
sale
between
RULING:
Yes, the Court held that in even assuming that Virginia
Lim had no authority to sell the subject properties, the
contract she executed in favor of respondent is not void, but
simply unenforceable, under the second paragraph of Article
1317 of the Civil Code which reads:
Art. 1317. A contract entered into in the name of
another by one who has no authority or legal representation,
or who has acted beyond his powers, shall be unenforceable,
unless it is ratified, expressly or impliedly, by the person on
whose behalf it has been executed, before it is revoked by the
other contracting party.
Ignacio Rubio merely denies the contract of sale and
claims without substantiation, that what he received was a
loan, not the down payment for the sale of the subject
properties. His acceptance and encashment of the check,
however, constituted ratification of the contract of sale and
"produce the efects of an express power of agency." His
action implies that he waived his right of action to avoid the
contract, and, consequently, it also implies the tacit, if not
express, confirmation of the said sale efected" by Virginia
Lim in favor of respondent.
In addition, the Baloloys have ratified the contract of
sale when they accepted and enjoyed its benefits. The
54
42.
MUNICIPAL
EVANGELISTA
COUNCIL
OF
ILOILO
VS
FACTS:
In a previous case, Tan Ong Tze sought to recover the
value of a strip of land belonging to her which was taken by
the municipality to widen a public street. The judgment
entitled her to 42, 966.40. When the judgment became final
and executory, Atty. Jose Evangelista as counsel for the
Intestate Estate of Atty. Jose Ma. Arroyo, filed a claim for
payment of fees for professional services that he and Atty.
Arroyo rendered in the said case.
At the hearing, several other claimants appeared,
including Atty. Antero Soriano who claimed that Tan Boon
Tiong- one of Tan Ong Tzes attorney-in-fact assigned the
amount to him and that he in turn assigned this amount to
Mauricio Cruz & Co. Inc. The Court ordered that the atty.s
lien in the amount of 15% of the judgment be recorded in
favor of Jose Evangelista and directed the municipality to file
an interpleader against the claiming parties PNB, Antero
Soriano, Jose Ma. Arroyo represented by Jose Evangelista.
43.
CHEMPIL EXPORT VS CA
55
FACTS:
This is a consolidation of two petitions for review filed
by Dynetics Inc. and Antonio Gracia; one sought the judicial
declaration, construction and interpretation of the validity of
a Surety Agreement that they entered into with the
Consortium of banks while the other sought declaratory relief
and/or injunction against Security Bank & Trust Co. In both
cases Dynetics and Garcia lost. The Consortium and SBTC
filed their respective counterclaims with prayer for the
issuance of writ of attachment which the Trial Court granted
and while the writ in favor of SBTC was lifted, it was
subsequently reinstated. Consequently, various properties
owned by Dynetics and Garcia were garnished including
Garcias shares of stocks in CIP/ Chemphil.
PCIB which in a previous case against CEIC sought
the annulment of a Court of Appeals decision, filed a motion
to dismiss the complaint of Dynetics and Garcia for lack of
interest to prosecute and to submit its counterclaims for
decision. The motion to dismiss was granted but the motion
to submit its counterclaim for decision was denied. The
Consortium filed motions for reconsideration which were
denied. The consortium thus appealed to the Court of
Appeals and while the same was pending, they entered into a
compromise agreement with Garcia where it was stipulated
that Garcia will pay 145M which shall earn interest of
eighteen percent from the date of the compromise.
It appears that a year before, Garcia sold the same
shares of stock to Ferro Chemicals Inc. for 79M. It was
agreed upon that the purchase price shall be paid directly to
Security Bank. But SBTC refused the payment as it was not
suficient, as such the payment was consigned to the RTC.
56
No.
FACTS:
Petitioners William Uy and Rodel Roxas are agents to
authorized to sell eight (8) parcels of land by the owners. By
virtue of such authority, petitioners ofered to sell the lands,
located at Benguet to respondent National Housing Authority
(NHA) to be utilized and developed as housing project.
NHA passed a resolution approving the acquisition of
said lands with an area of 31.8231 hectares, at the cost of
P23.867 million, pursuant to which the parties executed a
series of Deeds of Absolute Sale covering the subject lands.
However, only five (5) were paid for by NHA because of the
report it received from the Land Geosciences Bureau of the
57
45.
ANGELES vs. PNR, G.R. No. 150128, 500
SCRA 444, 31 August 2006
FACTS:
On May 5, 1980, respondent Philippine National
Railways (PNR) informed a certain Gaudencio Romualdez
that it has accepted the latters to buy, on an AS IS WHERE IS
basis, the PNRs scrap/unserviceable rails located in Del
Carmen and Lubao, Pampanga at P1,300.00 and P2,100.00
per metric ton, respectively, for the total amount of
P96,600.00 Romualdez authorized Lizette R. WijancoAngeles, the wife of petitioner Laureano Angeles to be his
representative in the withdrawal of the scrap/unserviceable
rails. The PNR granted said request and allowed Lizette to
withdraw scrap/unserviceable rail in Murcia, Capas and San
Miguel, Tarlac instead in Pampanga. However, the PNR
subsequently suspended the withdrawal in view of what it
considered as documentary discrepancies coupled by
reported pilferages of over P500,000.00 worth of PNR scrap
properties in Tarlac.
Consequently, the spouses Angeles demanded the
refund of the amount of P96,000.00. The PNR, however,
refused to pay, alleging that as per delivery receipt duly
signed by Lizette, 54.658 metric tons of unserviceable rails
had already been withdrawn which, at P2,100 per metric ton,
were worth of P114,781.80, an amount that exceed the claim
for refund.
58
59
No.
FACTS:
Prime Marine Services, Inc. (PMSI) obtained a group
insurance policy for its sailors. During the efectivity of the
policy, six covered employees of the PMSI perished at sea
when their vessel sunk somewhere in Morocco. Petitioners
sought to claim death benefits due to them and asked for
assistance with the President and General Manager of PMSI,
Captain Roberto Nuval. They were made to execute, with the
exception of the spouses, Alarcon, special powers of attorney
authorizing Captain Nuval to follow up, ask, demand, collect
and receive for their benefit indemnities of sums money due
to them.
Petitioners were able to receive their respect death
benefits. Unknown to them, however, the PMSI, in its
capacity as employer and policyholder of the life insurance of
its deceased workers, filed with the Insular Life (respondent)
formal claims for and in behalf of the beneficiaries, through
Captain Nuval. Insular issued checks payable to the order of
the petitioners. These checks were released to the treasurer
of PMSI, and upon instructions by Captain Nuval, it was
deposited in his personal account.
Petitioners learned that they were entitled, as
beneficiaries, to life insurance benefits under a group policy
but when they sought to recover these benefits, their claims
60
or
not
Insular
Life
acted
with
RULING:
Yes. The practice in group insurance business, which is
consistent with the jurisprudence thereon in the State of
California from whose laws our Insurance Code has been
mainly patterned, is that the employer-policyholder who
takes out the insurance for its oficers and employees, is the
agent of the insurer who has authority to collect the proceeds
from the insurer. In this case, the insurer, through the
negligence of its agent, allowed a purported attorney-in-fact
whose instrument does not clearly show such power to
collect the proceeds, it was liable therefore under the
doctrine that the principal is bound by the misconduct of its
agent.
49.
BA Finance vs. CA GR No. 82040 (201 SCRA
157)27 August 1991
See case number 29
50.
DEVELOPMENT
BANK
OF
THE
PHILIPPINES,
petitioner
vs. Court of Appeals and the ESTATE OF THE
LATE JUAN B. DANS, represented by CANDIDA G.
DANS, and the DBP MORTGAGE REDEMPTION
INSURANCE POOL, respondents.
FACTS:
61
FACTS:
Nora Eugenio was a dealer of Pepsi. She had one store
in Marikina but had a regular charge account in Q.C. And
Muntinlupa. Her husband Alfredo used to be a route manager
for Pepsi in its Q.C. Plant. Pepsi filed a complaint for a sum of
money against Eugenio spouses. since according to them the
spouses (1) had an outstanding balance since it purchased
and received on credit various products from both its Q.C.
and Muntinlupa plant and (2) had an unpaid obligation for
the loaned empties from Pepsi. They contend that the total
outstanding account was P94,651.xx. Eugenio's in their
defense presented four Trade Provisional Receipts (TPR)
allegedly issued to and received by them from Pepsi's Route
Manager (Malate Warehouse) Jovencio Estrada showing that
they paid a total sum of P80,500.xx. They also claim that the
signature of Nora Eugenio in a Sales Invoice (85366) for the
amount of P5,631.xx which was included in the computation
of their debt was falsified. Therefore, without these errors,
petitioner contend that (1) they do not have any outstanding
debt, and (2) it is Pepsi who owes them P3,546.02. RTC found
in favor of Pepsi. CA afirmed the decision.
ISSUE: W/N the amounts in the TPR should be credited
in favor of the spouses.?
RULING:
CA decision is annulled and set-aside. Pepsi is ordered
to pay Eugenio. Background: Eugenio submitted the TPR's to
Atty. Rosario (Pepsi's lawyer). Thereafter, Rosario ordered
Daniel Azurin (asst.personnel manager) to conduct an
investigation to verify the claim of the petitioners. According
to Azurin, Estrada denied that he issued and signed the
62
53.
TOYOTA
SHAW,
INC.,
vs.COURT
OF
APPEALS and LUNA L. SOSA, G.R. No. L-116650
May 23, 1995
FACTS:
Luna L. Sosa & Popong Bernardo, an agent of Toyota
Shaw, entered into an agreement stating that Luna Sosa will
give P100K as downpayment for a yellow light ace which
Toyota will release on June 17. It was agreed that the balance
would be paid through financing by BA. On June 17, Mr Sosa
was not able to get the car because according to Bernardo,
nasulot ng iba but as it turns out, the credit financing was
not approved by BA. Toyota then gave Mr Sosa the option to
purchase the unit by paying full price in cash but Sosa
refused. Furthermore, Mr. Sosa claims that Popong Bernardo
acted in his authority as agent of Toyota, thereby binding
Toyota in the agreement that they executed.
ISSUE: W/N the agreement could bind Toyota?
RULING:
No.The title of the agreement between the two parties
was AGREEMENTS BETWEEN MR. SOSA AND POPONG
BERNARDO OF TOYOTA SHAW INC, therefore, Popong
Bernardo was acting on his personal capacity and did not
represent Toyota in said agreement, something that Mr. Sosa
should have been aware of. Mr. Sosa knew that Popong
Bernado was only a sales representative of Toyota, and thus,
a mere agent and was therefore limited in his authority to
enter into contracts of sale of Toyotas vehicles.
63
54.
BACALTOS
COALMINES
HONORABLE COURT OF APPEALS,
114091, JUNE 29, 1995
Vs.THE
G.R. No.
FACTS:
RULING:
NO., The broadest scope of Savellons authority is
limited to the use of the coal operating contract an the clase
cannot contemplate any other power not included in the
enumeration or which are unrelated either to the power to
use the coal operating contract or to those already
enumerated.
55.
Yu Eng Cho vs. PANAM | G.R. No. 123560
(328 SCRA 717) | 27 March 2000
FACTS:
Plaintif Yu Eng Cho is the owner of Young Hardware
Co. and Achilles Marketing. In connection with [this]
business, he travels from time to time to Malaysia, Taipei and
Hongkong. On July 10, 1976, plaintifs bought plane tickets
64
65
56.
Litonjua vs. Fernandez | GR No. 148116 ( 427
SCRA 478) | 14 April 2004
FACTS:
Mrs. Lourdes Alimario and Agapito Fisico who worked
as brokers, ofered to sell to the petitioners, Antonio K.
Litonjua and Aurelio K. Litonjua, Jr., the parcels of land.
The owners of the properties were represented by
Mary Mediatrix Fernandez and Gregorio T. Eleosida,
respectively. The brokers told the petitioners that they were
authorized by respondent Fernandez to ofer the property for
sale.
The petitioners and respondent Fernandez agreed that
the petitioners would buy the property consisting of 36,742
square meters, for the price of P150 per square meter, or the
total sum of P5,098,500. They also agreed that the owners
would shoulder the capital gains tax, transfer tax and the
expenses for the documentation of the sale.
The petitioners and respondent Fernandez also agreed
to meet on December 8, 1995 to finalize the sale. It was also
agreed upon that on the said date, respondent Fernandez
would present a special power of attorney executed by the
owners of the property, authorizing her to sell the property
for and in their behalf, and to execute a deed of absolute sale
thereon. The petitioners would also remit the purchase price
to the owners, through respondent Fernandez. However, only
Agapito Fisico attended the meeting. He informed the
petitioners that respondent Fernandez was encountering
some problems with the tenants and was trying to work out a
settlement with them. After a few weeks of waiting, the
petitioners wrote respondent Fernandez on January 5, 1995,
66
however
rejected
the
claims
of
the
RULING:
No. The settled rule is that persons dealing with an
assumed agent are bound at their peril, and if they would
hold the principal liable, to ascertain not only the fact of
agency but also the nature and extent of authority, and in
case either is controverted, the burden of proof is upon them
to prove it. In this case, respondent Fernandez specifically
denied that she was authorized by the respondents-owners to
sell the properties, both in her answer to the complaint and
when she testified. The Letter dated January 16, 1996 relied
upon by the petitioners was signed by respondent Fernandez
alone, without any authority from the respondentsowners. There is no evidence on record that the respondentsowners ratified all the actuations of respondent Fernandez in
connection with her dealings with the petitioners. As such,
said letter is not binding on the respondents as owners of the
subject properties.
Held:
No. The Civil Code provides that a special power of
attorney is necessary to enter into any contract involving
immovable property or real rights. Any sale of real property
by one purporting to be the registered owner's agent must
show his authority in writing otherwise the sale is null and
void. The agent's declarations alone are generally insuficient
to establish his authority. In this case, there's no
documentary evidence to show Property X's owners
specifically authorized Fernandez to sell Property X to
Litonjua. Fernandez specifically denied authority to sell
Property X. The purported letter Fernandez sent Litonjua
representing herself to have authority to do so is signed by
67
FACTS:
RULING:
68
58.
Green Valley vs. IAC | GR No. L-49395 133
SCRA 697 | 26 December 1984 | Justice Abad
Santos
FACTS:
E.R. Squibb and Sons Phil. Corp. appointed petitioner
Green Valley Poultry and Alliend Products Inc. as a nonexclusive distributor for Squibb Veterinary Products.
However, Green Valley defaulted in the payment of goods
delivered by Squibbs. This prompted the latter to file a
collection suit. The lower court ruled in favour of Squibbs,
which was afirmed by the Court of Appeals.
Green Valley claimed that the contract with Squibb was
a mere agency to sell; that it never purchased goods from
Squibb; that the goods received were on consignment only
with the obligation to turn over the proceeds, less its
commission, or to return the goods f not sold, and since it
had sold the goods but had not been able to collect from the
purchasers thereof, the action was premature.
Upon the other hand, Squibb claimed that the contract
was one of sale so that Green Valley was obligated to pay for
the goods received upon the expiration of the 60-day credit
period. Both lower courts ruled that there was a contract of
sale.
ISSUE/S: Should Green Valley be held liable for selling
on credit? Does the distinction whether the contract
was that of sale or contract to sell material to its
liability?
RULING:
SECTION FOUR
59.
Bucton vs. Rural Bank of El Salvador, Inc. |
GR No. 179625 24 February 2014
FACTS:
Petitioner Nicanora G. Bucton owned a parcel of land in
Cagayan De Oro City, the title of which was borrowed by
Erlinda Concepcion on the pretext that she was only going to
show it to an interested buyer.
Little did Bucton knew that Concepcion used the said
title to mortgage the formers house lot as security for a Php
30,000 loan she sought to obtain from Rural Bank of El
Salvador. Inc., Misamis Oriental thru an SPA allegedly
executed by Bucton. Bucton defaulted in payment.
Consequently, Buctons house and lot were foreclosed.
69
N.A.
(G.R.
No.
FACTS:
Spouses Raul and Amalia Panlilio's initial intention was
to invest money in a Citibank product which had a high
interest but since it was not available, they put their
PhP1,000,000.00 in a savings account instead. More than a
month
later,
petitioners
placed
another
amount
of PhP2,134,635.87 in the Citibanks Long-Term Commercial
Paper (LTCP), a debt instrument that paid a high interest,
issued by the corporation Camella and Palmera Homes (C&P
Homes). Months after signing with the debt instrument and
after
receiving interests, petitioners
contested the
investment contract and demanded that the respondent bank
to return their investment money. This happened when
newspaper reports came out that C&P Homes' stock had
plunged in value.
ISSUES:
70
RULING:
Having bound themselves under the contract of agency,
petitioners as principals in an agency relationship are solely
obliged to observe the solemnity of the transaction entered
into by the agent on their behalf, absent any proof that the
latter acted beyond its authority. Concomitant to this
obligation is that the principal also assumes the risks that
may arise from the transaction. Indeed, as in the instant
case, bank regulations prohibit banks from guaranteeing
profits or the principal in an investment management
account.
61.
MANILA MEMORIAL PARK CEMETERY, INC.,
vs. LINSANGAN (G.R. No. 151319 November 22,
2004)
FACTS:
Florencia Baluyot ofered Atty. Pedro L. Linsangan a lot
called Garden State at the Holy Cross Memorial Park owned
by petitioner (MMPCI).
According to Baluyot, a former
owner of a memorial lot under Contract No. 25012 was no
longer interested in acquiring the lot and had opted to sell
his rights subject to reimbursement of the amounts he
already paid. The contract was for P95,000.00. Baluyot
reassured Atty. Linsangan that once reimbursement is made
71
62.
CUISON vs. CA (G.R. No. 88539 October 26,
1993)
FACTS:
72
RULING:
YES. As to the merits of the case, it is a wellestablished rule that one who clothes another with apparent
authority as his agent and holds him out to the public as such
cannot be permitted to deny the authority of such person to
act as his agent, to the prejudice of innocent third parties
dealing with such person in good faith and in the honest
belief that he is what he appears to be.It matters not whether
the representations are intentional or merely negligent so
long as innocent, third persons relied upon such
representations in good faith and for value.
73
63.
PLEASANTVILLE
DEVELOPMENT
CORPORATION
VS.
CA(G.R. No. 79688 February 1, 1996)
FACTS:
Edith
Robillo
purchased
from
Pleasantville
Development Corporation, herein petitioner a parcel of land
at Pleasantville Subdivision, Bacolod City. The property was
designated as Lot 9, Phase II. In 1975, herein respondent
Eldred Jardinico bought the said subject lot from the former
purchaser. Eldred later discovered that the property he
purchased had improvements introduced therein by
respondent Wilson Kee. Kee on the other hand bought on
installments Lot 8 of the same subdivision from C.T. Torres
Enterprises, Inc. (CTTEI) which is the exclusive real estate
74
deed of sale, wherein Lot 9 was sold to Kee. In the said deed
a provision stating that regardless of the outcome of the
decision, such shall not be pursued by the parties and shall
be considered dismissed and without efect. The appellate
court was not informed of this deal.
ISSUE: Whether or not CTTEI is liable for the acts of its
agent for the damage caused to the third party?
RULING:
The principal is responsible for the acts of the agent,
done within the scope of his authority, and should bear the
damage caused to third persons. On the other hand, the
agent who exceeds his authority is personally liable for the
damages. In the present case, CTTEI was acting within its
authority as the sole real estate representative of
Pleasantville when it made the delivery to Kee. In acting
within its scope of authority, it was, however, negligent. It is
this negligence that is the basis of Pleasantvilles liability, as
principal of CTTEI, per Articles 1909 and 1910 of the Civil
Code.
Pleasantvilles liability lies in the negligence of its
agent CTTEI. For such negligence, Pleasantvilles should be
held liable for damages. The extent and/or amount of
damages to be awarded is a factual issue which should be
determined after evidence is adduced. However, there is no
showing that such evidence was actually presented in the
trial court; hence no damages could be awarded.
64.
MANILA MEMORIAL PARK CEMETERY, INC.,
vs. LINSANGAN (G.R. No. 151319 November 22,
2004)
65.
Filipinas Life Assurance Co. (Now Ayala Life
Assurance, Inc.) v Clemente Pedroso, Teresita
Pedroso and Jennifer Palacio, G.R. No. 159489,
February 04, 2008
FACTS:
Teresita Pedroso is a policyholder of a 20-year
endowment life insurance issued by Filipinas LifeAssurance
Co. Pedroso claims Renato Valle was her insurance agent
since 1972 and Valle collected her monthly premiums. In the
first week of January 1977, Valle told her that the Filipinas
Life EscoltaOfice was holding a promotional investment
program for policyholders. It was ofering 8% prepaid
interest a month for certain amounts deposited on a monthly
basis. Enticed, she initially invested and issued a post-dated
check for P10, 000. In return, Valle issued Pedroso his
personal check forP800 for the 8% prepaid interest and
a Filipinas Life Agent receipt.
Pedroso called the Escolta ofice and talked to
Francisco Alcantara, the administrative assistant, who
referred
her to the branch manager,
Angel Apetrior. Pedroso inquired
about the promotional
investment and Apetrior confirmed that there was such a
promotion. She was even told she couldpush through with
the check she issued. From the records, the check, with the
endorsement of Alcantara at the back, was deposited in the
account of Filipinas Life with the Commercial Bank and Trust
Company, Escolta Branch.
75
76
77
78
69.
ALFRED HAHN, vs. COURT OF APPEALS and
BAYERISCHE
MOTOREN
WERKE
AKTIENGESELLSCHAFT (BMW), G.R. No. 113074
January 22, 1997
FACTS:
Alfred Hahn is a Filipino citizen doing business under
the
name
and style "Hahn-Manila." On the other hand, BMW is a
nonresident
foreign corporation existing under the laws of the former
Federal
Republic of Germany. On March 7, 1967, Hahn executed in
favor of BMW a "Deed of Assignment with Special Power of
Attorney". Per the agreement, the parties "continue[d]
business relations as has been usual in the past without a
formal contract." BUT on February 16, 1993, in a meeting
with a BMW representative and the president of Columbia
Motors
Corporation
(CMC), Jose Alvarez, Hahn was informed that BMW was
arranging to grant the exclusive dealership of BMW cars and
products to CMC, which had expressed interest in acquiring
the
same.
79
80
Finding the motion meritorious and considering that the pretrial conference has been repeatedly postponed on motion of
the DIC, the corporation has been declared in default.
On November 18, 1992, the court a quo rendered judgment:
DIC to pay Guevarra the sum of P156,473.90 representing
the total amount advanced by Guevarra in the payment of the
claims of DICs clients;
On December 14, 1992, DIC appealed the decision to the
Court of Appeals.
ISSUE:
81
82
71.
|ALBALADEJO VS. THE PHILIPPINE
REFINING CO., | G.R. No. 20726, December 20,
1923|STREET, J.:
FACTS:
Albaladejo y Cia., S. en C, instituted an action to
recover a sum of money from the Philippine Refining Co.
(RPC), as successor to the Visayan Refining Co., two causes
of action being stated in the complaint. Upon hearing the
cause the trial judge absolved the RPC from the first cause of
action but gave judgment for the Albaladejo to recover the
sum of P49,626.68, with costs, upon the second cause of
action. From this judgment the Albaladejo appealed with
respect to the action taken upon the first cause of action, and
the RPC appealed with respect to the action taken upon the
second cause of action.
Albaladejo y Cia. is a limited partnership, engaged in
the buying and selling of the products of the country,
especially copra.
The Visayan Refining Co. is a corporation engaged in
operating its extensive plant for the manufacture of coconut
oil.
On August 28, 1918, the Albaladejo made a contract
with the Visayan Refining Co., that during the year therein
contemplated, Albaladejo shall buy copra extensively for the
Visayan Refining Co. At the end of said year both parties
found themselves satisfied with the existing arrangement,
and they therefore continued by tacit consent to govern their
future relations by the same agreement. In this situation
afairs remained until July 9, 1920, when the Visayan
83
84
85
of
86
87
attorney from his father to sell the half interest in the San
Nicolas, and that he did so. That Angel L. Manzano had no
authority to sell the interest in the steamer, but that since the
date of said sale, July, 1912, the plaintif had illegally
appropriated all rents and profits of the boat to his own use,
which amount to P30,000 per year, after paying for all
repairs, etc., and they ask the court to absolve them from the
complaint, to declare them the owners of one-half of the
steamer San Nicolas, and to order the plaintifs to render a
detailed account of all the profits received from the San
Nicolas, arid to order one half of the profits paid to the
defendants.
ISSUE:Whether or not that the power of attorney
executed in favor of the wife revoked the one to the
son?
HOLDING and RATIO:
"The appointment of a new agent for the same business
produces a revocation of the previous agency from the day on
which notice was given to the former agent, excepting the
provisions of the next preceding article"
son,
88
74.
CMS LOGGING VS. COURT OF APPEALS|G.R.
No. L-41420, July 10, 1992|NOCON, J.
FACTS:
CMS is a forest concessionaire engaged in the logging
business, while DRACOR is engaged in the business of
exporting and selling logs and lumber. On August 28, 1957,
CMS and DRACOR entered into a contract of agency
whereby the former appointed the latter as its exclusive
export and sales agent for all logs that the former may
produce, for a period of five (5) years.
About six months prior to the expiration of the
agreement, while on a trip to Tokyo, Japan, CMS's president,
Atty. Carlos Moran Sison, and general manager and legal
counsel, Atty. Teodoro R. Dominguez, discovered that
DRACOR had used Shinko Trading Co., Ltd. (Shinko for
brevity) as agent, representative or liaison oficer in selling
CMS's logs in Japan for which Shinko earned a commission of
U.S. $1.00 per 1,000 board feet from the buyer of the logs.
Under this arrangement, Shinko was able to collect a total of
U.S. $77,264.67.[3]
CMS claimed that this commission paid to Shinko was
in violation of the agreement and that it (CMS) is entitled to
this amount as part of the proceeds of the sale of the logs.
CMS contended that since DRACOR had been paid the 5%
commission under the agreement, it is no longer entitled to
the additional commission paid to Shinko as this tantamount
to DRACOR receiving double compensation for the services it
rendered.
89
90
75.
CMS LOGGING VS. COURT OF APPEALS|G.R.
No. L-41420, July 10, 1992|NOCON, J.
See Case Number 74
FACTS:
The first recital of the deed is that Ong Guan Can, Jr.,
as agent of Ong Guan Can, the proprietor of the commercial
firm of Ong Guan Can & Sons, sells the rice-mill and camarin
for P13,000 and gives as his authority the power of attorney
dated the 23d of May, 1928, a copy of this public instrument
being attached to the deed and recorded with the deed in the
ofice of the register of deeds of Capiz. The receipt of the
money acknowledged in the deed was to the agent, and the
deed was signed by the agent in his own name and without
any words indicating that he was signing it for the principal.
76.
DY BUNCIO & COMPANY INC. vs ONG GUAN
CAN ET. AL./ G.R. NO. L-40681 / 2 October 1934 /
Justice Hull
ISSUE:
WoN the disputed land is subject to execution and
attachment?
RULING:
Yes. Article 1732 of the Civil Code is silent over the
partial termination of an agency. The making and accepting
of a new power of attorney, whether it enlarges or decreases
the power of the agent under a prior power of attorney, must
be held to supplant and revoke the latter when the two are
91
NO.
FACTS:
The Complaint alleged that private respondent Legaspi
is the owner of a land located in Bigte, Norzagaray, Bulacan.
In November 1999, petitioner Calimlim, representing the
Republic of the Philippines, and as then head of the
Intelligence Service of the Armed Forces of the Philippines
and the Presidential Security Group, entered into a
Memorandum of Agreement (MOA) with one Ciriaco Reyes.
The MOA granted Reyes a permit to hunt for treasure in a
land in Bigte, Norzagaray, Bulacan. Petitioner Diciano signed
the MOA as a witness. It was further alleged that thereafter,
Reyes, together with petitioners, started, digging, tunneling
and blasting works on the said land of Legaspi. The
complaint also alleged that petitioner Calimlim assigned
about 80 military personnel to guard the area and encamp
92
Issue:
WoN the contract of agency between Legaspi and
Guiterrez has been efectively revocked by Legaspi?
Ruling:
No. petitioners claim that the special power of attorney
of Gutierrez to represent Legaspi has already been revoked
by the latter. Private respondent Gutierrez, however,
contends that the unilateral revocation is invalid as his
agency is coupled with interest.
The Court agrees with private respondent.
Art. 1868 of the Civil Code provides that by the
contract of agency, an agent binds himself to render some
service or do something in representation or on behalf of
another, known as the principal, with the consent or
authority of the latter.
A contract of agency is generally revocable as it is a
personal contract of representation based on trust and
confidence reposed by the principal on his agent. As the
power of the agent to act depends on the will and license of
the principal he represents, the power of the agent ceases
when the will or permission is withdrawn by the principal.
Thus, generally, the agency may be revoked by the principal
at will.
However, an exception to the revocability of a contract
of agency is when it is coupled with interest, i.e., if a bilateral
contract depends upon the agency. The reason for its
irrevocability is because the agency becomes part of another
obligation or agreement. It is not solely the rights of the
principal but also that of the agent and third persons which
are afected. Hence, the law provides that in such cases, the
agency cannot be revoked at the sole will of the principal.
In the case at bar, we agree with the finding of the trial
and appellate courts that the agency granted by Legaspi to
Gutierrez is coupled with interest as a bilateral contract
depends on it. It is clear from the records that Gutierrez was
given by Legaspi, inter alia, the power to manage the
treasure hunting activities in the subject land; to file any case
against anyone who enters the land without authority from
Legaspi; to engage the services of lawyers to carry out the
agency; and, to dig for any treasure within the land and enter
into agreements relative thereto. It was likewise agreed upon
that Gutierrez shall be entitled to 40% of whatever treasure
may be found in the land. Pursuant to this authority and to
protect Legaspis land from the alleged illegal entry of
petitioners, agent Gutierrez hired the services of Atty. Adaza
to prosecute the case for damages and injunction against
petitioners. As payment for legal services, Gutierrez agreed
to assign to Atty. Adaza 30% of Legaspis share in whatever
treasure may be recovered in the subject land. It is clear that
the treasure that may be found in the land is the subject
matter of the agency; that under the SPA, Gutierrez can enter
into contract for the legal services of Atty. Adaza; and, thus
Gutierrez and Atty. Adaza have an interest in the subject
matter of the agency, i.e., in the treasures that may be found
in the land. This bilateral contract depends on the agency
and thus renders it as one coupled with interest, irrevocable
at the sole will of the principal Legaspi. When an agency is
constituted as a clause in a bilateral contract, that is, when
the agency is inserted in another agreement, the agency
ceases to be revocable at the pleasure of the principal as the
93
78.
SEVILLA vs. CA / G.R. NO. L- 41182-3 / 16
April 1988 / Justice Sarmento
FACTS:
On the strength of a contract (Exhibit A for the
appellant Exhibit 2 for the appellees) entered into on Oct. 19,
1960 by and between Mrs. Segundina Noguera, party of the
first part; the Tourist World Service, Inc., represented by Mr.
Eliseo Canilao as party of the second part, and hereinafter
referred to as appellants, the Tourist World Service, Inc.
leased the premises belonging to the party of the first part at
Mabini St., Manila for the former-s use as a branch ofice. In
the said contract the party of the third part held herself
solidarily liable with the party of the part for the prompt
payment of the monthly rental agreed on. When the branch
ofice was opened, the same was run by the herein appellant
Una 0. Sevilla payable to Tourist World Service Inc. by any
airline for any fare brought in on the eforts of Mrs. Lina
Sevilla, 4% was to go to Lina Sevilla and 3% was to be
withheld by the Tourist World Service, Inc.
On or about November 24, 1961 (Exhibit 16) the
Tourist World Service, Inc. appears to have been informed
that Lina Sevilla was connected with a rival firm, the
Philippine Travel Bureau, and, since the branch ofice was
94
95
xxx
xxx
96
97
98
99
177086|
FACTS:
Respondents Felix M. Bantolo (Bantolo), Antonio O.
Adriano and Eulogio Sta. Cruz, Jr. are owners of several
parcels of land situated in Tagaytay City. On April 3, 2000,
respondents executed in favor of petitioners Albert Ching
(Ching) and Romeo J. Bautista a Special Power of Attorney
(SPA] authorizing petitioners to obtain a loan using
respondents properties as collateral. Without notice to
petitioners, respondents executed a Revocation of Power of
100
101
102
103
L-6906|
FACTS:
Defendant Yangco sent a letter to Plaintif Rallos on
November 27, 1907 ofering a consignment agreement. In
such letter, Yangco made known that he conferred upon
Florentino Collantes a public power of attorney notarized by
Mr.Perfecto Salas Rodriguez dated November 16, 1907 to
perform in his name and on his behalf all acts necessary for
carrying out his plans.
Accepting this invitation, the plaintifs proceeded to do
a considerable business with the defendant through the said
Collantes, as his factor, sending to him as agent for the
defendant a good deal of produce to be sold on commission.
Later, and in the month of February, 1909, the plaintifs sent
to the said Collantes, as agent for the defendant, 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 P1,537.08 belonging to the plaintifs.
104
111924|
FACTS:
Petitioner Adoracion Lustan leased a parcel of land in
Iloilo, which he owns, to Nicolas Parangan for a term of ten
(10) years and an annual rent of One Thousand (P1,000.00)
Pesos.
During the period of lease, Parangan was regularly
extending loans in small amounts to petitioner to defray her
daily expenses and to finance her daughter's education. On
July 29, 1970, petitioner executed a Special Power of
Attorney in favor of Parangan to secure an agricultural loan
from private respondent Philippine National Bank (PNB) with
the aforesaid lot as collateral.
On February 18, 1972, a second Special Power of
Attorney was executed by petitioner, by virtue of which,
Parangan was able to secure four (4) additional loans, to wit:
the
sums
of P24,000.00, P38,000.00, P38,600.00
and P25,000.00 on December 15, 1975, September 6, 1976,
July 2, 1979 and June 2, 1980, respectively.
105
NO.
Third persons who are not parties to a loan may secure
the latter by pledging or mortgaging their own property. So
long as valid consent was given, the fact that the loans were
solely for the benefit of Parangan would not invalidate the
mortgage with respect to petitioner's property. In consenting
thereto, even granting that petitioner may not be assuming
personal liability for the debt, her property shall nevertheless
secure and respond for the performance of the principal
obligation. It is admitted that petitioner is the owner of the
parcel of land mortgaged to PNB on five (5) occasions by
virtue of the Special Powers of Attorney executed by
petitioner in favor of Parangan. Petitioner argues that the last
three mortgages were void for lack of authority. She totally
failed to consider that said Special Powers of Attorney are a
continuing one and absent a valid revocation duly furnished
to the mortgagee, the same continues to have force and
efect as against third persons who had no knowledge of such
lack of authority. Article 1921 of the Civil Code provides:
"Art. 1921. If the agency has been entrusted for the purpose
of contracting with specified persons, its revocation shall not
prejudice the latter if they were not given notice thereof."
The Special Power of Attorney executed by petitioner in
favor of Parangan duly authorized the latter to represent and
act on behalf of the former. Having done so, petitioner
clothed Parangan with authority to deal with PNB on her
behalf and in the absence of any proof that the bank had
knowledge that the last three loans were without the express
authority of petitioner, it cannot be prejudiced thereby.
106
FACTS:
Vicente Perez, mortgaged Lot No. 286-E of the
Kabankalan Cadastre to the appellant Philippine National
Bank-Bacolod Branch. Said mortgaged was made to secure
payment of a loan plus interests, payable in yearly
instalments. Subsequently, Vicente died intestate, survived
by his widow and children and leaving behind outstanding
balance on the mortgaged indebtedness. The widow of Perez
instituted Special Proceedings with the CIF for the
settlement of the estate where the widow was appointed as
Administratix and notice to the creditors was duly published,
however, PNB did not file a claim.
In 1956, the bank pursuant to the authority granted it
in the mortgaged deed, caused the mortgaged properties to
be extra-judicially foreclosed, however, the widow and the
heirs were not notified. Hence, they instituted a case against
PNB seeking to annul the extrajudicial foreclosure sale and
the transfer of the Certificate of Title as well as to recover
damages, claiming that the bank had acted illegally and in
bad faith. Using the decision set in Pasno V. Ravina, the Trial
Court (TC) declared null and void the extrajudicial
foreclosure sale, the cancellation of the Certificate of Title of
Perez and ordered payment of damages to the plaintifs.
The bank appealed directly to the Supreme Court.
ISSUE: Whether or not the extra-judicial foreclosure by
PNB under its power of sale is extinguished by the
death of Perez?
RULING:
No. The SC overruled the decision in Pasno v. Ravina
as it virtually wipes out the third alternative given to
creditor-mortgagee, that is to rely on the mortgage
exclusively, foreclosing the same at any time before it is
barred by prescription, without a claim for any deficiency.
Such is not in accord with reason and law, as said option
presents undoubted advantages for the estate of the
mortgagor.
The argument that foreclosure by the bank under its
power of sale is barred upon the death of the debtor, because
agency is distinguished by the death of the principal neglects
to take into account that the power to foreclose is not an
ordinary
agency
that
contemplates
exclusively
the
representation of the principal by the agent is primarily an
authority conferred upon the mortgagee for the latters own
protection. It is an ancillary stipulation supported by the
same causa or consideration for the mortgage and forms an
essential and inseparable part of that bilateral agreement.
The SC also upheld the validity of PNBs foreclosure,
however, as it did not suficient notice to the heirs of Vicente
Perez, the court permitted them to redeem the foreclosed
property within the reasonable time.
86.
TERRADO ET AL. V. COURT OF APPEALS ET
AL., G.R. No. L-58794; August 24, 1984
FACTS:
107
108
109
thereon, vacate the premises and pay for damages and other
fees.
Both the trial court and appellate courts ruled in favour
of plaintifs. Undaunted with said decision, defendants filed
a petition alleging errors committed by both courts. The High
Court, nevertheless, granted the defendants motion for
reconsideration.
ISSUES:
Whether or not an implied trust is created
between Celso Avelino and his parents in relation
to the questioned property?
Whether or not the disputed property is a trust
property?
RULING:
NO. Article 1448 of the Civil Code states that, There
is an implied trust when property is sold, and the legal estate
is granted to one party but the price is paid by another for
the purpose of having the beneficial interest of the property.
The former is the trustee, while the latter is the beneficiary.
However, if the person to whom the title is conveyed is a
child, legitimate or illegitimate, of the one paying the price of
the sale, no trust is implied by law, it being disputably
presumed that there is a gift in favour of the child.
In the case, it is petitioners contention that Rosendo
Avelino owned the money for the purchase of the property
and that he requested Celso, his son, to buy the property
allegedly in trust for the former. The fact remains, however,
that title to the property was conveyed to Celso. Accordingly,
88.
PEALBER V. RAMOS ET AL., G. R. No.
178645, January 30, 2009
FACTS:
Petitioner Lina Pealber, for many years, owned and
operated a hardware store prior to 1984 in a building she
owned along Bonifacio St., Tugueguerao, Cagayan (Bonifacio
Property). However, the lot on which the building is erected
is owned by Maria Mendoza (Mendoza), from whom
petitioner rented the same. On March 22, 1982, petitioner
allowed Spouses Ramos, the wife being her daughter, to take
over the management of the business with the verbal
agreement that that the accumulated earnings of the store
would be used to purchase the lot which Mendoza was selling
that time. Petitioner further alleged that based on the same
agreement, the Ramos spouses having the better credit
standing, they would be made to appear as vendees so that
the title to be issued in their names could be used to secure
110
RULING:
No.
The Supreme Court
allegations as to the existence of an
with respondent spouses Ramos,
testimonies and her son, do not hold
111
SECTION SEVEN
89.
VICTORIA JULIO V. EMILIANO DALANDAN
and MARIA DALANDAN, G.R. No. L-19012,
October 30, 1967
FACTS:
RULING:
112
113
114
was a
trust
contract
RULING:
NO.At the outset, the Court agrees with the Court of
Appeals that the agreement contained in the Minutes of the
Special Meeting of the RISCO Board of Directors held on
March 14, 1961 was a loan by the therein named
stockholders to RISCO. Careful perusal of the Minutes relied
upon by plaintifs-appellees in their claim, showed that their
contributions shall constitute as lien or interest on the
property. The term lien as used in the Minutes is defined as
"a discharge on property usually for the payment of some
debt or obligation. Hence, from the use of the word "lien" in
the Minutes, We find that the money contributed by plaintifsappellees was in the nature of a loan, secured by their liens
and interests duly annotated on the titles. The annotation of
their lien serves only as collateral and does not in any way
vest ownership of property to plaintifs. We are not
persuaded by the contention of Aznar, et al., that the
language of the subject Minutes created an express trust.
93.
HEIRS OF TRANQUILINO LABISTE v HEIRS OF
JOSE LABISTE
587 SCRA 417 (May 8, 2009)
115
DOCTRINE
If a trust relationship has been created between the parties
whether expressly or impliedly, prescription does not run
until the said trust is repudiated.
FACTS:
The case involved a parcel of Friar Land with an area of
13,308 square meters known at Cebu City which was purchased
from the Bureau of Lands way back on 1919 by Emilio in his own
behalf and on behalf of his brothers and sisters who were
the heirs of Jose. (Collectively known as Heirs of Jose)The
money that was used to purchase the land came from both
Emilio and their Uncle Lino so after full payment of the
purchase price but prior to the issuance of the deed of
conveyance by the Bureau of Lands, Emilio executed an
Afidavit in Spanish dated on 1923 afirming that he, as one
of the heirs of Jose and his Uncle Lino then co-owned the lot.
Thereafter or on 1924 the Bureau of Lands executed the
Deed of Conveyance in favor of Emilio and his siblings, or the
heirs of Jose by virtue of which a TCT was issued by the
Register of Deeds. On 1928, the lot was subdivided by
Deputy Land Surveyor, Engineer Bunag into two (2) equal
parts with an area of 6,664 square meters for Lino and an
area of 6,664 square meters for Emilio and the other heirs of
Jose. This was approved by the Director of Lands on 1928.On
1939, the heirs of Lino purchased the share of the lot of the
heirs of Jose as evidenced by the Calig-onan sa Panagpalit
executed by the parties in Visayan dialect. So the heirs of
Lino immediately took possession of the entire13, 308 sq.m. lot.
When World War II broke out however, Linos heirs fled the
city. Whenthey came back after the war, they found their
homes and possessions and therecords in the government
ofices burned and destroyed with squatters occupying their
entire property.Linos heirs subsequently learned that one of the
heirs of Jose filed apetition for reconstitution of title over the Lot on
September 17, 1993. So in October 1993 they opposed the said
petition but later on withdrew the same on the basis of a
compromise agreement they entered with the heirs of Jose to
expedite the reconstitution of title. So on December 14, 1994,
the Register of Deed issued the reconstituted Title in the
names of the heirs of Jose. The heirs of Jose however did not
honor the compromise agreement. Soon January 13, 1995,
the heirs of Lino filed a complaint for annulment of title, reconveyance of property with damages. Joses heirs however said that
the action of Linos heirs had long prescribed or barred by
laches.
ISSUE:
a) Whether or not Linos heirs had long prescribed or barred
by laches.
HELD / RATIO:
No. The rules on prescription and the principle of laches
cannot be applied here because of the existence of a trust
relationship. b) Trust is the right to the beneficial enjoyment
of property, the legal title to which is vested in another. It
may either be express or implied. An express trust is created by
direct and positive acts of the parties, by some writing or deed or
will. No particular words are required for the creation of an
express trust it being suficient that a trust is clearly
intended (Article 144, Civil Code). An implied trust comes
116
117
Held:
(1) YES, The Phil Trust Company in its individual
capacity is responsible for the contract as there was no
express stipulation that the trust estate and not the trustee
should be held liable on the contract in question. Not only is
there no express stipulation that the trustee should not be
held responsible but the Wherefore clause of the contract
states the judgment was expressly assigned in favor of Phil
Trust Company and not Phil Trust Company, the trustee. It
therefore follows that appellant had a right to proceed
directly against the Phil Trust on its contract and has no
claim against either Mindoro Sugar or the trust estate.
Section Seven
95.
Caezo vs. Rojas / G.R. No. 148788538 SCRA
242 / November 23, 2007/ Justice Ynares-Santiago
FACTS:
The petitioner Soledad Caezo filed a complaint against
her fathers second wife, respondent Concepcion Rojas for
the recovery of real property. The subject property is an
unregistered land with an area of 4,169 square meters
situated at Higatangan, Naval, Biliran. Caezo attached to the
complaint o Joint Afidavit executed by Isidro Catandijan and
Maximina Caezo attesting to her acquisition of the property.
The petitioner alleged that she bought the parcel of
land in 1939 from Crisogono Limpiado,although the
transaction was not reduced into writing. Thereafter, she
immediately took possession of the property. 1948, Soledad
Caezo and her husband left for Mindanao. She entrusted the
118
96.
Torbela V. Spouses Rosario/ G. R. No.
140528, 661 SCRA 633/ December 7, 2011/ Justice
C. J. Corona
FACTS:
The controversy began with a parcel of land, with an
area of 374 square meters located in Urdaneta City,
Pangasinan (Lot No. 356-A). It was part of larger parcel
which given by Valeriano Semilla to his sister Marta Semilla
119
120
121
122
97.
Heirs of Tranquilino Labiste vs. Heirs of Jose
Labiste / G.R. No. 162033, 587 SCRA 417 / May 08,
2009 / Justice Quisumbing
FACTS:
The late Epifanio Labiste, on his own and behalf of his
brothers and sisters who were the heirs of Jose Labiste,
purchased from th Bureau of Lands Lot No. 1054 of the
Banilad Friar Lands Estate, with an area of 13,308 square
meters, located at Guadalupe, Cebu City. The Bureau of Land
Director Jorge Vargas executed Deed of Conveyance in favor
to Epifanio and his brothers and sisters who were the heirs of
Jose Labiste.
After full payment of the purchase price but prior to the
issuance of the deed of conveyance, Epifanio executed an
Afidavit in Spanish afirming that he, as one of the heris of
Jose, and his uncle Tranquilino Labiste (petitioner), then coowned the said Lot because the money that was paid to the
government came from the two of them.
The Register of Deeds of Cebu City issued Original
Certificate of Title No. 3878. The lot subdivided into lots: Lot
123
124
125
Facts:
On January 29, 1997, petitioner Soledad Caezo filed a
Complaint for the recovery of real property plus damages
with the Municipal Trial Court (MTC) of Naval, Biliran,
against her fathers second wife, respondent Concepcion
Rojas. The subject property is an unregistered land with an
area of 4,169 square meters, situated at Higatangan, Naval,
Biliran. Caezo attached to the complaint a Joint Afidavit
[executed on May 10, 1979 by Isidro Catandijan and
Maximina Caezo attesting to her acquisition of the property.
Petitioner alleged that she bought the parcel of land in 1939
from Crisogono Limpiado, although the transaction was not
reduced into writing. Thereafter, she immediately took
possession of the property. When she and her husband left
for Mindanao in 1948, she entrusted the said land to her
father, Crispulo. Rojas, who took possession of, and
cultivated, the property. In 1980, she found out that the
respondent, her stepmother, was in possession of the
property and was cultivating the same. She also discovered
that the tax declaration over the property was already in the
name of his father Crispulo Rojas. They contented that
contrary to the petitioners claim, it was her husband,
126
99.
FACTS:
Spouses Martin Ramos and Candida Tanate died on October
4, 1906 and October 26, 1880, respectively. They were
survived by their 3 children. Moreover, Martin was survived
by his 7 natural children. In December 1906, a special
proceeding for the settlement of the intestate estate of said
spouses was conducted. Rafael Ramos, a brother of Martin,
administered the estate for more than 6 years. Eventually, a
partition project was submitted which was signed by the 3
legitimate children and 2 of the 7 natural children. A certain
Timoteo Zayco signed in representation of the other 5 natural
children who were minors. The partition was sworn to before
a justice of peace.
127
128
129
130
102.
G.R. No. 165696
April 30, 2008
ALEJANDRO B. TY, petitioner, vs. SYLVIA S. TY, in
her capacity as Administratrix of the Intestate
Estate of Alexander Ty, respondent.
FACTS:
Alexander Ty, son of Alejandro Ty and husband of
Sylvia Ty, dies of cancer at the age of 34. Sylvia files petition
for the settlement of Alexanders intestate estate. She also
asks court to sell or mortgage properties in order to pay the
estate tax amounting to P4,714,560.02 assessed by the BIR.
The properties include a parcel of land in EDSA Greenhills, a
residential land in Wack Wack, and the Meridien condo unit
in Annapolis, Greenhills.
Alejandro Ty opposed the move and filed for recovery of the
property with prayer for preliminary injunction and/or
131
ISSUE:
FACTS:
RULING:
No. There was no implied trust created in relation to
the EDSA property. If the person to whom the title is
conveyed is the child of the one paying the price of the sale,
no trust is implied by law under Art. 1448, the so-called
purchase money resulting trust. The said article provides an
132
104.
G.R. No. 181844
September 29,
2010SPS.
FELIPE
and
JOSEFA
PARINGIT, Petitioner,
vs.
MARCIANA
PARINGIT
BAJIT,
ADOLIO
PARINGIT
and
ROSARIO
PARINGIT
ORDOO, Respondents.
FACTS:
During their lifetime, spouses Paringit leased a lot in
Sampaloc, Manilafrom Terocel Realty. They built their home
there and raised five children. For having occupied the lot for
years, Terocel Realty ofered to sell it to Julian but he did not
have enough money at that time to meet the payment
deadline. Julian sought the help of his children so he can buy
the property but only his so nFelipe and wife Josefa had the
financial resources he needed at that time. To bring about the
purchase, Julian executed a deed of assignment of lease hold
right in favor of Felipe and his wife that would enable them
133
to acquire the lot. The latter then bought the same from
Terocel Realty and a TCT was subsequently issued in favor of
spouses Felipe and Josefa.
Later on, due to issues among Julians children regarding the
ownership of the lot, Julian executed an afidavit clarifying
the nature of Felipe and his wifes purchase of the lot. He
claimed that it was bought for the benefit of all his children.
Despite the title being under their name, the spouses moved
to another house on the same street in 1988. Marciana, et al,
on the other hand, continued to occupy the lot with their
families without paying rent. This was the situation when
their father died in 1994. A year later, Felipe and his wife
sent a demand letter to his siblings who occupy the lot,
asking them to pay rental arrearages for occupying the
property. They refused to pay or reply to the letter, believing
that they had the right to occupy the house and lot, it being
their inheritance from their parents. Because of this, Felipe
and his wife filed an ejectment suita gainst them. The suit
prospered, resulting in the ejectment of Marciana, et a land
their families from the property.
To vindicate what they regarded as their right to the lot and
the house, the other children filed the present action against
Felipe and his wife for annulment of title and reconveyance
of property.
ISSUE:
Whether or not Felipe and his wife purchased the subject lot
under an implied trust for the benefit of all the children of
Julian?
RULING:
Yes, the Court ruled that the case at bar falls under the
rubric of the implied trust provided in Article 1450 of the
Civil Code. Implied trust under Article 1450 presupposes a
situation where a person, using his own funds, buys property
on behalf of another, who in the meantime may not have the
funds to purchase it. Title to the property is for the time
being placed in the name of the trustee, the person who pays
for it, until he is reimbursed by the beneficiary, the person for
whom the trustee bought the land. It is only after the
beneficiary reimburses the trustee of the purchase price that
the former can compel conveyance of the property from the
latter. The circumstances of this case are actually what
implied trust is about. Although no express agreement
covered
Felipe and his wifes purchase of the lot for the siblings
and their father, it came about by operation of law and is
protected by it. The nature of the transaction established the
implied trust and this in turn gave rise to the rights
and obligations provided by law. Implied trust is a rule
of equity, independent of the particular intention of the
parties. Here, the evidence shows that Felipe and his wife
bought the lot for the benefit of Julian and his children,
rather than for themselves. There is no question that the
house originally belonged to Julian and Aurelia who built it.
First, if Julian really intended to sell the entire house
and assign the right to acquire the lot to Felipe and his wife,
he would have arranged for Felipes other siblings to give
their conformity as co-owners to such sale.
134
105.
G.R. No. L-12149 September 30, 1960 HEIRS
OF EMILIO CANDELARIA, ETC.,
vs. LUISA
ROMERO, ET AL.,
FACTS:
Parties
to this
case
are
the
heirs
of Emilio
Candelaria as plaintif and Luisa Romero, and the heirs of
Lucas as defendants. Emilio and Lucas Candelaria bought a
lot
on
an installment basis. Lucas paid the first two
installments but because of sickness which caused him to be
135
furnished
the
consideration
intending
to
obtain
a beneficial interest in the property in question.
Having
supplied the money, it is presumed that he intended
to purchase the lot for his own benefit. Moreover, by entering
into an agreement with Emilio that the necessary documents
of transfer will be made later,
Lucas
acknowledged
the
he
merely
held
the property in trust for his brother with the
understanding
that
it
will
eventually
be
conveyed
tothe plaintifs predecessor in interest. Lastly, by
acknowledging the presence of trust, the plaintifs action
cannot be said to have been barred by lapse of time. The case
is therefore remanded for further proceedings.
106.
G.R. No. 47354 March 21, 1989 HORACIO G.
ADAZA
and
FELICIDAD
MARUNDAN, petitioners, vs.THE
HONORABLE
COURT OF APPEALS and VIOLETA G. ADAZA,
assisted
by
her
husband
LINO
AMOR,
respondents.
FACTS:
In 1953, Victor Adaza Sr. executed a Deed of Donation,
covering the disputed land in this case,located in Sinonok,
Zamboanga del Norte in favor of Respondent Violeta. The
land being disposable publicland had been held and
cultivated by Victor, Sr. With the help of her brother, Horacio,
Violeta filed a homestead application over the land and a free
patent was issued in 1956. An OCT was issued in1960. In
of
the
property
and
its improvements.Violeta and Horacio signed the Deed with
Homero as a witness. A few months later, Violeta and
husband Lino filed a complaint for annulment of the Deed
of waiver and for damages against Horacio and wife Felisa.
The complaint alleged that (1) she was absolute owner of the
land by virtue of an unconditional donation executed by her
father in her favor; (2) she was registered owner; (3) she
signed
the
Deed
of waiver
because
of
fraud,
misrepresentation and undue influence; and (4) because of
such malicious acts, she is entitled to damages from Horacio.
Trial Court
Declared Deed of Waiver as valid and binding upon
Violeta, that Horacio was co-owner of of the land, and
ordering Violeta to pay Horacion the proceeds of his share.
CA
Reversed Trial court decision, declaring that though
the deed was signed voluntarily, such Deed was without
136
land
had
been
ISSUE:
Who owns the disputed parcel of land?
RULING:
Petitioners owned the parcel of land.
Deed of donation had a crossed-out provision: That the donee
shall share of the entire property with one of her brothers
and sisters after the death of the donor. The record is bereft
of any indication of any evil intent or malice on the part of
Homero, Victor, Jr. and Teresita (siblings of Violeta) that
would suggest deliberate collusion against Violeta. Their
father had executed the Deed of Donation with the
understanding that the same would be divided between
Horacio and Violeta and that Violeta had signed the Deed of
Waiver freely and voluntarily. Victor Adaza, Sr. left 4 parcels
of land divided among the 6 children through the practice
of having the lands acquired by him titled to the name of one
of his children. The property involved in the instant case is
owned in common by Violeta and brother, Horacio even
though the OCT was only in her name. She held half of the
land in trust for petitioner Horacioimplied trust based on
Article 1449 of the Civil Code: There is also an implied
trust when a donation is made to person but It appears that
although the legal estate is transmitted to the donee, he
nevertheless is either to have no beneficial interest of only a
part thereof. The doctrine of laces is not to be applied
mechanically as between near relatives.
137
138
139
140
141
any interest in the two fishponds and that the sole owners
thereof his father Banli and his aunt Ambrosia, as shown in
the Torrens titles issued in 1911 and 1917, and that he Juani
was the donee of Ambrosias one-half share.
Benita Salao and her nephews and niece asked for the
annulment of the donation to Juan S. Salao, Jr. and for the
reconveyance to them of the Calunuran fishpond as Valentin
Salaos supposed one-third share in the 145 hectares of
fishpond registered in the names of Juan Y. Salao, Sr. and
Ambrosia Salao.
Issue: Whether or not the Calunuran fishpond was held in
trust for Valentin Salao by Juan Y. Salao, Sr. and Ambrosia
Salao.
Held:
There was no resulting trust in this case because there never
was any intention on the part of Juan Y. Salao, Sr., Ambrosia
Salao and Valentin Salao to create any trust. There was no
constructive trust because the registration of the two
fishponds in the names of Juan and Ambrosia was not vitiated
by fraud or mistake. This is not a case where to satisfy the
demands of justice it is necessary to consider the Calunuran
fishpond being held in trust by the heirs of Juan Y. Salao, Sr.
for the heirs of Valentin Salao.
A Torrens Title is generally a conclusive evidence of the
ownership of the land referred to therein. (Sec. 47, Act 496).
A strong presumption exists that Torrens titles were
regularly issued and that they are valid. In order to maintain
an action for reconveyance, proof as to the fiduciary relation
of the parties must be clear and convincing.
142
143
Issue:
W/N the notary public of sale is suficient to
substantiate the municipalitys claim that it acquired the
disputed land by means of a Deed of Sale.
Held:
Yes.The fact that the notary public of sale showed the nature
of the instrument, the subject of the sale, the parties of the
contract, the consideration and the date of sale, the Court
held that it was a suficient evidence of the Deed of Sale.
Thus, when Norma inherited the land from her grandmother,
a portion of it has already been sold by the latter to the
Municipality of Victorias in1934. Her registration of the
parcel of land did not therefore transfer ownership but
merely confirmed it. As the civil code provides, where the
land is decreed in the name of a person through fraud or
mistake, such person is by operation of law considered a
trustee of an implied trust for the benefit of the persons from
whom the property comes. Consequently, she only held the
land in dispute in trust for the petitioner hence private
respondent is inequity bound to reconvey the subject land to
the cestui que trust , the Municipality of Victorias.
144
145
No. The trial court plainly erred. The complaint did not seek
the review of the decree or the reopening of the cadastral
case, but the enforcement of a trust. Hence, section 38 of Act
No. 496 does not apply. The estate of Juana Ringor as the
successor in interest of the trustee, Domingo Sumangil, is in
equity bound to execute a deed of conveyance of this lot to
the plaintif-appellant. The remedy herein prayed for has
been upheld by this Court in previous cases, one of which is
Severino vs. Severino (44 Phil., 343, year 1923). There is no
indication there of an intention to cut of, through the
issuance of a decree of registration, equitable rights or
remedies such as those here in question. On the contrary,
section 70 of the Act provides: Registered lands and
ownership therein, shall in all respects be subject to the
same burdens and incidents attached by law to unregistered
land. Nothing contained in this Act shall in any way be
construed to relieve registered land or the owners thereof
from any rights incident to the relation of husband and wife,
or from liability to attachment on mesne process or levy on
execution, or from liability to any lien of any description
established by law on land and the buildings thereon, or the
interest of the owner in such land or buildings, or to change
the laws of descent, or the rights of partition between
coparceners, joint tenants and other cotenants, or the right
to take the same by eminent domain, or to relieve such land
from liability to be appropriated in any lawful manner for the
payment of debts, or to change or afect in any other way any
other rights or liabilities created by law and applicable to
unregistered land, except as otherwise expressly provided in
146
147
148
FACTS:
On December 27, 1989, the RTC, Branch 19, of Digos City,
Davao del Sur, rendered a Decision5 in Civil Case No. 2514 (a
case for Reconveyance and Damages), ordering the exclusion
of 2.5002 hectares from Lot 13521. The trial court found that
said 2.5002 hectares which is part of Lot 13521, a 13,752square meter parcel of land covered by Original Certificate of
Title (OCT) No. P- 49526 registered in the name of Antonio
Go Pace (Antonio) on July 19, 1971 actually pertains to
Sesinando Jumamoy (Sesinando), Ciriacos predecessorininterest.
149
The RTC and CA ruled that Ciriaco is correct and that PNB
must reconvey the land to Ciriaco. Thus PNB filed this case to
question the ruling of the RTC and CA.
ISSUE Whether or not PNB canrecover the land to Ciriaco?
HELD
Yes. PNB is not an innocent purchaser/ mortgagee for value.
PNB In this case is considered a trustee in a constructive
trust holding the land in trust for Ciriaco. Also, since Ciriaco
is in possession of the land, the action based on constructive
trust is imprescriptible. Undoubtedly, our land registration
statute extends its protection to an innocent purchaser for
value, defined as "one who buys the property of another,
without notice that some other person has a right or interest
in such property and pays the full price for the same, at the
time of such purchase or before he has notice of the claims or
interest of some other person in the property."25 An
"innocent purchaser for value" includes an innocent lessee,
mortgagee, or other encumbrancer for value .26 Here, we
agree with the disposition of the RTC and the CA that PNB is
not an innocent purchaser for value. As we have already
declared: A banking institution is expected to exercise due
diligence before entering into a mortgage contract. The
ascertainment of the status or condition of a property ofered
to it as security for a loan must be a standard and
indispensable part of its operations. PNBs contention that
Ciriaco failed to allege in his complaint that PNB failed to
take the necessary precautions before accepting the
mortgage is of no moment. It is undisputed that the 2.5002hectare portion of the mortgaged property has been
adjudged in favor of Ciriacos predecessor-in-interest in Civil
Case No. 2514.
150