Professional Documents
Culture Documents
Page 1 of 6
Agency Digests Set B and C
Issue: which had been sold to Bosque and Ruiz by the plaintiff, acting
W/N Vicente is still liable to pay Gregorio his commission even through her attorney in fact, one Manuel Pirretas y Monros.
though the latter failed to disclose everything he received form
the transaction The case stemmed from the following:
1. Prior to September 17, 1919, the plaintiff Villa was the
Held: owner of a printing establishment and bookstore
Gregorio cannot demand from Vicente his commission located at Escolta, Manila, and known as La Flor de
Article 1891 states that every agent is bound to render an Cataluna, Viuda de E. Bota, with the machinery, motors,
account of his transactions and to deliver to the principal bindery, type material furniture, and stock appurtenant
whatever he may have received by virtue of the agency thereto. Upon the date stated, the plaintiff, then and
When Gregorio accepted the secret bonus and failed to disclose now a resident of Barcelona, Spain, acting through
this to his principal, he violated the agency agreement and Manuel Pirretas, as attorney in fact, sold the
FORFEITS HIS RIGHT TO COLLECT THE COMMISSION FORM THE establishment above-mentioned to the defendants
PRINCIPAL. This is regardless to W/N the principal suffered any Guillermo Garcia Bosque and Jose Pomar Ruiz,
injury because of the breach of trust. residents of the City of Manila, for the stipulated sum of
His acceptance of the secret profit corrupted his duty to serve the P55,000.
interest only of the principal. Instead of exerting his best to 2. In 1920, Pirretas absented himself from the Philippine
persuade the buyer to purchase the lot on the most advantageous Islands on a prolonged visit to Spain; and in
terms desired by his principal, he succeeded in persuading his contemplation of his departure he executed a
principal to accept the terms of the buyer to the detriment of his document purporting to be a partial substitution of
principal. agency, whereby he transferred to "the mercantile
entity Figueras Hermanos, or the person, or persons,
having legal representation of the same," the powers
U.S. VS. REYES (36 PHIL. 791) that had been previously conferred on Pirretas by the
plaintiff "in order that," so the document runs, "they
FACTS:
may be able to effect the collection of such sums of
R. B. Blackman, a surveyor in Pangasinan had an oral agreement money as may be due to the plaintiff by reason of the
with Domingo Reyes. The latter would collect in behalf of sale of the bookstore and printing establishment
Blackman amounts due from 12 individuals in connection with already mentioned, issuing for such purpose the
the survey of their lands totaling to Php 860.00. He only receipts, vouchers, letters of payment, and other
succeeded in collecting Php 540 and delivered Php 368 to necessary documents for whatever they shall have
Blackman, retaining the balance of Php 172.00. Both parties had received and collected of the character indicated."
different claims. Blackman said that the 3. When the time came for the payment of the second
agreement was 10% commission for Reyes. But Reyes insisted it installment and accrued interest due at the time, the
was 20%. If the Court would accept purchasers were unable to comply. Figueras Hermanos,
Blackmans claims, Reyes would be entitled to Php 54.00 acting as attorney in fact for the plaintiff, an agreement
therefore Php 172.00 misappropriated or Php was Afterwhich, another document was entered
118.00 if commission was deducted. On the other hand, if the (Exhibit 1) whereby the partnership in said document
Court accepts Reyes claims which was it stated that Bosque is indebted to Villa in the amount
20% then 20% of the amount supposed to be collected was Php of 32k which France and Goulette are bound as joint
172.00. Reyes was found guilty of estafa. and several sureties, and that the latters partnership
ISSUES: had transferred all its assets to the Bota Printing
Company.
1) Whether there was a contract of agency between the parties? 4. Rosa is now alleging that Figueras had no authority to
2) Whether its terms and conditions are complied with? execute the contract containing the release of
HELD: Guillermo from the liability, and that she had not
ratified the same. Defendants argue otherwise, using
There was a contract of agency. But with the terms and
the agreement as a novation releasing him from
conditions are not complied with. On the onset there was a
personal liability.
contract of agency through an oral agreement. Reyes was bound
to pay the principal all he received from the collecting dues as
CFIs ruling:
stated by Blackman. In view of the discrepancy in the evidence
The defendant Ruiz put in no appearance, and after
the court was not disposed to set up judgment as superior to that
publication judgment by default was entered against him. The
of the trial court. Also conceding that Reyes was to receive 20%,
other defendants answered with a general denial and various
this unless some contrary and express stipulation was included
special defenses. The trial judge gave judgment in favor of the
would not entitle him in advance to 20% of the amount actually
plaintiff, requiring all of the defendants, jointly and severally, to
collected. The right to receive a commission of either 10% or
pay to the plaintiff the sum of P19,230.01, as capital, with
20% did not make to hold out any sum he chose. Since for all
stipulated interest, plus the further sum of P1,279.70 as interest
practical purposes the agency was terminated the agent was
already accrued and unpaid upon the date of the institution of the
under the obligation to turn over to the principal the amount
action, with interest.
collected, minus his commission or that amount.
ISSUE:
ROSA VILLA MONNA, plaintiff-appellee, W/N Figueras had actual authority whatever to release the
vs. sureties or to make a novation of the contract without their
GUILLERMO GARCIA BOSQUE, ET AL., defendants. additional guaranty
GUILLERMO GARCIA BOSQUE, F. H. GOULETTE, and R. G.
FRANCE, appellants.
FACTS:
HELD:
This action was instituted in the Court of First Instance NO. The partial substitution of agency (Exhibit B to
of Manila by Rosa Villa y Monna, widow of Enrique Bota, for the amended complaint) purports to confer on Figueras Hermanos or
purpose of recovering from the defendants, Guillermo Garcia the person or persons exercising legal representation of the same
Bosque and Jose Romar Ruiz, as principals, and from the all of the powers that had been conferred on Pirretas by the
defendants R. G. France and F. H. Goulette, as solidary sureties for plaintiff in the original power of attorney. This original power of
said principals, the sum of P20,509.71, with interest, as a balance attorney is not before the SC, but assuming, as is stated in Exhibit
alleged to be due to the plaintiff upon the purchase price of a B, that the document contained a general power to Pirretas to sell
printing establishment and bookstore located at Escolta, Manila, the business known as La Flor de Catalua upon conditions to be
Page 2 of 6
Agency Digests Set B and C
fixed by him and power to collect money due to the plaintiff upon another company since he died almost immediately. But Dans is
any account, with a further power of substitution, yet it is entitled to moral damages.
obvious upon the face of the act of substitution (Exhibit B) that
the sole purpose was to authorize Figueras Hermanos to collect
the balance due to the plaintiff upon the price of La Flor de Philippine Products Company vs Primateria Societe
Catalua, the sale of which had already been affected by Pirretas. Anonyme Pour Le Commerce Exterieur
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Agency Digests Set B and C
it states that if the agent contracts in the name of the principal, As far as third persons are concerned, an act is deemed to have
exceeding the scope of his authority, and the principal does not been performed within the scope of the agents authority, if such
ratify the contract, it shall be void if the party with whom the is within the terms of the power of attorney, as written, even if
agent contracted is aware of the limits of the powers granted by the agent has in fact exceeded the limits of his authority
the principal. according to the understanding between the principal and his
Namerco acted beyond the bounds of its authority therefore it agent.
is personally liable to the party with whom he contracted.
Namercos principal expressly provided instructions that the sale FACTS: Nora Eugenio was a dealer of Pepsi. She had one store in
would be subject to the availability of a steamer. Even before the Marikina but had a regular charge account in Q.C. And
signing of the contract of sale, Namerco was aware that its Muntinlupa. Her husband Alfredo used to be a route manager for
principal was having difficulty in booking shipping space. It was Pepsi in its Q.C. Plant. Pepsi filed a complaint for a sum of money
also advised not to sign the contract unless it would assume full against Eugenio spouses. since according to them the spouses (1)
responsibility for the shipment. However, the president of had an outstanding balance since it purchased and received on
Namerco had no choice but to sign for NPC would forfeit the credit various products from both its Q.C. and Muntinlupa plant
bidders bond if the contract was not formalized. Also NPC was and (2) had an unpaid obligation for the loaned empties from
not aware of the limitations on the powers of Namerco. Since Pepsi. They contend that the total outstanding account was
Namerco exceeded the limits of its authority, it virtually acted in P94,651.xx. Eugenio's in their defense presented four Trade
its own name and is not being held liable under the contract of Provisional Receipts (TPR) allegedly issued to and received by
sale and is bound by the stipulation for liquidated damages. 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
ALBERT VS. UNIVERSITY PUBLISHING (85366) for the amount of P5,631.xx which was included in the
computation of their debt was falsified.
FACTS: Therefore, without these errors, petitioner contend that (1) they
do not have any outstanding debt, and (2) it is Pepsi who owes
Mariano Albert entered into a contract with University Publishing them P3,546.02. RTC found in favor of Pepsi. CA affirmed the
Co., Inc. through Jose M. Aruego, its President, whereby decision.
University would pay plaintiff for the exclusive right to publish
his revised Commentaries on the Revised Penal Code. The ISSUE: W/N the amounts in the TPR should be credited in favor
contract stipulated that failure to pay one installment would of the spouses.
render the rest of the payments due. When University failed to
pay the second installment, Albert sued for collection and won. HELD: CA decision is annulled and set-aside. Pepsi is ordered to
pay Eugenio. Background: Eugenio submitted the TPR's to Atty.
However, upon execution, it was found that the records of this Rosario (Pepsi's lawyer). Thereafter, Rosario ordered Daniel
Commission do not show the registration of UNIVERSITY Azurin (asst.personnel manager) to conduct an investigation to
PUBLISHING CO., INC., either as a corporation or verify the claim of the petitioners. According to Azurin, Estrada
partnership. Albert petitioned for a writ of execution against Jose denied that he issued and signed the TPR's. Azurin testified to
M. Aruego as the real defendant. University opposed, on the this in Court (However, Estrada never did. He failed to appear
ground that Aruego was not a party to the case. and was never found. Therefore, his testimony- as told by Azurin-
is barred by the Hearsay Evidence Rule).
ISSUE: WON University Publishing Co., Inc. is an existing Furthermore, the investigation conducted was really more of an
corporation with an independent juridical personality despite not interview without any safeguards and did not give Eugenio
being registered with the SEC. opportunity to object or cross-examine Estrada. The other points
of Estrada (and Pepsi) were all invalid since Estrada was
nowhere to be found and Pepsi failed to comply with the
pertinent rules for the admission of the evidence by which it
HELD: No. On account of the non-registration it cannot be sought to prove its contentions. Pepsi therefore was unable to
considered a corporation, not even a corporation de facto (Hall rebut the aforestated presumptions in favor of valid payment by
vs. Piccio, 86 Phil. 603). It has therefore no personality separate petitioners,
from Jose M. Aruego; it cannot be sued independently.
In relation to Agency: Assuming in this case that Pepsi never
received the amounts reflected in the TPR's, Pepsi still failed to
In the case at bar, Aruego represented a non-existent entity and prove that Estrada (its duly authorized agent) did not receive the
induced not only Albert but the court to believe in such amounts. In so far as Eugenio is concerned, their obligation is
representation. He signed the contract as President of extinguished when they paid Estrada using Pepsi's official
University Publishing Co., Inc., stating that this was a receipt. The substantive law is that payment shall be made to the
corporation duly organized and existing under the laws of the person in whose favor the obligation has been constituted, or his
Philippines. successor in interest, or any person authorized to receive it.
A person acting or purporting to act on behalf of a corporation *TPR: Trade Provisional Receipts are bound and given in
which has no valid existence assumes such privileges and booklets to the company sales representatives, under proper
obligations and becomes personally liable for contracts entered acknowledgement by them and with a record of the distribution
into or for other acts performed as such agent. thereof. After every transaction, when a collection is made the
customer is given by the sales representative a copy of the TPR,
Aruego, acting as representative of such non-existent principal, that is, the triplicate copy or customer's copy, properly filled up
was the real party to the contract sued upon, and thus assumed to reflect the completed transactions. All unused TPR's,as well as
such privileges and obligations and became personally liable for the collections made, are turned over by the sales representative
the contract entered into or for other acts performed as such to the appropriate company officer.
agent.
GREEN VALLEY V. IAC
The Supreme Court likewise held that the doctrine of corporation In an agency to sell, the agent is liable to pay the principal for
by estoppel cannot be set up against Albert since it was Aruego goods sold by the agent without the principals consent. The
who had induced him to act upon his (Aruegos) willful commission agent cannot without the express or implied consent
representation that University had been duly organized and was of the principal, sell on credit. Should he do so, the principal may
existing under the law. demand from him payment in cash, but the commission agent
shall be entitled to any interest or benefit, which may result from
such sale.
EUGENIO V. CA
Page 4 of 6
Agency Digests Set B and C
FACTS: In 1969, GREEN VALEY POULTRY AND ALLIED are payable from a particular fund, to wit, Fund 501. An
PRODUCTS entered into a letter agreement with SQUIBB & SONS instrument to be negotiable instrument must contain an
PHILIPPINE CORPORATION. The details of the agreement state unconditional promise or orders to pay a sum certain in money.
that Green Valley will be the nonexclusive distributor of the As provided by Sec 3 of NIL an unqualified order or promise to
products of Squibb Veterinary Products. As its distributor Green pay is unconditional though coupled with: 1st, an indication of a
Valley is entitled to 10% discount on Squibbs whole sale price particular fund out of which reimbursement is to be made or a
and catalogue price. Green Valley is also limited to selling particular account to be debited with the amount; or 2nd, a
Squibbs products to central and northern Luzon. Payment for statement of the transaction which give rise to the instrument.
purchases from Squibb will be due 60 days from date of invoice, But an order to promise to pay out of particular fund is not
etc. For goods delivered to Green Valley but unpaid, Squibb filed a unconditional. The indication of Fund 501 as the source of the
suit to collect. Squibb argues that their relationship with Green payment to be made on the treasury warrants makes the order or
Valley is a mere contract of sale as evidenced by the stipulation promise to pay not conditional and the warrants themselves
that Green Valley was obligated to pay for the goods received non-negotiable. There should be no question that the exception
upon the expiration of the 60-day credit period. Green Valley on Section 3 of NIL is applicable in the case at bar.
counters that the relationship between itself and Squibb is that of
an agency to sell. ISSUE: W/N Green Valley is an agent of Squibb.
RULING: Whether viewed as an agency to sell or as a contract of SET C
sale GREEN VALLEY is liable to Squibb for the unpaid products. If
it is a contract of sale then the Green Valley is liable by just Prudential Bank vs. CA
merely enforcing the clear words of the contract. If it is an agency
then Green Valley is liable because it sold on credit without Facts: The complaint in this case arose when private respondent
authority from its principal. The Civil Code says: Art. 1905 The Aurora F. Cruz, with her sister as co-depositor, invested P200,
commission agent cannot without the express or implied consent 000.00 in Central Bank bills with the Prudential Bank at its
of the principal, sell on credit. Should he do so, the principal may branch in Quezon Avenue, Quezon City, on June 23, 1986. Susan
demand from him payment in cash, but the commission agent Quimbo, the Bank employee assisted her on all her dealings. One
shall be entitled to any interest or benefit, which may result from of such dealing involves Cruz withdrawal from her Savings
such sale. Account No. 2546 and applying such amount to the investment
with the same bank. Cruz was asked to sign a Withdrawal Slip for
Metropolitan Bank & Trust Company vs. Court of Appeals P196, 122.98, representing the amount to be re-invested after
G.R. No. 88866 February, 18, 1991 deduction of the prepaid interest. Quimbo explained this was a
new requirement of the bank. Several days later, Cruz received
Facts: another Confirmation of Sale and a copy of the Debit Memo
Eduardo Gomez opened an account with Golden Savings coming from Quimbo. On October 27, 1986, Cruz returned to the
and deposited 38 treasury warrants. All warrants were bank and sought to withdraw her P200, 000.00. After verification
subsequently indorsed by Gloria Castillo as Cashier of Golden of her records, however, she was informed that the investment
Savings and deposited to its Savings account in Metrobank appeared to have been already withdrawn by her on August 25,
branch in Calapan, Mindoro. They were sent for clearance. 1986. There was no copy on file of the Confirmation of Sale and
Meanwhile, Gomez is not allowed to withdraw from his account, the Debit Memo allegedly issued to her by Quimbo. Quimbo
later, however, exasperated over Floria repeated inquiries and herself was not available for questioning as she had not been
also as an accommodation for a valued client Metrobank reporting for the past week. Prompted by the event Cruz's
decided to allow Golden Savings to withdraw from proceeds of reaction was to file a complaint for breach of contract against
the warrants. In turn, Golden Savings subsequently allowed Prudential Bank in the Regional Trial Court of Quezon City. She
Gomez to make withdrawals from his own account. Metrobank demanded the return of her money with interest, plus damages
informed Golden Savings that 32 of the warrants had been and attorney's fees. Cruz won the case in both the RTC and CA.
dishonored by the Bureau of Treasury and demanded the refund Issue: Does the fault of bank employee bind the Bank particularly
by Golden Savings of the amount it had previously withdrawn, to in cases where the bank employee created blunder or, worse,
make up the deficit in its account. The demand was rejected. intentionally cheat the depositor?
Metrobank then sued Golden Savings. Held:
The liability of the principal for the acts of the agent is not
Issue: debatable. Law and jurisprudence are clearly and absolutely
1. Whether or not Metrobank can demand refund agaist against the petitioner. Such liability dates back to the Roman Law
Golden Savings with regard to the amount withdraws to make up maxim, Qui per alium facit per seipsum facere videtur. "He who
with the deficit as a result of the dishonored treasury warrants. does a thing by an agent is considered as doing it himself." This
2. Whether or not treasury warrants are negotiable rule is affirmed by the Civil Code thus: Art. 1910. The principal
instruments must comply with all the obligations which the agent may have
contracted within the scope of his authority. Art. 1911. Even
Held: when the agent has exceeded his authority, the principal is
No. Metrobank is negligent in giving Golden Savings the solidarily liable with the agent if the former allowed the latter to
impression that the treasury warrants had been cleared and that, act as though he had full powers. Conformably, we have declared
consequently, it was safe to allow Gomez to withdraw. Without in countless decisions that the principal is liable for obligations
such assurance, Golden Savings would not have allowed the contracted by the agent. The agent's apparent representation
withdrawals. Indeed, Golden Savings might even have incurred yields to the principal's true representation and the contract is
liability for its refusal to return the money that all appearances considered as entered into between the principal and the third
belonged to the depositor, who could therefore withdraw it person. WHEREFORE, the petition is DENIED and the appealed
anytime and for any reason he saw fit. decision is AFFIRMED.
It was, in fact, to secure the clearance of the treasury
warrants that Golden Savings deposited them to its account with
Metrobank. Golden Savings had no clearing facilities of its own. It G.R. No. 88539 October 26, 1993
relied on Metrobank to determine the validity of the warrants KUE CUISON, doing business under the firm name and
through its own services. The proceeds of the warrants were style"KUE CUISON PAPER SUPPLY," petitioner,
withheld from Gomez until Metrobank allowed Golden Savings vs.
itself to withdraw them from its own deposit. THE COURT OF APPEALS, VALIANT INVESTMENT
Metrobank cannot contend that by indorsing the warrants in ASSOCIATES, respondents.
general, Golden Savings assumed that they were genuine and in
all respects what they purport to be, in accordance with Sec. 66 FACTS: Kue Cuison is a sole proprietorship engaged in the
of NIL. The simple reason that NIL is not applicable to non purchase and sale of newsprint, bond paper and scrap.
negotiable instruments, treasury warrants. Valiant Investment Associates delivered various kinds of paper
products to a certain Tan. The deliveries were made by Valiant
No. The treasury warrants are not negotiable instruments. pursuant to orders allegedly placed by Tiac who was then
Clearly stamped on their face is the word: non negotiable. employed in the Binondo office of petitioner. Upon delivery, Tan
Moreover, and this is equal significance, it is indicated that they paid for the merchandise by issuing several checks payable to
Page 5 of 6
Agency Digests Set B and C
cash at the specific request of Tiac. In turn, Tiac issued nine (9) in good faith, relied upon them. Taken in this light,. petitioner is
postdated checks to Valiant as payment for the paper products. liable for the transaction entered into by Tiac on his behalf. Thus,
Unfortunately, sad checks were later dishonored by the drawee even when the agent has exceeded his authority, the principal is
bank. solidarily liable with the agent if the former allowed the latter to
fact as though he had full powers (Article 1911 Civil Code), as in
the case at bar.
Thereafter, Valiant made several demands upon petitioner to pay Finally, although it may appear that Tiac defrauded his principal
for the merchandise in question, claiming that Tiac was duly (petitioner) in not turning over the proceeds of the transaction to
authorized by petitioner as the manager of his Binondo office, to the latter, such fact cannot in any way relieve nor exonerate
enter into the questioned transactions with Valiant and Tan. petitioner of his liability to private respondent. For it is an
Petitioner denied any involvement in the transaction entered into equitable maxim that as between two innocent parties, the one
by Tiac and refused to pay Valiant. who made it possible for the wrong to be done should be the one
to bear the resulting loss.
HELD:
YES
Even when the agent has exceeded his authority, the principal is
solidarily liable with the agent if the former allowed the latter to
act as though he had full powers.
It is evident from the records that by his own acts and admission,
petitioner held out Tiac to the public as the manager of his store
in Binondo. More particularly, petitioner explicitly introduced to
Villanueva, Valiants manager, as his (petitioners) branch
manager as testified to by Villanueva. Secondly, Tan, who has
been doing business with petitioner for quite a while, also
testified that she knew Tiac to be the manager of the Binondo
branch. Even petitioner admitted his close relationship with Tiu
Huy Tiac when he said that they are like brothers There was
thus no reason for anybody especially those transacting business
with petitioner to even doubt the authority of Tiac as his
manager in the Binondo branch.
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Agency Digests Set B and C