CASE NO.

1
AGENCY- Agency distinguished from other relations

Amon Trading Corporation and Juliana Marketing, petitioners

VS. C.A. and Tri-realty development and Construction Corporation, respondents
G.R. No. 158585

FACTS:
Line and Spaces represented by Eleanor Sanchez informed private respondent Tri-realty that it could
obtain cement for the latters satisfaction as a contractor from petitioners Amon Trading Corporation
and its sister company, Juliana marketing.
Thereafter, private respondent proceeded to order from Sanchez 6,050 bags of cement from Amon
Trading and 6,000 bags from Juliana. Through Mrs. Sanchez of lines and spaces, the respondent paid in
advance.

There were deliveries to private respondent of 3,850 bags and 3,000 bags, respectively from the
petitioners. However the balance of 3,000 and 5,200 bags were not delivered thus private respondent
sent petitioners written demands but the latter stated that they have already refunded the amount of
undelivered bags of cement to Lines and Spaces per written instruction of Eleanor Sanchez.

With news reaching the respondent that Eleanor Sanchez had already fled abroad, private respondent
filed a case for sum of money against petitioners and Lines and Spaces

Petitioners in its defense stated that private respondent had no cause of action and alleging that it had
no privity of contract with them as it was Lines and Spaces/Tri-Realty, through Mrs. Sanchez, that
ordered or purchased bags of cement and paid the price thereof without informing them of any special
arrangement nor disclosing that Lines and Spaces and respondent are distinct and separate entities.
Furthermore it was Mrs. Sanchez who cancelled their orders and the consideration of the cancelled
orders was later reimbursed to Lines and Spaces. Lines and Space on the other hand averred that it is
not represented by Mrs. Sanchez.

The Trial Court in its decision found Lines and Spaces solely liable to private respondent and absolved
petitioners liability thus the respondent partially appealed the said decision which was in turn reversed
by the CA and held petitioners to be jointly liable with Line and Spaces.

Hence the present petition.

ISSUE:
1) Whether or not petitioners and respondent has privity of contract

2) Whether or not there was a contract of agency between lines and spaces and respondent

RULING:
No there is no privity of contract between the petitioner and respondent, as gleaned from the
records and by admission in the complaint by the respondent there was no written contract entered
into between petitioners and private respondent on the basis that the private respondent agreed with
Mrs. Sanchez of Line and Spaces for the latter to source the cement needs of the former therefore, the
meeting of the minds was between private respondent and Mrs. Sanchez of Line and spaces which was
different from the contract of sale between petitioners and , Mrs Sanchez who represented herself to be
from Lines and Spaces/ Tri Realty, which, per her representation, was a single account or entity

With respect to the issue of agency between the respondent and Lines and Spaces The Supreme Court
ruled that Neither Sanchez nor Lines and Spaces was an agent for private respondent, but rather a
supplier for the latter cement needs.

Art. 1868 as a basis of agency is representation On the part of the principal, there must be an actual
intention to appoint or an intention naturally inferable from his words or actions and on the part of the
agent, there must be an intention to accept the appointment and act on it, and in the absence of such
intent, there is generally no agency. One factor which most clearly distinguishes agency from other legal
concepts is control and in the present case the intention of private respondent, as the Executive Officer
of respondent Corporation testified on, was merely for Lines & Spaces, through Eleanor Sanchez, to
supply them with the needed bags of cement.

Wherefore the petition is granted and the decision of the CA are hereby reversed and set aside and the
decision of the RTC are hereby reinstated.
CASE NO. 2
AGENCY- Art. 1874 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.

G.R. No. 160346

Pahud vs. Court of Appeals, Belarmino

FACTS:
Eufemia, Raul, Ferdiand, Zenaida, Milagros, Minerva, Isabelita and Virgilio were co-heirs of a parcel of
land acquired by their deceased parents. Sometime in 1992, Eufemia, Ferdinand and Raul executed a
deed of absolute sale in favour of petitioner Pahud. Eufemia also signed the deed on behalf of her four
other co-heirs on the basis of SPA but it is without the written authority of Minerva, Milagros and
Zenaida and it is not also notarized.

Thereafter Pahud gave his payment for the subject property but when Eufemia and her co-heirs drafted
a settlement to facilitate the transfer of the title to the Pahud, Virgilio refused to sign it and instead filed
a complaint for judicial partition of the property which ended into a compromise agreement that the 7
co-heirs agreeing to sell their undivided shares to Virgilio. Virgilio then sold the property to spouses
Belarmino and the latter immediately constructed a building on the property.

Alarmed by the ongoing construction, Pahud filed a complaint in intervention.

The Trial court upheld the validity of the sale to petitioners and so the respondent filed an appeal to the
CA arguing that the sale made by Eufemia for and on behalf of her other co-heirs to the Pahuds should have
been declared void and inexistent for want of a written authority from her co-heirs. The CA yielded and set
aside the findings of the trial court. Hence the petition before the Supreme Court.

ISSUE:
Whether or not the sale of Eufemia and her co-heirs to the Pahuds is valid and enforceable.

RULING:
The Supreme Court find the transaction valid and enforceable.
Based on the foregoing, it is not difficult to conclude, in principle, that the sale made by Eufemia, Isabelita
and her two brothers to the Pahuds sometime in 1992 should be valid only with respect to the 4/8 portion of
the subject property. The sale with respect to the 3/8 portion, representing the shares of Zenaida, Milagros,
and Minerva, is void because Eufemia could not dispose of the interest of her co-heirs in the said lot absent
any written authority from the latter, as explicitly required by law. However applying the principle of
estoppel during the pre-trial conference Zenaida, Minerva and Milagros together with the other co-heirs
admitted that they had indeed sold 7/8 of the property to the Pahuds sometime in 1992. Thus, the previous
denial was superseded, if not accordingly amended, by their subsequent admission. Moreover, in their
Comment, the said co-heirs again admitted the sale made to petitioners.
Wherefore the decision and the resolution of the Courts of Appeals are reversed and set aside and the
decision promulgated by the Regional Trial Court is reinstated with the MODIFICATION that the sale made by
respondent Virgilio San Agustin to respondent spouses Isagani Belarmino and Leticia Ocampo is valid only
with respect to the 1/8 portion of the subject property.
CASE NO. 3
AGENCY- 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
agency shall now follow the condition of the bilateral agreement

G.R. No. 156015

Republic of the Philippines, represented by Lt. Gen. Calimlim vs. Legaspi represented by his attorney in fact
Gutierrez

FACTS:
In a complaint for damages filed by Legaspi, he stated that Calimlim entered into a MOA with Ciriaco Reyes
allowing the former to hunt for treasure in the land owned by Legaspi located in Bulacan. The complaint also
alleged that petitioner assigned military personnel to guard the area and encamp thereon to intimidate
Legaspi and other occupants of the area.

Legaspi then executed a SPA appointing Gutierrez as his attorney in fact and the latter was given the power
to deal with the treasure hunting activities and to file charges against those who may enter Legaspis land
without the formers authority. Legaspi agreed to give Gutierrez 40% of the treasure that may be found in the
land.

Thereafter Gutierrez hired the legal services of Adaza and filed a case for damages and injuction against the
petitioners and agreed that Adaza will be entitled to 30% of Legaspis share in whatever treasure may be
found in the land as legal fees. The petitioners then filed a Motion to dismiss contending there is no real
party-in-interest as the SPA of Gutierrez to bring the suit was already revoked by Legaspi on March 7,
2000, as evidenced by a Deed of Revocation.

The Trial court denied the petitioners motion to dismiss and granted the respondents case for
injunction. On appeal, the Court of Appeals affirmed the decision of the trial court. Hence the instant
petition.

ISSUE:
With respect to the issue of agency, whether or not the contract of agency between Legaspi and private
respondent Gutierrez has been effectively revoked by Legaspi.

RULING:
The Supreme Court find no merit in the petition.

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 affected. Hence, the law provides that in such
cases, the agency cannot be revoked at the sole will of the principal. Hence the deed of revocation
executed by Legaspi has no effect.