LIM v. SABAN from Ybaez and because he was not a licensed real estate broker.

Ybaez was
able to convince Lim to cancel all four checks.
FACTS:
Under an Agency Agreement, Ybaez authorized Saban to look for a buyer of the In his Answer, Ybaez claimed that Saban was not entitled to any commission
lot for Two Hundred Thousand Pesos (P200,000.00) and to mark up the selling because he concealed the actual selling price from him and because he was not
price to include the amounts needed for payment of taxes, transfer of title and a licensed real estate broker.
other expenses incident to the sale, as well as Saban's commission for the sale.
ISSUE:
Through Saban's efforts, Ybaez and his wife were able to sell the lot to the Whether Saban is entitled to receive his commission from the sale
petitioner Genevieve Lim (Lim) and the spouses Benjamin and Lourdes Lim (the
Spouses Lim) on March 10, 1994. The price of the lot as indicated in the Deed of HELD:
Absolute Sale is Two Hundred Thousand Pesos (P200,000.00). It appears, Yes, Saban is entitled to receive his commission from the sale.
however, that the vendees agreed to purchase the lot at the price of Six The Supreme Court held that to deprive Saban of his commission
Hundred Thousand Pesos (P600,000.00), inclusive of taxes and other incidental subsequent to the sale which was consummated through his efforts would be a
expenses of the sale. breach of his contract of agency with Ybaez which expressly states that Saban
would be entitled to any excess in the purchase price after deducting the P200,
After the sale, Lim remitted to Saban the amounts of P113,257 for payment of 000.00 due to Ybaez and the transfer taxes and other incidental expenses of
taxes due on the transaction as well as P50,000.00 as broker's commission. Lim the sale.
also issued in the name of Saban four post dated checks in the aggregate
amount of P236,743.00. Moreover, the Court has already decided in earlier cases that would be in the
height of injustice to permit the principal to terminate the contract of agency to
Subsequently, Ybaez sent a letter dated June 10, 1994 addressed to Lim. In the the prejudice of the broker when he had already reaped the benefits of the
letter Ybaez asked Lim to cancel all the checks issued by her in Saban's favor broker's efforts.
and to "extend another partial payment" for the lot in his (Ybaez's) favor.
VALENZUELA v. COURT OF APPEALS, ARAGON et al.
After the four checks in his favor were dishonored upon presentment, Saban
filed a complaint for collection of sum of money and damages against Ybaez Topic: Effects of Non-payment/Partial Payment
and Lim
Saban alleged that Ybaez told Lim that he (Saban) was not entitled to any Facts: Arturo Valenzuela is a General Agent of Philippine American General
commission for the sale since he concealed the actual selling price of the lot Insurance (Philamgen) since 1965. He was authorized to solicit and sell in behalf
of Philamgen all kinds of non-life insurance, and in consideration of services respondents, he was made liable to Philamgen in the event the insured fail to
rendered was entitled to receive the full agents commission of 32.5% from pay the premiums due. They are estopped by their own positive averments and
Philamgen under the scheduled commission rates. From 1973 to1975, claims for damages. Therefore, the respondents cannot state that the agency
Valenzuela solicited marine insurance from one of his clients, the Delta Motors relationship between Valenzuela and Philamgen is not coupled with interest.
in the amount of P4.4 Million from which he was entitled to a commission of There is an exception to the principle that an agency is revocable at will and
32%. However, Valenzuela did not receive his full commission which amounted that is when the agency has been given not only for the interest of the principal
to P1.6 Million from the but for the interest of third persons or for the mutual interest of the principal
P4.4Million insurance coverage of the Delta Motors. In 1977, Philamgen started and the agent. In these cases, it is evident that the agency ceases to be freely
to becomeinterested in and expressed its intent to share in the commission due revocable by the sole will of the principal. The factor rendering Philamgen and
Valenzuela on a fifty-fifty basis. Because of the refusal of Valenzuela, Philamgen the private respondents liable in damages is that the termination by them of the
terminated the General Agency Agreement of Valenzuela. General Agency Agreement was tainted with bad faith. If a principal acts in bad
faith and with abuse of right in terminating the agency, then he is liable in
Issue: Whether or not Philamgen could continue to hold Valenzuela jointly and damages. Valenzuela is not liable to Philamgen for the unpaid
severally liable with the insured for unpaid premiums. and uncollected premiums. Under Section 77 of the Insurance Code, the remedy
for the non-payment of premiums is to put an end to and render the insurance
Held: NO. The principal cause of the termination of Valenzuela as General Agent policy not binding..
of Philamgen arose from his refusal to share his Delta commission.
Sec. 77 ... [N]otwithstanding any agreement to the contrary, no policy or
The apparent bad faith of the contract of insurance is valid and binding unless and until the premiums thereof
privaterespondents in terminating the General Agency Agreement of petitioners have been paid except in the case of a life or industrial life policy whenever the
: The agency involving petitioner and private respondent is one "coupled with an grace period provision appliesIn Philippine Phoenix Surety v. Woodworks, we
interest," and, therefore, should not be freely revocable at the unilateral will of held that the non-payment of premium does not merely suspend but puts an
the latter. With the termination of the General Agency Agreement, Valenzuela end to an insurance contract since the time of the payment is peculiarly of the
would no longer be entitled to commission on the renewal of insurance policies essence of the contract. And in Arce v. The Capital Insurance and Surety Co. Inc.
of clients sourced from his agency. Despite the termination of the agency, (117 SCRA 63, [1982]), we reiterated the rule that unless premium is paid, an
Philamgen continued to hold Valenzuela jointly and severally liable with the insurance contract does not take effect. Thus: It is to
insured for unpaid premiums. Valenzuela had an interest in the continuation of be noted that Delgado (Capital Insurance & Surety Co., Inc. v. Delgado, 9 SCRA
the agency when it was unceremoniously terminated not only because of the 177 [1963] was decided in the light of the Insurance Act before Sec. 72 was
commissions he should continue to receive from the insurance business he has amended by the underscored portion. Supra. Prior to the Amendment, an
solicited and procured but also for the fact that by the very acts of the insurance contract was effective even if the premium had not been paid so that
an insurer was obligated to pay indemnity in case of loss and correlatively he Heirs of Lorenzo Yap v. CA Digest
had also the right to sue for payment of the premium.
Facts:
But the amendment to Sec. 72 has radically changed the legal regime in 1. Petitioners as heirs of Lorenzo Yap filed an action against Ramon Yap and co-
that unless the premium is paid there is no insurance. respondent for the reconveyance of land, with buildings and improvement on it.
In Philippine Phoenix Surety case, we held: Moreover, an insurer cannot treat They alleged that the said property was held in trust by Ramon and that it was
a contract as valid for the purpose of collecting premiums and invalid for the their father Lorenzo who purchased the said land and constructed the
purpose of indemnity. apartment building on it. However, alleging that since at that time, Lorenzo was
No contract of Insurance by an insurance company is valid and binding unless still a Chinese citizen, hence prohibited from owning land, he caused it to be
and until the premium thereof has been paid, notwithstanding any agreement registered in the name of respondent Ramon.
to the contrary. Since admittedly the premiums have not been paid, the policies
issued have lapsed. 2. The said property was sold by Ramon to his co-respondent which caused the
Theinsurance coverage did not go into effect or did not continue and the obligati petitioners to file this action.
on of Philamgen as insurer ceased. Hence, for Philamgen which had no more
liability under 3. The lower court ruled in favor of the respondents or the ownership of Ramon.
thelapsed and inexistent policies to demand, much less sue Valenzuela for the u This was affirmed by the Court of Appeals. Hence this petition.
npaidpremiums would be the height of injustice and unfair dealing. In this
instance, with the lapsing of the policies through the non payment of premiums Issue: Whether or not a trust was constituted between Lorenzo and Ramon
by the insured there were no more insurance contracts to speak of. As this Court
held in the Philippine Phoenix Surety case, supra "the non-payment of premiums RULING: No, and even it there was an implied trust, it could not have been valid
does not merely suspend but puts an end to an as it was in contravention of applicable laws. There is a basic distinction
insurance contract since the time of the payment is peculiarly of the between implied and express trusts. Express trusts cannot be proved by parole
essence of the contract."The circumstances of the case, however, require that evidence. Even then, in order to establish the existence of an implied trust in
the contractual relationship between the parties shall be terminated upon real property by parole evidence, the prove should be as fully convincing as the
the satisfaction of the judgment. No more claims arising from or as a result of facts as if the acts giving rise to the trust obligation are proven by an authentic
the agency shall be entertained by the courts after that date. ACCORDINGLY, the document. The petitioners' evidence was insufficient to prove clearly that a trust
petition is GRANTED. was constituted between their father and Ramon.
SALTIGA DE ROMERO vs. COURT OF APPEALS
Facts:
On Dec. 12, 1939 Eugenio Romero bought from spouses Macan the latters
rights, interest, and participation in a 12-hectare land. The land in
question was then public land. When Eugenio Romero applied for a homestead
patent for said land, the same was disapproved by the Bureau of Lands because
said Romero already had applied for a homestead patent for 24 hectares and
was disqualified from owning additional 12 hectares. Eugenio Romero placed
the application in the name of his eldest son, Eutiquio Romero, allegedly in trust
for all the children of Eugenio. When Eutiquio got married and had children, the
application was transferred in the name of Lutero Romero. When Lutero in turn
got married, he relinquished the application in favor of his younger brother
Ricardo. Eugenio Romero died in 1948. In 1961, his widow Teodora caused the
land in question to be subdivided among 6 of her children. The appellants
claimed that after the partition, they had been in occupancy of their respective
shares through their tenants. However, Lutero claimed that in 1969, he was
picked up by a policeman and brought to the office of the mayor. He was then
made to sign 3 affidavits conveying his share to his sister Gloriosa, brother-in-
law Sabdullah and to Meliton Pacas. He said that he could not sell his land
because the 5-year period had not yet elapsed. He was made to sign anyway.
Subsequently, he repudiated the affidavits. He then filed an action for
the annulment of the affidavits.
Issue:
Was there a trust constituted for the benefit of the heirs of Eugenio Romero?
Held:
No trust is constituted. it has been held that a trust will not be created when, for
the purpose of evading the law prohibiting one from taking or holding real
property, he takes a conveyance thereof in the name of a third person.[14] In
the present case, the petitioners did not present any evidence to prove the
existence of thetrust. Petitioners merely alleged that LUTERO,
through fraudulent means, had the title of Lot 23 Pls-35issued in his name
contrary to the alleged agreement between the families that LUTERO would
merely hold the lot in trust for the benefit of EUGENIOs heirs.
The alleged agreement was not proven and even assuming that the petitioners
duly proved the existence of the trust, said trust would be of doubtful validity
considering that it would promote a direct violation of the provisions of the
Public Land Act as regards the acquisition of a homestead patent. A homestead
applicant is required by law to occupy and cultivate the land for his own benefit,
and not for the benefit of someone else.[15]
Furthermore, under Section 12 of ThePublic Land Act (CA 141), a person is
allowed to enter a homestead not exceeding twenty-four (24)hectares. In the
present case, it is not disputed that EUGENIO already applied for a homestead
patentfor twenty-four (24) hectares of land and was disqualified from applying
for an additional twelve (12)hectares. If we uphold the theory of the petitioners
and rule that a trust in fact existed, we would beabetting a circumvention of the
statutory prohibitions stated under the Public Land Act. We therefore findno
legal or factual basis to sustain the contention of the petitioners that LUTERO
merely held Lot 23 Pls-35 in trust for the benefit of the heirs of EUGENIO.