ATP5.3 Cuison v.

CA, 227 SCRA 391 (1993) tiac agent cuison principal

FACTS: Kue Cuison is a sole proprietorship engaged in the purchase and sale of newsprint, bond paper and
scrap. Valiant Investment Associates delivered various kinds of paper products to a certain Tan. The deliveries
were made by Valiant pursuant to orders allegedly placed by Tiac who was then employed in the Binondo office
of petitioner. Upon delivery, Tan paid for the merchandise by issuing several checks payable to cash at the
specific request of Tiac. In turn, Tiac issued nine (9) postdated checks to Valiant as payment for the paper
products. Unfortunately, sad checks were later dishonored by the drawee bank.
Thereafter, Valiant made several demands upon petitioner to pay for the merchandise in question, claiming that
Tiac was duly authorized by petitioner as the manager of his Binondo office, to enter into the questioned
transactions with Valiant and Tan. Petitioner denied any involvement in the transaction entered into by Tiac and
refused to pay Valiant.
Left with no recourse, private respondent filed an action against petitioner for the collection of sum of money
representing the price of the merchandise. After due hearing, the trial court dismissed the complaint against
petitioner for lack of merit. On appeal, however, the decision of the trial court was modified, but was in effect
reversed by the CA. CA ordered petitioner to pay Valiant with the sum plus interest, AF and costs.

ISSUE: WON Tiac possessed the required authority from petitioner sufficient to hold the latter liable for the
disputed transaction

RULING: YES Article 1911 of the Civil Code provides:

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.

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. Tiac, therefore, by petitioners own representations and
manifestations, became an agent of petitioner by estoppel, an admission or representation is rendered
conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon
(Article 1431, Civil Code of the Philippines).

ATP6.3 Pleasantville Dev. V. CA, 253 SCRA 10 (1996) pointed at the wrong lot

Rule is that 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.

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 agent of the petitioner. Under the contract Kee was allowed to take
possession of the property even before full payment of the price.

CTTEI through an employee, Zenaida Octaviano accompanied Kees wife Donabelle to inspect Lot No. 8.
Octaviano however mistakenly pointed towards Lot 9. Hence spouses Kee had their residence, an auto repair
shop, a store and other improvements constructed on the wrong lot.

Upon discovery of the blunder both Kee and Jardinico tried to reach an amicable settlement butthey failed.
Jardinico demanded that the improvements be removed but as Kee refused, Jardinico filed a complaint for
ejectment with damages against Kee at the Municipal Trial Court in Cities (MTCC) of Bacolod City.

Kee filed a third-party complaint against petitioner and CTTEI, which was dismissed by the RTC after ruling
that there was no evidence from which fault or negligence on the part of petitioner and CTTEI can be inferred.
The Court of Appeals disagreed and found CTTEI negligent for the erroneous delivery of the lot by Octaviano,
its employee.

Petitioner does not dispute the fact that CTTEI was its agent. But it contends that the erroneous delivery of Lot
9 to Kee was an act which was clearly outside the scope of its authority, and consequently, CTTEI alone should
be liable. It asserts that while [CTTEI] was authorized to sell the lot belonging to the herein petitioner, it was
never authorized to deliver the wrong lot to Kee.

ISSUE: Whether or not Court of Appeals erred in holding the principal, Pleasantville Development
Corporation, liable for the acts made by the agent in excess of its authority is clearly in violation of the
provision of the law

RULING: No. The rule is that 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 damage.

CTTEI was acting within its authority as the sole real estate representative of petitioner 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 petitioners liability, as principal of CTTEI, per Articles 1909 and 1910 of the Civil Code.

ATP7.3 Harry Keeler v. Rodriguez, 4 Phil 19 montelibano agent keeler pricipal

FACTS: Plaintiff is Harry E. Keeler Electric Co., a domestic corporation based in Manila engaged in the
electrical business, and among other things in the sale of what is known as the "Matthews" electric plant.
Defendant is Domingo Rodriguez a resident of Talisay, Occidental Negros
Montelibano, a resident of Iloilo, went to Keeler Electric and made arrangement with the latter wherein:
He claimed that he could find purchaser for the "Matthews" plant
Keeler Electric told Montelibano that for any plant that he could sell or any customer that he could find
he would be paid a commission of 10%for his services, if the sale was consummated.

Through Montelibanos efforts, Keeler was able to sell to Rodriguez one of the "Matthews" plants
Rodriguez paid Montelibano (the purchase price of P2,513.55), after the installation of the plant and without the
knowledge of Keeler Electric,
Keeler Electric filed an action against Rodriguez for the payment of the purchase price.
Rodriguez: Claimed that he already paid the price of the plant. In addition, he alleged that:
Montelibano sold and delivered the plant to him, and "was the one who ordered the installation of that electrical
plant"
There were evidences: a statement and receipt which Montelibano signed to whom he paid the money.
He paid Montelibano because the latter was the one who sold, delivered, and installed the electrical plant, and
he presented to him the account, and assured him that he was duly authorized to collect the value of the
electrical plant
It was supported with receipt
The answer alleges and the receipt shows upon its face that the plaintiff sold the plant to the defendant, and that
he bought it from the plaintiff.

Witness (Juan Cenar):

Cenar was sent by Keeler Electric to install the plant in Rodriguezs premises in Iloilo
He brought with him a statement of account for Rodriguez but the latter said that he would pay in Manila.

Lower Court: In favor of Rodriguez. It held that:

Keeler Electric had held out Montelibano to Rodriguez as an agent authorized to collect
Payment to Montelibano would discharge the debt of Rodriguez
The bill was given to Montelibano for collection purposes

Keeler Electric appealed. It alleged that:

Montelibano had no authority to receive the money.
His services were confined to the finding of purchasers for the "Matthews" plant
Montelibano was not an electrician, could not install the plant and did not know anything about its mechanism

ISSUES:
1. Whether Keeler Electric authorized Montelibano to receive or receipt for money in its behalf
2. Whether Rodriguez had a right to assume by any act or deed of Keeler Electric that Montelibano was
authorized to receive the money

RULING:
1. NO, Montelibano was not authorized. The plant was sold by Keeler Electric to Rodriguez and was consigned
to Iloilo where it was installed by Cenar, acting for, and representing, Keeler Electric, whose expense for the
trip is included in, and made a part of, the bill which was receipted by Montelibano.
a. Montelibano was not an agent of Keeler Electric
There is nothing on the face of this receipt to show that Montelibano was the agent of, or that he was acting for,
Keeler Electric. It is his own personal receipt and his own personal signature.

b. It was Juan Cenar, and not Montelibano who sold the plant to Rodiguez
After Cenar's return to Manila, Keeler Electric wrote a letter to Rodriguez requesting the payment of its
account, to which Rodriguez answered that he already paid to Montelibano. This is in direct conflict with the
receipted statement, which Rodriguez offered in evidence, signed by Montelibano. It will be noted that the
receipt which Montelibano signed is not dated, and it does not show when the money was paid.

2. NO. Article 1162 CC: Payment must be made to the persons in whose favor the obligation is constituted, or to
another
authorized to receive it in his name and Article 1727 CC: The principal shall be liable as to matters with respect
to which the agent has exceeded his authority only when he ratifies the same expressly or by implication.

Persons dealing with an assumed agent, whether the assumed agency be a general or special one, are bound at
their peril, if they would hold the principal, to ascertain not only the fact of the agency but the nature and extent
of the authority, and in case either is controverted, the burden of proof is upon them to establish it.

The person dealing with the agent must act with ordinary prudence and reasonable diligence. Obviously, if he
knows or has good reason to believe that the agent is exceeding his authority, he cannot claim protection. So if
the suggestions of probable limitations be of such a clear and reasonable quality, or if the character assumed by
the agent is of such a suspicious or unreasonable nature, or if the authority which he seeks to exercise is of such
an unusual or improbable character, the party dealing with him may not shut his eyes to the real state of the
case, but should either refuse to deal with the agent at all, or should ascertain from the principal the true
condition of affairs. Judgment of the lower court is REVERSED. Rodriguez should pay Keeler Electric the
purchase price of the plan

ATP8.3 Filipinas Life Assurance Co. v Pedroso, 543 SCRA 542 (2008)

FACTS: Teresita Pedroso is a policyholder of a 20-year endowment life insurance issued by Filipinas
Life Assurance 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 Escolta Office was holding a
promotional investment program for policyholders. It was offering 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 office 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 could push 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.

Relying on the representations made by Filipinas Lifes duly authorized representatives Apetrior and Alcantara,
as well as having known agent Valle for quite some time, Pedroso waited for the maturity of her initial
investment. A month after, her investment of P10,000 was returned to her after she made a written request
for its refund. To collect the amount, Pedroso personally went to the Escolta branch where Alcantara gave her the P10,000
in cash. After a second investment, she made 7 to 8more investments in varying amounts, totaling P37,000 but at a lower
rate of 5% prepaid interest a month. Upon maturity of Pedrosos subsequent investments, Valle would take back from
Pedroso the corresponding agents receipt he issued to the latter.

Pedroso told respondent Jennifer Palacio, also a Filipinas Life insurance policyholder, about the investment
plan. Palacio made a total investment of P49,550 but at only 5% prepaid interest. However, when Pedroso tried to
withdraw her investment, Valle did not want to return som P17,000 worth of it. Palacio also tried to withdraw hers, but
Filipinas Life, despite demands, refused to return her money.

ISSUE: Whether Filipinas Life is jointly and severally liable with Apetrior and Alcantara on the claim of Pedroso and
Palacio.
RULING: Pedroso and Palacio had invested P47,000 and P49,550, respectively. These were received by Valleand
remitted to Filipinas Life, using Filipinas Lifes official receipts. Valles authority to solicit and receive investments was
also established by the parties. When Pedroso and Palacio sought confirmation, Alcantara, holding a supervisory position,
and Apetrior, the branch manager confirmed that Valle had no authority. While it is true that a person dealing with an
agent is put upon inquiry and must discover at his own peril the agents authority, in this case Pedroso and Palacio did
exercise due diligence in removing all doubts and in confirming the validity of the representations made by Valle.

Filipinas Life, as the principal, is liable for obligations contracted by its agent Valle. By the contract of agency, a
person binds himself to render some service or to do something in representation or on behalf of another, with the consent
or authority of the latter. The general rule is that the principal is responsible for the acts of its agent done within the scope
of its authority and should bear the damage cause to third persons. When the agent exceeds his authority, the agent
becomes personally liable for damage. But even when the agent exceeds his authority, the principal is still solidarily liable
together with the agent if the principal allowed the agent to act as though the agent had full powers . The acts of an agent
beyond the scope of his authority do not bind the principal, unless the principal ratifies them, expressly or impliedly.

ATP9.3 Professional Services Inc v. CA, 611 SCRA 282 (2010)

FACTS: Natividad Agana was rushed to The Medical City General Hospital due to bowel movement difficulty and
bloody anal discharge. She was diagnosed by Dr. Miguel Ampil to be suffering from cancer of the sigmoid and found
that the cancer spread over her left ovary. Dr. Fuentes and Dr. Ampil then completed hysterectomy to remove the cancer.
However, the operation appeared to be flawed as her daughter found a piece of gauze protruding from her vagina. Dr.
Ampil removed said piece, and assured her that the pains would vanish soon. Still suffering from pain, Natividad sought
help from Polymedic General Hospital where it was found that another piece of gauze badly infected her vaginal vault.
She took another surgery to remove the same. The spouses Agana then filed a complaint for damages against Professional
Services, Inc who is the owner of The Medical City, Dr. Ampil and Dr. Fuentes. The RTC held PSI solidarily liable with
Dr. Ampil and Dr. Fuentes for damages. It ruled that by accrediting Dr. Ampil and advertising his qualifications, PSI
created the public impression that he was its agent. On appeal, the CA absolved Dr. Fuentes but affirmed the liability of
Dr. Ampil and PSI.

ISSUE: Whether PSI is directly liable to the Aganas

RULING: Yes. This Court holds that PSI is liable to the Aganas under the principle of ostensible agency for the
negligence of Dr. Ampil and, pro hac vice, under the principle of corporate negligence for its failure to perform its duties
as a hospital. Even when no employment relationship exists but it is shown that the hospital holds out to the patient that
the doctor is its agent, the hospital may still be vicariously liable under Article 2176 in relation to Article 1431 and Article
1869of the Civil Code or the principle of apparent authority. Moreover, regardless of its relationship with the doctor, the
hospital may be held directly liable to the patient for its own negligence or failure to follow established standard of
conduct to which it should conform as a corporation.

ATP10.3 Manila Remnants v. CA, 191 SCRA 622 (1990)

MAINPOINT: Failure of the principal to correct an irregularity despite knowledge thereof, deemed a
ratification of the act of the agent.

FACTS:

1. A.U. Valencia and Co., is the authorized agent of Manila Remnant to develop its subdivision with
authority to manage the sales thereof. Artemio Valencia is the president of both companies.

2. Manila Remnant thru A.U. Valencia, executed contracts to sell with Ventanilla covering two lots.
Ventanilla paid the downpayment.

3. Artemio Valencia also sold the same lots without informing Ventanilla to Crisostomo, his sales agent
without any consideration.

4. Manila Remnant terminated its collection agreement with AU Valencia due to discrepancies and
irregularities discovered in its collections and remittances. Valencia was also removed as the
President of Manila Remnant.
 5. The Ventanilla couple learned the termination of Valencia, thus they went immediately to Manila
Remnant to pay their balance but to their shock they discovered that their names did not appear in
the records of A.U. Valencia and Co. as lot buyers.

ISSUE: Whether or not petitioner Manila Remnant should be held solidarily liable together with A.U. Valencia
and Co. and Carlos Crisostomo for the payment of damages and attorney's fees in favor of the Ventanillas

HELD: the Valencia realty firm had clearly overstepped the bounds of its authority as agent and for that
matter, even the law when it undertook the double sale of the disputed lots. Such being the case, the
principal, Manila Remnant, would have been in the clear pursuant to Article 1897 of the Civil Code which states
that" (t)he agent who acts as such is not personally liable to that party with whom he contracts, unless he
expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his
powers." However, the unique relationship existing between the principal and the agent at the time of the dual
sale must be underscored. Bear in mind that the president then of both firms was Artemio U. Valencia, the
individual directly responsible for the sale scam. Hence, despite the fact that the double sale was beyond the
power of the agent, Manila Remnant as principal was chargeable with the knowledge or constructive notice of
that fact and not having done anything to correct such an irregularity was deemed to have ratified the same.

Also, we find that by the principle of estoppel, Manila Remnant is deemed to have allowed its agent to
act as though it had plenary powers.

ATP11.3 Petron Corp. v. Spouses Cesar Jovero & Erma F. Cudilla, 663 SCRA 172 (2012)

FACTS: Petron entered into a Retail Dealer Contract with Robin Uy for the period of May 1984-April 1989,
wherein the latter shall hold Petron harmless against all losses and claims. Petron contracted the hauling
services of Jose Villaruz to deliver the petroleum products to the dealer. Villaruz also obligated himself to be
answerable to Petron for damage including to those of its employees and dealers resuling from his
negligence/lack of diligence.

Robin Uy executed an SPA in favor of Chiong Uy authorizing the latter to manage and administer the gas
station. Chiong left for Hongkong and left his wife, Dortina, to manage the gas station. On On January 3, 1991
Petron requested the services of Villaruz to deliver the products to the gas station, however, Villaruz used a tank
truck different from the trucks specifically enumerated in the contract. Petron nevertheless allowed transport
and delivery in another tank truck driven by Pepito Igdanis. For reasons unknown, a fire started in the fill pipe
and spread to the rubber hose connected to the truck during unloading of the petroleum. Upon seeing the fire,
Pepito got into the truck without detaching the rubber hose and dragged the burning fuel hose along the way
resulting to a conflagration and consuming the nearby properties of herein respondents.

Respondents filed separate actions for damages against Petron, Villaruz, Robin Uy and Dortina Uy alleging
their negligence in the conduct of their businesses caused the fire that destroyed their properties. Petron alleged
that the petroleum products were already paid for Robin Uy so it no longer owned the products during transit
and unloading; that the delivery was the sole responsibility of Villaruz who was neither its employee or agent.
The RTC ruled in favor of respondents. On appeal, the CA held Petron negligent for having allowed the
operation of the gas station absent a valid dealership contract. Thus, the gas station was one run by Petron itself
and the persons managing it were Petrons mere agents. Petron now asserts that there was an implied renewal of
the dealership contract contending there is no law supporting CAs conclusion that upon expiration of the
contract, the dealer automatically became the suppliers agent.

ISSUE: Whether the expiration of the dealership contract automatically makes the relationship into one of
agency?

RULING: No. The expiration or nonexistence of a dealership contract did not ipso facto transform the
relationship of the dealer and petitioner into one of agency. As far as the parties to the dealership contract were
concerned, the rights and obligations as to them still subsisted, since they continued to mutually benefit from
the agreement. Thus, neither party can claim that it is no longer bound by the terms of the contract and the
expiration thereof.

ATP12.3 Hahn v. CA, 266 SCRA 537 (1997)

An agent receives his commission only upon the successful conclusion of a sale.

FACTS: Petitioner is a Filipino citizen doing business under the name of Hahn Manila. Private respondent
BMW is a non-resident corporation incorporated in Germany. Petitioner executed in favor of private respondent
a Deed of Assignment with a Special Power of Attorney which constituted petitioner as the exclusive dealer
of private respondent as long as the assignment of its trademark and device subsisted. However, no formal
contract was drawn between the two parties. Thereafter, petitioner was informed that BMW was arranging to
grant the exclusive dealership of BMW cars and products to Columbia Motors Corp. (CMC). BMW expressed
dissatisfaction with various aspect of petitioners business but nonetheless also expressed willingness to
continue business relations with petitioner on the basis of a standard BMW contract otherwise, if said offer was
unacceptable to petitioner then BMW would terminate petitioners exclusive dealership. Petitioner refused
BMWs offer in which case BMW withdrew its alternative offer and terminated petitioners exclusive dealership.
Petitioner therefore filed an action for specific performance and damages against BMW to compel it to continue
the exclusive dealership.BMW moved to dismiss the case contending that the trial court did not acquire
jurisdiction over it through the service of summons on DTI because BMW is a foreign corporation and is not
doing business in the Philippines. The trial court deferred the resolution of the motion for dismissal until after
trial on the merits for the reason that the grounds advanced by BMW did not seem indubitable. BMW appealed
said order to the CA. The CA resolved that BMW was not doing business in the country and therefore
jurisdiction over it could not have been acquired through the service of summons on DTI and it dismissed the
petition.

ISSUE: W/N BMW is doing business in the Philippines so as to enable the court to acquire jurisdiction over it
through the service of summons on the DTI.

RULING: RA 7042 enumerates what acts are considered as doing business. Section 3(d) enumerating such
acts includes the phrase appointing representatives or distributors in the Philippines but not when the
representative or distributor transacts business in his own name for his own account. In the case at bar,
petitioner is private respondent BMWs agent and not merely a broker. The record reveals that private
respondent exercised control over petitioners activities as a dealer and made regular inspections of petitioners
premises to enforce its standards. Since BMW is considered as doing business in the Philippines, the trial court
validly acquired jurisdiction over it by virtue of the service of summons on the DTI. Furthermore, it is now
settled that, for purposes of having summons served on a foreign corporation in accordance with the Rules of
Court, it is sufficient that it be alleged in the complaint that the foreign corporation is doing business in the
Philippines. The court need not go beyond the allegations in the complaint in order to determine whether or not
it acquired jurisdiction. Such determination that the foreign corporation is doing business in the Philippines is
only tentative and only for the purpose of enabling the court to acquire jurisdiction. A contrary determination
may be made based on the courts findings or evidence presented.

ATP13.3 De Castro v. CA, 384 SCRA 607 (2002)

FACTS: De castro were co-owners of four (4) lots. In a letter, Artigo was authorized by appellants to act as real
estate broker in the sale of these properties and 5% of which will be given to the agent as commission. It was
appellee who first found Times Transit Corporation, who bought 2 lots. Artigo felt short of his commission.
Hence, he sued below to collect the balance. De castros then moved for the dismissal for failure to implead
other co-owners as indispensable parties. The De Castros claim that Artigo always knew that the two lots were
co-owned with their other siblings and failure to implead such indispensable parties is fatal to the complaint
since Artigo, as agent of all the four co-owners, would be paid with funds co-owned by the four co-owners.

ISSUE: WON the complaint merits dismissal for failure to implead other co-owners as indispensable parties

RULING: Devoid of merit. Art. 1915. If two or more persons have appointed an agent for a common
transaction or undertaking, they shall be solidarily liable to the agent for all the consequences of the agency.
The rule in this article applies even when the appointments were made by the principals in separate acts,
provided that they are for the same transaction. The solidarity arises from the common interest of the
principals, and not from the act of constituting the agency. By virtue of this solidarity, the agent can
recover from any principal the whole compensation and indemnity owing to him by the others. The
parties, however, may, by express agreement, negate this solidary responsibility. The solidarity does not
disappear by the mere partition effected by the principals after the accomplishment of the agency.

When the law expressly provides for solidarity of the obligation, as in the liability of co-principals in a
contract of agency, each obligor may be compelled to pay the entire obligation. The agent may recover the
whole compensation from any one of the co-principals, as in this case.

ATP14.3 Dialosa v. CA, 130 SCRA 350 (1984)

FACTS: Baterna is a licensed real estate broker. The spouses Diolosa owned the Villa Alegre subdivision. In June 1968,
they entered into an agreement: Baterna would be their exclusive sales agent to sell the lots of the subdivision until all
the property is fully disposed. Three months later, the spouses terminated the services of Baterna because the remaining
unsold lots were reserved for their 6 grandkids. There were 27 lots which remained unsold.

Now, Baterna is claiming that under the terms of their contract, he had unrevocable authority to sell the lots until all were
disposed. The rescission of the contract contravenes their agreement. He also claims to be entitled to a commission on the
lots unsold because of the rescission.

The spouses argue that they are within their legal right to terminate the agency because they needed the undisposed lots
for the use of their family. They also say that Baterna has no legal right to a commission to unsold lots.

CFI dismissed. CA says that notwithstanding that the principal may revoke the agency at will, spouses could not terminate
the agency agreement without paying damages. The agency agreement expressly stipulated until all the property as is
fully disposed."

ISSUE: Can the spouses terminate the agency without paying damages to Baterna, the real estate broker?

RULING: NO. They have to pay damages.

Principal cannot lawfully terminate the agency at will without paying damages. Intent to reserve lots for own use cant
prevail over the clear terms of the agency agreement. Agent is allowed to sell the lots until all the subject property is fully
disposed of; authority to sell is not extinguished until all the lots have been sold. Agency may be rescinded on the grounds
specified in Arts. 1381 &1382; none of them were present in this case.

ATP15.3 JUAN GARCIA Y PALICIO vs. JOSEFA DE MANZANO, as administratrix of the estate of her
husband Narciso Lopez Manzano, defendant and appellant., 39 Phil 577 (1919)

MAINPOINT:

1. Effect of Appointment of a New Agent: xxx (c) If the first agent is not notified of the appointment of the
second agent, it is understood that the first agency still exists.
2. Revocation of Power of Attorney: A second power of attorney revokes the first one only after notice
given to first agent.

FACTS:

Narciso Lopez Manzano was a merchant in Atimonan, Tayabas, who went to Spain in May, 1910, and died there
the 8th of September, 1913. He gave a general power-of attorney to his son, Angel L. Manzano on the 9th of
February, 1910, and on the 25th of March a second general power-of-attorney to his wife, Josefa Samson.

Narciso L. Manzano had had various commercial dealings with the plaintiff in this case and renewed these
dealings before leaving for Spain.

Manzano was the owner of a half interest in a small steamer, the San Nicolas, the other half being owned by
Ocejo Perez & Co., with whom there was a partnership agreement to run the steamer for a few years. When this
period expired Ocejo, Perez & Co., refused to continue the contract and demanded that Manzano buy or sell. As
he did not want to sell at the price offered and could not buy, Juan Garcia bought the half interest held by Ocejo,
Perez & Co., on the 15th of October, 1910. Angel L. Manzano, acting under his power-of-attorney, sold in July,
1911, the other half of the boat to the plaintiff, but as Garcia is a Spaniard and could not register the boat in his
name at the Custom House, the boat was registered in the name of Agustin Garcia, a son of the plaintiff, who at
that time, July 2d, 1913, was a minor about twenty years old. Agustin Garcia shortly thereafter died, leaving his
parents as his heirs at law, and as such heirs plaintiff's wife was made a party.

On the 23d of July, 1912, Angel L. Manzano, by virtue of the power-of-attorney from his father, executed a
contract by which Juan Garcia agreed to extend a credit to Narciso L. Manzano in the sum of P12,000, and this
credit was used by the house of Manzano. To secure it a mortgage was given in the same document on three
parcels of land in Atimonan, with their improvements. The registration of this mortgage was refused by the
registrar.

The court of First Instance of Tayabas, on the 18th of April, 1914, named Josefa Samson y San Pedro,
administratrix of the property of Narciso L. Manzano, and commissioners were duly appointed, and notice was
published, and no claims having been presented against the estate to the commissioners, they so reported to the
court on the 7th of December, 1914.

On the 29th of July, 1915, the Court of First Instance ordered the partition of the property amongst the heirs of
Narciso L. Manzano.

On the 15th day of May, 1915, Juan Garcia filed his action in the Court of First Instance of Tayabas to foreclose
the so-called mortgage.

Josefa de Manzano filed a pleading stating that the estate had already been divided; that the property mentioned
in the complaint of the Juan Garcia had been assigned, property #1 and #2 to her and her children and property
#3 entirely to her; that her son Angel had ceded his share to her; that all the other children were minors and
suggesting that she be made guardian ad litem for the minors.

xxx

The trial court held that the sale of the interest in the steamer entered into by Angel and Juan is valid, by virtue
of the general power of attorney executed by Narciso in favor of Angel.

Josefa et al. argue that the power-of-attorney to the wife revoked the one to the son, in accordance with article
1735 of the Civil Code, and that even if not revoked, the power-of-attorney did not authorize the sale of the boat
by Angel L. Manzano.

ISSUE:

WN The trial court erred in holding that the power of attorney executed in favor of Angel L. Manzano was not
revoked, at least in so far as it might concern the plaintiff Juan Garcia Palicio.

RULING:

No. Trial court is correct.

With respect to the alleged revocation, there is no proof in the record that the first agent, the son, knew of the
power-of-attorney to his mother. It was necessary under the law for the defendants, in order to establish their
counterclaim, to prove that the son had notice of the second power-of-attorney. They have not done so, and it
must be considered that Angel L. Manzano was acting under a valid power-of-attorney from his father which
had not been legally revoked on the date of the sale of the half interest in the steamer to the plaintiff's son,
which half interest was legally inherited by the plaintiffs.

With respect to authority granted to Angel, The power-of-attorney, after scrutiny, authorizes the sale of real
property, the buying of real property and mortgaging the same, the borrowing of money and in fact is general
and complete. The power does not expressly state that the agent may sell the boat, but a power so full and
complete and authorizing the sale of real property-, must necessarily carry with it the right to sell a half interest
in a small boat. The record further shows the sale was necessary in order to get money or a credit without which
it would be impossible to continue the business which was being conducted in the name of Narciso L. Manzano
and for his benefit.
ATP16.3 Guardex v. NLRC, 191 SCRA 487 (1990)

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

It appears that Orbeta somehow learned that Escandor had offered to fabricate a fire truck for Rubberworld
(Phil.) Inc. He wrote to Escandor inquiring about the amount of commission for the sale of a fire truck.
Escandor wrote back on the same day to advise that it was P15,000.00 per unit. Four days later, Orbeta offered
to look after (follow-up) Escandor's pending proposal to sell a fire truck to Rubberworld, and asked for P250.00
as representation expenses. Escandor agreed and gave him the money.

When no word was received by Escandor from Orbeta after three days, she herself inquired in writing from
Rubberworld about her offer of sale of a fire truck.

About seven months afterwards, Escandor herself finally concluded a contract with Rubberworld for the latter's
purchase of a fire truck. The transaction was consummated with the delivery of the truck and full payment
thereof by Rubberworld.

At this point, Orbeta suddenly reappeared and asked for his commission for the sale of the fire truck to
Rubberworld. Escandor refused, saying that he had had nothing to do with the offer, negotiation and
consummation of the sale.

ISSUES: (1)Is Orbeta entitled to the commission?

(2)Was there a contract of agency?

RULING:

No. entitlement to the P15,000 commission is contingent on the purchase by a customer of a fire truck, the
implicit condition being that the agent would earn the commission if he was instrumental in bringing the sale
about. Orbeta certainly had nothing to do with the sale of the fire truck, and is not therefore entitled to any
commission at all.

No. even if Orbeta is considered to have been Escandor's agent for the time he was supposed to "follow up" the
offer to sell, such agency would have been deemed revoked upon the resumption of direct negotiations between
Escandor and Rubberworld, Orbeta having in the meantime abandoned all efforts (if indeed any were exerted)
to secure the deal in Escandor's behalf.

ATP1.4 Dy Buncio and Co v. Ong Guan Ca, 60 Phil 696 (1934)

FACTS: 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 the public instrument being attached to the deed and recorded with the deed in the office 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.

The power of attorney referred to in the deed and registered therewith was not a general power of attorney but a limited
one and does not give the express power to alienate the properties in question. (Article 1713 of the Civil Code.)

Petitioner Dy Buncio subsequently obtained attachment and execution against the same properties for a judgment debt
against Ong Guan Can at Court of First Instance of Capiz. Further it court held that the deed was invalid and that the
property was subject to the execution which has been levied on said properties by the judgment creditor of the owner.

Defendants Juan Tong and Pua Giok appealed and insist that the deed of the 31st of July, 1931, is valid. Appellants claim
that the defect is cured by a general power of attorney given to the same agent in 1920.

ISSUE: Is the contention tenable? Did the second power of attorney supplant the first?

RULING: No. 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 inconsistent . If the new appointment with
limited powers does not revoke the general power of attorney, the execution of the second power of attorney would be a
mere futile gesture . The properties in question were subject to attachment and execution, the title of the
princuipal(father) not having been divested by the sale made by the agent(son).

ATP2.4 Republic v. Evangelista, 466 SCRA 544 (2005)

FACTS: Plaintiff Dante Legaspi, through his Attorney-in-fact Paul Gutierrez, filed a complaint for damages, with prayer
for the issuance of a writ of preliminary injunction against Defendants then Lt. Gen. Jose M. Calimlim et al.

Previous thereto, Legaspi as principal executed a Special Power of Attorney (SPA) in favor of his nephew Gutierrez.
Based on records, 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 [defendants who were allegedly treasure
hunting on Legaspis land, with 80 military personnel detailed to guard and intimidate Legaspis group from going near
the area of operations]. 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.

On a motion to dismiss, defendants cited the nullity of the complaint which was filed by agent Gutierrez after his principal
Legaspi subsequently executed a Deed of Revocation, among others. The trial court denied the motion.

ISSUE: Whether the Contract of Agency has been validly revoked.

RULING: The contract of agency between principal Legaspi and agent Gutierrez is not revocable at will. 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

Here, the agency is coupled with interest as a bilateral contract depends on it. 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 agency shall now follow the condition of the bilateral agreement. Consequently, the Deed of Revocation
executed by Legaspi has no effect. The authority of Gutierrez to file and continue with the prosecution of the case at bar is
unaffected.

When a contract of agency is at will, the principal may compel the agent to return the document evidencing the agency at
any time. If the agency was constituted in order to contract with specified persons, the revocation of the agency does not
prejudice the latter if they were not given notice thereof. Notice in these cases are crucial.

ATP3.4 Sevilla v. CA, 160 SCRA 171 (1988)

FACTS: On the strength of a contract, Tourist World Service Inc. (TWS) leased the premises belonging to Mrs.
Segundina Noguera for the formers use as a branch office. Lina Sevilla bound herself solidarily liable with
TWS for the prompt payment of the monthly rentals thereon. When the branch office was opened, it was run by
appellant Sevilla payable to TWS by any airline for any fare brought in on the efforts of Sevilla, 4% was to go
to Sevilla and 3% was to be withheld by TWS.

TWS appears to have been informed that Sevilla was connected with a rival firm, the Philippine Travel Bureau,
and, since the branch office was anyhow losing, the TWS considered closing down its office. Two resolutions of
the TWS board of directors were passed to abolish the office of the manager and vice president of the branch
office and authorizing the corporate secretary to receive the properties in the said branch office. Subsequently,
the corporate secretary went to the branch office, and finding the premises locked and being unable to contact
Sevilla, padlocked the premises to protect the interests of TWS. When neither Sevilla nor her employees could
enter the locked premises, she filed a complaint against TWS with a prayer for the issuance of a mandatory
preliminary injunction. The trial court dismissed the case holding that TWS, being the true lessee, was within its
prerogative to terminate the lease and padlock the premises. It likewise found that Sevilla was a mere employee
of TWS and as such, was bound by the acts of her employer. The CA affirmed. Hence this petition.

ISSUES: Whether or not there was an employer-employee relationship between TWS and Sevilla?

RULING: It was a principal-agent relationship. In general, We have relied on the so-called right of control test.
Sevilla was not subject to control by TWS either as to the result of the enterprise or as to the means used in
connection therewith.

It is the Court's considered opinion, that when the petitioner, Lina Sevilla, agreed to (wo)man the private
respondent, Tourist World Service, Inc.'s Ermita office, she must have done so pursuant to a contract of agency.
It is the essence of this contract that the agent renders services "in representation or on behalf of another.18 In
the case at bar, Sevilla solicited airline fares, but she did so for and on behalf of her principal, Tourist World
Service, Inc. As compensation, she received 4% of the proceeds in the concept of commissions. And as we said,
Sevilla herself based on her letter of November 28, 1961, pre-assumed her principal's authority as owner of the
business undertaking. We are convinced, considering the circumstances and from the respondent Court's recital
of facts, that the ties had contemplated a principal agent relationship, rather than a joint managament or a
partnership..

But unlike simple grants of a power of attorney, the agency that we hereby declare to be compatible with the
intent of the parties, cannot be revoked at will. The reason is that it is one coupled with an interest, the agency
having been created for mutual interest, of the agent and the principal. 19 It appears that Lina Sevilla is a bona
fide travel agent herself, and as such, she had acquired an interest in the business entrusted to her. Moreover, she
had assumed a personal obligation for the operation thereof, holding herself solidarily liable for the payment of
rentals. She continued the business, using her own name, after Tourist World had stopped further operations.
Her interest, obviously, is not to the commissions she earned as a result of her business transactions, but one that
extends to the very subject matter of the power of management delegated to her. It is an agency that, as we said,
cannot be revoked at the pleasure of the principal. Accordingly, the revocation complained of should entitle the
petitioner, Lina Sevilla, to damages.

ATP4.4 Coleongco v. Claparols, 10 SCRA 577 (1964)

FACTS: Since 1951, defendant-appellee, Eduardo L. Claparols, operated a factory for the manufacture of nails in Talisay,
Occidental Negros, under the style of "Claparols Steel & Nail Plant. The marketing of the nails was handled by the
"ABCD Commercial" of Bacolod, which was owned by a Chinaman named Kho To. Due to losses, Claparols looked for
someone to finance the business. Kho To agreed to do the financing he introduced his compadre, appellant Vicente
Coleongco to be the financier instead of him. Claparols agreed, and Coleongco undertook to finance and put up the funds
required for the importation of the nail wire, which Claparols bound himself to convert into nails at his plant.

Claparols executed in favor of Coleongco, at the latter's behest a special power of attorney to open and negotiate letters of
credit, to sign contracts, bills of lading, invoices, and papers covering transactions; to represent appellee and the nail
factory; and to accept payments and cash advances from dealers and distributors. Thereafter, Coleongco also became the
assistant manager of the factory, and took over its business transactions, while Claparols devoted most of his time to the
nail manufacture processes.

However, a writ of execution to enforce a judgment obtained against him by the Philippine National Bank, despite the fact
that he had submitted an amortization plan to settle the account. Worried and alarmed, Claparols immediately left for
Manila to confer with the bank authorities. Upon arrival, he learned to his dismay that the execution had been procured
because of derogatory information against appellee that had reached the bank from his associate, appellant Coleongco, the
latter, without appellee's knowledge, had written to the bank - In my humble personal opinion I presume that Mr. Eduardo
L. Claparols is not serious in meeting his obligations with your bank, otherwise he had not taken these machines and
equipments a sign of bad faith since the factory is making a satisfactory profit of my administration.

Fortunately, Claparols managed to arrange matters with the bank and to have the execution levy lifted. Incensed at what
he regarded as disloyalty of his attorney-in-fact, he consulted lawyers. The examination by the auditors found that
Coleongco owed the Claparols Nail Factory the amount of P87,387.37, as of June 30, 1957.Thus, Claparols revoked the
special power of Attornew which was opposed by Coleongco, contendnig that the power of attorney was made to protect
his interest under the financing agreement and was one coupled with an interest that the appellee Claparols had no legal
power to revoke.

ISSUE: Whether the revocation of the SPA was valid even if it is coupled with interest on the part of agent

RULING: Yes. The financing agreement itself already contained clauses for the protection of appellant's interest, and did
not call for the execution of any power of attorney in favor of Coleongco. But granting appellant's view, it must not be
forgotten that a power of attorney can be made irrevocable by contract only in the sense that the principal may not recall it
at his pleasure; but coupled with interest or not, the authority certainly can be revoked for a just cause, such as when the
attorney-in-fact betrays the interest of the principal, as happened in this case. It is not open to serious doubt that the
irrevocability of the power of attorney may not be used to shield the perpetration of acts in bad faith, breach of
confidence, or betrayal of trust, by the agent for that would amount to holding that a power coupled with an interest
authorizes the agent to commit frauds against the principal.

That the appellee Coleongco acted in bad faith towards his principal Claparols is, on the record, unquestionable. His
letters to the Philippine National Bank attempting to undermine the credit of the principal and to acquire the factory of the
latter, without the principal's knowledge; Coleongco's letter to his cousin, Kho, instructing the latter to reduce to one-half
the usual monthly advances to Claparols on account of nail sales in order to squeeze said appellee and compel him to
extend the contract entitling Coleongco to share in the profits of the nail factory on better terms, and ultimately "own his
factory", a plan carried out by Kho's letter, reducing the advances to Claparols; Coleongco's attempt to, have Romulo
Agsam pour acid on the machinery; his illegal diversion of the profits of the factory to his own benefit; and the
surreptitious disposition of the Yates band resaw machine in favor of his cousin's Hong Shing Lumber Yard, made while
Claparols was in Baguio in July and August of 1956, are plain acts of deliberate sabotage by the agent that fully justified
the revocation of the power of attorney by Claparols and his demand for an accounting from his agent Coleongco.

ATP5.4 Lustan v. CA, 266 SCRA 663 (1997)

FACTS: Pet Adoracion Lustan is the registered owner of a parcelof land in Calinog, Iloilo containing an area of
10.0057hectares. She leased the property to private resp Nicolas Parangan for a term of ten 10 years and an
annual rent of P1K. 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. petitioner executed a SPA in favor of
Parangan to secure an agricultural loan from private resp PNB- with the aforesaid lot as collateral. a second SPA
was executed by Lustan by Virtue of which, Parangan was able to secure 4 additional loans, to wit the sums of
24K, 38K, 38.6K and 25K. The last three loans were without the knowledge of herein Lustan and all the
proceeds therefrom were used by Parangan for his own benefit.
Lustan signed a Deed of Pacto de Retro Sale in favor of Parangan which was superseded by the deed of definite
Sale dated, which Lustan signed upon Parangans representation that the sale merely evidences the loans
extended by him unto the former. For fear that her property might be prejudiced by the continued borrowing of
Parangan, she demanded there turn of her certificate of title. Instead of complying with the request, Parangan
asserted his rights over the property which allegedly had become his by virtue of the aforementioned deed of
definite Sale. under said document, Lustan conveyed the subject property and all the improvements thereon
unto Parangan absolutely for and in consideration of 75K.
ISSUE: Whether petitioners property is liable to PNB for the loans contracted by Parangan by Virtue of the
SPA.?
RULING: Yes. 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 effect 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. As far as third persons are
concerned, an act is deemed to have been performed within the scope of the agent's authority if such is within
the terms of the power of attorney as written even if the agent has in fact exceeded the limits of his authority
according to the understanding between the principal and the agent.
The property of third persons which has been expressly mortgaged to guarantee an obligation to which the said
persons are foreign, is directly and jointly liable for the fulfillment thereof; it is therefore subject to execution
and sale for the purpose of paying the amount of the debt for which it is liable. However, petitioner has an
unquestionable right to demand proportional indemnification from Parangan with respect to the sum paid to
PNB from the proceeds of the sale of her property in case the same is sold to satisfy the unpaid debts.
ATP6.4 Valera v. Velasco, 51 Phil 695 (1928)

Purchase by Agent Of Property Involved In Agency.

FACTS: By virtue of the powers of attorney executed by VALERA, VELASCO was appointed attorney-in-fact
of VALERA with authority to manage his property in the Philippines, consisting of the usufruct of a real
property located of Echague Street, City of Manila.

VELASCO (agent) accepted both powers of attorney, managed VALERA's property, reported his operations,
rendered accounts of his administration, and presented the FINAL account of his administration wherein it
appears that there is a balance of P3,058.33 in favor of the principal VALERA.

But after the liquidation of accounts, it was revealed that VALERA actually owed VELASCO P1,100, and as
misunderstanding arose between them, the agent VELASCO brought suit against VALERA.

Judgment was rendered in VELASCOs favour. Writ of execution was issued, and the sheriff levied upon
VALERAs right of usufruct, sold it at public auction and adjudicated it to VELASCO in payment of all of his
claim.

Subsequently, VALERA sold his right of redemption (over the levied usufructuary rights) to one Eduardo
Hernandez, for the sum of P200. This purchaser later (re)conveyed the same right of redemption, for the sum of
P200, to VALERA.

After VALERA had recovered his right of redemption, one Salvador VALLEJO, who had an execution upon a
judgment against VALERA in a separate civil case against the latter, levied upon said right of redemption,
which was sold by the sheriff at public auction to VALLEJO for P250 and was definitely adjudicated to him

Later, VALLEJO transferred said right of redemption to VELASCO. This is how the title to the right of usufruct
to the aforementioned property finally came to VELASCO

VALERA questions the validity of VELASCOs purchase of the usufructuary rights at public auction after
execution and his later acquisition of the right of redemption thereto when VELASCO was still an authorized
representative (agent) of VALERA

VELASCO, on the other hand, argued that his acquisitions of the usufructuary and right of redemption thereto
were perfectly valid since the agency relationship between them has long been extinguished when he brought
suit against VALERA for the collection of P1,100

ISSUE: Whether or not the acquisition of the usufructuary and right of redemption thereto are valid because the
agency between VALERA and VELASCO has been extinguished by virtue of the agents filing of a suit against
his principal

RULING: Yes. The purchase at public auction by the agent after having renounced and thus terminated the
agency, of the property involved in the agency sold at said auction for the purpose of satisfying a judgment
rendered against the principal in favor of the agent, is valid.

Even supposing the sale of a right of redemption to be void, yet if, when said right is levied upon as pertaining
to the purchaser, said vendor does not present a third party claim, nor file a complaint to recover said right
before the period for redemption expires, he can no longer contest the validity of said sale of the right of
redemption, for it has already ceased to exist at the expiration of the time within which it could be exercised.

ATP7.4 Herrera v. Uy Kim Guan, 1 SCRA 406 (1961)

DOCTRINE: The death of the principal does not render the act of an agent unenforceable, where the latter had no
knowledge of such extinguishment.

FACTS:

Natividad Herrera is a legitimate daughter of Luis Herrera

Luis Herrera owned three (3) parcels of land and before leaving for China, he executed a Deed of General
Power of Attorney in favor Luy Kim Guan authorizing him to administer and sell the properties of the
latter.
Luy Kim Guan, in his capacity as an attorney-in-fact for Luis Herrera sold the lot 1740 to Luy Chay
 Luy Chay then executed a deed of sale in favor of one Lino Bangayan
Luy Kim Guan, acting again as an attorney-in-fact for Luis Herrera sold to Nicomedes Salazar of the
two lots.
Luy Kim Guan Nicomedes Salazar executed a deed of mortgage in favor of Bank of the Philippines
Islands.
Luy Kim Guan and Salazar sold part of the remaining lot to Carlos Cizantos.
Salazar then sold his remaining interest to Lino Bangayan and Luy Kim Guan, both are as co-owners.
Both Natividad Herrera and Luy Kim Guan admitted that Luis Herrera is now deceased.
The appellants contend that the abovementioned transactions were fraudulent and were executed after the
death of Luis Herrera (principal) when the power of attorney was no longer operative.

ISSUE: Whether the transactions were null and void because they are executed after the death of the principal?

RULING: No, The transactions are not null and void and of no effect.

Coming now to the contention that these transactions are null and void and of no effect because they were executed by the
attorney-in-fact after the death of his Principal, suffice it to say that as found by the lower court, the date of death of Luis
Herrera has not been satisfactorily proven. The only evidence presented by the Plaintiff-appellant in this respect is a
supposed letter received from a certain "Candi", dated at Amoy in November, 1936, purporting to give information that
Luis Herrera (without mentioning his name) had died in August of that year. This piece of evidence was properly rejected
by the lower court for lack of identification. the other hand, we have the testimony of the witness Chung Lian to the effect
that when he was in Amoy the year 1940, Luis Herrera visited him and had a conversation with him, showing that the
latter was still alive at the time. Since the documents had been executed the attorney-in-fact one in 1937 and the other in
1939, it is evident, if we are to believe this testimony, that the documents were executed during the lifetime of the
principal. Be that as it may, even granting arguendo that Luis Herrera did die in 1936, plaintiffs presented no proof and
there is no indication in the record, that the age Luy Kim Guan was aware of the death of his prince at the time he sold the
property. The death of the principal does not render the act of an agent unenforceable, where the latter had no knowledge
of such extinguishment the agency.2

ATP8.4 Terrado v. CA, 131 SCRA 373 (1984)

FACTS: On January 21, 1973, the Philippine Legislature ceded a certain portion of Bayambang Province of Pangasinan
(which was once public land) to the municipality of the Bayambang to be used or disposed of in accordance with the
general municipal law relative to the letting of fisheries in municipal waters. On 1974, the municipality of Bayambang
enacted Ordinance No. 8, establishing the Bayambang Fishery and Hunting Park and Municipal Water Shed. Also in the
said ordinance, the municipality appointed and constituted private respondent Lacuesta as Manager-Administrator of the
watershed for a period of 25 years, renewable for another 25 years. This is under the condition that said respondent shall
pay the municipality the sum equivalent to 10% of the annual gross income that may be derived from the forest products,
wild game and fish. Such ordinance was approved by the Provincial Board of Pangasinan but was disapproved by the
Secretary of Agriculture and Natural Resources as it grants fishery privileges to respondent Lacuesta without the benefit
of competitive public hearing in contravention to law. The municipality then informed Lacuesta of the disapproval of the
ordinance and directed him to refrain and desist from acting as Administrator-Manager. However, Lacuesta refused and
insisted on retaining possession of the fisheries. Despite such refusal, the municipality of Bayambang passed another
resolution resolving to advertise for public bidding the said fishery area. Among the winning bidders are herein
petitioners.

There was a long line of petitions/motions filed in the RTC, CA, and SC filed by both parties. What is
important is that while the case was pending in the CFI of Pangasinan, Lacuesta died. The judge of said court (Judge
Villalon, also a respondent) sided with Lacuesta. As such, despite the fact that Lacuesta died, she still ordered the
restoration of the possession of all fisheries and areas covered by the contract to Lacuesta and his party.

ISSUE: Whether the Management-Administration contract still stands even if Lacuesta already died.

RULING: NO. Essentially, the contract of management and administration between the Municipality and Lacuesta is one
of agency whereby a person binds himself to render some service or to do something in representation or on behalf of
another, with the consent or authority of the latter. Lacuesta bound himself as Manager-Administrator of the Bayambang
Fishing and Hunting Park and Municipal Watershed to render service or perform duties and responsibilities in
representation or on behalf of the Municipality of Bayambang, with the consent or authority of the latter. Under Art. 1919
of the Civil Code, agency is extinguished by the death of the agent. His rights and obligations arising from the contract are
not transmittable to his heirs or predecessors-in-interest.