Professional Documents
Culture Documents
ARTICLE 1317. No one may contract in the name GEN. RULE: What a man may do in person, he may
of another without being authorized by the latter, do to another
or unless he has by law a right to represent him. Ratio: to accomplish results i.e do a great variety
ARTICLE 1403. The following contracts are of things of things by using the services of another
unenforceable, unless they are ratified: Aim: to extend the personality of the principal or
the party for whom another acts and from whom
(1) Those entered into in the name of such agent derives the authority to act
another person by one who has been CONSEQ:
given no authority or legal IF contract is entered into
representation, or who has acted beyond - without authority/
his powers; - acted beyond authority
THEN contract is UNENFORCEABLE, unless
ratified(expressly, or impliedly by the “principal”)
ELEMENTS OF THE CONTRACT OF AGENCY
1. CONSENT, express or implied, or the parties to establish the relationship
2. OBJECT, which is the Execution of Juridical Acts in Relation to Third Parties
3. AGENT ACTS AS A REPRESENTATIVE AN NOT FOR HIMSELF
4. AGENT ACTS WITHIN THE SCOPE OF HIS AUTHORITY
Agent SIMEON RALLOS executed a sale on behalf of dead principal, ; INVALID SALE; agent’s act is
unenforceable, ½ share on land invalidly sold. Petition Granted, ½ share of land reverted back to the
estate.
FACTS:
Agent(atty in fact/SPA), Simeon Rallos executed a sale on behalf of dead principal, Concepcion Rallos, of
his undivided share in a parcel of land in CEBU. The land was owned by siblings Rallos(Concepcion and
Geruna). After death of Concepcion, Simeon sold the land to FGCSRC for 10,6868.9PHP.
Administrator of estate of Concepcion, RAMON RALLOS-petitioner, moves to have the sale be declared
as unenforceable contending that Simeon had no authority to sell the land since his agency was
extinguished upon the death of Concepcion, the principal.
TC- valid sale as to the ½, part of Geruna’s share on the land. She died after the sale was made.
CA-valid sale
ISSUE: WON the sale of an undivided share of Concepcion Rallos was valid although it was executed by
the agent after the death of his principal.
RULING: NO, invalid sale of share on the land. Simeon’s agency was extinguished upon the death of the
principal.
1. That the agent acted without the knowledge of the death of the principal
2. That the third person who contracted with the agent himself acted in good faith
In the case at bar, Simeon was not in good faith for he and knowledge that Concepcion had died when he
executed the sale to FGCSRC.
Nature of agency:
1. Personal
2. Representative
3. Derivative
Juridical basis for agency: REPRESENTATION—integration of the personality of the principal into that of
the agent
FACTS:
AMERICAN AIRLINES, INC entered into a GENERAL SALES AGENCY AGREEMENT with ORIENT AIR
SERVICES AND HOTE REPRESENTAIVES whereby AAI authorized Orient Air to be its exclusive general
sales agent in the Philippines for SALE OF AIR PASSENGER TRANSPORTATION.
Unde their agreement,, Orient Air was to remit to AAI the net proceeds of the sales.
In the case at bar, AAI alleged that Orient Air failed to remit the net proceeds from Jan-Mar 1981
amouting to 254, 400.4 USD so AAI terminated the GSA. On the other hand, Orient Air denied failing to
remit the amount and contented that afer application theor to the commissions due under the
agreement, AAI actually owes Orient Air and that the termination was invalid
TC- in favour of Orient air, AAI to pay commission balance. GSA reinstated
IAC/CA- affirmed
AAI says that the commission is based only on sales of its services actually negotiatied or transacted by
Orient Air—ticketed sales.
On the other hand, Orient Air contends that the 3% overriding commission covers the total revenue of
AAU and not merely ticketed sales by OA.
Petition at hand seeks to know basis of the commission and wanting it to be based on total revenuw of
AAI
Orient Air was clearly justified in retaining and refusing to remit the sums claimed by AAI. The
termination of the GSA was, then, without cause.
HOWEVER, CA’s ruling affirming the reinstatement of the GSA was violative of the essence of Agency
that—A PERSON BINDS HIMSELF TO RENDER SOME SERVICE OR TO DO SOMETHING IN
REPRESENTATION OR ON BEHALF OF ANOTHER.
AGENCY VS BROKERAGE
RULES OF BROKERAGE
The TANs then filed a complaint to claim their commission MACONDARAY AND CO VS SELLNER
claiming that they were the EFFICIENT PROCURING CAUSE GEORGE SELLNER ALLEGEDLY SOLD A LAND FOR
in briniging about the sale of the property to the Sisters of MACONDRAY AND CO AFTER AUTHORITY TO MAKE THE
Mary but that their effforts were frustrated by the Gullas, SALEHAD BEED REVOKED.
themselves, who sought to evade paying the broker’s fee
by directly selling to the buyers. And that although various Sellnner sold the lot to Macondray for 17k. finding
agents negotiated the same land, it was the petitioners’ unsuited the land due to high tides during flood,
party who introduced them to each other. Also alleged Macondray authoried Sellner to find a buyer of the land on
undervalueness. a comiision basis—anything above the 17k price would go
to him. SEllner fount one Antonio Baretto who was a
On the other hand, the Gullas alleged that when the TANs willing byer for 18K, the deed of sale was dated Aug 21,
approached the Sisters, they were already set of buying 1912. Barretto agreed to accept the land upon
the land through PACANA, the other broker. examination of the title..
LC- granted petitioner’s commission Title examination; deadline impromptu
CA- reversed, not entitled SC says saleis stil recognized since deadline imposed was
SC reversed; granted petitioners’ commission arbitrary.
BROKER- one who is engaged, for others, on a commission, GUARDEXX ENTERPISES VS NLRC
negotiating contracts relative to property with the custody NLRC decided the case but it did not have jurisdiction.
of which he has no concern;
ORBETA SOUGHT to broker of escandor’s fire trucks.
- The negotiator between other parties, never acting
in his own name but in the name of those who He didn’t do anything.
employed him
Escandor did the work herself
Obeta came bank after 7 months, right after the sale was buying the stocks but submitted a count-offer for
consummated claiming for commission P1,000.00/share for 9,800shares payable in 5 years at 12%
per annul interest until fully paid.
Sc says, not entitled, did not do anything.
This proposal was communicated by Inland Realty to
PRATS vs CA defendant corporation but the latter opposed, claiming
Not the efficient procuring cause as he was not the one the offer was too low and asked petitioner if the price can
who introduced them in the first place in selling 300 bead justed according to the terms of the authority to sell.
hectares to sss but in equity he is granted 100k The period of the contract extended for several times.
commission. Petitioner asked for an exclusive authority and for a longer
period but Eduque would not give the same. The sale was
- Deed of sale was executed after the expiry of this made in favor of Stanford. Later on, Inland Realty sued
broker contract with D___ defendant for its brokerage fees. Defendant claims that it
- When Prats was engaged, he had multiple is not entitled because after the thirty day period expired,
meetings with SSS petitioner was no longer connected to the transaction and
- that it abandoned it.
Lee contracted with the officials of KGB Farm and the sale Malim et al were brokers engaged by the Ticongs to sell a
was consummated. HOWEVER, the brokers didn’t receive land at a net price of 900/sqm to be overpriced by them
their commission of 5 %. andthat under the MOA, they are entitled to commission
amounting to the overprice above 900—2.8 M.
The respondents, then, filed the case at bar for recovery of
their commission. The Malims found the Perez and introduced the parties
and gave then the letter of intent of the Ticongs..
The respondents contend that they are the procuring
cause of the sale because if not for them, Lee(buyer) would The Perez expressed that they are not willing anymore to
buy the property. Because of this, the Ticongs had to file
not be known to the petitioners. On the other hand,
petitioners claim that Medrano was not authorized by KGB for specific performance. Eventually, the land was sold for
to hire brokers and that the transaction with KGB 7._ M. the Malims were given a partial fee of 50 000.
consummated without intervention from the parties—that The Malims are claiming for their commission based on the
the respondents were not the procuring cause for the sale. overprice. The Ticongs were refusing to give the
WON THE RESPONDENTS ARE ENTITLED TO 5% COMISSION commission alleging that the Malims were not the
procuring cause for the sale since it was the Ticongs efforts
FOR THE SALE OF THE MANGO PLANTATION TO LEE
which consummated the sale through the action for
YES, the respondents are entitled to commission. The specific performance and are entitled only to 5% finders
respondents were the procuring cause for the sale. fee. On the other hand, the Malims contend to be the
procuring cause of the sale.
A procuring case is a cause originating a series of events
hich, without break in the continuitiy, result In the WON the Malims were the procuring cause of the sale
accomplishment of prime ojective of the employment of
YES, the Malims were the procuring cause. To be regarded
the broker.
as the procuring cause of a sale, a broker’s efforts must
It has been held that it is not necessary that the case be have been the foundation of the negotiations which
consummated. The broker is entitled to commission so subsequently resulted in a sale. The means employed by
long as he is a close, proximate and causal conector him and his efforts must result in the sale. He must find a
between for the sale. Nor is it necessary that the broker purchaser and the sale must proceed form his efforts
conduct the negotioation between the parties. It is a acting as a broker. In the case at bar, the FF are proof that
settled rule that the broker is entitled to commission the Malims were indeed the procuring cause
whenever he brings to his principal a part who is ABLE and
WILLING to take the property and enter into a valid 1. The letter of intent given by Malim to the Perez
contract—even if by other causes the sale doesn’t were with Lorenzo Ticong’s conformity;
materialize 2. Ticong expressly recognized respondents as their
sole agents and middlemen; and that they were
In the case at bar, the role of the respondents are not the one in constant communication with the buyer
disputed. They were the only ones who knew Lee and 3. Alvero, employee of the Ticongs, testified that the
spoke with him about the plantation. The fact that Lee respondents were agents which negotiated the
directly consummated the sale with the KGB Farm does not sale with the Buyer
remove form the respondents their right to commission 4. Ticongs gave 50K as partial payment which thereby
because they were the procuring cause thereto. impliedly recognized that the parties were the
procuring cause of the sale
5. That it was indeed the respondents’ efforts ----
through letters and telephone calls which brought
about the consummation of the sale. On the issue of the 5% finder’s fee, it is inferred from the
MOA that the 5% was for when they sold the lot for 900
When there is a close proximate and causal connection exactly. The land was overpriced by the Malims and they
between the agent’s efforts and the sae pf the property, are entitled to commission based on such overprice.
the agents are entitled to their commission.
FORMS ANS KINDS OF AGENCY
ART. 1869. Agency may be express, or implied
from the acts of the principal, from his silence or
lack of action, or his failure to repudiate the
agency, knowing that another person is acting on
his behalf without authority. Agency may be oral,
unless the law requires a specific form. (1710a)
ART. 1870. Acceptance by the agent may also be
express, or implied from his acts which carry out
the agency, or from his silence or inaction
according to the circumstances. (n)
ART. 1871. Between persons who are present, the
acceptance of the agency may also be implied if
the principal delivers his power of attorney to the
agent and the latter receives it without any
objection. (n)
ART. 1872. Between persons who are absent, the
acceptance of the agency cannot be implied from
the silence of the agent, except:
(1) When the principal transmits his power of
attorney to the agent, who receives it without
any objection;
(2) When the principal entrusts to him by letter or
telegram a power of attorney with respect to the
business in which he is habitually engaged as an
agent, and he did not reply to the letter or
telegram. (n)
ART. 1873. If a person specially informs another
or states by public advertisement that he has
given a power of attorney to a third person, the
latter thereby becomes a duly authorized agent,
in the former case with respect to the person
who received the special information, and in the
latter case with regard to any person.
The power shall continue to be in full force until
the notice is rescinded in the same manner in
which it was given. (n)