1. PITTSBURG v.

DIRECTOR OF PATENTS o They have been entrusted the task of handling foreign trademark
G.R. NO. L-22773 matters involving the petitioner.
MARCH 29, 1974 ● The motion was, however denied in a resolution dated April 29, 1964.
BY: Enzo
Topic: NATURE, KINDS AND FORMS OF AGENCY ISSUE:
Petitioners: PITTSBURG PLATE GLASS COMPANY Whether the law firm of Lichauco, Picazo and Agcaoili was authorized to
Respondents: THE DIRECTOR OF PATENTS and CHUA TUA HIAN AND COMPANY, doing represent the petitioner before the Philippine Patent Office? YES.
business as “SIN TECK HENG & CO,”
Ponente: CASTRO, J. HELD/RATIO:
● The petitioner does not deny, as it asserted in writing, that the law firm was
authorized to represent it by virtue of the powers it had vested upon Langner, et
SUMMARY: The petition is a review of two resolutions of the Director of Patents
al., to handle all foreign trademark matters.
dismissing the opposition of the Pittsburg Plate Glass Company to the registration
● The relationship between counsel and client is strictly a personal one.
of a trademark, “Solex Bluepane,” applied for by Chua Tua Hian Company for its
● Courts and administrative tribunals cannot but recognize on the faith of the
glass products. The law firm of Lichauco, Picazo and Agcaoili was authorized to
client’s word, especially when no substantial prejudice is thereby caused to any
represent petitioner, Pittsburg Plate Glass Company to handle all foreign
third party.
trademark matters. It also filed a duly authenticated power of attorney executed
● The questioned resolutions of the Director of Patents are set aside, and is hereby
by the petitioner. The main issue in this case is whether the said law firm can
directed to proceed with the determination of the application and the opposition
represent Pittsburg Plate Glass Company before the Philippine Patent Office. The
thereto with costs against Chua Tua Hian & Company.
Court held that the relationship between client and counsel Is strictly a personal
one and that courts and administrative tribunals cannot but recognize on the faith
of the client’s word.

DOCTRINE: The relationship between the client and its agent or representative is strictly a
personal one, which courts must recognize.

FACTS:
● November 5, 1962, the law firm of Lichauco, Picazo and Agcaoili filed with the
Philippine Patent Office in behalf of the petitioner a notice of opposition to the
respondent’s application for registration of “Solex Bluepane” as trademark for its
glass products.
● The plea was pursuant to a cablegram from Langner, Parry, Card and Langner
International Patent and Trademark Agents, USA.
● December 7, 1962, the law firm filed a duly authenticated power of attorney
executed by the petitioner.
● On October 14, 1963, the Director of Patents issued a resolution dismissing the
petitioner’s opposition on the ground that said counsel was not yet authorized to
file the pleading.
● November 14, 1963, the counsel filed a motion for reconsideration attaching an
affidavit which states that:
o The cablegram from Langner, et al. was duly authorized
 ● Having this information, Montelibano approached plaintiff at its Manila
2. HARRY E. KEELER ELECTRIC v. RODRIGUEZ o ce, claiming that he was from Iloilo and lived with Governor Yulo; that he
GR NO. 19001 was from Iloilo and lived with Governor Yulo; that he could find purchasers
NOVEMBER 11, 1922 for the "Matthews" plant, and was told by the plaintiff that for any plant that
he could sell or any customer that he could find he would be paid a
Topic:ATP commission of 10 percent for his services, if the sale was consummated.
Petitioners:HARRY E KEELER CO. Among other persons, Montelibano interviewed the defendant, and,
Respondents: DOMINGO RODRIGUEZ through his efforts, one of the "Matthews" plants was sold by the plaintiff to
Ponente: JOHNS, J the defendant, and was shipped from Manila to Iloilo, and later installed on
defendant's premises after which, without the knowledge of the plaintiff, the
defendant paid the purchase price to Montelibano. As a result, plaintiff
RECIT-READY: Montelibano (AGENT IN QUESTION)
commenced this action against the defendant, alleging that about August 18,
approached petitioner and said that he could find
1920 it sold and delivered to the defendant the electric plant at the agreed
purchasers for the “Matthew`s” plant.Petitioner told
price of P2,513.55 no part of which has been paid, and demands judgment
Montelibano that he would be paid a commission of 10
for the amount with interest from October 20, 1920.
percent for his services. Montelibano found defendant
herein and sold and delivered to plant to Iloilo and received
● Upon such issues the testimony was taken, and the lower court rendered
payment in the amount of 2,513.55 without the knowledge
the judgment for the defendant, from which the plaintiff appeals, claiming
of petitioner. Petitioner then sued Rodriguez for the amount
that the court erred in holding that the payment to A. C. Montelibano would
of which the plant was sold. The issue then is WoN payment
discharge the debt of defendant, and in holding that the bill was given to
to Montelibano was proper. According to the evidence,
Montelibano for collection purposes, and that the plaintiff had held out
Montelibano was never authorized by Petitioner to accept
Montelibano to the defendant as an agent authorized to collect, and in
and receive payment for such. He was only authorized to
rendering judgment for the defendant, and in not rendering judgment for
look for potential customers. Thus, the SC ruled that the
the plaintiff.
payment of the defendant to Montelibano was not valid and
ISSUE
ruled that he should pay the same to petitioner.
(1) WON payment to Montelibano was proper

DOCTRINE: Where a person in making payment solely relied upon the representation of an
agent a to his authority to receive and receipt for the money, such payment is made at his HELD/RATIO
won risk, and where the agent was not so authorized, such payment is not a valid defense (1) NO. Montelibano was not authorized to receive payment. The SC ruled
against the principal. that defendant herein paid the amount of plaintiffs claim to Montelibano
and that no part was paid to the plaintiff.

FACTS It appears from the testimony of H. E. Keeler that he was president of the plaintiff
● The plaintiff is domestic corporation with its principal office in the city of and that the plant in question was shipped from Manila to Iloilo and consigned to
Manila and engaged in the electrical business, and among other things in the the plaintiff itself, and that at the time of the shipment the plaintiff it sent Juan
sale of what is known, as the "Matthews" electric plant, and the defendant Cenar, one of its employees, with the shipment, for the purpose of installing the
is a resident of Talisay, Occidental Negros, and A. C. Montelibano was a plant on defendant's premises. That plaintiff gave Cenar a statement of the
resident of Iloilo. account, including some extras and the expenses of the mechanic, making a total
of P2,563.95. That Montelibano had no authority from the plaintiff to receive or
receipt for money. That in truth and in fact his services were limited and con ned
to the nding of purchasers for the "Matthews" plant to whom the plaintiff would
later make and consummate the sale. That Montelibano was not an electrician, #3 Insular Drug vs PNB
could not install the plant and did not know anything about its mechanism. GR # 38816
Date: Nov 3, 1933
The testimony is conclusive that the plaintiff never authorized Montelibano to By: Julienne Vida Pamatian
receive or receipt for money in its behalf, and that the defendant had no right to Plaintiff-Appellee: Insular Drug Co., Inc.
assume by any act or deed of the plaintiff that Montelibano was authorized to Defendants: The Philippine National Bank, et.al.
receive the money, and that the defendant made the payment at his own risk and
Appellant: the Philippine National Bank
on the sole representations of Montelibano that he was authorized to receipt for
the money Ponente: Malcolm, J:

PETITIONER WON
Summary:

Foerster was a collector for Insular Drugs. Upon collection of checks for
payment to the company, he deposited the checks in his own personal
account. This came to the knowledge of the company and upon
investigation, the salesman committed suicide thereafter. Insular Drugs
filed an action against the bank, to credit to its account the amount
Foerster and his wife took from them. CFI ruled in favor of Insular Drug and told bank
to pay the drug company. SC affirmed the decision. It held that a salesman with authority
to collect money belonging to his principal does not have the implied authority to indorse
checks received in payment.

DOCTRINE:

The right of an agent to indorse commercial paper is a very responsible power

and will not be lightly inferred. A salesman with authority to collect money belonging to his
principal does not have the implied authority to indorse checks received in payment. Any
person taking checks made payable to a corporation, which can act only by agents does so
at his peril, and must abide by the consequences if the agent who indorses the same is
without authority.

FACTS:

● The Insular Drug Co., Inc., is a Philippine corporation with offices in the City of Manila.
● U. E. Foerster was formerly a salesman of the drug company
o Foerster also acted as a collector for the company.
● He was instructed to take and deposit the checks which came to his hands for the drug o The bank could relieve itself from responsibility by pleading and proving that after the
company into the company’s bank account. money was withdrawn from the bank it passed to the drug company which thus
● Instead, Foerster deposited the checks in his personal account. suffered no loss, but the bank has not done so.
o Some of the checks were drawn against the Philippine National Bank.
o After the indorsements on the checks was written "Received payment prior
indorsement guaranteed by the Philippine National Bank, Iloilo Branch, Angel Padilla,
4.) Soriano vs. People
Manager."
GR NO. L-3008
o As a consequence of the indorsements on the checks the amounts therein stated March 19, 1951
were subsequently withdrawn by U. E. Foerster and Carmen E. de Foerster. By: Martin
● Eventually the office of the drug company investigated the transactions of Foerster Petitioners: Federico Soriano
o Upon the discovery, Foerster committed suicide. Ponente: Jugo
● The drug company sued PNB for the amount covered by the checks which was improperly DOCTRINE: The intent of gain cannot be inferred from the bare acts of the petitioner, in
and illegally cashed by Foerster view of the peculiar circumstances of the case that supply plausible reasons for said acts.
● The bank contended that as an agent of the drug company, Foerster had implied authority Had he sold or tried to dispose of the articles, intent of gain would have been
to indorse all checks made in the name of the Insular Drug. established.(From the Dissenting opinion)
● CFI: ruled in favor of Insular Drug Co. FACTS (Read the dissenting Opinion to have a better understanding of the background of
o required the bank to pay to the Insular Drug Co., Inc., the sum of P18,285.92 with the case)
legal interest and costs. · Federico Soriano was charged with the crime of theft of one electric motor
marked "Cyclix," with Western Electric Company cable, and one lantern slide
ISSUE: WHETHER FOERSTER HAD IMPLIED AUTHORITY TO INDORSE ALL CHECKS MADE projector, with their corresponding accessories, for the operation of motion pictures,
OUT IN THE NAME OF THE INSULAR DRUG belonging to the Eagle Cinema Co., Inc
· He was convicted by the CFI of Iloilo and appealed it to the CA however the
RATIO/ HELD: NO! affirmed trial court’s decision appellate court sustained the decision of the lower court
· The CA are of the opinion despite Emilia Saenz' letter where she writes to
● The right of an agent to indorse commercial paper is a very responsible power Benedicto that Federico Soriano was only in charge of collecting the rents and of
and will not be lightly inferred. transmitting them to her, that appellant was their representative and duly appointed
● A salesman with authority to collect money belonging to his principal does not substitute administrator in her stead. It seems also clear that, because of the
have the implied authority to indorse checks received in payment. disturbance caused by the war, the Eagle Cinema Co., Inc., was indebted to the Saenz
● Any person taking checks made payable to a corporation, which can act only by for rents due on account of the lease; and that appellant in the exercise of the
agents does so at his peril, and must abide by the consequences if the agent who indorses powers conferred upon him could have sued said debtor to foreclose the mortgage
the same is without authority. executed by the Eagle Cinema Co., Inc., in favor of his principals, if he could not have
come to a better understanding with Teodoro S. Benedicto. It is no longer disputed
● The bank could tell by the checks themselves that the money belonged to the
that the properties of the Eagle Cinema Co., Inc., in the building were losts, and that
Insular Drug Co., Inc., and not to Foerster or his wife
the lantern slide projector and the "Cyclix" motor generator have been found in the
● When the bank credited those checks to the personal account of Foerster and house and in the possession of the appellant after having repeatedly denied any
permitted Foerster and his wife to make withdrawals without there being any authority knowledge of the equipment and accessories of the Cine and disclined any
from the drug company to do so, the bank made itself responsible to the drug company for responsibility for their loss.
the amounts represented by the checks. · Counsel for appellant contends that the latter is entitled to an acquittal,
because in the case at bar
· 1. All the elements of theft are not present;
 · 2. There was no criminal intent (on the part of the appellant); The Eagle Cinema Co., Inc., was indebted to the Saenz heirs (represented by Emilia Saenz)
· 3. The action of the appellant is susceptible of two interpretations, both for rents of a building leased by the company. The apparatus, accessories and equipment
consistent with his innocence or guilt. Therefore, he should be acquitted; of the Eagle Cinema Co., Inc, contained in the leased building, were mortgaged to Saenz to
and secure the payment of siad rents. The petitioner was the representative and duly
· 4. The guilt of the appellant has not been proven beyond reasonable doubt. appointed substitute administrator of the premises, in place of Emilia Saenz. Indeed, the
· With regard to the "taking," appellant contends that he did not execute this petitioner could have sued the Eagle Cinema Co., Inc., and foreclosed its mortgage.
element of theft because being an attorney-in-fact of the heirs of Saenz, he acted for The fact that the lantern slide projector and the "Cyclix" motor generator forming part of
his principals, and for all intents and purposes of the power conferred upon him, he the equipment of the Eagle Co., Inc., were taken by the petitioner (after the Japanese Ishii,
was the principal himself and, naturally, he could not steal something belonging to who had ceased to operate the business, delivered to the petitioner the keys of the
him. The power of attorney clearly empowered the appellant "to ask, demand, sue building where said equipment was stored) and removed to and kept in petitioner's
for, recover, collect and receipt for any and all sums of money and other things of house, is consistent with the theory that the petitioner, to protect the interest of his
value of whatever nature or kind," and gave him "full power to do anything requisite principals, in good faith believed that he had the right to do so under his powers and by
and necessary to be done in the premises as fully as I (Emilia Saenz) could if virtue of the mortgage covering said equipment, especially because the petitioner was
personally present, hereby ratifying and confirming all that my said attorney and empowered not only to recover, collect or receive money, debts or dues, but also to take
substitute attorney shall lawfully do or cause to be done by virtue hereof." or recover "other things of value of whatever nature or kind" that may be due from the
lessee. That the petitioner was wrong in his belief, or had been so over-zealous in the
ISSUE matter as to have even denied that the articles in question were in this possession, made
· Whether appellant acted as an agent in getting the equipment belonging to him at most civilly liable but does not go to show that he acted with intent of personal
the Eagle Cinema Co., Inc for Emilia Saenz profit. The intent of gain cannot be inferred from the bare acts of the petitioner, in view of
HELD/RATIO the peculiar circumstances of the case that supply plausible reasons for said acts. Had he
· No. It is clear that said power of attorney did not authorize the petitioner to take sold or tried to dispose of the articles, intent of gain would have been established.
away the projector and the generator, hiding them in his house and denying to the
owner and the police authorities that he had them in his possessions, which was an
illegal act, not covered by his power-of-attorney. He was authorized only to ask, take,
sue for, recover, collect, etc., sums of money, debts, dues, accounts and other things
which were or might thereafter be due, etc., to his principal Emilia Saenz. This
authority referred mainly to the collection of the rents of the building rented by the
Eagle Cinema Co., Inc. The projector and the generator were not due or owing to
Emilia Saenz. It is not to be supposed that Saenz herself would have denied the
possession of those articles. It is was the purpose of the petitioner only to protect
those instruments from looting, there is no reason why he should have concealed
them from the owner and denied having them.
· Even though the equipment, including those articles, were mortgaged to Sanez
to guarantee the payment of the rents due on the building, yet there had been no
foreclosure and neither she nor the petitioner had the authority to take away and
conceal those articles from the owner or the police authorities. The Eagle Cinema
Co., Inc., had the right to possess said articles.
Read Dissent Opinion (Stated in the Syllabus)
PARAS, J., dissenting:
Under the facts of this case, as found by the Court of Appeals, the petitioner cannot
rightly be convicted of the crime of theft, because he had not acted with intent of gain.
 upon parties. The NLRC shall not assume jurisdiction over issues involved therein, except in
5. J. PHIL MARINE, INC. v. NLRC case of non-compliance…or if settlement was obtained through fraud, misrepresentation
561 SCRA 676, August 11, 2008 or coercion.” Such compromise has the effect and authority of res judicata. It is deemed
Petitioner/s: J-PHIL MARINE INC. and NORMAN SHIPPING SERVICES voluntarily entered into if there is personal and specific individual consent.
Respondent/s: NATIONAL LABOR RELATIONS COMMISSION and WARLITO DUMALAOG
(2) Counsel argues that the amount of P450,000 is unconscionably low. However, only
Doctrine: Only the employee, not his counsel, who can impugn the consideration of the respondent Dumalaog can impugn the consideration of the compromise as being
compromise as being unconscionable. The relation of attorney and client is in many unconscionable.
respects one of agency, and the general rules of agency apply to such relation—the
circumstances of this case indicate that the employee’s counsel acted beyond the scope of The relation of attorney and client is in many respects one of agency. The general rules of
his authority in questioning the compromise agreement. agency apply to such relation. The acts of an agent are deemed acts of the principal only if
the agent acts within the scope of his authority. However, the circumstances of this case
Facts: indicate that respondent’s counsel is acting beyond the scope of his authority in questioning
1. Respondent Warlito Dumaloag served as a cook aboard vessels plying overseas. the compromise agreement.
He filed a complaint before the NLRC against petitioners J-Phil, a manning agency,
and its foreign principal Norman Shipping Services, for unpaid money claims, paid The client has a right to compromise a suit without intervention of the lawyer, who may
leaves, disability benefits, among others. He claimed to have been disabled due only intervene if the compromise is entered into with the intent to defraud the lawyer of
to enlargement of the heart and severe thyroid enlargement contacted while the fees justly due him. However, there is no showing that respondent intended to defraud
discharging his duties as a cook. his counsel of his fees. In fact, the Quitclaim and Release notes that “20% attorney’s fees
2. In light of this, the NLRC awarded $50,000 disability benefit to respondent. (P90,000) would be paid on April 12, 2007.”
However, during the pendency of the case, respondent, against the advice of his
counsel, entered into a compromise agreement with petitioners. He received Case DISMISSED.
P450,000. He signed a Quitclaim and Release subscribed and sworn to before the
Labor Arbiter.
3. Subsequently, respondent’s counsel filed a Comment and Opposition
“purportedly on behalf of respondent” objecting to the absolution of petitioners
from paying respondent the award granted by the NLRC ($50,000). Counsel
prayed that the remaining balance be paid.

Issue: W/N counsel, as agent of respondent, acted within the scope of his authority as to
allow him to impugn the consideration of the compromise as being unconscionable. (NO)

Held:
(1) Art 227 of the Labor Code provides, “Any compromise, settlement… voluntarily agreed
upon by the parties with assistance of the Department of Labor, shall be final and binding
 and attached thereon is an inventory of the furniture and fittings which also is
6. MACKE V. CAMPS signed by Camps with the word “sublessee” below the name, and at the foot of
7 PHIL 553 this inventory the word “received” followed by the name “Ricardo Flores” with
FEBRUARY 27, 1907 the words “managing agent” immediately following his name.
By: HYLIE HUNG

Plaintiffs-appellees: B.H. Macke, ET AL. ISSUE: W/N Ricardo Flores was the agent of Camps
Defendant-appellant: Jose Camps
Ponente: CARSON, J. Ruling: Yes.
Evidence is sufficient to sustain a finding that Flores is the agent of Camps in the
DOCTRINE: One who clothes another with apparent authority as his agent, and holds him management of the bar of the Washington Café with authority to bind Camps, his principal,
out to the public as such, cannot be permitted to deny the authority of such person to act for the payment of the goods
as his agent, to the prejudice of innocent third persons dealing with such person in good The contract sufficiently establishes the fact that Camps was the owner of the
faith and in the honest belief that he is what he appears to be. business and of the bar, and the title of “managing agent” attached to the signature of
Flores which appears on that contract, together with the fact that at the time the purchases
FACTS: were made, Flores was apparently in charge of the business performing the duties usually
intrusted to a managing agent leave little room for doubt that he was there as the
authorized agent of Camps.
● Plaintiffs B. H. Macke and W.H. Chandler are partners doing business under the
Agency by Estoppel --- One who clothes another with apparent authority as his
firm name of Macke, Chandler And Company, alleged that during the months of
agent, and holds him out to the public as such, cannot be permitted to deny the authority
February and March 1905, they sold to Jose Camps and delivered at his place of
of such person to act as his agent, to the prejudice of innocent third persons dealing with
business, known as the “Washington Café,” various bills of goods amounting to
such person in good faith and in the honest belief that he is what he appears to be.
P351.50; that Camps has only paid on account of said goods the sum of P174; that
Estoppel---- “Whenever a party has, by his own declaration, act or omission,
there is still due them on account of said goods the sum of P177.50
intentionally and deliberately led another to believe a particular thing true, and to act upon
● Plaintiffs made demand for the payment from defendant and that the latter failed
such belief, he cannot, in any litigation arising out of such declaration, act, or omission be
and refused to pay the said balance or any part of it
permitted to falsify; and unless the contrary appears, the authority of the agent must be
● Macke, one of the plaintiffs, testified that on the order of one Ricardo Flores, who
presumed to include all the necessary and usual means of carrying his agency into effect.
represented himself to be the agent of Jose Camps, he shipped the said goods to
the defendant at the Washington Café; that Flores (agent) later acknowledged
the receipt of the said goods and made various payments thereon amounting in
all to P174; that believes that Flores is still the agent of Camps; and that when he
went to the Washington Café for the purpose of collecting his bill he found Flores,
in the absence of Camps, apparently in charge of the business and claiming to be
the business manager of Camps, said business being that of a hotel with a bar
and restaurant annexed.
● A written contract was introduced as evidence, from which it appears that one
Galmes, the former owner of “Washington Café” subrented the building wherein
the business was conducted, to Camps for 1 year for the purpose of carrying on
that business, Camps obligating himself not to sublet or subrent the building or
the business without the consent of the said Galmes.
● This contract was signed by Camps and the name of Ricardo Flores as a witness
 ● Collantes received the tobacco, and sold it for the sum of P1,744.
7. RALLOS V. YANGCO ● The charges for the sale were P206.96, leaving Collantes with the sum of
20 PHIL 269 P1,537.08 belonging to the plaintiffs. Apparently, this sum was converted to
SEPTEMBER 27, 1911 agent’s own use.
By: JUSTINE LIMJOCO ● However, it appears that prior to the sending of the said tobacco, Yangco has
severed his relations with Collantes, and that the latter was no longer his agent.
This fact was not known by the plaintiffs, and no notice was given by the
Petitioners: FLORENTINO RALLOS defendant.
Respondents: TEODORO YANGCO ● Rallos demanded payment, but Yangco refused to pay. Yangco argued that
Ponente: MORELAND, J. when the tobacco was received and sold by Collantes, the latter was acting
personally and not as his agent.

ISSUE
RECIT-READY: (Principal: Yangco, Agent: Collantes, Third Party: Rallos) Whether or not the plaintiffs, acting in good faith, can recover the sum from the
Yangco told Rallos that he’s opening a shipping and commission department, and defendant.
Rallos was invited to be a consignor. Collantes was given a SPA to act in behalf of
Yangco. Acting on the knowledge that Collantes was Yangco’s agent, Rallos sent HELD/RATIO
Collantes all the goods. However, prior to the sending of tobacco, Yangco already YES.
cut ties with Collantes. Subsequently, Collantes kept the sum he received after
selling the tobacco. Rallos demanded payment from Yangco, and the latter ● The Supreme Court held that the defendant is liable.
refused. Supreme Court held that defendant Yangco is liable for not notifying ● Having advertised that Collantes was his agent, Yangco had the duty to give due
Rallos the termination of his relationship with Collantes. and timely notice of the termination of the relationship of the principal and
agent.
● Since he failed to do so, he is responsible for whatever goods may have been
DOCTRINE: If the agent had general powers, revocation of the agency does not prejudice sent to the agent by the plaintiffs in good faith, and without negligence.
third persons who acted in good faith and without knowledge of the revocation. ● The plaintiffs had no knowledge, actual or constructive, of the termination of
the relationship.
FACTS
● Teodoro Yangco sent to plaintiff Florentino Rallos, among others, a letter
informing the latter that he has opened a shipping and commission department
in his steamship office for buying and selling leaf tobacco and other native
products under certain conditions. Yangco invited Rallos to be a consignor in
buying and selling leaf tobacco and other native products.
● Rallos accepted Yangco’s invitation.
● In this letter, Yangco informed Rallos that Florentino Collantes was conferred a
power-of-attorney to act in behalf of Yangco.
● Accepting this invitation, Rallos proceeded to do business with defendant
Yangco through the said Collantes.
● He sent to Collantes, as agent for the defendant, a good deal of produce to be
sold on commission.
● Rallos sent 218 bundles of tobacco leaf to be sold plus other produce.
 Difference between contract of sale and agency is the transfer of ownership of the subject
8. Sps. Viloria v. Continental Airlines, Inc, of the contract. In agency, the principal retains the ownership and the agent merely acts on
G.R. No. 188288 the principal’s behalf. In sale, the intention of the delivery of the subject of the contract
Jan 16, 2012 brings an effect of transfer of ownership, title, and control - meaning the recipient may do
By: Calaguas with the subject of the contract as he pleases.
Topic: Difference between Contract of Agency and Sale
Petitioners: Spouses Fernando And Lourdes Viloria FACTS
Respondents: Continental Airlines, Inc. > Petitioner Fernando, while in the US, bought himself and his wife 2 round trip tickets from
Ponente: Reyes, J. San Diego, California to Newark, NJ on board Continental Airlines.
- the tickets were purchased through a travel agency: HOLIDAY TRAVEL who was
attended by Margaret Mager (Mager).
RECIT-READY/SUMMARY:
- Petitioners agreed to purchase the airline tickets after being informed by Mager that
Petitioners wanted to take the Amtrak going to Newark from San Diego but Mager
there were no more seats available for the Amtrak (intercity passenger train service
told them that it was fully booked so Petitioners bought airline tickets flying
in the US)
Continental Airlines. After buying their tickets, Petitioners asked to reschedule
> Petitioner Fernando requested to reschedule their flight to an earlier date but Mager
their flight but Mager told them that there were no more seats available.
informed them that all flights were already fully booked
Petitioner opted for a refund but the tickets were non-refundable and that the
- Petitioner Fernando opted to request for a refund
best they could do was to allow them to re-issue the tickets within 1 year from
- Mager denied Petitioner’s request as the tickets were non-refundable and informed
the date the original tickets were purchased. Upon inquiring, Petitioner found out
them that their only option is that Continental Airlines can offer them a re-issuance
that there were still seats available on the Amtrak. Petitioner returned to Holiday
of new tickets within 1 year from the date of the purchased subject tickets
Travel demanding for refund but they were not given the refund.
> Petitioner Fernando was still having second thoughts so he decided to visit a greyhound
Petitioner wrote to Continental Airlines, Inc (CAI) saying that they were deluded
Station and saw a nearby Amtrak station
into buying airline tickets by Mager and that they wanted a refund. No refund was
- upon inquiring, Petitioner found out that there were still seats available on the
given but CAI gave them the options. Petitioner sought to replace the tickets into
Amtrak and so he bought 2 tickets for Washington, D.C.
a roundtrip ticket to LA for himself but was told that the ticket named to his wife
> After purchasing the Amtrak tickets, Petitioner went back to Holiday Travel and Mager
was non-transferable. Petitioner again wanted a refund.
and confronted her saying that she misled him into buying the airline tickets
RTC ruled in favor of Petitioner ordering CAI to grant the refund saying that Mager
- Petitioner demanded a refund but Mager was firm that the tickets were non-refundable
was an agent of CAI. Court of Appeals reversed the decision saying that the
> Petitioners, upon returning in the Philippines, sent a letter to Continental Airlines, Inc.
relationship between Holiday Travel and CAI was not agency but a contract of
(CAI) again demanding for a refund since they believe that they were deluded into buying
sale. SC ruled that Holiday Travel was an Agent of CAI since all the elements of a
the tickets
contract of agency were present. It explained the difference between contract of
- After a month, they were denied of their request for refund but were given the
sale and agency, the main diff being that in agency the principal still owns the
options of re-issuance of tickets within 2 years from the date that they were issued or
object while in sale the ownership of the object is also transferred. this is evidence
that the tickets be used a a form of payment for the purchase of another ticket (+ re-
by CAI still being the one bound to the contracts of carriage sold by Holiday
issuance fee)
Travel.Despite this ruling, SC ultimately ruled to deny the petition for reversal of
> Petitioner Fernando went to CAI ticketing office in Ayala Ave, Makati, to have the tickets
judgement since the Mager’s actions constituted a tort premised on culpa
replaced to a single round trip ticket from Manila to LA, California
aquilana which required Petitioners to prove the existence of either fault or
- He was informed that the ticket named to his wife was non-transferable and so it
negligence on the part of CAI - which they were not able to do so.
cannot be used in his favor
- He was also informed that he needed to pay the difference of the ticket to LA not
DOCTRINE:
covered by the price of the ticket from San Diego to Newark
> A few days later, Petitioner Fernando again demanded for a refund - and no longer wanted (1) Yes. Holiday Travel is an Agent of CAI
to replace the tickets > All 4 elements of Agency exist:
- Claimed that the refusal of the CAI to use his wife’s ticket to his favor was a breach of - 1st and 2nd element exist since CAI did not deny that they have an
its own undertaking when they informed them of their options agreement with Holiday Travel wherein the latter would enter into contract
> few months passed and Petitioners filed a complaint against CAI praying for CAI to be of carriage for the former’s behalf
ordered to refund their money with legal interest, moral damages, exemplary damages, and - 3rd element: Holiday Travel merely acted as a representative and CAI is still
atty’s fees. the one bound by the contracts of carriage entered into by Holiday Travel
- CAI’s defenses: - 4th element: CAI consistently maintains the validity of the contracts of
1. tickets were non-refundable carriage executed by Holiday Travel with Petitioners
2. tickets were non-transferable - Existence of these elements are proven by the letter sent to Petitioners
3. Mager is not a CAI employee and CAI cannot be liable for her acts (AGENCY) denying them of refund but informing them of their possible options
4. that there is no basis of bad faith to entitle Petitioners of moral, exemplary damages - there was also no denial on the part of CAI that Holiday Travel was their
and atty’s fees authorized agent
> RTC ruled in favor of Petitioners and ordered CAI to refund to Petitioners what was due > CAI is therefore estopped in claiming that Holiday Travel is not their agent
to them > Difference between contract of agency and sale:
- basis was Mager’s misrepresentation, saying that Mager was an Agent of CAI and that - in Agency:
she acted in bad faith - principal retains ownership and control over the property
- that there was fraudulent misrepresentation that the Amtrak was fully booked - agent merely act on the principal’s behalf and under his instructions
- and that the fraudulent misrepresentation was not specifically denied - in essence, the principal still has the right to control sales, fix the price and
- RTC said that CAI impliedly if not expressly acknowledged its principal-agent terms, demand and receive the proceeds (less the agent’s commission upon
relationship with Mager when it sent a letter denying the request for refund and sales made)
informing spouses of their options - in Sale:
- According to RTC, there was bad faith in reneging in the undertaking to replace the - when the parties intend that the delivery of the property will bring an effect
subject tickets when it refused to use Petitioner Fernando’s wife’s ticket to his favor of relinquishment of title, control, and ownership so that the recipient may
> CAI appealed to the CA, CA ruled in favor of CAI holding that Mager was not an agent since do with the property as he pleases
there was no proof that a principal-agent relationship existed between CAI and Holiday > In this case, it is clearly a contract of Agency since CAI is still the one bound by
Travel the contracts of carriage embodied by the tickets being sold by Holiday Travels on
- Petitioners had the burden to prove and establish the fact that Holiday Travel was an its behalf
agent of CAI - and that they failed to do so
- CA rules that the relationship between Holiday Travel and CAI is that of a contractual (2) Not necessarily. It must be determined if the cause of action is premised on culpa
relationship of a sale and NOT agency aquilana or cupla contractual
- “the transaction in issue was simply a contract of sale, wherein Holiday Travel buys > if culpa aquilana: there is a NEED to prove that the principal was also at fault or
airline tickets from Continental Airlines and then, through its employees, Mager was negligent
included, sells it at a premium to clients.” > if cupla contractual: no evidence of principal’s negligence of fault is required
- CA also said that “non-refundable” was clearly printed on the face of the subject - In this case, the cause of action was premised on culpa aquilana since there
tickets hence refund was not an available option for the Petitioners was no prior or pre-existing relationship between Petitioners and
ISSUE Respondents
(1) Whether Holiday Travel is an Agent of CAI (Agency) - However, Petitioners were not able to provide evidence that CAI
(2) Whether CAI is liable for the acts of its agent’s employees such as Mager contributed to Mager’s acts, HENCE CAI CANNOT BE MADE LIABLE for
Mager’s acts.
HELD/RATIO
Petition is denied. the language so used conveys such a power, no such construction should be given the
document.

FACTS:
● Diego Linan executed a document conferring powers to Marcos Puno to administer his
“interests.” The document reads:
o “…set forth that I hereby confer sufficient power, such as the law requires, upon Mr.
9.) LIÑAN v. PUNO Marcos P. Puno … in order that in my name and representation he may administer the
GR NO. 9608 interest I possess within this municipality of Tarlac, purchase, sell, collect and pay, as
AUGUST 7, 1915 well as sue and be sued before any authority, appear before the courts of justice and
By: RONNEL DEINLA administrative officers in any proceeding or business concerning the good
Topic: PRINCIPAL AND AGENT; CONTRACTS; GENERAL RULES OF CONSTRUCTION administration and advancement of my said interests, and may, in necessary cases,
PRINCIPAL AND AGENT; POWER TO SELL REAL ESTATE; CONSTRUCTION OF INSTRUMENT appoint attorneys at law or attorneys in fact to represent him.”
Petitioners: DIEGO LIÑAN ● Three years after the execution of said document, Puno sold a parcel of land.
Respondents: MARCOS P. PUNO ET AL. ● Linan alleges that the said document did not confer upon Puno the power to sell the land
Ponente: JOHNSON, J. and prayed that the sale be set aside; that the land be returned to him, together with
damages.
RECIT-READY/SUMMARY: Linan executed a document which conveyed certain
ISSUE: Whether said document conferred upon Puno the authority to sell the parcel of
powers, obligations, and responsibilities to Puno which ultimately says to further
land? Yes.
and protect his interests. Puno sold a parcel of land. Linan contends that the
document he executed did not confer upon Puno the authority to sell, only acts
HELD/RATIO:
of administration. The SC interpreted the document to show the true intent of
● Contracts of agency as well as general powers of attorney must be interpreted in
the parties. The words administer, purchase, and sell are seen to be equal in use.
accordance with the language used by the parties. The real intention of the parties is
Granting a ruling for Linan would mean that the words purchase and sell bear no
primarily to be determined from the language used. The intention is to be gathered from
weight in the document (although used) and only “administer” is to be given
the whole instrument. In case of doubt resort must be had to the situation, surroundings,
meaning. The dissenting opinion says otherwise; divides the sentence in two and
and relations of the parties.
restricts the words administer, purchase, and sell as those which further Linan’s
● Whenever it is possible, effect is to be given to every word and clause used by the parties.
interest. Puno could not sell these “interests” themselves.
It is to be presumed that the parties said what they intended to say and that they used
each word or clause with some purpose and that purpose is, if possible, to be ascertained
and enforced. The intention of the parties must be sustained rather than defeated.
DOCTRINE: ● If the contract be open to two constructions, one of which would uphold while the other
Contracts of agency, as well as general powers of attorney, must be interpreted in would overthrow it, the former is to be chosen.
accordance with the language used by the parties. The real intention of the parties is ● The acts of the parties in carrying out the contract will be presumed to be done in good
primarily to be determined from the language used. The intention is to be gathered from the faith. The acts of the parties will be presumed to have been done in conformity with and
whole instrument. In case of doubt, resort must be had to the situation, surroundings, and not contrary to the intent of the contract. The meaning of general words must be
relations of the parties construed with reference to the specific object to be accomplished and limited by the
recitals made in reference to such subject.
To confer the right upon an agent to sell real estate, a power of attorney must so express ● The words "administer, purchase, sell," etc., seem to be used coordinately. Each has
his powers in clear and unmistakable language. When there is any reasonable doubt that equal force with the other. There seems to be no good reason for saying that Puno had
 authority to administer and not to sell when "to sell" was as advantageous to the plaintiff
in the administration of his affairs as "to administer." 10. Oesmer v. Paraiso Development Corp.
● To hold that the power was "to administer" only when the power "to sell" was equally 514 SCRA 228
conferred would be to give effect to a portion of the contract only. That would give to February 5, 2007
special words of the contract a special and limited meaning to the exclusion of other By: HADJIRUL
general words of equal import. Topic: nature, form and kinds of agency
Petitioners: Rizalino, substituted by his hers, Josefina, Rolando and Fernando, Ernesto,
DISSENTING OPINION BY TRENT (nakalagay sa syllabus basahin daw) Leonora, Bibiano, Jr., Librado and Enriqueta, all surnamed Oesmer
● The document simply designates his property as "interests." This would ordinarily be Respondents: Paraiso Development Corporation
taken to include every species of property, real or personal, owned by him in that Ponente: Chico-Nazario, J.
municipality. That the power to administer these "interests" is expressly delegated
admits of no denial, as well as the power to appear in court, the power to engage counsel,
RECIT-READY/SUMMARY: Petitioners are co-owners of 2 parcels of land. They
and to appoint subagents.
inherited them from their parents when the latter died. Paular brought Ernesto
● We are interested in determining if the power to sell real estate is expressly delegated.
to meet with the President of respondent corporation. They drafted a contract of
Several cases were cited to Illustrate which documents expressly conveyed the power to
sale and a check for 100K was issued payable to Ernesto. In a letter to the
sell real estate, and those which do not.
respondent, petitioners informed the latter of their intention to rescind the
● The grammatical construction of the instrument admits of its division into two portions:
contract. Respondent did not respond so they filed a case. Lower court ruled in
o "(a) He may administer such interests as I possess within this municipality of Tarlac;
favor of Paraiso, ruling that Contract is valid. Petitioners argue that the Contract
o (b) And may buy, sell, collect, and pay, . . . in any way whatsoever for the good
is void because of lack of written authority (1874). They also claim that Contract
administration and furtherance of my said interests."
does not bind respondent because the latter did not sign to indicate its consent.
● The power to sell real estate is not expressly delegated in the first division.
SC said Contract is valid.
● The words “buy, sell, collect, and pay” are restricted by the stated purpose of “for the
good administration and furtherance of my said interests.” This phrase brings down the
DOCTRINE: Where the co-owners affixed their signatures on the Contract to Sell, they
words to the level of administrative acts.
were no longer selling their shares through an agent but, rather, they were selling the
● Therefore, the agent may buy or sell for the good of the administration and furtherance
same directly and in their own right—a written authority is no longer necessary to
of the principal’s interest, but he may not sell those interests themselves.
empower an agent.
● Linan owned a parcel of agricultural land. The full extent of Linan’s business "interests"
in the municipality of Tarlac is not disclosed by the record. But it is clear that he was not
FACTS:
engaged in the business of buying and selling real estate.
● Petition for Review on Certiorari
● Assuming that his "interests" in the said municipality were of almost any other
● Petitioners are brothers and sisters and the co-owners of undivided shares of two
description, it is evident that the sale of real estate by the defendant agent was an
parcels of agricultural and tenanted land. Both lots are unregistered and originally
extraordinary act, not capable of being classified as an act of administration.
owned by their parents. When the parents died, petitioner acquired the lots as
heirs of the former by rights of succession.
● Respondent Paraiso Development Corp. is engaged in the real estate business.
● Rogelio Paular brought along Petitioner Ernesto to meet with a certain Sotero Lee,
President of Paraiso Development Corp.
o Said meeting was for the purpose of brokering the sale of petitioners’
properties to respondent corp.
● A contract of sale was drafted.
o Petitioners Ernesto and Enriqueta signed the contract
 o A check in the amound of 100,000 payable to Ernesto was given as o Art. 1874. When a sale of a piece of land or any interest therein is
option money through an agent, the authority of the latter shall be in writing;
o A duplicate copy of the contract was returned to respondent and otherwise, the sale shall be void.
respondent brought the same to a notary public for notarization. ● The law itself explicitly requires a written authority before an agent can sell an
● In a letter addressed to respondent, petitioners informed the former of their immovable. The conferment of such an authority should be in writing, in as clear
intention to rescind the Contract to Sell and to return the amount given by and precise terms as possible. Thus, the Contract to Sell, although signed on the
respondent as option money margin by the 5 petitioners, is not sufficient to confer authority on petitioner
o Respondent did not respond so petitioners filed a Complaint for Ernesto to act as their agent in selling their shares in the properties in question.
Declaration of Nullity or for Annulment of Option Agreement or ● However, despite petitioner Ernesto's lack of written authority from the 5
Contract to Sell petitioners to sell their shares in the subject parcels of land, the supposed
● Lower court rule in favor of Paraiso Contract to Sell remains valid and binding upon the latter.
o Contract to Sell is valid and binding only to the undivided proportionate o As can be clearly gleaned from the contract itself, it is not only
share of the Ernesto petitioner Ernesto who signed the said Contract to Sell; the other 5
● Respondent appealed petitioners also personally affixed their signatures thereon. Therefore,
● CA modifined the decision a written authority is no longer necessary in order to sell their shares in
o Contract to Sell is valid and binding with respect to the undivided the subject parcels of land because, by affixing their signatures on the
proportionate shares of the 6 signatories of the said document Contract to Sell, they were not selling their shares through an agent but,
rather, they were selling the same directly and in their own right.
ISSUE ● It is well-settled that contracts are perfected by mere consent, upon the
● W/N Contract to Sell is valid considering that respondent itself did not sign it as acceptance by the offeree of the offer made by the offeror. From that moment,
to indicate its consent to be bound by its terms the parties are bound not only to the fulfillment of what has been expressly
stipulated but also to all the consequences which, according to their nature, may
HELD/RATIO be in keeping with good faith, usage and law. To produce a contract, the
● YES acceptance must not qualify the terms of the offer. However, the acceptance may
● Petitioners assert that the signatures of 5 of them namely: Enriqueta, Librado, be express or implied. For a contract to arise, the acceptance must be made
Rizalino, Bibiano, Jr., and Leonora, on the margins of the supposed Contract to known to the offeror. Accordingly, the acceptance can be withdrawn or revoked
Sell did not confer authority on petitioner Ernesto as agent to sell their respective before it is made known to the offeror.
shares in the questioned properties, and hence, for lack of written authority from o In the case at bar, the Contract to Sell was perfected when the
the above-named petitioners to sell their respective shares in the subject parcels petitioners consented to the sale to the respondent of their shares in
of land, the supposed Contract to Sell is void as to them. the subject parcels of land by affixing their signatures on the said
o Assuming that the signatures indicate consent, such consent was contract.
merely conditional. o Such signatures show their acceptance of what has been stipulated in
● They further claim that the supposed Contract to Sell does not bind the the Contract to Sell and such acceptance was made known to
respondent because the latter did not sign the said contract as to indicate its respondent corporation when the duplicate copy of the Contract to Sell
consent to be bound by its terms. was returned to the latter bearing petitioners' signatures.
● It is true that the signatures of the 5 petitioners on the Contract to Sell did not ● The Contract to Sell is not void merely because it does not bear the signature of
confer authority on petitioner Ernesto as agent authorized to sell their respective the respondent corporation.
shares in the questioned properties because of Article 1874 of the Civil Code, o Respondent corporation's consent to be bound by the terms of the
which expressly provides that: contract is shown in the uncontroverted facts which established that
there was partial performance by respondent of its obligation in the
said Contract to Sell when it tendered the amount of P100,000.00 to
 form part of the purchase price, which was accepted and acknowledged
expressly by petitioners. 11. REYES v. MOSQUEDA
o Therefore, by force of law, respondent is required to complete the G.R. NO. L-8669
payment to enforce the terms of the contract. Accordingly, despite the MAY 25, 1956
absence of respondent's signature in the Contract to Sell, the former BY: Enzo
cannot evade its obligation to pay the balance of the purchase price. Topic: NATURE, KINDS AND FORMS OF AGENCY
● Petition DENIED; CA decision affirmed Petitioners: VICENTA REYES, ET AL.
o Contract to Sell is VALID and binding with respect to the undivided Respondents: GUARDALINO C. MOSQUEDA, and THE COURT OF APPEALS
proportionate shares in the subject parcels of land of the 6 signatories Ponente: MONTEMAYOR, J.
of the said document
SUMMARY: Petitioner Reyes claims that Mosqueda contracted her services to
sell his parcel of land with a 5% commission. Mosqueda refused to pay the
amount that led Reyes to file an action in the CFI of Iloilo. The trial court ruled in
favor of Reyes but the CA reversed the decision and dismissed the complaint
without costs. The issue was whether Reyes is entitled the 5% commission upon
the sale. The Court ruled that the actual sale was perfected without the
intervention of Reyes and that as the broker; she must find prospective buyers
who will ACTUALLY BUY the property.

DOCTRINE: Commission does not accrue unless the broker finds a prospective buyer who
will actually buy the property on the terms and conditions imposed by the owner.

FACTS:
● On February 18, 1949, Mosqueda sold to Jose Marquez Lim his parcel of land in
Iloilo, containing 9,640 sq.m for the amout of P65,605.00.
● Petitioner claims that Mosqueda previously contracted her services to sell the
same land with a commission of 5% on the sales price.
● She commenced this action in the CFI of Iloilo to recover from Mosqueda
P3,280.25 with interest from the date of the filing of the complaint.
● The trial court rendered judgment in her favor ordering Mosqueda to pay her the
amount with interest of 6% from March 7, 1949. CA reversed the decision and
dismissed the complaint without costs.
● CA thru Justice Dionisio de Leon states the evidence presented by both parties:
o Plaintiff Reyes alleges that on February 16, 1949, she was contracted by
Mosqueda to sell the land for the sum of P7.50 per sq.m at a
commission of 5% on the total price.
o She offered the sale to Lim who said that the price was high as the land
was covered with water. Mosqueda then reduced the price to P7.30 per
sq.m
 o Appellant Mosqueda said that on February 16, 1949, he went to see o “Perhaps when she was requested by Lim to intercede in his behalf with
Lim, Manager of the Philippine-American Insurance Co. about a loan respect to the sale of Mosqueda’s land, Reyes grabbed this opportunity
offering his land. to make spare money as a sideline.”
o Lim offered to buy Mosqueda’s land as it adjoined his own land and
Mosqueda replied to sell to him at P8 per sq.m. #12. RAMOS v. CA
o Lim requested Reyes who were employees in his office to approach GR L-25463
Mosqueda on his behalf and exact from him the last price he could April 4, 1975
offer.
By: Madrid
o Reyes went to see Mosqueda without divulging the identity of her
buyer. Mosqueda reduced it to P7.30 but Lim was still not agreeable. ____________________________________________________________________
o Lim told Reyes to desist from further contracting Mosqueda on his Topic:
behalf as he himself would directly deal as he had initially done earlier Petitioner: Emerito Ramos
on the same day. Respondent: CA and Cesario Calanoc
o Mosqueda informed Reyes that he was definitely cancelling her ____________________________________________________________________
authority to find a buyer for his land. Doctrine:
● On February 18, Lim went personally to Mosqueda resulting in the execution of
“When there is no agreement to a fixed commission, the amount of commission
the deed of sale.
that a broker shall receive is FLUID - depending on the overprice obtained above the stated
ISSUE: markup price set by the principal.”
Whether plaintiff Reyes is entitled the 5% commission upon the consummation Facts:
of the sale of land? NO. - Petitioner Emerito Ramos, a businessman, is engaged in the import-export trade and is
using the name FIMCO (Farm Implement & Machinery Co.).
HELD/RATIO: - FIMCO entered into several contracts with local merchants for the resale to them of the
● Plaintiff Reyes was engaged only as a broker and in order to earn her commission,
imported goods.
it was not sufficient for her to find a prospective buyer but to find one who will
actually buy the property. - Herein private respondent Cesario Calanoc was asked by Pet. Ramos to sell the
o “The broker must be the efficient agent or the procuring cause of the merchandise at a mark up price of 23% of the invoice value of the importation and that the
sale. He must find the purchaser, and the sale must proceed from his overprice would constitute his commission.
efforts acting as a broker.” (Danon v. Brimo & Co.) - Calanoc was able to conclude a contract with Mrs. Salustiana Dee or Wellington & Co. who
● The actual sale was perfected and consummated without the intervention of first agreed to pay a premium of 25% and that therefore, after deducting the 23% required
Reyes, and her authority to sell the property had been withdrawn, at a time when
markup, would give a 2% commission to Calanoc. Calanoc informed Ramos about said
there was still no meeting of the minds of buyer and seller.
● There is nothing to show that bad faith was involved in the cancellation of the agreement.
authority of Reyes before the consummation of the sale. - However, Mrs. Dee changed her mind and went directly to Petitioner offering him a
● As observed by the CA, Reyes did not explain how she came to know that premium of 23 and a half percent (23 ½%)
defendant Mosqueda was interested in selling his land and was looking for a - Private respondent then instituted an action against petitioner for his 2% commission.
buyer. - CFI rendered judgment in favor or private respondent. So did the CA.
o It is highly possible that after Reyes was commissioned by Lim to
approach Mosqueda with a view to reduce the price of P8 per sq.m, it
Issue:
was then that she came to know about the desire of Mosqueda to sell
his land Whether or not Calanoc can demand from Ramos the 2% commission.
Held: 13. INLAND REALTY INVESTMENT SERVICE INC. v. CA
No. GR NO. 76969
JUNE 9, 1997
By: BEATRIZ A. NICOR
Topic: ATP – NATURE, FORM, AND KINDS OF AGENCY
Ratio: Petitioners: INLAND REALTY INVESTMENT SERVICE, INC. and ROMAN M. DE LOS REYES
- The amount of Calanoc’s commission is fluid, depending upon the overprice Respondents: HON. COURT OF APPEALS, GREGORIO ARANETA, INC. and J. ARMANDO
obtained above the 23% of the invoice value of the importation. EDUQUE
- Nothing in the agreement guaranteed Calanoc a fixed commission. What Ramos received Ponente: HERMOSISIMA, JR.
inthe Wellington Co. transaction in excess of his original 23% mark-up price was only 13,330
(which was the ½ overprice) and not 53, 320 (which was the original 2% of the 25% deal). RECIT-READY: Inland Realty was given a 30-day authority by Gregorio Araneta,
Inc. to sell its shares of stock. Inland found a prospective buyer, Stanford
Microsystems, but was unable to successfully close the sale within the term
although the 30-day authority to sell was extended thrice. 1 year and 5 months
later, Inland sold the shares to Stanford. They are now demanding that Araneta
pay them their broker’s commission. The SC held that they are not entitled to
receive the broker’s commission as they failed to sell the shares within the
predetermined terms and conditions set by Araneta. They were also not the
efficient procuring cause of the sale as Inland merely submitted Stanford’s name
as a prospective buyer.

DOCTRINE: Where a party is not the efficient cause in bringing about a sale, he is not
entitled to the stipulated broker’s fee.

FACTS:
· Gregorio Araneta, Inc. and its Assistant General Manager Armando Eduque
granted Inland Realty Investment Service, Inc. a 30-day authority to sell on a first come-
first served basis its 9,800 shares of stock in Architect’s Bldg. Inc. at the price of P1,500
per share.
· Stanford Microsystems was one of the prospective buyers, however they gave a
counter-proposal with a lower sale price. This was relayed by Inland Realty to Gregorio
Araneta, Inc. The latter rejected the counter-proposal as it was too low and suggested
that Inland see if they could negotiate a better price.
· The 30-day authority to sell was extended 3 times: Oct. 30, 1975, Oct. 28, 1975,
Dec. 2, 1975. Roman de los Reyes, manager of Inland Realty’s brokerage division, asked
for an exclusive authority and for a longer period but was denied by Eduque. The last
period for them to have the authority to sell was Jan. 1, 1976.
 · On July 8, 1977, - 1 year and 5 months after the last extension – Inland finally sold
the shares of stock to Stanford Microsystems for 13.5M. 14. INFANTE VS. CUNANAN
· On Sept. 6, 1977, Inland formally demanded from defendants, through a demand GR NO. L-5180
letter, for their 5% broker’s commission amounting to 675,000. Defendant declined on AUGUST 31, 1953
the ground that the claim has no factual or legal basis. BY: Ryan
· The RTC and CA both found that plaintiffs had no legal claim to the commission ____________________________________________________________________
as the authority to sell had already lapsed. Hence, this petition. TOPIC: PRINCIPAL ANG AGENT; AGENT’S COMMISSION; CANCELLATION OF AGENT’S
AUTHORITY; EFFECT OF CANCELLATION ON COMMISSION
ISSUE: PETITIONERS: CONSEJO INFANTE
(1) WON petitioners are entitled to claim broker’s commission RESPONDENTS: JOSE CUNANAN, JUAN MIJARES and CA
PONENTE: BAUTISTA ANGELO, J.
HELD/RATIO:
(1) NO. They are not entitled to claim broker’s commission.
SUMMARY: Infante contracted Cunanan and Mijares to sell her property for 5%
commission. They found Pio Noche however Infante backed-out of the deal and
· There is nothing in the record or in the testimonial evidence that the authority
revoked her authority over them. Afterwards, she met with Pio and sold the
extended 30 days from the last date of extension was ever reserved nor extended, nor
property to Pio Noche. Cunanan got wind of the deal and demanded their
has there been any communication made to defendants that the plaintiff was actually
commission but was refused. She made them sign a document which cancelled
negotiating with Stanford a better price than what was previously offered by it.
her authority. SC held that they are entitled to the commission as Infante acted in
· In fact, there was no longer any agency after the last extension. Certainly, the
bad faith. Cunanan did his job in finding a buyer and should be paid his
length of time which had transpired from the date of last extension of authority to the
commission.
final consummation of the sale with Stanford of about 1 year and 5 months without
any communication at all from plaintiffs to defendants with respect to the suggestion
of defendants that Stanford's offer was too low and suggested if plaintiffs may make it DOCTRINE: If the purpose of the principal in dealing directly with the purchaser and himself
better. We have a case of proposal and counter-proposal which would not constitute effecting the sale of the principal’s property is to avoid payment of his agent’s commission,
a definite closing of the transaction just because it was plaintiff who solely suggested the implied revocation is deemed made in bad faith and cannot be sanctioned without
to defendants the name of Stanford as buyer. according to the agent the commission which is due him.
· As a general rule, regardless of whether or not their agency contract and authority
to sell had expired, they are automatically entitled to their broker’s commission merely FACTS:
upon securing for and introducing Gregorio Araneta Inc. to Stanford Microsystems. ● On 11/30/1948, Infante contracted Cunanan’s and Mijares’ services to sell 2 parcels of land
However, Inland Realty did nothing but submit Stanford’s name as prospective buyer. with a house built thereon for PhP30k subject to the condition that the purchaser would
Inland Realty did not succeed outright selling the shares under the predetermined assume the mortgage that existed thereon in favor of Rehabilitation Finance Corp. (RFC for
terms and conditions set out by Gregorio Araneta Inc brevity).
· Petitioners were not the efficient procuring cause in bringing about the sale in ● Infante agreed to pay them a 5% commission on the purchase price plus whatever
question on July 8, 1977 and are, therefore, not entitled to the stipulated broker's overprice they may obtain for the property.
commission of "5% on the total price.” ● Cunanan and Mijares found Pio Noche, who was willing to buy the property under said
conditions, but upon meeting with Infante, Infante said she was no longer interested in
WHEREFORE, the instant petition is HEREBY DISMISSED. selling said property and succeeded in making them (Cunanan and Mjiares) to sign a
document that terminated the authority Infante gave them.
● Moreover, on 12/20/1948, Infante personally met Pio Noche and sold the property at DISPOSITIVE PORTION: Wherefore, the decision appealed from is hereby affirmed, with
PhP31k. Upon learning of the deal, Cunanan and Mijares demanded their commission costs against petitioner.
but Infante refused.
● Infante admitted to contracting Cunana and Mijares services but she agreed to pay them **Separate Opinion (JUST IN CASE)**
PhP1.2k on the condition that they buy her property in Taft Ave to where she might
transfer after selling her property. While Cunanan and Mijares made moves to sell her Labrador, J. concurring and dissenting
property, they sold the property at Taft Ave to another party and because of this failure
it was agreed that the authority be revoked. I concur in the result. I cannot agree, however, to the ruling made in the majority decision
● The lower court ruled in favor of Cunanan and Mijares and ordered Infante to pay them that the petitioners cannot introduce evidence of the circumstances under which the
PhP2.5k with interest. CA affirmed in toto. document was signed, i. e. upon promise by respondent that should the property be sold
● Infante contends that she withdrew her authority on 11/30/1948 when by the voluntary to petitioner's buyer they would nevertheless be entitled to the commission agreed upon.
acts of Cunanan and Mijares, they executed a document that stated that said authority Such evidence is not excluded by the parole evidence rule, because it does not tend to alter
was cancelled without any effect so that when Infante sold the property to Noche on or vary the terms of the document. This document was merely a withdrawal of the authority
12/20/1948, there was no existing commitment with Cunana and Mijares hence had no granted the petitioner to sell the property, not an agreement that they shall not be paid
obligation to pay them. their commission.

ISSUE: WON Cunanan and Mijares are entitled to the commission WINNER: CUNANAN AND MIJARES
LOSER: INFANTE. Has to pay their commission.
HELD/RATIO: YES.
● If the facts were as claimed by Infante, there is no doubt that she had no obligation to
pay them under her original authority since the Old Civil Code recognizes such right to
withdraw at will. (OCC Art. 1733)
● But this fact is disputed. Cunanan and Mijares claim that while they agreed to cancel
the authority given to them, they only did so upon the assurance that should the
property be sold to their own buyer, Pio Noche, they would be given the agreed
commission.
● The CA found that after Mijares had bestowed her authority to Cunanan and Mijares to
sell her lot for PhP30,000, they found Pio Noche, who agreed to her terms and was
immediately brought up to Infante. But by way of strategy, she told them that she was
now disinterested in the deal and had them sign a document cancelling her authority.
● That Infante changed her mind even if Cunanan and Mijares found Noche as a buyer is
a matter that would not give rise to a legal consequence if respondents agree to call off
the transaction in deference to Infante’s request. But the situation varies if one of the
parties takes advantage of another for his/her self-interest which is tantamount to bad
faith. Said act cannot be allowed w/o according to the party prejudiced the reward
which is due him.
● Infante took advantage of Cunanan and Mijares services. She believed she could
reneged from obligation and made a ruse by inducing them to sign the cancellation of
authority.
 ● The first delivery of 7,933 flags was made by the United Flag Industry. The next
15. Siasat V. IAC day, on October 17, 1974, the respondent's authority to represent the United Flag
GR NO. L-67889 Industry was revoked by petitioner Primitivo Siasat(the owner and General
October 10, 1985 manager of UFI).
By: Julpha Policina ● Siasat, after receiving the payment of P469,980.00 on October 23, 1974 for the
Petitioners: PRIMITIVO SIASAT and MARCELINO SIASAT first delivery, tendered the amount of P23,900.00 or five percent (5%) of the
Respondents: INTERMEDIATE APPELLATE COURT and TERESITA NACIANCENO amount received, to the respondent as payment of her commission.
Ponente: GUTIERREZ, JR. , J. ● The Naciancenco protested. She refused to accept the said amount insisting on
the 30% commission agreed upon. The respondent was assured by the petitioners
SUMMARY: Respondent Nacianceno convinced the Department of Education and that they would pay the commission in full after they delivered the other half of
Culture to purchase national flags without bidding. She then contacted United the order. The respondent states that she later on learned that petitioner Siasat
Flag Industry (Siasat were owners). She was then told by Siasat that she would had already received payment for the second delivery of 7,833 flags. When she
receive 30% commission. When the payment for the 1st delivery was made. confronted the petitioners, they vehemently denied receipt of the payment, at
Nacianceno was only given 5% commission and then 2nd delivery she was given the same time claiming that the respondent had no participation whatsoever with
none because Siasat was saying that her agency was revoked. RTC, IAC, SC held regard to the second delivery of flags and that the agency had already been
that she was an agent and that she was entitled to the commission agreed upon revoked.
and the 2 payments were indeed for one transaction only. ● Malacñang did not respond to her complaint.
● CFI in favor of the respondent. Recover 25% as balance on the first delivery and
DOCTRINE: An agent may be (1) universal; (2) general, or (3) special. A universal agent is 30% on the second delivery.
one authorized to do all acts for his principal which can lawfully be delegated to an agent. ● IAC: affirmed
So far as such a condition is possible, such an agent may be said to have universal authority
A general agent is one authorized to do all acts pertaining to a business of a certain kind or ISSUE
at a particular place, or all acts pertaining to a business of a particular class or series. He (1) WON the authorization making Nacianceno an agent granting her 30%
has usually authority either expressly conferred in general terms or in effect made general commission for all the flags sold is valid on “all the transactions”? YES
by the usages, customs or nature of the business which he is authorized to transact. (2) WON the revocation of the agency by petitioners can be upheld? NO

FACTS
● Sometime in 1974, respondent Teresita Nacianceno convinced the Department HELD/RATIO
of Education and Culture to purchase without public bidding, P1M worth of (1) Yes. Nacianceno was a general agent. It can easily be seen by the way general words
national flags for the use of public schools throughout the country. were employed in the agreement that no restrictions were intended as to the manner
● Nacianceno was able to expedite the approval of the purchase by handcarrying the agency was to be carried out or in the place where it was to be executed. The
the different indorsements from one office to another then all the legal power granted to the respondent was so broad that it practically covers the
requirements had been complied with, except the release of the purchase orders. negotiations leading to, and the execution of, a contract of sale of petitioners'
● When Nacianceno was informed by the Chief of the Budget Division of the merchandise with any entity or organization.
Department that the purchase orders could not be released unless a formal offer Section 7 Rule 130 of our Revised Rules of Court states that "when the terms of
to deliver the flags in accordance with the required specifications was first an agreement have been reduced to writing, it is to be considered as containing
submitted for approval, she contacted the owners of the United Flag Industry. all such terms, and, therefore, there can be between the parties and their
● She was then informed by the UFI that she will be entitled to a commission of successors-in-interest, no evidence of the terms of the agreement other than the
thirty (30%) percent. contents of the writing", except in cases specifically mentioned in the same rule.
 ● Petitioners have failed to show that their agreement falls under any of these
exceptions. The respondent was given ample authority to transact with the 16. MANOTOK BROTHERS, INC. v. CA
Department in behalf of the petitioners. 221 SCRA 224
● Equally without merit is the petitioners' proposition that the transaction APRIL 7, 1993
involved two separate contracts because there were two purchase orders By: JANINE
and two deliveries. The petitioners' evidence is overcome by other pieces ____________________________________________________________________
of evidence proving that there was only one transaction. Topic: ARTICLE 1869- 1877
(2) No. Since only one transaction was involved, we deny the petitioners' Petitioners: MANOTOK BROTHERS, INC.
contention that respondent Nacianceno is not entitled to the stipulated Respondents: THE HONORABLE COURT OF APPEALS, THE HONORABLE JUDGE OF THE
commission on the second delivery because of the revocation of the agency REGIONAL TRIAL COURT OF MANILA (Branch VI), and SALVADOR SALIGUMBA
effected after the first delivery. The revocation of agency could not prevent the Ponente: CAMPOS, JR., J
respondent from earning her commission because as the trial court opined, it ____________________________________________________________________
came too late, the contract of sale having been already perfected and partly RECIT-READY: Petitioner is the owner of the subject property which was leased by the City
executed. of Manila and used by the Claro M. Recto HS. Petitioner authorized private respondent to
● There is no evidence on record from which to conclude that the revocation of the negotiate with the city the sale of the property. Petitioner agreed to pay 5% commission
agency was deliberately effected by the petitioners to avoid payment of the when the sale is consummated. Eventually, City of Manila passed an ordinance
respondent's commission. What appears before us is only the petitioner's use in appropriating the amount for the purchase of the property. However, said ordinance was
court of such a factual allegation as a defense against the respondent's claim. This signed by the Mayor 183 days after petitioner’s last letter of authorization. After the parties
alone does not per se make the petitioners guilty of bad faith for that defense signed the deed of sale, petitioner refused to pay private respondent his commission.
should have been fully litigated Petitioner contended that private respondent would be entitled to a commission only if the
sale was consummated and the price paid within the period given in the respective letters
of authority; and private respondent was not the person responsible for the negotiation
Notes/Issue within the case: and consummation of the sale. CFI and CA ruled that private respondent is entitled to his
● There were two deliveries, on the 1st delivery she received 5% commission and commission. SC affirmed CA. In the case at bar, private respondent is the efficient procuring
none on the 2nd delivery. She did not allege in the initial complaint that she was cause for without his efforts, the municipality would not have anything to pass and the
not paid in full commission on the first delivery that was why the SC held that only Mayor would not have anything to approve. Court ruled that when there is a close,
30% of the 2nd delivery was due to her. proximate and causal connection between the agent's efforts and labor and the principal's
● She was also saying that her signature was forged. SC denied this. sale of his property, the agent is entitled to a commission.

DOCTRINE: When there is a close, proximate and causal connection between the agent's
efforts and labor and the principal's sale of his property, the agent is entitled to a
commission.

FACTS
● Petitioner is the owner of a certain parcel of land and building which were
formerly leased by the City of Manila and used by the Claro M. Recto High
School at Sampaloc Manila.
● By means of a letter dated July 1966, petitioner authorized private respondent
Salvador Saligumba to negotiate with the City of Manila the sale of the property
for not less than P425,000. In the same writing, petitioner agreed to pay private
 respondent a 5% commission in the event the sale is finally consummated and In an earlier case, this Court ruled that when there is a close, proximate and
paid. causal connection between the agent's efforts and labor and the principal's sale of his
● Petitioner, in March 1967, executed another letter extending the authority of property, the agent is entitled to a commission.
private respondent for 120 days. Thereafter, another extension was granted to We agree with respondent Court that the City of Manila ultimately became the
him for 120 more days. purchaser of petitioner's property mainly through the efforts of private respondent.
● Finally, through another letter dated November 1967, the corporation with Without discounting the fact that when Municipal Ordinance No. 6603 was signed by the
Rufino Manotok, its President, as signatory, authorized private respondent to City Mayor on May 17, 1968, private respondent's authority had already expired, it is to
finalize and consummate the sale of the property to the City of Manila for not be noted that the ordinance was approved on April 26, 1968 when private respondent's
less than P410,000.00. With this letter came another extension of 180 days. authorization was still in force. Moreover, the approval by the City Mayor came only three
● In April 1968, the Municipal Board of the City of Manila eventually passed an days after the expiration of private respondent's authority. It is also worth emphasizing
ordinance appropriating the sum of P410,816.00 for the purchase of the that from the records, the only party given a written authority by petitioner to negotiate
property which private respondent was authorized to sell. the sale from July 5, 1966 to May 14, 1968 was private respondent.
● Said ordinance however, was signed by the City Mayor only in May 1968, 183 While it may be true that Filomeno Huelgas followed up the matter with
days after the last letter of authorization. Councilor Magsalin, the author of Municipal Ordinance No. 6603 and Mayor Villegas, his
● In January 1969, the parties signed the deed of sale of the subject property. intervention regarding the purchase came only after the ordinance had already been
● Notwithstanding the realization of the sale, private respondent never received passed — when the buyer has already agreed to the purchase and to the price for which
any commission. This was due to the refusal of petitioner to pay private said property is to be paid. Without the efforts of private respondent then, Mayor Villegas
respondent said amount as the former does not recognize the latter's role as would have nothing to approve in the first place. It was actually private respondent's labor
agent in the transaction. that had set in motion the intervention of the third party that produced the sale, hence he
● Private respondent filed a complaint against petitioner, alleging that he had should be amply compensated.
successfully negotiated the sale of the property. He claimed that it was because
of his efforts that the Municipal Board of Manila passed the ordinance which WHEREFORE, in the light of the foregoing and finding no reversible error committed by
appropriated the sum for the payment of the property. respondent Court, the decision of the Court of Appeals is hereby AFFIRMED. The
● Petitioner contended that private respondent would be entitled to a temporary restraining order issued by this Court in its Resolution dated October 1, 1990 is
commission only if the sale was consummated and the price paid within the hereby lifted.
period given in the respective letters of authority; and private respondent was
not the person responsible for the negotiation and consummation of the sale,
instead it was Filomeno E. Huelgas, the PTA president of the Claro M. Recto High
School.
● CFI ordered petitioner to pay private respondent the sum of P20,540.00 by way
of his commission fees with legal interest.
● CA affirmed CFI.

ISSUE: WON private respondent is entitled to the 5% agent's commission

HELD: YES
In the case at bar, private respondent is the efficient procuring cause for without
his efforts, the municipality would not have anything to pass and the Mayor would not
have anything to approve.
 ● Hence, this petition.
#17 Philippine Health Care Providers vs. Estrada ISSUE: Whether or not Estrada is entitled of the service agreement commission - YES
GR # 171052 HELD/RATIO:
DATE: January 28, 2008 ● SC affirmed. Estrada is entitled of the commission.
By: JUS ● Estrada’s efforts consisted in being the first to offer the Maxicare plan to Meralco
Topic: using her connections with some of Meralco executives
Petitioners: Philippine Health Care Providers (MAXICARE) ● These efforts were evidence by Meralco’s recognition through certification issued
Respondents: Carmela Estrada/Cara Health Services certifying that Estrada initiated talks with them
Ponente: Nachura, J. ● Estrada was the efficient “intervening cause” in bringing about the service
SUMMARY: agreement
Maxicare approached Estrada to be the general agent of Maxicare Plan. Estrada ● Procuring cause – cause originating a series of events which, without break in
was able to get Meralco but Maxicare directly negotiated with Meralco after Estrada made their continuity, result in the accomplishment of the prime objective of the
Meralco subscribed. Estrada is claiming for commission but Mexicare refused claiming that employment of the broker – producing a purchaser ready, willing and able to buy
they personally negotiated with Meralco. SC held that Estrada was the efficient procuring on the owner’s terms; broker’s efforts must have been the foundation on which
cause since Estrada, with evidence, was the foundation on why the negotiation of the sale the negotiations resulting in a sale began.
took place between Maxicare and Meralco. ● Verily, Estrada was instrumental in the sale of the Maxicare health plans to
DOCTRINE: Meralco.
Broker’s efforts must have been the foundation on which the negotiations ● Without her intervention, no sale could have been consummated.
resulting in a sale began to be considered as a procuring cause and be entitled of the
commission.
FACTS:
● Philippine Health Care Providers, or Maxicare in this case, is engaged in selling
health insurance.
● Maxicare then engaged the services of Carmela Estrada who’s doing the business
under Cara Health Services – to promote and sell prepaid group practice health
care delivery or Maxicare Plan
● Maxicare made Estrada as the general agent evidenced by letter-agreement
● Estrada submitted proposals to Maxicare, one of which is Meralco
● When Meralco decided to subscribe to their Maxicare Plan, Maxicare then
directly negotiated with Meralco and left Estrada out of the discussions
● Meralco then signed Service Agreement directly with Maxicare.
● Estrada demanded from Maxicare for the commission from the Meralco account
and 9 other accounts
● Maxicare refused and claimed that Estrada has no cause of action since they
directly negotiated with Meralco and that she did not intervene in the
negotiations of the contract with Meralco.
● RTC – Maxicare is liable for breach of contract
● CA affirmed – declaring Estrada to be the “efficient procuring cause” in the
execution of the service agreement between Meralco and Maxicare
 ● This power is necessarily a part of the mere administration of such business as that
18 GERMANN & CO. v DONALDSON, SIM & CO described in the instruments.
G.R No. L-439 ● Assuming arguendo that the present action is an act “of strict ownership”, it appears
11 November 1901 to be expressly and specially authorized by the clause in the instrument conferring
By: Iñigo Untalan the power to "exact the payment" of sums of money "by legal means." (the case cited
_________________________________________________________________________ what was in the instrument but it was lengthy so I opted not to include it)
___

Topic: NATURE, FORM AND KINDS OF AGENCY

Petitioners: GERMANN & CO.
Respondents: DONALDSON, SIM & CO. NOT RELATED TO AGENCY
Ponente: J LADD ● If there is any doubt, the scope and purpose of the instrument must be considered.
The main object of the instrument would be to make Kammerzell the manager of
RECIT-READY DIGEST: Case is too short to provide for recit ready plaintiff’s Manila branch. It cannot be reasonably supposed that it would be the
intention of plaintiff to withhold such essential power.
Doctrine: The right to commence action for collection of debts owing to principal is not an
incident of strict ownership, which must be conferred in express terms. Kammerzell has the personality. The action shall prosper.

FACTS:
● Fernando Kammerzell, a lawyer, instituted an action to recover a sum claimed to be
due for freight under a charter party (against Donaldson, Sim & Co.).
● It was instituted by virtue of a general power for suits, executed in Manila on Oct.,
purported to be a substitution of several attorneys of powers conferred upon
Kammerzell in an instrument executed in Berlin by Max Tornow, the sole owner of
the Germann & Co. which operates in Berlin and Manila.
● Donaldson, Sim & Co. claim that the original power cannot be construed as
conferring upon Kammerzell the authority to institute or defend suits, saying that
the delegated power is invalid.
o This contention is based upon Art. 1713 of the OLD CIVIL CODE (which is
now Art. 1877 of NCC) which provided that "an agency stated in general
terms only includes acts of administration," and that "in order to
compromise, alienate, mortgage, or to execute any other act of strict
ownership, an express commission is required.”

ISSUE: Does Kammerzell have the personality to institute action to recover sum?

HELD: Yes! Kammerzell has the personality.

● An action like the present to collect a claim accruing in the ordinary course of
Germann & Co.’s business DOES NOT belong to the class of acts described as “acts
of strict ownership”.
 · Atty. Diokno stated that he is representing Tropical Homes, as counsel and
19. TROPICAL HOMES INC. vs VILLALUZ representative because he has a special power of attorney.
G.R. No. L-40628 · After the judge read the the special power of attorney, he declared in default
DATE: February 24, 1989
Tropical Homes Inc. for failure to appear at the pre-trial since the special power of
By: YRREVERRE
attorney the petitioner had, executed in favor of its counsel did not satisfy the
Topic: AGENCY
requirements of Sec. 1, Rule 20 of the Rules of Court in that no mention is made
Petitioner: TROPICAL HOMES, INC.
Defendant-Appellants: HON. ONOFRE VILLALUZ, Acting Presiding Judge, Branch XVII, therein of the attorney's authority to bind his client during the pre-trial.
Seventh Judicial District, Quezon City, and PEOPLE'S HOMESITE AND HOUSING · Tropical Homes Inc. contended respondent judge acted with grave abuse of
CORPORATION discretion in declaring the petitioner in default for non-appearance at the pre-trial
Ponente: PADILLA, J. conference of the case set on 8 May 1975, despite the special power of attorney.
· PHHC, contends that the power of attorney executed by the petitioner is not
sufficient since said power of attorney does not include the authority of the attorney
SUMMARY:
to bind his client at the pre-trial conference.

ISSUE: W/N the judge acted with grave abuse of discretion in declaring the petitioner in
DOCTRINES: If the terms of the special power of authority are comprehensive, it is enough
default – YES.
to include the authority to appear for its client at the pre-trial conference.
HELD:
FACTS
· YES. Respondent judge gravely abused his discretion in declaring the herein
· People's Homesite and Housing Corporation (PHHC) filed a complaint for the
petitioner in default for its alleged failure to appear at the pre-trial of the case. It
collection of certain sums of money against the petitioner, Tropical Homes, Inc.
would appear that the petitioner had authorized its counsel to appear for and on its
· the court set the case for pre-trial on 8 May 1976, at 11:30 o'clock in the morning.
behalf where the petitioner's appearance is required and to bind the petitioner in all
· The necessary notice were served upon the parties, and on the scheduled day
said instances. The pertinent portion of the special power of attorney executed by
for the pre- trial conference, Atty. Rene Diokno, counsel for the petitioner, arrived
the petitioner expressly authorized its counsel — "To appear for and in its behalf in
at the courtroom at about 11:00 o'clock in the morning.
the above-entitled civil case in all circumstances where its appearance is required
· The case of the petitioner, namely, PHHC vs. Tropical Homes, Inc., was fourth on
and to bind it in all said instances."
said calendar.
· Although the power of attorney in question does not specifically mention the
· At about 12:25 o'clock in the afternoon, while the respondent judge was authority of petitioner's counsel to appear and bind the petitioner at the pre-trial
conducting the pre-trial in the case of Patriarca vs. PHHC. Atty. Diokno felt hungry conference, the terms of said power of attorney are comprehensive enough as to
and asked the court if he could approach the Bench. include the authority to appear for the petitioner at the pre-trial conference.
· Atty. Diokno asked the respondent judge for the postponement of the pre-trial · Petitioner won. Order making Tropical Homes in default has been reversed.
conference in his case. Since his case was supposed to be at 11:30 and it was already
WHEREFORE, the petition is GRANTED. The order issued on 8 May 1975 in Civil Case No.
12:00 and he was hungry.
Q-19633 of the Court of First Instance of Rizal, Quezon City Branch, is hereby ANNULLED
· The court asked whether the parties are already present.
and SET ASIDE. Another pre-trial conference should be conducted in the case after due
· Atty. Aldana stated that she was appearing as counsel for the plaintiff and the notice to the parties and their attorneys. The temporary restraining order heretofore
assistant general manager, Jose Alinea, is here as representative of PHHC. issued is made permanent. Without costs.
 20 Cebu Stevedoring v Hon Judge Jose R. Ramolete
By: Shang
G.R. no. 56627
August 17, 1981

Petitioners: Cebu Stevedoring Company, Inc.

Respondents: Honorable Judge Jose Ramolete of CFI Cebu, Multifarms Agro-Industrial
Development Corporation, Assistant Clerk of Court Nicolas F. Jomuad, The Provincial Sheriff
of cebu, and Deputy Sheriff Felipe V. Belandres

Summary: Petitioner, through counsel Atty. Malilong, perfected its appeal

within the prescribed period. Respondent opposed the appeal alleging that the
notice of appeal and the record on appeal were not signed by the counsel Atty.
Zozobrado, and that there was no showing that the appeal bond has been paid.
Days after the lapse of the period for appeal, petitioner presented evidence to
show that the appeal bond was seasonably paid. The SC held that The Supreme
Court held, that the fact that no formal written entry of appearance has been
filed by a new collaborating counsel or that the same was filed only after he had
filed certain pleadings could not seriously affect, much less nullify, the validity of
the acts and the pleadings filed by the appearing attorney, since the entry of
appearance required under the Rules of Court is merely to enable the officers
concerned to effectively serve processes on the attorney of record.

Doctrine: Technical Rules of Procedure are fundamentally aimed to serve as aid to justice.

Facts:
● Private respondent Multifarms Agro-Industrial Development Corporation filed a
complaint (as plaintiff) for consignation against petitioner in CFI Cebu
● Within the reglementary period to perfect the appeal, petitioner, thru Malilong,
filed with the trial court a notice of appeal, stating its intention to elevate the case
to the Supreme Court on questions of law
● To show that he appeal had been paid timely on 10 Dec 1980, petitioner on Dec
19 filed its notice of filing cash appeal bond, attaching thereto the confirmatory
reciept
● On the same day, lawyer Francisco Malilong Jr. filed a notice of appearance as
counsel for the defendant in collaboration with Atty Valentin Zozobrado
● After a period of two months, respondent filed a motion for execution alleging
that the judgment has already become final and executory on the ground that the
 defendant was not able to file a notice of appeal and record on appeal within the
30-day reglementary period to perfect the appeal 21. FORTUNATO MERCADO v HON. ALBERTO UBAY
● Respondent judge issued his challenged order denying the appeal and ordering GR NO. L-35830
the issuance of a writ of execution on the ground that the lawyer who signed the JULY 24, 1990
notice of appeal, while timely, was not the attorney of record By: CHESKA DOMINGUEZ
● Petitioner then instituted this action of mandamus Topic: NATURE, FORM AND KINDS OF AGENCY
Petitioners: FORTUNATA MERCADO, BASILIA CUEVAS MERCADO, SOTERA MERCADO and
Issue: Whether the lack of a formal written notice of appearance by the collaborating TRINIDAD MERCADO
lawyer of Atty Malilong Jr affect the validity of the appeal timely perfected by counsel - NO Respondents: Hon. ALBERTO Q. UBAY, as Presiding Judge of the Court of First Instance of
Rizal, Branch XXXII, LUCINA SAMONTE and TRINIDAD M. SAMONTE
Held: Ponente: MEDIALDEA, J.
● The fact that no formal written entry of appearance was filed by the collaborating
counsel could not seriously affect, much less nullify, the validity of the acts and
RECIT-READY/SUMMARY: Petitioners sued respondents. The latter, represented
the pleadings filed by the appearing attorney
by Atty. Pine, lost the case. Respondents appealed, arguing that they did not
● The entry of appearance required under the Rules of Court was merely to enable
authorize Atty. Pine. Petitioners argued otherwise so they filed a MTD which was
the officers concerned to effectively serve processes on the attorney on record
denied by the lower court. Hence, this petition. The SC ruled that Atty. Pine is an
● Respondent judge in ruling that the seasonably perfected appeal was of no force
agent of the respondent. Thus, it was only proper for him to file their answers to
and effect erred and acted with grave abuse of discretion
the complaint and appeal to the CA.
● Respondent judge clearly ignored the oft-repeated principles laid down by the
court that rigid adherence to the technical rules of procedure disregards the
DOCTRINE: A counsel who fights for and defends a case with persistence and vigor is
fundamental aim of procedure to serve as an aid to justice, no as a means for its
presumed to be authorized or employed by the party concerned despite the lack of a
frustration, and the objective of the Rules of Court to afford litigants just, speedy
written power of attorney.
and inexpensive determination of their controversy.
● The court does not look with favor on such disregard of basic rules and principles
FACTS:
by the lower courts which needlessly compel the aggrieved parties to resort to
● Petitioners filed an action for partition with the CFI against the respondents. The
the higher courts for redress and take up the time which they could well devote
respondents were served with a copy of the complaint and summons, and thru
to more meritorious cases
their counsel, Atty. Danilo Pine, they filed their answers to the complaint.
However, the CFI favored the petitioners and issued a writ of execution.
ACCORDINGLY, the order complained of is set aside and the respondent court is hereby
● Respondents, through Atty. Pine, filed a petition for certiorari and mandamus
ordered to give due course to the appeal. As stated in the preceding paragraph, petitioner
with the CA seeking to annul the writ of execution issued by the trial court. The
is granted a period of fifteen (15) days from notice hereof within which to file directly with
CA dismissed the petition.
this Court the corresponding petition for review on certiorari of respondent court's
● Respondents brought an action before the CFI alleging that they did not authorize
judgment of October 27, 1980 and pay the docket and legal research fund fees. With costs
anyone, including Atty. Pine, to file an answer in their behalf and to appeal to the
against private respondent. SO ORDERED.
CA. Petitioners filed a MTD but was denied. Hence this petition.

ISSUE:
(1) WON Atty. Pine is an agent of the respondents?

HELD/RATIO:
(1) YES.
● An attorney is presumed to be properly authorized to represent any cause in
which he appears, and no written power of attorney is required to authorize him 22. PSCFC Financial Corporation vs CA
to appear in court for his client (Sec. 21, Rule 138, Rules of Court) G.R. No. 106094
● The filing of the answer by and appearance of Atty. Pine in their behalf are December 28, 1992
sufficient to give private respondents standing in court. By: Shanon Gaerlan
● It is hard to believe that a counsel who has no personal interest in the case would Topic: AGENCY
fight for and defend a case with persistence and vigor if he had not been
Petitioners: PSCFC FINANCIAL CORPORATION
authorized or employed by the party concerned.
Respondents: COURT OF APPEALS, HON. BENITO, NOTARY PUBLIC ENRIQUE I.
● SC granted the petition. The petitioners won in this case.
QUIASON, and BANCO FILIPINO SAVINGS & MORTGAGE BANK

DOCTRINE: Generally, a lawyer can act as an agent to its client as long as it does not
fall under the situations stipulated in Article 1878 of NCC and Rule 20 of the Rules of
Court.
In such situations, the authority should be given by the client.

FACTS
● PSCFC filed a complaint against private respondent Banco Filipino Savings
and Mortgage Bank (Banco Filipino) for annulment of foreclosure
proceedings and damages with the RTC Makati.
● PSCFC alleges that as land developer, it availed itself of the Home Financing
Plan of Banco Filipino and borrowed from the latter the amount of P6M as
"developer loan."
● PSCFC claimed that without the loan having matured, the land was extra-
judicially foreclosed.
● Banco Filipino admitted the loan of P6M for which petitioner had executed
a promissory note secured by a real estate mortgage on the properties
described in the complaint.
● However, they denied that PSCFC had availed itself of Banco Filipino's Home
Financing Plan.
● PSCFC served upon Banco Filipino a written request for admission of the
truth of certain matters set forth as follows:
o They availed the Home Financial Plan with the terms for maturity. It
has not yet matured yet because it was not sold to a 3rd person
● Private Respondent’s answer signed by the counsel Atty. Fortun
o Admitted loan but denied PSCFC of availing the Home financial plan
as well as the agreement for the maturity of debt
● Petitioner requested another admission of truth by stating
 o Atty. Fortun was not an attorney yet when Banco Filipino
inaugurated its financial planning ● Section 23 of Rule 138 provides that
o Atty. Fortun had no personal knowledge of the financial scheme "(a)ttorneys have authority to bind their clients in any case by any
o There was no formal notice to intent to foreclose mortgage and no agreement in relation thereto made in writing, and in taking appeals,
publication was made and in all matters of ordinary judicial procedure.
● Respondent objected because it was irrelevant and denied the rest
● PSCFC asked RTC to rule that private respondent impliedly admit the 2nd bid
for admission because:
o Under Rule 26 of Rules of Court, the answer to request of admission ● Rule 26 states that
should be made the party himself and not anybody else, not even a party shall respond to the request for admission, it should not be
the lawyer. restrictively construed to mean that a party may not engage the
● Furthermore, the answer was made by a lawyer who was not qualified to do services of counsel to make the response in his behalf.
so since he had no personal knowledge on the matter.
● PSCFC insisted that only the client could make a bidding admission in the ● Indeed, the theory of petitioner must not be taken seriously; otherwise, it
discovery proceedings. will negate the principles on agency in the Civil Code, 4 as well as Sec. 23,
● RTC denied petition. CA maintained RTC’s ruling Rule 138, of the Rule of Court.

ISSUE ● Even assuming arguendo that Atty. Fortun overstepped his authority, it is
Whether a request for admission directed to an adverse party under only his client, respondent Banco Filipino, which has the prerogative to
Sec. 1, Rule 26, of the Rules of Court may be answered only by his counsel. impugn his acts and not petitioner, the adverse party.
(YES)
● Interestingly, Banco Filipino has not objected to the response made by its
HELD/RATIO counsel in its behalf.
● Section 21 of Rule 138 states —

Sec. 21. Authority of attorney to appear. — An attorney is presumed ● WHEREFOR: Court Resolves to:
to be properly authorized to represent any cause in which he appears, (a) DENY the instant petition for utter lack of merit; and,
and no written power of attorney is required to authorize him to appear (b) REQUIRE counsel for petitioner, Atty. Peralta to SHOW
in court for his client CAUSE within ten (10) days from notice hereof why
she should not be administratively dealt with for
● Petitioner has not shown that the case at bar falls under any of the misquoting the text of the decision in Koh v. IAC,
recognized exceptions as found in Art. 1878 of the Civil Code which supra, to support her position and attain a favorable
enumerates the instances when special powers of attorney are necessary, or judgment for her client.
in Rule 20 of the Rules of Court on pre-trial where the parties and their ● WINNER: RESPONDENTS
attorneys are both directed to appear before the court for a conference
● So that for counsel to appear at the pre-trail in behalf of the client, he must
clothe the former with an adequate authority in the form of a special power
of attorney or corporate resolution.
 · During the trial, the counsel on record to Criselda was Atty. Yap however; Criselda
23. Criselda Jose vs. CA filed a Notice of Appeal on her own without the assistance of Atty. Yap.
GR # 128646 · The Judicial Records Division of the Court of Appeals sent a notice to pay docket
Date: Mar 14, 2003 fee to Atty. Yap, which was received by him
By: BL o However, he failed to pay this within the reglementary period thus
the appeal was dismissed
Topic: · May 9, 1996:the Division Clerk of Court issued the Entry of Judgment certifying the
Petitioner: Criselda Jose Resolution had become final and executory
Defendants: CA and Danilo Omega o Atty. Yap was sent a copy of the Entry of Judgment
Ponente: Austria-Martinez, J. · May 13, 1996: Criselda wrote a letter to the CA inquiring about the status of her
appeal and claiming that she has not received any notice from the appellate court.
Summary: · Upon knowing the notices and other incidents were sent to Atty. Yap, Criselda,
The Regional Trial Court of Cebu City rendered a decision declaring that the marriage of through counsel, reinstated her appeal through a motion.
respondent Danilo Omega and petitioner Criselda F. Jose as null and void on the ground of o CA denied the motion
psychological incapacity on the part of Criselda. Custody to their children was awarded to
Danilo.During trial, her counsel on record, Atty. Margarito D. Yap, represented Criselda. ISSUE: Whether the CA erred in denying Criselda’s motion to reinstate appeal
However, notice of appeal was filed by Criselda without the assistance of Atty. Yap. For RATIO/ HELD: NO!
failure to pay the docket fee, however, the appeal was dismissed and the decision of the · Although petitioner herself personally filed the Notice of Appeal, the fact remains
trial court became final and executory. The notice to pay docket fee and copy of resolution that Atty. Yap or the PAO has not filed any formal notice of withdrawal of appearance
and the entry of judgment were all sent to Atty. Yap. Later, Criselda inquired from the in the trial court.
appellate court the status of her appeal and claimed that she had not received any notice · Therefore, insofar as the appellate court is concerned, Atty. Yap is the counsel of
from the appellate court. Upon knowing the notices and other incidents were sent to Atty. record.
Yap, Criselda, through counsel, reinstated her appeal through a motion. The Court of · Section 22, Rule 138 of the Rules of Court, provides:
Appeals denied the motion, as well as the motion for reconsideration, hence, this petition. o "Section 22. Attorney who appears in lower court presumed to
SC denied the petition. It is settled that clients are bound by the mistakes, negligence and represent client on appeal. — An attorney who appears de parte in a case before a lower
omission of their counsel. court shall be presumed to continue representing his client on appeal, unless he files a
DOCTRINE: formal petition withdrawing his appearance in the appellate court."
It is settled that clients are bound by the mistakes, negligence and omission of their counsel. · Payment of the docket and other legal fees within the prescribed period is both
Moreover, under Section 21, Rule 138 of the Rules of Court, an attorney is presumed to be mandatory and jurisdictional, and failure of the appellant to conform with the rules on
properly authorized to represent any cause in which he appears. Under Section 22 of the appeal renders the judgment final and executory.
same Rule, an attorney who appears de parte in a case before a lower court shall be · Petitioner's counsel, Atty. Margarito Yap of the PAO was properly sent by the
presumed to continue representing his client on appeal, unless he files a formal petition appellate court a notice to pay the docket fees.
withdrawing his appearance in the appellate court." o It is settled that clients are bound by the mistakes, negligence and
FACTS: omission of their counsel.
· Nov 14, 1994: RTC declared the marriage between Danilo Omega and Criselda Jose · Also, Petitioner, failed to pursue her appeal for almost two years.
null and void ab initio due to psychological incapacity on the part of Criselda o She herself filed the notice of appeal on December 4, 1994 but
o Custody over the three children shall be entrusted to Danilo Omega.
thought of inquiring from the Court of Appeals about her appeal
 only on May 13, 1996 (or after the lapse of one year and five
months) as to the status of her appeal. 24. SPOUSES AGBULOS v. GUTIERREZ
· Petitioner failed to show that her appeal is extremely meritorious that to deprive GR NO. 176530
her of an appeal would unduly affect her substantial rights. JUNE 16, 2009

Topic:ATP
Petitioners:Spouses Agbulos
Respondents: Gutierrez
Ponente: JOHNS, J

RECIT-READY: Respondents inherited an eight-hectare

parcel of land from their father. Through fraud and deceit,
petitioners were able to make it appear that respondents
father sold the land to petitioenrs on July 1978 even though
he passed away on April 1977. RTC dismissed the case based
on lack of jurisdiction. Atty Magbitang filed an appeal even
though respondnets and said atty had no formal agreement
as to pursuing the appeal. The appeal given due course
hence this petition from Sps. Agbulos. The issue is WoN Atty
Magbitan had authority to act on its clients case without said
client`s consent and knowledge. The SC held *see ratio *

DOCTRINE: A lawyer who represents a client before the trial court is presumed to represent
such client before the appellate court, Section 22 of Rule 138 creates this presumption, thus:
SEC. 22. Attorney who appears in lower court presumed to represent client on
appeal. — An attorney who appears de parte in a case before a lower court shall be
presumed to continue representing his client on appeal, unless he files a formal petition
withdrawing his appearance in the appellate court

FACTS
● On October 16, 1997, respondents, Dr. Nicasio G. Gutierrez, et al. through
their counsel, Atty. Adriano B. Magbitang, led with RTC of Gapan, Nueva
Ecija, a complaint against petitioners, spouses Agbulos , for declaration of
nullity of contract, cancellation of title, reconveyance and damages. The
complaint alleged that respondents inherited from their father, Maximo
 Gutierrez, an eight-hectare parcel of land located in Callos, Penaranda, “ A lawyer who represents a client before the trial court is presumed to represent
Nueva Ecija. such client before the appellate court, Section 22 of Rule 138 creates this
● Through fraud and deceit, petitioners succeeded in making it appear that presumption, thus:
Maximo Gutierrez executed a DoS on July 1978 when, in truth, he died on
April 1977. As a result, the TCT was cancelled and a new one, TCT was issued SEC. 22. Attorney who appears in lower court presumed to represent client on
in the name of petitioners. Based on the notation at the back of the appeal. — An attorney who appears de parte in a case before a lower court shall
certificate of title, portions of the property were brought under the be presumed to continue representing his client on appeal, unless he files a
Comprehensive Agrarian Reform Program (CARP) and awarded to Lorna formal petition withdrawing his appearance in the appellate court. “
Padilla, Elenita Nuega and Suzette Nuega who were issued Certificates of
Land Ownership Award A reading of respondent Elena Garcia's letter to the RTC would show that she did
not actually withdraw Atty. Magbitang's authority to represent respondents in
● In their defense, petitioners averred that respondents were not the real the case. The letter merely stated that there was, as yet, no agreement that they
parties in interest, that the Deed of Sale was regularly executed before a would pursue an appeal.
notary public, that they were possessors in good faith, and that the action
had prescribed. In any case, an unauthorized appearance of an attorney may be ratifed by the
client either expressly or impliedly. Ratification retroacts to the date of the
● The RTC dismissed the initial case on the basis of the lack of jurisdiction lawyer's rst appearance and validates the action taken by him.Implied ratification
(since property was under CARP, ang may jurisdiction is DARAB) may take various forms, such as by silence or acquiescence, or by acceptance and
retention of benefits owing therefrom. Respondents' silence or lack of
remonstration when the case was finally elevated to the CA means that they have
● Atty. Magbitang filed a Notice of Appeal 5 with the RTC, which gave due acquiesced to the ling of the appeal.
course to the same.The records reveal that on December 15, 2003,
respondent Elena G. Garcia wrote a letter to Judge Arturo M. Bernardo,
Acting Judge of RTC Gapan, Branch 87, stating that they were surprised to RESPONDENT WON
receive a communication from the court informing them that their notice of
appeal was ready for disposition. She also stated in the letter that there was
no formal agreement with Atty. Magbitang as to whether they would pursue
an appeal with the CA, because one of the plaintiffs was still in America.
● The CA granted the appeal of the respondents hence the issue

ISSUE
(1) WoN Atty Magbitan had authority to act on its clients case without said
client`s consent and knowledge

HELD/RATIO
(1) YES.