BORDADOR V.

LUZ The records show that neither an express nor an implied

agency was proven to have existed between Deganos and Brigida
D. Luz. Evidently, petitioners, who were negligent in their
FACTS: transactions with Deganos, cannot seek relief from the effects of
Petitioners(Bordadors) were engaged in the business of their negligence by conjuring a supposed agency relation
purchase and sale of jewelry and respondent (Brigida D. Luz, also between the two respondents where no evidence supports such
known as Aida D. Luz), was their regular customer. claim.

On several occasions, respondent Narciso Deganos, the What was finally proven as a matter of fact is that there was
brother of Brigida D. Luz, received several pieces of gold and no such contract between Brigida D. Luz and Narciso Deganos,
jewelry from petitioners amounting to P382,816.00. [1] executed or partially executed, and no delivery of any of the items
subject of this case was ever made to the former.
These items and their prices were indicated in seventeen
receipts covering the same. Eleven of the receipts stated that
they were received for a certain Evelyn Aquino, a niece of
ORIENT AIR SERVICES v. CA
Deganos, and the remaining six indicated that they were received
for Brigida D. Luz. [2]
Deganos was supposed to sell the items at a profit and Facts:
thereafter remit the proceeds and return the unsold items to
petitioners. American Air, an air carrier offering passenger and air cargo
transportation, entered into a General Sales Agency Agreement
Deganos remitted only the sum of P53,207.00. He neither
with Orient Air, authorizing the latter to act as its exclusive
paid the balance of the sales proceeds, nor did he return any
unsold item to petitioners. general sales agent for the sale of air passenger transportation.
Orient air failed to remit the net proceeds of sales for several
The total of his unpaid account to petitioners, including months prompting American Air to undertook the collection of
interest, reached the sum ofP725,463.98. [3]
the proceeds of tickets sold originally by Orient Air and
ISSUE: terminating their agreement. American air instituted suit against
Orient Air for the settlement of past outstanding funds in
The primary issue in the instant petition is whether or not
possession of the latter. Orient Air contended that because of the
herein respondent spouses are liable to petitioners for the
latters claim for money and damages in the sum of P725,463.98, unpaid overriding commissions it retained the sales proceeds
plus interests and attorneys fees, despite the fact that the before remitting the balance to American Air. American Air
evidence does not show that they signed any of the subject contended that the sale must be made by Orient Air and the sale
receipts or authorized Deganos to receive the items of jewelry on must be done with the use of American Air's ticket stocks in
their behalf. order for it to be entitled to the overriding commission. On the
RULING: other hand, Orient Air contends that the contractual stipulation
of a 3% overriding commission covers the total revenue of
No error having been committed by the Court of Appeals in American Air and not merely that derived from ticketed sales
affirming the judgment of the court a quo, its challenged decision
undertaken by Orient Air because it was an exclusive General
and resolution are hereby AFFIRMED and the instant petition is
DENIED, with double costs against petitioners Sales Agent. CA held that Orient Air is entitled to commissions
and ordered American Air to reinstate Orient Air as its General
HELD: Sales Agent.
No evidence support the theory of petitioners that Deganos
was an agent of Brigida D. Luz and that the latter should Issue:
consequently be held solidarily liable with Deganos in his
obligation to petitioners. While the quoted statement in the Whether or not Orient Air is entitled to commissions.
findings of fact of the assailed appellate decision mentioned that
Deganos ostensibly acted as an agent of Brigida, the actual Whether CA is correct in ordering reinstatement of Orient Air as
conclusion and ruling of the Court of Appeals categorically stated an agent.
that, (Brigida Luz) never authorized her brother (Deganos) to
act for and in her behalf in any transaction with Petitioners Held:
x x x.[15] It is clear, therefore, that even assuming arguendo that
Deganos acted as an agent of Brigida, the latter never authorized 1. Yes. Orient Air was entitled to an overriding commission based
him to act on her behalf with regard to the transactions subject of on total flown revenue. American Air's perception that Orient Air
this case.
was remiss or in default of its obligations under the Agreement
The Civil Code provides: was, in fact, a situation where the latter acted in accordance with
the Agreementthat of retaining from the sales proceeds its
Art. 1868. By the contract of agency a person accrued commissions before remitting the balance to American
binds himself to render some service or to do Air. Since the latter was still obligated to Orient Air by way of
something in representation or on behalf of such commissions. Orient Air was clearly justified in retaining
another, with the consent or authority of the
and refusing to remit the sums claimed by American Air. The
latter.
latter's termination of the Agreement was, therefore, without
cause and basis, for which it should be held liable to Orient Air.
The basis for agency is representation. Here, there is no
showing that Brigida consented to the acts of Deganos or
2. No. CA in effect compels American Air to extend its personality
authorized him to act on her behalf, much less with respect to the
particular transactions involved. Petitioners attempt to foist to Orient Air. Such would be violative of the principles and
liability on respondent spouses through the supposed agency essence of agency, defined by law as a contract whereby "a
relation with Deganos is groundless and ill-advised. person binds himself to render some service or to do something
in representation or on behalf of another, WITH THE CONSENT
Besides, it was grossly and inexcusably negligent of
petitioners to entrust to Deganos, not once or twice but on at OR AUTHORITY OF THE LATTER. In an agent-principal
least six occasions as evidenced by six receipts, several pieces of relationship, the personality of the principal is extended through
jewelry of substantial value without requiring a written the facility of the agent. In so doing, the agent, by legal fiction,
authorization from his alleged principal. A person dealing with becomes the principal, authorized to perform all acts which the
an agent is put upon inquiry and must discover upon his peril the latter would have him do. Such a relationship can only be effected
authority of the agent.[16]
with the consent of the principal, which must not, in any way, be compel it to continue the exclusive dealership. BMW moved to
compelled by law or by any court.
dismiss the case contending that the trial court did not acquire
Albaladejo y Cia vs PRC jurisdiction over it through the service of summons on DTI
because BMW is a foreign corporation and is not doing business
Facts Albaladejo is a corporation location in Legaspi engaged in in the Philippines. The trial court deferred the resolution of the
producing copra. Later, Albaladejo and PRC entered into a motion for dismissal until after trial on the merits for the reason
contract with PRC binding itself to buy Albaladejos copra. that the grounds advanced by BMW did not seem indubitable.
Further, PRC would neither appoint any other agent to purchase BMW appealed said order to the CA. The CA resolved that BMW
copra nor buy copra from any vendor in Legaspi. The contract was not doing business in the country and therefore jurisdiction
also stipulated PRC would provide transportation for the copra over it could not have been acquired through the service of
Albaladejo collected and deposited for shipment. The agreement summons on DTI and it dismissed the petition.
was satisfactory to both parties and due to PRCs large
requirements of copra, Albaladejo established numerous Issue: W/N BMW is doing business in the Philippines so as to
agencies in various ports and places. The agreement ended when enable the court to acquire jurisdiction over it through the
after a few years PRC closed down its factory and withdrew from service of summons on the DTI.
the copra market. After such closure, PRC gradually shipped out
the copra already purchased and the accounts between the 2 HeId: RA 7042 enumerates what acts are considered as doing
parties were liquidated. However, Albalaedjo filed suit against business. Section 3(d) enumerating such acts includes the
PRC on the ground the latter failed to transport copra ready for phrase appointing representatives or distributors in the
shipment resulting in the copra diminishing in value. Philippines but not when the representative or distributor
transacts business in his own name for his own account. In the
Issue case at bar, petitioner is private respondent BMWs agent and not
merely a broker. The record reveals that private respondent
Is PRC liable to Albaladejo for the expenses the latter incurred in exercised control over petitioners activities as a dealer and made
keeping its organization intact to support the formers copra regular inspections of petitioners premises to enforce its
requirements? standards. Since BMW is considered as doing business in the
Philippines, the trial court validly acquired jurisdiction over it by
Held No. In this case, Albaladejo argues there was a principal- virtue of the service of summons on the DTI. Furthermore, it is
agent relationship created and PRC is liable to indemnify it for now settled that, for purposes of having summons served on a
damages incurred in carrying out the agency. However, no such foreign corporation in accordance with the Rules of Court, it is
agency was created. Its undisputed PRC made Albaladejo one of sufficient that it be alleged in the complaint that the foreign
its many instrumentalities to collect copra, but its also clear that corporation is doing business in the Philippines. The court need
Albaladejo purchased the copra on its own account. When not go beyond the allegations in the complaint in order to
Albaladejo turned the copra over to PRC, there was in effect a determine whether or not it acquired jurisdiction. Such
second sale. Further, the mere fact PRC was prohibited from determination that the foreign corporation is doing business in
appointing any other agent in the Legaspi area during the the Philippines is only tentative and only for the purpose of
continuance of the agreement doesnt mean Albaladejo was enabling the court to acquire jurisdiction. A contrary
considered its agent for buying copra. This single clause in the determination may be made based on the courts findings or
contract cant dominate the real nature of the agreement evidence presented.
between the parties. Other letters PRC sent to various
instrumentalities used to buy copra are also referred to as agents
but such term was simply used for the sake of convenience. Its
clear that Albaladejo was acting in its own name in buying the Far Eastern Export & Import, Co. v. Lim Teck Suan,
copra for PRC. Ownership over the copra remained with 97 Phil 171
Albaladejo until it was subsequently sold to PRC. Simply put, this FACTS:
is just a case of sale. Ignacio Delizalde, an agent of the Far Eastern Export& Import
Company, went to the store of Lim TeckSuan in Manila and
Hahn v. Court of Appeals [266 SCRA 537 (January 22, 1997)] offered to sell textile.
Jurisdiction Over Foreign Corporation Doing Business in Having arrived at an agreement with Bernardo Lim,General
the Philippines Without a License Manager of Lim Teck Suan, Delizalde
returned with a buyers order. Suan established a letter of credit
Facts: Petitioner is a Filipino citizen doing business under the in favour ofFrenkel International Corporation through HSBC.
name of Hahn-Manila. Private respondent BMW is a non- The textile arrived and was received by Suan, butcomplained to
resident corporation incorporated in Germany. Petitioner Far Eastern of the inferior quality of the textile. Upon the
executed in favor of private respondent a Deed of Assignment instruction of Far Eastern, Suan depositedthe goods in a
with a Special Power of Attorney which constituted petitioner as warehouse and withdrew the sameand was offered for sale. The
the exclusive dealer of private respondent as long as the net direct loss is nowbeing claimed against Far Eastern.
assignment of its trademark and device subsisted. However, no The defense set up is that Far Eastern only acted as abroker in
formal contract was drawn between the two parties. Thereafter, this transaction.
petitioner was informed that BMW was arranging to grant the The lower court acquitted Far Eastern.
exclusive dealership of BMW cars and products to Columbia CA reversed the judgment, basing its decision ofreversal on the
Motors Corp. (CMC). BMW expressed dissatisfaction with various case of Jose Velasco v. UniversalTrading where the transaction
aspect of petitioners business but nonetheless also expressed therein involved wasfound by the court to be one of purchase and
willingness to continue business relations with petitioner on the saleand not of brokerage or agency
basis of a standard BMW contract otherwise, if said offer was Issue:
unacceptable to petitioner then BMW would terminate WON the Far Eastern Company not only an agent of the Frenkel
petitioners exclusive dealership. Petitioner refused BMWs offer Corporation but also the agent of or broker for Suan?
in which case BMW withdrew its alternative offer and terminated Held:
petitioners exclusive dealership. Petitioner therefore filed an The Supreme Court, speaking through Justice Montemayor, held
action for specific performance and damages against BMW to that it could only be an agent of the former. Said the Court: ". . .
where a foreign company has an agent here selling its goods and
merchandise, that same agent could not very well act as agent for That the service station belonged to the company and bore its
local buyers, because the interests of his foreign principal and tradename and the operator sold only the products of the
those of the buyer would be in direct conflict. He could not serve company; that the equipment used by the operator belonged to
two masters at the same time." the company and were just loaned to the operator and the
In holding that the transaction was one of purchase and sale and company took charge of their repair and maintenance
not one of brokerage or agency, the Court noticed the following
similarities between the present case and the Velasco case: As the act of the agent or his employees acting within the scope of
(1) Here, the Far Eastern company acted as agent for Frenkel his authority is the act of the principal, the breach of the
Corporation, the supplier of the textile sold; in the Velasco case, undertaking by the agent is one for which the principal is
the Universal Trading Co. was acting as agent for Wilson Co., the answerable
supplier of the whisky sold;
(2) In this instant case, Suan was merely commissioning the The latter was negligent and the company must answer for the
export company to procure for him the textile, just as in the other negligent act of its mechanic which was the cause of the fall of the
case, Velasco was suppoesd to be ordering the whisky through car from the hydraulic lifter.
the Universal Trading Co.;
SEVILLA VS CA
(3) In the present case, the price was paid for by Suan by means
of an irrevocable letter of credit in favor of the supplier. In the Facts Respondent Noguera and Tourist World Service entered
other case, Velasco was allowed either to open a similar letter of into a contract with the former leasing her property to the latter.
credit in favor of the supplier or make a cash deposit; Petitioner Sevilla bound her solidarily liable for the payment of
(4) Although in the Velasco case, the buyer there refused to monthly rentals. Shel also ran the office in the leased premises
receive the whisky shipped, and that in the present case Suan and she received a commission for every ticket she sold. Later,
received the goods, the latter nonetheless made an immediate Tourist World was informed that Sevilla was connected to a rival
protest and later sold the merchandise at a lose; company and because Sevillas brach was losing, it considered
(5) The present case was even a stronger one than that of the closing down its office. Tourist World then terminated the lease
other case for holding the transaction as one of purchase and sale contract and padlocked the premises. Sevilla, unable to enter the
because the agreement in the present case spoke of the locked premises, filed suit against petitioners.
merchanise therein involved as sold, and the sale was even
confirmed by the Far Eastern Company;
(6) In both cases, the agents dealt directly with the local buyers
without expressly revealing their principals; Issue What is the relationship between Sevilla and Tourist
(7) In both cases, there was no privity of contract between the World?
local buyers and the foreign firms; and that
(8) In both cases, no commission was paid or agreed to be paid Held
by the buyers to the Far Eastern company and the universal
Agency. In this case, Sevilla solicited airline fares on Tourist
Trading Co., proof that there was no agency or brokerage as
Worlds behalf, her principal. And as compensation, Sevilla
between them.
received a commission for every ticket she sold. Sevilla herself
concedes the principals authority as owner of the business
Shell Co. v. Firemens Insurance Company of Newark G.R. No. undertaking. However, the agency in this case cant be revoked at
L-8169 January 29, 1957 the principals will. The agency here is coupled with interest, it
having been created for mutual interest of the agent and
Facts: This is an action for recovery of sum of money, based on principal. Sevilla is a bona fide travel agent and as such, acquired
alleged negligence of the defendants an interest in the business entrusted to her. Moreover, she
assumed a personal obligation for the operation thereof, holding
A car was brought to a Shell gasoline station owned by dela herself solidarily liable to pay rentals. Her interest isnt the
Fuente for washing and greasing. The car was placed on a commissions she earned as a result of the business transactions,
hydraulic lifter for greasing. As some parts of the car couldnt be but one that extends to the very subject matter of the power of
reached by the greaseman, the lifter was lowered. Unfortunately, management delegated to her. Further, Tourist World itself
for unknown reasons (probably due to mechanical failure or padlocked the premises and deprived Sevilla of her business
human error), while the lifter was being lowered, the car swung maliciously. Tourist World performed these acts after learning
and fell from the platform. Sevilla allegedly was moonlighting for a rival firm. Consequently,
there was an unwarranted revocation of the agency and Sevilla is
Said car was insured against loss or damage by Firemen's entitled to damages.
Insurance Company of Newark, New Jersey, and Commercial
Casualty Insurance Company jointly for the sum of P10,000

The insurance companies after paying the sum of P1,651.38 for LIM vs. PEOPLE CASE NUMBER: G.R. No. L-34338 DATE:
the damage and charging the balance of P100.00 to Salvador November 21, 1984 PONENTE: RELOVA, J
Sison in accordance with the terms of the insurance contract,
have filed this action together with said Salvador Sison for the FACTS: 1. Lourdes Lim went to the house of Maria de Guzman
recovery of the total amount of the damage from the defendants and proposed to sell the latters tobacco. 2. Maria agreed with the
on the ground of negligence proposalhence the execution of a receipt manifesting that
Lourdes received 615 kilos of tobacco to be sold at P1.30 per kilo,
Issue: WON dela Fuente is merely an agent of Shell Co. the overprice for which would be received by Lourdes. 3. The
receipt also states that the proceeds will be given to Mariaas soon
Held: Yes. De la Fuente was the operator of the station "by grace" as it was sold. 4. However, Lourdes paid only P240, despite
of the Defendant Company which could and did remove him as it repeated demands. 5. Thus, Maria filed a complaint, and Lourdes
pleased; that all the equipments needed to operate the station was found guilty of estafa. (Estafa is present where contract to
was owned by the Defendant Company which took charge of their sell constituted another as mere agent) 6. Lourdes argued that
proper care and maintenance, despite the fact that they were the receipt was a contract of sale and not a contract of agency
loaned to him; that the Defendant company did not leave the to sell. ISSUE: Is Lourdes argument tenable? RULING: NO. The
fixing of price for gasoline to De la Fuente; contract was not a contract of sale because there was no transfer
of ownership of the goods to Lourdes. Instead, the agreement was Flores later acknowledged the receipt of said goods and made
a contract of agency to sell for it constituted Lourdes as agent various payments amounting in all to P174.
with the obligation to give the proceeds of the sale to Maria as
soon as the same was sold. The obligation was immediately On demand for payment of balance of the account Flores
demandable as soon as the tobacco was disposed of. informed him that he did not have the necessary funds on Page
Consequently, there is no need for the court to fix the duration of 32 hand, and that he would have to wait the return of his
the obligation, as contended by Lourdes. principal, the defendant, who was at that time visiting in the
provinces.

The plaintiffs were satisfied as to the credit of the defendant

SAN DIEGO, SR. vs. NOMBRE CASE NUMBER: G.R. No. L-19265 and as to the authority of Flores to act as his agent who was
DATE: May 29, 1964 PONENTE: PAREDES, J.: apparently in charge of the business and claiming to be the
business manager of the defendant.
FACTS: 1. While being the judicial administrator of the intestate
estate subject of Special Proceeding 7279, AdeloNombre leased A written contract (for the hotel with a bar and restaurant
one of the properties (fishpond) of the said estate to Pedro business of the defendant) dated May 25, 1904, was introduced
Escanlar for 3 years without approval of the court. 2. When in evidence to establish the relationship between the defendant
Nombre was removed as judicial administrator, he was and Flores.
substituted by SofronioCampillanos. Campillanos filed a motion
asking for authority to execute a lease contract of the same The defendant relies wholly on his contention that the
fishpond in favour of Moises San Diego.This motion was granted foregoing facts are not sufficient to establish the fact that he
on the ground that the contract of lease entered into between received the goods for which payment is demanded.
Nombre and Escanlar was void for want of judicial authority. 3.
Nombre and Escanlar appealed this order to the Court of Appeals, ISSUE: WON Flores was managing the business as agent?
which reversed the same order. 4. Aggrieved, San Diego appealed
to the Supreme Court. ISSUE: San Diego raised the following legal RULING:
questions: 1. Whether a judicial administrator can validly lease
YES, the evidence is sufficient to sustain a finding that Flores
property of the estate without prior judicial authority and
was the agent of the defendant in the management of the bar of
approval, and 2. Whether the provisions of the New Civil Code on
the Washington Cafe with authority to bind the defendant, his
Agency (referring specifically to par. 8 of Article 1878) should
principal, for the payment of the goods mentioned in the
apply to judicial administrators. RULING: Administrator has the
complaint. Lastly, from an examination of the items of the
power of administering the estate of the deceased person. He
account attached to the complaint, we are of opinion that Flores
may, therefore, exercise all acts of administration without special
was acting within the scope of his authority.
authority of the court. For instance, he may lease the property
without prior approval from the court, since leasing has been
It is a well settled rule that: One who clothes another apparent
considered an act of administration. Par. 8 of Article 1878 states
authority as his agent, and holds him out to the public as such,
that Special powers of attorney are necessary to lease any real
can not be permitted to deny the authority of such person to act
property to another person for more than one (1) year. This
as his agent, to the prejudice of innocent third parties dealing
provision, according to San Diego, is a limitation to the right of a
with such person in good faith and in the honest belief that he is
judicial administrator to lease real property without prior
what he appears to be.
judicial authority if it exceeds one (1) year. However, the same
argument falls because provisions on Agency do not apply to
judicial administrators. A judicial administrator is appointed by
the court. He is not only the representative of the court, but also MANOTOK BROS. INC. VS CA
the heirs and creditors of the estate. Before conducting his duties,
he is required to file a bond. His actions are subject to specific Facts Manotok Inc. owns Property X that was leased to the City of
provisions of law and orders of the appointing court. These Manila. Later, Manotok authorized respondent Saligumba to
circumstances are not true in case of agency. negotiate with City of Manila for the sale of Property X at a
certain price with a 5% commission. Saligumbas authority
allowed it to finalize and consummate the sale of Property X to
the City of Manila for not less than P410 thousand, said authority
MACKE vs. CAMPS CASE NUMBER: G.R. No. 2962 DATE: 27 to last for 180 days. The City of Manila then passed an ordinance
February 1907 PONENTE: CARSON, J. to purchase Property X but said ordinance was signed only 183
days after the authorization was given to Saligumba.
FACTS:
Nevertheless, Saligumba executed the deed of sale and full
payment was made. However, Manotok refused to give Saligumba
The plaintiffs are partners doing business under the firm name
his commission because the former didnt recognize the latters
of Macke, Chandler & Company, allege that during the months of
role as agent in the transaction. Saligumba then filed suit against
February and March, 1905, they sold to the defendant and
Manotok.
delivered at his place of business, known as the "Washington
Cafe," various bills of goods amounting to P351.50. Issue Is Saligumba entitled to the 5% commission?

The plaintiffs further alleged that the defendant has only paid Held Yes. In this case, at first glance it seems Salimbuga isnt
on account of said accounts the sum of P174; that there is still entitled to its commission because the deed of sale was executed
due sum of P177.50; that before instituting this action they made after its authority had already expired. It seems this case would
demand for the payment but the defendant had failed and fall under the general rule that a broker or agent isnt entitled to
refused to pay. commission until he has successfully done the job given to him.
However, the exception applies in this case, the all-encompassing
The plaintiffs, testified that on the order of one Ricardo Flores,
exception of equity. Here, the exception should apply because
who represented himself to be agent of the defendant, he shipped
Salimbuga was the efficient procuring cause in bringing about the
the said goods to the defendants at the Washington Cafe; that
sale. When the agent is the efficient procuring cause in bringing
about the sale, such agent is entitled to commission. Further, the
City of Manila approved the ordinance while Salimbugas FACTS: Quiroga and Parsons entered into a contract for the
authority was still subsisting but was signed after a measly 3 exclusive sale of Quiroga beds in the Visayan Islands. They agreed
days after such authority already expired. Also, only Salimbuga on the following terms: a) Quiroga shall furnish the beds and
had authority to negotiate the sale of Property X. Also, Manotok shall give a 25% discount on the invoiced prices as commission
intervened in the sale only when the ordinance was already sales and Parsons shall order by the dozen; b) Payment shall be
passed and all that was left to do was for the Mayor to sign it. made within 60 days from date of shipment; c) Transportation
and shipment expenses shall be borne by Quiroga while freight,
TAN VS GULLAS insurance, and cost of unloading by Parsons; d) If before an
invoice falls due, Quiroga should request payment, payment
Facts Gullas owns Property X that he wants to sell. Gullas made shall be prompt payment and a deduction of 2% shall be
authorized Tan, a real estate broker, to negotiate for the sale of given; same discount if payment is in cash; e) Notice from
the land with a commission if Tan does sell it. Tan found a buyer Quiroga shall be given at least 15 days before any change in price;
in the Sisters of Mary Banneaux. After negotiations, Gullas agreed f) Parsons binds himself not to sell any other kind of bed; and g)
to sell Property X to Sisters of Mary Banneaux. Gullas authorized Contract is for an unlimited period.
his attorney to sell, transfer, and convey Property X. The
transaction went smoothly and title was issued in Sisters of Mary Parsons violated some of the conditions such as not to sell the
Banneauxs favor. Afterwards, Tan went to Gullas to collect his beds at higher prices, pay for the advertisement expenses, and to
commission but Gullas refused reasoning another broker order beds by the dozen. Quiroga alleged that Parsons was his
introduced Sisters of Mary Banneaux to Gullas. agent and that the obligations are implied in a commercial agency
contract.
Issue Is Tan entitled to the commission?
ISSUE: w/n Parsons, by reason of the contract, was a purchaser
Held Yes. An agent receives a commission upon the sale's or an agent of Quiroga for the sale of the latters beds.
successful conclusion. Meanwhile, a broker earns his commission
by merely bringing the buyer and seller together, even if no sale
HELD: NO, Parsons was not an agent. In order to classify a
is eventually made. In this case, it was Tan who first introduced
Sisters of Mary Banneaux to Gullas. Gullas allegation that he contract, due regard must be given to the essential clauses. In this
hired another broker who first introduced Sisters of Mary case, there was an obligation on Quirogas part to supply beds
Banneaux to him is untenable because he failed to provide while an obligations on Parsons part to pay the price. These are
evidence proving it. Gullas is merely avoiding paying Tan his essential features of a contract of purchase and sale. None of the
commission for Tans role in the transaction. Further, Tan wasn't clauses conveys the idea of an agency where an agent received
able to participate in the negotiations because of Gullas actions. the thing to sell it and does not pay the price but delivers to the
principal the price he obtains from the sale to a third person, and
if he does not sell it, he returns it.

SIASAT V. IAC The word agency used in the contract only expresses that
Parsons was the only one who could sell the petitioners beds in
Facts: Nacianceno was able to convince the Department of the Visayan Islands. A contract is what the law defines it to be
Education and Culture to purchase without bidding Philippine and not what the parties call it.
Flags. When she followed-up the Department of Budget regarding
such purchase, the latter informed her that purchase order
cannot be released until a formal offer to deliver the flags is
given. Due this, she contacted Siasat, the owner of the United Flag
PNB v Sta Maria
Ind. The latter then issued a document authorizing Nacianceno to
deal with any entity regarding the marketing of the products of
Facts: PNB filed an action against the Sta. Maria family
the UFI. They also agreed that Nacianceno shall be entitled to a
commission of 30%. The purchase order was then released in and Associated Surety for the collection of certain amounts
favor of UFI. After the first delivery was made, UFI gave representing unpaid balances on two crop loans due from the
Nacianceno her commission amounting to 5% of the amount defendants. Maximo Sta Maria obtained a Special Power of
purchased. UFI then revoked the authorization given to Attorney, executed in his favor from his brothers and sisters.
Nacianceno. After such revocation, another delivery was made by Said power of attorney authorized Maximo to mortgage or
UFI to the DEC. Because of this, Nacianceno demanded that her
convey as security to any bank, company or to any natural or
full 30% from the first delivery be given as well as her
commission for the second delivery. UFI then contended, among juridical person, our undivided shares over a certain parcel of
others, that she has no right over the commission since the land together with the improvements thereon. In addition,
agency contract is special in character (as it is limited to the sister Valerina alone executed in favor of Maximo, a Special
marketing of the UFI products only). Power of Attorney authorizing the latter to borrow money and
make, execute, sign and deliver mortgages of real estate in my
Issue: WON the agency contract authorizing of Nacianceno is name xxx. By virtue of these two powers, applied for two loans
special in character.
from the PNB. As security, Maximo executed in his own name, in
Held:B No. A special agent is one authorized to do some favor of PNB, two chattel mortgages over the standing crops on
particular act or to act upon some particular occasion while a the land, guaranteed by Associated. The lower court found for
general agent is one authorized to do all acts pertaining to a PNC, holding that the Sta. Marias and Associated liable. The Sta
business of a certain kind or at a particular place, or all acts Maria brothers and sisters (except Maximo) appealed. The Sta
pertaining to a business of a particular class or series. Marias contend that they did not authorize Maximo to borrow
In this case, it is clear from the document that no restrictions money but only to mortgage the real estate jointly owned by
were intended as to the manner the agency was to be carried out
them.
or in the place where it was to be executed. The power granted to
the respondent was so broad that it practically covers the
negotiations leading to, and the execution of, a contract of sale of Issue: W/N the SPAs of (1) the Sta Marias and (2) Valeriana
petitioners' merchandise with any entity or organization. authorized Maximo to borrow money.

Held: A Special Power of Attorney to mortgage real

Andres Quiroga v. Parsons Hardware Co., estate is limited to such authority to mortgage and does not carry
with it the authority to contract obligation unless the contrary is
G.R. No. L-11491 August 23, 1918 shown.
 In the case at bar, the authority granted by the Sta FACTS: 1. Defendant-appellant Damaso Perez has presented a
Marias (except Valeriana) to Maximo was merely to mortgage the motion for new trial on the ground of newly discovered evidence.
property jointly owned by them. They did not grant Maximo any 2. Damaso Perez claims that he was not aware of the nature of the
authority to contract for any loans in their names and behalf. power of attorney that Ramon Racelis used, purportedly signed
MAximo alone and Valeriana who authorized him to borrow by him, to secure the loans for the Republic Armored Car Service
money, must answer for said loans and the others only liability is Corporation and the Republic Credit Corporation. 3. He claims
that the real estate authorized by them would be subject to that Ramon Racelis only used a photastic copy as proof of the
foreclosure and sale to respond for the obligations contracted by Power of Attorney. He further presents the original purporting
Maximo. Hence, in the absence of ratification on their part by the alleged true authority granted by the movant. - It is not
estoppel, they cannot be held personally liable for the payment of expressly mentioned that this is the precise power of attorney
such obligations. that Ramon Racelis Utilized to secure the loans the collection of
which is sought in these cases.
DPWH v Sing juco.. see printed digest
ISSUE: Whether or not the claim of the movant is tenable as to
invalidate the security loans secured under the name of movant?
NO, it is not.
RURAL BANK OF BOMBON INC. vs. COURT OF APPEALS CASE
NUMBER: G.R. No. 95703 DATE: August 3, 1992 PONENTE: RULING: Assuming, for the sake of argument, that the said power
GRINO-AQUINO, J, of attorney incorporated in the motion for reconsideration was
the one used to obtain the loans. We find that the movant's
FACTS: 1. On January 12, 1981, Ederlinda M. Gallardo, married to contention has no merit. In accordance with the document,
Daniel Manzo, executed a special power of attorney in favor of Racelis was authorized to negotiate for a loan or various loans ..
Rufina S. Aquino authorizing him: - To secure a loan from any with other being institution, financing corporation, insurance
institution for any amount or mortgage the property at Las Pinas, companies or investment corporations, in such sum or sums,
Rizal 2. On August 26, 1981, a Deed of Real Estate Mortgage was aforesaid Attorney-in-fact Mr. Ramon Racelis, may deem proper
executed by Rufino S. Aquino in favor of the Rural Bank of and convenient to my interests, ... and to execute any and all
Bombon(Camarines Sur), Inc. The property was secured for a documents he deems requisite and necessary in order to obtain
loan in the total sum of Three Hundred Fifty Thousand Pesos only such loans, always having in mind best interest; ... We hold that
(P350,000.00), plus interest at the rate of fourteen (14%) per this general power attorney to secure loans from any banking
annum. 3. Spouses Gallardo filed an action against Rufino Aquino institute was sufficient authority for Ramon Racelis to obtain the
and Rural Bank. They alleged that Aquino mortgaged the credits subject of the present suits
property to pay for his personal loans, from the same Bank. - The
trial court temporarily restrained the Rural Bank "from enforcing
PNB v. AGUDELO (1933)
the real estate mortgage and from foreclosing it either judicially
or extrajudicially until further orders from the court. 4. Aquino,
Legal Doctrine
in his answer, alleged that the spouses allowed him to mortgage
the property and use the use the proceeds thereof to compensate
The exception to the general rule in OCC 1717 (now 1883) is
for the pre-existing obligation of P350,000 that the spouse owed
applicable only when the agent, acting in his own name in
him. 5. The trial court lifted the TRO against the bank and connection with the properties of his principal, does so within
ordered the foreclosure proceeding against the mortgaged the scope of his authority.
property. The Spouses Gallardo appealed to the Court of Appeals
(CA). The CA reversed the trial court and held that Rufino Aquino Facts
had no authority to mortgage the land. Thus, this appeal against
the decision. * Paz Agudelo y Gonzaga and Amparo Garrucho both executed
separately special powers of attorney in favor of Mauro Garrucho
ISSUE: Whether or not the Deed of Real Estate Mortgageexecuted to sell, alienate and mortgage in the manner and form he might
by Rufino S. Aquinoin favor of the Rural Bank of Bombon (Cam. deem convenient all their real estate situated in Murcia, Bacolod
Sur), Inc. is with authority, thus valid? NO, it was without and Bago in Occidental Negros.
authority.
* Nothing in the said powers of attorney expressly authorized
RULING: Agent who signs a Deed of Mortgage in his name alone Mauro Garrucho to contract any loan nor to constitute a
does not validly bind the owner of the real estate mortgage on the properties belonging to the respective
mortgaged.Aquino's act of signing the Deed of Real Estate principals, to secure his [own] obligations.
Mortgage in his name alone as mortgagor, without any indication
that he was signing for and in behalf of the property owner, * Subsequently, Mauro Garrucho contracted loans with Philippine
National Bank (PNB), whereby constituted mortgages on
Ederlinda Gallardo, bound himself alone in his personal capacity
properties included in the aforementioned special powers of
as a debtor of the petitioner Bank and not as the agent or attorney.
attorney-in-fact of Gallardo. The petitioner misapplied Art. 1883.
The above provision of the Civil Code relied upon by the * However, Mauro failed to pay his loans to PNB, and thus, PNB
petitioner Bank, is not applicable to the case at bar. Herein instituted an action.
respondent Aquino acted purportedly as an agent of Gallardo, but
actually acted in his personal capacity. Involved herein are * The lower court ruled that since Paz Agudelo is the owner of the
properties titled in the name of respondent Gallardo against subject properties mortgaged to PNB, she is liable to the former
which the Bank proposes to foreclose the mortgage constituted for Mauros outstanding loans.
by an agent (Aquino) acting in his personal capacity. Under these
circumstances, we hold, that Gallardo's property is not liable on Issue
the real estate mortgage.
W/N Paz Agudelo is liable for the payment of the loans obtained
by Mauro Garrucho from PNB for the security of which he
constituted a mortgage on a real estate belonging to Paz.
COMMERCIAL BANK & TRUST CO. OF THE PHILS Vs. REP.
ARMORED CAR SERVICE CORP. CASE NUMBER: Held
No. be considered as entered into between the principal and the third
person.
Ratio

OCC 1717 (now, 1883): When an agent acts in his own name, the
principal shall have no right of action against the persons with Victoria Milling Co., Inc. v. CA and Consolidated Sugar
whom the agent has contracted, nor the said persons against the Corporation
principal. G.R. No. 117356 June 19, 2000
Quisumbing, J.
In such case, the agent is directly liable to the person with whom FACTS:
he has contracted, as if the transaction were his own. Cases St. Therese Merchandising regularly bought sugar from
involving things belonging to the principal are excepted. Victorias Milling Co., Inc. In the course of their dealings,
Victorias Milling issued several Shipping List/Delivery Receipts
The provisions of this article shall be understood to be without (SLDRs) to St. Therese Merchandising as proof of purchases.
prejudice to actions between principal and agent. Among these was SLDR No. 1214M which covers 25,000 bags
of sugar. Each bag contained 50 kilograms and priced at
P638.00 per bag. The transaction it covered was a direct sale.
On October 25, 1989, St. Therese Merchandising sold to
Dominion Insurance Corp. vs CA Consolidated Sugar Corp. its rights in SLDR No. 1214M for
P14,750,000.00. Consolidated Sugar Corp. issued checks in
payment. That same day, Consolidated Sugar Corp. wrote
Facts Respondent Guevarra, Dominion Insurance Corps
Victorias Milling that it had been authorized by St. Therese
manager, filed a case to recover money which he claimed to have Merchandising to withdraw the sugar covered by SLDR No.
advanced in his capacity as manager to satisfy claims filed by 1214M.
Dominion Insurances clients. Consolidated Sugar Corp. surrendered SLDR No. 1214M to
Victorias Millings NAWACO warehouse and was allowed to
Issue Did Guevarra act within his authority as Dominion withdraw sugar. However, after 2,000 bags had been released,
Insurance Corps agent? Victorias Milling refused to allow further withdrawals of sugar
against SLDR No. 1214M because, according to it, St. Therese
Held No. A general power of agency permits the agent to do all Merchandising had already withdrawn all the sugar covered by
the cleared checks.
acts for which the law doesnt require a special power. One such
instance where a special power of attorney is required is to make ISSUE: WON the contract was one of agency or sale
such payments as are not usually considered as acts of
administration, In this case, Dominion Insurance and Guevarra HELD: Sale.
entered into a principal-agent relationship evidenced by the Victorias Milling heavily relies upon St. Therese Merchandisings
document Special Power of Attorney. However, despite the word letter of authority allowing Consolidated Sugar Corp. to withdraw
Special in the documents title, the contents reveal a general sugar against SLDR No. 1214M to show that the latter was St.
Therese Merchandisings agent. The pertinent portion of said
agency. The agency comprises all the principals business but is
letter reads: This is to authorize Consolidated Sugar Corporation
couched in general terms limited only to acts of administration. or its representative to withdraw for and in our behalf (stress
Payment of insurance claims isnt an act of administration and supplied) the refined sugar covered by Shipping List/Delivery
consequently requires a special power of attorney. Guevarra had Receipt = Refined Sugar (SDR) No. 1214 dated October 16, 1989
authority to pay only very specific insurance claims and even in the total quantity of 25, 000 bags.
then from a specific fund in his possession. Guevarra acted Art. 1868. By the contract of agency a person binds himself to
outside the scope of his authority and therefore the principal isnt render some service or to do something in representation or on
behalf of another, with the consent or authority of the latter.
liable
The basis of agency is representation. On the part of the principal,
there must be an actual intention to appoint or an intention
NATIONAL FOOD AUTHORITY vs. INTERMEDIATE naturally inferable from his words or actions; and on the part of
APPELLATE COURT CASE NUMBER: GR NO. 75640 DATE: the agent, there must be an intention to accept the appointment
April 5, 1990 PONENTE: Paras and act on it, and in the absence of such intent, there is generally
no agency. One factor which most clearly distinguishes agency
FACTS: Medalla, as commission agent of Superior Shipping from other legal concepts is control; one person - the agent -
Corporation (SSC), entered into a contract for hire of ship with agrees to act under the control or direction of another - the
the National Grains Authority (NGA), where sacks of rice principal.
belonging to the latter would be transported from Occidental
Mindoro to Manila. SSC then asked payments from NGA and it
EUROTECH INDUSTRIAL VS CUIZON
requested that the payment be made to it and not to Medalla.
NGA replied that it could not grant its request because the Facts Eurotech is in the business of importing and distributing
contract was entered into by NGA and Medalla who did not various European industrial equipment for customers in the
disclose that he was acting as a mere agent of SSC. NGA paid Philippines. Eurotech has Impact Systems (represented by Sales
Medalla. The SSC asked Medalla for the payment but the latter Manager Cuizon) as one of its customers. Impact Systems bought
ignored the request. equipment from Eurotech. When the equipment arrived in the
Philippines Eurotech refused to give it to Impact Systems until it
ISSUE: : Is NGA liable to SSC?
fully pays their indebtedness. Impact Systems paid by way of a
deed of assignment transferring the receivables due it from
RULING: NGA is liable under Art 1883 of the Civil Code. Relevant
Toledo Power in Eurotechs favor. However, Impact Systems still
portion of the provision states, In such case the agent is the one
collected on the receivables due from Toledo Power. When
directly bound in favor of the person with whom he has
Eurotech discovered Impact Systems actions, Eurotech
contracted, as if the transaction were his own, except when the
demanded payment from Impact Systems that it failed to do so.
contract involves things belonging to the principal.
Consequently, when things belonging to the principal (in this
Issue Did Cuizon exceed his authority when he signed the Deed of
case, SSC) are dealt with, the agent is bound to the principal
Assignment thereby making him personally liable to Eurotech?
although he does not assume the character of such agent and
appears acting in his own name. Thus, in effect, the contract must Held No. The basis of agency is representation, the agents acts for
and on behalf of the principal on matters within the scope of his
authority and said acts have the same legal effect as if the
principal personally executed them. As a general rule an agent is
not personally liable to the party with whom he contracts. The
exception is if the agent binds himself to the obligation and if the
agent exceeds his authority. If the agent exceeds his authority, the
3rd person affected cant recover from both agent and principal.
In this case, Cuizon is the agent while Erwin Cuizon (Impact
Systems owner) is the principal. Cuizon signed the deed of
assignment in his capacity as Impact Systems Sales Manager. An
agents powers are particularly broad in the case of one acting as
a general agent or manager. A high degree of confidence and
liberal powers are invested in such agent. Such agent may enter
into any contract he deems reasonably necessary or requisite to
protect the principals interest. Here, Cuizon acted within his
authority because Impact Systems had great need for the
equipment and negotiations were being held up.