G.R. No. L-57339 December 29, 1983 AIR FRANCE, petitioner, vs. HONORABLE COURT OF APPEALS, JOSE G.

GANA (Deceased), CLARA A. GANA, RAMON GANA, MANUEL GANA, MARIA TERESA GANA, ROBERTO GANA, JAIME JAVIER GANA, CLOTILDE VDA. DE AREVALO, and EMILY SAN JUAN, respondents. Sometime in February, 1970, the late Jose G. Gana and his family, numbering nine (the GANAS), purchased from AIR FRANCE through Imperial Travels, Incorporated, a duly authorized travel agent, nine (9) "open-dated" air passage tickets for the Manila/Osaka/Tokyo/Manila route. The GANAS paid a total of US$2,528.85 for their economy and first class fares. Said tickets were bought at the then prevailing exchange rate of P3.90 per US$1.00. The GANAS also paid travel taxes of P100.00 for each passenger. On 24 April 1970, AIR FRANCE exchanged or substituted the aforementioned tickets with other tickets for the same route. At this time, the GANAS were booked for the Manila/Osaka segment on AIR FRANCE Flight 184 for 8 May 1970, and for the Tokyo/Manila return trip on AIR FRANCE Flight 187 on 22 May 1970. The aforesaid tickets were valid until 8 May 1971, the date written under the printed words "Non valuable apres de (meaning, "not valid after the"). The GANAS did not depart on 8 May 1970. Sometime in January, 1971, Jose Gana sought the assistance of Teresita Manucdoc, a Secretary of the Sta. Clara Lumber Company where Jose Gana was the Director and Treasurer, for the extension of the validity of their tickets, which were due to expire on 8 May 1971. Teresita enlisted the help of Lee Ella Manager of the Philippine Travel Bureau, who used to handle travel arrangements for the personnel of the Sta. Clara Lumber Company. Ella sent the tickets to Cesar Rillo, Office Manager of AIR FRANCE. The tickets were returned to Ella who was informed that extension was not possible unless the fare differentials resulting from the increase in fares triggered by an increase of the exchange rate of the US dollar to the Philippine peso and the increased travel tax were first paid. Ella then returned the tickets to Teresita and informed her of the impossibility of extension. In the meantime, the GANAS had scheduled their departure on 7 May 1971 or one day before the expiry date. In the morning of the very day of their scheduled departure on the first leg of their trip, Teresita requested travel agent Ella to arrange the revalidation of the tickets. Ella gave the same negative answer and warned her that although the tickets could be used by the GANAS if they left on 7 May 1971, the tickets would no longer be valid for the rest of their trip because the tickets would then have expired on 8 May 1971. Teresita replied that it will be up to the GANAS to make the arrangements. With that assurance, Ella on his own, attached to the tickets validating stickers for the Osaka/Tokyo flight, one a JAL. sticker and the other an SAS (Scandinavian Airways System) sticker. The SAS sticker indicates thereon that it was "Reevaluated by: the Philippine Travel Bureau, Branch No. 2" (as shown by a circular rubber stamp) and signed "Ador", and the date is handwritten in the center of the circle. Then appear under printed headings the notations: JL. 108 (Flight), 16 May (Date), 1040 (Time), OK (status). Apparently, Ella made no more attempt to contact AIR FRANCE as there was no more time. Notwithstanding the warnings, the GANAS departed from Manila in the afternoon of 7 May 1971 on board AIR FRANCE Flight 184 for Osaka, Japan. There is no question with respect to this leg of the trip.

However, for the Osaka/Tokyo flight on 17 May 1971, Japan Airlines refused to honor the tickets because of their expiration, and the GANAS had to purchase new tickets. They encountered the same difficulty with respect to their return trip to Manila as AIR FRANCE also refused to honor their tickets. They were able to return only after pre-payment in Manila, through their relatives, of the readjusted rates. They finally flew back to Manila on separate Air France Frights on 19 May 1971 for Jose Gana and 26 May 1971 for the rest of the family. On 25 August 1971, the GANAS commenced before the then Court of First Instance of Manila, Branch III, Civil Case No. 84111 for damages arising from breach of contract of carriage. AIR FRANCE traversed the material allegations of the Complaint and alleged that the GANAS brought upon themselves the predicament they found themselves in and assumed the consequential risks; that travel agent Ella's affixing of validating stickers on the tickets without the knowledge and consent of AIR FRANCE, violated airline tariff rules and regulations and was beyond the scope of his authority as a travel agent; and that AIR FRANCE was not guilty of any fraudulent conduct or bad faith. On 29 May 1975, the Trial Court dismissed the Complaint based on Partial and Additional Stipulations of Fact as wen as on the documentary and testimonial evidence. On 15 December 1980, respondent Appellate Court set aside and reversed the Trial Court's judgment in a Decision, which decreed: The crucial issue is whether or not, under the environmental milieu the GANAS have made out a case for breach of contract of carriage entitling them to an award of damages. We are constrained to reverse respondent Appellate Court's affirmative ruling thereon. Pursuant to tariff rules and regulations of the International Air Transportation Association (IATA), included in paragraphs 9, 10, and 11 of the Stipulations of Fact between the parties in the Trial Court, dated 31 March 1973, an airplane ticket is valid for one year. "The passenger must undertake the final portion of his journey by departing from the last point at which he has made a voluntary stop before the expiry of this limit (parag. 3.1.2. ) ... That is the time allowed a passenger to begin and to complete his trip (parags. 3.2 and 3.3.). ... A ticket can no longer be used for travel if its validity has expired before the passenger completes his trip (parag. 3.5.1.) ... To complete the trip, the passenger must purchase a new ticket for the remaining portion of the journey" (ibid.) 3 From the foregoing rules, it is clear that AIR FRANCE cannot be faulted for breach of contract when it dishonored the tickets of the GANAS after 8 May 1971 since those tickets expired on said date; nor when it required the GANAS to buy new tickets or have their tickets re-issued for the Tokyo/Manila segment of their trip. Neither can it be said that, when upon sale of the new tickets, it imposed additional charges representing fare differentials, it was motivated by selfinterest or unjust enrichment considering that an increase of fares took effect, as authorized by the Civil Aeronautics Board (CAB) in April, 1971. This procedure is well in accord with the IATA tariff rules which provide: 6. TARIFF RULES 7. APPLICABLE FARE ON THE DATE OF DEPARTURE 3.1 General Rule.

All journeys must be charged for at the fare (or charge) in effect on the date on which transportation commences from the point of origin. Any ticket sold prior to a change of fare or charge (increase or decrease) occurring between the date of commencement of the journey, is subject to the above general rule and must be adjusted accordingly. A new ticket must be issued and the difference is to be collected or refunded as the case may be. No adjustment is necessary if the increase or decrease in fare (or charge) occurs when the journey is already commenced. 4 The GANAS cannot defend by contending lack of knowledge of those rules since the evidence bears out that Teresita, who handled travel arrangements for the GANAS, was duly informed by travel agent Ella of the advice of Reno, the Office Manager of Air France, that the tickets in question could not be extended beyond the period of their validity without paying the fare differentials and additional travel taxes brought about by the increased fare rate and travel taxes. ATTY. VALTE Q What did you tell Mrs. Manucdoc, in turn after being told this by Mr. Rillo? A I told her, because that is the reason why they accepted again the tickets when we returned the tickets spin, that they could not be extended. They could be extended by paying the additional fare, additional tax and additional exchange during that time. Q You said so to Mrs. Manucdoc? A Yes, sir." ... 5 The ruling relied on by respondent Appellate Court, therefore, in KLM. vs. Court of Appeals, 65 SCRA 237 (1975), holding that it would be unfair to charge respondents therein with automatic knowledge or notice of conditions in contracts of adhesion, is inapplicable. To all legal intents and purposes, Teresita was the agent of the GANAS and notice to her of the rejection of the request for extension of the validity of the tickets was notice to the GANAS, her principals. The SAS validating sticker for the Osaka/Tokyo flight affixed by Era showing reservations for JAL. Flight 108 for 16 May 1971, without clearing the same with AIR FRANCE allegedly because of the imminent departure of the GANAS on the same day so that he could not get in touch with Air France 6 was certainly in contravention of IATA rules although as he had explained, he did so upon Teresita's assurance that for the onward flight from Osaka and return, the GANAS would make other arrangements. Q Referring you to page 33 of the transcript of the last session, I had this question which reads as follows: 'But did she say anything to you when you said that the tickets were about to expire?' Your answer was: 'I am the one who asked her. At that time I told her if the tickets being used ... I was telling her what about their bookings on the return. What about their travel on the return? She told me it is up for the Ganas to make the arrangement.' May I know from you what did you mean by this testimony of yours? A That was on the day when they were asking me on May 7, 1971 when they were checking the tickets. I told Mrs. Manucdoc that I was going to get the tickets. I asked her what about the tickets onward from the return from Tokyo, and her answer was it is up for the Ganas to make the arrangement, because I told her that they could leave on the seventh, but they could take care of that when they arrived in Osaka.

Q What do you mean? A The Ganas will make the arrangement from Osaka, Tokyo and Manila. Q What arrangement? A The arrangement for the airline because the tickets would expire on May 7, and they insisted on leaving. I asked Mrs. Manucdoc what about the return onward portion because they would be travelling to Osaka, and her answer was, it is up to for the Ganas to make the arrangement. Q Exactly what were the words of Mrs. Manucdoc when you told her that? If you can remember, what were her exact words? A Her words only, it is up for the Ganas to make the arrangement. Q This was in Tagalog or in English? A I think it was in English. ... 7 The circumstances that AIR FRANCE personnel at the ticket counter in the airport allowed the GANAS to leave is not tantamount to an implied ratification of travel agent Ella's irregular actuations. It should be recalled that the GANAS left in Manila the day before the expiry date of their tickets and that "other arrangements" were to be made with respect to the remaining segments. Besides, the validating stickers that Ella affixed on his own merely reflect the status of reservations on the specified flight and could not legally serve to extend the validity of a ticket or revive an expired one. The conclusion is inevitable that the GANAS brought upon themselves the predicament they were in for having insisted on using tickets that were due to expire in an effort, perhaps, to beat the deadline and in the thought that by commencing the trip the day before the expiry date, they could complete the trip even thereafter. It should be recalled that AIR FRANCE was even unaware of the validating SAS and JAL. stickers that Ella had affixed spuriously. Consequently, Japan Air Lines and AIR FRANCE merely acted within their contractual rights when they dishonored the tickets on the remaining segments of the trip and when AIR FRANCE demanded payment of the adjusted fare rates and travel taxes for the Tokyo/Manila flight. WHEREFORE, the judgment under review is hereby reversed and set aside, and the Amended Complaint filed by private respondents hereby dismissed.

G.R. No. L-20136

June 23, 1965

IN RE: PETITION FOR ISSUANCE OF SEPARATE CERTIFICATE OF TITLE. JOSE A. SANTOS Y Diaz, petitioner-appellant, vs. ANATOLIO BUENCONSEJO, ET AL., respondents-appellees. It appears that the aforementioned Lot No. 1917 covered by Original Certificate of Title No. RO3848 (25322) was originally owned in common by Anatolio Buenconsejo to the extent of undivided portion and Lorenzo Bon and Santiago Bon to the extent of the other (Exh. B); that Anatolio Buenconsejo's rights, interests and participation over the portion abovementioned were on January 3, 1961 and by a Certificate of Sale executed by the Provincial Sheriff of Albay, transferred and conveyed to Atty. Tecla San Andres Ziga, awardee in the corresponding auction

sale conducted by said Sheriff in connection with the execution of the decision of the Juvenile Delinquency and Domestic Relations Court in Civil Case No. 25267, entitled " Yolanda Buenconsejo, et al. vs. Anatolio Buenconsejo"; that on December 26, 1961 and by a certificate of redemption issued by the Provincial Sheriff of Albay, the rights, interest, claim and/or or participation which Atty. Tecla San Andres Ziga may have acquired over the property in question by reason of the aforementioned auction sale award, were transferred and conveyed to the herein petitioner in his capacity as Attorney-in-fact of the children of Anatolio Buenconsejo, namely, Anastacio Buenconsejo, Elena Buenconsejo and Azucena Buenconsejo (Exh. C). It would appear, also, that petitioner Santos had redeemed the aforementioned share of Anatolio Buenconsejo, upon the authority of a special power of attorney executed in his favor by the children of Anatolio Buenconsejo; that relying upon this power of attorney and redemption made by him, Santos now claims to have acquired the share of Anatolio Buenconsejo in the aforementioned Lot No. 1917; that as the alleged present owner of said share, Santos caused a subdivision plan of said Lot No. 1917 to be made, in which the portion he claims as his share thereof has been marked as Lot No. 1917-A; and that he wants said subdivision at No. 1917-A to be segregated from Lot No. 1917 and a certificate of title issued in his name exclusively for said subdivision Lot No. 1917-A. As correctly held by the lower court, petitioner's claim is clearly untenable, for: (1) said special power of attorney authorized him to act on behalf of the children of Anatolio Buenconsejo, and, hence, it could not have possibly vested in him any property right in his own name; (2) the children of Anatolio Buenconsejo had no authority to execute said power of attorney, because their father is still alive and, in fact, he and his wife opposed the petition of Santos; (3) in consequence of said power of attorney (if valid) and redemption, Santos could have acquired no more than the share pro indiviso of Anatolio Buenconsejo in Lot No. 1917, so that petitioner cannot without the conformity of the other co-owners (Lorenzo and Santiago Bon), or a judicial decree of partition issued pursuant to the provisions of Rule 69 of the new Rules of Court (Rule 71 of the old Rules of Court) which have not been followed By Santos adjudicate to himself in fee simple a determinate portion of said Lot No. 1917, as his share therein, to the exclusion of the other co-owners. Inasmuch as the appeal is patently devoid of merit, the order appealed from is hereby affirmed, with treble cost against petitioner-appellant Jose A. Santos y Diaz. It is so ordered.

G.R. No. L-20726 December 20, 1923 ALBALADEJO Y CIA., S. en C., plaintiff-appellant, vs. The PHILIPPINE REFINING CO., as successor to The Visayan Refining Co., defendant-appellant. It appears that Albaladejo y Cia. is a limited partnership, organized in conformity with the laws of these Islands, and having its principal place of business at Legaspi, in the Province of Albay; and during the transactions which gave origin to this litigation said firm was engaged in the buying and selling of the products of the country, especially copra, and in the conduct of a general mercantile business in Legaspi and in other places where it maintained agencies, or subagencies, for the prosecution of its commercial enterprises.

The Visayan Refining Co. is a corporation organized under the laws of the Philippine Islands; and prior to July 9, 1920, it was engaged in operating its extensive plant at Opon, Cebu, for the manufacture of coconut oil. On August 28, 1918, the plaintiff made a contract with the Visayan Refining Co., the material parts of which are as follows: Memorandum of Agreement Re Purchase of Copra. This memorandum of agreement, made and entered into by and between Albaladejo y Compania, S. en C., of Legaspi, Province of Albay, Philippine Islands, party of the first part, and the Visayan Refining Company, Inc., of Opon, Province of Cebu, Philippine Islands, party of the second part, Witnesseth That. Whereas, the party of the first part is engaged in the purchase of copra in the Province of Albay; and Whereas, the party of the second part is engaged in the business of the manufacture of coconut oil, or which purpose it must continually purchase large quantities of copra; Now, Therefore, in consideration of the premises and covenants hereinafter set forth, the said parties have agreed and do hereby contract and agree as follows, to wit: 1. The party of the first part agrees and binds itself to sell to the party of the second part, and the party of the second part agrees and binds itself to buy from the party of the first part, for a period of one (1) year from the date of these presents, all the copra purchased by the party of the first part in Province of Albay. 2. The party of the second part agrees to pay the party of the first part for the said copra the market price thereof in Cebu at date (of) purchase, deducting, however, from such price the cost of transportation by sea to the factory of the party of second part at Opon, Cebu, the amount deducted to be ascertained from the rates established, from time to time, by the public utility commission, or such entity as shall succeed to its functions, and also a further deduction for the shrinkage of the copra from the time of its delivery to the party of the second part to its arrival at Opon, Cebu, plus one-half of a real per picul in the event the copra is delivered to boats which will unload it on the pier of the party of the second part at Opon, Cebu, plus one real per picul in the event that the party of the first part shall employ its own capital exclusively in its purchase. 3. During the continuance of this contract the party of the second part will not appoint any other agent for the purchase of copra in Legaspi, nor buy copra from any vendor in Legaspi. 4. The party of the second part will, so far as practicable, keep the party of the first part advised of the prevailing prices paid for copra in the Cebu market. 5. The party of the second part will provide transportation by sea to Opon, Cebu, for the copra delivered to it by the party of the first part, but the party of the first part must deliver such copra to the party of the second part free on board the boats of the latter's ships or on the pier alongside the latter's ships, as the case may be. Pursuant to this agreement the plaintiff, during the year therein contemplated, bought copra extensively for the Visayan Refining Co. At the end of said year both parties found themselves satisfied with the existing arrangement, and they therefore continued by tacit consent to govern their future relations by the same agreement. In this situation affairs remained until July 9, 1920,

when the Visayan Refining Co. closed down its factory at Opon and withdrew from the copra market. When the contract above referred to was originally made, Albaladejo y Cia. apparently had only one commercial establishment, i.e., that at Legaspi; but the large requirements of the Visayan Refining Co. for copra appeared so far to justify the extension of the plaintiff's business that during the course of the next two or three years it established some twenty agencies, or subagencies, in various ports and places of the Province of Albay and neighboring provinces. After the Visayan Refining Co. had ceased to buy copra, as above stated, of which fact the plaintiff was duly notified, the supplies of copra already purchased by the plaintiff were gradually shipped out and accepted by the Visayan Refining Co., and in the course of the next eight or ten months the accounts between the two parties were liquidated. The last account rendered by the Visayan Refining Co. to the plaintiff was for the month of April, 1921, and it showed a balance of P288 in favor of the defendant. Under date of June 25, 1921, the plaintiff company addressed a letter from Legaspi to the Philippine Refining Co. (which had now succeeded to the rights and liabilities of the Visayan Refining Co.), expressing its approval of said account. In this letter no dissatisfaction was expressed by the plaintiff as to the state of affairs between the parties; but about six weeks thereafter the present action was begun. Upon reference to paragraph five of the contract reproduced above it will be seen that the Visayan Refining Co. obligated itself to provide transportation by sea to Opon, Cebu, for the copra which should be delivered to it by the plaintiff; and the first cause of action set forth in the complaint is planted upon the alleged negligent failure of the Visayan Refining Co. to provide opportune transportation for the copra collected by the plaintiff and deposited for shipment at various places. In this connection we reproduce the following allegations from the complaint: 6. That, from the month of September, 1918, until the month of June, 1920, the plaintiff opportunely advised the Visayan of the stocks that the former had for shipment, and, from time to time, requested the Visayan to send vessels to take up said stocks; but that the Visayan culpably and negligently allowed a great number of days to elapse before sending the boats for the transportation of the copra to Opon, Cebu, and that due to the fault and negligence of the Visayan, the stocks of copra prepared for shipment by the plaintiff had to remain an unnecessary length of time in warehouses and could not be delivered to the Visayan, nor could they be transmitted to this latter because of the lack of boats, and that for this reason the copra gathered by the plaintiff and prepared for delivery to the Visayan suffered the diminishment of weight herein below specified, through shrinkage or excessive drying, and, in consequence thereof, an important diminishment in its value. 8. That the diminishment in weight suffered as shrinkage through excessive drying by all the lots of copra sold by the plaintiff to the Visayan, due to the fault and negligence of the Visayan in the sending of boats to take up said copra, represents a total of 9,695 piculs and 56 cates, the just and reasonable value of which, at the rates fixed by the purchaser as the price in its liquidation, is a total of two hundred and one thousand, five hundred and ninetynine pesos and fifty-three centavos (P201,599.53), Philippine currency, in which amount the plaintiff has been damaged and injured by the negligent and culpable acts and omissions of the Visayan, as herein above stated and alleged. In the course of the appealed decision the trial judge makes a careful examination of the proof relative to the movements of the fleet of boats maintained by the Visayan Refining Co. for the purpose of collecting copra from the various ports where it was gathered for said company, as

well as of the movements of other boats chartered or hired by said company for the same purpose; and upon consideration of all the facts revealed in evidence, his Honor found that the Visayan Refining Co. had used reasonable promptitude in its efforts to get out the copra from the places where it had been deposited for shipment, notwithstanding occasional irregularities due at times to the condition of the weather as related to transportation by sea and at other times to the inability of the Visayan Refining Co. to dispatch boats to the more remote ports. This finding of the trial judge, that no negligence of the kind alleged can properly be imputed to the Visayan Refining Co., is in our opinion supported by the proof. Upon the point of the loss of weight of the copra by shrinkage, the trial judge found that this is a product which necessarily undergoes considerable shrinkage in the process of drying, and intelligent witnesses who are conversant with the matter testified at the trial that shrinkage of cobra varies from twenty to thirty per centum of the original gross weight. It is agreed that the shrinkage shown in all of the copra which the plaintiff delivered to the Visayan Refining Co. amounted to only 8.187 per centum of the whole, an amount which is notably below the normal. This showing was undoubtedly due in part, as the trial judge suggests, to the fact that in purchasing the copra directly from the producers the plaintiff's buyers sometimes estimated the picul at sixty-eight kilos, or somewhat less, but in no case at the true weight of 63.25 kilos. The plaintiff was therefore protected in a great measure from loss by shrinkage by purchasing upon a different basis of weight from that upon which he sold, otherwise the shrinkage shown in the result must have been much greater than that which actually appeared. But even considering this fact, it is quite evident that the demonstrated shrinkage of 8.187 per centum was extremely moderate average; and this fact goes to show that there was no undue delay on the part of the Visayan Refining Co. in supplying transportation for the copra collected by the plaintiff. In the course of his well-reasoned opinion upon this branch of the case, the trial judge calls attention to the fact that it is expressly provided in paragraph two of the contract that the shrinkage of copra from the time of its delivery to the party of the second part till its arrival at Opon should fall upon the plaintiff, from whence it is to be interfered that the parties intended that the copra should be paid for according to its weight upon arrival at Opon regardless of its weight when first purchased; and such appears to have been the uniform practice of the parties in settling their accounts for the copra delivered over a period of nearly two years. From what has been said it follows that the first cause of action set forth in the complaint is not well founded, and the trial judge committed no error in absolving the plaintiff therefrom. It appears that in the first six months of the year 1919, the plaintiff found that its transactions with the Visayan Refining Co. had not been productive of reasonable profit, a circumstance which the plaintiff attributed to loss of weight or shrinkage in the copra from the time of purchase to its arrival at Opon; and the matter was taken up with the officials of said company, with the result that a bounty amounting to P15,610.41 was paid to the plaintiff by the Visayan Refining Co. In the ninth paragraph of the complaint the plaintiff alleges that this payment was made upon account of shrinkage, for which the Visayan Refining Co. admitted itself to be liable; and it is suggested that the making of this payment operated as a recognition on the part of the Visayan refining Co. of the justice of the plaintiff's claim with respect to the shrinkage in all subsequent transactions. With this proposition we cannot agree. At most the payment appears to have been made in recognition of an existing claim, without involving any commitment as to liability on the part of the defendant in the future; and furthermore it appears to have been in the nature of a mere gratuity given by the company in order to encourage the plaintiff and to assure that the plaintiff's organization would be kept in an efficient state for future activities. It is certain that no

general liability for plaintiff's losses was assumed for the future; and the defendant on more than one occasion thereafter expressly disclaimed liability for such losses.

As already stated purchases of copra by the defendant were suspended in the month of July, 1920. At this time the plaintiff had an expensive organization which had been built up chiefly, we suppose, with a view to the buying of copra; and this organization was maintained practically intact for nearly a year after the suspension of purchases by the Visayan Refining Co. Indeed in October, 1920, the plaintiff added an additional agency at Gubat to the twenty or more already in existence. As a second cause of action the plaintiff seeks to recover the sum of P110,000, the alleged amount expended by the plaintiff in maintaining and extending its organization as above stated. As a basis for the defendant's liability in this respect it is alleged that said organization was maintained and extended at the express request, or requirement, of the defendant, in conjunction with repeated assurances that the defendant would soon resume activity as a purchaser of copra. With reference to this cause of action the trial judge found that the plaintiff, as claimed, had incurred expenses at the request of the defendant and upon its representation that the plaintiff would be fully compensated therefor in the future. Instead, however, of allowing the plaintiff the entire amount claimed, his Honor gave judgment for only thirty per centum of said amount, in view of the fact that the plaintiff's transactions in copra had amounted in the past only to about thirty per centum of the total business transacted by it. Estimated upon this basis, the amount recognized as constituting a just claim was found to be P49,626.68, and for this amount judgment was rendered against the defendant. The discussion of this branch of the appeal involves the sole question whether the plaintiff's expense in maintaining and extending its organization for the purchase of copra in the period between July, 1920, to July, 1921, were incurred at the instance and request of the defendant, or upon any promise of the defendant to make the expenditure good. A careful examination of the evidence, mostly of a documentary character, is, in our opinion, convincing that the supposed liability does not exist. By recurring to paragraph four of the contract between the plaintiff and the Visayan Refining Co. it will be seen that the latter agreed to keep the plaintiff advised of the prevailing prices paid for the copra in the Cebu market. In compliance with this obligation the Visayan Refining Co. was accustomed to send out "trade letters" from time to time its various clients in the southern provinces of whom the plaintiff was one. In these letters the manager of the company was accustomed to make comment upon the state of the market and to give such information as might be of interest or value to the recipients of the letters. From the series of letters thus sent to Albaladejo y Cia. during the latter half of 1920, we here reproduce the following excerpts: (Letter of July 2, 1920, from K.B. Day, General Manager of the Visayan Refining Co., to Albaladejo y Cia.) The copra market is still very weak. I have spent the past two weeks in Manila studying conditions and find that practically no business at all is being done. A few of the mills having provincial agents are accepting small deliveries, but I do not suppose that 500 piculs of copra are changing hands a day. Buyers are offering from P13 to P15, depending on quality, and sellers are offering to sell at anywhere from P16 to P18, but no business can be done for the simple reason that the banks will not lend the mills any money to buy copra with at this time.

Reports from the United States are to the effect that the oil market is in a very serious and depressed condition and that large quantities of oil cannot be disposed of at any price. Under this conditions it is imperative that this mill buy no more copra than it can possibly help at the present time. We are not anxious to compete, nor do we wish to purchase same in competition with others. We do, however, desire to keep our agents doing business and trust that they will continue to hold their parroquianos (customers), buying only minimum quantities at present. The local market has not changed since last week, and our liquidating price is P14. (Letter of July 9, 1920, from Visayan Refining Co. to Albaladejo y Cia.) Notify your subagents to drop out of the market temporarily. We do not desire to purchase at present. (Letter of July 10, 1920, from K. B. Day, General Manager, to Albaladejo y Cia.) The market continues to grow weaker. Conditions are so uncertain that this company desires to drop out of the copra market until conditions have a chance to readjust themselves. We request therefore that our agents drop out of active competition for copra temporarily. Stocks that are at present on hand will, of course, be liquidated, but no new stocks should be acquired. Agents should do their best to keep their organizations together temporarily, for we expect to be in the market again soon stronger than ever. We expect the cooperation of agents in making this effective; and if they give us this cooperation, we will endeavor to see that they do not lose by the transaction in the long run. This company has been receiving copra from its agents for a long time at prices which have netted it a loss. The company has been supporting its agents during this period. It now expects the same support from its agents. Agents having stocks actually on hand in their bodegas should telegraph us the quantity immediately and we will protect same. But stocks not actually in bodegas cannot be considered. (Letter of July 17, 1920, from K.B. Day to Albaladejo y Cia.) Conditions have changed very little in the copra market since last reports. . . . We are in the same position as last week and are out of the market. For the benefit of our agents, we wish to explain in a few words just why we are have been forced to close down our mill until the arrival of a boat to load some of our stocks on hand. We have large stocks of copra. The market for oil is so uncertain that we do not care to increase these stocks until such time as we know that the market has touched the bottom. As soon as this period of uncertainty is over, we expect to be in the market again stronger than ever, but it is only the part of business wisdom to play safe at such times as these. Owing to the very small amounts of copra now in the provinces, we do not think that our agents will lose anything by our being out of the market. On the contrary, the producers of copra will have a chance to allow their nuts to mature on the trees so that the quality of copra which you will receive when we again are in the market should be much better than what you have been receiving in the past. Due to the high prices and scarcity of copra a large proportion of the copra we have received has been made from unripe coconuts and in order to keep revenue coming in the producers have kept harvesting these coconuts without giving them a chance to reach maturity. This period now should give them the chance to let their nuts ripen and should give you a better copra in the future which will shrink less and be more satisfactory both from your

standpoint and ours. Please do all you can to assist us at this time. We shall greatly appreciate your cooperation.lawphi1.net (Letter of August 7, 1920, from H.U. Umstead, Assistant General Manager, to Albaladejo y Cia.) The copra situation in Manila remains unchanged and the outlook is still uncertain. Arrivals continue small. We are still out of the market and are not yet in a position to give you buying orders. We trust, however, that within the next few days weeks we may be able to reenter the market and resume our former activity. While we are not of the market we have no objection whatever to our agents selling copra to other purchasers, if by doing so they are able to keep themselves in the market and retain their parroquianos (customers). We do not, however, wish you to use our money, for this purpose, nor do we want you to buy copra on speculation with the idea in mind that we will take it off of your hands at high prices when we reenter the market. We wish to warn you against this now so that you will not be working under any misapprehension. In this same mail, we are sending you a notice of change of organization. In your dealings with us hereafter, will you kindly address all communications to the Philippine Refining Corporation, Cebu, which you will understand will be delivered to us. (Letter of August 21, 1920, from Philippine Refining Corporation, by K.B. Day, to Albaladejo y Cia.) We are not yet in the market, but, as we have indicated before, are hopeful of renewing our activities soon. We shall advise all our agents seasonably of our return to the market. . . . We are preparing new form of agreement between ourselves and our agents and hope to have them completed in time to refer them to our agents in the course of the next week or ten days. All agents should endeavor to liquidate outstanding advances at this time because this is a particularly good time to clean out old accounts and be on a business basis when we return to the market. We request that our agents concentrate their attention on this point during the coming week.lawphi1.net (Letter of October 16, 1920, from K.B. Day, Manager, to Albaladejo y Cia.) Copra in Manila and coconut oil in the United States have taken a severe drop during the past week. The Cebu price seems to have remained unchanged, but we look for an early drop in the local market. We have received orders from our president in New York to buy no more copra until the situation becomes more favorable. We had hoped and expected to be in the market actively before this time, but this most unexpected reaction in the market makes the date of our entry in it more doubtful. With this in view, we hereby notify our agents that we can accept no more copra and advance no more money until we have permission from our president to do so. We request, therefore, that you go entirely out of the market, so far as we are concerned, with the exception of receiving copra against outstanding accounts.

In case any agent be compelled to take in copra and desire to send same to us, we will be glad to sell same for him to the highest bidder in Cebu. We will make no charge for our services in this connection, but the copra must be forwarded to us on consignment only so that we will not appear as buyers and be required to pay the internal-revenue tax. We are extremely sorry to be compelled to make the present announcement to you, but the market is such that our president does not deem it wise for us to purchase copra at present, and, with this in view, we have no alternative other than to comply with his orders. We hope that our agents will realize the spirit in which these orders are given, and will do all they can to remain faithful to us until such time as we can reenter the market, which we hope and believe will be within a comparatively short time. (Special Letter of October 16, 1920, from Philippine Refining Corporation, by K.B. Day, to Albaladejo y Cia.) We have received very strict instructions from New York temporarily to suspend the purchase of copra, and of course we must comply therewith. However, should you find yourselves obliged to buy copra in connection with your business activities, and cannot dispose of it advantageously in Cebu, we shall be glad to receive your copra under the condition that we shall sell it in the market on your account to the highest bidder, or, in other words, we offer you our services free, to sell your copra to the best possible advantages that the local market may offer, provided that, in doing so, we be not obliged to accept your copra as a purchase when there be no market for this product. Whenever you find yourselves obliged to buy copra in order to liquidate pending advances, we can accept it provided that, so long as present conditions prevail, we be not required to make further cash advances. We shall quote no further from letters written by the management of the Philippine Refining Corporation to the plaintiff, as we find nothing in the correspondence which reflects an attitude different from that reflected in the matter above quoted. It is only necessary to add that the hope so frequently expressed in the letters, to the effect that the Philippine Refining Corporation would soon enter the market as a buyer of copra on a more extensive scale than its predecessor, was not destined to be realized, and the factory at Opon remained closed. But it is quite obvious that there is nothing in these letters on which to hold the defendant liable for the expenses incurred by the plaintiff in keeping its organization intact during the period now under consideration. Nor does the oral testimony submitted by the plaintiff materially change the situation in any respect. Furthermore, the allegation in the complaint that one agency in particular (Gubat) had been opened on October 1, 1920, at the special instance and request of the defendant, is not at all sustained by the evidence. We note that in his letter of July 10, 1920, Mr. Day suggested that if the various purchasing agents of the Visayan Refining Co. would keep their organization intact, the company would endeavor to see that they should not lose by the transaction in the long run. These words afford no sufficient basis for the conclusion, which the trial judge deduced therefrom, that the defendant is bound to compensate the plaintiff for the expenses incurred in maintaining its organization. The correspondence sufficiently shows on its face that there was no intention on the part of the company to lay a basis for contractual liability of any sort; and the plaintiff must have understood the letters in that light. The parties could undoubtedly have contracted about it, but there was clearly no intention to enter into contractual relation; and the law will not raise a

contract by implication against the intention of the parties. The inducement held forth was that, when purchasing should be resumed, the plaintiff would be compensated by the profits then to be earned for any expense that would be incurred in keeping its organization intact. It is needless to say that there is no proof showing that the officials of the defendant acted in bad faith in holding out this hope. In the appellant's brief the contention is advanced that the contract between the plaintiff and the Visayan Refining Co. created the relation of principal and agent between the parties, and the reliance is placed upon article 1729 of the Civil Code which requires the principal to indemnify the agent for damages incurred in carrying out the agency. Attentive perusal of the contract is, however, convincing to the effect that the relation between the parties was not that of principal and agent in so far as relates to the purchase of copra by the plaintiff. It is true that the Visayan Refining Co. made the plaintiff one of its instruments for the collection of copra; but it is clear that in making its purchases from the producers the plaintiff was buying upon its own account and that when it turned over the copra to the Visayan Refining Co., pursuant to that agreement, a second sale was effected. In paragraph three of the contract it is declared that during the continuance of this contract the Visayan Refining Co. would not appoint any other agent for the purchase of copra in Legaspi; and this gives rise indirectly to the inference that the plaintiff was considered its buying agent. But the use of this term in one clause of the contract cannot dominate the real nature of the agreement as revealed in other clauses, no less than in the caption of the agreement itself. In some of the trade letters also the various instrumentalities used by the Visayan Refining Co. for the collection of copra are spoken of as agents. But this designation was evidently used for convenience; and it is very clear that in its activities as a buyer the plaintiff was acting upon its own account and not as agents, in the legal sense, of the Visayan Refining Co. The title to all of the copra purchased by the plaintiff undoubtedly remained in it until it was delivered by way of subsequent sale to said company. For the reasons stated we are of the opinion that no liability on the part of the defendant is shown upon the plaintiff's second cause of action, and the judgment of the trial court on this part of the case is erroneous. The appealed judgment will therefore be affirmed in so far as it absolves the defendant from the first cause of action and will be reversed in so far as it gives judgment against the defendant upon the second cause of action; and the defendant will be completely absolved from the complaint. So ordered, without express findings as to costs of either instance. G.R. No. L-2411 June 28, 1951

DAVID (DAVE) THOMAS, plaintiff-appellant, vs. HERMOGENES S. PINEDA, defendant-appellant. For a first cause of action the plaintiff sought to compel an accounting of the defendant's operation of a saloon and restaurant of which the plaintiff claims to have been the sole owner. For a second cause of action the court was asked to enjoin the defendant from using the name of that business, Silver Dollar Cafe. The court below found for the defendant on the suit for accounting and for the plaintiff on the suit for injunction. On the first cause of action it is alleged that the defendant managed the business as plaintiff's employee or trustee during the Japanese occupation of the City of Manila and on a share of the profits basis after liberation. Grounded on different relationships between the parties before and after the occupation, this cause of action evolves two different acts of evidence, which it may be

well to take up separately for the sake of clarity. We will set out the material facts in so far as they are uncontroverted, leaving for later discussion those about which the parties are in disagreement. It appears that in 1931, the plaintiff bought the bar and restaurant known as Silver Dollar Cafe located at Plaza Santa Cruz, Manila, from one Dell Clark, paying P20,000 for its physical assets and good will. Thereafter he employed the defendant, Clark's former employee, as a bartender with a salary of P60. In the course of time, the defendant became successively cashier and manager of the business. The outbreak of war found him holding the latter position with a monthly compensation of P250. To prevent the business and its property from falling into enemy hands, the plaintiff being a citizen of the United States, David Thomas on or about December 28, 1941, made a fictitious sale thereof to the defendant; and to clothe the sale with a semblance of reality, the bill of sale was antedated November 29, 1941. Though this document was said to have been destroyed and no copy thereof was available, the fictitiousness and lack of consideration of the conveyance was expressly admitted in the answer. Besides this admission, it is agreed that simultaneously with or soon after the execution of the simulated sale, the plaintiff and the defendant signed a private or secret document, identified as Exhibit "F", which was kept by the plaintiff. Because of its important bearing on the case, it is convenient to copy this instrument in full. PRIVATE AGREEMENT KNOW ALL MEN BY THESE PRESENTS THAT: On November 29, 1941, a document which purported to be a deed of sale of the bar and restaurant business known as the SILVER DOLLAR CAFE entered into by and between David (Dave) Thomas and Hermogenes Pineda and acknowledged before Julian Lim, a notary public for and in the City of Manila and entered in his notarial register as Document No. 127, Page No. 27, Book I and Series of 1941, witnessed by the Misses Florence Thomas and Esther Thomas. The said document was prepared and executed only for the purpose of avoiding the seizure of the said establishment if and when the enemy forces entered the City of Manila. Upon the restoration of peace and order and the absence of the danger abovementioned, the said document automatically becomes null and void and of no effect, the consideration of Ten Thousand Pesos (P10,000), Philippine Currency, mentioned therein, being fictitious and not paid to the Vendor. Thomas was interred at Santo Tomas during the greater part of the war, and his business was operated by the defendant exclusively throughout that period in accordance with the aforequoted stipulation. On February 3, 1945, the building was destroyed by fire but the defendant had been able to remove some of its furniture, the cash register, the piano, the safe, and a considerable quantity of stocks to a place of safety. According to the defendant, all of these goods were accounted for and turned over to the plaintiff after the City of Manila had been retaken by the American Forces. On May 8, 1945, a bar was opened on Calle Bambang, district of Sta. Cruz, under the old name of Silver Dollar Cafe. Housed in a makeshift structure, which was erected on a lot belonging to the defendant, the Bambang shop was conducted for about four months, i.e., until September of the

same year, when it was transferred to the original location of the Silver Dollar Cafe at No. 15 Plaza Sta. Cruz. It is asserted and denied that the plaintiff as well as the defendant took a more or less active part in the management of the post-liberation business until about the middle of September of the following year, when, it is also alleged, the plaintiff brought a certified public accountant to the establishment in Sta. Cruz for the purpose of examining the books of the business and the defendant threatened the plaintiff and his companion with a gun if they persisted in their purpose. As a result of that incident, the plaintiff forthwith filed the present action, and set up a separate business under the same trade-name, Silver Dollar Cafe, on Echague Street. The defendant remained with the Silver Dollar Cafe at Plaza Sta. Cruz, which was burn down on December 15, 1946. In the face of Exhibit "F" before transcribed, there is no denying that throughout the Japanese military regime the Silver Dollar Cafe belonged exclusively to the plaintiff and that the defendant had charge of it merely as plaintiff's employee, trustee, or manager. There is no pretense that the defendant invested in the business within that period any capital of his own in the form of cash or merchandise. The controversy lies in nature and scope of the defendant's obligation toward the plaintiff in relation to the business. It will be noticed that Exhibit "F" is silent on this point. The defendant endeavored to prove that there was a third, verbal, agreement, the import of which was that he was to operate the business with no liability other than to turn it over to the plaintiff as the plaintiff would find it after the war. Little or no weight can be attached to this assertion if by it the defendant means, as he apparently does, that he was relieved of any duty to make an accounting. Such understanding as the defendant says existed would be at war with the care and precaution which the plaintiff took to insure his rights in the business and its assets, which had an inventory value of P60,000, according to the plaintiff. As the property consisted mostly of perishable and expendable goods to be constantly disposed of and replenished as long as the business lasted, the plaintiff could not, by any stretch of the imagination, have agreed to be content with what the defendant would deign to give him when normalcy was restored. For that was what the defendant's version of the alleged verbal agreement would amount to and what the court below found. As sole manager with full power to do as his fancies dictated, the defendant could strip the business naked of all its stocks, leaving the plaintiff holding the bag, as it were, when the defendant's management was terminated. Unless Thomas was willing to give away his property and its profits, no man in his right senses would have given his manager an outright license such as the defendant claims to have gotten from his employer. Not only did the plaintiff see to the execution of a counter agreement but he stated that his elder daughter "had it (Exhibit "F") kept in her possession;" that "there were many efforts by Mr. Pineda to get hold of this document during the first two weeks of the Japanese occupation," and he was "surprised;" that he "did not know what was in the future" and he "wanted my children to have something more than an empty possession." Referring to the defendant's attempts to take Exhibit "F" away from him, Thomas said that the defendant sent to the hospital where he (plaintiff) was confined, defendant's friend, an attorney by the name of Swartzcoff of whom he had heard "things", "to recover that document", and he, plaintiff, became more determined not to part with it; that as Swartzcoff kept on coming, he gave the document to his children to keep up to the end of the war. This testimony has all the stamps of veracity and vehemence and refutes the defendant's allegation. The conclusion thus seems clear that the defendant owes the plaintiff an accounting of his management of the plaintiff's business during the occupation. The exact legal character of the defendant's relation to the plaintiff matters not a bit. It was enough to show, and it had been shown, that he had been entrusted

with the possession and management of the plaintiff's business and property for the owner's benefit and had not made an accounting. Neither did the defendant's sweeping statement at the trial that all the proceeds from the business had been used to support the plaintiff and his daughters and to entertain or bribe Japanese officers and civilians dispense with defendant's duty to account. It was a clear error for the court below to declare at this stage of the proceeding, on the basis of defendant's incomplete and indefinite evidence, that there were no surplus profits, and to call matters even. Under the pleadings and the evidence the court's inquiry ought to have been confined to the determination of the plaintiff's right to secure an accounting; and that right having been established, the appropriate judgment should have been a preliminary or interlocutory one that the defendant do account. The court was not called upon to decide, and should not have decided, anything beyond that. Monies and foodstuffs which the defendant said he had supplied the plaintiff and his daughters during the war are appropriate items to be considered on taking account. Receipts and expenses involving thousands of pesos, covering a great length of time, and consisting of complicated items are, on their face, so complex and in as to necessitate being threshed out in an appropriations by the defendants substantiated. By the defendant's admission, the business made good profits during the war, and there are charges that he amassed a fortune out of the trusteeship. True or false, those allegations and many others which it was the plaintiff's right to prove, if he could, should not have been dismissed summarily. Not technicalities but substantial rights, equity, and justice clearly demanded adherence to the normal course of practice and procedure. The employment of auditors might be necessary. The defendant denied that the plaintiff had any proprietary interest in the saloon in Bambang and at Plaza Sta. Cruz after liberation. Thomas' evidence on this phase of the litigation is to the effect that, upon his release from the internment camp, he immediately took steps to rehabilitate his business. He declared that he borrowed P2.000 from a friend by the name of Bill Drummond, and with that amount he constructed a temporary building in Bambang and with the stocks saved by the defendant opened the business there. He said that, as before, the defendant now worked as manager, with the difference that under the new arrangement he was to get onehalf the net profits. The defendant, on the other hand, undertook to show that he himself put up the Bambang business, furnishing the construction materials, paying for the labor, and purchasing the needed merchandise. And when the business was to be moved to Plaza Sta. Cruz, he said, he called on Mrs. Angela Butte, was able to rent the Plaza Sta. Cruz premises from her for Pl,200, and told the lessor when he handed her the rent, "This is my money." He went on to say that Thomas told him to do whatever he pleased with the premises, only requesting him to negotiate the sale of or a loan on plaintiff's mining shares so that the plaintiff could join him as partner or "buy him out" by December. But, according to the defendant, the plaintiff was not able to raise funds, so his desire to acquire interest in or buy the business did not materialize. The plaintiff did not invest a centavo in the new business because he had no money to invest, the defendant concluded. Leaving aside the evidence which depends entirely on the credibility of the Witnesses, the following undisputed or well-established circumstances are, in our judgment, decisive: 1. The defendant corroborated the plaintiff when he practically declared that upon the plaintiff's release from the internment camp, Thomas lost no time in looking a site to open a saloon. That the plaintiff then had the means to do that, was a fact brought out by the defendant's own

evidence as well as by the plaintiff's testimony. There were several cases of whiskey, rum, gin and other kinds of liquor which the defendant admitted he had carted away and delivered to the plaintiff after liberation. What the latter did or could have done with those goods, if not to start a business with, there was no plausible explanation. Granting that ten cases of the liquor were confiscated by the MP the plaintiff said they were soon returned the confiscation could not have stopped the plaintiff from continuing with the business, which was riding in the crest of a boom. Significantly, the defendant said that the day following the alleged confiscation he handed the plaintiff P2,000 in cash. If he had nothing else, this was an amount which ought to have been enough to enable the plaintiff to keep the business going, which needed no large capital. That this payment was "in full and complete liquidation of the Silver Dollar Cafe," as the defendant asserted, was, under the circumstances, highly improbable, to put it mildly. 2. It is also an admitted fact that the bar in Bambang was called Silver Dollar Cafe, Branch No. 1. The use of the old name suggested that the business was in fact an extension and continuation of the Silver Dollar Cafe which the defendant had operated for the plaintiff during the enemy occupation, and precluded any thought of the business having been established by the defendants as his own. It should be remembered that the defendant had not yet appropriated the trade-name Silver Dollar Cafe for himself. This the subject of the second cause of action he did on September 27, 1945. 3. Despite statements to the contrary, it was the plaintiff who, in September, 1945, before the reopening of the bar at Plaza Sta. Cruz, entered into a written contract of lease (Exhibit A) with Mrs. Angela Butte for the Sta. Cruz location; Thomas was named in the contract as the lessee. The contract also reveals that it was the plaintiff who personally paid Mrs. Butte the advanced rent (P1,200) for the period August 31-September 30, 1945, the first month of the lease. And thereafter, all the rental receipts were made out in Thomas' name, except those for the months of October, November and December, which were put in the name of the defendant. A propose of this temporary substitution, Jose V. Ramirez, owner of the land and administrator of the building, testified that the Bureau of Internal Revenue had licensed and taxed the business in the name of Hermogenes Pineda and so thought it necessary that for those three months the defendant's name should be put in the receipts. Ramirez added that Mrs. Butte agreed to the Internal Revenue Bureau's requirement on the assurance that beginning January, 1946, the receipts would be issued again in favor of Thomas. Mrs. Butte testified to the same effect. At any rate, the issuance of three of the receipts in defendant's name was far from implying that he was the proprietor or part owner of the Silver Dollar Cafe. Appropriately, as manager he could make disbursement and get receipts therefor in his name. What would have been strange was the issuance of receipts, let alone the execution of the lease contract, in the name of David Thomas if Thomas had nothing to do with the business, as the defendant would have the court believe. The defendant testified, and the lower court believed, that he consented to the issuance of the three receipts and the execution of the contract of lease in the plaintiff's name because it was expected that the plaintiff would buy the business or "chip in" as partner. How the mere possibility, by no means certain, of the plaintiff becoming the owner of the saloon or defendant's partner on some future date could have induced the defendant to let the plaintiff figure unqualifiedly as owner of the business in receipts and leases that had nothing to do with the contemplated deal, and why the plaintiff would want to pose as owner while he was yet a complete stranger to the enterprise, is utterly beyond comprehension.

For the rest, the plaintiff's testimony is as convincing and as well supported by the natural course of things as the defendant's explanation is unreasonable. It can not be disputed that Thomas had accumulated money from the business in Bambang which, it has also been proved to the point of certainty, he operated with the goods retrieved by the defendant from the pre-war Silver Dollar Cafe. Conducting saloons having been the plaintiffs only means of support before the war, and the calling in which he had acquired plenty of experience, it is inconceivable that he would have remained idle at a time when the trade was most lucrative and he had been impoverished by the war. That the plaintiff, established a bar behind the Great Eastern Hotel on Echague Street, a hidden place, immediately or very soon after he and the defendant had a falling out, is mute testimony to his eagerness to take advantage of the current boom. 4. That the defendant was only a manager is also made evident by two sets of business cards of the Silver Dollar Cafe which he himself caused to be printed. On the first set, of which 500 prints were made, David Thomas was held out as the proprietor and Hermogenes Pineda, the defendant, as manager. On the second set, which were ordered later, the defendant was not even mentioned as manager, but one Bill Magner, while David Thomas' name was retained as the proprietor. Customers of the place testified that copies of these cards were handed to them for distribution to their friends by the defendant himself. The defendant swore that he put away the cards in a small drawer under some books and denied they had been distributed. He gave to understand that he was at a loss to know how the plaintiff and his witnesses got hold of some of said cards, though, he said, he suspected that Thomas went upstairs and grabbed some copies while the witnesses found other copies scattered after the fire which burned the establishment for the second time in 1946. However the case may be, whether the defendant distributed the cards or not, the important point is why he, in the first place, ordered the cards in the form in which they were printed. He did not give cogent reasons. His explanation was that Hugo Santiago, the printer's agent, "gave me a hint that Mr. Thomas was going to open the Silver Dollar Cafe in Plaza Sta. Cruz." This explanation fails to forge any sensible link between the printing of Thomas' name in the cards and Thomas' plan to join him in the business. Incidentally, the defendant did not tell the truth when he declared that the cards were ordered when the shop was still in Bambang; the cards gave the location of the Silver Dollar Cafe as No. 15 Plaza Sta. Cruz, and, besides, Santiago, who testified for both sides, was positive that the cards were delivered to the defendant in September, 1945. 5. At different times from May 8 to December 15, 1945, the defendant handed the plaintiff averse amounts totalling P24,100 without so much as asking Thomas to sign a receipts for any of them. The defendant testified that these amounts were simple loans secured by plaintiff's mining shares of stock. The plaintiff countered that they were advances chargeable to his share of the net profits. While he admitted that he owned some Baguio Consolidated and Baguio Gold shares, he denied that he had given them to the defendant as collateral or in any other concept. He swore that he kept those securities in his own safe and removed them in plain sight of Pineda when he became suspicious of the latter. It is difficult to understand how the payment of the amounts in question to the plaintiff could have been for any purpose other than that affirmed by him. The lack of any receipt is incompatible with the hypothesis of loans. The defendant's possession of the plaintiff's mining

shares, granting that the defendant held them, was no reason for dispensing with the necessity of getting from the plaintiff some form of acknowledgment that the said amounts were personal debts, if that was the case. Without such acknowledgment, which could have been made in a matter of minutes and required no expert to make, the shares of stock did not afford the creditor much if any protection, as an experienced and intelligent man that the defendant is must have realized. These amounts were the subject of a counterclaim and the court sustained the defendant's theory and gave him judgment for them. In the light of the what has just been said and of the evidence previously discussed, there is no escaping the conclusion that the plaintiff was the sole owner of the post-war Silver Dollar bar and restaurant, that the defendant was only an industrial partner, and that the said amounts were withdrawals on account of the profits, which appear from portions of the defendant's entries in the books to have been considerable. On the second cause of action, which relates to the ownership of the Silver Dollar Cafe tradename, it appears that the defendant on September 27, 1945, registered the business and its name as his own. The defendant contends that in 1940, the plaintiff's right to use this trade-name expired and by abandonment or non-use the plaintiff ceased to have any title thereto. The alleged abandonment or non-use is predicated on the testimony that the plaintiff expressly allowed the defendant to appropriate the trade-name in dispute. The parties' actions negative all motions of abandonment by the plaintiff. In the fictitious bill of sale executed on December 29, 1941, the plaintiff asserted and the defendant acknowledged Thomas' ownership of the business. It is manifest from Exhibit "C" and "D, samples of the business cards which were printed at the instance of the defendant himself, that the plaintiff continued to display the name Silver Dollar Cafe after liberation. And when the plaintiff set up a new saloon on Echague Street after he broke with the defendant, he gave the establishment the same appellation Silver Dollar Cafe. The most that can be said in favor of the defendant, which is the view taken by the trial Judge, is that the plaintiff instructed Pineda to renew the registration of the trade-name and the defendant understood the instruction as permission to make the registration in his favor. It is to be doubted to whether even honest mistakes were possible under the circumstance of the case. It is an understatement to say that indications pointed to bad faith in the registration. The application for registration contained brazen untruths. The plaintiff non-use of his trade name in 1945, granting that to have been the case, did not work as a forfeiture of his exclusive right to the name, name which he and the man from whom he bought the business had used for over forty years without interruption. Under the provision of Commerce Administrative Order No. 1, issued on January 11, 1946, by the Secretary of Commerce and Agriculture, the rights registrant of business names, the records of which had been destroyed or lost during the war, were expressly protected. This administrative Order No. 11, dated October 29, 1946, but the amendment referred only to the procedure for authentication of the documents to be submitted. On the other hand, the amendatory order extended the filing of application for reconstitution up to as late as December 31, 1946, that is ninety days after plaintiff commenced the present action. As legal proposition and in good conscience, the defendants registration of the trade name Silver Dollar Cafe must be deemed to have been affected for the benefit of its owner of whom he was a

mere trustee or employee. "The relations of an agent to his principal are fiduciary and it is an elementary and very old rule that in regard to property forming the subject matter of the agency, he is estopped from acquiring or asserting a title adverse to that of principal. His position is analogous to that of a trustee and he cannot consistently, with the principles of good faith, be allowed to create in himself an interest in opposition to that of his principal or cestui que trust. A receiver, trustee, attorney, agent or any other person occupying fiduciary relations respecting property or persons utterly disabled from acquiring for his own benefit the property committed to his custody for management. This rule is entirely independent of the fact whether any fraud has intervened. No fraud in fact need be shown, and no excuse will be heard from any such inquiry that the rule takes so general form. The rule stands on the moral obligation to refrain from placing one's self in position which ordinarily excite conflicts between self-interest at the expense of one's integrity and duty to another, by making it possible to profit by yielding to temptation". (Barreto vs. Tuason, 50 Phil. 888; Severino vs. Severino, 44 Phil., 343.) To recapitulate, we find from what we believed is conclusive evidence, both direct and circumstance, that the plaintiff was the owner of the Silver Dollar Cafe at Plaza Sta. Cruz during the enemy occupation and is of right entitled to have an accounting of its administration by the defendant. Exhibit "F" does not state the remuneration the defendant was to be paid for managing the plaintiff's business. The natural presumption under normal circumstances would be that his prewar compensation was to continue. But conditions during the occupation being different from what they were before the war, the defendants remuneration may and should be increased if so warranted by the changed circumstances. This matter should be left for consideration in the accounting, having in mind the nature and extent of the services rendered, the volumes of business transacted, the profits obtained and the losses incurred, the personal risk run by the defendant, and other factors related to the success or failure of the defendant's management. We have it from the plaintiff that he promised to give the defendant one-half of the net profits of the business established in Bambang and later at Plaza Sta. Cruz after liberation. This offer was reasonable, even liberal, and no unforeseen circumstances having supervened to warrants its alteration, the same will not be disturbed and will serve as basis of liquidation. The other basis of liquidation of the post-war business are that the plaintiff was the exclusive owner of its stocks and other assets from May 8, 1945, when it was reestablished in Bambang, to December 15 1946, when the business was levelled to the ground at Plaza Sta. Cruz. For the reasons hereinbefore stated, the various sums of money aggregating P24,100 and received or taken by the plaintiff were, and they hereby are declared to be, accounting from the defendants share of said profits if there be any. We also find that the trade-name Silver Dollar Cafe belongs to the plaintiff and that the defendant should be and he is perpetually enjoined from using it or any essential part thereof. In all other respects, especially in connection with the demand for accounting, this case is remanded to the court of origin for further proceedings in accordance with law and the tenor of this decision and for a final judgment on the balance that may be found due from either party. The defendant will pay the costs of this appeal. Separate Opinions PARAS, C. J. concurring and dissenting:

I concur in the majority opinion except in so far as it requires the defendant to render an accounting of the business Silver Dollar Cafe during the Japanese occupation. The proof shows that the defendant was told the enterprise and pretend to be its owner during the war in order to save it for being surely seized by the Japanese as American property, and that the defendant not only succeeded in doing so but, with all honesty, used the proceeds of the business for the support of the defendant and his daughters. The arrangement cannot be said to have been a regular business proposition undertaken by the parties under normal conditions in virtue of which the defendant was made a mere manager; and even if the defendant had in fact derived personal advantages, its justification necessarily follows from the accomplishment of the mission entrusted by the plaintiff. Moreover, the business during the occupation was carried on in Japanese currency which is now worthless.

G.R. No. L-49219

December 11, 1946

PABLO D. PALMA, petitioner, vs. EDUARDO REYES CRISTOBAL, respondent. A parcel of a land located in Quesada Street, Tondo, Manila, covered by transfer certificate of title No. 31073 of the Register of Deeds of Manila, issued in favor of petitioner Pablo D. Palma, is the subject of contention between the parties. Petitioner sought, at first, to eject respondent Eduardo Cristobal Reyes from the land in question in a complaint filed with the Municipal Court of Manila. As respondent raised the question of ownership, the complaint was dismissed, and petitioner filed with the Court of First Instance of Manila the complaint which initiated this case, petitioner praying that he be declared the owner of the land and that respondent be ordered to restore its possession and to remove his house therefrom. The complaint was dismissed and petitioner brought the case to the Court of Appeals, where he again failed, the appealed judgment having been affirmed by a decision penned by Mr. Justice Padilla, concurred in by Mr. Justice Jose G. Generoso and Mr. Justice Pedro Tuason. The case is now before us on appeal by certiorari. In 1909, after registration proceedings under the provisions of Act No. 496, original certificate of title No. 1627 was issued in the names of petitioner and his wife Luisa Cristobal. In 1923, said certificate was cancelled and substituted by certificate of title No. 20968 by virtue of a decree issued by the Court of First Instance of Manila in connection with Manila cadastre. It was later substituted by certificate of title No. 26704, also in the name of petitioner and his wife. After the latter's death in 1922,a new certificate of title was issued in 1923 only in the name of the name of the petitioner, substituted in 1928 by certificate of title No. 31073. The Court of Appeals, upon the evidence, concluded with the Court of First Instance of Manila that the parcel of land in question is a community property held by petitioner in trust for the real owners (the respondent being an heir of one of them), the registration having been made in accordance with an understanding between the co-owners, by reason of the confidence they had in petitioner and his wife. This confidence, close relationship, and the fact that the co-owners were receiving their shares in the rentals, were the reasons why no step had been taken to partition the property.

The Court of Appeals explains that it was only after the death of Luisa Cristobal and petitioner had taken a second wife that trouble on religious matters arose between petitioner and respondent, and it gives credence to the testimony of Apolonia Reyes and respondent to the effect that Luisa, before her death, called her husband, the petitioner, and enjoined him to give her co-owners their shares in the parcel of land; but respondent told her then not to worry about it, for it was more important to them to have her cured of the malady that affected her. Petitioner answered his wife that she should not worry because he would take care of the matter by giving the co-owners their respective shares. Petitioner assigns as first error of the Court of Appeals the fact that it considered the oral testimony adduced in behalf of respondent sufficient to rebut the legal presumption that petitioner is the owner of the land in controversy. . In Severino vs. Severino (43 Phil., 343), this court declared that "the relations of an agent to his principal are fiduciary and it is an elementary and very old rule that in regard to property forming the subject-matter of the agency, he is estopped from acquiring or asserting a title adverse to that of the principal. His position is analogous to that of a trustee and he cannot consistently, with the principles of good faith, be allowed to create in himself an interest in opposition to that of his principal or cestui que trust." Affirming the said doctrine in Barretto vs. Tuason (50 Phil., 888), the Supreme Court declared that the registration of the property in the name of the trustees in possession thereof, must be deemed to have been effected for the benefit of the cestui que trust. In Palet vs. Tejedor (55 Phil., 790), it was declared that whether or not there is bad faith or fraud in obtaining a decree with respect to a registered property, the same does not belong to the person in whose favor it was issued, and the real owners be entitled to recover the ownership of the property so long as the same has not been transferred to a third person who has acquired it in good faith and for a valuable consideration. This right to recover is sanctioned by section 55 of Act No. 496, as amended by Act No. 3322. There is no showing why the conclusions of facts of the Court of Appeals should be disturbed, and upon said facts petitioner's first assignment of errors appears to be untenable in the light of law and of the decision of this court. Petitioner alleged that the Court of Appeals erred in not holding the respondent estopped from claiming that petitioner is not the absolute owner of the property in question because, after Luisa Cristobal, petitioner's wife, died in 1922, instead of moving for the partition of the property, considering specially that petitioner had promised such a partition at the deathbed of the deceased, respondent appeared as attorney for petitioner and prayed that a new certificate of title be issued in the name of said petitioner as the sole owner of the property. Petitioner insisted with energy that respondent himself was a party to the fraud upon the court, as guilty as petitioner himself, and that estops him from asserting that he is the co-owner of the land involved herein.lawphil.net There is no merit in petitioner's contention. The fact that respondent has been a party to the deception which resulted in petitioner's securing in his name the title to a property not belonging to him, is not valid reason for changing the legal relationship between the latter and its true owners to such an extent as to let them lose their ownership to a person trying to usurp it. Whether petitioner and respondent are or are not jointly responsible for any fraud upon a court of justice, cannot affect the substantial rights of the real owners of the title of a real property.

Respondent is not barred because his appearance as attorney for petitioner was not a misrepresentation which would induce petitioner to believe that respondent recognized the former as the sole owner of the property in controversy. The misrepresentation could deceive the court and outsiders, because they were not aware of the understanding between the co-owners that the property be registered in the name of petitioner. The Court of Appeals found, and the finding is not now in issue, that petitioner was a party to the understanding and assumed the role of an instrument to make it effective. Respondent's appearance, as attorney for petitioner in 1923, was a consequence of the understanding, and petitioner could not legitimately assume that it had the effect of breaking or reversing said understanding. Lastly, it is contended by petitioner that, even conceding that the controverted property was owned in common by several co-owners, yet the Court of Appeals erred in not holding that, as against respondent, petitioner had acquired absolute ownership of the same through prescription. Upon the premise that the registration in 1909 in the name of petitioner and his wife, Luisa Cristobal, was in accordance with an agreement among the co-owners, petitioner advances the theory that when he, upon the death of his wife in 1922, caused the trust property to be registered in his sole name in 1923, and subsequently partitioned between himself and his daughter, Ildefonsa Cristobal Ditangco, as heirs of the decedent, "he openly breached the agreement of 1909 as well as the promise made to his dying wife of giving the co-owners their respective shares," concluding that "that breach was an assumption of ownership, and could be the basis of title by prescription." This theory holds no water because, according to the pronouncement of the Court of Appeals, upon the evidence, petitioner held the property and secured its registration in his name in a fiduciary capacity, and it is elementary that a trustee cannot acquire by prescription the ownership of the property entrusted to him. The position of a trustee is of representative nature. His position is the position of a cestui que trust. It is logical that all benefits derived by the possession and acts of the agent, as such agent, should accrue to the benefit of his principal. Petitioner's pretension of building his right to claim ownership by prescription upon his own breach of a trust cannot be countenanced by any court, being subversive of generally accepted ethical principles. The decision of the Court of Appeals is affirmed. No costs.

G.R. No. L-7144

May 31, 1955

FAR EASTERN EXPORT & IMPORT CO., petitioner, vs. LIM TECK SUAN, respondent. Sometime in November, 1948, Ignacio Delizalde, an agent of the Far Eastern Export & Import Company, went to the store of Lim Teck Suan, and offered to sell textile, showing samples thereof, and having arrived at an agreement with Bernardo Lim, the General Manager of Lim Teck Suan, Delizalde returned on November 17 with the buyer's order already prepared: In accordance with said Exhibit A, plaintiff established a letter of credit No. 6390 (Exhibit B) in favor of Frenkel International Corporation through the Hongkong and Shanghai Bangking Corporation. On February 11, 1949, the textile arrived at Manila on board the vessel M. S. Arnold

Maersk, issued by Frenkel International Corporation direct to the plaintiff. The plaintiff complained to the defendant of the inferior quality of the textile received by him and had them examined by Marine Surveyor Del Pan & Company. Said surveyor took swatches of the textile and had the same analyzed by the Institute of Science and submitted a report or survey. Upon instructions of the defendants plaintiff deposited the goods with the United Warehouse Corporation. As per suggestion of the Far Eastern Export and Import Company contained in its letter dated June 16, 1949, plaintiff withdrew from the United Bonded Warehouse the fifteen cases of Ashtone Acetate and Rayon Suiting for the purpose of offering them for sale which netted P11,907.30. Deducting this amount from the sum of P23,686.96 which included the amount paid by plaintiff for said textile and the warehouse expenses, a difference of P11,476.66 is left, representing the net direct loss. The defense set up is that the Far Eastern Export and Import Company only acted as a broker in this transaction; that after placing the order the defendants took no further action and the cargo was taken directly by the buyer Lim Teck Suan, the shipment having been made to him and all the documents were also handled by him directly without any intervention on the part of the defendants; that upon receipt of Lim Teck Suan's complaint the defendants passed it to its principal, Frenkel International Corporation, for comment, and the latter maintained that the merchandise was up to standard called for. The lower court acquitted the defendants from the complaint asking for damages in the sum of P19,500.00. As already stated, the Court of Appeals reversed the judgment entered by the CFI, basing its decision of reversal on the case of Jose Velasco, vs. Universal Trading where the transaction therein involved was found by the court to be one of purchase and sale and not of brokerage or agency. We have carefully examined the Velasco case and we agree with the Court of Appeals that the facts in that case are very similar to those in the present case. We notice the following similarities. In the present case, the export company acted as agent for Frenkel International Corporation, presumably the supplier of the textile sold. In the Velasco case, the Universal Trading Co., was acting as agent for A. J. Wilson Company, also the supplier of the whisky sold. In the present case, Suan according to the first part of the agreement is said merely to be commissioning the Export Company to procure for him the merchandise in question, just as in the other case, Velasco was supposed to be ordering the whisky thru the Universal Trading Co. In the present case, the price of the merchandise bought was paid for by Suan by means of an irrevocable letter of credit opened in favor of the supplier, Frenkel International Corporation. In the Velasco case, Velasco was given the choice of either opening a similar irrevocable letter of credit in favor of the supplier A. J. Wilson Company or making a cash deposit. It is true that in the Velasco case, upon the arrival of the whisky and because it did not conform to specifications, Velasco refused to received it; but in the present case although Suan received the merchandise he immediately protested its poor quality and it was deposited in the warehouse and later withdrawn and sold for the best price possible, all at the suggestion of the Export company. The present case is in our opinion a stronger one than that of Velasco for holding the transaction as one of purchase and sale because as may be noticed from the agreement, the same speaks of the items (merchandise) therein involved as sold, and the sale was even confirmed by the Export company. In both cases, the agents Universal Trading Co. and the export company dealt directly with the local merchants Velasco and Suan without expressly indicating or revealing their principals. In both cases there was no privity of contract between the buyers Suan and Velasco and the suppliers Frenkel International Corporation and A. J. Wilson

Company, respectively. In both cases no commission or monetary consideration was paid or agreed to be paid by the buyers to the Export company and the Universal Trading Co., proof that there was no agency or brokerage, and that the profit of the latter was undoubtedly the difference between the price listed to the buyers and the net or special price quoted to the sellers, by the suppliers. As already stated, it was held in the Velasco case that the transaction therein entered into was one of purchase and sale, and for the same reasons given there, we agreed with the Court of Appeals that the transaction entered into here is one of purchase and sale. As was held by this Tribunal in the case of Gonzalo Puyat & Sons Incorporated vs. Arco Amusement, where a foreign company has an agent here selling its goods and merchandise, that same agent could not very well act as agent for local buyers, because the interests of his foreign principal and those of the buyer would be in direct conflict. He could not serve two masters at the same time. In the present case, the Export company being an agent of the Frenkel International Corporation could not, as it claims, have acted as an agent or broker for Suan. Finding no reversible error in the decision appealed from, the same is hereby affirmed, with costs.

NIELSON & COMPANY vs. LEPANTO CONSOLIDATED MINING COMPANY G.R. No. L-21601, Dec. 17, 1966 FACTS: On Jan. 30, 1937, a 5-year contract was executed between Nielson and Lepanto whereby Nielson operated and managed the mining properties owned by the Lepanto for a management fee of P2,500.00 a month and a 10%participation in the net profits resulting from the operation of the mining properties. This was later renewed in 1941 for another 5 years. In January, 1942 operation of the mining properties was disrupted on account of the war. The Japanese occupied the mining properties during the war and were ousted from the mining properties only in Aug. of 1945. Lepanto took possession of the properties and its rehabilitation and reconstruction was not completed until 1948. On June 26, 1948 the mines resumed operation under the exclusive management of Lepanto. Nielson and Lepanto had a disagreement as to the status of the operating contract which as renewed expired in 1947. Under its terms the management contract shall remain in suspense in case of fortuitous event or force majeure, such as war or civil commotion, adversely affects the work of mining and milling. Nielson held the view that, on account of the war, the contract was suspended during the war; hence the life of the contract should be considered extended for such time of the period of suspension. On the other hand, Lepanto contended that the contract should expire in 1947 as originally agreed upon because the period of suspension accorded by virtue of the war did not operate to extend further the life of the contract. On Feb. 6, 1958, Nielson brought an action against Lepanto to recover certain sums of money representing damages allegedly suffered by the former in view of the refusal of the latter to comply with the terms of a management contract. ISSUES/ HELD:

1. WON the management contract has been suspended as a result of the supervening war? YES In order that the management contract may be deemed suspended two events must take place which must be brought in a satisfactory manner to the attention of defendant within a reasonable time, to wit: (1) the event constituting the force majeure must be reasonably beyond the control of Nielson, and (2) it must adversely affect the work of mining and milling the company is called upon to undertake. The Court take judicial notice that war supervened in our country and that the mines in the Philippines were either destroyed or taken over by the occupation forces with a view to their operation, the Lepanto mines included. Reports by Mr. DeWitt (president of Lepanto) and Mr. Blessing (an official Nielson) stated that on February of 1942, the mill, power plant, supplies on hand, equipment, concentrates on hand, and mine, were destroyed upon orders of the U.S. Army to prevent their utilization by the enemy. Beginning February, 1942 the operation of the Lepanto mines stopped or became suspended as a result of the destruction of the mill, power plant and other important equipment necessary for such operation in view of a cause which was clearly beyond the control of Nielson and that as a consequence such destruction adversely affected the work of mining and milling which the latter was called upon to undertake under the management contract. Consequently, by virtue of the very terms of said contract the same may be deemed suspended from February, 1942 and as of that month the contract still had 60 months to go. The Lepanto mines were liberated on Aug. 1, 1945, but because of the period of rehabilitation and reconstruction it cannot be said that the suspension of the contract ended on that date. Hence, the contract must still be deemed suspended during the succeeding years of reconstruction and rehabilitation, and this period can only be said to have ended on June 26, 1948 when the companyofficially resumed the mining operations of the Lepanto. The period of suspension is from Feb. 1942 to June 26, 1948 as urged by Nielson. 2. WON such suspension extended the period of the management contract for the period of said suspension? YES. The management contract was extended from June 27, 1948 to June 26, 1953, or for a period of 60 months. Schoely (officer of both companies) and Nestle (employee of Nelson) testified that the suspension had the effect of extending the period of the contract. The standard force majeure clause embodied in the management contract was taken from similar mining contracts regarding mining operations and the understanding regarding the nature and effect of said clause was that when there is suspension of the operation that suspension meant the extension of the contract .Records or minutes of the Special Meeting of the Board of Directors of Lepanto where President DeWitt expressed the opinion that as a result of the suspension of the mining operation because of the effects of the war the period of the contract had been extended. 3. WON Nielson is guilty of laches? NO. The elements of laches are the following: (1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which complaint is made and for which the complaint seeks a remedy; (2) delay in asserting the complainant's rights, the complainant having had knowledge or notice of the defendant's conduct and having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and (4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held barred.

Not all the elements are present in this case. The 1 st element is conceded by Nielson when it claimed that Lepanto refused to pay its management fees, its percentage of profits and refused to allow it to resume the management operation As to the 2nd element, while Nielson knew since 1945 that Lepanto refused to permit it to resume management and that since 1948 Lepanto has resumed operation of the mines and Nielson filed its complaint only on February6, 1958, the delay is justified and as such cannot constitute laches. Only a period of less than one year had elapsed from the date of the final denial of the claim [June 25, 1957] to the date of the filing of the complaint [Feb. 6, 1958], which certainly cannot be considered as unreasonable delay. As to the 3rd element, it cannot be said that Lepanto did not know that Nielson would assert its rights on which it based suit. Since March 10, 1945, Nielson already claimed its right to the extension of the contract. Lastly if there has been some delay in bringing the case to court it was mainly due to the attempts at arbitration and negotiation made by both parties. 4. WON the action of Nielson prescribed? NO. The defense of laches applies independently of prescription. Laches is different from the statute of limitations. Prescription is concerned with the fact of delay, whereas laches is concerned with the effect of delay. Prescription is a matter of time; laches is principally a question of inequity of permitting a claim to be enforced, this inequity being founded on some change in the condition of the property or the relation of the parties. Prescription is statutory; laches is not. Laches applies in equity, whereas prescription applies at law. Prescription is based on fixed time, laches is not. Lepanto contended that the period to be considered for the prescription of the claim regarding participation in the profits is only four years, because the modification of the sharing embodied in the management contract is merely verbal, no written document to that effect having been presented. This contention is untenable. A modification, was made in the management contract relative to the participation in the profits by Nielson, as contained in the minutes of the special meeting of the Board of Directors of Lepanto held on Aug. 21, 1940,should be considered as a written contract insofar as the application of the statutes of limitations is concerned. Hence, the action thereon prescribes within ten (10) years. The right of Nielson to its 10% participation in the 1941 operations accrued on Dec. 21, 1941 and the right to commence an action thereon began on Jan. 1, 1942 so that the action must be brought within 10 years from the latter date. In this case, even if complaint was filed only on Feb. 6, 1958 (16y, 1m,5d), the SC held that the action has not yet prescribed for the following reasons: a. Operation of the Moratorium Law: moratorium may be imposed in times of economic crisis or a natural disaster like a flood or earthquake, to allow people to return to normal before having to worry about preventing foreclosures and the like. Operation of the Moratorium Law suspends the running of the statute of limitations. SC held that the Moratorium Law had been enforced for 8 years, 2 months and 8 days. Deducting this period from the time that had elapsed since the accrual of the right of action to the date of the filing of the complaint, there would be less than 8 years to be counted for purposes of prescription. Hence appellant's action on its claim of 10% on the 1941 profits had not yet prescribed. b. Arbitration clause in the management contract between Nielson and Lepanto. It requires that any disagreement as to any amount of profits shall be subject to arbitration before an action may be taken to court. The evidence shows that an arbitration committee was constituted but it failed to accomplish its purpose on June 25, 1957.

THE SHELL COMPANY OF THE PHILIPPINES, LTD., petitioner, vs. FIREMENS INSURANCE COMPANY OF NEWARK, NEW JERSEY COMMERCIAL CASUALTY INSURANCE CO., SALVADOR SlSON, PORFIRIO DE LA FUENTE and THE COURT OF APPEALS (First Division), respondents. 1. PRINCIPAL AND AGENT; WHEN AGENCY EXISTS AND NOT AN INDEPENDENT CONTRACTOR.Where the operator of a gasoline and service station owed his position to the company and the latter could remove him or terminate his services at will; that the service station belonged to the company and bore its tradename and the operator sold only the products of the company; that the equipment used by the operator belongedto the company and were just loaned to the operator and the company took charge of their repair and maintenance; that an employee of the company supervised the operator and conducted periodic inspection of the companys gasoline and service station; that the price of the products sold by the operator was fixed by the company and not by the operator; and that the receipts signed by the operator indicated that he was a mere agent. Held: that the operator is an agent of the company and not an independent contractor. It is a fact that a Plymounth car owned by Salvador R. Sison was brought, on September 3, 1947 to the Shell Gasoline and Service Station, for washing, greasing and spraying. The operator of the station, having agreed to do service upon payment of P8.00, the car was placed on a hydraulic lifter under the direction of the personnel of the station. What happened to the car is recounted by Perlito Sison, as follows: Q. Will you please describe how they proceeded to do the work? A. Yes, sir. The first thing that was done, as I saw, was to drive the car over the lifter. Then by the aid of the two grease men they raised up my car up to six feet high, and then washing was done. After washing, the next step was greasing. Before greasing was finished, there is a part near the shelf of the right fender, right front fender, of my car to be greased, but the the grease men cannot reached that part, so the next thing to be done was to loosen the lifter just a few feet lower. Then upon releasing the valve to make the car lower, a little bit lower . . . Q. Who released the valve? A. The greasemen, for the escape of the air. As the escape of the air is too strong for my ear I faced backward and covered my ear. After the escaped of the air has been finished, the air coming out from the valve, I turned to face the car and I saw the car swaying at that time, and just for a few second the car fell. The case was immediately reported to the Manila Adjustor Company, the adjustor of the firemen's Insurance Company and the Commercial Casualty Insurance Company, as the car was insured with these insurance companies. After having been inspected by one Mr. Baylon, representative of the Manila Adjustor Company, the damaged car was taken to the shops of the Philippine Motors for repair upon order of the Firemen's Insurance Company and the Commercial Casualty Company, with the consent of Salvador R. Sison. The car was restored to running condition after repairs amounting to P1,651.38, and was delivered to Salvador R. Sison, who, in turn made assignments of his rights to recover damages in favor of the Firemen's Insurance Company and the Commercial Casualty Insurance Company.

On the other hand, the fall of the car from the hydraulic lifter has been explained by Alfonso M. Adriano, a greaseman in the Shell Gasoline and Service Station. The position of Defendant Porfirio de la Fuente is stated in his counter-statement of facts which is hereunder also reproduced: In the afternoon of September 3, 1947, an automobile belonging to the plaintiff Salvador Sison was brought by his son, Perlito Sison, to the gasoline and service station owned by the defendant The Shell Company, but operated by the defendant Porfirio de la Fuente, for the purpose of having said car washed and greased for a consideration of P8.00. Said car was insured against loss or damage by Firemen's Insurance Company and Commercial Casualty Insurance Company jointly for the sum of P10,000. The job of washing and greasing was undertaken by his two employees, Alfonso M. Adriano, as greaseman and one surnamed de los Reyes, a helper and washer. To perform the job the car was carefully and centrally placed on the platform of the lifter in the gasoline and service station aforementioned before raising up said platform to a height of about 5 feet and then the servicing job was started. After more than one hour of washing and greasing, the job was about to be completed except for an ungreased portion underneath the vehicle which could not be reached by the greasemen. So, the lifter was lowered a little by Alfonso M. Adriano and while doing so, the car for unknown reason accidentally fell and suffered damage to the value of P1, 651.38. The insurance companies after paying the sum of P1,651.38 for the damage and charging the balance of P100.00 to Salvador Sison in accordance with the terms of the insurance contract, have filed this action together with said Salvador Sison for the recovery of the total amount of the damage from the defendants on the ground of negligence. The defendant denied negligence in the operation of the lifter in his separate answer and contended further that the accidental fall of the car was caused by unforseen event. The On 6 December 1947 the insurers and the owner of the car brought an action in the CFI against Shell and Porfirio de la Fuente to recover from them, jointly and severally, the sum of P1,651.38, interest thereon at the legal rate from the filing of the complaint until fully paid, the costs. After trial the Court dismissed the complaint. The plaintiffs appealed. The Court of Appeals reversed the judgment and sentenced the defendant to pay the amount sought to be recovered. In arriving at the conclusion that when the car was brought to the station for servicing Profirio de la Fuente, the operator of the gasoline and service station, was an agent of Shell, the Court of Appeals found that . . . De la Fuente owned his position to the Shell Company which could remove him terminate his services at any time from the said Company, and he undertook to sell the Shell Company's products exclusively at the said Station. For this purpose, De la Fuente was placed in possession of the gasoline and service station under consideration, and was provided with all the equipments needed to operate it, by the said Company, such as the tools and articles which the hydraulic lifter (hoist) and accessories, from which Sison's automobile fell on the date in question. These equipments were delivered to De la Fuente on a so-called loan basis. The Shell Company took charge of its care and maintenance and rendered to the public or its customers at that station for the proper functioning of the equipment. De la Fuente, as operator, was given special prices by the Company for the gasoline products sold therein. Exhibit 1 Shell, which was a receipt by Antonio Tiongson and signed by the De la Fuente, acknowledging the delivery of

equipments of the gasoline and service station in question was subsequently replaced by Exhibit 2 Shell, an official form of the inventory of the equipment which De la Fuente signed above the words: "Agent's signature" And the service station in question had been marked "SHELL", and all advertisements therein bore the same sign. . . . Taking into consideration the fact that the operator owed his position to the company and the latter could remove him or terminate his services at will; that the service station belonged to the company and bore its tradename and the operator sold only the products of the company; that the equipment used by the operator belonged to the company and were just loaned to the operator and the company took charge of their repair and maintenance; that an employee of the company supervised the operator and conducted periodic inspection of the company's gasoline and service station; that the price of the products sold by the operator was fixed by the company and not by the operator; and that the receipt signed by the operator indicated that he was a mere agent, the finding of the Court of Appeals that the operator was an agent of the company and not an independent contractor should not be disturbed. To determine the nature of a contract courts do not have or are not bound to rely upon the name or title given it by the contracting parties, should there be a controversy as to what they really had intended to enter into, but the way the contracting parties do or perform their respective obligation stipulated or agreed upon may be shown and inquired into, and should such performance conflict with the name or title given the contract by the parties, the former must prevail over the latter. It was admitted by the operator of the gasoline and service station that "the car was carefully and centrally placed on the platform of the lifter . . ." and the Court of Appeals found that . . . the fall of Appellant Sison's car from the hydraulic lift and the damage caused therefor, were the result of the jerking and swaying of the lift when the valve was released, and that the jerking was due to some accident and unforeseen shortcoming of the mechanism itself, which caused its faulty or defective operation or functioning, . . . the servicing job on Appellant Sison's automobile was accepted by De la Fuente in the normal and ordinary conduct of his business as operator of his co-appellee's service station, and that the jerking and swaying of the hydraulic lift which caused the fall of the subject car were due to its defective condition, resulting in its faulty operation. . . . As the act of the agent or his employees acting within the scope of his authority is the act of the principal, the breach of the undertaking by the agent is one for which the principal is answerable. Moreover, the company undertook to "answer and see to it that the equipments are in good running order and usable condition;" and the Court of Appeals found that the Company's mechanic failed to make a thorough check up of the hydraulic lifter and the check up made by its mechanic was "merely routine" by raising "the lifter once or twice and after observing that the operator was satisfactory, he (the mechanic) left the place." The latter was negligent and the company must answer for the negligent act of its mechanic which was the cause of the fall of the car from the hydraulic lifter. The judgment under review is affirmed, with costs against the petitioner.

Sevilla vs CA G..R. No. L-41182-3 April 16, 1988 Employer-Employee Relationship Facts: The petitioners invoke the provisions on human relations of the Civil Code in this appeal by certiorari. Mrs. Segundina Noguera, party of the first part; the Tourist World Service, Inc., represented by Mr. Eliseo Canilao as party of the second part, and hereinafter referred to as appellants, the Tourist World Service, Inc. leased the premises belonging to the party of the first part at Mabini St., Manila for the former-s use as a branch office. In the said contract the party of the third part held herself solidarily liable with the party of the part for the prompt payment of the monthly rental agreed on. When the branch office was opened, the same was run by the herein appellant Una 0. Sevilla payable to Tourist World Service Inc. by any airline for any fare brought in on the efforts of Mrs. Lina Sevilla, 4% was to go to Lina Sevilla and 3% was to be withheld by the Tourist World Service, Inc. On November 24, 1961 the Tourist World Service, Inc. appears to have been informed that Lina Sevilla was connected with a rival firm, the Philippine Travel Bureau, and, since the branch office was anyhow losing, the Tourist World Service considered closing down its office. On June 17,1963, appellant Lina Sevilla refiled her case against the herein appellees and after the issues were joined, the reinstated counterclaim of Segundina Noguera and the new complaint of appellant Lina Sevilla were jointly heard following which the court ordered both cases dismiss for lack of merit. In her appeal, Lina Sevilla claims that a joint bussiness venture was entered into by and between her and appellee TWS with offices at the Ermita branch office and that she was not an employee of the TWS to the end that her relationship with TWS was one of a joint business venture appellant made declarations. Issue: Whether or not the padlocking of the premises by the Tourist World Service, Inc. without the knowledge and consent of the appellant Lina Sevilla entitled the latter to the relief of damages prayed for and whether or not the evidence for the said appellant supports the contention that the appellee Tourist World Service, Inc. unilaterally and without the consent of the appellant disconnected the telephone lines of the Ermita branch office of the appellee Tourist World Service, Inc.? Held: The trial court held for the private respondent on the premise that the private respondent, Tourist World Service, Inc., being the true lessee, it was within its prerogative to terminate the lease and padlock the premises. It likewise found the petitioner, Lina Sevilla, to be a mere

employee of said Tourist World Service, Inc. and as such, she was bound by the acts of her employer. The respondent Court of Appeal rendered an affirmance. In this jurisdiction, there has been no uniform test to determine the evidence of an employeremployee relation. In general, we have relied on the so-called right of control test, "where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end." Subsequently, however, we have considered, in addition to the standard of right-of control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, in determining the existence of an employer-employee relationship. the Decision promulgated on January 23, 1975 as well as the Resolution issued on July 31, 1975, by the respondent Court of Appeals is hereby REVERSED and SET ASIDE. The private respondent, Tourist World Service, Inc., and Eliseo Canilao, are ORDERED jointly and severally to indemnify the petitioner, Lina Sevilla, the sum of 25,00.00 as and for moral damages, the sum of P10,000.00, as and for exemplary damages, and the sum of P5,000.00, as and for nominal and/or temperate damages.

G.R. No. L-34338 November 21, 1984 LOURDES VALERIO LIM, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent. 1. Criminal Law; Contracts; Where a person obliged himself to pay to another the proceeds of the latters tobacco as soon as they are disposed of, a period exists for payment of the obligation and, therefore, Art. 1197, N.C.C. does not apply.It is clear in the agreement, Exhibit A, that the proceeds of the sale of the tobacco should be turned over to the complainant as soon as the same was sold, or, that the obligation was immediately demandable as soon as the tobacco was disposed of. Hence, Article 1197 of the New Civil Code, which provides that the courts may fix the duration of the obligation if it does not fix a period, does not apply. 2. Criminal Law; Contracts; Agency; Estafa is present where contract to sell constituted another as mere agent.Aside from the fact that Maria Ayroso testified that the appellant asked her to be her agent in selling Ayrosos tobacco, the appellant herself admitted that there was an agreement that upon the sale of the tobacco she would be given something. The appellant is a businesswoman, and it is unbelievable that she would go to the extent of going to Ayrosos house and take the tobacco with a jeep which she had brought if she did not intend to make a profit out of the transaction. Certainly, if she was doing a favor to Maria Ayroso and it was Ayroso who had requested her to sell her tobacco, it would not have been the appellant who would have gone to the house of Ayroso, but it would have been Ayroso who would have gone to the house of the appellant and deliver the tobacco to the appellant. 3. Criminal Law; Contracts; Agency; Sale; There is no contract of sale, but mere agency to sell, where agreement was to pay over to tobacco owner the proceeds thereof as soon as it was sold.-

The fact that appellant received the tobacco to be sold at P1.30 per kilo and the proceeds to be given to complainant as soon as it was sold, strongly negates transfer of ownership of the goods to the petitioner. The agreement (Exhibit A) constituted her as an agent with the obligation to return the tobacco if the same was not sold. Notes.In estafa under Article 315, paragraph 1(b) of the Revised Penal Code which is committed with abuse of confidence previous demand is necessary; whereas in paragraph 2(a) no demand is necessary. Elements of estafa by means of issuing bouncing checks are different from estafa by means of false pretenses or by means of misappropriation. After the filing of information for estafa, liability of accused cannot be novated into a civil one anymore by the parties compromise agreement.

Petitioner Lourdes Valerio Lim was found guilty of the crime of estafa. From this judgment, appeal was taken to the then Court of Appeals which affirmed the decision of the lower court but modified the penalty imposed. The question involved in this case is whether the receipt, Exhibit "A", is a contract of agency to sell or a contract of sale of the subject tobacco between petitioner and the complainant, Maria Ayroso, thereby precluding criminal liability of petitioner for the crime charged. The appellant is a businesswoman. On January 10, 1966, the appellant went to the house of Maria Ayroso and proposed to sell Ayroso's tobacco. Ayroso agreed to the proposition of the appellant to sell her tobacco consisting of 615 kilos at P1.30 a kilo. The appellant was to receive the overprice for which she could sell the tobacco. This agreement was made in the presence of plaintiff's sister. Salud Bantug drew the document which reads: To Whom It May Concern: This is to certify that I have received from Mrs. Maria de Guzman Vda. de Ayroso. of Gapan, Nueva Ecija, six hundred fifteen kilos of leaf tobacco to be sold at Pl.30 per kilo. The proceed in the amount of Seven Hundred Ninety Nine Pesos and 50/100 (P 799.50) will be given to her as soon as it was sold. This was signed by the appellant and witnessed by the complainant's sister, Salud, and the latter's maid. The appellant at that time was bringing a jeep, and the tobacco was loaded in the jeep and brought by the appellant. Of the total value of P799.50, the appellant had paid to Ayroso only P240.00, and this was paid on three different times. Demands for the payment of the balance of the value of the tobacco were made upon the appellant by Ayroso, and particularly by her sister, Salud. Salud Bantug further testified that she had gone to the house of the appellant several times, but the appellant often eluded her. Although the appellant denied that demands for payment were made upon her, it is a fact that on October 19, 1966, she wrote a letter to Salud Bantug explaining why she was not able to pay. Pursuant to this letter, the appellant sent a money order for a total of P240.00. As no further amount was paid, the complainant filed a complaint against the appellant for estafa.

In this petition for review by certiorari, Lourdes Valerio Lim poses the following questions of law, to wit: 1. Whether or not the Honorable Court of Appeals was legally right in holding that the document "fixed a period" and "the obligation was therefore, immediately demandable as soon as the tobacco was sold" as against the theory of the petitioner that the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended in which case the only action that can be maintained is a petition to ask the court to fix the duration thereof; 2. Whether or not the Honorable Court of Appeals was legally right in holding that "Art. 1197 of the New Civil Code does not apply" as against the alternative theory of the petitioner that the receipt gives rise to an obligation wherein the duration of the period depends upon the will of the debtor in which case the only action that can be maintained is a petition to ask the court to fix the duration of the period; and 3. Whether or not the honorable Court of Appeals was legally right in holding that the foregoing receipt is a contract of agency to sell as against the theory of the petitioner that it is a contract of sale. It is clear in the agreement, Exhibit "A", that the proceeds of the sale of the tobacco should be turned over to the complainant as soon as the same was sold, or, that the obligation was immediately demandable as soon as the tobacco was disposed of. Hence, Article 1197 which provides that the courts may fix the duration of the obligation if it does not fix a period, does not apply. Anent the argument that petitioner was not an agent because Exhibit "A" does not say that she would be paid the commission if the goods were sold, the Court of Appeals correctly resolved the matter as follows: ... Aside from the fact that Maria Ayroso testified that the appellant asked her to be her agent in selling Ayroso's tobacco, the appellant herself admitted that there was an agreement that upon the sale of the tobacco she would be given something. The appellant is a businesswoman, and it is unbelievable that she would go to the extent of going to Ayroso's house and take the tobacco with a jeep which she had brought if she did not intend to make a profit out of the transaction. Certainly, if she was doing a favor to Maria Ayroso and it was Ayroso who had requested her to sell her tobacco, it would not have been the appellant who would have gone to the house of Ayroso, but it would have been Ayroso who would have gone to the house of the appellant and deliver the tobacco to the appellant. The fact that appellant received the tobacco to be sold at P1.30 per kilo and the proceeds to be given to complainant as soon as it was sold, strongly negates transfer of ownership of the goods to the petitioner. The agreement (Exhibit "A') constituted her as an agent with the obligation to return the tobacco if the same was not sold. ACCORDINGLY, the petition for review on certiorari is dismissed for lack of merit.

G.R. No. L-19265

May 29, 1964

MOISES SAN DIEGO, SR., petitioner, vs. ADELO NOMBRE and PEDRO ESCANLAR, respondents. 1. Executors and administrators; Judicial administrator may lease property without prior judicial approval.A judicial ad- ministrator can validly lease property of the estate without prior judicial authority and approval. 2. Executors and administrators; Non-applicability of provisions of New Civil Code on agency to judicial administrators.The provisions on agency (Art. 1878, C.C.), should not apply to a judicial administrator. A judicial administrator is appointed by the Court. He is not only the representative of said Court, but also the heirs and creditors of the estate (Chua Tan vs. Del Rosario, 57 Phil. 411), A judicial administrator before entering into his duties, is required to file a bond. These circumstances are not true in case of agency. The agent is only answerable to his principal. The protection which the law gives the principal, in limiting the powers and rights of an agent, stems from the fact that control by the principal can only be true agreements, whereas the acts of a judicial administrator are subject to specific provisions of law and orders of the appointing court, Note.Cf. Araneta v. Perez where a testamentary trustee, who was subject to the supervision of the Court, was allowed to donate the property under trusteeship.

Nombre was judicial administrator of the intestate estate subject of the Sp. Proc., leased one of the properties of the estate (a fishpond), to Pedro Escanlar, the other respondent. The terms of the lease was for three (3) years to expire on May 1, 1963, the transaction having been done, admittedly, without previous authority or approval of the Court where the proceedings was pending. On January 17, 1961, Nombre was removed as administrator by Order of the court and one Sofronio Campillanos was appointed in his stead. Respondent Escanlar was cited for contempt, allegedly for his refusal to surrender the fishpond to the newly appointed administrator. On March 20, 1961, Campillanos filed a motion asking for authority to execute a lease contract of the same fishpond, in favor of petitioner herein, Moises San Diego, Sr., for 5 years from 1961. Escanlar was not notified of such motion. Nombre, the deposed administrator, presented a written opposition to the motion of Campillanos, pointing out that the fishpond had been leased by him to Escanlar for 3 years, the period of which was going to expire on May 1, 1963. In a supplemental opposition, he also invited the attention of the Court that to grant the motion of the new administrator would in effect nullify the contract in favor of Escanlar, a person on whom the Court had no jurisdiction. He also intimated that the validity of the lease contract entered into by a judicial administrator, must be recognized unless so declared void in a separate action. The opposition notwithstanding, the Court declared that the contract in favor of Escanlar was null and void, for want of judicial authority and that unless he would offer the same as or better conditions than the prospective lessee, San Diego, there was no good reason why the motion for authority to lease the property to San Diego should not be granted. Nombre moved to reconsider, stating that Escanlar was willing to increase the rental of P5,000.00, but only after the termination of his original contract. The motion for reconsideration was denied, the trial judge stating that the contract in favor of Escanlar was executed in bad faith and was fraudulent because of the imminence of Nombre's removal as administrator, one of the causes of which was his indiscriminate pleasant, of the property with inadequate rentals.

From this Order, a petition for Certiorari asking for the annulment of the Orders was presented by Nombre and Escanlar with the Court of Appeals. The Court of Appeals issued the injunctive writ and required respondents therein to Answer. The Court of Appeals, in dismissing the petition for certiorari, among others said The controlling issue in this case is the legality of the contract of lease entered into by the former administrator Nombre, and Pedro Escanlar. Respondents contend that this contract, not having been authorized or approved by the Court, is null and void and cannot be an obstacle to the execution of another of lease by the new administrator, Campillanos. This contention is without merit. ... . It has been held that even in the absence of such special powers, a contract or lease for more than 6 years is not entirely invalid; it is invalid only in so far as it exceeds the six-year limit. No such limitation on the power of a judicial administrator to grant a lease of property placed under his custody is provided for in the present law. Under Article 1647 of the present Civil Code, it is only when the lease is to be recorded in the Registry of Property that it cannot be instituted without special authority. Thus, regardless of the period of lease, there is no need of special authority unless the contract is to be recorded in the Registry of Property. As to whether the contract in favor of Escanlar is to be so recorded is not material to our inquiry. On the contrary, Rule 85, Section 3, of the Rules of Court authorizes a judicial administrator, among other things, to administer the estate of the deceased not disposed of by will. Commenting on this Section in the light of several Supreme Court decisions, Moran says: "Under this provision, the executor or administrator has the power of administering the estate of the deceased for purposes of liquidation and distribution. He may, therefore, exercise all acts of administration without special authority of the Court. For instance, he may lease the property without securing previously any permission from the court. And where the lease has formally been entered into, the court cannot, in the same proceeding, annul the same, to the prejudice of the lessee, over whose person it had no jurisdiction. The proper remedy would be a separate action by the administrator or the heirs to annul the lease. ... . The Court of Appeals denied the motions for reconsideration. With the denial of the said motions, only San Diego, appealed therefrom, raising legal questions, which center on "Whether a judicial administrator can validly lease property of the estate without prior judicial authority and approval", and "whether the provisions of the New Civil Code on Agency should apply to judicial administrators." The Rules of Court provide that An executor or administrator shall have the right to the possession of the real as well as the personal estate of the deceased so long as it is necessary for the payment of the debts and the expenses of administration, and shall administer the estate of the deceased not disposed of by his will. Lease has been considered an act of administration. The Civil Code, on lease, provides: If a lease is to be recorded in the Registry of Property, the following persons cannot constitute the same without proper authority, the husband with respect to the wife's paraphernal real

estate, the father or guardian as to the property of the minor or ward, and the manager without special power. (Art. 1647). The same Code, on Agency, states: Special powers of attorneys are necessary in the following cases: (8) To lease any real property to another person for more than one year. (Art. 1878) Petitioner contends, that No. 8, Art. 1878 is the limitation to the right of a judicial administrator to lease real property without prior court authority and approval, if it exceeds one year. The lease contract in favor of Escanlar being for 3 years and without such court approval and authority is, therefore, null and void. Upon the other hand, respondents maintain that there is no limitation of such right; and that Article 1878 does not apply in the instant case. We believe that the Court of Appeals was correct in sustaining the validity of the contract of lease in favor of Escanlar, notwithstanding the lack of prior authority and approval. The law and prevailing jurisprudence on the matter militates in favor of this view. While it may be admitted that the duties of a judicial administrator and an agent (petitioner alleges that both act in representative capacity), are in some respects, identical, the provisions on agency (Art. 1878, C.C.), should not apply to a judicial administrator. A judicial administrator is appointed by the Court. He is not only the representative of said Court, but also the heirs and creditors of the estate. A judicial administrator before entering into his duties, is required to file a bond. These circumstances are not true in case of agency. The agent is only answerable to his principal. The protection which the law gives the principal, in limiting the powers and rights of an agent, stems from the fact that control by the principal can only be thru agreements, whereas the acts of a judicial administrator are subject to specific provisions of law and orders of the appointing court. WHEREFORE, the decision appealed from should be, as it is hereby affirmed, in all respects.

G.R. No. L-40242 December 15, 1982 DOMINGA CONDE, petitioner, vs. THE HONORABLE COURT OF APPEALS, MANILA PACIENTE CORDERO, together with his wife, NICETAS ALTERA, RAMON CONDE, together with his wife, CATALINA T. CONDE, respondents. 1. Civil Law; Agency; Implied agency created from silence or lack of action or failure to repudiate the agency.If, as opined by both the Court a quo and the Appellate Court, petitioner had done nothing to formalize her repurchase, by the same token, neither have the vendees-a-retro done anything to clear their title of the encumbrance therein regarding petitioners right to repurchase. No new agreement was entered into by the parties as stipulated in the deed of pac to de retro, if the vendors a retro failed to exercise their right of redemption after ten years. If, as alleged, petitioner exerted no effort to procure the signature of Pio Altera after he had recovered from his illness, neither did the Alteras repudiate the deed that their son-in-law had signed. Thus, an implied agency must be held to have been created from their silence or lack of action, or their failure to repudiate the agency.

2. Same; Laches; Respondents delay for 24 years in instituting action for quieting of title and adverse and uninterrupted possession of the lot by the petitioner renders respondent guilty of laches.Possession of the lot in dispute having been adversely and uninterruptedly with petitioner from 1945 when the document of repurchase was executed, to 1969, when she instituted this action, or for 24 years, the Alteras must be deemed to have incurred in laches. Facts: On 7 April 1938, Margarita Conde, Bernardo Conde and the petitioner Dominga Conde, as heirs of Santiago Conde, sold with right of repurchase, within ten (10) years from said date, a parcel of agricultural land, with an approximate area of one (1) hectare, to Casimira Pasagui, married to Pio Altera (hereinafter referred to as the Alteras), for P165.00. The "Pacto de Retro Sale" further provided: ... (4) if at the end of 10 years the said land is not repurchased, a new agreement shall be made between the parties and in no case title and ownership shall be vested in the hand of the party of the SECOND PART (the Alteras). On 17 April 1941, the Cadastral Court of Leyte adjudicated Lot No. 840 to the Alteras "subject to the right of redemption by Dominga Conde, within ten (10) years counting from April 7, 1938, after returning the amount of P165.00 and the amounts paid by the spouses in concept of land tax. OCT in the name of the Alteras, subject to said right of repurchase, was transcribed in the "Registration Book" of the Registry of Deeds. On 28 November 1945, private respondent Paciente Cordero, son-in-law of the Alteras, signed a document in the Visayan dialect, the English translation of which reads: MEMORANDUM OF REPURCHASE OVER A PARCEL OF LAND SOLD WITH REPURCHASE WHICH DOCUMENT GOT LOST WE, PIO ALTERA and PACIENTE CORDERO, both of legal age, and residents of Burauen Leyte, Philippines, after having been duly sworn to in accordance with law free from threats and intimidation, do hereby depose and say: 1. That I, PIO ALTERA bought with the right of repurchase two parcels of land from DOMINGA CONDE, BERNARDO CONDE AND MARGARITA CONDE, all brother and sisters. 2. That these two parcels of land were all inherited by the three. 3. That the document of SALE WITH THE RIGHT OF REPURCHASE got lost in spite of the diligent efforts to locate the same which was lost during the war. 4. That these two parcels of land which was the subject matter of a Deed of Sale with the Right of Repurchase consists only of one document which was lost. 5. Because it is about time to repurchase the land, I have allowed the representative of Dominga Conde, Bernardo Conde and Margarita Conde in the name of EUSEBIO AMARILLE to repurchase the same. 6. Now, this very day November 28, 1945, I or We have received together with Paciente Cordero who is my son-in-law the amount of ONE HUNDRED SIXTY-FIVE PESOS (P165. 00) Philippine

Currency of legal tender which was the consideration in that sale with the right of repurchase with respect to the two parcels of land. That we further covenant together with Paciente Cordero who is my son-in-law that from this day the said Dominga Conde, Bernardo Conde and Margarita Conde will again take possession of the aforementioned parcel of land because they repurchased the same from me. If and when their possession over the said parcel of land be disturbed by other persons, I and Paciente Cordero who is my son-in-law will defend in behalf of the herein brother and sisters mentioned above, because the same was already repurchased by them. PIO ALTERA (Sgd.) PACIENTE CORDERO To be noted is the fact that neither of the vendees-a-retro, Pio Altera nor Casimira Pasagui, was a signatory to the deed. Petitioner maintains that because Pio Altera was very ill at the time, Paciente Cordero executed the deed of resale for and on behalf of his father-in-law. Petitioner further states that she redeemed the property with her own money as her co-heirs were bereft of funds for the purpose. The pacto de retro document was eventually found. On 30 June 1965 Pio Altera sold the disputed lot to the spouses Ramon Conde and Catalina T. Conde, who are also private respondents herein. Their relationship to petitioner does not appear from the records. Nor has the document of sale been exhibited. Contending that she had validly repurchased the lot in question in 1945, petitioner filed a Complaint for quieting of title to real property and declaration of ownership. Petitioner's evidence is that Paciente Cordero signed the Memorandum of Repurchase in representation of his father-in-law Pio Altera, who was seriously sick on that occasion, and of his mother-in-law who was in Manila at the time, and that Cordero received the repurchase price of P65.00. Private respondents, for their part, adduced evidence that Paciente Cordero signed the document of repurchase merely to show that he had no objection to the repurchase; and that he did not receive the amount of P165.00 from petitioner inasmuch as he had no authority from his parents-in-law who were the vendees-a-retro. After trial, the lower Court rendered its Decision dismissing the Complaint and the counterclaim and ordering petitioner "to vacate the property in dispute and deliver its peaceful possession to the defendants Ramon Conde and Catalina T. Conde". On appeal, the Court of Appeals upheld the findings of the Court a quo that petitioner had failed to validly exercise her right of repurchase in view of the fact that the Memorandum of Repurchase was signed by Paciente Cordero and not by Pio Altera, the vendee-a-retro, and that there is nothing in said document to show that Cordero was specifically authorized to act for and on behalf of the vendee a retro, Pio Altera. There is no question that neither of the vendees-a-retro signed the "Memorandum of Repurchase", and that there was no formal authorization from the vendees for Paciente Cordero to act for and on their behalf.

Of significance, however, is the fact that from the execution of the repurchase document in 1945, possession has been in the hands of petitioner as stipulated therein. Land taxes have also been paid for by petitioner yearly from 1947 to 1969. If, as opined by both the Court a quo and the Appellate Court, petitioner had done nothing to formalize her repurchase, by the same token, neither have the vendees-a-retro done anything to clear their title of the encumbrance therein regarding petitioner's right to repurchase. No new agreement was entered into by the parties as stipulated in the deed of pacto de retro, if the vendors a retro failed to exercise their right of redemption after ten years. If, as alleged, petitioner exerted no effort to procure the signature of Pio Altera after he had recovered from his illness, neither did the Alteras repudiate the deed that their son-in-law had signed. Thus, an implied agency must be held to have been created from their silence or lack of action, or their failure to repudiate the agency. Possession of the lot in dispute having been adversely and uninterruptedly with petitioner from 1945 when the document of repurchase was executed, to 1969, when she instituted this action, or for 24 years, the Alteras must be deemed to have incurred in laches. Private respondents Ramon Conde and Catalina Conde, to whom Pio Altera sold the disputed property in 1965, assuming that there was, indeed, such a sale, cannot be said to be purchasers in good faith. OCT No. 534 in the name of the Alteras specifically contained the condition that it was subject to the right of repurchase within 10 years from 1938. Although the ten-year period had lapsed in 1965 and there was no annotation of any repurchase by petitioner, neither had the title been cleared of that encumbrance. The purchasers were put on notice that some other person could have a right to or interest in the property. It behooved Ramon Conde and Catalina Conde to have looked into the right of redemption inscribed on the title, and particularly the matter of possession, which, as also admitted by them at the pre-trial, had been with petitioner since 1945. Private respondent must be held bound by the clear terms of the Memorandum of Repurchase that he had signed wherein he acknowledged the receipt of P165.00 and assumed the obligation to maintain the repurchasers in peaceful possession should they be "disturbed by other persons". It was executed in the Visayan dialect which he understood. He cannot now be allowed to dispute the same. There is nothing in the document of repurchase to show that Paciente Cordero had signed the same merely to indicate that he had no objection to petitioner's right of repurchase. In sum, although the contending parties were legally wanting in their respective actuations, the repurchase by petitioner is supported by the admissions at the pre-trial that petitioner has been in possession since the year 1945, the date of the deed of repurchase, and has been paying land taxes thereon since then. The imperatives of substantial justice, and the equitable principle of laches brought about by private respondents' inaction and neglect for 24 years, loom in petitioner's favor. WHEREFORE, the judgment of respondent Court of Appeals is hereby REVERSED and SET ASIDE, and petitioner is hereby declared the owner of the disputed property.

HARRY E. KEELER ELECTRIC Co., INC., plaintiff and appellant, vs. DOMINGO RODRIGUEZ, defendant and appellee.

1. BURDEN OF PROOF.The defendant, having alleged that the plaintiff sold and delivered the plant to him, and that he paid the purchase price to the plaintiff, it devolved upon him to prove such payment by a preponderance of the evidence 2. To WHOM PAYMENT SHOULD BE MADE.Payment must be made to the person in whose favor the obligation is constituted, or t another authorized to receive it in his name. (Article 1162, Civil Code.) 3. ID.The repayment of a debt must be made to the person in whose favor the obligation is constituted, or to another expressly authorized to receive the payment in his name. 4. DUTIES OF PERSONS DEALING WITH AN ASSUMED AGENT.Persons dealing with an assumed agent, whether the assumed agency be a general or special one, are bound at their peril, if they would hold the principal, to ascertain not only the fact of the agency but the nature and extent of the authority, and in case either is controverted, the burden of proof is upon them to establish it. 5. AGENT ALONE CANNOT ENLARGE HIS AUTHORITY.The agent alone cannot enlarge or extend his authority by his own acts or statements, nor can he alone remove limitations or waive conditions imposed by his principal. To charge the principal in such a case, the principal's consent or concurrence must be shown. 6. PAYMENT AT OWN RISK.Where a person in making payment solely relied upon the representation of an agent as to his authority to receive and receipt for the money, such payment is made at his own risk, and where the agent was not so authorized, such payment is not a valid defense against the principal. STATEMENT The plaintiff is a domestic corporation with its principal office in the city of Manila and engaged in the electrical business, and among other things in the sale of what is known as the "Matthews" electric plant, and the defendant is a resident of Talisay, Occidental Negros, and A. C. Montelibano was a resident of Iloilo. Having this information, Montelibano approached plaintiff at its Manila office, claiming that he was from Iloilo and lived with Governor Yulo; that he could find purchaser 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 commission of 10 per cent for his services, if the sale was consummated. Among other persons, Montelibano interviews the defendant, and, through his efforts, one of the "Matthews" plants was sold by the plaintiff to 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 commenced this action against the defendant, alleging that about August 18, 1920, it sold and delivered to the defendant the electric plant at the agreed price of P2,513.55 no part of which has been paid. For answer, the defendant admits the corporation of the plaintiff, and denies all other material allegations of the complaint, and, as an affirmative defense, alleges "that on or about the 18th of August, 1920, the plaintiff sold and delivered to the defendant a certain electric plant and that the defendant paid the plaintiff the value of said electric plant, to wit: P2,513.55."

Upon such issues the testimony was taken, and the lower court rendered judgment for the defendant, from which the plaintiff appeals, claiming that the court erred in holding that the payment to A. C. Montelibano would discharge the debt of defendant, and in holding that the bill was given to Montelibano for collection purposes, and that the plaintiff had held out Montelibano to the defendant as an agent authorized to collect. JOHNS, J.: The testimony is conclusive that the defendant paid the amount of plaintiff's claim to Montelibano, and that no part of the money was ever paid to the plaintiff. The defendant, having alleged that the plaintiff sold and delivered the plant to him, and that he paid the plaintiff the purchase price, it devolved upon the defendant to prove the payment to the plaintiff by a preponderance of the evidence. It appears from the testimony of H. E. Keeler that he was president of the plaintiff and that the plant in question was shipped from Manila to Iloilo and consigned to the plaintiff itself, and that at the time of the shipment the plaintiff sent Juan Cenar, one of its employees, with the shipment, for the purpose of installing the plant on defendant's premises. That plaintiff gave Cenar a statement of the 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 confined to the finding of purchasers for the "Matthews" plant to whom the plaintiff would later make and consummate the sale. That Montelibano was not an electrician, could not install the plant and did not know anything about its mechanism. Cenar, as a witness for the plaintiff, testified that he went with shipment of the plant from Manila to Iloilo, for the purpose of installing, testing it, and to see that everything was satisfactory. That he was there about nine days, and that he installed the plant, and that it was tested and approved by the defendant. He also says that he personally took with him the statement of account of the plaintiff against the defendant, and that after he was there a few days, the defendant asked to see the statement, and that he gave it to him, and the defendant said, "he was going to keep it." I said that was all right "if you want." "I made no effort at all to collect the amount from him because Mr. Rodriguez told me he was going to pay for the plant here in Manila." That after the plant was installed and approved, he delivered it to the defendant and returned to Manila. The only testimony on the part of the defendant is that of himself in the form of a deposition in which he says that Montelibano sold and delivered the plant to him, and "was the one who ordered the installation of that electrical plant," and he introduced in evidence as part of his deposition a statement and receipt which Montelibano signed to whom he paid the money. When asked why he paid the money to Montelibano, the witness says: Because he was the one who sold, delivered, and installed the electrical plant, and he presented to me the account, and he assured me that he was duly authorized to collect the value of the electrical plant. There is nothing on the face of this receipt to show that Montelibano was the agent of, or that he was acting for, the plaintiff. It is his own personal receipt and his own personal signature. Outside of the fact that Montelibano received the money and signed this receipt, there is no evidence that he had any authority, real or apparent, to receive or receipt for the money. Neither is there any evidence that the plaintiff ever delivered the statement to Montelibano, or

authorized anyone to deliver it to him, and it is very apparent that the statement in question is the one which was delivered by the plaintiff to Cenar, and is the one which Cenar delivered to the defendant at the request of the defendant. The evidence of the defendant that Montelibano was the one who sold him the plant is in direct conflict with his own pleadings and the receipt statement which he offered in evidence. This statement also shows upon its face that P81.60 of the bill is for the expenses of Cenar in going to Iloilo from Manila and return, to install the plant, and is strong evidence that it was Cenar and not Montelibano who installed the plant. If Montelibano installed the plant, as defendant claims, there would not have been any necessity for Cenar to make this trip at the expense of the defendant. After Cenar's return to Manila, the plaintiff wrote a letter to the defendant requesting the payment of its account, in answer to which the defendant on September 24 sent the following telegram: Electric plant accessories and installation are paid to Montelibano about three weeks Keeler Company did not present bill. This is in direct conflict with the receipted statement, which the defendant offered in evidence, signed by Montelibano. That shows upon its face that it was an itemized statement of the account of plaintiff with the defendant. Again, it will be noted that the receipt which Montelibano signed is not dated, and it does not show when the money was paid. Speaking of Montelibano, the defendant also testified: "and he assured me that he was duly authorized to collect the value of the electrical plant." This shows upon its face that the question of Montelibano's authority to receive the money must have been discussed between them, and that, in making the payment, defendant relied upon Montelibano's own statements and representation, as to his authority, to receipt for the money. In the final analysis, the plant was sold by the plaintiff to the defendant, and was consigned by the plaintiff to the plaintiff at Iloilo where it was installed by Cenar, acting for, and representing, the plaintiff, whose expense for the trip is included in, and made a part of, the bill which was receipted by Montelibano. There is no evidence that the plaintiff ever delivered any statements to Montelibano, or that he was authorized to receive or receipt for the money, and defendant's own telegram shows that the plaintiff "did not present bill" to defendant. He now claims that at the very time this telegram was sent, he had the receipt of Montelibano for the money upon the identical statement of account which it is admitted the plaintiff did render to the defendant. Article 1162 of the Civil Code provides: Payment must be made to the persons in whose favor the obligation is constituted, or to another authorized to receive it in his name. And article 1727 provides: The principal shall be liable as to matters with respect to which the agent has exceeded his authority only when he ratifies the same expressly or by implication. In the case of Ormachea Tin-Conco vs. Trillana (13 Phil., 194), this court held: The repayment of a debt must be made to the person in whose favor the obligation is constituted, or to another expressly authorized to receive the payment in his name.

Mechem on Agency, volume I, section 743, says: In approaching the consideration of the inquiry whether an assumed authority exist in a given case, there are certain fundamental principles which must not be overlooked. Among these are, as has been seen, (1) that the law indulges in no bare presumptions that an agency exists: it must be proved or presumed from facts; (2) that the agent cannot establish his own authority, either by his representations or by assuming to exercise it; (3) that an authority cannot be established by mere rumor or general reputation; (4)that even a general authority is not an unlimited one; and (5) that every authority must find its ultimate source in some act or omission of the principal. An assumption of authority to act as agent for another of itself challenges inquiry. It is therefore declared to be a fundamental rule, never to be lost sight of and not easily to be overestimated, that persons dealing with an assumed agent, whether the assumed agency be a general or special one, are bound at their peril, if they would hold the principal, to ascertain not only the fact of the agency but the nature and extent of the authority, and in case either is controverted, the burden of proof is upon them to establish it. The person dealing with the agent must also act with ordinary prudence and reasonable diligence. Obviously, if he knows or has good reason to believe that the agent is exceeding his authority, he cannot claim protection. So if the suggestions of probable limitations be of such a clear and reasonable quality, or if the character assumed by the agent is of such a suspicious or unreasonable nature, or if the authority which he seeks to exercise is of such an unusual or improbable character, as would suffice to put an ordinarily prudent man upon his guard, the party dealing with him may not shut his eyes to the real state of the case, but should either refuse to deal with the agent at all, or should ascertain from the principal the true condition of affairs. And not only must the person dealing with the agent ascertain the existence of the conditions, but he must also, as in other cases, be able to trace the source of his reliance to some word or act of the principal himself if the latter is to be held responsible. As has often been pointed out, the agent alone cannot enlarge or extend his authority by his own acts or statements, nor can he alone remove limitations or waive conditions imposed by his principal. To charge the principal in such a case, the principal's consent or concurrence must be shown. This was a single transaction between the plaintiff and the defendant. Applying the above rules, the testimony is conclusive that the plaintiff never authorized Montelibano to receive or receipt for money in its behalf, and that the defendant had no right to assume by any act or deed of the plaintiff that Montelibano was authorized to receive the money, and that the defendant made the payment at his own risk and on the sole representations of Montelibano that he was authorized to receipt for the money. The judgment of the lower court is reversed, and one will be entered here in favor of the plaintiff and against the defendant for the sum of P2,513.55.

B. H. MACKE ET AL., plaintiffs and appellees, vs. JOS CAMPS, defendant and appellant. 1. AGENCY; ESTOPPEL.One who clothes another with apparent authority as his agent and holds him out to the public as such, can not be permitted to deny the authority of such person to

act as his agent to the prejudice of innocent third parties dealing with such agent in good faith and in the honest belief that he is what he appears to be. 2. ID.; PRESUMPTION.Unless the contrary appears, the authority of an agent must be presumed to include all the necessary and usual means of carrying his agency into effect. The plaintiffs in this action, B. H. Macke and W. H. Chandler, partners doing business under the firm name of Macke, Chandler & Company, allege that during the months of February and March, 1905, they sold to the defendant and delivered at his place of business, known as the "Washington Cafe," various bills of goods amounting to P351.50; that the defendant has only paid on account of said accounts the sum of P174; that there is still due them on account of said goods the sum of P177.50; that before instituting this action they made demand for the payment thereof; and that defendant had failed and refused to pay the said balance or any part of it up to the time of the filing of the complaint. B. H. Macke, one of the plaintiffs, testified that on the order of one Ricardo Flores, who represented himself to be agent of the defendant, he shipped the said goods to the defendants at the Washington Cafe; that Flores later acknowledged the receipt of said goods and made various payments thereon amounting in all to P174; that on demand for payment of balance of the account Flores informed him that he did not have the necessary funds on hand, and that he would have to wait the return of his principal, the defendant, who was at that time visiting in the provinces; that Flores acknowledged the bill for the goods furnished and the credits being the amount set out in the complaint; that when the goods were ordered they were ordered on the credit of the defendant and that they were shipped by the plaintiffs after inquiry which satisfied the witness as to the credit of the defendant and as to the authority of Flores to act as his agent; that the witness always believed and still believes that Flores was the agent of the defendant; and that when he went to the Washington Cafe for the purpose of collecting his bill he found Flores, in the absence of the defendant in the provinces, apparently in charge of the business and claiming to be the business manager of the defendant, said business being that of a hotel with a bar and restaurant annexed. A written contract dated May 25, 1904, was introduced in evidence, from which it appears that one Galmes, the former owner of the business now known as the "Washington Cafe," subrented the building wherein the business was conducted, to the defendant for a period of one year, for the purpose of carrying on that business, the defendant obligating himself not to sublet or subrent the building or the business without the consent of the said Galmes. This contract was signed by the defendant and the name of Ricardo Flores appears thereon as a witness, and attached thereto is an inventory of the furniture and fittings which also is signed by the defendant with the word "sublessee" below the name, and at the foot of this inventory the word "received" followed by the name "Ricardo Flores," with the words "managing agent" immediately following his name. Galmes was called to the stand and identified the above- described document as the contract and inventory delivered to him by the defendant, and further stated that he could not tell whether Flores was working for himself or for someone else that it to say, whether Flores was managing the business as agent or sublessee. In the absence of proof to the contrary we think that this evidence is sufficient to sustain a finding that Flores was the agent of the defendant in the management of the bar of the Washington Cafe with authority to bind the defendant, his principal, for the payment of the goods mentioned in the complaint.

The contract introduced in evidence sufficiently establishes the fact that the defendant was the owner of 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 in question were made, Flores was apparently in charge of the business, performing the duties usually entrusted to managing agent, leave little room for doubt that he was there as authorized agent of the defendant. One who clothes another apparent authority as his agent, and holds him out to the public as such, cannot be permitted to deny the authority of such person to act as his agent, to the prejudice of innocent third parties dealing with such person in good faith and in the following preassumptions or deductions, which the law expressly directs to be made from particular facts, are deemed conclusive: (1) "Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out such declaration, act, or omission, be permitted to falsify it"; and unless the contrary appears, the authority of an agent must be presumed to include all the necessary and usual means of carrying his agency into effect. That Flores, as managing agent of the Washington Cafe, had authority to buy such reasonable quantities of supplies as might from time to time be necessary in carrying on the business of hotel bar may fairly be presumed from the nature of the business, especially in view of the fact that his principal appears to have left him in charge during more or less prolonged periods of absence; from an examination of the items of the account attached to the complaint, we are of opinion that he was acting within the scope of his authority in ordering these goods are binding on his principal, and in the absence of evidence to the contrary, furnish satisfactory proof of their delivery as alleged in the complaint.