PHILPOTTS vs. PHIL. MNFG.

CO 40 PHIL 491
FACTS:
W.G. Philpotts (Petitioner) , a stockholder in Philippine Manufacturing Company sought to compel respondents
to permit plaintiff, a person or by some authorized agent or attorney to inspect and eamine the records of the
business transacted by said company since !anuary ", "#"$.%espondent corporation or any of its officials has
refused to allo& the petitioner himself to eamine anything relating to the affairs of the company, and the
petitioner prays for an order commanding respondents to place records of all business transactions of the
company, during a specific period, at the disposal of the plaintiff or his duly authorized agent or attorney.
Petitioner desires to eercise said right through agent or attorney. Petition is filed originally in the 'upreme
Court under authority of 'ection ("( of Code of Ci)il Procedure, &hich gi)es 'C concurrent *urisdiction &ith
then Court of +irst ,nstance in cases &here any corporation or person unla&fully ecludes the plaintiff from use
and en*oyment and some right he is entitled.
ISSUE:
Whether the right &hich the la& concedes to a stockholder to inspect the records can be eercised by a proper
agent or attorney of the stockholder as &ell as by stockholder in person
HELD:
-es. %ight of inspection of records can be eercised by proper agent or attorney of the stockholder as &ell as
by stockholder in person. .he right of inspection / eamination into corporate affairs gi)en to a stockholder in
section (" of the Corporation 0a& &hich states1
2.he records of all business transactions of the corporation and the minutes of any meeting shall be open to the
inspection of any director, member, or stockholder of the corporation at reasonable hour3 can be exec!se"
e!#$e b% $!&se'( ) b% an% "*'% a*#$)!+e" e,esen#a#!ve ) a##)ne% !n (ac#- an" e!#$e .!#$ ) .!#$)*#
#$e a##en"ance )( #$e s#)c/$)'"e. .his is in conformity &ith the general rule that &hat a man may do in
person he may do through another
O!en# A! Sev!ces vs CA
FACTS:
". 4n "( !anuary "#55, 6merican 6irlines, ,nc. an air carrier offering passenger and air cargo transportation in
the Philippines, and 4rient 6ir 'er)ices and 7otel %epresentati)es , entered into a General 'ales 6gency
6greement &hereby the former authorized the latter to act as its eclusi)e general sales agent &ithin the
Philippines for the sale of air passenger transportation.
8. 4n "" May "#$", alleging that 4rient 6ir had reneged on its obligations under the 6greement by failing
to promptly remit the net proceeds of sales for the months of !anuary to March "#$" in the amount of
9':8(;,;<<.;<, 6merican 6ir by itself undertook the collection of the proceeds of tickets sold originally by
4rient 6ir and terminated forth&ith the 6greement.

=. +our (;) days later, or on "( May "#$", 6merican 6ir instituted suit against 4rient 6ir &ith the C+, of
Manila, >ranch 8;, for 6ccounting &ith Preliminary 6ttachment or Garnishment, Mandatory ,n*unction and
%estraining 4rder a)erring the aforesaid basis for the termination of the 6greement as &ell as therein
defendant?s pre)ious record of failures @to promptly settle past outstanding refunds of &hich there &ere
a)ailable funds in the possession of the defendant, . . . to the damage and pre*udice of plaintiff.@
;. De(en"an# O!en# A!:
Adenied the material allegations of the complaint &ith respect to plaintiffBs entitlement to alleged unremitted
amounts, contending that after application thereof to the commissions due it under the 6greement, plaintiff in
fact still o&ed 4rient 6ir a balance in unpaid o)erriding commissions
A +urther, the defendant contended that the actions taken by 6merican 6ir in the course of terminating the
6greement as &ell as the termination itself &ere untenable, 4rient 6ir claiming that 6merican 6ir?s precipitous
conduct had occasioned pre*udice to its business interests.
(. .C ruled in fa)or of 4%,CD. 6,%
Adismissing the complaint and holding the termination made by the plaintiff 6merican 6irlines as affecting
the G'6 agreement illegal and improper and
Aorder the plaintiff 6merican 6irlines to reinstate defendant as its general sales agent for passenger
transportation in the Philippines in accordance &ith said G'6 agreementE
Aplaintiff is ordered to pay defendant the balance of the o)erriding commission on total flo&n re)enue co)ering
the period from March"F, "#55 to Gecember =", "#$< in the amount of 9':$;,$8".=" plus the additional
amount of 9':$,<<<.<< by &ay of proper =H o)erriding commission per month commencing from !anuary ",
"#$" until such reinstatement or said amounts in its Philippine peso eIui)alent legally pre)ailing at the time of
payment plus legal interest to commence from the filing of the counterclaim up to the time of payment.

F. ,ntermediate 6ppellate Court (no& Court of 6ppeals) in a decision promulgated on 85 !anuary "#$F,
affirmed the findings of the court
a Iuo
on their material points but &ith some modifications &ith respect to the monetary a&ards granted.

5. >oth appealed the decision of the C6
ISSUE: W4D 6merican 6ir can be ordered by the court to @reinstate defendant as its general sales agent for
passenger transportation in the Philippines in accordance &ith said G'6 6greement.
HELD. D4

A>y affirming this ruling of the trial court, respondent appellate court, in effect, compels 6merican 6ir to etend
its personality to 4rient 6ir.
A'uch &ould be )iolati)e of the principles and essence of agency, defined by la& as a contract &hereby @a
person binds himself to render some ser)ice or to do something in representation or on behalf of another,
0ITH THE CONSENT O1 AUTHO1IT2 OF THE LATTE1 .
A,n an agentAprincipal relationship, the personality of the principal is etended through the facility of the agent.
,n so doing, the agent, by legal fiction, becomes the principal, authorized to perform all acts &hich the latter
&ould ha)e him do. 'uch a relationship can only be effected &ith the consent of the principal, &hich must not,
in any &ay, be compelled by la& or by any court.
A.he 6greement itself bet&een the parties states that @either party may terminate the 6greement &ithout cause
by gi)ing the other =<days? notice by letter, telegram or cable.@
1ALLOS v FELI3 GO CHAN 4 1EALT2 COP1.
Fac#s:
JConcepcion and Gerundia both surnamed %allos &ere sisters and registered coAo&ners of a parcel of land.
J.hey eecuted a special po&er of attorney in fa)or of their brother, 'imeon %allos,authorizing him to sell such
land for and in their behalf.
J6fter Concepcion died, 'imeon %allos sold the undi)ided shares of his sisters Concepcion and Gerundia to
+eli Go Chan K 'ons %ealty Corporation and ne& .C.s &ere issued to the latter.
JPetitioner %amon %allos, administrator of the ,ntestate Cstate of Concepcion filed a complaint praying (") that
the sale of the undi)ided share of the deceased Concepcion %allos be unenforceable, and said share be
recon)eyed to her estateE (8) that the Certificate of ?title issued in the name of +eli Go Chan K 'ons %ealty
Corporation be cancelled and another title be issued in the names of the corporation and the @,ntestate estate
of Concepcion %allos@ in eIual undi)ided and (=) that plaintiff be indemnified by &ay of attorney?s fees and
payment of costs of suit.
CFI: ,n fa)or of plaintiff, ordering the sale &as null and )oid insofar as the oneAhalf proAindi)iso share of
Concepcion %allos and ordered the issuance of ne& .C. in proportion of L share each proAindi)iso.
J!uan .. >orromeo, administrator of the Cstate of 'imeon %allos &as ordered to pay defendant the price of the
L share of the land (P(,=;=.;() plus attorneyBs feesM>orromeo filed a third party complaint against !osefina
%allos, special administratri of the Cstate of GerundiaN
JGismissed &ithout pre*udice to filing either a complaint against the regular administrator of the Cstate of
Gerundia %allos or a claim in the ,ntestateACstate of Cerundia %allos, co)ering the same sub*ectAmatter
On a,,ea' #) #$e CA:C+, Gecision re)ersed, upheld the sale of ConcepcionBs share.
M1:denied.
Iss*es:
". W4D the sale &as )alid although it &as eecuted after the death of the principal, Concepcion.
8. W4D the sale fell &ithin the eception to the general rule that death etinguishes the authority of the agent.
=. W4D petitioner must suffer the conseIuence for failing to annotate a notice of death in the title e)en there
&as a good faith on the part of respondent corporation.
He'":
.he essential elements of agency are1 (") there is consent, epress or implied of the parties to establish the
relationshipE (8) the ob*ect is the eecution of a *uridical act in relation to a third personE (=) the agents acts as a
representati)e and not for himself, and (;) the agent acts &ithin the scope of his authority.
Paragraph " of 6rticle ";<= pro)ides that1
6rticle ";<=. .he follo&ing contracts are unenforceable, unless they are *ustified1
(") .hose entered into in the name of another person by one &ho hi A been gi)en no authority or legal
representation or &ho has acted beyond his po&ersE
.he general rule for etinguishment of agency is pro)ided in Par. = of 6rticle "#"# &hich states that1
6rticle "#"#. Agency is extinguished.

=. By the death, ci)il interdiction, insanity or insol)ency of the principal or of the agent.

>ut the eception to the general rule are pro)ided in "#=< and "#=".
6%.. "#=<. .he agency shall remain in full force and effect e)en after the death of the principal, if it has been
constituted in the common interest of the latter and of the agent, or in the interest of a third person &ho has
accepted the stipulation in his fa)or.
6%.. "#=". 6nything done by the agent, &ithout kno&ledge of the death of the principal or of any other cause
&hich etinguishes the agency, is )alid and shall be fully effecti)e &ith respect to third persons &ho may ha)e
contracted &ith him in good faith.
". Do, the sale &as )oid. Do one may contract in the name of another &ithout being authorized by the latter, or
unless he has by la& a right to represent him. 6 contract entered into in the name of another by one &ho has
no authority or the legal representation or &ho has acted beyond his po&ers, shall be unenforceable, unless it
is ratified, epressly or impliedly, by the person on &hose behalf it has been eecuted, before it is re)oked by
the other contracting party.
8. Do, the sale did not fall under the eception to the general rule that death etinguishes the authority of the
agent. 6rticle "#=< is not applicable because the special po&er of attorney eecuted in fa)or of 'imeon
%allos &as not coupled &ith an interest. We refer to 6rticle "#=", an act done by the agent after the death of
his principal is )alid and effecti)e only under t&o conditions1 (") that the agent acted without knowledge of
the death of the principal and (2) that the third person who contracted with the agent himself acted in good
faith. 'imeon %allos, kne& of the death of his principal at the time he sold the latter?s share of the disputed
land to respondent corporation, hence Article 1931 is inapplicable .he la& epressly reIuires for its
application lack of kno&ledge on the part of the agent of the death of his principalE it is not enough that the
third person acted in good faith.
=. Do, the Ci)il Code does not impost a duty on the heirs of the principal to notify the agent of the eath of the
principal. ,f re)ocation &as by the act of the principal1 a general po&er &hich does not specify the persons to
&hom represents? on should be made, it is the general opinion that all acts, eecuted &ith third persons &ho
contracted in good faith, &ithout kno&ledge of the re)ocation, are )alid. >ut, if re)ocation &as due to
death of the principal1 etinguishment, by operation of la&, is instantaneous &ithout the need for notification
to the parties concerned.