GREEN VALLEY V.

IAC
D: In an agency to sell, the agent is liable to pay the principal for
goods sold by the agent without the principals consent. The
commission agent cannot without the express or implied consent of
the principal, sell on credit. Should he do so, the principal may
demand from him payment in cash, but the commission agent shall
be entitled to any interest or benefit, which may result from such
sale.
FACTS:
In 1969, GREEN VALEY POULTRY AND ALLIED
PRODUCTS entered into a letter agreement with SQUIBB
& SONS PHILIPPINE CORPORATION.
The details of the agreement state that Green Valley will be
the nonexclusive distributor of the products of Squibb
Veterinary Products.
As its distributor Green Valley is entitled to 10% discount on
Squibbs whole sale price and catalogue price. Green Valley
is also limited to selling Squibbs products to central and
northern Luzon.
Payment for purchases from Squibb will be due 60 days
from date of invoice, etc. For goods delivered to Green
Valley but unpaid, Squibb filed a suit to collect.
Squibb argues that their relationship with Green Valley is a
mere contract of sale as evidenced by the stipulation that
Green Valley was obligated to pay for the goods received
upon the expiration of the 60-day credit period.
Green Valley counters that the relationship between itself
and Squibb is that of an agency to sell.
ISSUE: W/N Green Valley is an agent of Squibb.
RULING: Whether viewed as an agency to sell or as a contract of
sale GREEN VALLEY is liable to Squibb for the unpaid products. If
it is a contract of sale then the Green Valley is liable by just merely
enforcing the clear words of the contract. If it is an agency then

Green Valley is liable because it sold on credit without authority

from its principal.
The Civil Code says: Art. 1905 The commission agent cannot
without the express or implied consent of the principal, sell on credit.
Should he do so, the principal may demand from him payment in
cash, but the commission agent shall be entitled to any interest or
benefit, which may result from such sale.

DOMINGO vs. DOMINGO

Petitioners: Vicente Domingo represented by his heirs
Respondents: Gregorio Domingo [Vicente Domingos agent
& broker]
Intervenor: Teofilo Purisima [Gregorio Domingos subagent]
Quick Summary:
Facts: Gregorio Domingo, Vicente Domingos broker and agent, received
P1,000 from Oscar de Leon as gift or propina. Oscar gave him said amount
after Gregorio succeeded in persuading Vicente to accept his offer to buy
the lot for P1.20 instead of P2.
Held: An agent who takes a secret profit in the nature of a bonus, gratuity
or personal benefit from the vendee, without revealing the same to his
principal, the vendor, is guilty of a breach of his loyalty to the principal and
forfeits his right to collect the commission from his principal, even if the
principal does not suffer any injury by reason of such breach of fidelity, or
that he obtained better results or that the agency is a gratuitous one, or
that usage or custom allows it. The fact that the principal may have been
benefited by the valuable services of the said agent does not exculpate the
agent who has only himself to blame for such a result by reason of his
treachery or perfidy. As a necessary consequence of such breach of trust,
Gregorio Domingo must forfeit his right to the commission and must return
the part of the commission he received from his principal.

Facts:
Vicente Domingo granted to Gregorio Domingo, a real
estate broker, the exclusive agency to sell his Lot No.
883, Piedad Estate in a document. Said lot has an area
of 88,477 sq. m.
According to the document, said lot must be sold for P2
per sq. m. Gregorio is entitled to 5% commission on
the total price if the property is sold:
by Vicente or by anyone else during the 30-day
duration of the agency or
by Vicente within 3 months from the termination of
the agency to a purchaser to whom it was
submitted by Gregorio during the effectivity of the
agency with notice to Vicente.
This contract is in triplicate with the original and
another copy being retained by Gregorio. The last copy
was given to Vicente.

Subsequently, Gregorio authorized Teofilo Purisima to

look for a buyer without notifying Vicente. Gregorio
promised Teofilo of the 5% commission.
Teofilo introduced Oscar de Leon to Gregorio as a
porspective buyer.
Oscar submitted a written offer which was very much
lower than the P2 per sq. m. price.
Vicente directed Gregorio to tell Oscar to raise his
offer.
After several conferences between Gregorio and Oscar,
Oscar raised his offer to P1.20 per sq. m. or P109,000
in total. Vicente agreed to said offer.
Upon Vicentes demand, Oscar issued a P1,000 check
to him as earnest money. Vicente, then, advanced
P300 to Gregorio.
Subsequently, Vicente asked for an additional P1,000
as earnest money, which Oscar promised to deliver to
Vicente.
The written agreement, Exhibit C, between the parties
was amended.
Oscar will vacate on or about September 15, 1956
his house and lot at Denver St., QC, which is part of
the purchase price
Later on, it was again amended to state that Oscar will
vacate his house and lot on Dec. 1, 1956 because his
wife was pregnant at that time.
Oscar gave Gregorio P1,000 as a gift or propina for
succeeding in persuading Vicente to sell his lot at
P1.20 per sq. m. gregorio did not disclose said gift or
propina to Vicente.
Moreover, Oscar did not pay Vicente the additional
P1,000 Vicente asked from him as earnest money.
The deed of sale was not executed since Oscar gave
up on the negotiation when he did not receive his
money from his brother in the US, which he
communicated to Gregorio.
Gregorio did not see Oscar for several weeks thus
sensing that something fishy might be going on.

So, he went to Vicentes house where he read a portion

of the agreement to the effect that Vicente was still
willing to pay him 5% commission, P5,450.
Thereafter, Gregorio went to the Register of Deeds of
QC, where he discovered that a Deed of sale was
executed by Amparo de Leon, Oscars wife, over their
house and lot in favor of Vicente.
After discovering that Vicente sold his lot to Oscars
wife, Gregorio demanded in writing the payment of his
commission.
Gregorio also conferred with Oscar. Oscar told him that
Vicente went to him and asked him to eliminate
Gregorio in the transaction and that he would sell his
property to him for P104,000.
In his reply, Vicente stated that Gregorio is not entitled
to the 5% commission because he sold the property
not to Gregorio's buyer, Oscar de Leon, but to another
buyer, Amparo Diaz, wife of Oscar de Leon.
CA: exclusive agency contract is genuine. The sale of
the lot to Amparo de Leon is practically a sale to Oscar.

Issue:
WON Gregorios act of accepting the gift or propina from
Oscar constitutes a fraud which would cause the forfeiture
of his 5% commission [YES]
Ratio:
Gregorio Domingo as the broker, received a gift or
propina from the prospective buyer Oscar de Leon,
without the knowledge and consent of his principal,
Vicente
Domingo.
His
acceptance
of
said
substantial monetary gift corrupted his duty to
serve the interests only of his principal and
undermined his loyalty to his principal, who gave
him partial advance of P3000 on his commission. As a
consequence, instead of exerting his best to persuade
his prospective buyer to purchase the property on the
most advantageous terms desired by his principal,
Gregorio Domingo, succeeded in persuading his

principal to accept the counter-offer of the prospective

buyer to purchase the property at P1.20 per sq. m.
The duties and liabilities of a broker to his
employer are essentially those which an agent
owes to his principal.
An agent who takes a secret profit in the nature
of a bonus, gratuity or personal benefit from the
vendee, without revealing the same to his
principal, the vendor, is guilty of a breach of his
loyalty to the principal and forfeits his right to
collect the commission from his principal, even if
the principal does not suffer any injury by
reason of such breach of fidelity, or that he
obtained better results or that the agency is a
gratuitous one, or that usage or custom allows
it.
Rationale: prevent the possibility of any wrong not
to remedy or repair an actual damage
agent thereby assumes a position wholly
inconsistent with that of being an agent for
hisprincipal, who has a right to treat him, insofar as
his commission is concerned, as if no agency had
existed
The fact that the principal may have been
benefited by the valuable services of the said
agent does not exculpate the agent who has
only himself to blame for such a result by reason
of his treachery or perfidy.
As a necessary consequence of such breach of
trust, Gregorio Domingo must forfeit his right to
the commission and must return the part of the
commission he received from his principal.

Decisive Provisions

 Article 18911 and 19092 CC

The modification contained in the first paragraph
Article 1891 consists in changing the phrase "to pay"
to "to deliver", which latter term is more
comprehensive than the former. Paragraph 2 of Article
1891 is a new addition designed to stress the highest
loyalty that is required to an agent condemning as
void any stipulation exempting the agent from the duty
and liability imposed on him in paragraph one thereof.
Article 1909 demand the utmost good faith, fidelity,
honesty, candor and fairness on the part of the agent,
the real estate broker in this case, to his principal, the
vendor. The law imposes upon the agent the absolute
obligation to make a full disclosure or complete
account to his principal of all his transactions and other
material facts relevant to the agency, so much so that
the law as amended does not countenance any
stipulation exempting the agent from such an
obligation and considers such an exemption as void.
The duty of an agent is likened to that of a trustee.
This is not a technical or arbitrary rule but a rule
founded on the highest and truest principle of morality
as well as of the strictest justice.
Situations where the duty mandated by Art 1891
does not apply
agent or broker acted only as a middleman with the
task of merely bringing together the vendor and
1

Every agent is bound to render an account of his transactions and to

deliver to the principal whatever he may have received by virtue of the
agency, even though it may not be owing to the principal. Every stipulation
exempting the agent from the obligation to render an account shall be void.

The agent is responsible not only for fraud, but also for negligence,
which shall be judged with more or less rigor by the courts, according to
whether the agency was or was not for a compensation.

vendee, who themselves thereafter will negotiate on

the terms and conditions of the transaction
agent or broker had informed the principal of the gift or
bonus or profit he received from the purchaser and his
principal did not object
Teofilo Purisimas entitlement to his share in the 5%
commission
Teofilo can only recover from Gregorio his share of
whatever amounts Gregorio Domingo received by
virtue of the transaction as his sub-agency contract
was with Gregorio Domingo alone and not with Vicente
Domingo, who was not even aware of such sub-agency.
Since Gregorio already received a total of P1,300 from
Oscar and Vicente, P650 of which should be paid by
Gregorio to Teofilo.
Dispositive: CA decision reversed.

January 1979: Eduardo Gomez opened an account with Golden

Savings and deposited over a period of 2 months 38 treasury warrants
totalling P1,755,228.37.
all drawn by the Philippine Fish Marketing Authority and
purportedly signed by its General Manager and countersigned by its
Auditor:
6 - directly payable to Gomez
32 - indorsed by their respective payees, followed
by Gomez as second indorser
June 25 - July 16, 1979: all warrants were subsequently indorsed by
Gloria Castillo as Cashier of Golden Savings and deposited to its Savings
in the Metrobank branch
They were then sent for clearing by the branch office to the
principal office of Metrobank, which forwarded them to the Bureau of
Treasury for special clearing
More than 2 weeks after the deposits, Castillo asked if the warrants
were cleared.
She was told to wait.
Gomez was also not allowed to withdraw from his account
exasperated over Gloria's repeated inquiries and also as an
accommodation for a "valued client," Metrobank allowed Golden Savings
to make the following withdrawals:

July 9, 1979 - P508,000.00

July 13, 1979 - P310,000.00

July 16, 1979 - P150,000.00

Gomez was also allowed to withdraw a total amount of P1,167,500
(latest on July 16, 1979)
July 21, 1979: Metrobank informed Golden Savings that 32 of the
warrants had been dishonored by the Bureau of Treasury on July 19, 1979,
and demanded the refund by Golden Savings of the amount it had
previously withdrawn, to make up the deficit in its account. - refused
CA affirmed RTC: favored Golden Savings

ISSUE: W/N Metrobank can claim a refund from Golden Savings

Metrobank V. CA And Golden Savings & Loan Assoc. Inc (1991)
FACTS:

HELD: NO. Affirmed. withdrawn must be charged not to Golden Savings but
to Metrobank, which must bear the consequences of its own negligence. But the
balance of P586,589.00 should be debited to Golden Savings, as obviously

Gomez can no longer be permitted to withdraw this amount from his deposit
because of the dishonor of the warrants

Metrobank was negligent in giving Golden Savings the impression

that the treasury warrants had been cleared and that, consequently, it was
safe to allow Gomez to withdraw

It "presumed" that the warrants had been cleared simply

because of "the lapse of one week."

There was no reason why it should not have waited until the
treasury warrants had been cleared
Art. 1909. The agent is responsible not only for fraud, but also for
negligence, which shall be judged 'with more or less rigor by the courts,
according to whether the agency was or was not for a compensation.

Golden Savings acted with due care and diligence

Forgery cannot be presumed. It must be established by clear, positive

and convincing evidence. -here not proven

treasury warrants in question are not negotiable instruments

stamped on their face is the word "non-negotiable"

indicated that they are payable from a particular fund

Sec. 1. Form of negotiable instruments. An instrument to be negotiable
must conform to the following requirements:
(a) It must be in writing and signed by the maker or drawer;
(b) Must contain an unconditional promise or order to pay a sum certain in
money;
(c) Must be payable on demand, or at a fixed or determinable future time;
(d) Must be payable to order or to bearer; and
(e) Where the instrument is addressed to a drawee, he must be named or
otherwise indicated therein with reasonable certainty.
xxx xxx xxx
Sec. 3. When promise is unconditional. An unqualified order or promise to
pay is unconditional within the meaning of this Act though coupled with
(a) An indication of a particular fund out of which reimbursement is to be made
or a particular account to be debited with the amount; or
(b) A statement of the transaction which gives rise to the instrument judgment.
But an order or promise to pay out of a particular fund is not unconditional.

PNB v. MANILA SURETY & FIDELITY CO., INC and CA

By allowing the assigned funds to be exhausted without notifying the
surety (Manila Surety), the Bank (PNB) deprived Manila Surety of
any possibility of recoursing against the security. PNB thereby
exonerated Manila Surety, pursuant to Article 2080.
FACTS:
1. PNB opens a Letter of Credit and advances $120K to Edgington
Oil Refinery for 8000 tons of hot asphalt.
2. Adams & Taguba Corp. (ATACO) wished to buy 2,000 tons worth
of hot asphalt valued at P279,000.00 so that it can fill a purchase
order by the Bureau of Public Works (BPW). ATACO had sold it
to BPW for P431,466.52.
3. ATACO assigns PNB as its attorney-in-fact and irrevocably
authorizes PNB to collect on its behalf from BPW amounts owed
to ATACO until its debt (P279K) was liquidated. Moreover, the
hot asphalt was delivered under a trust receipt guaranteed by
Manila Surety & Fidelity Co. up to the amount of P75,000.00
4. After ATACO delivered the hot asphalt to BPW, PNB was able to
collect Php 106,382.01 from BPW (21 Apr 1948 18 Nov 1948).
However, for some unexplained reason, PNB ceased to
collect from BPW.
5. In 1952, PNB discovers that ATACO had allowed other creditors
to collect funds due to ATACO under the same purchase order to
a total of Php 311,230.41, such that PNB could no longer collect
the balance from BPW.
6. After its demands for payment to ATACO & Manila Surety were
refused, PNB sues to recover the balance of Php 158,563.18
plus interests and costs.
7. CFI: Orders ATACO & Manila Surety to pay PNB P174,462.34
less P8,000.00 and orders ATACO to pay Manila Surety any
amount in excess of 75K that Manila Surety pays to PNB plus
5% interest. Only Manila Surety appeals.
8. CA: PNB was negligent in having stopped collecting from BPW,
thereby allowing the funds to be exhausted by other collectors to

the prejudice of the surety. This exonerates Manila Surety from

liability (Art 20803)

9. PNB: Power of attorney merely an additional security in its favor.

It was Manila Surety's responsibility to make sure that ATACO
fulfills its obligation. It did not have an obligation to Manila Surety
to collect from ATACO.

ISSUE(S): WoN Manila Surety is liable to PNB for ATACO's

uncollected debt? NO

RATIO:
1. PNB's duty as the holder of an exclusive and irrevocable power
of attorney was to collect from BPW, and not from ATACO (the
principal). Therefore, its negligence in performing this duty
makes it liable for the damages which ATACO incurred. In fact,
PNB's power to collect was expressly made irrevocable, so that
BPW could very well refuse to make payments to the principal
(ATACO) and may even reject demands for payment by the
surety.

2. PNB's negligence of its duty releases Manila Surety from liability.

(Art 2080)
DISPOSITIVE:
CA decision AFFIRMED. Costs against PNB.
FABIOLA SEVERINO vs. GUILLERMO SEVERINO & FELICITAS
VILLANUEVA
Putative Principal: Melecio Severino
Putative Agent:Guillermo Severino
Putative 3rd Person: *Paano ito in relation to this case?

3 Art. 2080. The guarantors, even though they

be solidary, are released from their obligation
whenever by some act of the creditor they cannot
be subrogated to the rights, mortgages and
preferences of the latter.

FACTS:
Melecio Severino owned 428 hectares of the land, which was administered by
his brother, Guillermo Severino. After Melecio's death, Guillermo continued to
occupy the land.
Cadastral proceedings were then instituted for the registration of the lands titles
within the surveyed area. In the said proceedings, Guillermos lawyer Hofilea
filed answers in behalf of Guillermo claiming that Melecios lots were the
property of his client. Since no opposition was made in the said proceedings, the
titles were eventually decreed in Guillermos favor.
Fabiola Severino (the alleged natural daughter of Melecio) filed an action to
compel Guillermo to convey to her four parcels land, or in default to pay
damages for wrongfully causing said land to be registered in his own name.
Felicitas Villanueva, in her capacity as administratrix of the estate of Melecio,
filed a complaint in intervention claiming in the same relief as the original
plaintiff, except in so far as she prays that the conveyance be made, or
damages paid, to the estate instead of to the plaintiff Fabiola Severino.
The lower court rendered a judgment:
Recognizing the plaintiff Fabiola Severino as the acknowledged natural child
Melecio Severino and
Ordering the Guillermo to convey to Felicitas (as administratix of Melecios
estate):
o 428 hectares of the land in question
o Proceeds in his possession of a certain mortgage placed thereon by him and
to pay the costs.
From this judgment, only Guillermo appeals.
MAIN ISSUE: Whether or not Guillermo ought to reconvey the property to the
administratix Felicitas Villanueva?
RULING: YES. Guillermo came into possession of the property as the agent of
Melecio.
1. 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 subjectmatter 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.
2. That Guillermo came into the possession of the property in question as
the agent of Melecio Severino in the administration of the property, is
clear and cannot be disputed.

a.

In the case Montelibano vs. Severino, Guillermos testimony is

conclusive in this respect. He stated under oath that from 1902-1913,
he had been in charge and occupation of the land as the encargado or
administrator of Melecio Severino and that he had always known the
land as the property of Melecio Severino.
b. In his answer filed in the same case, Guillermo, through his attorney,
disclaimed all personal interest in the land and averred that it was
wholly the property of his brother Melecio.
3. Guillermo argues that his title has become res judicata through the decree
of registration and cannot now be disturbed; however, the Court disagrees.
a. According to the Land Registration Act, this decree becomes
conclusive after 1 year from the date of the entry if it is not disputed
and no one attempts to disturb the decree or the proceedings upon
which it is based.
b. Felicita, as administratix, raises the principle of equity and contends
that the legal title so acquired inured to the benefit of the estate of
Melecio Severino (Guillermos principal and cestui que trust). She
thus asks that this superior equitable right be made effective by
compelling the defendant, as the holder of the legal title, to transfer it
to the estate.
4. Here, the Court acknowledges that torrens titles carry a strong presumption
in favor of their regularity or validity. However, once it is cleary proven
that a fiduciary relation existed and a consequent breach of trust
occurred, there is no reason why the Court should not make such needed
reparation.
a. As long as the land stands registered in the name of the party guilty of
the breach of trust and no rights of innocent third parties are adversely
affected, reparation can take place (in the form of a conveyance or
transfer of the title to the cestui que trust).
Judgment appealed from is AFFIRMED (with some additional directions to its
dipositive clauses) with the costs against the appellant. The right of Fabiola
Severino to establish in the probate proceedings her status as Melecios
recognized natural child is reserved.

Del Rosario v La Bedania

D: A subagent is not obliged to fulfill more than the contents of the

mandate and to answer for the damages caused to the principal by his
failure to do so.
FACTS:
Bernard Gabelman was the Philippine agent of International
Films by virtue of a power of attorney in 1933. In the same
year, International Films, through its agent, leased the film
entitled, Monte Carlo Madness, to Lyric Film to be shown
in different theaters. One of the conditions was that Lyric
Film would answer for the loss of the film whatever the
cause.
After the last showing of the film, Gabelman requested Albo,
chief of the film department of Lyric Film, to permit him to
deposit the film in the latters vault under Gabelmans
responsibility, since this would not be covered by the
insurance, which Lyric Film carries.
In 1933, Gabelman was succeeded by Lazarus Joseph as
agent of International Films. Upon his possession of the
agency, he asked for the return of the films White Devils,
Congress Dances, and Monte Carlo Madness.
However, Lyric Film only returned the first 2 movies, since
Monte Carlo Madness would still be shown in Cebu.
Subsequently, the bodega of Lyric Film burned down before
it was shown in Cebu, together with the film Monte Carlo
Madness.
ISSUE: W/N Lyric Film is liable to International Films for the
destruction by fire of the film

INTERNATIONAL FILMS (CHINA) V. LYRIC FILM

HELD: NO. Preponderance of evidence has shown that the verbal

agreement between Gabelman and Albo was that the film would
remain deposited in the safety vault of Lyric Film under the
responsibility of Gabelman and that Lyric Film, as his subagent,
could show it in his theaters.

As the agreement is one of sub-agency, Lyric Film cannot be held

liable to International Films because it was not obliged to fulfill more
than the contents of the mandate and to answer for the damages
caused to International Films by his failure to do so.
The fact that the film was not insured against fire does not constitute
fraud or negligence on the part of Lyric Film, because as subagent, it
received no instruction to that effect from International Films, as its
principal, and the insurance of the film does not form part of the
obligation imposed upon it by law.

CERVANTES VS CA
FACTS:

PAL issued to Cervantes a round trip ticket for ManilaHonolulu-Los Angeles-Honolulu-Manila. This ticket expressly
provide an expiry date of 1 year from issuance or until
March 27, 1990.
The ticket was issued in compliance w/ a Compromise
Agreement entered between PAL & Cervantes in 2 previous
suits between them.
On March 3, 1990, $ days before the expiry date, Cervantes
used it. Upon his arrival to LA, on the same day, he
immediately booked his LA-Manila return ticket w/ PAL office
which was confirmed for April 2, 1990 flight.
Cervantes learned that the same PAL plane would make a
stop-over in San Francisco and because he would be in San
Francisco on April 2, 1990, he made arrangements w/ PAL
for him to board the flight in San Francisco instead of
boarding it in LA.
When Cervantes checked in at PAL counter in San Francisco
he was not allowed to board. PAL personnel made a notation
on his ticket TICKET NOT ACCEPTED DUE TO EXPIRATION OF
VALIDITY.
Aggrieved, Cervantes filed a complaint for damages for
Breach of Contract of Carriage. The RTC dismissed the
complaint w/c was upheld by the CA.
ISSUE: 1. WON the act of the PAL agents in confirming the
ticket of Cervantes extended the period of validity.
RULING: The SC ruled in the negative.

The plane ticket itself provides that it is not valid after March
27, 1990. It is also stipulated in paragraph 8 of the
Conditions of Contract that 8. This ticket is good for carriage
for one year from date of issue, except as otherwise
provided in this ticket, in carrier's tariffs, conditions of
carriage, or related regulations. The fare for carriage

hereunder is subject to change prior to commencement of

carriage. Carrier may refuse transportation if the applicable
fare has not been paid. 6

In the case of Lufthansa vs. Court of Appeals, the SC held

that the "ticket constitute the contract between the parties.
It is axiomatic that when the terms are clear and leave no
doubt as to the intention of the contracting parties,
contracts are to be interpreted according to their literal
meaning."

In his effort to evade this inevitable conclusion, petitioner

theorized that the confirmation by the PAL's agents in Los
Angeles and San Francisco changed the compromise
agreement between the parties.

As aptly by the appellate court:

. . . on March 23, 1990, he was aware of the risk that his

ticket could expire, as it did, before he returned to the
Philippines.'
The 2 personnel from PAL did not have an authority to
extend the validity of the ticket. Cervantes knew this from
the start when he called up the Legal Department of
appellee in the Philippines before he left for the United
States of America. He had first hand knowledge that the
ticket in question would expire on March 27, 1990 and that
to secure an extension, he would have to file a written
request for extension at the PAL's office in the Philippines. ).
Despite this knowledge, he persisted to use the ticket in
question."

Since the PAL agents are not privy to the said Agreement
and Cervantes knew that a written request to the legal
counsel of PAL was necessary, he cannot use what the PAL
agents did to his advantage. The said agents, according to
the Court of Appeals, 10 acted without authority when they
confirmed the flights of the petitioner.

Under Article 1989 11 of the New Civil Code, the acts an

agent beyond the scope of his authority do not bind the
principal, unless the latter ratifies the same expressly or
impliedly. Furthermore, when the third person (herein
petitioner) knows that the agent was acting beyond his
power or authority, the principal cannot be held liable for
the acts of the agent. If the said third person is aware of
such limits of authority, he is to blame, and is not entitled to
recover damages from the agent, unless the latter
undertook to secure the principal's ratification.