DVOR, College of Law

AGENCY, PARTNERSHIP AND TRUST

Judge Manasseh S. Bastes
MTCC, Tacloban City
BACA (U.P.), LLB (USC)
(1st Semester, AY 2019-2020)

Class Rules:

1. Attendance is a must. A total of more than eight (8) absences per semester shall
automatically drop a student from the roll.

2. Read all assigned laws and jurisprudence. Recitation and quizzes shall constitute 50% of
the grade. The other 50% shall be taken from major examinations.

3. Make-up examinations shall not be allowed, except only in case of medical emergency of
the student. Failure to take the examination, quiz or recitation on the scheduled date or
session shall mean a zero score in that examination, quiz or recitation.

4. All electronic gadgets, books, notes, etc. must be placed below the seat, except writing
pens and blank papers during quizzes and examinations.

COURSE OUTLINE

THE LAW ON AGENCY

SESSIONS 1 & 2 / WEEK 1

I. Introduction

A. How is agency defined? 1868


1. Consent -1868,1969 to 1872,1898,1901,1910,1317,1403(1)

a. Express; ratification
b. Implied; ratification

Rallos v. Felix Go Chan, 81 SCRA 251

Orient Air Services v. CA, 197 SCRA 645
Uyv.CA,314SCRA69
Macke v. Camps, 7 Phil. 553
Prudential Bank v. CA, 223 SCRA 350
Litonjua, Jr. v. Eternit Corp. 490 SCRA 204 /

SESSION 3 & 4 / WEEK 2

II. What is the form of the contract of agency? 1869, 1874

A. Oral
B. Written

Angeles v. Phil. National Railways, 500 SCRA 444 (2006)

Jimenez v. Rabot, 38 Phil. 378
City-Lite v. CA, 325 SCRA 385

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 Cosmic Lumber v. CA, 265 SCRA 168
San Juan Structural Steel v. CA, 296 SCRA 631
Delos Reyes v. CA, 313 SCRA 632

AF Realty v. Dieselman Freight, 373 SCRA 385

SESSIONS 5 & 6 / WEEK 3

III. Who has the obligation to determine existence and scope of agency?

Keeler Electric Co. v. Rodriguez, 44 Phil. 19

Yu Eng Cho v. Pan American, 328 SCRA 717

IV. How is agency distinguished from other contracts/relationships?

A. Master-servant - 1689 to 1699

B. Employer-employee - 1700
C. Lease of service - 1644
D. Independent contractor -1713
E. Trust - 1440
F. Sale-1458

G. Partnership -1767

H. Negotiorum gestio/quasi-contract - 2144,2145
I. Judicial administrator

J. Broker

Sevilla v. CA, 160 SCRA 171

Shell v. Firemen's Insurance Co., 100 Phil. 757
Dela Cruz v. Northern Theatrical Enterprises, 95 Phil. 739
Nielson & co. v. Lepanto Consolidated, 26 SCRA 540
Quiroga v. Parsons Hardware, 38 Phil. 501

Gonzalo Puyat & Sons v. Arco Amusement Co., 72 Phil. 402
Lim v. People, 133 SCRA 333

Pacific Commercial v. Yatco, 68 Phil. 398 Ker v. Lingad, 38 SCRA 524

Hahn v. CA, 266 SCRA 537

SESSIONS 7 & 8 / WEEK 4

V. Some classes of agents

A. Attorneys-at-law
B. Auctioneers
C. Brokers

D. Factors; commission merchants - 1903 to 1908

VI. What are the classifications of agency contracts?

A. Express agency; implied agency

B. Agency by estoppel; no consent - 1900,1911,1921,1922
C. Agency by operation of law - 1869,1884(2), 1930,1931
D. Universal, general and special - 1876
E. Durable agency-1930

Siasat v. IAC, 139 SCRA 238


Dominion Insurance v. CA, GR. No. 129919,6 February 2002

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F. Couched in general terms; couched in specific terms - 1877 to 1880

1. Mortgage-1878(12)

PNB v. Sta. Maria, 29 SCRA 303 Bank of PI v. De Coster, 47 Phil. 594

2. Loan/borrow-1878(7)

Hodges v. Salas, 63 Phil. 567



3. Sell-1878(5)

Strong v. Gutierrez Rupide, 6 Phil. 680 (main opinion only)

Katigbak v. Tai Hing Co., 52 Phil. 622

4. Lease-1878(8)

Chua v. IAC, 229SCRA99



5. Compromise -1878(3)

Dungo v. Lopena, 6 SCRA 1007

Vicente v. Geraldez, 52 SCRA 210

6. Other acts of strict dominion - 1878(12)



Insular Drug Co. v. National Bank, 58 Phil. 684

SESSIONS 9 & 10 / WEEK 5



VII. What are the obligations and liabilities of agents to their principals?

A. Act within scope of authority - 1879,1880,1881,1882,1887

B. Carry out the agency -1884,1928,1929
C. Not to carry out the agency - 1888
D. Loyalty - 1889,1890,1891
E. Diligence - 1885,1887,1909
F. Account/deliver-1891

G. Solidary liability - 1894,1895
H. Pay interest - 1896
I. Fraud; negligence - 1909

J. Specific obligations of commission agents - 1903 to 1908

Austria v. CA, 39 SCRA 527


PNB v. Manila Surety, 14 SCRA 776
Domingo v. Domingo, 42 SCRA 131
Severino v. Severino, 44 Phil. 343
Green Valley Poultry v. IAC, 133 SCRA 697
Municipal Council of Iloilo v. Evangelista, 55 Phil. 290

VIII. Responsibility for acts of substitutes - 1892,1893

Del Rosario v. La Badenia, 33 Phil. 316

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 International Films v. Lyric Film, 63 Phil. 778

SESSIONS 11 & 12 / WEEK 6

IX. What are the obligations and liabilities of agents to third parties?

A. Agent acting within scope of authority - 1883,1897,1899

B. Agent acting outside of authority - 1897,1898,1911

1. With notice to third parties - 1901

2. Without notice to third parties

PNB v. Agudelo, 58 Phil. 655

Philippine Products v. Primateria, 15 SCRA 301
NPC v. National Merchandising, 117 SCRA 789
National Bank & Welch Fairchild, 44 Phil. 780
Tuazon v. Orosco, 5 Phil 596

Cervantes v. CA, 304 SCRA 25

C. Agent acting in his own name; exception - 1883

Barreto v. Sta. Marina, 26 Phil. 440

Diolosa v. CA, 130 SCRA 350
New Manila v. Republic, 107 Phil. 824
Dy Buncio v. Ong Guan, 60 Phil. 606
Garcia v. De Manzano, 39 Phil. 577
Rallos v. Yangco, 20 Phil. 269
Compania General de Tobaccos v. Diabu, 20 Phil 321
Del Rosario v. Abad, 104 Phil. 648
Coleongco v. Claparols, 10 SCRA 577

SESSIONS 13 & 14 / WEEK 7



X. What are the obligations and liabilities of principals to agents?

A. Advance/reimburse - 1912,1914,1918
B. Indemnify - 1913 (Dela Cruz v. No. Theatrical)
C. Solidary liability- 1915
D. Compensation - 1875
E. Agent's lien - 1914

Macondray v. Sellner, 33 Phil. 370

Danon v. Brim & Co.. 42 Phil. 133
Rocha v. Prats, 43 Phil 397

Inland Realty v. CA, 273 SCRA 70
Infante v. Cunanan, 93 Phil. 691

Prats v. CA, 81 SCRA 360

Uniland Resources v. DBP, 200 SCRA 757
Domingo v. Domingo, supra


XI. What are the obligations of principals to third parties?

A. Agent acting within scope of authority - 1883,1910,1917


B. Agent acting outside scope of authority - 1900,1911, 1916,1917

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C. For crimes; for torts

Gonzalez v. Haberer, 47 Phil. 380

Tuazon v. Orosco, supra

SESSIONS 15 & 16 / WEEK 8

XII. Duty of third parties dealing with agent - 1902

Bell v. Sotelo, 44 Phil. 874


Rural Bank of Bombon v. CA, 212 SCRA 25
Sy-Juco v. Sy-Juco, 40 Phil. 634

National Food Authority v. IAC, 184 SCRA 166
Gold Star Mining v. Lim Jimenez, 25 SCRA 597

XIII. How is agency extinguished?

A. Revocation; agency coupled with an interest - 1873,1919 to 1927

B. Withdrawal - 1919,1928,1929


Valera v. Velasco, 51 Phil 695

C. Death; agency coupled with an interest - 1919,1930 to 1932

Pasno v. Ravina, 54 Phil 378


Ramos v. Caoibes, 94 Phil. 440
Herrera v. Luy Kim Guan, 1 SCRA 406
Rallos v. Felix Go Chan, supra

D. Dissolution of the firm/corporation


E. Accomplishment of the object/purpose
F. Expiration of the period

G. Civil interdiction, insanity, insolvency

-MIDTERM EXAM-

THE LAW ON PARTNERSHIP

WEEK 1

I. Nature; Creation
A. Definition; essential features - 1767

B. Creation - 1770,1771,1772,1784,1815, Code of Professional
Responsibility Rule 3.02,1141

Agad v. Mabato, 23 SCRA 1223

Torres v. CA, 320 SCRA 428
Arbes v. Polistico, 53 Phil. 489
Tocao v. CA, 342 SCRA 20

C. Separate juridical personality - 1768,1775, NIRC Sec. 22(b), NIRC Sec. 26,1811 second par.

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 Aguila v. CA, 319 S 246 (1999)

Tan v. Del Rosario, 237 SCRA 324 (1994)
Mendiola v. CA, 497 SCRA 346

Angeles v. Secretary of Justice, 465 SCRA 106

D. Mutual agency -1803,1818,1819,1820,1821,1822,1825, Sec. 29 Rule 130, Section 11, Rule

14,1800,1801,1802,1832,1833,1834

WEEK 2

E. Distinguish from:


1. Co-ownership; co-possession
2. Tenancy in common; joint tenancy 3. Joint ventures
4. Joint adventures

5. Joint accounts

6. Cuentas en participation
7. Agency

1769,1825, Arts. 239-243 Code of Commerce

SEC Opinion dated 29 Feb 1980

Gatchalian v. CIR, 67 Phil 666

Pascual v. CIR, 166 SCRA 560 (1988)
Obillos v. CIR, 139 SCRA 436

Rivera v. People's Bank, 73 Phil 546 (1942)
Tuason v. Bolanos, 95 Phil 106

Heirs of Tan Eng Kee v. CA, 341 S 740 (2000)
Aurbach v. Sanitary Wares, 180 SCRA 130
Litonjua v. Litonjua, 477 SCRA 576
Bourns v. Carman, 7 Phil 117

Sevilla v. CA, 160 SCRA 171 (1988)

Philex Mining Corp v. CIR, 551 SCRA 428

WEEK 3

II. Kinds of partnership

A. Universal - 1776 - 1782, 739

B. Particular - 1776,1783
C. General -1776

D. Limited -1776

E. At will-1785

F. For a term or undertaking - 1785
G. Commercial -1767
H. Professional -1767

I. By estoppel/apparent - 1825

Ortega v. CA, 245 SCRA 529 (1995)

III. Kinds of partners

A. Industrial - 1789, 1797


B. Capitalist - 1789,1790,1797,1808
C. Managing - 1792,1800,1801,1802
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D. By estoppel - 1825

IV. Partner's obligations to the partnership

A. To contribute; warrant - 1786,1787,1788,1790,1791,1795

B. To apply sums collected pro rata - 1792
C. To compensate - 1794

D. To be loyal; fiduciary duty - 1807

Lim Tanhu v. Remolete, 66 SCRA 425

Liwanag v. CA, 281 SCRA 225 (1997)
US v. Clarin, 17 Phil 84
Pang Lim v. Lo Seng, 42 Phil 282
Catalan v. Gatchalian, 105 Phil 1270

V. Partner’s obligations inter se

A. To bring to collation - 1793


B. To share in the profits/losses - 1797,1798,1799
C. To render true and full information - 1806

D. Not to engage in another business - 1789,1808

Pioneer Insurance v. CA, 175 SCRA 668 (1989)

Evangelista v. Abad Santos, 51 SCRA 416
Moran v. CA, 133 SCRA 88
Martinez v. Ong Pong Co, 14 Phil 726
Agustin v. Inocencio, 9 Phil 134
Soncuya v. De Luna, 67 Phil 646

WEEK 4

VI. Partner's obligations to personal and partnership creditors; third parties

A. To have his partnership interest charged for personal debts (primary)

1814,1827

B. To be liable pro rata for partnership debts (subsidiary & joint) - 1816,
1817,1835

C. Tort liability; breach of trust liability (primary & solidary) - 1822-1824
D. Liability in case of estoppel - 1825; Sec. 21 Corporation Code

E. Liability of new partners (subsidiary) - 1826

In re Sycip, 92 SCRA 1 Litton v. Hill, 67 Phil 509

Goquiolay v. Sycip, 9 SCRA 663
Goquiolay v. Sycip, 108 Phil 947

MacDonald v. National City Bank, 99 Phil 156
Compania Maritima v. Munoz, 9 Phil 326
Co-Pitco v. Yulo, 8 Phil 544
Pacific Commercial v. Aboitiz, 48 Phil 841
Magdusa v. Albaran, 5 SCRA 511
Island Sales v. United, 65 SCRA 554
Munasque v. CA, 139 SCRA 533

Lim tong Lim v. Philippine Fishing Gear, Inc. 317 SCRA 728
Bachrach v. La Protectora, 37 Phil 441

WEEK 5 & 6
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VII. Rights of a partner

A. To associate another in his share - 1804


B. To access, inspect and copy partnership books - 1805
C. To have a formal account - 1809,1842

D. Property rights - 1810

1. To possess specific partnership property - 1811

2. To convey partnership interest - 1812, 1813

E. To ask for dissolution - 1830 (2), 1831

Dan Fue Leung v. IAC, 169 SCRA 746

US v. Clarin, supra
Emnace v. CA, 370 S 431

VIII. Partnership's obligations to the partners

A. To reimburse; to answer for obligations contracted - 1796

Martinez v. Ong Pong, 14 Phil 726

Agustin v. Inocencio, Phil 134

X. Rights of assignees

A. To receive the interest - 1813

B. To require an account - 1813
C. To ask for dissolution - 1831

XI. Dissolution & Winding Up

A. Dissolution; winding up; termination - 1828,1829

B. Causes of dissolution

1. Without violating the agreement - 1830(1)

2. In contravention of the agreement - 1830(2)
3. By operation of law - 1830(30)-(7)

4. By court decree -1830(8), 1831

C. Effects of dissolution


1. Termination of mutual agency; exceptions - 1832,1833, 1834

D. Right to wind up - 1836


E. Settling of accounts/application of properties/sharing of profits & losses
1797,1798,1799,1827,1837,1838

F. Effects of rescission - 1838,1839

G. Effects of continuation of the business - 1840,1841
H. Prescription of action - 1153,1144

Idos v. CA, 296 S 194 (1998)

Ortega v. CA, 245 SCRA 529
Rojas v. Maglana, 192 SCRA 110
Lichauco v. Lichauco, 33 Phil 350
Bearneza v. Dequilla, 43 Phil 237
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 Singson v. Isabela Sawmill, 88 SCRA 623
Bonnevie v. Hernandez, 95 Phil 175
Yu v. NLRC. 224 SCRA 75
Sunga-Chan v. CA, 555 SCRA 275

Primelink Properties v. Lazatin-Magat, 493 SCRA 444

WEEKS 7 & 8

TRUSTS — Arts. 1440 to 1457 NCC

Trusts are vested with equitable considerations

Government v. Abadilla, 46 Phil. 642 (1924)

Deluao v. Casteel, 22 SCRA 231 (1962)
Miguel v. CA, 29 SCRA 760 (1969)
Salao v. Salao, 70 SCRA 65 (1976)
Ramos v. CA, 232 SCRA 348 (1994)

No trust is implied by law if property is given as gift to a minor; Rebuttable presumption.

Bernardo delos Santos vs. Faustino Reyes, et al., L-45027, Jan. 27, 1992

Action for partition in implied trust prescribes after 10 years.

Juanito Gonzales, et al., vs. IAC et al., G.R. NO. 66479, Nov. 21, 1991

Implied trust; Imprescriptibility of action.

Ancog, et al., vs. CA, et al., G.R. No. 112260, June 30, 1997

Trust; Resulting trust

Morales vs. CA, G.R. NO. 117228, June 19, 1997

Implied trust; 10-year period to question title.

Purita Salvatierra v. CA, G.R. No. 107797, Aug. 26, 1996

A person who acquires a property thru fraud, holds it in trust.

Veran vs. CA, L-41154, Jan. 29, 1988

END-

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