Rallos vs Felix Go Chan & Sons Realty Corp

Facts:
This is a case of an attorney-in-fact, Simeon Rallos, who after of his death of his
principal, Concepcion Rallos, sold the latter's undivided share in a parcel of land
pursuant to a power of attorney which the principal had executed in favor. The
administrator of the estate of the went to court to have the sale declared uneanforceable
and to recover the disposed share.

RTC/CFI: The trial court granted the relief prayed for (sided with Rallos)
CA: the Court of Appeals uphold the validity of the sale and the complaint. (sided with
Felix Go Chan)

Issue: Whether the sale entered into by an agent is valid although executed after death
of the principal.

Ruling:
No, the sale is void because Simeon’s authority as an agent of Concepcion was
extinguished upon her death.

Article 1317 provides that no one may contract in the name of another without being
authorized or unless he has, by law, a right to represent him. Article 1919 furthers that
the death of the principal terminates the agency.

The case at bar is also not among the exceptions whereby an agent’s acts bind the
principal even after the latter’s death because of Simeon’s knowledge of Concepion’s
death is material. Hence, the sale was null and void.
Doles vs Angeles

Facts: Sale of real property to pay off indebtedness

RTC/CFI: Dismissed the case due to insufficiency of evidence

CA: Reversed decision of RTC

Issue: Whether or not petitioner and respondent were acting on their personal capacity
or as mere agents

Ruling: The question whether an agency has been created is ordinarily a question
which may be established in the same was as any other fact, either by direct or
circumstantial evidence. Agency may be implied from the words and conduct of the
parties and the circumstances of the particular case. Though the fact or extent of
authority of the agents may not, as a general rule, be established from the declarations
of the agents alone, if one frofessed to act as agent for another, she may be stopped to
deny her agency both as against the asserted principal and the third persons interested
in the transaction in which he or she is engaged.

In this case, petitioner knew that the financier of the respondent is Pua, and respondent
knew that the borrowers are friends of petitioner. It is sufficient that petitioner disclosed
to respondent that the former was acting in behalf of her principals, her friends. For an
agency to arise, it is not necessary that the principal personally encounter the third
person with whom the agent interacts. Here, both petitioner and respondent have
undeniably disclosed to each other that they are representing someone else and so both
of them are estopped to deny the same. That both parties acted as mere agents is
shown by the undisputed fact that the friends of the petitioner issued checks in payment
of the loan in the name of Arsenio Pua.
Eurotech Industrial Tech Inc v Cuizon

RTC/CFI: trial court granted petitioner’s prayer for the issuance of writ of preliminary
attachment.

the trial court rendered its assailed Order dated 29 January 2002 dropping respondent
EDWIN as a party defendant in this case.

CA: affirmed decision of the RTC

Ruling:

Thesis - we hold that Edwin Cuizon acted well-within his authority when he signed the
Deed of Assignment.

Law - The agent who acts as such is not personally liable to the party with whom he
contracts, unless he expressly binds himself or exceeds the limits of his authority without
giving such party sufficient notice of his powers

Discussion - Article 1897 reinforces the familiar doctrine that an agent, who acts as
such, is not personally liable to the party with whom he contracts. The same provision,
however, presents two instances when an agent becomes personally liable to a third
person. The first is when he expressly binds himself to the obligation and the second is
when he exceeds his authority. In the last instance, the agent can be held liable if he
does not give the third party sufficient notice of his powers. We hold that respondent
EDWIN does not fall within any of the exceptions contained in this provision

Application - To recall, petitioner refused to deliver the one unit of sludge pump unless
it received, in full, the payment for Impact Systems’ indebtedness.36 We may very well
assume that Impact Systems desperately needed the sludge pump for its business since
after it paid the amount of fifty thousand pesos (₱50,000.00) as down payment on 3
March 1995,37 it still persisted in negotiating with petitioner which culminated in the
execution of the Deed of Assignment of its receivables from Toledo Power Company on
28 June 1995.38 The significant amount of time spent on the negotiation for the sale of
the sludge pump underscores Impact Systems’ perseverance to get hold of the said
equipment. There is, therefore, no doubt in our mind that respondent EDWIN’s
participation in the Deed of Assignment was "reasonably necessary" or was required in
order for him to protect the business of his principal. Had he not acted in the way he did,
the business of his principal would have been adversely affected and he would have
violated his fiduciary relation with his principal.
De Castro v Court of Appeals
Facts: The De Castros were co-owners of a parcel of land. They authorized Artigo
as a real estate broker. Artigo felt short of his commission and sued to collect the
balance.

RTC/CFI: Principals are jointly and solidarily liable to plaintiff-agent

CA: Affirmed decision of the RTC in toto

Issue: WON the De castros are jointly and solidarily liable to plaintiff –agent.

Ruling: Yes. Art. 1915. If two or more persons have appointed an agent for a common
transaction or undertaking, they shall be solidarily liable to the agent for all the
consequences of the agency.
Yoshizaki v Joy Training Center of Aurora

RTC/CFI: In favor of Yoshizaki because they were authorized by majority of the BOT.
Sale of Personal properties was valid because it was registered under their name.

CA: Upheld sale of personal properties. Reversed sale of real properties because it was
not approved by majority of the board.

Issue: Whether or not there was a contract of agency to sell the real properties between
Joy Training Coprporation and the spouses Johnson. (real property and Wrangler jeep)

Ruling: No Agency.

Law - As a general rule, a contract of agency may be oral. However, it must be written
when the law requires a specific form. Specifically, Article 1874 of the Civil Code
provides that the contract of agency must be written for the validity of the sale of a piece
of land or any interest therein. Otherwise, the sale shall be void

Article 1878 of the Civil Code, states that special powers of attorney are necessary to
convey real rights over immovable properties.

Jurisprudence - We unequivocably declared in Cosmic Lumber Corporation v. Court of

Appeals that a special power of attorney must express the powers of the agent in
clear and unmistakable language for the principal to confer the right upon an agent to
sell real estate. When there is any reasonable doubt that the language so used conveys
such power, no such construction shall be given the document.

Application - The evidence (TCT, board resolution, and certification ) that was
presented in this case was not substantial enough to convince the Supreme Court of the
existence of the contract of agency to sell the real properties.

TCT No. T-25334 merely states that Joy Training is represented by the spouses
Johnson. The title does not explicitly confer to the spouses Johnson the authority to sell
the parcel of land and the building thereon.

The resolution which purportedly grants the spouses Johnson a special power of
attorney is negated by the phrase “land and building owned by spouses Richard A.
and Linda J[.] Johnson.

The certification is a mere general power of attorney which comprises all of Joy
Training’s business. Article 1877 of the Civil Code clearly states that “[a]n agency
couched in general terms comprises only acts of administration, even if the principal
should state that he withholds no power or that the agent may execute such acts
as he may consider appropriate, or even though the agency should authorize a
general and unlimited management.

Counter argument of the buyer: that a party dealing with a registered land need not go
beyond the certificate of title to determine the condition of the property.
Bordador v Luz

Facts: The Bordadors, who were running a jewelry business, entrusted pieces of jewelry
to Degnos, who was obliged to sell them. Deganos failed to account for them. A civil and
criminal case were filed against him, which prayed that Brigida Luz, who was puported to
be his principal, be held solidarily liable. The Court ruled that Deganos was not the agent
of Luz, as there was no evidence that Luz consented to, or authorized Deganos to act on
her behalf. The Bordador's were in the business of purchase and sale of jewelry, and
Brigida Luz was their regular customer.

RTC/CFI: no agency between Brigida Luz and Deganos. It was Bordador who indicated
that the items were received on behalf of Luz. Even if there was contract of agency,
there was no memorandum to this effect and
was therefore unenforceable.

CA: Affirmed the decision of he RTC

Issue: Was there a contract of agency between Luz and Deganos? NO.

Ruling:

Law – By the contract of agency a person binds himself to render some service or to do
something in representation or on behalf of another, with the consent or authority of the
latter. The basis for agency is representation.

Application - While it was shown in the findings of fact that Deganos had ostensibly
acted as an agent of Luz, there was no showing that Luz authorized him to act on her
behalf regarding the transaction questioned in this case. The basis for agency is
representation, and there is no showing that Luz consented or authorized Deganos to
act on her behalf.

It was inexcusably negligent of the Bordados to entrust Deganos with several pieces of
jewelry without requiring a written authorization from the supposed principal. A person
dealing with an agent is put upon inquiry and must
discover upon his peril the authority of the agent. There was no express or implied
agency between Deganos and Luz.
Severino v Severino
Facts: Melecio Severino owned 428 hectares of land in Silay, Occidental Negros. During
Melecio’s lifetime, his brother, Guillermo (D), worked to administer the land for Melecio’s
behalf. When Melecio died in 1915, D continued to occupy the said land.

An action brought by P, alleged natural daughter and sole heir of Melecio to compel D to
convey to her four parcels of land described in the complaint, or in default thereof to pay
her the sum of P800,000 in 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 Severino, has filed a complaint in intervention claiming the same relief as P,
except in so far as she prays that the conveyance be made, or damages paid, to the
estate.

Ruling:
Agent-Principal Relationship is Fiduciary - It is an elementary and very old rule that in
regard to property forming the subject-matter of the agency, an agent 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.

An agent is not only estopped from denying his principal’s title to the property, but he is
also disabled from acquiring interests therein adverse to those of his principal during the
term of the agency.
International Films vs Lyric Films

RTC/CFI: Dismissed the complaint

CA:

Issue: Liability of a subagent

Ruling:

NO. Lyric Film Exchange, as subagent of the International Films in the exhibition of the
film "Monte Carlo Madness", was not obliged to insure it against fire, not having received
any express mandate to that effect, and it is not liable for the accidental destruction
thereof by fire.

The preponderance of evidence shows that the verbal agreement had between Bernard
Gabelman, the former agent of the International Films, and Vicente Albo, chief of the film
department of the Lyric Film Exchange, was that said film "Monte Carlo Madness" would
remain deposited in the safety vault of the defendant company under the responsibility of
said former agent and that the defendant company, as his subagent, could show it in its
theaters.

the defendant company, as subagent of the plaintiff in the exhibition of the film "Monte
Carlo Madness", was not obliged to insure it against fire, not having received any
express mandate to that effect, and it is not liable for the accidental destruction thereof
by fire.
Bacaling vs Muya

Issue: Agency couple with interest

Ruling: Substantively, we rule that Bacaling cannot revoke at her whim and pleasure the
irrevocable special power of attorney which she had duly executed in favor of petitioner
Jose Juan Tong and duly acknowledged before a notary public. The agency, to stress, is
one coupled with interest which is explicitly irrevocable since the deed of agency was
prepared and signed and/or accepted by petitioner Tong and Bacaling with a view to
completing the performance of the contract of sale of the one hundred ten (110) sub-lots.
It is for this reason that the mandate of the agency constituted Tong as the real party in
interest to remove all clouds on the title of Bacaling and that, after all these cases are
resolved, to use the irrevocable special power of attorney to ultimately "cause and effect
the transfer of the aforesaid lots in the name of the vendees [Tong with two (2) other
buyers] and execute and deliver document/s or instrument of whatever nature necessary
to accomplish the foregoing acts and deeds."41 The fiduciary relationship inherent in
ordinary contracts of agency is replaced by material consideration which in the type of
agency herein established bars the removal or dismissal of petitioner Tong as Bacaling's
attorney-in-fact on the ground of alleged loss of trust and confidence.

While Bacaling alleges fraud in the performance of the contract of agency to justify its
revocation, it is significant to note that allegations are not proof, and that proof requires
the intervention of the courts where both petitioners Tong and Bacaling are heard.
Stated otherwise, Bacaling cannot vest in herself just like in ordinary contracts the
unilateral authority of determining the existence and gravity of grounds to justify the
rescission of the irrevocable special power of attorney. In Sevilla v. Court of
Appeals42 we thus held-

But unlike simple grants of a power of attorney, the agency that we hereby declare to be
compatible with the intent of the parties, cannot be revoked at will. The reason is that it is
one coupled with an interest, the agency having been created for the mutual interest of
the agent and the principal xxx [Petitioner's] interest, obviously, is not limited to the
commissions she earned as a result of her business transactions, but one that extends
to the very subject matter of the power of management delegated to her. It is an agency
that, as we said, cannot be revoked at the pleasure of the principal. Accordingly, the
revocation complained of should entitle the petitioner x x x to damages.

The requirement of a judicial process all the more assumes significance in light of the
dismissal with prejudice, hence, res judicata, of Bacaling's complaint to annul the
contract of sale which in turn gave rise to the irrevocable special power of attorney. It is
clear that prima facie there are more than sufficient reasons to deny the revocation of
the said special power of attorney which is coupled with interest. Inasmuch as no
judgment has set aside the agency relationship between Bacaling and Tong, we rule that
petitioner Tong maintains material interest to prosecute the instant petition with or
without the desired cooperation of Bacaling.
NFA v IAC and Superior Shipping
Facts:
Medalla, as commission agent of the plaintiff Superior Shipping Corporation, entered into
a contract for hire of ship known as MV Sea Runner with NFA (then National Grain
Authority). Under the said contract Medalla obligated to transport on the "MV Sea
Runner" 8,550 sacks of rice belonging to defendant National Grains Authority from the
port of San Jose, Occidental Mindoro, to Malabon, Metro Manila.

Upon completion of the delivery, Superior Shipping wrote a letter requesting NGA that it
be allowed to collect the amount for the transaction. Superior Shipping wrote another
letter to NGA, this time specifically requesting that the payment for freightage and other
charges be made to it and not to defendant Medalla because plaintiff was the owner of
the vessel "MV Sea Runner". In reply, NGA informed Superior Shipping that it could not
grant its request because the contract to transport the rice was entered into by NGA and
Medalla who did not disclose that he was acting as a mere agent of Superior Shipping.

NGA then made the payment to Medalla. Superior shipping demandad Medalla to turn
over to it the payment by NGA but Medalla did not do so.

RTC/CFI: NFA and Agent Medalla is liable

CA: Affirmed the decision of the trial court

Issue: won NFA is liable to Superior Shipping. Yes.

Ruling: Art. 1883. If an agent acts in his own name, the principal has no right of action
against the persons with whom the agent has contracted; neither have such persons
against the principal.

In such case the agent is the one directly bound in favor of the person with whom he has
contracted, as if the transaction were his own, except when the contract involves things
belonging to the principal.

Counter Argument: It is contended by petitioner NFA that it is not liable under the
exception to the rule (Art. 1883) since it had no knowledge of the fact of agency between
respondent Superior Shipping and Medalla at the time when the contract was entered
into between them (NFA and Medalla). Petitioner submits that "(A)n undisclosed
principal cannot maintain an action upon a contract made by his agent unless such
principal was disclosed in such contract. One who deals with an agent acquires no right
against the undisclosed principal.
Diolosa v CA
Facts: Baterno, a licensed real estate broker, on June 20, 1968, entered into an
agreement with the Diolosa Spouses whereby the former was constituted as exclusive
sales agent of the latter, its successors, heirs and assigns, to dispose of, sell, cede,
transfer and convey the lots included in VILLA ALEGRE SUBDIVISION owned by the
Diolosa Spouses. On September 27, 1968, the Diolosa Spouses terminated the services
of plaintiff as their exclusive sales agent through a letter when Baterno had already sold
several subdivisions

Issue:

1. Can the defendants terminate their agreement with the plaintiff by a letter like
Exhibit “B”?
2. 2. How can an agency agreement terminated?

Ruling:

1. NO. Under the contract, Exhibit “A”, herein petitioners allowed the private respondent
“to dispose of, sell, cede, transfer and convey x x x until all the subject property as
subdivided is fully disposed of.” The authority to sell is not extinguished until all the lots
have been disposed of. When, therefore, the petitioners revoked the contract with
private respondent in a letter, Exhibit “B”—they become liable to the private respondent
for damages for breach of contract.

2. And, it may be added that since the agency agreement, Exhibit “A”, is a valid contract,
the same may be rescinded only on grounds specified in Articles 1381 and 1382 of the
Civil Code, as follows: “ART. 1381. The following contracts are rescissible: 1. Those
which are entered into by guardians whenever the wards whom they represent suffer
lesion by more than one fourth of the value of the things which are the object thereof; 2.
Those agreed upon in representation of absentees, If the latter suffer the lesion stated in
the preceding number; 3. Those undertaken in fraud of creditors when the latter cannot
in any other manner collect the claims due them; 4. Those which refer to things under
litigation if they have been entered into by the defendant without the knowledge and
approval of the litigants or of competent judicial authority; 5. All other contracts specially
declared by law to be subject to rescission. “ART. 1382. Payments made in a state of
insolvency for obligations to whose fulfillment the debtor could not be compelled at the
time they were effected, are also rescissible.” In the case at bar, not one of the grounds
mentioned above is present which may be the subject of an action of rescission, much
less can petitioners say that the private respondent violated the terms of their
agreement—such as failure to deliver to them (Subdivision owners) the proceeds of the
purchase price of the lots.
Rallos v Yangco
Facts: Rallos sold tobacco to Yangco through agent, Collantes. Collantes received
tobacco from Rallos but he used it for his own. Yangco did not inform Rallos that he
severed relationship with his agent, Collantes.

Issue: WON Collantes is an agent of Yangco. Yes.

Ruling: Having advertised the fact that Collantes was his agent and having given them a
special invitation to deal with such agent, it was the duty of the defendant on the
termination of the relationship of principal and agent to give due and timely notice
thereof to the plaintiffs. Failing to do so, he is responsible to them for whatever goods
may have been in good faith and without negligence sent to the agent without
knowledge, actual or constructive, of the termination of such relationship.

Caleongco v Claparols
Facts:

Caparols owned a steel and nail plant. Losses compelled Claparols in 1953 to look for
someone to finance his imports of nail wires. Coleongco became his financier. A
financing agreement was perfected . In addition, a special power of attorney was
executed authorizing Coleongco to open and negotiate letters of credit, to sign contracts,
bills of lading, invoices, and papers covering transactions; to represent appellee and the
nail factory; and to accept payments and cash advances from dealers and distributors.
Thereafter, Coleongco also became the assistant manager of the factory. In1956,
Claparols was surprised by service of an alias writ of execution to enforce a judgment
obtained against him by the Philippine National Bank, despite the fact that on the
preceding September he had submitted an amortization plan to settle the account. He
further discovered the following acts of disloyalty of Coleongco.
Claparols consequently revoked the power of attorney, and informed Coleongco by
registered mail, demanding a full accounting at the same time. Coleongco protested.
Claparols requested external auditors, examination showed that Coleongco owed the
Claparols Nail Factory the amount of P87,387.37, as of June 30, 1957.

RTC/CFI:
CA:

Issue:
1) WON the contract of agency between Claparols and Coleongco was one coupled with
interest. NO

2.) WON a contract of agency when coupled with an interest may be validly revoked by
the principal. YES

Ruling:
1.) The financing agreement itself already contained clauses for the protection of
appellant's interest, and did not call for the execution of any power of attorney in favor of
Coleongco.

2.) But granting appellant's view, it must not be forgotten that a power of attorney can be
made irrevocable by contract only in the sense that the principal may not recall it at his
pleasure; but coupled with interest or not, the authority certainly can be revoked for a
just cause, such as when the attorney-in-fact betrays the interest of the principal, as
happened in this case. It is not open to serious doubt that the irrevocability of the power
of attorney may not be used to shield the perpetration of acts in bad faith, breach of
confidence, or betrayal of trust, by the agent for that would amount to holding that a
power coupled with an interest authorizes the agent to commit frauds against the
principal. Our new Civil Code, in Article 1172, expressly provides the contrary in
prescribing that responsibility arising from fraud is demandable in all obligations, and
that any waiver of action for future fraud is void. It is also on this principle that the Civil
Code, in its Article 1800, declares that the powers of a partner, appointed as manager, in
the articles of co-partnership are irrevocable without just or lawful cause; and an agent
with power coupled with an interest can not stand on better ground than such a partner
in so far as irrevocability of the power is concerned. That the appellee Coleongco acted
in bad faith towards his principal Claparols is, on the record, unquestionable. The facts
mentioned acts of deliberate sabotage by the agent that fully justified the revocation of
the power of attorney.
Valera v Velasco
Facts: Valera appointed Velasco through a power of attorney with the authority to
manage his property in the Philippines consisting of a usufruct of a real property.

RTC/CFI: Dismissed case in favor of agent because of no right of action

CA:

Issue: Extinguishment of an agency

Ruling:

Law - Agency is terminated by: a) revocation, b)withdrawal of agent, c)death,

interdiction, bankruptcy, or insolvency of the principal or of the agent.

Law - An agent may withdraw by giving notice to principal. If principal suffer any
damage, agent must indemnify him unless the agent’s reason should be the impossibility
of continuing to act as such without serious detriment to himself. The misunderstanding
between the plaintiff and the defendant over the payment of the balance of P1,000 due
the latter more than prove the breach of the juridical relation between them; for, although
the agent has not expressly told his principal that he renounced the agency, yet neither
dignity nor decorum permits the latter to continue representing a person who has
adopted such an antagonistic attitude towards him. When the agent filed a complaint
against his principal for recovery of a sum of money arising from the liquidation of the
accounts between them in connection with the agency, principal could not have
understood otherwise than that agent renounced the agency; because his act was more
expressive than words and could not have caused any doubt

In this case Briefly, then, the fact that an agent institutes an action against his principal
for the recovery of the balance in his favor resulting from the liquidation of the accounts
between them arising from the agency, and renders and final account of his operations,
is equivalent to an express renunciation of the agency, and terminates the juridical
relation between them.
Buason et al v Panuyas
Facts: Dayao executed a power of attorney to Bayuga to sell a parcel of land. Dayao
died. Dayao’s children sold land to Bauson. Bayuga sold land to Panuyas.

Issue: Who has a better right to the possession of the subject property?

Ruling: Panuyas, the appellee, has a better right.

The power of attorney executed by Buenaventura Dayao on 29 October 1930

authorizing Eustaquio Bayuga to sell the parcel of land, was annotated or inscribed on
the back of original certificate of title, and the sale executed by Eustaquio Bayuga in
favor of the appellee Mariano Panuyas and his wife Sotera B. Cruz under the aforesaid
power of attorney was annotated or inscribed on the back of the same original certificate
of title It does not appear that the appellee and his wife had actual knowledge of the
previous sale. In the absence of such knowledge, they had a right to rely on the face of
the certificate of title of the registered owners and of the authority conferred by them
upon the agent also recorded on the back of the certificate of title. As this is a case of
double sale of land registered under the Land Registration Act, he who recorded the sale
in the Registry of Deeds has a better right than he who did not.

Issue: Does the fact that the death of the principal ended the authority of the agent to
sell the land? No.

Ruling: Suffice it to state that it has not been shown that the agent knew of his
principal's demise, and for that reason article 1931 of the New Civil Code, which
provides: Anything done by the agent, without knowledge of the death of the principal or
of any other cause which extinguishes the agency, is valid and shall be fully effective
with respect to third persons who may have contracted with him in good faith, is the law
applicable to the point raised by the appellants.