Escolar Documentos
Profissional Documentos
Cultura Documentos
The Case
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following
issues
for
our
First Issue:
Agency
Well-entrenched is the rule that the Supreme
Courts role in a petition under Rule 45 is limited to
reviewing errors of law allegedly committed by the
Court of Appeals. Factual findings of the trial court,
especially when affirmed by the CA, are conclusive
on the parties and this Court. 8 Petitioners have not
given us sufficient reasons to deviate from this
rule.
In a contract of agency, one binds oneself to render
some service or to do something in representation
or on behalf of another, with the latters consent or
authority.9 The following are the elements of
agency: (1) the partiesconsent, express or implied,
to establish the relationship; (2) the object, which is
the execution of a juridical act in relation to a third
person; (3) the representation, by which the one
who acts as an agent does so, not for oneself, but
as a representative; (4) the limitation that the
agent acts within the scope of his or her
authority.10 As
the
basis
of
agency
is
representation, there must be, on the part of the
principal, an actual intention to appoint, an
intention naturally inferable from the principals
words or actions. In the same manner, there must
be an intention on the part of the agent to accept
the appointment and act upon it. Absent such
mutual intent, there is generally no agency.11
This Court finds no reversible error in the findings
of the courts a quo that petitioners were the rice
buyers themselves; they were not mere agents of
respondents in their rice dealership. The question
of whether a contract is one of sale or of agency
depends on the intention of the parties.12
VICTORIAS
MILLING CO., INC., petitioner,
vs.
COURT OF APPEALS and CONSOLIDATED
SUGAR CORPORATION, respondents.
DECISION
QUISUMBING, J.:
Before us is a petition for review on certiorari under
Rule 45 of the Rules of Court assailing the decision
of the Court of Appeals dated February 24, 1994, in
CA-G.R. CV No. 31717, as well as the respondent
court's resolution of September 30, 1994 modifying
said decision. Both decision and resolution
amended the judgment dated February 13, 1991,
of the Regional Trial Court of Makati City, Branch
147, in Civil Case No. 90-118.
The facts of this case as found by both the trial and
appellate courts are as follows:
St. Therese Merchandising (hereafter STM)
regularly bought sugar from petitioner Victorias
Milling Co., Inc., (VMC). In the course of their
dealings, petitioner issued several Shipping
List/Delivery Receipts (SLDRs) to STM as proof of
purchases. Among these was SLDR No. 1214M,
which gave rise to the instant case. Dated October
16, 1989, SLDR No. 1214M covers 25,000 bags of
sugar. Each bag contained 50 kilograms and priced
at P638.00 per bag as "per sales order VMC
Marketing No. 042 dated October 16, 1989." 1 The
transaction it covered was a "direct sale." 2 The
SLDR also contains an additional note which reads:
"subject for (sic) availability of a (sic) stock at
NAWACO (warehouse)."3
On October 25, 1989, STM sold to private
respondent Consolidated Sugar Corporation (CSC)
its rights in SLDR No. 1214M for P 14,750,000.00.
CSC issued one check dated October 25, 1989 and
three checks postdated November 13, 1989 in
payment. That same day, CSC wrote petitioner that
it had been authorized by STM to withdraw the
sugar covered by SLDR No. 1214M. Enclosed in the
letter were a copy of SLDR No. 1214M and a letter
it could
against
already
cleared
filed
separate
. . . In paragraph 4 of the
complaint,
plaintiffs
alleged themselves to
be "sellers' agents" for
the several owners of
the 8 lots subject matter
of the case. Obsviously,
William Uy and Rodel
Roxas in filing this case
acted as attorneys-infact of the lot owners
who are the real parties
in interest but who were
omitted to be pleaded
as party-plaintiffs in the
case. This omission is
fatal. Where the action
is
brought
by
an
attorney-in-fact of a land
owner in his name, (as
in our present action)
and not in the name of
his principal, the action
was properly dismissed
(Ferrer vs. Villamor, 60
SCRA
406
[1974];
Marcelo vs. de Leon, 105
Phil. 1175) because the
rule is that every action
must be prosecuted in
the name of the real
parties-in-interest
(Section 2, Rule 3, Rules
of Court).
I. THE RESPONDENT CA
ERRED IN DECLARING
THAT RESPONDENT NHA
HAD ANY LEGAL BASIS
FOR RESCINDING THE
SALE INVOLVING THE
LAST
THREE
(3)
PARCELS COVERED BY
NHA RESOLUTION NO.
1632.
II.
GRANTING
ARGUENDO THAT THE
RESPONDENT NHA HAD
LEGAL
BASIS
TO
RESCIND THE SUBJECT
SALE, THE RESPONDENT
CA
NONETHELESS
ERRED
IN
DENYING
HEREIN
PETITIONERS'
CLAIM TO DAMAGES,
CONTRARY
TO
THE
PROVISIONS OF ART.
1191 OF THE CIVIL
CODE.
III. THE RESPONDENT CA
ERRED IN DISMISSING
THE
SUBJECT
COMPLAINT
FINDING
THAT THE PETITIONERS
FAILED TO JOIN AS
INDISPENSABLE
PARTY
PLAINTIFF THE SELLING
LOT-OWNERS. 3
We first resolve the issue raised in the the third
assignment of error.
Petitioners claim that they lodged the complaint
not in behalf of their principals but in their own
name as agents directly damaged by the
termination of the contract. The damages prayed
for were intended not for the benefit of their
principals but to indemnify petitioners for the
losses they themselves allegedly incurred as a
result of such termination. These damages consist
mainly
of
"unearned
income"
and
advances. 4 Petitioners, thus, attempt to distinguish
the case at bar from those involving agents
or apoderedos instituting actions in their own name
but in behalf of their principals. 5 Petitioners in this
case purportedly brought the action for damages in
their own name and in their own behalf.
We find this contention unmeritorious.
person.
supplied.)
(Emphasis
13
. . . granting that
appellant
had
the
authority to sell the
property, the same did
not make the buyer
liable
for
the
commission
she
claimed. At most, the
owner of the property
and
the
one
who
promised to give her a
commission should be
the one liable to pay the
same and to whom the
claim should have been
directed. . . .
As petitioners are not parties, heirs, assignees, or
beneficiaries of a stipulation pour autrui under the
contracts of sale, they do not, under substantive
law, possess the right they seek to enforce.
Therefore, they are not the real parties-in-interest
in this case.
Petitioners not being the real parties-in-interest,
any decision rendered herein would be pointless
since the same would not bind the real parties-ininterest. 14
Nevertheless, to forestall further litigation on the
substantive aspects of this case, we shall proceed
to rule on me merits. 15
Petitioners submit that respondent NHA had no
legal basis to "rescind" the sale of the subject three
parcels of land. The existence of such legal basis,
notwithstanding, petitioners argue that they are
still entitled to an award of damages.
Petitioners confuse the cancellation of the contract
by the NHA as a rescission of the contract under
Article 1191 of the Civil Code. The right of
EIGHT
HUNDRED
NINETEEN
(56,819) SQUARE METERS, more
or less . . . .
Ordinarily, a party's motives for entering into the
contract do not affect the contract. However, when
the motive predetermines the cause, the motive
may be regarded as the cause. In Liguez vs. Court
of Appeals, 24 this Court, speaking through Justice
J.B.L. REYES, HELD:
. . . it is well to note,
however, that Manresa
himself (Vol. 8, pp. 641642), while maintaining
the
distinction
and
upholding
the
inoperativeness of the
motives of the parties to
determine the validity of
the contract, expressly
excepts from the rule
those contracts that are
conditioned upon the
attainment
of
the
motives of either party.
The same view is held
by the Supreme Court of
Spain, in its decisions of
February 4, 1941, and
December
4,
1946,
holding that the motive
may
be
regarded
as causa when
it
predetermines
the
purpose of the contract.
In this case, it is clear, and petitioners do not
dispute, that NHA would not have entered into the
contract were the lands not suitable for housing. In
other words, the quality of the land was an implied
condition for the NHA to enter into the contract. On
the part of the NHA, therefore, the motive was the
cause for its being a party to the sale.
Geology
ARISTOTLE
A.
Geologist II
SUBJECT:
Preliminary
Assessment of
Tadiangan
Project
in
Benguet 26
Housing
Tuba,
the
EUROTECH
INDUSTRIAL
INC., Petitioner,
vs.
EDWIN
CUIZON
CUIZON, Respondents.
TECHNOLOGIES,
and
ERWIN
DECISION
CHICO-NAZARIO, J.:
Before Us is a petition for review by certiorari
assailing the Decision1 of the Court of Appeals
dated 10 August 2004 and its Resolution2 dated 17
March 2005 in CA-G.R. SP No. 71397 entitled,
"Eurotech Industrial Technologies, Inc. v. Hon.
Antonio T. Echavez." The assailed Decision and
Resolution affirmed the Order3 dated 29 January
2002 rendered by Judge Antonio T. Echavez
ordering the dropping of respondent EDWIN Cuizon
(EDWIN) as a party defendant in Civil Case No.
CEB-19672.
The generative facts of the case are as follows:
Petitioner is engaged in the business of importation
and distribution of various European industrial
equipment for customers here in the Philippines. It
has as one of its customers Impact Systems Sales
("Impact Systems") which is a sole proprietorship
owned by respondent ERWIN Cuizon (ERWIN).
Respondent EDWIN is the sales manager of Impact
Systems and was impleaded in the court a quo in
said capacity.
From January to April 1995, petitioner sold to
Impact Systems various products allegedly
amounting to ninety-one thousand three hundred
thirty-eight (P91,338.00) pesos. Subsequently,
respondents sought to buy from petitioner one unit
of sludge pump valued at P250,000.00 with
respondents making a down payment of fifty
thousand pesos (P50,000.00).4 When the sludge
pump arrived from the United Kingdom, petitioner
refused to deliver the same to respondents without
their having fully settled their indebtedness to
petitioner. Thus, on 28 June 1995, respondent
EDWIN and Alberto de Jesus, general manager of
JOCELYN
B.
DOLES, Petitioner,
vs.
MA. AURA TINA ANGELES, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
This refers to the Petition for Review on Certiorari
under Rule 45 of the Rules of Court questioning the
Decision1dated April 30, 2001 of the Court of
Appeals (CA) in C.A.-G.R. CV No. 66985, which
reversed the Decision dated July 29, 1998 of the
Regional Trial Court (RTC), Branch 21, City of
Manila; and the CA Resolution 2 dated August 6,
2001 which denied petitioners Motion for
Reconsideration.
The antecedents of the case follow:
On April 1, 1997, Ma. Aura Tina Angeles
(respondent) filed with the RTC a complaint for
Specific Performance with Damages against Jocelyn
B. Doles (petitioner), docketed as Civil Case No. 9782716. Respondent alleged that petitioner was
indebted to the former in the concept of a personal
loan amounting to P405,430.00 representing the
principal amount and interest; that on October 5,
1996, by virtue of a "Deed of Absolute
Sale",3petitioner, as seller, ceded to respondent, as
buyer, a parcel of land, as well as the
improvements thereon, with an area of 42 square
meters, covered by Transfer Certificate of Title No.
382532,4 and located at a subdivision project
known as Camella Townhomes Sorrente in Bacoor,
Cavite, in order to satisfy her personal loan with
respondent; that this property was mortgaged to
National Home Mortgage Finance Corporation
(NHMFC) to secure petitioners loan in the sum
of P337,050.00 with that entity; that as a condition
for the foregoing sale, respondent shall assume the
undue balance of the mortgage and pay the
monthly
amortization
of P4,748.11
for
the
remainder of the 25 years which began on
September 3, 1994; that the property was at that
time being occupied by a tenant paying a monthly
rent of P3,000.00; that upon verification with the
NHMFC, respondent learned that petitioner had
SALE
BETWEEN
THE
PARTIES
HAS
NO
CONSIDERATION OR INSUFFICIENCY OF EVIDENCE.6
On April 30, 2001, the CA promulgated its Decision,
the dispositive portion of which reads:
WHEREFORE, IN VIEW OF THE FOREGOING, this
appeal is hereby GRANTED. The Decision of the
lower court dated July 29, 1998 is REVERSED and
SET ASIDE. A new one is entered ordering
defendant-appellee to execute all necessary
documents to effect transfer of subject property to
plaintiff-appellant with the arrearages of the
formers loan with the NHMFC, at the latters
expense. No costs.
SO ORDERED.
The CA concluded that petitioner was the borrower
and, in turn, would "re-lend" the amount borrowed
from the respondent to her friends. Hence, the
Deed of Absolute Sale was supported by a valid
consideration, which is the sum of money petitioner
owed respondent amounting to P405,430.00,
representing both principal and interest.
The CA took into account the following
circumstances in their entirety: the supposed
friends of petitioner never presented themselves to
respondent and that all transactions were made by
and between petitioner and respondent;7 that the
money borrowed was deposited with the bank
account of the petitioner, while payments made for
the loan were deposited by the latter to
respondents bank account;8 that petitioner herself
admitted in open court that she was "re-lending"
the money loaned from respondent to other
individuals for profit;9 and that the documentary
evidence shows that the actual borrowers, the
friends of petitioner, consider her as their creditor
and not the respondent.10
Furthermore, the CA held that the alleged threat or
intimidation by respondent did not vitiate consent,
since the same is considered just or legal if made
to enforce ones claim through competent authority
under Article 133511of the Civil Code;12 that with
respect to the arrearages of petitioner on her
monthly amortization with the NHMFC in the sum
of P26,744.09, the same shall be deemed part of
the balance of petitioners loan with the NHMFC
a. Yes, sir.
Atty. Diza:
witness:
Atty. Diza:
q. You also mentioned that you were not
the one indebted to the plaintiff?
witness:
a. No, sir.
Atty. Diza:
witness:
a. Yes, sir.
a. Yes, sir.
Atty. Diza:
witness:
Atty. Diza:
q. How much?
a. Yes, sir.
witness:
Atty. Diza:
q. You are intermediaries?
witness:
a. We are both intermediaries. As
evidenced by the checks of the debtors
they were deposited to the name of
Arsenio Pua because the money came
from Arsenio Pua.
xxxx
Atty. Diza:
Atty. Villacorta:
witness:
Atty. Villacorta:
witness:
Atty. Diza:
q. What is that transaction?
witness:
Atty. Diza:
witness:
q. You are re-lending the money?
Atty. Diza:
witness:
witness:
witness:
Atty. Villacorta:
a. Yes, sir.
Atty. Villacorta:
q. So it is not actually your money but the
money of Arsenio Pua?
witness:
xxxx
a. Yes, sir.
witness:
Atty. Villacorta:
Court:
a. Yes, sir.
witness:
witness:
Atty. Villacorta:
q. Is it not a fact Ms. Witness that the
defendant
borrowed
from
you
to
accommodate somebody, are you aware
of that?
witness:
a. I am aware of that.
Atty. Villacorta:
q. More or less she [accommodated]
several friends of the defendant?
Atty. Villacorta:
q. And because of that Arsenio Pua got
mad with you?
witness:
a. Yes, sir.
Respondent is estopped to deny that she herself
acted as agent of a certain Arsenio Pua, her
disclosed principal. She is also estopped to deny
that petitioner acted as agent for the alleged
debtors, the friends whom she (petitioner) referred.
witness:
a. Yes, sir.
Atty. Villacorta:
witness:
witness:
xxxx
a. Yes, sir.
Atty. Villacorta:
Atty. Villacorta:
q. So that occasion lasted for more than a
year?
PABLITO
MURAO
and
NELIO
HUERTAZUELA, petitioners,.
vs.
PEOPLE OF THE PHILIPPINES, respondent.
DECISION
CHICO-NAZARIO, J.:
In this Petition for Review on Certiorari under Rule
45 of the Rules of Court, petitioners pray for the
reversal of the Decision of the Court of Appeals in
CA-G.R.
CR
No.
21134,
dated
31
May
1999,1 affirming with modification the Judgment of
the Regional Trial Court (RTC) of Puerto Princesa
City, Palawan, in Criminal Case No. 11943, dated
05 May 1997,2 finding petitioners guilty beyond
reasonable doubt of the crime of estafa under
Article 315(1)(b) of the Revised Penal Code.
Petitioner Pablito Murao is the sole owner of Lorna
Murao Industrial Commercial Enterprises (LMICE), a
company engaged in the business of selling and
refilling fire extinguishers, with branches in
Palawan, Naga, Legaspi, Mindoro, Aurora, Quezon,
Isabela, and Laguna. Petitioner Nelio Huertazuela is
the Branch Manager of LMICE in Puerto Princesa
City, Palawan.3
On 01 September 1994, petitioner Murao and
private complainant Chito Federico entered into a
Dealership
Agreement
for
the
marketing,
distribution, and refilling of fire extinguishers within
Puerto Princesa City.4 According to the Dealership
Agreement, private complainant Federico, as a
dealer for LMICE, could obtain fire extinguishers
from LMICE at a 50% discount, provided that he
sets up his own sales force, acquires and issues his
own sales invoice, and posts a bond with LMICE as
security for the credit line extended to him by
LMICE. Failing to comply with the conditions under
the
said
Dealership
Agreement,
private
complainant Federico, nonetheless, was still
allowed to act as a part-time sales agent for LMICE
entitled to a percentage commission from the sales
of fire extinguishers.5
or
WITHOUT
fees
SHOPPERS
PARADISE
REALTY
&
DEVELOPMENT
CORPORATION, petitioner,
vs.
EFREN P. ROQUE, respondent.
DECISION
VITUG, J.:
On 23 December 1993, petitioner Shoppers
Paradise Realty & Development Corporation,
represented by its president, Veredigno Atienza,
entered into a twenty-five year lease with Dr. Felipe
C. Roque, now deceased, over a parcel of land, with
an area of two thousand and thirty six (2,036)
square meters, situated at Plaza Novaliches,
Quezon City, covered by Transfer of Certificate of
Title (TCT) No. 30591 of the Register of Deeds of
Quezon City in the name of Dr. Roque. Petitioner
issued to Dr. Roque a check for P250,000.00 by
way of "reservation payment." Simultaneously,
petitioner and Dr. Roque likewise entered into a
memorandum of agreement for the construction,
development and operation of a commercial
building complex on the property. Conformably with
the agreement, petitioner issued a check for
another P250,000.00 "downpayment" to Dr. Roque.
The contract of lease and the memorandum of
agreement, both notarized, were to be annotated
on TCT No. 30591 within sixty (60) days from 23
December 1993 or until 23 February 1994. The
annotations, however, were never made because of
the untimely demise of Dr. Felipe C. Roque. The
death of Dr. Roque on 10 February 1994
constrained petitioner to deal with respondent
Efren P. Roque, one of the surviving children of the
late Dr. Roque, but the negotiations broke down
due to some disagreements. In a letter, dated 3
November 1994, respondent advised petitioner "to
desist from any attempt to enforce the
aforementioned
contract
of
lease
and
memorandum of agreement". On 15 February
1995, respondent filed a case for annulment of the
contract of lease and the memorandum of
agreement, with a prayer for the issuance of a
preliminary injunction, before Branch 222 of the
Regional Trial Court of Quezon City. Efren P. Roque
"A. By inheritance.
"Q. Inheritance in the form of donation?
"A. I mean inheritance.
"Q. What I am only asking you is, were you
told by Dr. Felipe C. Roque at the time of
your transaction with him that all these
three properties were given to his children
by way of donation?
"A. What Architect Biglang-awa told us in
his exact word: "Yang mga yan pupunta sa
mga anak. Yong kay Ruben pupunta kay
Ruben. Yong kay Efren palibhasa nasa
America sya, nasa pangalan pa ni Dr.
Felipe C. Roque."
"x x x
xxx
xxx
September 9, 2004
brevity,
business
airplane,
from the
to the
US$59,798.22 x x x or
its equivalent in legal
tender with interest at
the legal rate from May
1997 until full payment;
2)
Ordering
the
[petitioner] to pay the
[respondent]
further
sum of US$6,513.00 or
its equivalent in legal
tender as intermediarys
commission;
3)
Ordering
the
[petitioner] to pay the
[respondent]
another
sum of US$13,026.00 or
its equivalent in legal
tender
as
actual
damages in the form of
attorneys fees;
4)
Ordering
the
[petitioner] to pay the
[respondent] expenses
of litigation as can be
proved;
5)
Ordering
the
[petitioner] to pay the
costs of the suit; and,
9. On 6 November 1997, we
received
a
letter
from
[respondent]
demanding
payment of $65,131.00 allegedly
for the ferry flight services
rendered
by
Universal
and
brokered by [respondent].
16.
Thus,
[petitioner]
was
surprised when [respondent] filed
the instant complaint[,] for[,] as
far
as
the
former
[was]
concerned[,] the accounting of
the claim was nowhere near
definite nor clear[.]
6) [Respondent] prays
for such further or other
relief as may be deemed
just or equitable.
13.
[Petitioner]
verbally
requested [respondent] to further
substantiate its claim by sending
their accountants to the offices of
APC[.]
of
its
as
3. [P]50,000.00 as and
for attorneys fees; and,
Costs of suit.
SO ORDERED.
"The [petitioner] filed a Motion for New
Trial on the grounds that: (a) it was
deprived of its day in court due to the
gross negligence of its former counsel,
Atty. Manolito A. Manalo; (b) the
Receipt/Agreement executed by Atty.
Manolito A. Manalo, in behalf of the
[petitioner], was unauthorized as there
was no Resolution of the Board of
Directors authorizing him to execute said
Receipt/Agreement and, hence, said
counsel acted beyond the scope of his
authority; (c) the claim of IBASPI was
excessive and unjustified; [and] (d) the
[petitioner] never agreed to pay the
[respondent] a commission of 10% of the
billings of UWAI.
"On July 26, 1999, the Court issued a
Resolution denying the Motion for
New Trial of the [petitioner]. The latter
forthwith interposed its appeal, from said
Decision and Resolution of the Court a
quo."5
Ruling of the Court of Appeals
Affirming the Decision of the lower court with some
modification, the CA ruled that under the Rules of
Civil Procedure, petitioner could not avail itself of a
new trial, because its former counsel was guilty of
only simple -- not gross -- negligence. In addition,
petitioner, being equally negligent as its counsel,
could notbe relieved from the effects of its
negligence. Thus, it was held liable for
US$59,798.22 and attorneys fees, but not for the
10 percent commission or brokers fee, for which
the requisite quantum of evidence in its favor had
not been mustered by respondent.
Hence this Petition.6
The Issues
Petitioner submits the following issues for our
consideration:
by
Simple
supposed to
petitioner.
be
known
and
assented
to
by
per
Receipt/Agreement
and
Interest
or
location
plan
furnished
by
the
Owner/Seller to the buyer. Furthermore, in
the event that the right of way is
insufficient for the buyer's purposes
(example: entry of a 45-foot container),
the seller agrees to sell additional square
meter from his current adjacent property
to allow the buyer to full access and full
use of the property.5
Roxas indicated his acceptance of the offer on page
2 of the deed. Less than a month later or on July 1,
1991, Roxas, as President of RECCI, as vendor, and
Dy, as President of WHI, as vendee, executed a
contract to sell in which RECCI bound and obliged
itself to sell to Dy Lot No. 491-A-3-B-2 covered by
TCT No. 78086 for P7,213,000. 6 On September 5,
1991, a Deed of Absolute Sale 7 in favor of WHI was
issued, under which Lot No. 491-A-3-B-2 covered by
TCT No. 78086 was sold for P5,000,000, receipt of
which was acknowledged by Roxas under the
following terms and conditions:
The Vendor agree (sic), as it hereby
agrees and binds itself to give Vendee the
beneficial use of and a right of way from
Sumulong Highway to the property herein
conveyed consists of 25 square meters
wide to be used as the latter's egress from
and ingress to and an additional 25 square
meters in the corner of Lot No. 491-A-3-B1, as turning and/or maneuvering area for
Vendee's vehicles.
The Vendor agrees that in the event that
the right of way is insufficient for the
Vendee's use (ex entry of a 45-foot
container) the Vendor agrees to sell
additional square meters from its current
adjacent property to allow the Vendee full
access and full use of the property.
February 6, 2002
DOMINION
INSURANCE
CORPORATION, petitioner,
vs.
COURT OF APPEALS, RODOLFO S. GUEVARRA,
and FERNANDO AUSTRIA, respondents.
DECISION
PARDO, J.:
The Case
This is an appeal via certiorari1 from the decision of
the Court of Appeals2 affirming the decision3 of the
Regional Trial Court, Branch 44, San Fernando,
Pampanga, which ordered petitioner Dominion
Insurance Corporation (Dominion) to pay Rodolfo S.
Guevarra
(Guevarra)
the
sum
of
P156,473.90 representing
the
total
amount
advanced by Guevarra in the payment of the
claims of Dominions clients.
The Facts
The facts, as found by the Court of Appeals, are as
follows:
"On January 25, 1991, plaintiff Rodolfo S. Guevarra
instituted Civil Case No. 8855 for sum of money
against defendant Dominion Insurance Corporation.
Plaintiff sought to recover thereunder the sum of
P156,473.90 which he claimed to have advanced in
his capacity as manager of defendant to satisfy
certain claims filed by defendants clients.
"In its traverse, defendant denied any liability to
plaintiff
and
asserted
a
counterclaim
for
P249,672.53, representing premiums that plaintiff
allegedly failed to remit.
"On August 8, 1991, defendant filed a third-party
complaint against Fernando Austria, who, at the
time relevant to the case, was its Regional Manager
for Central Luzon area.
"SO ORDERED.
"On May 22, 1992 the case was again called for
pre-trial conference. Only plaintiff and counsel were
present. Despite due notice, defendant and counsel
did not appear, although a messenger, Roy
Gamboa, submitted to the trial court a handwritten
note sent to him by defendants counsel which
instructed him to request for postponement.
Plaintiffs counsel objected to the desired
postponement and moved to have defendant
declared as in default. This was granted by the trial
court in the following order:
"ORDER
"When this case was called for pre-trial this
afternoon only plaintiff and his counsel Atty. Romeo
Maglalang appeared. When shown a note dated
May 21, 1992 addressed to a certain Roy who was
requested to ask for postponement, Atty. Maglalang
vigorously objected to any postponement on the
ground that the note is but a mere scrap of paper
and moved that the defendant corporation be
declared as in default for its failure to appear in
court despite due notice.
"Finding the verbal motion of plaintiffs counsel to
be meritorious and considering that the pre-trial
conference has been repeatedly postponed on
motion of the defendant Corporation, the
defendant Dominion Insurance Corporation is
hereby declared (as) in default and plaintiff is
allowed to present his evidence on June 16, 1992 at
9:00 oclock in the morning.
The Issues
The issues raised are: (1) whether respondent
Guevarra acted within his authority as agent for
petitioner, and (2) whether respondent Guevarra is
entitled to reimbursement of amounts he paid out
of his personal money in settling the claims of
several insured.
The Court's Ruling
The petition is without merit.
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.10 The basis for
agency is representation.11 On the part of the
principal, there must be an actual intention to
appoint12 or an intention naturally inferrable from
his words or actions;13 and on the part of the agent,
there must be an intention to accept the
appointment and act on it,14 and in the absence of
such intent, there is generally no agency.15
xxx
xxx
xxx
xxx
xxx
given
you on
TPPI
x x x "24
C.
AUSTRIA
[Emphasis supplied]
The instruction of petitioner as the principal could
not be any clearer.1wphi1 Respondent Guevarra
was authorized to pay the claim of the insured, but
the payment shall come from the revolving fund or
collection in his possession.
Having deviated from the instructions of the
principal, the expenses that respondent Guevarra
incurred in the settlement of the claims of the
insured may not be reimbursed from petitioner
Dominion. This conclusion is in accord with Article
1918, Civil Code, which states that:
"The principal is not liable for the expenses
incurred by the agent in the following cases:
"(1) If the agent acted in contravention of
the principals instructions, unless the
latter should wish to avail himself of the
benefits derived from the contract;
"xxx
xxx
xxx"
The Fallo
second
paragraph,
Civil
Code,
In
its
Answer
with
Compulsory
Counterclaim,10 respondent averred that, contrary
to petitioners allegations, the SPA in favor of Julian
included the subject property, covered by one of
the titles specified in paragraph 1(b) thereof, TCT
No. RT- 106338 registered with the Registry of
Deeds of Pasig (now Makati). The subject property
was purportedly registered previously under TCT
No. T-106338, and was only subsequently
reconstituted as TCT RT-18206 (106338). Moreover,
TCT No. T-106338 was actually registered with the
Registry of Deeds of Quezon City and not before
the Registry of Deeds of Pasig (now Makati).
Respondent explained that the discrepancy in the
designation of the Registry of Deeds in the SPA was
merely an error that must not prevail over the clear
intention of Perla to include the subject property in
the said SPA. In sum, the property referred to in the
SPA Perla executed in favor of Julian as covered by
TCT No. 106338 of the Registry of Deeds of Pasig
(now Makati) and the subject property in the case
at bar, covered by RT 18206 (106338) of the
Registry of Deeds of Quezon City, are one and the
same.
adverse
unenforceable
authority.
for
having
been
done
without
PARAS, J.:p
This is a petition for review on certiorari which
seeks to reverse and set aside (1) the decision of
the Court of Appeals dated July 21, 1987 in CA-G.R.
No. CV-06522 entitled "B.A. Finance Corporation,
Plaintiff-Appellant, vs. Manuel Cuady and Lilia
Cuady,
Defendants-Appellees,"
affirming
the
decision of the Regional Trial Court of Manila,
Branch 43, which dismissed the complaint in Civil
Case No. 82-10478, and (2) the resolution dated
February 9, 1988 denying petitioner's motion for
reconsideration.
As gathered from the records, the facts are as
follows:
On July 15, 1977, private respondents Manuel
Cuady and Lilia Cuady obtained from Supercars,
Inc. a credit of P39,574.80, which amount covered
the cost of one unit of Ford Escort 1300, four-door
sedan. Said obligation was evidenced by a
promissory note executed by private respondents
in favor of Supercars, Inc., obligating themselves to
pay the latter or order the sum of P39,574.80,
inclusive of interest at 14% per annum, payable on
monthly installments of P1,098.00 starting August
16, 1977, and on the 16th day of the next 35
months from September 16, 1977 until full
payment thereof. There was also stipulated a
penalty of P10.00 for every month of late
installment payment. To secure the faithful and
prompt compliance of the obligation under the said
promissory note, the Cuady spouses constituted a
received
a
down
payment
and
monthly
installments as indicated in the contract. 11 Official
receipts showing the application of payment were
turned over to Baluyot whom Atty. Linsangan had
from the beginning allowed to receive the same in
his behalf. Furthermore, whatever misimpression
that Atty. Linsangan may have had must have been
rectified by the Account Updating Arrangement
signed by Atty. Linsangan which states that he
"expressly admits that Contract No. 28660 'on
account of serious delinquencyis now due for
cancellation under its terms and conditions.'''12
The trial court held MMPCI and Baluyot jointly and
severally liable.13 It found that Baluyot was an
agent of MMPCI and that the latter was estopped
from denying this agency, having received and
enchased the checks issued by Atty. Linsangan and
given to it by Baluyot. While MMPCI insisted that
Baluyot was authorized to receive only the down
payment, it allowed her to continue to receive
postdated checks from Atty. Linsangan, which it in
turn consistently encashed.14
The dispositive portion of the decision reads:
WHEREFORE, judgment by preponderance
of evidence is hereby rendered in favor of
plaintiff declaring Contract No. 28660 as
valid
and
subsisting
and
ordering
defendants to perform their undertakings
thereof which covers burial lot No. A11
(15), Block 83, Section Garden I, Holy
Cross
Memorial
Park
located
at
Novaliches, Quezon City. All payments
made by plaintiff to defendants should be
credited for his accounts. NO DAMAGES,
NO ATTORNEY'S FEES but with costs
against the defendants.
The cross claim of defendant Manila
Memorial Cemetery Incorporated
as
against defendant Baluyot is GRANTED up
to the extent of the costs.
SO ORDERED.15
MMPCI appealed the trial court's decision to the
Court of Appeals.16 It claimed that Atty. Linsangan
is bound by the written contract with MMPCI, the
terms of which were clearly set forth therein and
read, understood, and signed by the former. 17 It
also alleged that Atty. Linsangan, a practicing
lawyer for over thirteen (13) years at the time he
entered into the contract, is presumed to know his
contractual obligations and is fully aware that he
cannot belatedly and unilaterally change the terms
of the contract without the consent, much less the
knowledge of the other contracting party, which
was MMPCI. And in this case, MMPCI did not agree
to a change in the contract and in fact
implemented the same pursuant to its clear terms.
SAFIC
ALCAN
&
vs.
IMPERIAL
VEGETABLE
INC., respondent.
contracts,
in
the
aggregate
amount
of
US$391,593.62, despite written demand therefor.
CIE, petitioner,
OIL
CO.,
YNARES-SANTIAGO, J.:
Petitioner Safic Alcan & Cie (hereinafter, "Safic") is
a French corporation engaged in the international
purchase, sale and trading of coconut oil. It filed
with the Regional Trial Court of Manila, Branch XXV,
a complaint dated February 26, 1987 against
private respondent Imperial Vegetable Oil Co., Inc.
(hereinafter, "IVO"), docketed as Civil Case No. 8739597. Petitioner Safic alleged that on July 1, 1986
and September 25, 1986, it placed purchase orders
with IVO for 2,000 long tons of crude coconut oil,
valued at US$222.50 per ton, covered by Purchase
Contract Nos. A601446 and A601655, respectively,
to be delivered within the month of January 1987.
Private respondent, however, failed to deliver the
said coconut oil and, instead, offered a "wash out"
settlement, whereby the coconut oil subject of the
purchase contracts were to be "sold back" to IVO at
the prevailing price in the international market at
the time of wash out. Thus, IVO bound itself to pay
to Safic the difference between the said prevailing
price and the contract price of the 2,000 long tons
of crude coconut oil, which amounted to
US$293,500.00. IVO failed to pay this amount
despite repeated oral and written demands.
Under its second cause of action, Safic alleged that
on eight occasions between April 24, 1986 and
October 31, 1986, it placed purchase orders with
IVO for a total of 4,750 tons of crude coconut oil,
covered by Purchase Contract Nos. A601297A/B,
A601384, A601385, A601391, A601415, A601681,
A601683 and A601770A/B/C/. When IVO failed to
honor its obligation under the wash out settlement
narrated above, Safic demanded that IVO make
marginal deposits within forty-eight hours on the
eight purchase contracts in amounts equivalent to
the difference between the contract price and the
market price of the coconut oil, to compensate it
for the damages it suffered when it was forced to
acquire coconut oil at a higher price. IVO failed to
make the prescribed marginal deposits on the eight
WHEREFORE,
judgment
is
hereby
rendered dismissing the complaint of
plaintiff Safic Alcan & Cie, without
prejudice to
any action it might
subsequently institute against Dominador
Monteverde, the former President of
Imperial Vegetable Oil Co., Inc., arising
from the subject matter of this case. The
counterclaim
and
supplemental
counterclaim of the latter defendant are
likewise hereby dismissed for lack of
merit. No pronouncement as to costs.
The writ of preliminary attachment issued
in this case as well as the order placing
Imperial Vegetable Oil Co., Inc. under
receivership are hereby dissolved and set
aside.3
Both IVO and Safic appealed to the Court of
Appeals, jointly docketed as CA-G.R. CV No.40820.
IVO raised only one assignment of error, viz:
THE TRIAL COURT ERRED IN HOLDING
'I'HAT THE ISSUANCE OF THE WRIT OF
PRELIMINARY ATTACHMENT WAS NOT THE
MAIN CAUSE OF THE DAMAGES SUFFERED
BY DEFENDANT AND IN NOT AWARDING
DEFENDANT-APPELLANT SUCH DAMAGES.
For its part, Safic argued that:
THE TRIAL COURT ERRED IN HOLDING
THAT IVO'S PRESIDENT, DOMINADOR
MONTEVERDE,
ENTERED
INTO
CONTRACTS
WHICH
WERE ULTRA
Atty. Fernando
Court
Witness may answer if he knows.
Court
Why don't you lay the basis?
Witness
A. Trading future[s] contracts
wherein the trader commits a
price and to deliver coconut oil in
the future in which he is yet to
acquire the stocks in the future.
Atty. Abad
Q. Were you a member of the board at the
time?
Atty. Abad
Atty. Fernando
Atty. Abad.
Witness
A. Those were not recorded at all in the
books of accounts of the company, sir.20
xxxxxxxxx
A. Yes, sir.
Q. Do you have a copy of the minutes of
your meeting in 1985?
A. Incidentally our Secretary of the Board
of Directors, Mr. Elfren Sarte, died in 1987
or 1988, and despite [the] request of our
office for us to be furnished a copy he was
not able to furnish us a copy.19
xxxxxxxxx
Atty. Abad
Witness
A. Yes, sir.
Q.
How
far
has
this
Dominador
Monteverde been using the name of I.V.0.
in selling future contracts without the
proper authority and consent of the
company's Board of Directors?
A. Dominador Monteverde never records
those transactions he entered into in
connection with these future[s] contracts
in the company's books of accounts.
Atty. Abad
Q. What do you mean by that the future[s]
contracts were not entered into the books
of accounts of the company?
February 4, 2008
SO ORDERED.4
On appeal, the CA affirmed the trial courts order
and partial decision, but reversed the later
decision. The dispositive portion of its assailed
Decision reads:
WHEREFORE, upon all the foregoing premises
considered, this Court rules:
1. the appeal of the Baloloys from the
Order denying the Petition for Relief from
Judgment and Orders dated July 4, 1994
and Supplemental Petition dated July 7,
1994 is DISMISSED. The Order appealed
from is AFFIRMED.
WARRANTING
THEREOF.
THE
CANCELLATION
I
Petitioners argue, as follows:
THE HONORABLE COURT OF APPEALS ERRED IN
DENYING THE PETITION FOR RELIEF FROM
JUDGMENT FILED BY THE BALOLOYS.
II
SO ORDERED.
Faustino
Mercado,
through
a
ComplaintAffidavit18 against private respondents before the
Office of the Ombudsman which was docketed as
OMB-1-94-3425 entitled Antonio B. Baltazar v.
Eulogio Mariano, Jose Jimenez, Jr., Toribio Ilao, Jr.
and Ernesto Salenga for violation of RA 3019.
Petitioner
charged
private
respondents
of
conspiracy through the issuance of the TRO in
allowing respondent Salenga to retain possession
of the fishpond, operate it, harvest the produce,
and keep the sales under the safekeeping of other
private
respondents.
Moreover,
petitioner
maintains that respondent Ilao, Jr. had no
jurisdiction to hear and act on DARAB Case No.
552-P93 filed by respondent Salenga as there was
no tenancy relation between respondent Salenga
and Rafael L. Lopez, and thus, the complaint was
dismissible on its face.
Through the December 14, 1994 Order, 19 the
Ombudsman required private respondents to file
their
counter-affidavits,
affidavits
of
their
witnesses, and other controverting evidence. While
the other respondents submitted their counteraffidavits, respondent Ilao, Jr. instead filed his
February 9, 1995 motion to dismiss, February 21,
1995 Reply, and March 24, 1995 Rejoinder.
Ombudsmans Determination of Probable
Cause
On May 10, 1996, the Ombudsman issued a
Resolution20 finding cause to bring respondents to
court, denying the motion to dismiss of respondent
Ilao, Jr., and recommending the filing of an
Information for violation of Section 3 (e) of RA
3019. Subsequently, respondent Ilao, Jr. filed his
September 16, 1996 Motion for Reconsideration
and/or Re-investigation21 which was denied through
the October 3, 1996 Order.22Consequently, the
March 17, 1997 Information23 was filed against all
the private respondents before the Sandiganbayan
which was docketed as Criminal Case No. 23661.
Before the graft court, respondent Ilao, Jr. filed his
May 19, 1997 Motion for Reconsideration and/or
Re-investigation which was granted through the
August 29, 1997 Order.24 On September 8, 1997,
respondent Ilao, Jr. subsequently filed his CounterAffidavit25 with attachments while petitioner did not
file any reply-affidavit despite notice to him. The
OSP of the Ombudsman conducted the reinvestigation; and the result of the re-investigation
was embodied in the assailed November 26, 1997
Order26 which recommended the dismissal of the
complaint in OMB-1-94-3425 against all private
respondents. Upon review, the Ombudsman
approved the OSPs recommendation on August 21,
1998.
Petitioners
Motion
for
Reconsideration27 was
likewise denied by the OSP through the October 30,
VIRGIE
SERONA, petitioner,
vs.
HON. COURT OF APPEALS and THE PEOPLE OF
THE PHILIPPINES, respondents.
DECISION
YNARES-SANTIAGO, J.:
During the period from July 1992 to September
1992, Leonida Quilatan delivered pieces of jewelry
to petitioner Virgie Serona to be sold on
commission basis. By oral agreement of the
parties, petitioner shall remit payment or return the
pieces of jewelry if not sold to Quilatan, both within
30 days from receipt of the items.
Upon petitioners failure to pay on September 24,
1992, Quilatan required her to execute an
acknowledgment receipt (Exhibit B) indicating their
agreement and the total amount due, to wit:
Ako, si Virginia Serona, nakatira sa Mother Earth
Subd., Las Pinas, ay kumuha ng mga alahas kay
Gng. Leonida Quilatan na may kabuohang halaga
na
P567,750.00
para
ipagbili
para
ako
magkakomisyon at ibibigay ang benta kung
mabibili o ibabalik sa kanya ang mga nasabing
alahas kung hindi mabibili sa loob ng 30 araw.
Las Pinas, September 24, 1992.1
The receipt was signed by petitioner and a witness,
Rufina G. Navarette.
Unknown to Quilatan, petitioner had earlier
entrusted the jewelry to one Marichu Labrador for
the latter to sell on commission basis. Petitioner
was not able to collect payment from Labrador,
which caused her to likewise fail to pay her
obligation to Quilatan.
Subsequently, Quilatan, through counsel, sent a
formal letter of demand2 to petitioner for failure to
settle her obligation. Quilatan executed a
complaint affidavit3 against petitioner before the
GANCAYCO, J.:
Section 2, Rule 1 of the Rules of Court provides for
the basic rule of thumb that said "rules shall be
liberally construed in order to promote its objective
and to assist the parties in obtaining just, speedy,
and inexpensive determination of every action and
proceeding." Its application is put into test in the
present case.
The antecedent facts are undisputed. Private
respondent
filed
a complaint for
specific
performance and damages against petitioner dated
April 11, 1980 in the Court of First Instance of
Misamis Oriental, docketed as Civil Case No. 7072.
After receipt of service of summons petitioner filed
an
answer
with
counterclaim
within
the
reglementary period.
The case was set for pre-trial conference on August
5, 1980 of which the parties and their counsel were
duly notified. At said pre-trial conference petitioner
was represented by Atty. Arturo A. Magallanes who
presented a special power of attorney executed by
Bernardito R. Pulvera, regional branch manager of
petitioner for Mindanao and Visayas, authorizing
said counsel to represent petitioner at the pre-trial
conference, to enter into any amicable settlement
and to do such other acts as may be necessary to
THIRD
[G.R.
DIVISION
No.
82978.
November
22,
1990.]
S.
Talingcos,
for Petitioners.
DECISION
FERNAN, J.:
argument
is
devoid
of
merit.
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
commencemen
t of carriage.
Carrier
may
refuse
transportation
if the applicable
fare has not
been paid. 6
. . . on March
23, 1990, he
was aware of
the risk that his
ticket
could
expire, as it did,
before
he
returned to the
Philippines.'
(pp.
320-321,
Original
Records) 8
(TSN,
Testimony
of
Nicholas
Cervantes,
August 2, 1991,
pp.
20-23).
Despite
this
knowledge,
appellant
persisted to use
the ticket in
question." 9
and
in
my
capacity
as
o
f SIREDY ENTERPRISE, INCORPORATED
P
1978, Yanga
of Authority,
RINCIPAL
On October 15, 1978, Santos entered into a
Deed of Agreement[10] with De Guzman. The deed
expressly stated that Santos was representing
Siredy Enterprises, Inc. Private respondent was
referred to as contractor while petitioner Siredy
was cited as principal.
In said Deed of Agreement we find the
following stipulations:
1.) That, the PRINCIPAL has contracts
with
different
SSS
members
employed with different domestic
entities to build for them 2-bedroom
single housing units and 4-bedroom
duplex housing units;
In
its
defense,
petitioner
presented
testimonial evidence to the effect that Siredy had
no contract with De Guzman and had not
authorized Santos to enter into a contract with
anyone for the construction of housing units at
Ysmael Village.
SO ORDERED.[14]
On appeal, De Guzman obtained a favorable
judgment from the Court of Appeals. The appellate
court held that the Letter of Authority duly signed
by Yanga clearly constituted Santos as Siredys
agent,[15] whose authority included entering into a
contract for the building of housing units at Ysmael
Village. Consequently, Siredy cannot deny liability
for the Deed of Agreement with private respondent
De Guzman, since the same contract was entered
into
by
Siredys
duly
designated
agent,
Santos. There was no need for Yanga himself to be
a signatory to the contract, for him and Siredy to
be bound by the terms thereof.
Hence, the Court of Appeals held:
WHEREFORE, We find merit in the appeal and We
hereby REVERSE the appealed Decision. In its
stead, we render the following verdict: Appellee
Siredy Enterprises. Inc. is ordered to pay appellant
Conrado de Guzman cost (sic) and P412,154.93 as
actual damage plus legal interest thereon from the
filing of the Complaint on July 29, 1982 until full
payment
thereof.
All
other
claims
and
counterclaims are dismissed.
SO ORDERED.[16]
I. RESPONDENT
COURT
ERRED
IN
HOLDING THAT A VALID AGENCY WAS
CONSTITUTED DESPITE THE FACT
THAT
PETITIONER
WAS
NOT
INVOLVED IN THE CONSTRUCTION
BUSINESS;
II. RESPONDENT
COURT
ERRED
IN
FAILING TO CONSIDER A VITAL
PROVISION
IN
THE
DEED
OF
AGREEMENT (PAR. 8), WHEN IT
RENDERED ITS DECISION; and
III. RESPONDENT COURT ERRED IN
FAILING TO CONSIDER THAT PRIVATE
RESPONDENT WAS NOT ENTITLED TO
HIS CLAIM AS HE WAS THE PARTY
WHO VIOLATED THE CONTRACT.[18]
We find two main issues presented for
resolution: First, whether or not Hermogenes B.
Santos was a duly constituted agent of Siredy, with
authority to enter into contracts for the
construction of residential units in Ysmael Village
and thus the capacity to bind Siredy to the Deed of
Agreement; and Second, assuming arguendo that
Siredy was bound by the acts of Santos, whether or
not under the terms of the Deed of Agreement,
Siredy can be held liable for the amount sought to
be collected by private respondent De Guzman.
By the relationship of agency, one party
called the principal authorizes another called the
agent to act for and in his behalf in transactions
with third persons. The authority of the agent to act
emanates from the powers granted to him by his
principal; his act is the act of the principal if done
within the scope of the authority. He who acts
through another acts himself.[19]
Was Santos then an agent of Siredy? Was he
acting within the scope of his authority?
Resolution of the first issue necessitates a
review of the Letter of Authority executed by
Ismael E. Yanga as president of Siredy in favor of
Santos. Within its terms can be found the nature
and extent of the authority granted to Santos
which, in turn, determines the extent of Siredys
participation in the Deed of Agreement.
On its face, the instrument executed by Yanga
clearly and unequivocally constituted Santos to do
and execute, among other things, the act of
[25]
Such
an
argument
deserves
scant
consideration. As found by the Court of Appeals,
being a doctor of medicine and a businessman,
Yanga knew the meaning and import of this
document and had in fact admitted having signed
it. As aptly observed by the Court of Appeals, there
is no evidence that ante litem, he abrogated the
Letter of Authority and withdrew the power
conferred on Santos.
SO ORDERED.
His motion for reconsideration having been denied
in the resolution of respondent Court on 27 October
1988, 3petitioner filed the instant appeal by
certiorari under Rule 45 of the Rules of Court urging
Us to annul and set aside the aforesaid decision
and
resolution
because
respondent
Court
committed the following errors which are the
very errors he ascribed to the trial court: (a) in not
holding that petitioner is not a signatory to the
credit application card attached as Annex "A" of
private
respondent's
complaint
as
clearly
evidenced by the fact that only the signatures
of Me Cruz and Marilou Cruz, who are not
impleaded as party defendants, appear therein; (b)
in not holding that his signature does not appear in
the invoices submitted by private respondent; (c) in
not holding that he did not receive the letters of
demand; (d) in not finding and concluding that
private respondent failed to comply with the Order
of the trial court to amend the complaint; and (e) in
denying his motion for reconsideration.
show
the
CRUZ, J.:
This case, for all its seeming complexity, turns on a
simple question of negligence. The facts, pruned of
all non-essentials, are easily told.
The Metropolitan Bank and Trust Co. is a
commercial bank with branches throughout the
Philippines and even abroad. Golden Savings and
Loan Association was, at the time these events
happened, operating in Calapan, Mindoro, with the
other private respondents as its principal officers.
In January 1979, a certain Eduardo Gomez opened
an account with Golden Savings and deposited
over a period of two months 38 treasury warrants
with a total value of P1,755,228.37. They were all
drawn by the Philippine Fish Marketing Authority
and purportedly signed by its General Manager and
countersigned by its Auditor. Six of these were
directly payable to Gomez while the others
appeared to have been indorsed by their respective
payees, followed by Gomez as second indorser. 1
On various dates between June 25 and July 16,
1979, all these warrants were subsequently
indorsed by Gloria Castillo as Cashier of Golden
Savings and deposited to its Savings Account No.
2498 in the Metrobank branch in Calapan, Mindoro.
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. 2
More than two weeks after the deposits, Gloria
Castillo went to the Calapan branch several times
to ask whether the warrants had been cleared. She
was told to wait. Accordingly, Gomez was
meanwhile not allowed to withdraw from his
account. Later, however, "exasperated" over
Gloria's repeated inquiries and also as an
accommodation for a "valued client," the petitioner
says it finally decided to allow Golden Savings to
withdraw
from
the
proceeds
of
the
warrants. 3
to insufficiency
of
funds,
forgery,
unauthorized overdraft or any other
reason. (Emphasis supplied.)
According to Metrobank, the said conditions clearly
show that it was acting only as a collecting agent
for Golden Savings and give it the right to "charge
back to the depositor's account any amount
previously credited, whether or not such item is
returned. This also applies to checks ". . . which are
unpaid due to insufficiency of funds, forgery,
unauthorized overdraft of any other reason." It is
claimed that the said conditions are in the nature
of contractual stipulations and became binding on
Golden Savings when Gloria Castillo, as its Cashier,
signed the deposit slips.
Doubt may be expressed about the binding force of
the conditions, considering that they have
apparently been imposed by the bank unilaterally,
without the consent of the depositor. Indeed, it
could be argued that the depositor, in signing the
deposit slip, does so only to identify himself and
not to agree to the conditions set forth in the given
permit at the back of the deposit slip. We do not
have to rule on this matter at this time. At any rate,
the Court feels that even if the deposit slip were
considered a contract, the petitioner could still not
validly disclaim responsibility thereunder in the
light of the circumstances of this case.
In stressing that it was acting only as a collecting
agent for Golden Savings, Metrobank seems to be
suggesting that as a mere agent it cannot be liable
to the principal. This is not exactly true. On the
contrary, Article 1909 of the Civil Code clearly
provides that
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.
The negligence of Metrobank has been sufficiently
established. To repeat for emphasis, it was the
clearance given by it that assured Golden Savings
it was already safe to allow Gomez to withdraw the
proceeds of the treasury warrants he had deposited
Metrobank misled Golden Savings. There may have
been no express clearance, as Metrobank insists
(although this is refuted by Golden Savings) but in
any case that clearance could be implied from its
allowing Golden Savings to withdraw from its
account not only once or even twice but three
times. The total withdrawal was in excess of its
original balance before the treasury warrants were
deposited, which only added to its belief that the
treasury warrants had indeed been cleared.
Metrobank's argument that it may recover the
disputed amount if the warrants are not paid for
CRUZ, J.:p
The basic issue before us is the capacity in which
petitioner Sylvia H. Bedia entered into the subject
contract with private respondent Emily A. White.
Both the trial court and the respondent court held
she was acting in her own personal behalf. She
faults this finding as reversible error and insists
that she was merely acting as an agent.
The case arose when Bedia and White entered into
a Participation Contract 1 reading in full as follows:
THE STATE FAIR OF TEXAS '80
PARTICIPATION CONTRACT
PARTICIPANT (COMPANY
EMILY
ENTERPRISES
NAME)
WHITE
I/We,
the
abovementioned
company
hereby
agrees
to
participate in the 1980 Dallas
State Fair to be held in Dallas,
Texas on October 3, to October
19,1980. I/We request for a 15
square meter booth space worth
$2,250.00 U.S. Dollars.
I/We further understand that this
participation contract shall be
deemed non-cancellable after
payment of the said down
PARTICIPATION
SIGNATURE:
their common
allegation.
counsel,
as
as
moral
exemplary
IV
Respondent Court of Appeals has
decided a question of substance
contrary to law and applicable
decision of the Supreme Court
when it refused to award
damages in favor of herein
Petitioner-Appellants.
It is petitioner-insured's submission that the
fraudulent act of Malapit, manager of respondent
insurance company's branch office in Baguio, in
misappropriating his premium payments is the
proximate cause of the cancellation of the
insurance policy. Petitioner-insured theorized that
Malapit's act of signing and even sending the
notice of cancellation himself, notwithstanding his
personal knowledge of petitioner-insured's full
payment of premiums, further reinforces the
allegation of bad faith. Such fraudulent act
committed by Malapit, argued petitioner-insured, is
attributable to respondent insurance company, an
artificial corporate being which can act only
through its officers or employees. Malapit's
actuation, concludes petitioner-insured, is therefore
not separate and distinct from that of respondentinsurance company, contrary to the view held by
the Court of Appeals. It must, therefore, bear the
consequences of the erroneous cancellation of
subject insurance policy caused by the nonremittance by its own employee of the premiums
paid. Subsequent reinstatement, according to
petitioner-insured, could not possibly absolve
respondent insurance company from liability, there
being an obvious breach of contract. After all,
reasoned out petitioner-insured, damage had
already been inflicted on him and no amount of
rectification could remedy the same.
Respondent insurance company, on the other hand,
argues that where reinstatement, the equitable
relief sought by petitioner-insured was granted at
an opportune moment, i.e. prior to the filing of the
complaint, petitioner-insured is left without a cause
of action on which to predicate his claim for
We
uphold
petitioner-insured's
submission.
Malapit's fraudulent act of misappropriating the
premiums paid by petitioner-insured is beyond
doubt directly imputable to respondent insurance
company. A corporation, such as respondent
insurance company, acts solely thru its employees.
The latters' acts are considered as its own for
which it can be held to account. 11 The facts are
clear as to the relationship between private
respondent insurance company and Malapit. As
admitted by private respondent insurance company
in its answer, 12 Malapit was the manager of its
Baguio branch. It is beyond doubt that he
represented its interest and acted in its behalf. His
act of receiving the premiums collected is well
within the province of his authority. Thus, his
receipt of said premiums is receipt by private
respondent insurance company who, by provision
of law, particularly under Article 1910 of the Civil
Code, is bound by the acts of its agent.
Article 1910 thus reads:
Art. 1910. The principal must
comply with all the obligations
which the agent may have
contracted within the scope of his
authority.
As for any obligation wherein the
agent has exceeded his power,
the principal is not bound except
when he ratifies it expressly or
tacitly.
Malapit's failure to remit the premiums he received
cannot constitute a defense for private respondent
insurance company; no exoneration from liability
could result therefrom. The fact that private
respondent
insurance
company
was
itself
defrauded due to the anomalies that took place in
its Baguio branch office, such as the non-accrual of
said premiums to its account, does not free the
same from its obligation to petitioner Areola. As
4. Costs.
SO ORDERED.35
The RTC upheld all the allegations of petitioners
and concluded that Amalia never instructed
Citibank to invest the money in an LTCP. Thus, the
RTC found Citibank in violation of its contractual
and fiduciary duties and held it liable to return the
money invested by petitioners plus damages.
Respondent appealed to the CA.
On appeal, in its Decision promulgated on May 28,
2002, the CA reversed the Decision of the RTC,
thus:
WHEREFORE, premises considered, the assailed
decision dated 16 February 2000 is REVERSED and
SET ASIDE and a new one entered DISMISSING Civil
Case No. 99-500.36
The CA held that with respect to the amount of
PhP2,134,635.87, the account opened by Amalia
was an investment management account; as a
result, the money invested was the sole and
exclusive obligation of C&P Homes, the issuer of
the LTCP, and was not guaranteed or insured by
herein respondent Citibank;37 that Amalia opened
such an account as evidenced by the documents
she executed with Citibank, namely, the Directional
Investment Management Agreement (DIMA), Term
Investment Application (TIA), and Directional
Letter/Specific Instructions, which were all dated
November 28, 1997, the day Amalia brought the
money to Citibank. Further, the CA brushed aside
petitioners' arguments that Amalia failed to
understand the true nature of the LTCP investment,
and that she failed to read the documents as they
were written in fine print. The CA ruled that
petitioners could not seek the court's aid to
extricate them from their contractual obligations.
Citing jurisprudence, the CA held that the courts
protected only those who were innocent victims of
fraud, and not those who simply made bad
bargains or exercised unwise judgment.
On petitioners' motion for reconsideration, the CA
reiterated its ruling and denied the motion in a
Resolution38dated December 11, 2002.
Thus, the instant petition which raises issues,
summarized as follows: (1) whether petitioners are
bound by the terms and conditions of the
Directional Investment Management Agreement
(DIMA), Term
Investment
Application
(TIA),
Directional
Letter/Specific
Instructions,
and
Confirmations of Investment (COIs); (2) and
whether petitioners are entitled to take back the
money they invested from respondent bank; or
stated differently, whether respondent is obliged to
return the money to petitioners upon their demand
prior to maturity.
Petitioners contend that they are not bound by the
terms and conditions of the DIMA, Directional Letter
REPRICEABLE
EVERY 91 DAYS
PURSUANT
TO
THE
BANGKO
SENTRAL
REGULATIONS, THE PRINCIPAL AND INTEREST OF
YOUR INVESTMENT ARE OBLIGATIONS OF THE
BORROWER AND NOT OF THE BANK. YOUR
INVESTMENT IS NOT A DEPOSIT AND IS NOT
GUARANTEED BY CITIBANK N.A.
xxxx
Please examine this Confirmation and notify us in
writing within seven (7) days from receipt hereof of
any deviation from your prior conformity to the
investment. If no notice is received by us within
this period, this Confirmation shall be deemed
correct and approved by you, and we shall be
released and discharged as to all items, particulars,
matters and things set forth in this Confirmation.51
Petitioners admit receiving only the first COI on
December 8, 1997.52 The evidence on record,
however, supports respondent's contentions that
petitioners received the three other COIs on
February 12, 1998,53 May 14, 1998,54and August 14,
1998,55 before petitioners' first demand letter dated
August 18, 1998.56
The DIMA, Directional Letter, TIA and COIs, read
together, establish the agreement between the
parties as an investment management agreement,
which created a principal-agent relationship
between petitioners as principals and respondent
as agent for investment purposes. The agreement
is not a trust or an ordinary bank deposit; hence,
no trustor-trustee-beneficiary or even borrowerlender relationship existed between petitioners and
respondent with respect to the DIMA account.
Respondent purchased the LTCPs only as agent of
petitioners; thus, the latter assumed all obligations
or inherent risks entailed by the transaction under
Article 1910 of the Civil Code, which provides:
Article 1910. The principal must comply with all the
obligations which the agent may have contracted
within the scope of his authority.
As for any obligation wherein the agent has
exceeded his power, the principal is not bound
except when he ratifies it expressly or tacitly.
The transaction is perfectly legal, as investment
management activities may be exercised by a
banking institution, pursuant to Republic Act No.
337 or the General Banking Act of 1948, as
amended,
which
was
the
law
then
in
effect.1avvphi1 Section 72 of said Act provides:
Sec. 72. In addition to the operations specifically
authorized elsewhere in this Act, banking
institutions
other than
building
and
loan
associations may perform the following services:
(a) Receive in custody funds, documents,
and valuable objects, and rent safety
OTHERS
and
estates,
executorship,
receivership,
and
other
similar
services which do not create or result
in a trusteeship. It shall exclude
collecting
or
paying
agency
arrangements and similar fiduciary
services which are inherent in the use
of the facilities of the other operating
departments
of
said
bank.
Investment management activities,
which are considered as among other
fiduciary
business,
shall
be
separately defined in the succeeding
item to highlight its being a major
source of fiduciary business.
c. Investment management activity
shall refer to any activity resulting
from
a
contract
or
agreement
primarily for financial return whereby
the bank (the investment manager)
binds itself to handle or manage
investible funds or any investment
portfolio in a representative capacity
as financial or managing agent,
adviser, consultant or administrator
of
financial
or
investment
management, advisory, consultancy
or any similar arrangement which
does not create or result in a
trusteeship.(Emphasis supplied.)
The Court finds no proof to sustain petitioners'
contention that the DIMA and Directional Letter
contradict other papers on record, or were signed
in
blank,
or
had
unauthorized
intercalations.59 Petitioners themselves admit that
Amalia signed the DIMA and the Directional Letter,
which bars them from disowning the contract on
the belated claim that she signed it in blank or did
not read it first because of the "fine print." 60 On the
contrary, the evidence does not support these
latter allegations, and it is highly improbable that
someone fairly educated and with investment
experience would sign a document in blank or
without reading it first.61 Petitioners owned various
businesses and were clients of other banks, which
omits the possibility of such carelessness. 62 Even
more damning for petitioners is that, on record,
Amalia admitted that it was not her habit to sign in
blank and that the contents of the documents were
explained to her before she signed.63
Testimonial evidence and the complaint itself
contained allegations that petitioners' reason for
transferring their money from local banks to
respondent is because it is safer to do so, 64 a clear
indicia of their intelligence and keen business
sense which they could not have easily surrendered
upon meeting with respondent.
)
rollover
rollover w/
added funds
( ) rollover w/
payout
Ref. No. ____
)
[ ] Dollar TD [ ] Confirmation
[ ] Peso Time
[
] of
Sale
Depositories
Multicurrency [ ] CITIHI-Yielder
[ ] NNPN
TD
TRUST
NEW ADDED FUNDS WILL
COME
FROM:
( ) debit my/our account no.
________________
(
)
Check
No.
____________________________
(
)
Cash
deposit
__________________________
for
P/$
_______________
for
P/$
_______________
for
P/$
_______________
P/$
3,000,000
Value
11/28/97
Date
INTEREST
RATE
around Term
84
16.25%
91 days
(Emphasis supplied.)
clearly contradicts the DIMA, Directional Letter and
COIs.
Petitioners insist that the amount PhP3 million in
the TIA does not tally with the actual value of the
investment which appeared on the first COI, which
was PhP2,134,635.87. Petitioners add that the TIA's
interest rate of "around 16.25%" with the term "91
days" contradicts the COI's interest rate of 16.95%
with a tenor of 75 days repriceable after 91
days.85 Further, petitioners claim that the word
"TRUST" inscribed on the TIA obviously meant that
they opened a trust account, and not any other
account.86
The explanation of respondent is plausible. Only
PhP2,134,635.87 out of the PhP3 million was
placed in the LTCP since this was the only amount
of LTCP then available, while the balance was
placed in two PRPN accounts, each one in trust for
Amalia's two children, upon her instructions. 87 The
disparity in the interest rate is also explained by
the fact that the 16.95% rate placed in the COI is
gross and not net interest,88 and that it is subject to
repricing every 91 days.
The Court gives credence to respondent's
explanation that the word "TRUST" appearing on
the TIA simply means that the account is to be
handled by the bank's trust department, which
handles not only the trust business but also the
other
fiduciary
business
and
investment
management activities of the bank, while the "ITF"
or "in trust for" appearing on the other documents
only signifies that the money was invested by
Amalia in trust for her two children, a device that
she uses even in her ordinary deposit accounts
with other banks.89 The ITF device allows the
children to obtain the money without need of
paying estate taxes in case Amalia meets a
premature death.90However, it creates a trusteebeneficiary relationship only between Amalia and
her children, and not between Amalia, her children,
and Citibank.
All the documents signed by Amalia, including the
DIMA and Directional Letter, show that her
agreement with respondent is one of agency, and
not a trust.
The DIMA, TIA, Directional Letter and COIs, viewed
altogether, establish without doubt the transaction
between the parties, that on November 28, 1997,
with PhP3 million in tow, Amalia opened an
investment management account with respondent,
under which she instructed the latter as her agent
to invest the bulk of the money in LTCP.
1604
of
the
Civil
Code
Q: What did
Nicolas tell you
why he invited
you
to
go
there?
A: He told me
that
I
will
witness on the
indebtedness of
Adoracion
to
Parangan.
Q:
Before
Adoracion
Lustan signed
her name in
this Exh. "4",
was
this
document read
to her?
A: No, sir.
Q: Did Nicolas
Parangan right
in that very
room
tell
Adoracion what
she
was
signing?
Q: In (sic) May
4, 1979, you
remember
having
went
(sic)
to
the
Municipality of
Calinog?
A: Yes, sir.
Q: Who invited
you
to
go
there?
A: Parangan.
Q: You mean
Nicolas
Parangan?
A: Yes, sir.
A: No, sir.
xxx xxx xxx
Q: What did
you have in
mind when you
were
signing
this document,
Exh. "4"?
A: To show that
Adoracion
Lustan
has
debts
with
Nicolas
Parangan. 18
de
&
Castro
representing
collection
suit
filed within the
prescriptive period mandated by the
Civil Code."22
Clearly, the De Castros' defense of laches finds no
support in law, equity or jurisprudence.
Third issue: whether the determination of the
purchase price was made in violation of the
Rules on Evidence
The De Castros want the Court to re-examine the
probative value of the evidence adduced in the trial
court to determine whether the actual selling price
of the two lots was P7.05 million and not P3.6
million. The De Castros contend that it is erroneous
to base the 5 percent commission on a purchase
price of P7.05 million as ordered by the trial court
and the appellate court. The De Castros insist that
the purchase price is P3.6 million as expressly
stated in the deed of sale, the due execution and
authenticity of which was admitted during the trial.
The De Castros believe that the trial and appellate
courts committed a mistake in considering
incompetent evidence and disregarding the best
evidence and parole evidence rules. They claim
that the Court of Appeals erroneously affirmed sub
silentio the trial court's reliance on the various
correspondences between Constante and Times
Transit which were mere photocopies that do not
satisfy the best evidence rule. Further, these letters
covered only the first negotiations between
Constante and Times Transit which failed; hence,
these are immaterial in determining the final
purchase price.
The De Castros further argue that if there was an
undervaluation, Artigo who signed as witness
benefited therefrom, and being equally guilty,
should be left where he presently stands. They
likewise claim that the Court of Appeals erred in
relying on evidence which were not offered for the
purpose considered by the trial court. Specifically,
Exhibits "B", "C", "D" and "E" were not offered to
prove that the purchase price was P7.05 Million.
Finally, they argue that the courts a quo erred in
giving credence to the perjured testimony of Artigo.
They want the entire testimony of Artigo rejected
as a falsehood because he was lying when he
claimed at the outset that he was a licensed real
estate broker when he was not.
Whether the actual purchase price was P7.05
Million as found by the trial court and affirmed by
the Court of Appeals, or P3.6 Million as claimed by
the De Castros, is a question of fact and not of law.
Inevitably, this calls for an inquiry into the facts
and evidence on record. This we can not do.
It is not the function of this Court to re-examine the
evidence submitted by the parties, or analyze or
weigh the evidence again.23 This Court is not the
proper venue to consider a factual issue as it is not
made several
pay for the
Court:
xxx xxx xxx
Q And who was
managing the
store in Sto.
Cristo?
A At first it was
Mr. Ang, then
later Mr. Tiu
Huy Tiac but I
cannot
remember the
exact year.
Q So, Mr. Tiu
Huy Tiac took
over
the
management,.
A Not that was
because every
afternoon, I was
there, sir.
Q But in the
morning,
who
takes charge?
A Tiu Huy Tiac
takes charge of
management a
nd if there (sic)
orders
for
newsprint
or
bond
papers
they are always
referred to the
compound
in
Baesa,
sir.
(t.s.n., p. 16,
Session
of
January
20,
1981,
CA
decision, Rollo,
p. 50, emphasis
supplied).
PADILLA, J.:
This case is a consolidation of two (2) petitions for
review on certiorari of a decision 1 of the Court of
Appeals in CA-G.R. No. CV-04294, entitled
"American Airlines, Inc. vs. Orient Air Services and
Hotel Representatives, Inc." which affirmed, with
modification, the decision 2 of the Regional Trial
Court of Manila, Branch IV, which dismissed the
complaint and granted therein defendant's
counterclaim for agent's overriding commission
and damages.
The antecedent facts are as follows:
On 15 January 1977, American Airlines, Inc.
(hereinafter referred to as American Air), an air
carrier
offering
passenger
and
air
cargo
transportation in the Philippines, and Orient Air
Services and Hotel Representatives (hereinafter
referred to as Orient Air), entered into a General
Sales Agency Agreement (hereinafter referred to as
the Agreement), whereby the former authorized
the latter to act as its exclusive general sales agent
within the Philippines for the sale of air passenger
transportation.
Pertinent
provisions
of
the
agreement are reproduced, to wit:
WITNESSETH
In consideration of the mutual convenants
herein contained, the parties hereto agree
as follows:
1. Representation of American by Orient
Air Services
Orient Air Services will act on American's
behalf as its exclusive General Sales Agent
within the Philippines, including any
United States military installation therein
which are not serviced by an Air Carrier
Representation Office (ACRO), for the sale
of air passenger transportation. The
GANCAYCO, J.:
This case involves the bitter quarrel of two brothers
over two (2) parcels of land and its improvements
now worth a fortune. The bone of contention is the
apparently conflicting factual findings of the trial
court and the appellate court, the resolution of
which will materially affect the result of the
contest.
The following facts are not disputed.
Ishwar, Choithram and Navalrai, all surnamed
Jethmal Ramnani, are brothers of the full blood.
Ishwar and his spouse Sonya had their main
business based in New York. Realizing the difficulty
of managing their investments in the Philippines
they executed a general power of attorney on
January 24, 1966 appointing Navalrai and
Choithram as attorneys-in-fact, empowering them
to manage and conduct their business concern in
the Philippines. 1
On February 1, 1966 and on May 16, 1966,
Choithram, in his capacity as aforesaid attorney-infact of Ishwar, entered into two agreements for the
purchase of two parcels of land located in Barrio
Ugong, Pasig, Rizal, from Ortigas & Company, Ltd.
Partnership (Ortigas for short) with a total area of
approximately
10,048
square
meters.2 Per
agreement, Choithram paid the down payment and
installments on the lot with his personal checks. A
building was constructed thereon by Choithram in
CHOITHRAM
IN
THE
TRIAL
COURT
ESTABLISHING THAT THE PROPERTIES
WERE
PURCHASED WITH PERSONAL
FUNDS OF PETITIONER CHOITHRAM AND
NOT WITH MONEY ALLEGEDLY REMITTED
BY RESPONDENT ISHWAR.
III
THE COURT OF APPEALS ACTED IN EXCESS
OF JURISDICTION IN AWARDING DAMAGES
BASED ON THE VALUE OF THE PROPERTIES
AND THE FRUITS OF THE IMPROVEMENTS
THEREON. 9
Similarly, spouses Ishwar filed a petition for review
of said amended decision of the appellate court
exculpating Ortigas of liability based on the
following assigned errors
I
THE RESPONDENT HONORABLE COURT OF
APPEALS COMMITTED GRAVE ERROR AND
HAS DECIDED A QUESTION OF SUBSTANCE
NOT IN ACCORD WITH LAW AND/OR WITH
APPLICABLE
DECISIONS
OF
THIS
HONORABLE COURT
A)
IN
PROMULGATING
THE
QUESTIONED
AMENDED
DECISION (ANNEX "A") RELIEVING
RESPONDENT ORTIGAS FROM
LIABILITY
AND
DISMISSING
PETITIONERS'
AMENDED
COMPLAINT IN CIVIL CASE NO.
534-P,
AS
AGAINST
SAID
RESPONDENT ORTIGAS;
B) IN HOLDING IN SAID AMENDED
DECISION THAT AT ANY RATE NO
ONE
EVER
TESTIFIED
THAT
ORTIGAS WAS A SUBSCRIBER TO
THE MANILA TIMES PUBLICATION
OR THAT ANY OF ITS OFFICERS
READ THE NOTICE AS PUBLISHED
IN THE MANILA TIMES, THEREBY
ERRONEOUSLY
CONCLUDING
THAT FOR RESPONDENT ORTIGAS
TO BE CONSTRUCTIVELY BOUND
BY THE PUBLISHED NOTICE OF
REVOCATION, ORTIGAS AND/OR
ANY OF ITS OFFICERS MUST BE A
SUBSCRIBER AND/OR THAT ANY
OF ITS OFFICERS SHOULD READ
THE
NOTICE
AS
ACTUALLY
PUBLISHED;
C) IN HOLDING IN SAID AMENDED
DECISION THAT ORTIGAS COULD
NOT BE HELD LIABLE JOINTLY
AND
SEVERALLY
WITH
THE
DEFENDANTS-APPELLEES
CHOITHRAM, MOTI AND NIRMLA
RAMNANI, AS ORTIGAS RELIED
II
THE RESPONDENT HONORABLE COURT OF
APPEALS HAS SO FAR DEPARTED FROM
THE ACCEPTED AND USUAL COURSE OF
xxx
xxx
the
registered
mail
was
addressed to whom?
A Choithram Ramnani. (TSN, 7
March 1984, pp. 14-15).
On
cross-examination,
the
witness
reiterated the remittance of the money to
his brother Choithram, which was sent to
him by his father-in-law, Rochiram L.
Mulchandoni from Switzerland, a man of
immense wealth, which even defendantsappellees' witness Navalrai Ramnani
admits to be so (tsn., p. 16, S. Oct. 13,
1985). Thus, on cross-examination, Ishwar
testified as follows:
Q How did you receive these two
bank drafts from the bank the
name of which you cannot
remember?
A I got it from my father-in-law.
Q From where did your father- inlaw sent these two bank drafts?
A From Switzerland.
Q He was in Switzerland.
A Probably, they sent out these
two drafts from Switzerland.
(TSN, 7 March 1984, pp. 16-17; Emphasis
supplied.)
This positive and affirmative testimony of
plaintiff-appellant that he sent the two (2)
bank drafts totalling US $ 150,000.00 to
his brother, is proof of said remittance.
Such positive testimony has greater
probative force than defendant-appellee's
denial of receipt of said bank drafts, for a
witness who testifies affirmatively that
something did happen should be believed
for it is unlikely that a witness will
remember
what
never
happened
(Underhill's Cr. Guidance, 5th Ed., Vol. 1,
pp. 10-11).
That is not all. Shortly thereafter, plaintiffappellant Ishwar Ramnani executed a
General Power of Attorney (Exhibit "A")
dated January 24, 1966 appointing his
brothers, defendants-appellees Navalrai
and
Choithram
as
attorney-in-fact
empowering the latter to conduct and
manage
plaintiffs-appellants' business
affairs in the Philippines and specifically
No. 14. To acquire, purchase for
us,
real
estates
and
improvements for the purpose of
real estate business anywhere in
the Philippines and to develop,
subdivide, improve and to resell
to buying public (individual, firm
or corporation); to enter in any
CMS
LOGGING,
INC., petitioner,
vs.
THE COURT OF APPEALS and D.R. AGUINALDO
CORPORATION, respondents.
NOCON, J.:
This is a petition for review on certiorari from the
decision dated July 31, 1975 of the Court of
Appeals in CA-G.R. No. 47763-R which affirmed in
toto the decision of the Court of First Instance of
Manila, Branch VII, in Civil Case No. 56355
dismissing the complaint filed by petitioner CMS
Logging, Inc. (CMS, for brevity) against private
respondent D.R. Aguinaldo Corporation (DRACOR,
for brevity) and ordering the former to pay the
latter attorney's fees in the amount of P1,000.00
and the costs.
The facts of the case are as follows: Petitioner CMS
is a forest concessionaire engaged in the logging
business, while private respondent DRACOR is
engaged in the business of exporting and selling
logs and lumber. On August 28, 1957, CMS and
DRACOR
entered
into
a
contract
of
agency 1 whereby the former appointed the latter
as its exclusive export and sales agent for all logs
that the former may produce, for a period of five
(5) years. The pertinent portions of the agreement,
which was drawn up by DRACOR, 2 are as follows:
1. SISON [CMS] hereby appoints
DRACOR as his sole and exclusive
export sales agent with full
authority,
subject
to
the
conditions
and
limitations
hereinafter set forth, to sell and
export under a firm sales
contract acceptable to SISON, all
logs produced by SISON for a
period
of
five
(5)
years
commencing upon the execution
of the agreement and upon the
terms and conditions hereinafter
provided and DRACOR hereby
accepts such appointment;
president
and
general
manager),
also
a
respondent, to request petitioner to reduce his
commission, but the latter refused.
In a letter dated October 3, 1990, Unilab, through
Carlos Ejercito, another respondent, confirmed its
decision not to renew the health program contract
with Medicard.
SO ORDERED.
filed
its
Verified
Answer
and
Position
Paper,6 claiming as follows, quoted verbatim:
COMPLAINANT IS NOT ENTITLED FOR THE
REFUND OF HER 24 MONTHS SAVINGS
3. Complainant could not anymore claim nor
entitled for the refund of her 24 months savings as
she already took back her saving already last year
and the employer did not deduct any money from
her salary, in accordance with a Fascimile
Message from
the
respondent
SUNACEs
employer, Jet Crown International Co. Ltd., a
xerographic copy of which is herewith attached
as ANNEX "2" hereof;
COMPLAINANT IS NOT ENTITLED TO REFUND
OF HER 14 MONTHS TAX AND PAYMENT OF
ATTORNEYS FEES
4. There is no basis for the grant of tax refund to
the complainant as the she finished her one year
contract and hence, was not illegally dismissed by
her employer. She could only lay claim over the tax
refund or much more be awarded of damages such
as attorneys fees as said reliefs are available only
when the dismissal of a migrant worker is without
just valid or lawful cause as defined by law or
contract.
The rationales behind the award of tax refund and
payment of attorneys fees is not to enrich the
complainant but to compensate him for actual
injury suffered. Complainant did not suffer injury,
hence, does not deserve to be compensated for
whatever kind of damages.
Hence, the complainant has NO cause of action
against respondent SUNACE for monetary claims,
considering that she has been totally paid of all the
monetary benefits due her under her Employment
Contract to her full satisfaction.
6. Furthermore, the tax deducted from her salary is
in compliance with the Taiwanese law, which
respondent
SUNACE
has
no
control
and
complainant has to obey and this Honorable Office
has no authority/jurisdiction to intervene because
the power to tax is a sovereign power which the
Taiwanese Government is supreme in its own
territory. The sovereign power of taxation of a state
is recognized under international law and among
sovereign states.
7. That respondent SUNACE respectfully reserves
the right to file supplemental Verified Answer
and/or Position Paper to substantiate its prayer for
the dismissal of the above case against the herein
respondent. AND BY WAY OF x x x x (Emphasis and underscoring supplied)
Reacting to Divinas Position Paper, Sunace filed on
April 25, 2000 an ". . . answer to complainants
position paper"7 alleging that Divinas 2-year
extension of her contract was without its
knowledge and consent, hence, it had no liability
ZENAIDA
G.
MENDOZA, Petitioner,
vs.
ENGR. EDUARDO PAULE, ENGR. ALEXANDER
COLOMA
and
NATIONAL
IRRIGATION
ADMINISTRATION
(NIA
MUOZ,
NUEVA
ECIJA), Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 176271
MANUEL
DELA
CRUZ Petitioner,
vs.
ENGR.
EDUARDO
M.
PAULE,
ENGR.
ALEXANDER
COLOMA
and
NATIONAL
IRRIGATION ADMINISTRATION (NIA MUOZ,
NUEVA ECIJA), Respondents.
DECISION
YNARES-SANTIAGO, J.:
These consolidated petitions assail the August 28,
2006 Decision1 of the Court of Appeals in CA-G.R.
CV No. 80819 dismissing the complaint in Civil
Case No. 18-SD (2000),2 and its December 11,
2006 Resolution3 denying the herein petitioners
motion for reconsideration.
Engineer Eduardo M. Paule (PAULE) is the proprietor
of E.M. Paule Construction and Trading (EMPCT). On
May 24, 1999, PAULE executed a special power of
attorney (SPA) authorizing Zenaida G. Mendoza
(MENDOZA) to participate in the pre-qualification
and bidding of a National Irrigation Administration
(NIA) project and to represent him in all
transactions related thereto, to wit:
1.
To
represent
E.M.
PAULE
CONSTRUCTION & TRADING of which I
(PAULE) am the General Manager in all my
business
transactions
with
National
Irrigation Authority, Muoz, Nueva Ecija.
2. To participate in the bidding, to secure
bid bonds and other documents pre-
SO ORDERED.16
Where
the
defendant
has
interposed
a
counterclaim (whether compulsory or permissive)
or is seeking affirmative relief by a cross-complaint,
the plaintiff cannot dismiss the action so as to
affect the right of the defendant in his counterclaim
or prayer for affirmative relief. The reason for that
exception is clear. When the answer sets up an
independent action against the plaintiff, it then
becomes an action by the defendant against the
plaintiff, and, of course, the plaintiff has no right to
ask for a dismissal of the defendants action. The
present rule embodied in Sections 2 and 3 of Rule
17 of the 1997 Rules of Civil Procedure ordains a
more equitable disposition of the counterclaims by
ensuring that any judgment thereon is based on
the merit of the counterclaim itself and not on the
survival of the main complaint. Certainly, if the
counterclaim is palpably without merit or suffers
jurisdictional flaws which stand independent of the
complaint, the trial court is not precluded from
dismissing it under the amended rules, provided
that the judgment or order dismissing the
counterclaim is premised on those defects. At the
same time, if the counterclaim is justified, the
amended rules now unequivocally protect such
counterclaim from peremptory dismissal by reason
of the dismissal of the complaint.23
Notwithstanding the immutable character of
PAULEs liability to MENDOZA, however, the exact
amount thereof is yet to be determined by the trial
court, after receiving evidence for and in behalf of
MENDOZA on her counterclaim, which must be
considered pending and unresolved.
WHEREFORE, the petitions are GRANTED. The
August 28, 2006 Decision of the Court of Appeals in
CA-G.R. CV No. 80819 dismissing the complaint in
Civil Case No. 18-SD (2000) and its December 11,
2006
Resolution
denying
the
motion
for
reconsideration are REVERSED and SET ASIDE. The
August 7, 2003 Decision of the Regional Trial Court
of Nueva Ecija, Branch 37 in Civil Case No. 18-SD
(2000) finding PAULE liable is REINSTATED, with the
MODIFICATION that the trial court is ORDERED to
receive evidence on the counterclaim of petitioner
Zenaida G. Mendoza.
SO ORDERED.
accounts
with
PHILAMGEN.
defendant
Even
defendants
very
own
Exhibit 38- A-3, showed that
plaintiff Arturo P. Valenzuela's
balance as of 1978 amounted to
only P3,865.59, not P826,128.46
as
stated
in
defendant
Bienvenido M. Aragon's letter
dated December 20,1978 (Exhibit
14) or P1,528,698.40 as reflected
in defendant's Exhibit 46 (Audit
Report
of
Banaria
dated
December 24, 1980).
These glaring discrepancy (sic) in
the accountability of plaintiff
Arturo P. Valenzuela to defendant
PHILAMGEN only lends credence
to the claim of plaintiff Arturo P.
Valenzuela that he has no
outstanding
account
with
defendant PHILAMGEN when the
latter, thru defendant Bienvenido
M.
Aragon,
terminated
the
General
Agency
Agreement
entered into by plaintiff (Exhibit
A) effective January 31, 1979
(see Exhibits "2" and "2-A").
Plaintiff Arturo P. Valenzuela has
shown that as of October 31,
1978, he has overpaid defendant
PHILAMGEN in the amount of
P53,040.37 (Exhibit "EEE", which
computation
was
based
on
defendant PHILAMGEN's balance
of P744,159.80 furnished on
several occasions to plaintiff
Arturo P. Valenzuela by defendant
PHILAMGEN (Exhibits H-1, VV, VV1, WW, WW-1 , YY , YY-2 , ZZ
and , ZZ-2).
Prescinding from the foregoing, and considering
that the private respondents terminated Valenzuela
with evidentmala fide it necessarily follows that the
former are liable in damages. Respondent
Philamgen has been appropriating for itself all
these years the gross billings and income that it
unceremoniously took away from the petitioners.
The preponderance of the authorities sustain the
preposition that a principal can be held liable for
damages in cases of unjust termination of agency.
In Danon v. Brimo, 42 Phil. 133 [1921]), this Court
ruled that where no time for the continuance of the
contract is fixed by its terms, either party is at
liberty to terminate it at will, subject only to the
ordinary requirements of good faith. The right of
the principal to terminate his authority is absolute
and unrestricted, except only that he may not do
so in bad faith.
The trial court in its decision awarded to Valenzuela
the amount of Seventy Five Thousand Pesos
(P75,000,00) per month as compensatory damages
from June 1980 until its decision becomes final and
executory. This award is justified in the light of the
evidence extant on record (Exhibits "N", "N-10",
"0", "0-1", "P" and "P-1") showing that the average
gross premium collection monthly of Valenzuela
over a period of four (4) months from December
1978 to February 1979, amounted to over
P300,000.00 from which he is entitled to a
commission of P100,000.00 more or less per
month. Moreover, his annual sales production
amounted to P2,500,000.00 from where he was
given 32.5% commissions. Under Article 2200 of
the new Civil Code, "indemnification for damages
shall comprehend not only the value of the loss
suffered, but also that of the profits which the
obligee failed to obtain."
The circumstances of the case, however, require
that the contractual relationship between the
parties shall be terminated upon the satisfaction of
the judgment. No more claims arising from or as a
DECISION
TINGA, J.:
Before the Court is a Petition for Review on
Certiorari assailing the Decision1 dated October 27,
2003 of the Court of Appeals, Seventh Division, in
CA-G.R. V No. 60392.2
The late Eduardo Ybaez (Ybaez), the owner of a
1,000-square meter lot in Cebu City (the "lot"),
entered into anAgreement and Authority to
Negotiate and Sell (Agency Agreement) with
respondent Florencio Saban (Saban) on February 8,
1994. Under the Agency Agreement, Ybaez
authorized Saban to look for a buyer of the lot for
Two Hundred Thousand Pesos (P200,000.00) and to
mark up the selling price to include the amounts
needed for payment of taxes, transfer of title and
other expenses incident to the sale, as well as
Sabans commission for the sale.3
Through Sabans efforts, Ybaez and his wife were
able to sell the lot to the petitioner Genevieve Lim
(Lim) and the spouses Benjamin and Lourdes Lim
(the Spouses Lim) on March 10, 1994. The price of
the lot as indicated in the Deed of Absolute Sale is
Two Hundred Thousand Pesos (P200,000.00).4 It
appears, however, that the vendees agreed to
purchase the lot at the price of Six Hundred
Thousand Pesos (P600,000.00), inclusive of taxes
and other incidental expenses of the sale. After the
sale, Lim remitted to Saban the amounts of One
Hundred Thirteen Thousand Two Hundred Fifty
Seven Pesos (P113,257.00) for payment of taxes
due on the transaction as well as Fifty Thousand
Pesos (P50,000.00) as brokers commission.5 Lim
also issued in the name of Saban four postdated
checks in the aggregate amount of Two Hundred
Thirty Six Thousand Seven Hundred Forty Three
Pesos (P236,743.00). These checks were Bank of
the Philippine Islands (BPI) Check No. 1112645
dated June 12, 1994 for P25,000.00; BPI Check No.
1112647 dated June 19, 1994 for P18,743.00; BPI
Check No. 1112646 dated June 26, 1994
for P25,000.00; and Equitable PCI Bank Check No.
021491B dated June 20, 1994 forP168,000.00.
Subsequently, Ybaez sent a letter dated June 10,
1994 addressed to Lim. In the letter Ybaez asked
Lim to cancel all the checks issued by her in
Sabans favor and to "extend another partial
payment" for the lot in his (Ybaezs) favor. 6
Amount
111985
P259,253,573.4
6
112685
144,459,242.84
030686
Credit Lyonnais-Manila
209,880,477.07
042286
Societ General-Manila
82,151,953.10
060986
Credit Lyonnais-Manila
536,158.62
Total
P696,281,405.0
9
APPLICATIONS
Date Applied to
Amount
P389,246,324.6
0
15,863,898.79
P19,688,763.29
" 20
Subsequently, PNB applied the P19,688,763.29 to
PHILSUCOM's account with PHILEXCHANGE which in