ASSIGNED CASES-BUS ORG-AGENCY

ORIENT AIR SERVICES AND HOTEL REPRESENTATIVES vs. COURT OF APPEALS

GR. NO. 76931, MAY 29, 1991

January 15 1977- American Airlines, Inc. an air carrier offering passenger and air cargo
transportation in the Philippines, and Orient Air Services and Hotel Representatives entered into
a General Sales Agency 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.

May 11 1981- American Air took charge of the collection of the proceeds of tickets sold
originally by Orient Air and terminated the Agreement in accordance with Paragraph 13 thereof
(Termination).

13. Termination
American may terminate the Agreement on two days' notice in the event Orient Air
Services is unable to transfer to the United States the funds payable by Orient Air Services to
American under this Agreement. Either party may terminate the Agreement without cause by
giving the other 30 days' notice by letter, telegram or cable.

May 15 1981- American Air instituted suit against Orient Air with the Court of First Instance
of Manila, for Accounting with Preliminary Attachment or Garnishment, Mandatory Injunction and
Restraining Order

In its Answer with counterclaim dated 9 July 1981, Orient Air denied the material
allegations of the complaint with respect to plaintiff's entitlement to alleged unremitted amounts,
contending that after application thereof to the commissions due it under the Agreement, plaintiff
in fact still owed Orient Air a balance in unpaid overriding commissions. Further, the defendant
contended that the actions taken by American Air in the course of terminating the Agreement as
well as the termination itself were untenable, Orient Air claiming that American Air's precipitous
conduct had occasioned prejudice to its business interests.

Trial Court ruled in favor of Orient Air.

ON APPEAL: Intermediate Appellate Court affirmed the ruling of TC

ISSUE:

W/N the respondent appellate court correctly ruled that Orient Air be reinstated again as
sales agent of American Air

RULING:

By affirming this ruling of the trial court, respondent appellate court, in effect, compels
American Air to extend its personality to Orient Air. Such would be violative of the principles and
essence of agency, defined by law as a contract whereby "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 .
 In an agent-principal relationship, the personality of the principal is extended through the
facility of the agent. In so doing, the agent, by legal fiction, becomes the principal, authorized to
perform all acts which the latter would have him do. Such a relationship can only be affected with
the consent of the principal, which must not, in any way, be compelled by law or by any court.
The Agreement itself between the parties states that "either party may terminate the Agreement
without cause by giving the other 30 days' notice by letter, telegram or cable." (Emphasis supplied)
We, therefore, set aside the portion of the ruling of the respondent appellate court reinstating
Orient Air as general sales agent of American Air.

WHEREFORE, with the foregoing modification, the Court AFFIRMS the decision and
resolution of the respondent Court of Appeals, dated 27 January 1986 and 17 December 1986,
respectively. Costs against petitioner American Air.

RALLOS vs. FELIX GO CHAN & SONS REALTY CORPORATION

G.R. L-24332, January 31, 1978

Concepcion and Gerundia Rallos were sisters and registered co-owners of a parcel of
land known as Lot No. 5983 of the Cadastral Survey of Cebu covered by Transfer Certificate of
Title No. 11116 of the Registry of Cebu.

They executed a special power of attorney in favor of their brother, Simeon Rallos,
authorizing him to sell such land for and in their behalf.

After Concepcion died, Simeon Rallos sold the undivided shares of his sisters Concepcion
and Gerundia to Felix Go Chan & Sons Realty Corporation for the sum of P10,686.90. New TCTs
were issued to the latter.

Petitioner Ramon Rallos, administrator of the Intestate Estate of Concepcion filed a

complaint praying (1) that the sale of the undivided share of the deceased Concepcion Rallos in
lot 5983 be unenforceable, and said share be reconveyed to her estate; (2) that the Certificate of
'title issued in the name of Felix Go Chan & Sons Realty Corporation be cancelled and another
title be issued in the names of the corporation and the "Intestate estate of Concepcion Rallos" in
equal undivided and (3) that plaintiff be indemnified by way of attorney's fees and payment of
costs of suit.

CFI: [Plaintiffs Complaint]

 Sale of land was null and void insofar as the one-half pro-indiviso share of Concepcion
Rallos.
Ordered the issuance of new TCTs to respondent corporation and the estate of
Concepcion in the proportion of share each pro-indiviso and the payment of attorneys fees and
cost of litigation.
[Respondent filed cross claim against Simon Rallos(*Simon and Gerundia died during pendency
of case)]
Juan T. Borromeo, administrator of the Estate of Simeon Rallos was ordered to pay
defendant the price of the share of the land (P5,343.45) plus attorneys fees.
[Borromeo filed a third party complaint against Josefina Rallos, special administratrix of the Estate
of Gerundia]
Dismissed without prejudice to filing either a complaint against the regular administrator
of the Estate of Gerundia Rallos or a claim in the Intestate-Estate of Cerundia Rallos, covering
the same subject-matter

CA: CFI Decision reversed, upheld the sale of Concepcions share.

MR: denied.

ISSUES:
1. Whether or not sale was valid although it was executed after the death of the principal,
Concepcion.
2. Whether or not the sale fell within the exception to the general rule that death
extinguishes the authority of the agent.
3. Whether or not the agents knowledge of the principals death is a material factor.

RULING:
1. Sale was void.
No one may contract in the name of another without being authorized by the latter, or
unless he has by law a right to represent him (Art. 1317 of the Civil Code).
Simons authority as agent was extinguished upon Concolacions death.

2. The sale did not fall under the exceptions to the general rule that death ipso jure
extinguishes the authority of the agent
Art. 1930 inapplicable: SPA in favor of Simon Rallos was not coupled with interest.
 Art. 1931 inapplicable: Simon Rallos knew (as can be inferred from his pleadings) of
principal Concepcions death.
For Art 1931 to apply, both requirements must be present.

3. Yes, agents knowledge of principals death is material.

Respondent asserts that: there is no provision in the Code which provides that whatever
is done by an agent having knowledge of the death of his principal is void even with respect to
third persons who may have contracted with him in good faith and without knowledge of the death
of the principal.
Court says: this contention ignored the ignores the existence of the general rule
enunciated in Article 1919 that the death of the principal extinguishes the agency. Article 1931,
being an exception to the general rule, is to be strictly construed.

AIR FRANCE vs. COURT OF APPEALS

G.R. NO. L-57339, December 29, 1983

CAUSE OF ACTION: Petition for review on certiorari assailing the Decision of then respondent
Court of Appeals promulgated "Jose G. Gana, et al. vs. Sociedad Nacionale Air France", which
reversed the Trial Court's judgment dismissing the Complaint of private respondents for damages
arising from breach of contract of carriage, and awarding instead P90,000.00 as moral damages.

Late Jose G. Gana and his family (the GANAS), purchased from AIR FRANCE (9) "open-
dated" air passage tickets for the Manila/Osaka/Tokyo/Manila route. On 24 April 1970, AIR
FRANCE exchanged or substituted the aforementioned tickets with other tickets for the same
route. At this time, the GANAS were booked for the Manila/Osaka segment on AIR FRANCE
Flight 184 for 8 May 1970, and for the Tokyo/Manila return trip on AIR FRANCE Flight 187 on 22
May 1970.

The aforesaid tickets were valid until 8 May 1971. The GANAS did not depart on 8 May
1970. Instead, Jose Gana sought the assistance of Teresita Manucdoc, a Secretary of the Sta.
Clara Lumber Company where Jose Gana was the Director and Treasurer, for the extension of
the validity of their tickets, which were due to expire on 8 May 1971.

Teresita enlisted the help of Lee Ella Manager of the Philippine Travel Bureau. Ella sent
the tickets to Cesar Rillo, Office Manager of AIR FRANCE. The tickets were returned to Ella who
was informed that extension was not possible unless the fare differentials resulting from the
increase in fares triggered by an increase of the exchange rate of the US dollar to the Philippine
peso and the increased travel tax were first paid. Ella then returned the tickets to Teresita and
informed her of the impossibility of extension.
 In the meantime, the GANAS had scheduled their departure on 7 May 1971 or one day
before the expiry date. Teresita requested travel agent Ella to arrange the revalidation of the
tickets. Ella gave the same negative answer and warned her that although the tickets could be
used by the GANAS if they left on 7 May 1971, the tickets would no longer be valid for the rest of
their trip because the tickets would then have expired on 8 May 1971. Teresita replied that it will
be up to the GANAS to make the arrangements.

With that assurance, Ella on his own, attached to the tickets validating stickers for the
Osaka/Tokyo flight, one a JAL. sticker and the other an SAS (Scandinavian Airways System)
sticker. The SAS sticker indicates thereon that it was "Reevaluated by: the Philippine Travel
Bureau, Branch No. 2" (as shown by a circular rubber stamp) and signed "Ador", and the date is
handwritten in the center of the circle. Then appear under printed headings the notations: JL. 108
(Flight), 16 May (Date), 1040 (Time), OK (status). Apparently, Ella made no more attempt to
contact AIR FRANCE as there was no more time.

Notwithstanding the warnings, the GANAS departed from Manila in the afternoon of 7 May
1971 on board AIR FRANCE Flight 184 for Osaka, Japan. There is no question with respect to
this leg of the trip.

However, for the Osaka/Tokyo flight on 17 May 1971, Japan Airlines refused to honor the
tickets because of their expiration, and the GANAS had to purchase new tickets. They
encountered the same difficulty with respect to their return trip to Manila as AIR FRANCE also
refused to honor their tickets. They were able to return only after pre-payment in Manila, through
their relatives, of the readjusted rates. They finally flew back to Manila on separate Air France
Frights on 19 May 1971 for Jose Gana and 26 May 1971 for the rest of the family.

On 25 August 1971, the GANAS commenced before the then Court of First Instance of
Manila, Branch III, Civil Case No. 84111 for damages arising from breach of contract of carriage.

AIR FRANCE traversed the material allegations of the Complaint and alleged that the
GANAS brought upon themselves the predicament they found themselves in and assumed the
consequential risks; that travel agent Ella's affixing of validating stickers on the tickets without the
knowledge and consent of AIR FRANCE, violated airline tariff rules and regulations and was
beyond the scope of his authority as a travel agent; and that AIR FRANCE was not guilty of any
fraudulent conduct or bad faith.

TC dismissed the Complaint of the GANAS based on Partial and Additional Stipulations
of Fact .

The GANAS appealed to the CA. During the pendency of the appeal, Jose Gana, the
principal plaintiff, died.

CA set aside and reversed the TCs decision ordering Air France to pay appellants moral
damages in the total sum P90,000.00 plus costs.

Reconsideration sought by AIR FRANCE was denied, hence, petitioner's recourse before
this instance, to which we gave due course.
ISSUES:
1. Whether or not, under the environmental milieu the GANAS have made out a case for
breach of contract of carriage entitling them to an award of damages? No!

2. Whether or not Teresita was the agent of the GANAS and notice to her of the rejection
of the request for extension of the validity of the tickets was notice to the GANAS, her principals?
YES!

RULING:
1. No! SC reversed the affirmative ruling of the CA. (As for the mainFIRST issue)
AIR FRANCE cannot be faulted for breach of contract when it dishonored the tickets of
the GANAS after 8 May 1971 since those tickets expired on said date; nor when it required the
GANAS to buy new tickets or have their tickets re-issued for the Tokyo/Manila segment of their
trip. Neither can it be said that, when upon sale of the new tickets, it imposed additional charges
representing fare differentials, it was motivated by self-interest or unjust enrichment considering
that an increase of fares took effect, as authorized by the Civil Aeronautics Board (CAB) in April,
1971. This procedure is well in accord with the IATA tariff rules which provide:
6. TARIFF RULES
7. APPLICABLE FARE ON THE DATE OF DEPARTURE
3.1 General Rule.
All journeys must be charged for at the fare (or charge) in effect on the date on which
transportation commences from the point of origin. Any ticket sold prior to a change of fare or
charge (increase or decrease) occurring between the date of commencement of the journey, is
subject to the above general rule and must be adjusted accordingly. A new ticket must be issued
and the difference is to be collected or refunded as the case may be. No adjustment is necessary
if the increase or decrease in fare (or charge) occurs when the journey is already commenced.

The GANAS cannot defend by contending lack of knowledge of those rules since the
evidence bears out that Teresita, who handled travel arrangements for the GANAS, was duly
informed by travel agent Ella of the advice of Reno, the Office Manager of Air France, that the
tickets in question could not be extended beyond the period of their validity without paying the
fare differentials and additional travel taxes brought about by the increased fare rate and travel
taxes.
Teresita was the agent of the GANAS and notice to her of the rejection of the request for
extension of the validity of the tickets was notice to the GANAS, her principals. (AGENCY:
NOTICE TO THE AGENT IS NOTICE TO THE PRINCIPAL)
 The circumstances that AIR FRANCE personnel at the ticket counter in the airport allowed
the GANAS to leave is not tantamount to an implied ratification of travel agent Ella's irregular
actuations. It should be recalled that the GANAS left in Manila the day before the expiry date of
their tickets and that "other arrangements" were to be made with respect to the remaining
segments. Besides, the validating stickers that Ella affixed on his own merely reflect the status of
reservations on the specified flight and could not legally serve to extend the validity of a ticket or
revive an expired one.
The conclusion is inevitable that the GANAS brought upon themselves the predicament
they were in for having insisted on using tickets that were due to expire in an effort, perhaps, to
beat the deadline and in the thought that by commencing the trip the day before the expiry date,
they could complete the trip even thereafter.
It should be recalled that AIR FRANCE was even unaware of the validating SAS and JAL.
stickers that Ella had affixed spuriously. Consequently, Japan Air Lines and AIR FRANCE merely
acted within their contractual rights when they dishonored the tickets on the remaining segments
of the trip and when AIR FRANCE demanded payment of the adjusted fare rates and travel taxes
for the Tokyo/Manila flight.
WHEREFORE, the judgment under review is hereby reversed and set aside, and the
Amended Complaint filed by private respondents hereby dismissed.

SANTOS vs. BUENCONSEJO

G.R. No. L-20136, June 23, 1965

Petitioner Jose A. Santos y Diaz seeks the reversal of an order of the Court of First
Instance of Albay, denying his petition:
a. Cancellation of original certificate of title No. RO-3848 (25322), issued in the name of
Anatolio Buenconsejo, Lorenzo Bon and Santiago Bon, and covering Lot No. 1917 of the
Cadastral Survey of Tabaco, Albay, and
b. Issuance in lieu thereof, of a separate transfer certificate of title in his name.

Lot No. 1917 covered by Original Certificate of Title No. RO-3848 (25322) was originally
owned in common by Anatolio Buenconsejo to the extent of undivided portion and Lorenzo Bon
and Santiago Bon to the extent of the other (Exh. B)

Anatolio Buenconsejo's rights, interests and participation over the portion

abovementioned were by a Certificate of Sale executed by the Provincial Sheriff of Albay,
transferred and conveyed to Atty. Tecla San Andres Ziga, awardee in the corresponding auction
sale conducted by said Sheriff

By a certificate of redemption issued by the Provincial Sheriff of Albay, the rights, interest,
claim and/or or participation which Atty. Tecla San Andres Ziga may have acquired over the
property in question by reason of the aforementioned auction sale award, were transferred and
conveyed to the herein petitioner in his capacity as Attorney-in-fact of the children of Anatolio
Buenconsejo, namely, Anastacio Buenconsejo, Elena Buenconsejo and Azucena Buenconsejo
(Exh. C).

Petitioner Santos had redeemed the aforementioned share of Anatolio Buenconsejo, upon
the authority of a special power of attorney executed in his favor by the children of Anatolio
Buenconsejo.

Relying upon this power of attorney and redemption made by him, Santos now claims to
have acquired the share of Anatolio Buenconsejo in the aforementioned Lot No. 1917;

As the alleged present owner of said share, Santos caused a subdivision plan of said Lot
No. 1917 to be made, in which the portion he claims as his share thereof has been marked as Lot
No. 1917-A; and that he wants said subdivision at No. 1917-A to be segregated from Lot No. 1917
and a certificate of title issued in his name exclusively for said subdivision Lot No. 1917-A.

Lower court: ruled in favor of the respondents.

ISSUE:

Whether or not petitioner Santos claim that he has acquired the share of Anatolio
Buenconsejo in Lot No. 1917 relying upon a power of attorney and redemption made by him is
tenable?

RULING:

No! SC affirmed the lower courts decision that petitioner's claim is clearly untenable, for
three reasons:

a. Said special power of attorney authorized him to act on behalf of the children of Anatolio
Buenconsejo, and, hence, it could not have possibly vested in him any property right in his own
name; (
b. The children of Anatolio Buenconsejo had no authority to execute said power of
attorney, because their father is still alive and, in fact, he and his wife opposed the petition of
Santos;
c. In consequence of said power of attorney (if valid) and redemption, Santos could have
acquired no more than the share pro indiviso of Anatolio Buenconsejo in Lot No. 1917, so that
petitioner cannot without the conformity of the other co-owners (Lorenzo and Santiago Bon),
or a judicial decree of partition issued pursuant to the provisions of Rule 69 of the new Rules of
Court (Rule 71 of the old Rules of Court) which have not been followed By Santos adjudicate
to himself in fee simple a determinate portion of said Lot No. 1917, as his share therein, to the
exclusion of the other co-owners.

Inasmuch as the appeal is patently devoid of merit, the order appealed from is hereby
affirmed, with treble cost against petitioner-appellant Jose A. Santos y Diaz. It is so ordered.
 ALBADEJO y CIA vs. PHILIPPINE REFINING CO.
December 20, 1923

It appears that Albaladejo y Cia. is a limited partnership, organized in conformity with the laws of
these Islands, and having its principal place of business at Legaspi, Albay. The firm was
engaged in the buying and selling of the products of the country, especially copra.
The Visayan Refining Co. is a corporation organized engaged in operating its extensive plant at
Opon, Cebu, for the manufacture of coconut oil.
On August 28, 1918, the plaintiff made a contract with the Visayan Refining Co., the material
parts of which are as follows: (important provisions)
- The party of the first part (Albadejo) agrees and binds itself to sell to the party of the second
part (Visayan Refining Co.) , and the party of the second part agrees and binds itself to buy from
the party of the first part, for a period of one (1) year

- During the continuance of this contract the party of the second part will not appoint any other
agent for the purchase of copra in Legaspi, nor buy copra from any vendor in Legaspi.

- The party of the second part will provide transportation by sea to Opon, Cebu, for the copra
delivered to it by the party of the first part, but the party of the first part must deliver such copra
to the party of the second part free on board the boats of the latter's ships or on the pier
alongside the latter's ships.

Pursuant to this agreement the plaintiff bought copra extensively for the Visayan Refining Co.
for a year. At the end of said year both parties found themselves satisfied with the existing
arrangement, and they therefore continued by tacit consent to govern their future relations by
the same agreement.

When the contract above referred to was originally made, Albaladejo y Cia. apparently had only
one commercial establishment. After the Visayan Refining Co. had ceased to buy copra, the
supplies of copra already purchased by the plaintiff were gradually shipped out and accepted by
\the Visayan Refining Co. In next eight or ten months the accounts between the two parties
were liquidated. The last account rendered by the Visayan Refining Co. to the plaintiff was for
the month of April, 1921, and it showed a balance of P288 in favor of the defendant.
Under date of June 25, 1921, the plaintiff company addressed a letter from Legaspi to the
Philippine Refining Co. (which had now succeeded to the rights and liabilities of the Visayan
Refining Co.), expressing its approval of said account. In this letter no dissatisfaction was
expressed by the plaintiff as to the state of affairs between the parties; but about six weeks
thereafter the present action was begun.
This action was instituted in the CFI Albay by Albaladejo to recover a sum of money from the
Philippine Refining Co., as successor to the Visayan Refining Co., two causes of action being
stated in the complaint.
Upon hearing the cause, the trial judge absolved the defendant from the first cause of action but
gave judgment for the plaintiff to recover the sum of P49,626.68, with costs, upon the second
cause of action.
The plaintiff appealed the first cause of action, and the defendant appealed with respect to the
action taken upon the second cause of action. It results that, by the appeal of the two parties,
the decision of the lower court is here under review.
ISSUE: Whether he defendant liable for the expenses incurred by the plaintiff in keeping its
organization intact during the period now under consideration.

RULING: NO
First cause of action: The alleged negligent failure of the Visayan Refining Co. to provide
opportune transportation for the copra collected by the plaintiff and deposited for shipment.
Upon consideration of all the facts revealed in evidence (records of shipping), court found that
the Visayan Refining Co. had used reasonable promptitude in its efforts to get out the copra
from the places where it had been deposited for shipment, notwithstanding occasional
irregularities due at times to the condition of the weather as related to transportation by sea and
at other times to the inability of the Visayan Refining Co. to dispatch boats to the more remote
ports. This finding of the trial judge, that no negligence of the kind alleged can properly be
imputed to the Visayan Refining Co., is in our opinion supported by the proof.
The trial judge calls attention to the fact that it is expressly provided in paragraph two of the
contract that the shrinkage of copra from the time of its delivery to the party of the second part
till its arrival at Opon should fall upon the plaintiff, from whence it is to be interfered that the
parties intended that the copra should be paid for according to its weight upon arrival at Opon
regardless of its weight when first purchased.
From what has been said it follows that the first cause of action set forth in the complaint
is not well founded, and the trial judge committed no error in absolving the plaintiff
therefrom.
Second cause of action: Plaintiff seeks to recover the sum of P110,000, the alleged amount
expended by the plaintiff in maintaining and extending its organization for Visayan Refining Co.
As a basis for the defendant's liability in this respect it is alleged that said organization was
maintained and extended at the express request, or requirement, of the defendant, in
conjunction with repeated assurances that the defendant would soon resume activity as a
purchaser of copra.
SC: We note that in his letter of July 10, 1920, Mr. Day suggested that if the various purchasing
agents of the Visayan Refining Co. would keep their organization intact, the company would
endeavour to see that they should not lose by the transaction in the long run. These words afford
no sufficient basis for the conclusion, which the trial judge deduced there from, that the defendant
is bound to compensate the plaintiff for the expenses incurred in maintaining its organization. The
correspondence sufficiently shows on its face that there was no intention on the part of the
company to lay a basis for contractual liability of any sort; and the plaintiff must have understood
the letters in that light. The parties could undoubtedly have contracted about it, but there was
clearly no intention to enter into contractual relation; and the law will not raise a contract by
implication against the intention of the parties.
The inducement held forth was that, when purchasing should be resumed, the plaintiff would be
compensated by the profits then to be earned for any expense that would be incurred in keeping
its organization intact. It is needless to say that there is no proof showing that the officials of the
defendant acted in bad faith in holding out this hope.
In the appellant's brief the contention is advanced that the contract between the plaintiff and the
VisayanRefining Co. created the relation of principal and agent between the parties, and the
reliance is placed upon article1729 of the Civil Code which requires the principal to indemnify
the agent for damages incurred in carrying out the agency. Attentive perusal of the contract is,
however, convincing to the effect that the relation between the parties was not that of principal
and agent in so far as relates to the purchase of copra by the plaintiff. It is true that the Visayan
Refining Co. made the plaintiff one of its instruments for the collection of copra; but it is clear
that in making its purchases from the producers the plaintiff was buying upon its own account
In paragraph three of the contract it is declared that during the continuance of this contract the
Visayan Refining Co. would not appoint any other agent forthe purchase of copra in Legaspi;
and this gives rise indirectly to the inference that the plaintiff was considered its buying agent.
But the use of this term in one clause of the contract cannot dominate the real nature of the
agreement as revealed in other clauses, no less than in the caption of the agreement itself.

In some of the trade letters also the various instrumentalities used by the Visayan Refining Co.
for the collection of copra are spoken of as agents. But this designation was evidently used for
convenience; and it is very clear that in its activities as a buyer the plaintiff was acting upon its
own account and not as agents of the Visayan Refining Co. The title to all of the copra
purchased by the plaintiff undoubtedly remained in it until it was delivered by way of subsequent
sale to said company.
For the reasons stated we are of the opinion that no liability on the part of the defendant is
shown upon the plaintiff's second cause of action, and the judgment of the trial court on this part
of the case is erroneous.

THOMAS vs. PINEDA

CASE NUMBER: G.R. No. L-2411
DATE: June 28, 1951

FACTS:
Thomas bought the bar and restaurant known as Silver Dollar Caf at Plaza Sta. Cruz.
He employed Pineda as a bartender-promoted to cashier and manager
During Japanese occupation, to prevent the business and its property from falling into enemy
hands, Thomas made a fictitious sale to Pineda fictitious sale was admitted by both parties;
2nd agreement which was a secret stating that the sale was fictitious
Original building was destroyed by fire, Pineda was able to remove some furniture and a
considerable qty of stocks to a place of safety- a bar was opened on Calle Bambang-after 4
months it was transferred to the original location
Thomas brought a CPA for the purpose of examining the books- Pineda threatened Thomas
with a gun if they persisted in their purpose. So Thomas filed a case and set up another bar
1st CoA- Thomas sought to compel an ACCOUNTING of Pinedas operations during the time
he was in control of the bar
- Pineda claims that there was a 3rd verbal agreement, the import of which was that he was to
operate the business with no liability other than to turn over to the plaintiff as the plaintiff would
find it after the war

2nd CoA: ownership of Silver Dollar Caf trade name it appears that Pineda registered the
business as his own

RULING:
1st CoA valid
- Little or no weight can be attached to Pinedas assertion .As sole manager with full power to do
as his fancies dictated; the defendant could strip the business naked of all its stocks, leaving the
plaintiff holding the bag, as it were, when the defendant's management was terminated. Unless
Thomas was willing to give away his property and its profits, no man in his right senses would
have given his manager an outright license such as the defendant claims to have gotten from his
employer.

- The conclusion thus seems clear that the defendant owes the plaintiff an accounting of his
management of the plaintiff's business during the occupation. The exact legal character of the
defendant's relation to the plaintiff matters not a bit. It was enough to show, and it had been
shown, that he had been entrusted with the possession and management of the plaintiff's
business and property for the owner's benefit and had not made an accounting.

- It was error for the court below to declare at this stage of the proceeding, on the basis of
defendant's incomplete and indefinite evidence, that there were no surplus profits

- Monies and food stuffs which the defendant said he had supplied the plaintiff and his daughters
during the war are appropriate items to be considered on taking account

Upon plaintiffs release from the internment camp, he lost no time in looking for a site where he
could open a saloon
The use of the old name suggested that the business was in fact an extension and continuation
of the Silver Dollar Caf
- Upon the reopening of the bar in the original place- lease was in the name of Thomas; calling
cards saying Thomas is the proprietor == defendant was only a manager. 2nd CoA- Thomas is
the owner of the trade name
- In the fictitious bill of sale Pineda acknowledged Thomas ownership of the business
- Business cards: Thomas is the proprietor
- No abandonment because when Thomas set up a new saloon it used the same name
The most that can be said is that the plaintiff instructed Pineda to renew the registration of the
trade-name and the defendant understood the instruction as permission to make the registration
in his favor
As legal proposition and in good conscience, the defendants registration of the trade name
Silver Dollar Cafe must be deemed to have been affected for the benefit of its owner of whom
he was a mere trustee or employee.
"The relations of an agent to his principal are fiduciary and it is an elementary and very old rule
that in regard to property forming the subject matter of the agency, he is estopped from
acquiring or asserting a title adverse to that of principal. His position is analogous to that of a
trustee and he cannot consistently, with the principles of good faith, be allowed to create in
himself an interest in opposition to that of his principal or cestuique trust. A receiver, trustee,
attorney, agent or any other person occupying fiduciary relations respecting property or persons
utterly disabled from acquiring for his own benefit the property committed to his custody for
management.
The rule stands on the moral obligation to refrain from placing one's self in position which
ordinarily excite conflicts between self-interest at the expense of one's integrity and duty to
another, by making it possible to profit by yielding to temptation,

PALMA VS. CRISTOBAL

CASE NUMBER: G.R. No. L-49219
DATE: December 11, 1946

FACTS:
A parcel of a land located in Quesada Street, Tondo, Manila, covered by transfer certificate of
title No. 31073 of the Register of Deeds of Manila, issued in favor of petitioner Pablo D. Palma, is
the subject of contention between the parties.
o Petitioner sought, at first, to eject respondent Eduardo Cristobal Reyes from the land in question
in a complaint filed with the Municipal Court of Manila. As respondent raised the question of
ownership, the complaint was dismissed, and petitioner filed with the Court of First Instance of
Manila the complaint which initiated this case, petitioner praying that he be declared the owner of
the land and that respondent be ordered to restore its possession and to remove his house
therefrom.
o The complaint was dismissed and petitioner brought the case to the Court of Appeals, where
he again failed.
o The case is appealed by certiorari.
In 1909, after registration proceedings under the provisions of Act No. 496, original certificate
of title No. 1627 was issued in the names of petitioner and his wife Luisa Cristobal.
In 1923, said certificate was cancelled and substituted by certificate of title No. 20968 by virtue
of a decree issued by the Court of First Instance of Manila in connection with Manila cadastre.
It was later substituted by certificate of title No. 26704, also in the name of petitioner and his
wife.
After the wifes death in 1922,a new certificate of title was issued in 1923 only in the name of
the name of the petitioner, substituted in 1928 by certificate of title No. 31073.
The Court of Appeals, upon the evidence, concluded with the Court of First Instance of Manila
that the parcel of land in question is a community property held by petitioner in trust for
the real owners (the respondent being an heir of one of them), the registration having been
made in accordance with an understanding between the co-owners, by reason of the
confidence they had in petitioner and his wife. This confidence, close relationship, and the
fact that the co-owners were receiving their shares in the rentals, were the reasons why no step
had been taken to partition the property.
It was only after the death of Luisa Cristobal and petitioner had taken a second wife that trouble
on religious matters arose between petitioner and respondent, and it gives credence to the
testimony of Apolonia Reyes and respondent to the effect that Luisa, before her death, called
her husband, the petitioner, and enjoined him to give her co-owners their shares in the
parcel of land; but respondent told her then not to worry about it, for it was more important
to them to have her cured of the malady that affected her. Petitioner answered his wife that
she should not worry because he would take care of the matter by giving the co-owners
their respective shares.
After Luisa Cristobal, petitioners wife, died in 1922, instead of moving for the partition of
the property, considering specially that petitioner had promised such a partition at the deathbed
of the deceased, respondent appeared as attorney for petitioner and prayed that a new
certificate of title be issued in the name of said petitioner as the sole owner of the property.

Petitioner assigns as first error of the Court of Appeals the fact that it considered the oral testimony
adduced in behalf of respondent sufficient to rebut the legal presumption that petitioner is the
owner of the land in controversy. .
In Severino vs. Severino (43 Phil. 343), this court declared that Affirming the said doctrine in
Barretto vs. Tuason (50 Phil. 888), the Supreme Court declared that In Palet vs. Tejedor (55 Phil.
790), it was declared that This right to recover is sanctioned by section 55 of Act No. 496, as
amended by Act No. 3322.
There is no showing why the conclusions of facts of the Court of Appeals should be disturbed,
and upon said facts petitioners first assignment of errors appears to be untenable in the light of
law and of the decision of this court.
Petitioner alleged that the Court of Appeals erred in not holding

ISSUE: Whether the respondent is estopped from claiming that petitioner is not the absolute
owner of the property in question.

RULING: No
The fact that respondent has been a party to the deception which resulted in petitioners
securing in his name the title to a property not belonging to him, is not valid reason for changing
the legal relationship between the latter and its true owners to such an extent as to let them lose
their ownership to a person trying to usurp it.
Respondent is not barred because his appearance as attorney for petitioner was not a
misrepresentation which would induce petitioner to believe that respondent recognized the
former as the sole owner of the property in controversy.
Respondents appearance, as attorney for petitioner in 1923, was a consequence of the
understanding, and petitioner could not legitimately assume that it had the effect of breaking or
reversing said understanding.
Lastly, it is contended by petitioner that, even conceding that the controverted property was
owned in common by several co-owners, yet the Court of Appeals erred in not holding that, as
against respondent,
ISSUE: Whether petitioner had acquired absolute ownership of the property through
prescription.
Upon the premise that the registration in 1909 in the name of petitioner and his wife, Luisa
Cristobal, was in accordance with an agreement among the co-owners, petitioner advances
the theory that when he, upon the death of his wife in 1922, caused the trust property to
be registered in his sole name in 1923, and subsequently partitioned between himself
and his daughter, Ildefonsa Cristobal Ditangco, as heirs of the decedent, he openly
breached the agreement of 1909 as well as the promise made to his dying wife of giving the
co-owners their respective shares, concluding that that breach was an assumption of
ownership, and could be the basis of title by prescription.
RULING No, Petitioners pretension of building his right to claim ownership by prescription upon
his own breach of a trust cannot be countenanced by any court, being subversive of generally
accepted ethical principles.
Petitioner held the property and secured its registration in his name in a fiduciary capacity,
and it is elementary that a trustee cannot acquire by prescription the ownership of the property
entrusted to him.
The position of a trustee is of representative nature. His position is the position of a cestui que
trust.
It is logical that all benefits derived by the possession and acts of the agent, as such agent,
should accrue to the benefit of his principal.
The registration of the property in the name of the trustees in possession thereof, must be
deemed to have been effected for the benefit of the cestui que trust.
whether or not there is bad faith or fraud in obtaining a decree with respect to a registered
property, the same does not belong to the person in whose favor it was issued, and the real
owners be entitled to recover the ownership of the property so long as the same has not been
transferred to a third person who has acquired it in good faith and for a valuable consideration.

VALERA VS. VELASCO

CASE NUMBER: G.R. No. L-28050
DATE: March 13, 1928

Doctrine: The filing of a complaint by an agent against his principal for the collection of a balance
in his favor resulting from the liquidation of the agency accounts between them, and his rendering
of a final account of his operations, are equivalent to an express renunciation of the agency and
terminates the juridical relation between them.
FACTS:
This is an appeal taken by Federico Valera from the judgment of the Court of First Instance of
Manila dismissing his complaint against Miguel Velasco, on the ground that he has not
satisfactorily proven his right of action.
By virtue of the powers of attorney, Exhibits X and Z, executed by the plaintiff on April 11, 1919,
and on August 8, 1922, the defendant was appointed attorney-in-fact of the said plaintiff
with authority to manage his property in the Philippines, consisting of the usufruct of a real
property located of Echague Street, City of Manila.
The defendant accepted both powers of attorney, managed plaintiff's property, reported his
operations, and rendered accounts of his administration; and on March 31, 1923 presented exhibit
F to plaintiff, which is the final account of his administration for said month, wherein it appears
that there is a balance of P3,058.33 in favor of the plaintiff.
The liquidation of accounts revealed that the plaintiff owed the defendant P1,100, and as
misunderstanding arose between them, the defendant brought suit against the plaintiff, civil
case No. 23447 of this court. Judgment was rendered in his favor on March 28, 1923, and after
the writ of execution was issued, the sheriff levied upon the plaintiff's right of usufruct, sold it at
public auction and adjudicated it to the defendant in payment of all of his claim.

o Subsequently, on May 11, 1923, the plaintiff sold his right of redemption to one Eduardo
Hernandez, for the sum of P200 (Exhibit A). On September 4, 1923, this purchaser conveyed the
same right of redemption, for the sum of P200, to the plaintiff himself, Federico Valera (Exhibit
C).
o After the plaintiff had recovered his right of redemption, one Salvador Vallejo, who had an
execution upon a judgment against the plaintiff rendered in a civil case against the latter, levied
upon said right of redemption, which was sold by the sheriff at public auction to Salvador Vallejo
for P250 and was definitely adjudicated to him. Later, he transferred said right of redemption to
the defendant Velasco. This is how the title to the right of usufruct to the aforementioned property
later came to vest the said defendant.

ISSUE: Whether the lower court erred in holding that one of the ways of terminating an agency is
by the express or tacit renunciation of the agent; and that the institution of a civil action and the
execution of the judgment obtained by the agent against his principal is but renunciation of the
powers conferred on the agent;

RULING:
The lower court did not err. The fact that an agent institutes an action against his principal for the
recovery of the balance in his favor resulting from the liquidation of the accounts between them
arising from the agency, and renders a final account of his operations, is equivalent to an express
renunciation of the agency, and terminates the juridical relation between them.
Article 1732 of the Civil Code reads as follows:
Art. 1732. Agency is terminated:
1. By revocation;
2. By the withdrawal of the agent;
3. By the death, interdiction, bankruptcy, or insolvency of the principal or of the agent.
And article 1736 of the same Code provides that:
Art. 1736. An agent may withdraw from the agency by giving notice to the principal. Should the
latter suffer any damage through the withdrawal, the agent must indemnify him therefore, unless
the agent's reason for his withdrawal should be the impossibility of continuing to act as such
without serious detriment to himself.
The misunderstanding between the plaintiff and the defendant over the payment of the
balance of P1,000 due the latter, as a result of the liquidation of the accounts between them
arising from the collections by virtue of the former's usufructuary right, who was the principal,
made by the latter as his agent, and the fact that the said defendant brought suit against the
said principal on March 28, 1928 for the payment of said balance, more than prove the breach
of the juridical relation between them; for, although the agent has not expressly told his principal
that he renounced the agency, yet neither dignity nor decorum permits the latter to continue
representing a person who has adopted such an antagonistic attitude towards him.
When the agent filed a complaint against his principal for recovery of a sum of money arising
from the liquidation of the accounts between them in connection with the agency, Federico
Valera could not have understood otherwise than that Miguel Velasco renounced the agency;
because his act was more expressive than words and could not have caused any doubt.
In order to terminate their relations by virtue of the agency the defendant, as agent, rendered
his final account on March 31, 1923 to the plaintiff, as principal.
The defendant-appellee Miguel Velasco, in adopting a hostile attitude towards his
principal, suing him for the collection of the balance in his favor, resulting from the liquidation of
the agency accounts, ceased ipso facto to be the agent of the plaintiff-appellant, said
agent's purchase of the aforesaid principal's right of usufruct at public auction held by virtue of
an execution issued upon the judgment rendered in favor of the former and against the latter, is
valid and legal.
The defendant-appellee, Miguel Velasco, having acquired Federico Valera's right of
redemption from Salvador Vallejo, who had acquired it at public auction by virtue of a writ of
execution issued upon the judgment obtained by the said Vallejo against the said Valera, the
latter lost all right to said usufruct.
The disagreements between an agent and his principal with respect to the agency, and the
filing of a civil action by the former against the latter for the collection of the balance in favor of
the agent, resulting from a liquidation of the agency accounts, are facts showing a rupture of
relations, and the complaint is equivalent to an express renunciation of the agency, and is more
expressive than if the agent had merely said, "I renounce the agency."

CUI vs. CUI

CASE NUMBER: L-7041
DATE: August 31, 1964

FACTS:
1. The Hospicio is a charitable institution established by the spouses Don Pedro Cui and Doa
Benigna Cui, now deceased, "for the care and support, free of charge, of indigent invalids, and
incapacitated and helpless persons." It was incorporated under Act No. 3239 of the Philippine
Legislature in 1925 and endowed with extensive properties by the said spouses through a series
of donations, principally the deed of donation executed in 1926.
2. Section 2 of Act No. 3239 gave the initial management to the founders jointly and, in case of
their incapacity or death, to "such persons as they may nominate or designate, in the order
prescribed to them."
3. Don Pedro Cui died in 1926, while his widow died in 1929. The administration passed to
Mauricio Cui and Dionisio Jakosalem. The former died on 8 May 1931 and the latter on 1
July 1931.
4. On 2 July 1931 Dr. Teodoro Cui, only son of Mauricio Cui, became the administrator. Beginning
1932, a series of controversies and court litigations ensued concerning the position of
administrator.
5. Plaintiff Jesus Ma. Cui and defendant Antonio Ma. Cui are brothers, being the sons of Mariano
Cui, one of the nephews of the spouses Don Pedro Cui and Doa Benigna Cui. In 1960, the then
incumbent administrator, Dr. Teodoro Cui, resigned in favor of Antonio Ma. Cui pursuant to a
"convenio" entered into between them. On February 28, Antonio Ma. Cui took his oath of office.
Jesus Ma. Cui, had no prior notice of either the "convenio" or of his brother's assumption of the
position.
6. Dr. Teodoro Cui died on 27 August and the plaintiff wrote a letter to the defendant demanding
that the office be turned over to him. The demand remained unheeded, the plaintiff filed the
complaint. Romulo Cui later on intervened, claiming a right to the same office, being a grandson
of Vicente Cui, one of the nephews mentioned by the founders of the Hospicio in their deed of
donation.
7. As between Jesus and Antonio the main issue turns upon their respective qualifications to the
position of administrator. Jesus is the older and under equal circumstances would be preferred
pursuant to section 2 of the deed of donation. However, before the test of age may be, applied
the deed gives preference to the one, among the legitimate descendants of the nephews named,
"que posea titulo de abogado, o medico, o ingeniero civil, o farmaceutico, o a falta de estos titulos
el que pague al estado mayor impuesto o contribucion."
8. What is being disputed is the meaning of the term "titulo de abogado." Jesus Ma. Cui holds the
degree of Bachelor of Laws from the University of Santo Tomas (Class 1926) but is not a member
of the Bar, not having passed the examinations. Antonio Ma. Cui is a member of the Bar and
although disbarred by the Court but was reinstated by resolution about two weeks before he
assumed the position of administrator of the Hospicio.
9. The Court a quo, decied in favor of the plaintiff and held that the phrase "titulo de
abogado," taken alone, means that of a full-fledged lawyer, but that has used in the deed
of donation and considering the function or purpose of the administrator, it should not be
given a strict interpretation but a liberal one," and therefore means a law
degree or diploma of Bachelor of Laws.
10. Jesus Ma. Cui believed he was entitled to the office in as long ago as 1932. On January 26
of that year he filed a complaint in quo warranto against Dr. Teodoro Cui, who assumed the
administration of the Hospicio. Mariano Cui, the plaintiff's father and Antonio Ma. Cui came in as
intervenors. The case was dismissed by the Court of First Instance upon a demurrer by the.
Upon appeal to the Supreme Court from the order of dismissal, the case was remanded. The
plaintiff, did not prosecute the case as decided by the Court, but entered into an arrangement
whereby Teodoro Cui continued as administrator, Mariano Cui was named "legal adviser" and
plaintiff Jesus Ma. Cui accepted a position as assistant administrator.
11. The plaintiff tried to get the position by a series of extra-judicial maneuvers. However, the
Commissioner to the Secretary of Justice ruled that the plaintiff, not being a lawyer, was not
entitled to the administration of the Hospicio.
12. Defendant Antonio Ma. Cui was reinstated by this Court as member of the Bar, and
succeeded Dr. Teodoro Cui when he resigned as administrator pursuant to the "convenio"
between them.

ISSUE & RULING:

WON the administrator should only have possession of the academic degree of Bachelor
of Laws. NO.
The Court is of the opinion, that whether taken alone or in context the term "titulo de
abogado" means not mere possession of the academic degree of Bachelor of Laws but
membership in the Bar after due admission, qualifying one for the practice of law. In
Spanish the word "titulo" is defined as "testimonies o instrumento dado para ejercer un
empleo, dignidad o profesion" and the word "abogado," as follows: "Perito en el derecho
positivo que se dedica a defender en juicio, por escrito o de palabra, los derechos o
intereses de los litigantes, y tambien a dar dictmen sobre las cuestiones o puntos
legales que se le consultan (Id., p.5) A Bachelor's degree alone, conferred by a law school
upon completion of certain academic requirements, does not entitle its holder to exercise the
legal profession. The English equivalent of "abogado" is lawyer or attorney-at-law. This term
has a fixed and general signification, and has reference to that class of persons who are
by license officers of the courts, empowered to appear, prosecute and defend, and upon
whom peculiar duties, responsibilities and liabilities are devolved by law as a
consequence.
2) WON Jesus Cui is disqualified as being an administrator. YES.
He only has the academic degree of Bachelor of Laws. The founders of the Hospicio de San
Jose de Barili provided in the deed of donation that if not a lawyer, the administrator should be a
doctor or a civil engineer or a pharmacist, in that order; or failing all these, should be the one
who pays the highest taxes among those otherwise qualified. A lawyer, first of all, because
under Act No. 3239 the managers or trustees of the Hospicio shall "make regulations for
the government of said institution (Sec. 3, b); shall "prescribe the conditions subject to
which invalids and incapacitated and destitute persons may be admitted to the institute"
(Sec. 3, d); shall see to it that the rules and conditions promulgated for admission are not
in conflict with the provisions of the Act; and shall administer properties of considerable
value for all of which work, it is to be presumed, a working knowledge of the law and a
license to practice the profession would be a distinct asset.
3) WON Antonio Cui is entitled as administrator despite his past disbarment. YES.
It is argued that although the latter (Antonio) is a member of the Bar he is nevertheless
disqualified by virtue of paragraph 3 of the deed of donation, which provides that the
administrator may be removed on the ground, among others, of ineptitude in the
discharge of his office or lack of evident sound moral character. Reference is made to
the fact that the defendant was disbarred by this Court in1957 for immorality and
unprofessional conduct. It is also a fact, however, that he was reinstated in 1960, before he
assumed the office of administrator. His reinstatement is a recognition of his moral
rehabilitation, upon proof no less than that required for his admission to the Bar in the first place.
As far as moral character is concerned, the standard required of one seeking reinstatement
to the office of attorney cannot be less exacting than that implied in paragraph 3 of the
deed of donation as a requisite for the office which is disputed in this case. When the
defendant was restored to the roll of lawyers the restrictions and disabilities resulting from
his previous disbarment were wiped out.
This action must fail on one other ground: it is already barred by lapse of time amounting
the prescription or laches. Under Section 16 of Rule 66, this kind of action must be filed
within one (1) year after the right of plaintiff to hold the office arose.
4) WON the action of the plaintiff for administrator has prescribed. YES.
The failure of the plaintiff to prosecute his claim judicially after this Court decided the
first case of Cui v. Cui in 1934 remanding it to the trial court for further proceedings; his
acceptance instead of the position of assistant administrator, allowing Dr. Teodoro Cui to
continue as administrator and his failure to file an action in quo warranto against said Dr.
Cui after 31 July 1956, when the appeal in Civil Case No. R-1216 of the Cebu Court was
dismissed upon motion of the parties precisely so that the conflicting claims of the
parties could be ventilated in such an action all these circumstances militate against
the plaintiff's present claim in view of the rule that an action in quo warranto must be
filed within one year after the right of the plaintiff to hold the office arose. The excuse
that the plaintiff did not file an action against Dr. Teodoro Cui after 31 July 1956 because
of the latter's illness did not interrupt the running of the statutory period. And the fact
that this action was filed within one year of the defendant's assumption of office in
September 1960 does not make the plaintiff's position any better, for the basis of the
action is his own right to the office and it is from the time such right arose that the one-
year limitation must be counted, not from the date the incumbent began to discharge the
duties of said office.
5) WON Romulo Cui is entitled as administrator. NO.
Now for the claim of intervenor and appellant Romulo Cui. This party is also a lawyer,
grandson of Vicente Cui, one of the nephews of the founders of the Hospicio mentioned
by them in the deed of donation. He is further, in the line of succession, than defendant
Antonio Ma. Cui, who is a son of Mariano Cui, another one of the said nephews. The deed
of donation provides: "a la muerte o incapacidad de estos administradores (those
appointed in the deed itself) pasara a una sola persona que sera el varon, mayor de edad,
que descienda legitimamente de cualquiera de nuestros sobrinos legitimos Mariano Cui,
Mauricio Cui, Vicente Cui, Victor Cui, y que posea titulo de abogado ... En igualdad de
circumstancias, sera preferido el varon de mas edad descendiente de quien tenia
ultimamente la administration." Besides being a nearer descendant than Romulo Cui,
Antonio Ma. Cui is older than he and therefore is preferred when the circumstances are
otherwise equal. The intervenor contends that the intention of the founders was to confer the
administration by line and successively to the descendants of the nephews named in the deed,
in the order they are named. Thus, he argues, since the last administrator was Dr. Teodoro Cui,
who belonged to the Mauricio Cui line, the next administrator must come from the line of Vicente
Cui, to whom the intervenor belongs. This interpretation, however, is not justified by the terms of
the deed of donation.
IN VIEW OF THE FOREGOING CONSIDERATIONS, the judgment appealed from is reversed
and set aside, and the complaint as well as the complaint in intervention are dismissed,
with costs equally against plaintiff-appellee and intervenor-appellant.

ALLIED FREE WORKERS UNION [PLUM] vs. COMPANIA MARITIMA

CASE NUMBER: L-22971
DATE: January 31, 1967
FACTS:
1. MARITIMA is a local corporation engaged in the shipping business. Teves is its branch
manager in the port of Iligan City and AFWU is a duly registered legitimate labor organization with
225 members.
2. On August 11, 1952, MARITIMA, through Teves, entered into a CONTRACT with AFWU to do
and perform all the work of stevedoring and arrastre services of all its vessels or boats calling in
the port of Iligan City, beginning August 12, 1952.
3. During the first month of the existence of the CONTRACT, AFWU rendered satisfactory service.
So, MARITIMA, through Teves, verbally renewed the same.
4. The harmonious relations between MARITIMA and AFWU lasted up to the latter part of 1953
when the former complained to the latter of unsatisfactory and inefficient service by the laborers
doing the arrastre and stevedoring work. This deteriorating situation was admitted as a fact by
AFWU's president.
5. To remedy the situation since MARITIMA's business was being adversely affected -Teves was
forced to hire extra laborers from among "stand-by" workers not affiliated to any union to help in
the stevedoring and arrastre work. The wages of these extra laborers were paid by MARITIMA
through separate vouchers and not by AFWU. Moreover, said wages were not charged to the
consignees or owners of the cargoes.
6. On July 23, 1954, AFWU presented to MARITIMA a written proposal for a collective bargaining
agreement. This demand embodied certain terms and conditions of employment different from
the provisions of the CONTRACT. No reply was made by MARITIMA.
7. AFWU sued MARITIMA for unfair labor practice saying that MARITIMA refused to bargain
collectively. CIR dismissed the case on the ground that it has no jurisdiction over the case.

ISSUES:
1. Whether or not Maritima is can be considered an employer of the members of AFWU? NO.
2. Whether or not AFWU is an agent of Maritima? NO.

RULING:
1. There is no any direct employment relationship between MARITIMA and the laborers. The latter
have no separate individual contracts with MARITIMA. In fact, the court a quo found that it was
AFWU that hired them. Their only possible connection with MARITIMA is through AFWU which
contracted with the latter. Hence, they could not
possibly be in a better class than AFWU which dealt with MARITIMA.

a. Under the CONTRACT, AFWU was an independent contractor of MARITIMA.

i. The petitioner union operated as a labor contractor under the so-called "cabo" system has a
complete set of officers and office personnel and its organizational structure.

ii. The payrolls where laborers are listed and paid were prepared by the union itself without the
intervention or control of the respondent company and/or its agent at. The respondent never
had any knowledge of the individual names of laborers and/or workers listed in the union payroll
or in their roster of membership.
iii. The union engaged the services of their members in undertaking the work of arrastre and
stevedoring geither to haul shippers' goods from their warehouses to the MARITIMA boat or
from the boat to the different consignees. The charges for such service were known by the
union and collected by them through their bill collector, who are employees of the union and not
of the respondent. The respondent had no intervention whatsoever in the collection of those
charges.

iv. The union members who were hired by the union to perform arrastre and stevedoring work
on respondents' vessels at Iligan port were being supervised and controlled by the general
foreman of the petitioner union or by any union assistant when performing arrastre and/or
stevedoring work aboard vessels of the Compaia MARITIMA. There were no instances where
offices and employees of the respondent Compaia MARITIMA and/or its agent had interferred
in the giving of instructions to the laborers performing the arrastre and/or stevedoring work.

b. It is true that MARITIMA admits that it did not answer AFWU's proposal for a collective
bargaining agreement. From this it does not necessarily follow that it is guilty of unfair labor
practice. Under the law the duty to bargain collectively arises only between the "employer" and
its "employees". Where neither party is an ''employer" nor an "employee" of the other, no such
duty would exist. Needless to add, where there is no duty to bargain collectively the refusal to
bargain violates no right.

c. The facts as found by the court a quo strongly indicate that it is AFWU itself who is the
"employer" of those laborers. The facts very succinctly show that it was AFWU, through its
officers, which (1) selected and hired the laborers, (2) paid their wages, (3) exercised
control and supervision over them, and (4) had the power to discipline and dismiss them.
These are the very elements constituting an employer-employee relationship.

2. An agent can not represent two conflicting interests that are diametrically opposed. And that
the cases sought to be relied upon did not involve representatives of opposing interests.