INFANTE vs CUNANAN – TO – FRANCISCO vs GSIS

Infante vs Cunanan
It was seen that Infante took advantage of the benevolence of the petitioners and acted in a
manner that would promote his own selfish interest. This act is unfair and amounts to bad faith.
Petitioner took advantage of the services rendered by respondents, but believing that she could
evade payment of their commission, she induced them to sign the deed of cancellation. This act
of subversion cannot be sanctioned and cannot serve as basis for petitioner to escape payment of
the commission agreed upon.
That petitioner had changed her mind even if respondents had found a buyer who was willing to
close the deal, is a matter that would not give rise to a legal consequence if respondents agree to
call off the transaction in deference to the request of the petitioner. But the situation varies if one
of the parties takes advantage of the benevolence of the other and acts in a manner that would
promote his own selfish interest. This act is unfair as would amount to bad faith. This act cannot
be sanctioned without according to the party prejudiced the reward which is due him. This is the
situation in which respondents were placed by petitioner. Petitioner took advantage of the
services rendered by respondents, but believing that she could evade payment of their
commission, she made use of a ruse by inducing them to sign the deed of cancellation Exhibit 1.
This act of subversion cannot be sanctioned and cannot serve as basis for petitioner to escape
payment of the commission agreed upon.

Lim vs Saban
To deprive Saban of his commission subsequent to the sale which was consummated through his
efforts would be a breach of his contract of agency with Ybañez which expressly states that
Saban would be entitled to any excess in the purchase price after deducting the P200,000.00 due
to Ybañez and the transfer taxes and other incidental expenses of the sale. In Macondray & Co.
v. Sellner, the Court recognized the right of a broker to his commission for finding a suitable
buyer for the seller’s property even though the seller himself consummated the sale with the
buyer. The Court held that it would be in the height of injustice to permit the principal to
terminate the contract of agency to the prejudice of the broker when he had already reaped the
benefits of the broker’s efforts. Saban had completely performed his obligations under his
contract of agency with Ybañez by finding a suitable buyer to preparing the Deed of Absolute
Sale between Ybañez and Lim and her co-vendees. Moreover, the contract of agency very clearly
states that Saban is entitled to the excess of the mark-up of the price of the lot after deducting
Ybañez’s share of P200,000.00 and the taxes and other incidental expenses of the sale.

Prats vs CA
Prats was not the efficient procuring cause in bringing about the sale proceeding from the fact of
expiration of his exclusive authority. But, the Court notes that Prats had Monthly taken steps to
bring back together respondent Doronila and the SSS. Prats communicated with the Office of the
Presidential Housing Commission on February 23, 1968 offering the Doronila property. Prats
wrote a follow-up letter on April 1968 which was answered by the Commission with the
suggestion that the property be offered directly to the SSS. Prats wrote toSSS on March 16,
1968, inviting Chairman Ramon Gaviola, Jr. to discuss the offer of the sale of the property in
question to the SSS. On May 6, 1968, Prats made a formal written offer to the Social Security
System to self the 300 hectare land of Doronila at the price of P6.00 per square meter. Doronila
received on May 17, 1968 from the SSS Administrator a telegram that the SSS was considering
the purchase of Doronilas property for its housing project. Prats and his witness Raagas testified
that Prats had several dinner and lunch meetings with Doronila and/or his nephew, Atty. Manuel
D. Asencio, regarding the progress of the negotiations with the SSS.
Even if Prats was not the procuring cause in bringing about the sale, the Court grants in equity
the sum of One Hundred Thousand Pesos (P100,000.00) by way of compensation for his efforts
and assistance in the transaction, which however was finalized and consummated after the
expiration of his exclusive authority

Manotok Brothers vs CA
At first sight, it would seem that private respondent is not entitled to any commission as he was
not successful in consummating the sale between the parties, for the sole reason that when the
Deed of Sale was finally executed, his extended authority had already expired. By this alone, one
might be misled to believe that a broker or agent is not entitled to any commission until he has
successfully done the job given to him. But following the decision in Prats, Saligumba should be
paid his commission, While in Prats vs. Court of Appeals, the agent was not even the efficient
procuring cause in bringing about the sale, unlike in the case at bar, it was still held therein that
the agent was entitled to compensation. In the case at bar, private respondent is the efficient
procuring cause for without his efforts, the municipality would not have anything to pass and the
Mayor would not have anything to approve.

Uniland Resources vs DBP

From the very beginning, petitioner was aware that it had no express authority from DBP to find
buyer…in equity, the Court recognizes the efforts of petitioner in bringing together respondent
DBP and an interested and financially-able buyer. While not actively involved in the actual
bidding and transfer of ownership of the warehouse property, petitioner may be said to have
initiated, albeit without proper authority, the transaction that eventually took place…there is
sufficient reason to believe that the DBP became more confident to venture and redeem the
properties from the APT due to the presence of a ready and willing buyer, as communicated and
assured by petitioner. Thus the Court in equity, granted Uniland Resources the sum of
P100,000.00 for the role it played in the transaction between respondent DBP and buyer Glaxo,
Philippines.
Domingo vs Domingo
Article 1909 of the New Civil Code is essentially a reinstatement of Article 1726 of the old
Spanish Civil Code which reads thus: Art. 1726. The agent is liable not only for fraud, but also
for negligence, which shall be judged with more or less severity by the courts, according to
whether the agency was gratuitous or for a price or reward.
The provisions demand the utmost good faith, fidelity, honesty, candor and fairness on the part
of the agent, the real estate broker in this case, to his principal, the vendor. The law imposes
upon the agent the absolute obligation to make a full disclosure or complete account to his
principal of all his transactions and other material facts relevant to the agency, so much so that
the law as amended does not countenance any stipulation exempting the agent from such an
obligation and considers such an exemption as void. The duty of an agent is likened to that of a
trustee. This is not a technical or arbitrary rule but a rule founded on the highest and truest
principle of morality as well as of the strictest justice. Hence, an agent who takes a secret profit
in the nature of a bonus, gratuity or personal benefit from the vendee, without revealing the same
to his principal, the vendor, is guilty of a breach of his loyalty to the principal and forfeits his
right to collect the commission from his principal, even if the principal does not suffer any injury
by reason of such breach of fidelity, or that he obtained better results or that the agency is a
gratuitous one, or that usage or custom allows it; because the rule is to prevent the possibility of
any wrong, not to remedy or repair an actual damage. By taking such profit or bonus or gift or
propina from the vendee, the agent thereby assumes a position wholly inconsistent with that of
being an agent for his principal, who has a right to treat him, insofar as his commission is
concerned, as if no agency had existed. The fact that the principal may have been benefited by
the valuable services of the said agent does not exculpate the agent who has only himself to
blame for such a result by reason of his treachery or perfidy. In the case at bar, defendant-
appellee Gregorio Domingo as the broker, received a gift or propina in the amount of One
Thousand Pesos (P1,000.00) from the prospective buyer Oscar de Leon, without the knowledge
and consent of his principal, herein petitioner-appellant Vicente Domingo.
His acceptance of said substantial monetary gift corrupted his duty to serve the interests only of
his principal and undermined his loyalty to his principal
Instead of exerting his best to persuade his prospective buyer to purchase the property on the
most advantageous terms desired by his principal, the broker, herein defendant-appellee
Gregorio Domingo, succeeded in persuading his principal to accept the counter-offer of the
prospective buyer to purchase the property at P1.20 per square meter or One Hundred Nine
Thousand Pesos (P109,000.00). As a necessary consequence of such breach of trust, defendant-
appellee Gregorio Domingo must forfeit his right to the commission and must return the part of
the commission he received from his principal.

Baltazar vs Ombudsman

For one, petitioner’s principal, Faustino Mercado, is an agent himself and as such cannot further
delegate his agency to another. Otherwise put, an agent cannot delegate to another the same
agency. The legal maxim potestas delegata non delegare potest; a power once delegated cannot
be re-delegated, while applied primarily in political law to the exercise of legislative power, is a
principle of agency. For another, a re-delegation of the agency would be detrimental to the
principal as the second agent has no privity of contract with the former. In the instant case,
petitioner has no privity of contract with Paciencia Regala, owner of the fishpond and principal
of Faustino Mercado.

Moreover, while the Civil Code under Article 1892 allows the agent to appoint a substitute, such
is not the situation in the instant case. The SPA clearly delegates the agency to petitioner to
pursue the case and not merely as a substitute. Besides, it is clear in the aforecited Article that
what is allowed is a substitute and not a delegation of the agency.

Serona vs People
Serona did not ipso facto commit estafa through conversion or misappropriation by delivering
the jewelry to a sub-agent for sale on commission basis.
It must be pointed out that the law on agency in our jurisdiction allows the appointment by an
agent of a substitute or sub-agent in the absence of an express agreement to the contrary between
the agent and the principal. In the case at bar, the appointment of Labrador as petitioner’s sub-
agent was not expressly prohibited by Quilatan. Neither does it appear that petitioner was
verbally forbidden by Quilatan from passing on the jewelry to another person before the
acknowledgment receipt was executed or at any other time.
Thus, it cannot be said that petitioner’s act of entrusting the jewelry to Labrador is characterized
by abuse of confidence because such an act was not proscribed and is, in fact, legally sanctioned
It cannot be said that petitioner misappropriated the jewelry or delivered them to Labrador
"without right." Aside from the fact that no condition or limitation was imposed on the mode or
manner by which petitioner was to effect the sale, it is also consistent with usual practice for the
seller to necessarily part with the valuables in order to find a buyer and allow inspection of the
items for sale.
Where, as in the present case, the agents to whom personal property was entrusted for sale,
conclusively proves the inability to return the same is solely due to malfeasance of a subagent to
whom the first agent had actually entrusted the property in good faith, and for the same purpose
for which it was received; there being no prohibition to do so and the chattel being delivered to
the subagent before the owner demands its return or before such return becomes due, we hold
that the first agent cannot be held guilty of estafa by either misappropriation or conversion. The
abuse of confidence that is characteristic of this offense is missing under the circumstance

Woodchild vs Roxas
Court ruled that the agent was not specifically authorized to grant a right of way or to agree to
sell to a portion thereof. It found that the authority of the agent, under the resolution, did not
include the authority to sell a portion of the adjacent lot, or to create or convey real rights
thereon.
Powers of attorney are generally construed strictly and courts will not infer or presume broad
powers from deeds which do not sufficiently include property or subject under which the agent is
to deal. The general rule is that the power of attorney must be pursued within legal structures,
and the agent can neither go beyond it; nor beside it. The act done must be legally identical with
that authorized to be done.
This case demonstrates a strict application of the rule that the agent must act within the scope of
his authority

Guinhawa vs People
Case law has it that wherever the doing of a certain act or the transaction of a given affair, or the
performance of certain business is confided to an agent, the authority to so act will, in
accordance with a general rule often referred to, carry with it by implication the authority to do
all of the collateral acts which are the natural and ordinary incidents of the main act or business
authorized.

Board of Liquidators vs Heirs of Maximo Kalaw

It is possible for any corporate officer “intrusted with the general management and control” of
the corporation’s business (e.g. president, CEO, manager) to perform an act without prior
approval from the board of directors provided that the act is “necessary or appropriate to conduct
the ordinary business of the corporation”. The Court added that such acts must be “an ordinary
nature, which by usage or necessity are incident to his office”. In this case, the Court looked at
the nature of the business of the corporation and the previous practice of the corporation and
determined that the contracts in question were within the general authority granted to the
corporate officer.

San Juan vs CA
The issue in this case revolved around the authority of the corporate treasurer to enter into the
disputed contract of sale on behalf of the corporation. The Court ruled that the contract was not
binding on Motorich because it never authorized or ratified the sale. It explained that because the
corporation has a separate juridical personality distinct from its stockholders, the property of the
corporation is not the property of the stockholders and may not be sold without express
authorization from the board of directors.

A corporation may act only through its board of directors or, when authorized either by its
bylaws or by its board resolution, through its officers or agents in the normal course of business.
The general principles of agency govern the relation between the corporation and its officers or
agents, subject to the articles of incorporation, bylaws, or relevant provisions of law. Thus, this
Court has held that "a corporate officer or agent may represent and bind the corporation in
transactions with third persons to the extent that the authority to do so has been conferred upon
him, and this includes powers which have been intentionally conferred, and also such powers as,
in the usual course of the particular business, are incidental to, or may be implied from, the
powers intentionally conferred, powers added by custom and usage, as usually pertaining to the
particular officer or agent, and such apparent powers as the corporation has caused persons
dealing with the officer or agent to believe that it has conferred."

AF Realty vs Dieselman
Here, a member of the board of directors of the corporation issued a letter authorizing a real
estate broker to look for buyers and negotiate the sale of a parcel of land owned by the
corporation. The Court stated the relevant rule as follows:
Section 23 of the Corporation Code expressly provides that the corporate powers of all
corporations shall be exercised by the board of directors. Just as a natural person may authorize
another to do certain acts in his behalf, so may the board of directors of a corporation validly
delegate some of its functions to individual officers or agents appointed by it.19 Thus, contracts
or acts of a corporation must be made either by the board of directors or by a corporate agent
duly authorized by the board.20 Absent such valid delegation/authorization, the rule is that the
declarations of an individual director relating to the affairs of the corporation, but not in the
course of, or connected with, the performance of authorized duties of such director, are held not
binding on the corporation.
The Court ruled that the director had no written authority from the board to sell or negotiate the
sale of the lot much less to appoint other persons for the same purpose.

Francisco vs GSIS
The issue was whether alleged acceptance made by a corporate officer was binding on the
corporation. The court ruled that GSIS was bound by the acceptance.

The terms of the offer were clear, and over the signature of defendant's general manager,
Rodolfo Andal, plaintiff was informed telegraphically that her proposal had been accepted. There
was nothing in the telegram that hinted at any anomaly, or gave ground to suspect its veracity,
and the plaintiff, therefore, can not be blamed for relying upon it. There is no denying that the
telegram was within Andal's apparent authority, but the defense is that he did not sign it, but that
it was sent by the Board Secretary in his name and without his knowledge. Assuming this to be
true, how was appellee to know it? Corporate transactions would speedily come to a standstill
were every person dealing with a corporation held duty-bound to disbelieve every act of its
responsible officers, no matter how regular they should appear on their face. This Court has
observed in Ramirez vs. Orientalist Co., 38 Phil. 634, 654-655, that —
In passing upon the liability of a corporation in cases of this kind it is always well to keep in
mind the situation as it presents itself to the third party with whom the contract is made.
Naturally he can have little or no information as to what occurs in corporate meetings; and he
must necessarily rely upon the external manifestations of corporate consent. The integrity of
commercial transactions can only be maintained by holding the corporation strictly to the
liability fixed upon it by its agents in accordance with law; and we would be sorry to announce a
doctrine which would permit the property of a man in the city of Paris to be whisked out of his
hands and carried into a remote quarter of the earth without recourse against the corporation
whose name and authority had been used in the manner disclosed in this case. As already
observed, it is familiar doctrine that if a corporation knowingly permits one of its officers, or any
other agent, to do acts within the scope of an apparent authority, and thus holds him out to the
public as possessing power to do those acts, the corporation will, as against any one who has in
good faith dealt with the corporation through such agent, be estopped from denying his authority;
and where it is said "if the corporation permits" this means the same as "if the thing is permitted
by the directing power of the corporation."

Thus, the court was saying that third persons have every right to rely on corporate
communications, particularly in this case where there was nothing to alert Francisco of any
anomaly. If the telegram was sent by the board secretary and not by the general manager, there
was no way for Francisco to know that.