G.R. No. L-8169 January 29, 1957 finished, there is a part near the shelf of the Q.
finished, there is a part near the shelf of the Q. On that occasion, have you been able to finish
THE SHELL COMPANY OF THE PHILIPPINES,
LTD., petitioner,
vs.
FIREMEN'S INSURANCE COMPANY OF NEWARK,
NEW JERSEY COMMERCIAL CASUALTY INSURANCE
CO., SALVADOR SISON, PORFIRIO DE LA FUENTE and
THE COURT OF APPEALS (First Division),respondents.
Ross, Selph, Carrascoso & Janda for petitioner.
J. A. Wolfson and Manuel Y. Macias for respondents.
PADILLA, J.:
Appeal by certiorari under Rule 46 to review a judgment of the
Court of Appeals which reversed that of the Court of First
Instance of Manila and sentenced ". . . the defendants-appellees to
pay, jointly and severally, the plaintiffs-appellants the sum of
P1,651.38, with legal interest from December 6, 1947
(Gutierrez vs. Gutierrez, 56 Phil., 177, 180), and the costs in both
instances."
The Court of Appeals found the following:
Inasmuch as both the Plaintiffs-Appellants and the
Defendant-Appellee, the Shell Company of the
Philippine Islands, Ltd. accept the statement of facts
made by the trial court in its decision and appearing on
pages 23 to 37 of the Record on Appeal, we quote
hereunder such statement:
This is an action for recovery of sum of money, based
on alleged negligence of the defendants.
It is a fact that a Plymounth car owned by Salvador R.
Sison was brought, on September 3, 1947 to the Shell
Gasoline and Service Station, located at the corner of
Marques de Comillas and Isaac Peral Streets, Manila,
for washing, greasing and spraying. The operator of the
station, having agreed to do service upon payment of
P8.00, the car was placed on a hydraulic lifter under the
direction of the personnel of the station.
What happened to the car is recounted by Perlito Sison,
as follows:
Q. Will you please describe how they
proceeded to do the work?
A. Yes, sir. The first thing that was done, as I
saw, was to drive the car over the lifter. Then
by the aid of the two grease men they raised
up my car up to six feet high, and then
washing was done. After washing, the next
step was greasing. Before greasing was
1
right fender, right front fender, of my car to be
greased, but the the grease men cannot reached
that part, so the next thing to be done was to
loosen the lifter just a few feet lower. Then
upon releasing the valve to make the car lower,
a little bit lower . . .
Q. Who released the valve?
A. The greasemen, for the escape of the air. As
the escape of the air is too strong for my ear I
faced backward. I faced toward Isaac Peral
Street, and covered my ear. After the escaped
of the air has been finished, the air coming out
from the valve, I turned to face the car and I
saw the car swaying at that time, and just for a
few second the car fell., (t.s.n. pp. 22-23.)
The case was immediately reported to the Manila Adjustor
Company, the adjustor of the firemen's Insurance Company and
the Commercial Casualty Insurance Company, as the car was
insured with these insurance companies. After having been The position of Defendant Porfirio de la Fuente is stated in his counter-
inspected by one Mr. Baylon, representative of the Manila statement of facts which is hereunder also reproduced:
Adjustor Company, the damaged car was taken to the shops of the
Philippine Motors, Incorporated, for repair upon order of the
Firemen's Insurance Company and the Commercial Casualty
Company, with the consent of Salvador R. Sison. The car was
restored to running condition after repairs amounting to
P1,651.38, and was delivered to Salvador R. Sison, who, in turn
made assignments of his rights to recover damages in favor of the
Firemen's Insurance Company and the Commercial Casualty
Insurance Company.
On the other hand, the fall of the car from the hydraulic damage by Firemen's Insurance Company of Newark, New
lifter has been explained by Alfonso M. Adriano, a
greaseman in the Shell Gasoline and Service Station, as
follows:
Q. Were you able to lift the car on the
hydraulic lifter on the occasion, September 3, Alfonso M. Adriano, as greaseman and one surnamed de los
1947?
A. Yes, sir.
Q. To what height did you raise more or less?
A. More or less five feet, sir.
Q. After lifting that car that height, what did of washing and greasing, the job was about to be completed
you do with the car?
A. I also washed it, sir.
Q. And after washing?
A. I greased it.
greasing and washing the car?
A. There is one point which I could not reach.
Q. And what did you do then?
A. I lowered the lifter in order to reach that point.
Q. After lowering it a little, what did you do then?
A. I pushed and pressed the valve in its gradual
pressure.
Q. Were you able to reach the portion which you
were not able to reach while it was lower?
A. No more, sir.
Q. Why?
A. Because when I was lowering the lifter I saw that
the car was swinging and it fell.
THE COURT. Why did the car swing and fall?
WITNESS: 'That is what I do not know, sir'. (t.s.n., p.67.)
In the afternoon of September 3, 1947, an automobile
belonging to the plaintiff Salvador Sison was brought by his
son, Perlito Sison, to the gasoline and service station at the
corner of Marques de Comillas and Isaac Peral Streets, City
of Manila, Philippines, owned by the defendant The Shell
Company of the Philippine Islands, Limited, but operated by
the defendant Porfirio de la Fuente, for the purpose of having
said car washed and greased for a consideration of P8.00
(t.s.n., pp. 19-20.) Said car was insured against loss or
Jersey, and Commercial Casualty Insurance Company jointly
for the sum of P10,000 (Exhibits "A', "B", and "D").
The job of washing and greasing was undertaken by
defendant Porfirio de la Fuente through his two employees,
Reyes, a helper and washer (t.s.n., pp. 65-67). To perform the
job the car was carefully and centrally placed on the platform
of the lifter in the gasoline and service station aforementioned
before raising up said platform to a height of about 5 feet and
then the servicing job was started. After more than one hour
except for an ungreased portion underneath the vehicle which
could not be reached by the greasemen. So, the lifter was
lowered a little by Alfonso M. Adriano and while doing so,
the car for unknown reason accidentally fell and suffered
damage to the value of P1, 651.38 (t.s.n., pp. 65-67).
 The insurance companies after paying the sum of
P1,651.38 for the damage and charging the balance of
P100.00 to Salvador Sison in accordance with the terms
of the insurance contract, have filed this action together
with said Salvador Sison for the recovery of the total
amount of the damage from the defendants on the
ground of negligence (Record on Appeal, pp. 1-6).
The defendant Porfirio de la Fuente denied negligence
in the operation of the lifter in his separate answer and
contended further that the accidental fall of the car was
caused by unforseen event (Record on Appeal, pp. 17-
19).
The owner of the car forthwith notified the insurers who ordered
their adjustor, the Manila Adjustor Company, to investigate the
incident and after such investigation the damaged car, upon order
of the insures and with the consent of the owner, was brought to
the shop of the Philippine Motors, Inc. The car was restored to
running condition after thereon which amounted to P1,651.38 and
returned to the owner who assigned his right to collect the
aforesaid amount to the Firemen's Insurance Company and the
Commercial Casualty Insurance Company.
On 6 December 1947 the insures and the owner of the car brought
an action in the Court of First Instance of Manila against the Shell
Company of the Philippines, Ltd. and Porfirio de la Fuente to
recover from them, jointly and severally, the sum of P1,651.38,
interest thereon at the legal rate from the filing of the complaint
until fully paid, the costs. After trial the Court dismissed the
complaint. The plaintiffs appealed. The Court of Appeals
reversed the judgment and sentenced the defendant to pay the
amount sought to be recovered, legal interest and costs, as stated
at the beginning of this opinion.
In arriving at the conclusion that on 3 September 1947 when the
car was brought to the station for servicing Profirio de la Fuente,
the operator of the gasoline and service station, was an agent of
the Shell Company of the Philippines, Ltd., the Court of Appeals
found that —
. . . De la Fuente owned his position to the Shell
Company which could remove him terminate his
services at any time from the said Company, and he
undertook to sell the Shell Company's products
exculusively at the said Station. For this purpose, De la
Fuente was placed in possession of the gasoline and
service station under consideration, and was provided
with all the equipments needed to operate it, by the said
Company, such as the tools and articles listed on
Exhibit 2 which the hydraulic lifter (hoist) and
accessories, from which Sison's automobile fell on the
2
date in question (Exhibit 1 and 2). These equipments
were delivered to De la Fuente on a so-called loan basis.
The Shell Company took charge of its care and
maintenance and rendered to the public or its customers
at that station for the proper functioning of the
equipment. Witness Antonio Tiongson, who was sales
superintendent of the Shell Company, and witness
Augusto Sawyer, foreman of the same Company,
supervised the operators and conducted periodic
inspection of the Company's gasoline and service
station, the service station in question inclusive.
Explaining his duties and responsibilities and the reason
for the loan, Tiongson said: "mainly of the supervision
of sales or (of) our dealers and rountinary inspection of
the equipment loaned by the Company" (t.s.n., 107); "we
merely inquire about how the equipments are, whether
they have complaints, and whether if said equipments
are in proper order . . .", (t.s.n., 110); station equipments
are "loaned for the exclusive use of the dealer on
condition that all supplies to be sold by said dealer
should be exclusively Shell, so as a concession we loan
equipments for their use . . .," "for the proper
functioning of the equipments, we answer and see to it
that the equipments are in good running order usable
condition . . .," "with respect to the public." (t.s.n., 111-
112). De la Fuente, as operator, was given special prices
by the Company for the gasoline products sold therein.
Exhibit 1 — Shell, which was a receipt by Antonio
Tiongson and signed by the De la Fuente,
acknowledging the delivery of equipments of the
gasoline and service station in question was
subsequently replaced by Exhibit 2 — Shell, an official
from of the inventory of the equipment which De la
Fuente signed above the words: "Agent's signature" And
the service station in question had been marked
"SHELL", and all advertisements therein bore the same
sign. . . .
. . . De la Fuente was the operator of the station "by
grace" of the Defendant Company which could and did
remove him as it pleased; that all the equipments needed
to operate the station was owned by the Defendant
Company which took charge of their proper care and
maintenance, despite the fact that they were loaned to
him; that the Defendant company did not leave the
fixing of price for gasoline to De la Fuente; on the other
hand, the Defendant company had complete control
thereof; and that Tiongson, the sales representative of
the Defendant Company, had supervision over De la
Fuente in the operation of the station, and in the sale of
Defendant Company's products therein. . . .
Taking into consideration the fact that the operator owed his position to
the company and the latter could remove him or terminate his services
at will; that the service station belonged to the company and bore its
tradename and the operator sold only the products of the company; that
the equipment used by the operator belonged to the company and were
just loaned to the operator and the company took charge of their repair
and maintenance; that an employee of the company supervised the
operator and conducted periodic inspection of the company's gasoline
and service station; that the price of the products sold by the operator
was fixed by the company and not by the operator; and that the receipt
signed by the operator indicated that he was a mere agent, the finding of
the Court of Appeals that the operator was an agent of the company and
not an independent contractor should not be disturbed.
To determine the nature of a contract courts do not have or are not
bound to rely upon the name or title given it by the contracting parties,
should there be a controversy as to what they really had intended to
enter into, but the way the contracting parties do or perform their
respective obligation stipulated or agreed upon may be shown and
inquired into, and should such performance conflict with the name or
title given the contract by the parties, the former must prevail over the
latter.
It was admitted by the operator of the gasoline and service station that
"the car was carefully and centrally placed on the platform of the lifter .
. ." and the Court of Appeals found that —
. . . the fall of Appellant Sison's car from the hydraulic lift and
the damage caused therefor, were the result of the jerking and
swaying of the lift when the valve was released, and that the
jerking was due to some accident and unforeseen shortcoming
of the mechanism itself, which caused its faulty or defective
operation or functioning,
. . . the servicing job on Appellant Sison's automobile was
accepted by De la Fuente in the normal and ordinary conduct
of his business as operator of his co-appellee's service station,
and that the jerking and swaying of the hydraulic lift which
caused the fall of the subject car were due to its defective
condition, resulting in its faulty operation. . . .
As the act of the agent or his employees acting within the scope of his
authority is the act of the principal, the breach of the undertaking by the
agent is one for which the principal is answerable. Moreover, the
company undertook to "answer and see to it that the equipments are in
good running order and usable condition;" and the Court of Appeals
found that the Company's mechanic failed to make a thorough check up
of the hydraulic lifter and the check up made by its mechanic was
"merely routine" by raising "the lifter once or twice and after observing
that the operator was satisfactory, he (the mechanic) left the place." The
latter was negligent and the company must answer for the
negligent act of its mechanic which was the cause of the fall of
the car from the hydraulic lifter.
The judgment under review is affirmed, with costs against the
petitioner.
G.R. No. L-5486 August 17, 1910
JOSE DE LA PEA Y DE RAMON, plaintiff-appellant,
vs.
FEDERICO HIDALGO, defendant-appellant.
O'Brien and DeWitt, for plaintiff and appellant.
E. Gutierrez Repilde, for defendant and appellant.
TORRES, J.:
On May 23, 1906, Jose dela Peña y de Ramon, and Vicenta de
Ramon, in her own behalf and as the legal guardian of her son
Roberto de la Peña, filed in the Court of First Instance of Manila
a written complaint against of Federico Hidalgo, Antonio
Hidalgo, and Francisco Hidalgo, and, after the said complaint,
already amended, had been answered by the defendants Antonio
and Francisco Hidalgo, and the other defendant, Federico
Hidalgo, had moved for the dismissal of this complaint, the
plaintiff, Jose de la Peña y de Ramon, as the judicial
administrator of the estate of the deceased Jose de la Peña y
Gomiz, with the consent of the court filed a second amended
complaintprosecuting his action solely against Federico Hidalgo,
who answered the same in writing on the 21st of may and at the
same time filed a counterclaim, which was also answered by the
defendant.
On October 22, 1907, the case was brought up for hearing and
oral testimony was adduced by both parties, the exhibits
introduced being attached to the record. In view of such
testimony and of documentary evidence, the court, on March 24,
1908, rendered judgment in favor of the plaintiff-administrator
for the sum of P13,606.19 and legal interest from the date of the
filing of the complaint on May 24, 1906, and the costs of the trial.
Both the plaintiff and the defendant filed notice of appeal from
this judgment and also asked for the annulment of the same and
for a new trial, on the ground that the evidence did not justify the
said judgment and that the latter was contrary to law. The
defendant, on April 1, 1908, presented a written motion for new
hearing, alleging the discovery of new evidence favorable to him
and which would necessarily influence the decision such
evidence or to introduce it at the trial of the case, notwithstanding
the fact that he had used all due diligence. His petition was
accompanied by affidavits from Attorney Eduardo Gutierrez
Repilde and Federico Hidalgo, and was granted by order of the
court of the 4th of April.
3
At this stage of the proceedings and on August 10, 1908, the voyage to Spain, remitted from Singapore, one of the ports to call, to
plaintiff Peña y De Ramon filed a third amended complaint, with Father Ramon Caviedas, a Franciscan friar residing in this city, the sum
the permission of the court, alleging, among other things, as a first of 6,000 pesos with the request to deliver the same, which he did, to
cause of action, that during the period of time from November 12, defendant, who, on receiving this money, appropriated it to himself and
1887, to January 7, 1904, when Federico Hidalgo had possession converted it to his own use and benefit, since he only remitted to Peña y
of and administered the following properties, to wit; one house Gomiz in Sapin, by draft, 737.24 pesos, on December 20, 1888; and,
and lot at No. 48 Calle San Luis; another house and lot at No. 6 later, on December 21, 1889, he likewise remitted by another draft 860
Calle Cortada; another house and lot at 56 Calle San Luis, and a pesos, without having returned or paid the balance of the said sum,
fenced lot on the same street, all of the district of Ermita, and notwithstanding the demands made upon him so to do: wherefore the
another house and lot at No. 81 Calle Looban de Paco, belonging defendant owes to the plaintiff, for the third cause of action, the sum of
to his principal, Jose de la Peña y Gomiz, according to the power P4,402.76, with interest at the rate of 5 per cent per annum,
of attorney executed in his favor and exhibited with the complaint compounded yearly, to the time of the filing of the complaint and with
under letter A, the defendant, as such agent, collected the rents and interest at 6 per cent from that date, as provided by law.
income from the said properties, amounting to P50,244, which As a fourth cause of action the plaintiff alleges that, on or about January
sum, collected in partial amounts and on different dates, he should 23, 1904, on his arrival from Spain and without having any knowledge
have deposited, in accordance with the verbal agreement between or information of the true condition of affairs relative to the property of
the deceased and himself, the defendant, in the general treasury of the deceased Peña y Gomiz and its administration, he delivered and
the Spanish Government at an interest of 5 per cent per annum, paid to the defendant at his request the sum of P2,000, derived from the
which interest on accrual was likewise to be deposited in order property of the deceased, which sum the defendant has not returned
that it also might bear interest; that the defendant did not remit or notwithstanding the demands made upon him so to do.
pay to Jose de la Peña y Gomiz, during the latter's lifetime, nor to
nay representative of the said De la Peña y Gomiz, the sum Wherefore the plaintiff petitions the court to render judgment
aforestated nor any part thereof, with the sole exception of sentencing the defendant to pay, as first cause of action, the sum of
P1,289.03, nor has he deposited the unpaid balance of the said P72,548.24, with interest thereon at the rate of 6 per cent per annum
sum in the treasury, according to agreement, wherefore he has from May 24, 1906, the date of the filing of the complaint, and the
become liable to his principal and to the defendant-administrator costs; as a second cause of action, the sum of P15,774.19, with interest
for the said sum, together with its interest, which amounts to at the rate of 6 per cent per annum from the said date of the filing of the
P72,548.24 and that, whereas the defendant has not paid over all complaint, and costs; as a third cause of action, P9,811.13, with interest
nor any part of the last mentioned sum, he is liable for the same, as from the aforesaid date, and costs; and, finally, as a fourth cause of
well as for the interest thereon at 6 per cent per annum from the action, he prays that the defendant be sentenced to refund the sum of
P2,000, with interest thereon at the rate of 6 per cent per annum from
time of the filing of the complaint, and for the costs of the suit.
the 23d of January, 1904, and to pay the costs of trial.
In the said amended complaint, the plaintiff alleged as a second
cause of action: That on December 9, 1887, Gonzalo Tuason The defendant, Federico Hidalgo, in his answer to the third amended
deposited in the general treasury of the Spanish Government, to complaint, sets forth: That he admits the second, third, and fourth
the credit of Peña y Gomiz, the sum of 6,360 pesos, at 5 per cent allegations contained in the first, second, third, and fourth causes of
interest per annum, and on December 20, 1888, the defendant, as action, and denies generally and specifically each one and all of the
the agent of Peña y Gomiz, withdrew the said amount with its allegations contained in the complaint, with the exception of those
expressly admitted in his answer; that, as a special defense against the
interest, that is, 6,751.60 pesos, and disposed of the same for his
first cause of action, he, the defendant, alleges that on November 18,
own use and benefit, without having paid all or any part of the said
1887, by virtue of the powers conferred upon him by Peña y Gomiz, he
sum to Peña y Gomiz, or to the plaintiff after the latter's death,
took charge of the administration of the latter's property and
notwithstanding the demands made upon him: wherefore the
defendant now owes the said sum of 6,751.60 pesos, with interest administered the same until December 31, 1893, when for reasons of
health he ceased to discharge the duties of said position; that during the
at the rate of 5 per cent per annum, compounded annually, from
years 1889, 1890, 1891, and 1892, the defendant continually by letter
the 20th of December, 1888, to the time of the filing of this
requested Peña y Gomiz, his principal, to appoint a person to substitute
complaint, and from the latter date at 6 per cent, in accordance
with law. him in the administration of the latter's property, inasmuch as the
defendant, for reasons of health, was unable to continue in his trust;
The complaint recites as a third cause of action: that, on or about that, on March 22, 1894, the defendant Federico Hidalgo, because of
November 25, 1887, defendant's principal, Peña y Gomiz, on his serious illness, was absolutely obliged to leave these Islands and
embarked on the steamer Isla de Luzon for Sapin, on which date
the defendant notified his principal that, for the reason
aforestated, he had renounced his powers and turned over the
administration of his property to Antonio Hidalgo, to whom he
should transmit a power of attorney for the fulfillment, in due
form, of the trust that the defendant had been discharging since
January 1, 1894, or else execute a power of attorney in favor of
such other person as he might deem proper;
That prior to the said date of March 22, the defendant came,
rendered accounts to his principal, and on the date when he
embarked for Spain rendered the accounts pertaining to the years
1892 and 1893, which were those that yet remained to be
forwarded, and transmitted to him a general statement of accounts
embracing the period from November 18, 1887, to December 31,
1893, with a balance of 6,774.50 pesos in favor of Peña y Gomiz,
which remained in the control of the acting administrator,
Antonio Hidalgo; that from the 22nd of March, 1894, when the
defendant left these Islands, to the date of his answer to the said
complaint, he has not again intervened nor taken any part directly
or indirectly in the administration of the property of Peña y
Gomiz, the latter's administrator by express authorization having
been Antonio Hidalgo, from January 1, 1894, to October, 1902,
who, on this latter date, delegated his powers to Francisco
Hidalgo, who in turn administered the said property until January
7, 1904; that the defendant, notwithstanding his having rendered,
in 1894, all his accounts to Jose Peña y Gomiz, again rendered to
the plaintiff in 1904 those pertaining to the period from 1887 to
December 31, 1893, which accounts the plaintiff approved
without any protest whatever and received to his entire
satisfaction the balance due and the vouchers and documents and
documents relating to the property of the deceased Peña y Gomiz
and issued to the defendant the proper acquaintance therefor.
As a special defense to the second cause of action, the defendant
alleged that, on December 9, 1886, Jose de la Peña y Gomiz
himself deposited in the caja general de depositos (General
Deposit Bank) the sum of 6,000 pesos, at 6 per cent interest for
the term of one year, in two deposit receipts of 3,000 pesos each,
which two deposit receipts, with the interest accrued thereon,
amounted to 6,360 pesos, ad were collected by Gonzalo Tuason,
through indorsement by Peña y Gomiz, on December 9, 1887,
and on this same date Tuason, in the name of Peña y Gomiz,
again deposited the said sum of 6,360 pesos in the General
Deposit Bank, at the same rate of interest, for the term of one year
and in two deposit receipts of 3,180 pesos each, registered under
Nos. 1336 and 1337; that, on December 20, 1888, father Ramon
Caviedas, a Franciscan friar, delivered to the defendant, Federico
Hidalgo, by order of De la Peña y Gomiz, the said two deposit
receipts with the request to collect the interest due thereon viz.,
4
741.60 pesos an to remit it by draft on London, drawn in favor of 2,000 pesos. Wherefore the defendant prays the court to render
De la Peña y Gomiz, to deposit again the 6,000 pesos in the said judgment absolving him from the complaint with the costs against the
General Deposit Bank, for one year, in a single deposit, and in the plaintiff, and to adjudge that the latter shall pay to the defendant the
latter's name, and to deliver to him, the said Father Caviedas, the sum 9,000 pesos, which he still owes defendant, with legal interest
corresponding deposit receipt and the draft on London for their thereon from the date of the counterclaim, to wit, May 21, 1907, and to
transmittal to Peña y Gomiz: all of which was performed by the grant such other and further relief as may be just and equitable.
defendant who acquired the said draft in favor of De la Peña y On the 25th of September, 1908, and subsequent dates, the new trial
Gomiz from the Chartered Bank of India, Australia and China, on was held; oral testimony was adduced by both parties, and the
December 20, 1888, and delivered the draft, together with the documentary evidence was attached to the record of the proceedings,
receipt from the General Deposit Bank, to Father Caviedas, and on which show that the defendant objected and took exception to the
the same date, by letter, notified Peña y Gomiz of the transactions introduction of certain oral and documentary evidence produced by the
executed; that on December 20, 1889, the said Father Hidalgo, by plaintiff. On February 26, 1909, the court in deciding the case found
order of Peña y Gomiz, the aforesaid deposit receipt from the that the defendant, Federico Hidalgo, as administrator of the estate of
General Deposit Bank, with the request to remit, in favor of his the deceased Peña y Gomiz, actually owed by the plaintiff, on the date
constituent, the interest thereon, amounting to 360 pesos, besides of the filing of the complaint, the sum of P37,084.93; that the plaintiff
500 pesos of the capital, that is 860 pesos in all, and to again was not entitled to recover any sum whatever from the defendant for the
deposit the rest, 5,500 pesos, in the General Deposit Bank for alleged second, third, and fourth causes of action; that the plaintiff
another year in Peña y Gomiz's own name, and to deliver to Father actually owed the defendant, on the filing of the complaint, the sum of
Caviedas the deposit receipt and the draft on London, for their P10,155, which the defendant was entitled to deduct from the sum
transmittal to his constituent; all of which the defendant did; he owing by him to the plaintiff. Judgment was therefore entered against
again deposited the rest of the capital, 5,500 pesos, in the General the defendant, Federico Hidalgo, for the payment of P26,629.93, with
Deposit Bank, in the name of Peña y Gomiz, for one year at 5 per interest thereon at the rate of 6 per cent per annum from May 23, 1906,
cent interest, under registry number 3,320, and obtained from the and the costs of the trial.
house of J. M. Tuason and Co. a draft on London for 860 pesos in
favor of Peña y Gomiz, on December 21, 1889, and thereupon Both parties filed written exceptions to this judgment and asked,
separately, for its annulment and that a new trial be ordered, on the
delivered the said receipt and draft to Father Caviedas, of which
acts, when performed, the defendant advised Peña y Gomiz by grounds that the findings of fact contained in the judgment were not
supported nor justified by the evidence produced, and because the said
letter of December 24, 1889' and that, on December 20, 1890, the
said Father Ramon Caviedas delivered to the defendant, by order judgment was contrary to law, the defendant stating in writing that his
exception and motion for a new trial referred exclusively to that part of
of Peña y Gomiz, the said deposit receipt for 5,500 pesos with the
request that he withdraw from the General Deposit Bank the the judgment that was condemnatory to him. By order of the 10th of
April, 1909, the motions made by both parties were denied, to which
capital and accrued interest, which amounted all together to 5,775
pesos, and that he deliver this amount to Father Caviedas, which they excepted and announced their intention to file their respective bills
he did, in order that it might be remitted to Peña y Gomiz. of exceptions.
The defendant denied each of the allegations contained in the third By written motions of the 24th of March, 1909, the plaintiff prayed for
cause of action, and avers that they are all false and calumnious. the execution of the said judgment, and the defendant being informed
thereof solicited a suspension of the issuance of the corresponding writ
He likewise makes a general and specific denial of all the of execution until his motion for a new trial should be decided or his
allegations of the fourth cause of action. bill of exceptions for the appeal be approved, binding himself to give
As a counterclaim the defendant alleges that Jose Peña y Gomiz such bond as the court might fix. The court, therefore, by order of the
owed and had not paid the defendant, up to the date of his death, 25th of the same month, granted the suspension asked for, conditioned
the sum of 4,000 pesos with interest at 6 per cent per annum, and upon the defendants giving a bond, fixed at P34,000 by another order of
3,600 pesos, and on the plaintiff's being presented with the receipt the same date, to guarantee compliance with the judgment rendered
subscribed by his father, Peña y Gomiz, on the said date of should it be affirmed, or with any other decision that might be rendered
January 15th, and evidencing his debt, plaintiff freely and in the case by the Supreme Court. This bond was furnished by the
voluntarily offered to exchange for the said receipt another defendant on the 26th of the same month.
document executed by him, and transcribed in the complaint. On April 16 and May 4, 1909, the defendant and the plaintiff filed their
Defendant further alleges that, up to the date of his counterclaim, respective bills of exceptions, which were certified to and approved by
the plaintiff has not paid him the said sum, with the exception of order of May 8th and forwarded to the clerk of this court.
Before proceeding to examine the disputed facts to make such
legal findings as follows from a consideration of the same and of
the questions of law to which such facts give rise, and for the
purpose of avoiding confusion and obtaining the greatest
clearness and an easy comprehension of this decision, it is
indispensable to premise: First, that as before related, the original
and first complaint filed by the plaintiff was drawn against
Federico Hidalgo, Antonio Hidalgo, and Francisco Hidalgo, the
three persons who had successively administered the property of
Jose de la Peña y Gomiz, now deceased; but afterwards the action
was directed solely against Federico Hidalgo, to the exclusion of
the other defendants, Antonio and Francisco Hidalgo, in the
second and third amended complaints, the latter of the date of
August 10, 1908, after the issuance by the court of the order of
April 4th of the same year, granting the new trial solicited by the
defendant on his being notified of the ruling of the 24th of the
previous month of March; second, that the administration of the
property mentioned, from the time its owner left these Islands and
returned to Spain, lasted from November 18, 1887, to January 7,
1904; and third that, the administration of the said Federico,
Antonio, and Francisco Hidalgo, having lasted so long, it is
necessary to divide it into three periods in order to fix the time
during which they respectively administered De la Peña's
property: During the first period, from November 18, 1887, to
December 31, 1893, the property of the absent Jose de la Peña y
Gomiz was administered by his agent, Federico Hidalgo, under
power of attorney; during the second period, from January 1,
1894, to September, 1902, Antonio Hidalgo administered the said
property, and during the third period, from October, 1902, to
January 7, 1904, Francisco Hidalgo was its administrator.
Before Jose de la Peña y Gomiz embarked for Spain, on
November 12, 1887, he executed before a notary a power of
attorney in favor of Federico Hidalgo, Antonio L. Rocha,
Francisco Roxas and Isidro Llado, so that, as his agents, they
might represent him and administer, in the order in which they
were appointed, various properties he owned and possessed in
Manila. The first agent, Federico Hidalgo, took charge of the
administration of the said property on the 18th of November,
1887.
After Federico Hidalgo had occupied the position of agent and
administrator of De la Peña's property for several years, the
former wrote to the latter requesting him to designate a person
who might substitute him in his said position in the event of his
being obliged to absent himself from these Islands, as one of
those appointed in the said power of attorney had died and the
others did not wish to take charge of the administration of their
principal's property. The defendant, Hidalgo, stated that his
constituent, Peña y Gomiz, did not even answer his letters, to
5
approve or object to the former's accounts, and did not appoint or
designate another person who might substitute the defendant in his
administration of his constituent's property. These statements were
neither denied nor proven to be the record show any evidence
tending to disapprove them, while it does show, attached to the
record and exhibited by the defendant himself, several letters
written by Hidalgo and addressed to Peña y Gomiz, which prove
the said statements, and also a letter from the priest Pedro Gomiz,
a relative of the deceased Jose de la Peña y Gomiz, addressed to
Federico Hidalgo, telling the latter that the writer had seen among
the papers of the deceased several letters from the agent, Federico
Hidalgo, in which the latter requested the designation of a
substitute, because he had to leave this country for Spain, and also
asked for the approval or disapproval of the accounts of his
administration which had been transmitted to his constituent, Peña
y Gomiz.
For reasons of health and by order of his physician, Federico
Hidalgo was obliged, on March 22, 1894, to embark for Spain,
and, on preparing for his departure, he rendered the accounts of
his administration corresponding to the last quarters, up to
December 31, 1893, not as yet transmitted, and forwarded them to
his constituent with a general statement of all the partial balances,
which amounted to the sum total of 6,774.50 pesos, by letter of the
date of March 22, 1894, addressed to his principal, Peña y Gomiz.
In this letter the defendant informed the latter of the writer's
intended departure from this country and of his having
provisionally turned over the administration of the said property to
his cousin, Antonio Hidalgo, upon whom the writer had conferred
a general power of attorney, but asking, in case that this was not
sufficient, that Peña send to Antonio Hidalgo a new power of
attorney.
This notifications is of the greatest importance in the decision of
this case. The plaintiff avers that he found no such letter among
his father's papers after the latter's death, for which reason he did
not have it in his possession, but on the introduction of a copy
thereof by the defendant at the trial, it was admitted without
objection by the plaintiff (p. 81 of the record); wherefore, in spite
of the denial of the plaintiff and of his averment of his not having
found that said original among his father's papers, justice demands
that it be concluded that this letter of the 22d of March, 1894, was
sent to, and was received by Jose de la Peña y Gomiz, during his
lifetime, for its transmittal, with inclosure of the last partial
accounts of Federico Hidalgo's administration and of the general
resume of balances, being affirmed by the defendant, the fact of
the plaintiff's having found among his deceased father's paper's the
said resume which he exhibited at the trial, shows conclusively
that it was received by the deceased, as well as the letter of
transmittal of the 22nd of March, 1894, one of the several letters
written by Hidalgo, which the said priest, Father Gomiz, affirms that he
saw among the papers of the deceased Peña, the dates of which ran
from 1890 to 1894; and it is also shown by the record that the defendant
Hidalgo positively asserted that the said letter of March was the only
one that he wrote to Peña during the year 1894; From all of which it is
deduced that the constituent, Peña y Gomiz, was informed of the
departure of his agent from these Islands for reasons of health and
because of the physician's advice, of the latter's having turned over the
administration of the property to Antonio Hidalgo, and of his agent's the
defendant's petition that he send a new power of attorney to the
substitute.
The existence, amount the papers of the deceased, of the
aforementioned statement of all accounts rendered, which comprise the
whole period of the administration of the property of the constituent by
the defendant, Federico Hidalgo, from November 18, 1887, to
December 31, 1893 — a statement transmitted with the last partial
accounts which were a continuation of those already previously
received — and the said letter of March 22, 1894, fully prove that Jose
de la Peña y Gomiz also received the said letter, informed himself of its
contents, and had full knowledge that Antonio Hidalgo commenced to
administer his property from January of that year. They likewise prove
that he did no see fit to execute a new power of attorney in the letter's
favor, nor to appoint or designate a new agent to take charge of the
administration of his property that had been abandoned by the
defendant, Federico Hidalgo.
From the procedure followed by the agent, Federico Hidalgo, it is
logically inferred that he had definitely renounced his agency was duly
terminated, according to the provisions of article 1732 of the Civil
Code, because, although in the said letter of March 22, 1894, the word
"renounce" was not employed in connection with the agency or power
of attorney executed in his favor, yet when the agent informs his
principal that for reasons of health and by medical advice he is about to
depart from the place where he is exercising his trust and where the
property subject to his administration is situated, abandons the property,
turns it over a third party, without stating when he may return to take
charge of the administration, renders accounts of its revenues up to a
certain date, December 31, 1893, and transmits to his principal a
general statement which summarizes and embraces all the balances of
his accounts since he began to exercise his agency to the date when he
ceased to hold his trust, and asks that a power of attorney in due form in
due form be executed and transmitted to another person who substituted
him and took charge of the administration of the principal's property, it
is then reasonable and just to conclude that the said agent expressly and
definitely renounced his agency, and it may not be alleged that the
designation of Antonio Hidalgo to take charge of the said
administration was that of a mere proceed lasted for more than fifteen
years, for such an allegation would be in conflict with the nature of the
agency.
This renouncement was confirmed by the subsequent procedure,
as well as of the agent as of the principal, until the latter died, on
August 2, 1902, since the principal Peña did not disapprove the
designation of Antonio Hidalgo, nor did he appoint another, nor
send a new power of attorney to the same, as he was requested to
by the previous administrator who abandoned his charge; and the
trial record certainly contains no proof that the defendant, since
he left these Islands in March, 1894, until January, 1904, when he
returned to this city, took any part whatever, directly or even
indirectly, in the said administration of the principal's property,
while Antonio Hidalgo was the only person who was in charge of
the aforementioned administration of De la Peña y Gomiz's
property and the one who was to represent the latter in his
business affairs, with his tacit consent. From all of which it is
perfectly concluded (unless here be proof to the contrary, and
none appears in the record), that Antonio Hidalgo acted in the
matter of the administration of the property of Jose de la Peña y
Gomiz by virtue of an implied agency derived from the latter, in
accordance with the provisions of article 1710 of the Civil Code.
The proof of the tacit consent of the principal, Jose de la Peña y
Gomiz, the owner of the property administered — a consent
embracing the essential element of a legitimate agency, article
1710 before cited — consists in that Peña, knowing that on
account of the departure of Federico Hidalgo from the Philippines
for reasons of health, Antonio Hidalgo took charge of the
administration of his property, for which Federico Hidalgo, his
agent, who was giving up his trust, requested him to send a new
power of attorney in favor of the said Antonio Hidalgo,
nevertheless he, Jose de la Peña y Gomiz, saw fit not to execute
nor transmit any power of attorney whatever to the new
administrator of his property and remained silent for nearly nine
years; and, in that the said principal, being able to prohibit the
party designated, Antonio Hidalgo, from continuing in the
exercise of his position as administrator, and being able to
appoint another agent, did neither the one nor the other.
Wherefore, in permitting Antonio Hidalgo to administer his
property in this city during such a number of years, it is inferred,
from the procedure and silence of the owner thereof, that he
consented to have Antonio Hidalgo administer his property, and
in fact created in his favor an implied agency, as the true and
legitimate administrator.
Antonio Hidalgo administered the aforementioned property of De
la Peña y Gomiz, not in the character of business manager, but as
agent by virtue of an implied agency vested in him by its owner
who was not unaware of the fact, who knew perfectly well that
the said Antonio Hidalgo took charge of the administration of that
property on account of the obligatory absence of his previous
6
agent for whom it was an impossibility to continue in the completely free and clear from the consequences and results of the
discharge of his duties. second administration, continued by a third party and accepted by his
It is improper to compare the case where the owner of the property principal; for it is a fact, undenied nor even doubted, that the said first
is ignorant of the officious management of the third party, with the administrator had to abandon this country and the administration of
case where he had perfect knowledge of the management and Peña's property for reasons of health, which made it possible for him to
administration of the same, which administration and continue in the discharge of his duties without serious detriment to
management, far from being opposed by him was indeed himself, his conduct being in accordance with the provisions of article
consented to by him for nearly nine years, as was done by Peña y 1736 of the Civil Code.
Gomiz. The administration and management, by virtue of an In the power of attorney executed by Peña y Gomiz in this city on
implied agency, is essentially distinguished from that management November 12, 1887, in favor of, among others, Federico Hidalgo, no
of another's business, in this respect, that while the former authority was conferred upon the latter by his principal to substitute the
originated from a contract, the latter is derived only from a qausi- power or agency in favor of another person; wherefore the agent could
contract. not, by virtue of the said power of attorney, appoint any person to
The implied agency is founded on the lack of contradiction or substitute or relieve him in the administration of the principal's
opposition, which constitutes simultaneous agreement on the part property, for the lack of a clause of substitution in the said instrument
of the presumed principal to the execution of the contract, while in authorizing him so to do.
the management of another's business there is no simultaneous The designation of Antonio Hidalgo was not made as a result of
consent, either express or implied, but a fiction or presumption of substitution of the power of attorney executed by Peña in favor of the
consent because of the benefit received. defendant, but in order that the principal's property should not be
The distinction between an agency and a business management abandoned, inasmuch as, for the purposes of the discharge of the duties
has been established by the jurisprudence of the supreme court (of of administrator of the same, the agent, who was about to absent
Spain) in its noteworthy decision of the 7th of July, 1881, setting himself from this city, requested his principal to send to the party,
up the following doctrine: provisionally designated by the former, a new power of attorney, for the
reason that the general power of attorney which Federico Hidalgo had
That laws 28 and 32, title 12 Partida 3, refer to the left, executed in favor of his cousin Antonio Hidalgo, was so executed
expenses incurred in things not one's own and without in his own name and for his own affairs, and not in the name of Peña y
power of attorney from those to whom they belong, and Gomiz, as the latter had not authorized him to take such action.
therefore the said laws are not applicable to this suit
where the petition of the plaintiff is founded on the If the owner of the property provisionally administered at the time by
verbal request made to him by the defendant or the Antonio Hidalgo, saw fit to keep silent, even after having received the
latter's employees to do some hauling, and where, aforesaid letter of March 22, 1894, and during the lapse of nearly ten
consequently, questions that arise from a contract that years, without counter commanding or disapproving the designation of
produces reciprocal rights and duties can not be the person who took charge of the administration of his property,
governed by the said laws. knowing perfectly well that his previous agent was obliged, by sickness
and medical advice to leave this city where such property was situated,
It being absolutely necessary for Federico Hidalgo to leave this he is not entitled afterwards to hold amenable the agent who had to
city and abandon the administration of the property of his abandon this country for good and valid reasons, inasmuch as the latter
principal, Peña y Gomiz, for reasons of health, he made delivery immediately reported to his principal the action taken by himself and
of the property and of his administration to Antonio Hidalgo and informed him of the person who had taken charge of the administration
gave notice of what he had done to his constituent, Peña, in order of his property, which otherwise would have been left abandoned. From
that the latter might send a new power of attorney to Antonio the time of that notification the agent who, for legitimate cause, ceased
Hidalgo, the person charged with the administration of the to exercise his trust, was free and clear from the results and
property. Peña y Gomiz did not send the power of attorney consequences of the management of the person who substituted him
requested, did not oppose or prohibit Antonio Hidalgo's containing with the consent, even only a tacit one, of the principal, inasmuch as the
to administer his property, and consented to his doing so for nearly said owner of the property could have objected to could have prohibited
nine years. Consequently the second administrator must be the continuance in the administration thereof, of the party designated by
considered as a legitimate agent of the said principal, as a result of his agent, and could have opportunely appointed another agent or
the tacit agreement on the latter's part, and the previous agent, who mandatory of his own confidence to look after his property and if he did
necessarily abandoned and ceased to hold his position, as not do so, he is obliged to abide by the consequences of his negligence
and abandonment and has no right to claim damages against his
previous agent, who complied with his duty and did all that he
could and ought to have done, in accordance with the law.
The defendant Federico Hidalgo, having ceased in his
administration of the property belonging to Peña y Gomiz, on
account of physical impossibility, which cessation he duly
reported to his principal and also informed him of the person who
relieved him as such administrator, and for whom he had
requested a new power of attorney, is only liable for the results
and consequences of his administration during the period when
the said property was in his charge, and therefore his liability can
not extend beyond the period of his management, as his agency
terminated by the tacit or implied approval of his principal,
judging from the latter's silence in neither objecting to nor in
anywise prohibiting Antonio Hidalgo's continuing to administer
his property, notwithstanding the lapse of the many years since he
learned by letter of the action taken by his previous agent,
Federico Hidalgo.
Moreover, this latter, in announcing the termination of his
agency, transmitted the last partial accounts that he had not
rendered, up to December 31, 1893, together with a general
statement of all the resulting balances covering the period of his
administration, and Jose de la Peña y Gomiz remained silent and
offered no objection whatever to the said accounts and did not
manifest his disapproval of the same nor of the general statement,
which he must have received in April or may, 1894, to the time
he died, in August, 1902; and when his son, the plaintiff, came to
this city in company with the defendant, Federico Hidalgo, they
traveled together from Spain and arrived in Manila during one of
the early days of January, 1904, the former, for the purpose of
taking charge of the estate left by his father, and after the plaintiff
had examined the accounts kept by Federico Hidalgo, his
deceased father's first agent, he approved them and therefore
issued in favor of the defendant the document, Exhibit 5, found
on page 936 of the second record of trial, dated January 15, 1904,
in which Jose de la Peña y de Ramon acknowledged having
received from his deceased father's old agent the accounts,
balances, and vouchers to his entire satisfaction, and gave an
acquittance in full settlement of the administration that had been
commended to the defendant Hidalgo.
This document, written in the handwriting of the plaintiff, Peña y
de Ramon, appears to be executed in a form considered to be
sufficient by its author, and, notwithstanding the allegations of
the said plaintiff, the record contains no proof of any kind of
Federico Hidalgo's having obtained it by coercion, intimidation,
deceit, or fraud; neither is its shown to have been duly impugned
as false, criminally or civilly, for the statements therein made by
the plaintiff are too explicit and definite to allow, without proof
7
of some vice or defect leading to nullification, of its being Gomiz to Antonio Hidalgo for good and valid reasons, and reasons, and
considered as void and without value or legal effect. in proceeding in the manner aforesaid he complied with the duty
With respect to the responsibility contracted by the defendant, as required of him by law and justice and acted as a diligent agent. If the
regards the payment of the balance shown by the accounts principal, Jose de la Peña Gomiz, the owner of the property mentioned,
rendered by him, it is not enough that the agent should have although informed opportunely of what had occurred saw fit to keep
satisfactorily rendered the accounts pertaining to his trust, but it is silent, not to object to the arrangements made, not to send the power of
also indispensable that it be proved that he had paid to his attorney requested by Federico Hidalgo in favor of Antonio Hidalgo,
principal, or to the owner of the property administered, the balance and took no action nor made any inquiry whatever to ascertain how his
resulting from his accounts. This balance, which was allowed in property was being administered by the second agent, although to the
the judgment appealed from, notwithstanding the allegations of time of his death more than eight years had elapsed, the previous agent,
the plaintiff, which were not deemed as established, amounts to who ceased in the discharge of his duties, can in nowise be held liable
P6,774.50, according to the proofs adduced at the trial. It was the for the consequences of such abandonment, nor for the results of the
imperative duty of the administrator, Federico Hidalgo, to transmit administration of property by Antonio Hidalgo, for the reason that,
this sum to his principal, Jose de la Peña y Gomiz, as the final since his departure from this country, he has not had the least
balance of the accounts of his administration, struck on December intervention nor even indirect participation in the aforementioned
31, 1893, and by his failure so to do and delivery of the said sum administration of the said Antonio Hidalgo who, under the law, was the
to his successor, Antonio Hidalgo, he acted improperly, and must agent or administrator by virtue of an implied agency, which is
pay the same to the plaintiff. equivalent in its results to an express agency, executed by the owner of
the property. Consequently, Federico Hidalgo is not required to render
Antonio Hidalgo took charge of the administration of Peña y accounts of the administration corresponding to the second period
Gomiz's property from January, 1894, to September, 1902, that is, mentioned, nor to pay the balance that such accounts may show to be
during the second period of administration of the several owing.
properties that belonged to the deceased Peña.
At the first trial of this cause, Federico Hidalgo, testified under oath that
Although the plaintiff, in his original complaint, had included the his principal, Jose Peña y Gomiz, did not agree to the appointment of
said Antonio Hidalgo as one of the responsible defendants, yet he Antonio Hidalgo, chosen by the witness, not to such appointee's taking
afterwards excluded him, as well from the second as from the third charge of the administration of his property. Aside from the fact that the
amended complaint, and consequently the liability that might trial record does not show honor on what date Peña expressed such
attach to Antonio Hidalgo was not discussed, nor was it disagreement it is certain that, in view of the theory of defense
considered in the judgment of the lower court; neither can it be in maintained by the defendant Hidalgo could have said, by means of a no,
the decision, for the reason that the said Antonio Hidalgo is not a that his principal did not agree to the appointment of the said Antonio
party to this suit. However, the said liability of Antonio Hidalgo is Hidalgo, and the intercalation of the word no in the statement quoted is
imputed to Federico Hidalgo, and so it is that, in the complain t, more inexplicable in that the attorney for the adverse party moved that
the claim is made solely against Federico Hidalgo, in order that the said answer be stricken from the record, as he objected to its
the latter might be adjudged to pay the amounts which constitute appearing therein.
the balance owing from him who might be responsible, Antonio
Hidalgo, during the period of this latter's administration. Were it true that the principal Jose de la Peña by Gomiz, had neither
agreed to the designation of Antonio Hidalgo, nor to the latter's
Federico Hidalgo, in our opinion, could not and can not be administering his property, he would immediately have appointed
responsible for the administration of the property that belonged to another agent and administrator, since he knew that Federico Hidalgo
the deceased Peña y Gomiz, which was administered by Antonio had left the place where his property was situated and that it would be
Hidalgo during eight years and some months, that is, during the abandoned, had he not wished that Antonio Hidalgo should continue to
second period, because of the sole fact of his having turned over to administer it. If the latter continued in the administration of the property
the latter the administration of the said property on his departure for so long a time, nearly nine years, it was because the said Peña
from this city of Spain. Neither law nor reason obliged Federico agreed and gave his consent to the acts performed by his outgoing
Hidalgo to remain in this country at the cost of his health and agent, and for this reason the answer given by Federico Hidalgo
perhaps of his life, even though he were the administrator of mistakenly, or not, that his principal, Peña, did not agree to the
certain property belonged to Peña y Gomiz, since the care of the appointment of Antonio Hidalgo, is immaterial and does not affect the
property and interests of another does not require sacrifice on the terms of this decision.
part of the agent of his own life and interests. Federico Hidalgo
was obliged to deliver the said property belonging to Peña y
If the defendant is not responsible for the results of the
administration of said property administered by Antonio Hidalgo
during the second period before referred to, neither is he
responsible for that performed during the third period by
Francisco Hidalgo, inasmuch as the latter was not even chosen by
the defendant who, on October 1, 1902, when Francisco Hidalgo
took charge of Peñas' property that had been turned over to him
by Antonio Hidalgo, was in Spain and had no knowledge of nor
intervention in such delivery; wherefore the defendant can in no
manner be obliged to pay to the plaintiff any sum that may be
found owing by Francisco Hidalgo.
The trial judge — taking into consideration that, by the evidence
adduced at the hearing, it was proved that Francisco Hidalgo
rendered accounts to the plaintiff of the administration of the
property in question during the said third period, that is, for one
year, three months, and someday, and that he delivered to the
plaintiff the balance of 1,280.03 pesos, for which the latter issued
to the said third administrator the document Exhibit 2, written in
his own handwriting under date of January 7, 1904, and the
signature which, affixed by himself, he admitted in his testimony
was authentic, on its being exhibited to him — found that the
plaintiff, Peña y de Ramon, was not entitled to recover any sum
whatever for the rents pertaining to the administration of his
property by the said Francisco Hidalgo.
All the reasons hereinbefore given relate to the first cause of
action, whereby claim is made against Federico Hidalgo for the
payment of the sum of P72,548.24 and interest at the rate of 6 per
cent per centum, and they have decided some of the errors
assigned by the appellants in their briefs to the judgment appealed
from.
Two amounts are have claimed which have one and the same
origin, yet are based on two causes of action, the second and the
third alleged by the plaintiff; and although the latter, afterwards
convinced by the truth and of the impropriety of his claim, had to
waive the said third cause of action during the second hearing of
this cause (pp. 57 and 42 of the record of the evidence), the trial
judge, on the grounds that the said second and third causes of
action refer to the same certificates of deposit of the treasury of
the Spanish Government, found, in the judgment appealed from,
that the plaintiff was not entitled to recover anything for the
aforesaid second and third causes of action — a finding that is
proper and just, although qualified as erroneous by the plaintiff in
his brief.
It appears, from the evidence taken in this cause, that Jose de la
Peña y Gomiz, according to the certificates issued by the chief of
the division his lifetime, after having in 1882 withdrawn from the
General Deposit Bank of the Spanish Government a deposit of
17,000 pesos and its interest deposit any sum therein until
8
December 9, 1886, when he deposited two amounts of 3,000 pesos
each, that is, 6,000 pesos in all, the two deposit receipts for the
same being afterwards endorsed in favor of Gonzalo Tuason. The
latter, on December 9, 1887, withdrew the deposit and took out the
said two amounts, together with the interest due thereon, and on
the same date redeposited them in the sum of 6,360 pesos at 5 per
cent per annum in the name of Jose de la Peña y Gomiz. On the
20th of December of the following year, 1888, the defendant
Hidalgo received from his principal, Peña y Gomiz, through
Father Ramon Caviedas, the two said letters of credit, in order that
he might withdraw from the General Deposit Bank the two
amounts deposited, together with the interest due thereon,
amounting to 741 pesos, and with this interest purchase a draft on
London in favor of its owner and then redeposit the original
capital of 6,000 pesos. This, the defendant Hidalgo did and then
delivered the draft and the deposit receipt to Father Caviedas, of
all of which transactions he informed his principal by letter of the
same date, transcribed on page 947 of the second trial record.
In the following year, 1889, Father Ramon Caviedas again
delivered to the defendant Hidalgo the aforementioned deposit
receipt with the request to withdraw from the General Deposit
bank the sum deposited and to purchase a draft of 860 pesos on
London in favor of their owner, Jose de la Peña y Gomiz, and,
after deducting the cost of the said draft from the capital and
interest withdrawn from deposit, amounting to 6,360 pesos, to
redeposit the remainder, 5,500 pesos, in the bank mentioned, in
accordance with the instructions from Peña y Gomiz: All of which
was done by the defendant Hidalgo, who delivered to Father
Caviedas the receipt for the new deposit of 5,500 pesos as
accredited by the reply-letter, transcribed on page 169 of the
record, and by the letter addressed by Hidalgo to Peña, of the date
of December 20 of that year and shown as an original exhibit by
the plaintiff himself on page 29 of the record of the evidence.
Lastly, in December, 1890, Father Caviedas, aforementioned,
delivered to the defendant Hidalgo the said deposit receipt for
5,500 pesos in order that he might withdraw this amount from
deposit and deliver it with the interest thereon to the former for the
purpose of remitting it by draft to Jose de la Peña; this Hidalgo
did, according to a reply-letter from Father Caviedas, the original
of which appears on page 979 of the file of exhibits and is copied
on page 171 of the trial record, and is apparently confirmed by the
latter in his sworn testimony.
So that the two amounts of 3,000 pesos each, expressed in two
deposit receipts received from De la Peña y Gomiz by Father
Ramon Caviedas and afterwards delivered to Francisco Hidalgo
for the successive operations of remittance and redeposit in the
bank before mentioned, are the same and only ones that were on
deposit in the said bank in the name of their owner, Peña y Gomiz.
The defendant Hidalgo made two remittances by drafts of London, one
in 1888 for 741.60 pesos, through a draft purchased from the Chartered
Bank, and another in 1889 for 860 pesos, through a draft purchased
from the house of Tuason & Co., and both in favor of Peña y Gomiz,
who received through Father Ramon Caviedas the remainder, 5,500
pesos, of the sums deposited. For these reasons, the trial judge was of
the opinion that the certificates of deposit sent by Peña y Gomiz to
Father Ramon Caviedas and those received from the latter by the
defendant Hidalgo were identicals, as were likewise the total amounts
expressed by the said receipts or certificates of deposit, from the sum of
which were deducted the amounts remitted to Peña y Gomiz and the
remainder deposited after each anual operation until, finally, the sum of
5,500 pesos was remitted to its owner, Peña y Gomiz, according to his
instructions, through the said Father Caviedas. The lower court, in
concluding its judgment, found that the plaintiff was entitled to recover
any sum whatever for the said second and third causes of action,
notwithstanding that, as hereinbefore stated, the said plaintiff withdrew
the third cause of action. This finding of the court, with respect to the
collection of the amounts of the aforementioned deposit receipts, is
perfectly legal and in accordance with justice, inasmuch as it is a
sustained by abundant and conclusive documentary evidence, which
proves in an incontrovertible manner the unrighteousness of the claim
made by the plaintiff in twice seeking payment, by means of the said
second and third causes of action, of the said sum which, after various
operations of deposit and remittance during three years, was finally
returned with its interest to the possession of its owner, Peña y Gomiz.
From the trial had in this case, it also appears conclusively proved that
Jose de la Peña y Gomiz owed, during his lifetime, to Federico Hidalgo,
7,600 pesos, 4,000 pesos of which were to bear interest at the rate of 6
per cent per annum, and the remainder without any interest, and that,
notwithstanding the lapse of the period of three years, from November,
1887, within which he bound himself to repay the amount borrowed,
and in spite of his creditor's demand of payment, made by registered
letter, the original copy of which is on page 38 of the file of exhibits
and a transcription thereof on page 930 of the first and second record of
the evidence, the debt was not paid up to the time of the debtor's death.
For such reasons, the trial court, in the judgment appealed from, found
that there was a preponderance of evidence to prove that this loan had
been made and that the plaintiff actually owed the defendant the sum
loaned, as well as the interest thereon, after deducting therefrom the
2,000 pesos which the defendant received from the plaintiff on account
of the credit, and that the former was entitled to recover.
It appears from the pleadings and evidence at the trial that in January,
1904, on the arrival in this city of Federico de la Peña de Ramon, and
on the occasion of the latter's proceeding to examine the accounts
previously rendered, up to December 31, 1893, by the defendant
Hidalgo to the plaintiff's father, then deceased, Hidalgo made demand
upon the plaintiff, Peña y de Ramon, for the payment of the said debt of
his father, although the creditor Hidalgo acceded to the requests
of the plaintiff to grant the latter an extension of time until he
should be able to sell one of the properties of the estate. It was at
that time, according to the defendant, that the plaintiff Peña took
up the instrument of indebtedness, executed by his deceased
father during his lifetime, and delivered to the defendant in
exchange therefor the document of the date of January 15, 1904,
found on page 924 of the second record of evidence, whereby the
plaintiff, Jose de la Peña, bound himself to pay his father's debt of
11,000 pesos, owing to the defendant Hidalgo, out of the
proceeds of the sale of some of the properties specified in the said
document, which was written and signed by the plaintiff in his
own handwriting.
The plaintiff not only executed the said document acknowledging
his father's debt and binding himself to settle it, but also, several
days after the sale of a lot belonging to the estate, paid to the
creditor on account the sum of 2,000 pesos, according to the
receipt issued by the latter and exhibited on page 108 of the first
record of evidence.
The said document, expressive of the obligation contracted by the
plaintiff Peña y de Ramon that he would pay to the defendant the
debt of plaintiff's deceased father, amounting to 11,000 pesos, out
of the proceeds from some of the properties of the estate, has not
been denied nor impugned as false; and not withstanding the
averment made by the plaintiff that when he signed he lacked
information and knowledge of the true condition of the affairs
concerning Hidalgo's connection with the property that be
absolutely no proof whatever is shown in the trial record of the
creditor's having obtained the said document through deceit or
fraud — circumstances in a certain manner incompatible with the
explicit statements contained therein. For these reasons, the trial
court, weighing the whole of the evidence furnished by the
record, found that the loan of the said 7,600 pesos was truly and
positively made, and that the plaintiff must pay the same to the
defendant, with the interest thereon, and that he was not entitled
to recover the 2,000 pesos, as an undue payment made by him to
the defendant creditor. For the foregoing reason the others errors
assigned by the plaintiff to the judgment appealed from are
dismissed.
With respect to the obligation to pay the interest due on the
amounts concerned in this decision, it must be borne in mind that,
as provided by article 1755 of the Civil Code, interest shall only
be owed when it has been expressly stipulated, and that should
the debtor, who is obliged to pay a certain sum of money, be in
default and fail to fulfill the agreement made with his creditor, he
must pay, as indemnity for losses and damages, the interest
agreed upon, and should there be no express stipulation, the legal
interest (art. 1108 of the Civil Code); but, in order that the debtor
9
may be considered to be in default and obliged to pay the
indemnity, it is required, as a general rule, that his creditor shall
demand of such debtor the fulfillment of his obligation, judicially
or extrajudicially, except in such cases as are limitedly specified in
article 1100 of the Civil Code.
It was not expressly stipulated that either the balance of the last
account rendered by the defendant Federico Hidalgo in 1893, or
the sum which the plaintiff bound himself to pay to the defendant,
in the instrument of the 15th of January, 1904, should bear
interest; nor is there proof that a judicial or extrajudicial demand
was made, on the part of the respective creditors concerned, until
the date of complaint, on the part of the plaintiff, and that of the
counterclaim, on the part of the defendant. Therefore no legal
interest is owing for the time prior to the respectives dates of the
complaint and counterclaim.
By virtue, then, of the reasons herein before set forth, it is proper,
in our opinion, to adjudge, as we do hereby adjudge, that the
defendant, Federico Hidalgo, shall pay to the plaintiff, Jose de la
Peña y de Ramon, as administrator of the estate of the deceased
Jose de la Peña y Gomiz, the sum of P6,774.50, and the legal
interest thereon at the rate of 6 per cent per annum from 23rd of
May, 1906, the date of the filing of the original complaint in this
case; that we should and hereby do declare that the said defendant
Federico Hidalgo, is not bound to gibe nor render accounts of the
administration of the property of the said deceased Jose de la Peña
y Gomiz administered, respectively, by Antonio Hidalgo, from
January, 1894, to September 30, 1902, and by Francisco Hidalgo,
from October 1, 1902, to January 7, 1904, and therefore the
defendant, Federico Hidalgo, not being responsible for the results
of the administration of the said property administered by the said
Antonio and Francisco Hidalgo, we do absolve the said defendant
from the complaint filed by the plaintiff, in so far as it concerns
the accounts pertaining to the aforesaid two periods of
administration and relates to the payment of the balances resulting
from such accounts; and that we should and hereby do absolve the
defendant Hidalgo from the complaint with respect to the demand
for the payment of the sums of P15,774.19 and P2,000, with their
respective interests, on account of the second and the fourth cause
of action, respectively, and because the plaintiff renounced and
withdrew his complaint, with respect to the third cause of action;
and that we should and do likewise adjudge, that the plaintiff, Jose
de la Peña y de Ramon, shall pay to Federico Hidalgo, by reason
of the counterclaim, the sum of P9,000 with legal interest thereon
at the rate of 6 per cent per annum from 21st of may, 1907, the
date of the counterclaim.
The judgment appealed from, together with that part thereof On 28 November 1945, private respondent Paciente Cordero, son-in-
relative to the statement it contains concerning the equivalence
law of the Alteras, signed a document in the Visayan dialect, the
between the Philippine peso and the Mexican peso, is affirmed in
English translation of which reads:
so far as it is in agreement with the findings of this decision, and the
said judgment is reversed in so far as it is not in accordance herewith.
No special finding is made as to costs assessed in either instance, and to
the plaintiff is reserved any right that he may be entitled to enforce
against Antonio Hidalgo.
G.R. No. L-40242 December 15, 1982
DOMINGA CONDE, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, MANILA
PACIENTE CORDERO, together with his wife, NICETAS
ALTERA, RAMON CONDE, together with his wife, CATALINA
T. CONDE, respondents.
MELENCIO-HERRERA, J.:
An appeal by certiorari from the Decision of respondent Court of
Appeals 1 (CA-G.R. No. 48133- R) affirming the judgment of the Court
of First Instance of Leyte, Branch IX, Tacloban City (Civil Case No. B-
110), which dismissed petitioner's Complaint for Quieting of Title and
ordered her to vacate the property in dispute and deliver its possession
to private respondents Ramon Conde and Catalina Conde.
The established facts, as found by the Court of Appeals, show that on 7
April 1938. Margarita Conde, Bernardo Conde and the petitioner
Dominga Conde, as heirs of Santiago Conde, sold with right of
repurchase, within ten (10) years from said date, a parcel of agricultural
land located in Maghubas Burauen Leyte, (Lot 840), with an
approximate area of one (1) hectare, to Casimira Pasagui, married to
Pio Altera (hereinafter referred to as the Alteras), for P165.00. The
"Pacto de Retro Sale" further provided:
... (4) if at the end of 10 years the said land is not
repurchased, a new agreement shall be made
between the parties and in no case title and
ownership shall be vested in the hand of the party of
the SECOND PART (the Alteras).
xxx xxx xxx (Exhibit "B")
On 17 April 1941, the Cadastral Court of Leyte adjudicated Lot No.
840 to the Alteras "subject to the right of redemption by Dominga
Conde, within ten (10) years counting from April 7, 1983, after
returning the amount of P165.00 and the amounts paid by the spouses
in concept of land tax ... " (Exhibit "1"). Original Certificate of Title
No. N-534 in the name of the spouses Pio Altera and Casimira Pasagui,
subject to said right of repurchase, was transcribed in the "Registration
Book" of the Registry of Deeds of Leyte on 14 November 1956
(Exhibit "2").
 MEMORANDUM OF REPURCHASE
OVER A PARCEL OF LAND SOLD WITH
REPURCHASE WHICH DOCUMENT GOT
LOST
WE, PIO ALTERA and PACIENTE
CORDERO, both of legal age, and residents
of Burauen Leyte, Philippines, after having
been duly sworn to in accordance with law
free from threats and intimidation, do hereby
depose and say:
1. That I, PIO ALTERA
bought with the right of
repurchase two parcels of
land from DOMINGA
CONDE, BERNARDO
CONDE AND
MARGARITA CONDE,
all brother and sisters.
2. That these two parcels
of land were all inherited
by the three.
3. That the document of
SALE WITH THE
RIGHT OF
REPURCHASE got lost in
spite of the diligent efforts
to locate the same which
was lost during the war.
4. That these two parcels
of land which was the
subject matter of a Deed
of Sale with the Right of
Repurchase consists only
of one document which
was lost.
5. Because it is about time
to repurchase the land, I
have allowed the
representative of Dominga
Conde, Bernardo Conde
and Margarita Conde in
the name of EUSEBIO
AMARILLE to repurchase
the same.
6. Now, this very day
November 28, 1945, 1 or
We have received together
10
with Paciente Cordero who Contending that she had validly repurchased the lot in question in 1945,
is my son-in-law the petitioner filed, on 16 January 1969, in the Court of First Instance of
amount of ONE Leyte, Branch IX, Tacloban City, a Complaint (Civil Case No. B-110),
HUNDRED SIXTY-FIVE against Paciente Cordero and his wife Nicetas Altera, Ramon Conde
PESOS (P165. 00) and his wife Catalina T. Conde, and Casimira Pasagui Pio Altera
Philippine Currency of having died in 1966), for quieting of title to real property and
legal tender which was the declaration of ownership.
consideration in that sale Petitioner's evidence is that Paciente Cordero signed the Memorandum
with the right of repurchaseof Repurchase in representation of his father-in-law Pio Altera, who
with respect to the two was seriously sick on that occasion, and of his mother-in-law who was
parcels of land. in Manila at the time, and that Cordero received the repurchase price of
That we further covenant together with P65.00.
Paciente Cordero who is my son-in-law that Private respondents, for their part, adduced evidence that Paciente
from this day the said Dominga Conde, Cordero signed the document of repurchase merely to show that he had
Bernardo Conde and Margarita Conde will no objection to the repurchase; and that he did not receive the amount
again take possession of the aforementioned of P165.00 from petitioner inasmuch as he had no authority from his
parcel of land because they repurchased the parents-in-law who were the vendees-a-retro.
same from me. If and when their possession
over the said parcel of land be disturbed by After trial, the lower Court rendered its Decision dismissing the
other persons, I and Paciente Cordero who is Complaint and the counterclaim and ordering petitioner "to vacate the
my son-in-law will defend in behalf of the property in dispute and deliver its peaceful possession to the defendants
herein brother and sisters mentioned above, Ramon Conde and Catalina T. Conde".
because the same was already repurchased by On appeal, the Court of Appeals upheld the findings of the Court a
them. quo that petitioner had failed to validly exercise her right of repurchase
IN WITNESS WHEREOF, I or We have in view of the fact that the Memorandum of Repurchase was signed by
hereunto affixed our thumbmark or signature Paciente Cordero and not by Pio Altera, the vendee-a-retro, and that
to our respective names below this document there is nothing in said document to show that Cordero was specifically
or memorandum this 28th day of November authorized to act for and on behalf of the vendee a retro, Pio Altera.
1945 at Burauen Leyte, Philippines, in the Reconsideration having been denied by the Appellate Court, the case is
presence of two witnesses. before us on review.
PIO ALTERA (Sgd.) PACIENTE CORDERO There is no question that neither of the vendees-a-retro signed the
"Memorandum of Repurchase", and that there was no formal
WITNESSES:
authorization from the vendees for Paciente Cordero to act for and on
1. (SGD.) TEODORO C. AGUILLON their behalf.
To be noted is the fact that neither of the vendees-a-retro, Pio Of significance, however, is the fact that from the execution of the
Altera nor Casimira Pasagui, was a signatory to the deed. repurchase document in 1945, possession, which heretofore had been
Petitioner maintains that because Pio Altera was very ill at the with the Alteras, has been in the hands of petitioner as stipulated
time, Paciente Cordero executed the deed of resale for and on therein. Land taxes have also been paid for by petitioner yearly from
behalf of his father-in-law. Petitioner further states that she 1947 to 1969 inclusive (Exhibits "D" to "D-15"; and "E"). If, as opined
redeemed the property with her own money as her co-heirs were by both the Court a quo and the Appellate Court, petitioner had done
bereft of funds for the purpose. nothing to formalize her repurchase, by the same token, neither have
The pacto de retro document was eventually found. the vendees-a-retro done anything to clear their title of the encumbrance
therein regarding petitioner's right to repurchase. No new agreement
On 30 June 1965 Pio Altera sold the disputed lot to the spouses
Ramon Conde and Catalina T. Conde, who are also private was entered into by the parties as stipulated in the deed of pacto de
retro, if the vendors a retro failed to exercise their right of redemption
respondents herein. Their relationship to petitioner does not
appear from the records. Nor has the document of sale been after ten years. If, as alleged, petitioner exerted no effort to procure the
exhibited. signature of Pio Altera after he had recovered from his illness, neither
did the Alteras repudiate the deed that their son-in-law had signed.
Thus, an implied agency must be held to have been created from
their silence or lack of action, or their failure to repudiate the
agency. 2
Possession of the lot in dispute having been adversely and
uninterruptedly with petitioner from 1945 when the document of
repurchase was executed, to 1969, when she instituted this action,
or for 24 years, the Alteras must be deemed to have incurred in
laches. 3 That petitioner merely took advantage of the
abandonment of the land by the Alteras due to the separation of
said spouses, and that petitioner's possession was in the concept
of a tenant, remain bare assertions without proof.
Private respondents Ramon Conde and Catalina Conde, to whom
Pio Altera sold the disputed property in 1965, assuming that there
was, indeed, such a sale, cannot be said to be purchasers in good
faith. OCT No. 534 in the name of the Alteras specifically
contained the condition that it was subject to the right of
repurchase within 10 years from 1938. Although the ten-year
period had lapsed in 1965 and there was no annotation of any
repurchase by petitioner, neither had the title been cleared of that
encumbrance. The purchasers were put on notice that some other
person could have a right to or interest in the property. It
behooved Ramon Conde and Catalina Conde to have looked into
the right of redemption inscribed on the title, and particularly the
matter of possession, which, as also admitted by them at the pre-
trial, had been with petitioner since 1945.
Private respondent must be held bound by the clear terms of the
Memorandum of Repurchase that he had signed wherein he
acknowledged the receipt of P165.00 and assumed the obligation
to maintain the repurchasers in peaceful possession should they
be "disturbed by other persons". It was executed in the Visayan
dialect which he understood. He cannot now be allowed to
dispute the same. "... If the contract is plain and unequivocal in its
terms he is ordinarily bound thereby. It is the duty of every
contracting party to learn and know its contents before he signs
and delivers it." 4
There is nothing in the document of repurchase to show that
Paciente Cordero had signed the same merely to indicate that he
had no objection to petitioner's right of repurchase. Besides, he
would have had no personality to object. To uphold his oral
testimony on that point, would be a departure from the parol
evidence rule 5 and would defeat the purpose for which the
doctrine is intended.
... The purpose of the rule is to give stability
to written agreements, and to remove the
temptation and possibility of perjury, which
would be afforded if parol evidence was
admissible. 6
11
In sum, although the contending parties were legally wanting in
their respective actuations, the repurchase by petitioner is
supported by the admissions at the pre-trial that petitioner has
been in possession since the year 1945, the date of the deed of
repurchase, and has been paying land taxes thereon since then.
The imperatives of substantial justice, and the equitable principle
of laches brought about by private respondents' inaction and
neglect for 24 years, loom in petitioner's favor.
WHEREFORE, the judgment of respondent Court of Appeals is
hereby REVERSED and SET ASIDE, and petitioner is hereby
declared the owner of the disputed property. If the original of OCT
No. N-534 of the Province of Leyte is still extant at the office of
the Register of Deeds, then said official is hereby ordered to
cancel the same and, in lieu thereof, issue a new Transfer
Certificate of Title in the name of petitioner, Dominga Conde.
No costs.
SO ORDERED.
G.R. No. 6906 September 27, 1911
FLORENTINO RALLOS, ET AL., plaintiff-appellee,
vs.
TEODORO R. YANGCO, defendant-appellant.
Mariano Escueta, for appellant.
Martin M. Levering, for appellees.
MORELAND, J.:
This is an appeal from a judgment of the Court of First Instance of
the Province of Cebu, the Hon. Adolph Wislizenus presiding, in
favor of the plaintiffs, in the sum of P1,537.08, with interest at 6
per cent per annum from the month of July, 1909, with costs.
The defendant in this case on the 27th day of November, 1907,
sent to the plaintiff Florentino Rallos, among others, the following
letter:
CIRCULAR NO. 1.
MANILA, November 27, 1907
MR. FLORENTINO RALLOS, Cebu.
DEAR SIR: I have the honor to inform you that I have
on this date opened in my steamship office at No. 163
Muelle de la Reina, Binondo, Manila, P. I., a shipping
and commission department for buying and selling leaf
tobacco and other native products, under the following
conditions:
1. When the consignment has been received, the
consignor thereof will be credited with a sum not to
exceed two-thirds of the value of the goods shipped,
which may be made available by acceptance of a draft or
written order of the consignor on five to ten day's sight, or by
his ordering at his option a bill of goods. In the latter case he
must pay a commission of 2 per cent.
2. No draft or written order will be accepted without previous
notice forwarding the consignment of goods to guarantee the
same.
3. Expenses of freight, hauling and everything necessary for
duly executing the commission will be charged in the
commission.
4. All advances made under sections (1) and (3) shall bear
interest at 10 per cent a year, counting by the sale of the
goods shipped or remittance of the amount thereof.
5. A commission of 2 ½ per cent will be collected on the
amount realized from the sale of the goods shipped.
6. A Payment will be made immediately after collection of the
price of the goods shipped.
7. Orders will be taken for the purchase of general
merchandise, ship-stores, cloths, etc., upon remittance of the
amount with the commission of 2 per cent on the total value
of the goods bought. Expenses of freight, hauling, and
everything necessary for properly executing the commission
will be charged to the consignor.
8. The consignor of the good may not fix upon the consignee
a longer period than four months, counting from the date of
receipt, for selling the same; with the understanding that after
such period the consignee is authorized to make the sale, so as
to prevent the advance and cost of storage from amounting to
more than the actual value of said goods, as has often
happened.
9. The shipment to the consignors of the goods ordered on
account of the amount realized from the sale of the goods
consigned and of the goods bought on remittance of the value
thereof, under sections (1) and (3), will not be insured against
risk by sea and land except on written order of the interested
parties.
10. On all consignments of goods not insured according to the
next preceding section, the consignors will bear the risk.
11. All the foregoing conditions will take effect only after this
office has acknowledged the consignor's previous notice.
12. All other conditions and details will be furnished at the
office of the undersigned.
If you care to favor me with your patronage, my office is at
No. 163 Muelle de la Reinna, Binondo, Manila, P. I., under
the name of "Teodoro R. Yangco." In this connection it gives
me great pleasure to introduce to you Mr. Florentino
 Collantes, upon whom I have conferred public power of
attorney before the notary, Mr. Perfecto Salas
Rodriguez, dated November 16, 1907, to perform in my
name and on my behalf all acts necessary for carrying
out my plans, in the belief that through his knowledge
and long experience in the business, along with my
commercial connections with the merchants of this city
and of the provinces, I may hope to secure the most
advantageous prices for my patrons. Mr. Collantes will
sign by power of attorney, so I beg that you make due
note of his signature hereto affixed.
Very respectfully,
(Sgd.) T. R. YANGCO.
(Sgd.) F. COLLANTES.
Accepting this invitation, the plaintiffs proceeded to do a
considerable business with the defendant through the said
Collantes, as his factor, sending to him as agent for the defendant
a good deal of produce to be sold on commission. Later, and in
the month of February, 1909, the plaintiffs sent to the said
Collantes, as agent for the defendant, 218 bundles of tobacco in
the leaf to be sold on commission, as had been other produce
previously. The said Collantes received said tobacco and sold it
for the sum of P1,744. The charges for such sale were P206.96.
leaving in the hands of said Collantes the sum of P1,537.08
belonging to the plaintiffs. This sum was, apparently, converted
to his own use by said agent.
It appears, however, that prior to the sending of said tobacco the
defendant had severed his relations with Collantes and that the
latter was no longer acting as his factor. This fact was not known
to the plaintiffs; and it is conceded in the case that no notice of
any kind was given by the defendant to the plaintiffs of the
termination of the relations between the defendant and his agent.
The defendant refused to pay the said sum upon demand of the
plaintiffs, placing such refusal upon the ground that at the time
the said tobacco was received and sold by Collantes he was acting
personally and not as agent of the defendant. This action was
brought to recover said sum.
As is seen, the only question for our decision is whether or not
the plaintiffs, acting in good faith and without knowledge, having
sent produce to sell on commission to the former agent of the
defendant, can recover of the defendant under the circumstances
above set forth. We are of the opinion that the defendant is liable.
Having advertised the fact that Collantes was his agent and
having given them a special invitation to deal with such agent, it
was the duty of the defendant on the termination of the
relationship of principal and agent to give due and timely notice
thereof to the plaintiffs. Failing to do so, he is responsible to them
12
for whatever goods may have been in good faith and without owner of the business now know as the "Washington Cafe," subrented
negligence sent to the agent without knowledge, actual or the building wherein the business was conducted, to the defendant for a
constructive, of the termination of such relationship. period of one year, for the purpose of carrying on that business, the
For these reasons the judgment appealed from is confirmed, defendant obligating himself not to sublet or subrent the building or the
without special finding as to costs. business without the consent of the said Galmes. This contract was
signed by the defendant and the name of Ricardo Flores appears
G.R. No. 2962 February 27, 1907 thereon as a witness, and attached thereto is an inventory of the
B. H. MACKE, ET AL., plaintiffs-appellees, furniture and fittings which also is signed by the defendant with the
vs. word "sublessee" (subarrendatario) below the name, and at the foot of
JOSE CAMPS, defendant-appellant. this inventory the word "received" (recibo) followed by the name
Manuel G. Gavieres for appellant. "Ricardo Flores," with the words "managing agent" (el manejante
Gibbs & Gale for appellees. encargado) immediately following his name.
CARSON, J.: Galmes was called to the stand and identified the above- described
document as the contract and inventory delivered to him by the
The plaintiffs in this action, B. H. Macke and W. H. Chandler, defendant, and further stated that he could not tell whether Flores was
partners doing business under the firm name of Macke, Chandler working for himself or for some one else — that it to say, whether
& Company, allege that during the months of February and Flores was managing the business as agent or sublessee.
March, 1905, they sold to the defendant and delivered at his place
of business, known as the "Washington Cafe," various bills of The defendant did not go on the stand nor call any witnesses, and relies
goods amounting to P351.50; that the defendant has only paid on wholly on his contention that the foregoing facts are not sufficient to
account of said accounts the sum of P174; that there is still due establish the fact that he received the goods for which payment is
them on account of said goods the sum of P177.50; that before demanded.
instituting this action they made demand for the payment thereof; In the absence of proof of the contrary we think that this evidence is
and that defendant had failed and refused to pay the said balance sufficient to sustain a finding that Flores was the agent of the defendant
or any part of it up to the time of the filing of the complaint. in the management of the bar of the Washington Cafe with authority to
B. H. Macke, one of the plaintiffs, testified that on the order of bind the defendant, his principal, for the payment of the goods
one Ricardo Flores, who represented himself to be agent of the mentioned in the complaint.
defendant, he shipped the said goods to the defendants at the The contract introduced in evidence sufficiently establishes the fact that
Washington Cafe; that Flores later acknowledged the receipt of the defendant was the owner of business and of the bar, and the title of
said goods and made various payments thereon amounting in all to "managing agent" attached to the signature of Flores which appears on
P174; that on demand for payment of balance of the account that contract, together with the fact that, at the time the purchases in
Flores informed him that he did not have the necessary funds on question were made, Flores was apparently in charge of the business,
hand, and that he would have to wait the return of his principal, performing the duties usually entrusted to managing agent, leave little
the defendant, who was at that time visiting in the provinces; that room for doubt that he was there as authorized agent of the defendant.
Flores acknowledged the bill for the goods furnished and the One who clothes another apparent authority as his agent, and holds him
credits being the amount set out in the complaint; that when the out to the public as such, can not be permitted to deny the authority of
goods were ordered they were ordered on the credit of the such person to act as his agent, to the prejudice of innocent third parties
defendant and that they were shipped by the plaintiffs after inquiry dealing with such person in good faith and in the following
which satisfied the witness as to the credit of the defendant and as preassumptions or deductions, which the law expressly directs to be
to the authority of Flores to act as his agent; that the witness made from particular facts, are deemed conclusive:
always believed and still believes that Flores was the agent of the
(1) "Whenever a party has, by his own declaration, act, or omission,
defendant; and that when he went to the Washington Cafe for the
intentionally and deliberately led another to believe a particular thing
purpose of collecting his bill he found Flores, in the absence of the
true, and to act upon such belief, he can not, in any litigation arising out
defendant in the provinces, apparently in charge of the business
such declaration, act, or omission, be permitted to falsify it" (subsec. 1,
and claiming to be the business manager of the defendant, said
sec. 333, Act no. 190); and unless the contrary appears, the authority of
business being that of a hotel with a bar and restaurant annexed.
an agent must be presumed to include all the necessary and usual means
A written contract dated May 25, 1904, was introduced in of carrying his agency into effect. (15 Conn., 347; 90 N. C. 101; 15 La.
evidence, from which it appears that one Galmes, the former Ann, 247; 43 Mich., 364; 93 N. Y., 495; 87 Ind., 187.)
That Flores, as managing agent of the Washington Cafe, had
authority to buy such reasonable quantities of supplies as might
from time to time be necessary in carrying on the business of
hotel bar may fairly be presumed from the nature of the business,
especially in view of the fact that his principal appears to have
left him in charge during more or less prolonged periods of
absence; from an examination of the items of the account
attached to the complaint, we are of opinion that he was acting
within the scope of his authority in ordering these goods are
binding on his principal, and in the absence of evidence to the
contrary, furnish satisfactory proof of their delivery as alleged in
the complaint.
The judgment of the trial court is affirmed with the costs of his
instance against the appellant. After expiration of twenty days
judgment will be rendered in accordance herewith, and ten days
thereafter the case remanded to the lower court for proper action.
So ordered.
G.R. No. 15823 September 12, 1921
JULIO DANON, plaintiff-appellee,
vs.
ANTONIO A. BRIMO & CO., defendant-appellant.
Claro M. Recto for appellant.
Canillas & Cardenas for appellee.
JOHNSON, J.:
This action was brought to recover the sum of P60,000, alleged to
be the value of services rendered to the defendant by the plaintiff
as a broker. The plaintiff alleges that in the month of August,
1918, the defendant company, through its manager, Antonio A.
Brimo, employed him to look for a purchaser of its factory known
as "Holland American Oil Co.," for the sum of P1,200,000,
payable in cash; that the defendant promised to pay the plaintiff,
as compensation for his services, a commission of five per cent
on the said sum of P1,200,000, if the sale was consummated, or if
the plaintiff should find a purchaser ready, able and willing to
buy said factory for the said sum of P1,200,000; that
subsequently the plaintiff found such a purchaser, but that the
defendant refused to sell the said factory without any justifiable
motive or reason therefor and without having previously notified
the plaintiff of its desistance or variation in the price and terms of
the sale.
To that complaint the defendant interposed a general denial.
Upon the issue thus presented, the Honorable Simplicio del
Rosario, judge, after hearing and considering the evidence
adduced during the trial of the cause, rendered a judgment in
favor of the plaintiff and against the defendant for the sum of
P60,000, with costs. From that judgment the defendant appealed
to this court.
13
The proof with regard to the authority of the plaintiff to sell the had not sold it to someone else. The evidence does not show that the
factory in question for the defendant, on commission, is extremely Santa Ana Oil Mill had definitely decided to buy the property in
unsatisfactory. It consists solely of the testimony of the plaintiff, question at the fixed price of P1,200,000. The board of directors of said
on the one hand, and of the manager of the defendant company, corporation had not resolved to purchase said property; and even if its
Antonio A. Brimo, on the other. From a reading of their testimony president could legally make the purchase without previous formal
we believe that neither of them has been entirely free from authorization of the board of directors, yet said president does not
prevarications. However, after giving due weight to the finding of pretend that he had definitely and formally agreed to buy the factory in
the trial court in this regard and after carefully considering the question on behalf of his corporation at the price stated. On direct
inherent probability or improbability of the testimony of each of examination he testified for the plaintiff as follows:
said witnesses, we believe we are approximating the truth in Q. You say that we were going to accept or that it was
finding: (1) That Antonio A. Brimo, in a conversation with the beneficial for us; will you say to whom your refer, when you
plaintiff, Julio Danon, about the middle of August, 1918, informed say "we?" —
the latter that he (Brimo) desired to sell his factory, the Holland
American Oil Co., for the sum of P1,200,000; (2) that he agreed A. Our company, the Santa Ana Oil Mill.
and promised to pay to the plaintiff a commission of 5 per cent Q. And is that company able to pay the sum of
provided the latter could sell said factory for that amount; and (3) P1,200,000? —
that no definite period of time was fixed within which the plaintiff A. Yes, sir.
should effect the sale. It seems that another broker, Sellner, was
also negotiating the sale, or trying to find a purchaser for the same Q. And you accepted it at that price of P1,200.000? —
property and that the plaintiff was informed of the fact either by A. Surely, because as I already said before, we were in
Brimo himself or by someone else; at least, it is probable that the the difficult position of not being able to operate our factory,
plaintiff was aware that he was not alone in the field, and his because of the obstacle placed by the Government.
whole effort was to forestall his competitor by being the first to
Q. And did you inform Mr. Danon of this acceptance?
find a purchaser and effect the sale. Such, we believe. was the —
contract between the plaintiff and the defendant, upon which the
present action is based. A. I did not explain to Mr. Danon.
The next question to determine is whether the plaintiff had On cross-examination the same witness testified:
performed all that was required of him under that contract to Q. What actions did the board of directors of the Santa
entitle him to recover the commission agreed upon. The proof in Ana Oil Mill take in order to acquire or to make an offer to
this regard is no less unsatisfactory. It seems that immediately Mr. Brimo of the Holland American Oil Company? —
after having an interview with Mr. Brimo, as above stated, the
A. But nothing was effected, because Mr. Danon stated
plaintiff went to see Mr. Mauro Prieto, president of the Santa Ana
that the property had been sold when I was going to deal with
Oil Mill, a corporation, and offered to sell to him the defendant's
him.
property at P1,200,000. The said corporation was at that time in
need of such a factory as the plaintiff was offering for sale, and Q. But do you not say that you made an offer of
Mr. Prieto, its president, instructed the manager, Samuel E. Kane, P1,200,000? —
to see Mr. Brimo and ascertain whether he really wanted to sell A. No; it was Mr. Danon who made the offer and we
said factory, and, if so, to get permission from him to inspect the were sure to put the deal through because we have bound
premises. Mr. Kane inspected the factory and, presumably, made a ourselves.
favorable report to Mr. Prieto. The latter asked for an appointment
The plaintiff claims that the reasons why the sale to the Santa Ana Mill
with Mr. Brimo to perfect the negotiation. In the meantime
was not consummated was because Mr. Brimo refused to sell to a
Sellner, the other broker referred to, had found a purchaser for the
Filipino firm and preferred an American buyer; that upon learning such
same property, who ultimately bought it for P1,300,000. For that
attitude of the defendant the plaintiff endeavored to procure another
reason Mr. Prieto, the would be purchaser found by the plaintiff,
purchaser and found a Mr. Leas, who delivered to the plaintiff a letter
never came to see Mr. Brimo to perfect the proposed negotiation.
addressed to Mr. Brimo, offering to buy the factory in question at
Under the proofs in this case, the most that can be said as to what P1,200,000. the offer being good for twenty-four; that said offer was
the plaintiff had accomplished is, that he had found a person not accepted by Brimo because while he was reading the letter of Leas,
who might have bought the defendant's factory if the defendant Sellner came in, drew Brimo into another room, and then and there
closed the deal at P1,300,000. The last statement is admitted by
the defendant.
Such are the facts in this case, as nearly accurate as we can gather
them from the conflicting evidence before us. Under those facts,
is the plaintiff entitled to recover the sum of P60,000, claimed by
him as compensation for his services? It will be noted that,
according to the plaintiff's own testimony, the defendant agreed
and promised to pay him a commission of 5 per cent provided
he (the plaintiff) could sell the factory at P1,200.000 ("con tal que
V. me venda la fabrica en P1,200.000"). It will also be noted that
all that the plaintiff had accomplished by way of performance of
his contract was, that he had found a person who might have
bought the factory in question had not the defendant sold it to
someone else. (Beaumont vs. Prieto, 41 Phil., 670; 249 U.S.,
554.)
Under these circumstances it is difficult to see how the plaintiff
can recover anything in the premises. The plaintiff's action is not
one for damages for breach of contract; it is an action to recover
"the reasonable value" of services rendered. this is unmistakable
both from the plaintiff's complaint and his testimony as a witness
during the trial.
Q. And what is the reasonable value of the
services you rendered to Mr. Brimo? —
A. Five per cent of the price at which it was sold.
Q. Upon what do you base your qualification that
those services were reasonable? —
A. First, because that is the common rate in the
city, and, secondly, because of the big gain that he
obtained from the sale.
What benefit did the plaintiff, by his "services," bestow upon the
defendant to entitle him to recover from the latter the sum of
P60,000? It is perfectly clear and undisputed that his "services"
did not any way contribute towards bringing about the sale of the
factory in question. He was not "the efficient agent or the
procuring cause of the sale."
The broker must be the efficient agent or the procuring
cause of sale. The means employed by him and his
efforts must result in the sale. He must find the
purchaser, and the sale must proceed from his efforts
acting as broker. (Wylie vs. Marine National Bank, 61
N. Y., 414; 416; citing: McClure vs. Paine, 49 N. Y.,
561; Lloyd vs. Mathews, 51 id., 124; Lyon vs. Mitchell,
36 id., 235; Briggs vs. Rowe, 4 Keyes, 424;
Murray vs. Currie, 7 Carr. and Payne, 584;
Wilkinson vs. Martin, 8 id., 5.)
14
A leading case on the subject is that of Sibbald vs. Bethlehem Iron
Co. (83 N. Y., 378; 38 Am. Rep., 441). In the case, after an
exhaustive review of various cases, the Court of Appeals of New
York stated the rule as follows:
In all the cases, under all and varying forms of
expression, the fundamental and correct doctrine, is,
that the duty assumed by the broker is to bring the minds
of the buyer and seller to an agreement for a sale, and
the price and terms on which it is to be made, and until
that is done his right to commissions does not accrue.
(McGavock vs. Woodlief, 20 How., 221;
Barnes vs. Roberts, 5 Bosw., 73; Holly vs. Gosling, 2 E.
D., Smith, 262; Jacobs vs. Kolff, 2 Hilt., 133;
Kock vs. Emmerling, 22 How., 72; Corning vs. Calvert,
2 Hilt., 56; Trundy vs. N.Y. and Hartf. Steamboat Co., 6
Robt., 312; Van Lien vs. Burns, 1 Hilt., 134.)
xxx xxx xxx
It follows, as a necessary deduction from the established
rule, that a broker is never entitled to commissions for
unsuccessful efforts. The risk of a failure is wholly his.
The reward comes only with his success. That is the
plain contract and contemplation of the parties. The
broker may devote his time and labor, and expend his
money with ever so much of devotion to the interest of
his employer, and yet if he fails, if without effecting an
agreement or accomplishing a bargain, he abandons the
effort, or his authority is fairly and in good faith
terminated, he gains no right to commissions. He loses
the labor and effort which was staked upon success. And
in such event it matters not that after his failure, and the
termination of his agency, what he has done proves of
use and benefit to the principal. In a multitude of cases
that must necessarily result. He may have introduced to
each other parties who otherwise would have never met;
he may have created impressions, which under later and
more favorable circumstances naturally lead to and
materially assist in the consummation of a sale; he may
have planted the very seed from which others reap the
harvest; but all that gives him no claim. It was part of his
risk that failing himself, not successful in fulfilling his
obligation, others might be left to some extent to avail
themselves of the fruit of his labors. As we said in
Wylie vs. Marine National Bank (61 N.Y., 416), in such
a case the principal violates no right of the broker by
selling to the first party who offers the price asked, and
it matters not that sale is to the very party with whom the
broker had been negotiating. He failed to find or produce
a purchaser upon the terms prescribed in his
employment, and the principal was under no obligation to
wait longer that he might make further efforts. The failure
therefore and its consequences were the risk of the broker
only. This however must be taken with one important and
necessary limitation. If the efforts of the broker are rendered a
failure by the fault of the employer; if capriciously he
changes his mind after the purchaser, ready and willing,
and consenting to the prescribed terms, is produced; or if the
latter declines to complete the contract because of some
defect of title in the ownership of the seller, some unremoved
incumbrance, some defect which is the fault of the latter, then
the broker does not lose his commissions. And that upon the
familiar principle that no one can avail himself of the
nonperformance of a condition precedent, who has himself
occasioned its nonperformance. But this limitation is not even
an exception to the general rule affecting the broker's right for
it goes on the ground that the broker has done his duty, that he
has brought buyer and seller to an agreement, but that the
contract is not consummated and fails though the after-fault of
the seller. The cases are uniform in this respect.
(Moses vs.Burling, 31 N.Y., 462; Glentworth vs. Luther, 21
Barb., 147; Van Lien vs. Burns, 1 Hilt., 134.)
One other principle applicable to such a contract as existed in
the present case needs to be kept in view. 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. Usually the broker is
entitled to a fair and reasonable opportunity to perform his
obligation, subject of course to the right of the seller to sell
independently. But having been granted him, the right of the
principal to terminate his authority
is absolute and unrestricted, except only that he may not do it
in bad faith, and as a mere device to escape the payment of
the broker's commissions. Thus, if in the midst of negotiations
instituted by the broker, and which were plainly and evidently
approaching success, the seller should revoke the authority of
the broker, with the view of concluding the bargain without
his aid, and avoiding the payment of commission about to be
earned, it might be well said that the due performance his
obligation by the broker was purposely prevented by the
principal. But if the latter acts in good faith, not seeking to
escape the payment of commissions, but moved fairly by a
view of his own interest, he has the absolute right before a
bargain is made while negotiations remain unsuccessful,
before commissions are earned, to revoke the broker's
authority, and the latter cannot thereafter claim compensation
for a sale made by the principal, even though it be to a
customer with whom the broker unsuccessfully negotiated,
and even though, to some extent, the seller might justly be
 said to have availed himself of the fruits of the broker's
labor. (Ibid. pp. 444, 445 and 446.)
The rule laid down in the foregoing case was adopted and
followed in the cases of Zeimer vs. Antisell (75 Cal. 509), and
Ayres vs. Thomas (116 Cal., 140).
The undertaking to procure a purchaser requires of the
party so undertaking, not simply to name or introduce a
person who may be willing to make any sort of contract
in reference to the property, but to produce a party
capable, and who ultimately becomes the purchaser.
(Kimberly vs. Henderson and Lupton, 29 Md., 512, 515,
citing: Keener vs. Harrod and Brooke, 2 Md. 63;
McGavock vs. Woodlief, 20 How., 221. See also
Richards, Executor, vs. Jackson, 31 Md., 250.)
The defendant sent a proposal to a broker in these
words: If you send or cause to be sent to me, by
advertisement or otherwise, any party with whom I may
see fit and proper to effect a sale or exchange of my real
estate, above described I will pay you the sum of $200.
The broker found a person who proposed to purchase
the property, but the sale was not affected. Held: That
the broker was not entitled to compensation.
(Walker vs. Tirrel, 3 Am. Rep., 352.)
It is clear from the foregoing authorities that, although the present
plaintiff could probably have effected the sale of the defendant's
factory had not the defendant sold it to someone else, he is not
entitled to the commissions agreed upon because he had no
intervention whatever in, and much sale in question. It must be
borne in mind that no definite period was fixed by the defendant
within which the plaintiff might effect the sale of its factory. Nor
was the plaintiff given by the defendant the exclusive agency of
such sale. Therefore, the plaintiff cannot complaint of the
defendant's conduct in selling the property through another agent
before the plaintiff's efforts were crowned with success. "One
who has employed a broker can himself sell the property to a
purchaser whom he has procured, without any aid from the
broker." (Hungerford vs. Hicks, 39 Conn., 259; Wylie vs. Marine
National Bank, 61 N.Y., 415, 416.)
For the foregoing reasons the judgment appealed from is hereby
revoked and the defendant is hereby absolved from all liability
under the plaintiff's complaint, with costs in both instances
against the plaintiff. So ordered.
G.R. No. L-5180 August 31, 1953
CONSEJO INFANTE, petitioner,
vs.
15
JOSE CUNANAN, JUAN MIJARES and THE COURT OF overprice they may obtain for the property. Petitioner, however,
APPEALS, SECOND DIVISION, respondents. contends that authority has already been withdrawn on November 30,
Yuseco, Abdon & Yuseco for petitioner. 1948 when, by the voluntary act of respondents, they executed a
Jose E. Erfe and Maria Luisa Gomez for respondents. document stating that said authority shall be considered cancelled and
without any effect, so that when petitioner sold the property to Pio S.
BAUTISTA ANGELO, J.: Noche on December 20, 1948, she was already free from her
This is a petition for review of a decision of the Court of appeals commitment with respondents and, therefore, was not in duty bound to
affirming the judgement of the court of origin which orders the pay them any commission for the transaction..
defendant to pay the plaintiffs the sum of P2,500 with legal If the facts were as claimed by petitioner, there is in-deed no doubt that
interest thereon from February 2,1949 and the costs of action.
she would have no obligation to pay respondents the commission which
Consejo Infante, defendant herein, was the owner of two parcels was promised them under the original authority because, under the old
of land, together with a house built thereon, situated in the City of Civil Code, her right to withdraw such authority is recognized. A
Manila and covered by Transfer Certificate of Title No. 61786. On principal may withdraw the authority given to an agent at will. (Article
or before November 30, 1948, she contracted the services of Jose 1733.) But this fact is disputed. Thus, respondents claim that while they
Cunanan and Juan Mijares, plaintiff herein, to sell the above- agreed to cancel the written authority given to them, they did so merely
mentioned property for a price of P30,000 subject to the condition upon the verbal assurance given by petitioner that, should the property
that the purchaser would assume the mortgage existing thereon in be sold to their own buyer, Pio S. Noche, they would be given the
the favor of the Rehabilitation Finance Corporation. She agreed to commission agreed upon. True, this verbal assurance does not appear in
pay them a commission of 5 per cent on the purchase price plus the written cancellation, Exhibit 1, and, on the other hand, it is disputed
whatever overprice they may obtain for the property. Plaintiffs by petitioner, but respondents were allowed to present oral evidence to
found one Pio S. Noche who was willing to buy the property prove it, and this is now assigned as error in this petition for review.
under the terms agreed upon with defendant, but when they The plea that oral evidence should not have been allowed to prove the
introduced him to defendant, the latter informed them that she was alleged verbal assurance is well taken it appearing that the written
no longer interested in selling the property and succeeded in authority given to respondents has been cancelled in a written
making them sign a document stating therein that the written statement. The rule on this matter is that "When the terms of an
authority she had given them was already can-celled. However, on agreement have been reduced to writing, it is to be considered as
December 20, 1948, defendant dealt directly with Pio S. Noche containing all those terms, and, therefore, there can be, between parties
selling to him the property for P31,000. Upon learning this and their successors in interest, no evidence of the terms of the
transaction, plaintiffs demanded from defendant the payment of agreement other than the contents of the writing." (Section 22, Rule
their commission, but she refused and so they brought the present 123, Rules of Court.) The only exceptions to this rule are: "(a)Where a
action. mistake or imperfection of the writing, or its failure to express the true
Defendant admitted having contracted the services of the plaintiffs intent and agreement of the parties, or the validity of the agreement is
to sell her property as set forth in the complaint, but stated that she put in issue by the pleadings"; and "(b) Where there is an intrinsic
agreed to pay them a commission of P1,200 only on condition that ambiguity in the writing." (Ibid.) There is no doubt that the point raised
they buy her a property somewhere in Taft Avenue to where she does not come under any of the cases excepted, for there is nothing
might transfer after selling her property. Defendant avers that therein that has been put in issue by respondents in their complaint. The
while plaintiffs took steps to sell her property as agreed upon, they terms of the document, Exhibit 1, seem to be clear and they do not
sold the property at Taft Avenue to another party and because of contain any reservation which may in any way run counter to the clear
this failure it was agreed that the authority she had given them be intention of the parties.
cancelled. But even disregarding the oral evidence adduced by respondents in
The lower court found that the preponderance of evidence was in contravention of the parole evidence rule, we are, however, of the
favor of the plaintiffs and rendered judgement sentensing the opinion that there is enough justification for the conclusion reached by
the lower court as well as by the Court of Appeals to the effect that
defendant to pay the plaintiff the sum of P2,500 with legal interest
thereon from February 2,1949 plus the costs of action. This respondents are entitled to the commission originally agreed upon. It is
decision was affirmed in toto by the Court of Appeals. a fact found by the Court of Appeals that after petitioner had given the
There is no dispute that respondents were authorized by petitioner written authority to respondents to sell her land for the sum of P30,000,
to sell her property for the sum of P30,000 with the understanding respondents found a buyer in the person of one Pio S. Noche who was
that they will be given a commission of 5 percent plus whatever willing to buy the property under the terms agreed upon, and this matter
was immediately brought to the knowledge of petitioner. But the
latter, perhaps by way of strategem, advised respondents that she
was no longer interested in the deal and was able to prevail upon
them to sign a document agreeing to the cancellation of the
written authority.
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
ac-cording 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.
Wherefore, the decision appealed from is hereby affirmed, with
costs against petitioner.
G.R. No. L-67889 October 10, 1985
PRIMITIVO SIASAT and MARCELINO
SIASAT, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and TERESITA
NACIANCENO, respondents.
Payawal, Jimenez & Associates for petitioners.
Nelson A. Loyola for private respondent.
GUTIERREZ, JR., J.:
This is a petition for review of the decision of the Intermediate
Appellate Court affirming in toto the judgment of the Court of
First Instance of Manila, Branch XXI, which ordered the
petitioner to pay respondent the thirty percent (30%) commission
on 15,666 pieces of Philippine flags worth P936,960.00, moral
damages, attorney's fees and the costs of the suit.
Sometime in 1974, respondent Teresita Nacianceno succeeded in
convincing officials of the then Department of Education and
Culture, hereinafter called Department, to purchase without
public bidding, one million pesos worth of national flags for the
use of public schools throughout the country. The respondent was
able to expedite the approval of the purchase by hand-carrying
the different indorsements from one office to another, so that by
16
the first week of September, 1974, all the legal requirements had The trial court decided in favor of the respondent. The dispositive
been complied with, except the release of the purchase orders. portion of the decision reads as follows:
When Nacianceno was informed by the Chief of the Budget
Division of the Department that the purchase orders could not be
released unless a formal offer to deliver the flags in accordance
with the required specifications was first submitted for approval,
she contacted the owners of the United Flag Industry on
September 17, 1974. The next day, after the transaction was
discussed, the following document (Exhibit A) was drawn up:
Mrs. Tessie Nacianceno,
This is to formalize our agreement for you to
represent United Flag Industry to deal with any
entity or organization, private or government
in connection with the marketing of our
products-flags and all its accessories.
For your service, you will be entitled to a
commission of thirty
(30%) percent.
Signed
Mr. Primitive Siasat
Owner and Gen. Manager
On October 16, 1974, the first delivery of 7,933 flags was made
by the United Flag Industry. The next day, on October 17, 1974,
the respondent's authority to represent the United Flag Industry
was revoked by petitioner Primitivo Siasat.
According to the findings of the courts below, Siasat, after
receiving the payment of P469,980.00 on October 23, 1974 for the
first delivery, tendered the amount of P23,900.00 or five percent
(5%) of the amount received, to the respondent as payment of her
commission. The latter allegedly protested. She refused to accept
the said amount insisting on the 30% commission agreed upon.
The respondent was prevailed upon to accept the same, however,
because of the assurance of the petitioners that they would pay the
commission in full after they delivered the other half of the order.
The respondent states that she later on learned that petitioner
Siasat had already received payment for the second delivery of
7,833 flags. When she confronted the petitioners, they vehemently
denied receipt of the payment, at the same time claiming that the
respondent had no participation whatsoever with regard to the
second delivery of flags and that the agency had already been
revoked.
The respondent originally filed a complaint with the Complaints
and Investigation Office in Malacañang but when nothing came of
the complaint, she filed an action in the Court of First Instance of
Manila to recover the following commissions: 25%, as balance on
the first delivery and 30%, on the second delivery.
WHEREFORE, judgment is hereby rendered
sentencing Primitivo Siasat to pay to the plaintiff
the sum of P281,988.00, minus the sum P23,900.00,
with legal interest from the date of this decision, and
ordering the defendants to pay jointly and solidarily
the sum of P25,000.00 as moral damages, and
P25,000.00 as attorney's fees, also with legal
interest from the date of this decision, and the costs.
The decision was affirmed in toto by the Intermediate Appellate Court.
After their motion for reconsideration was denied, the petitioners went
to this Court on a petition for review on August 6, 1984.
In assailing the appellate court's decision, the petition tenders the
following arguments: first, the authorization making the respondent the
petitioner's representative merely states that she could deal with any
entity in connection with the marketing of their products for a
commission of 30%. There was no specific authorization for the sale of
15,666 Philippine flags to the Department; second, there were two
transactions involved evidenced by the separate purchase orders and
separate delivery receipts, Exhibit 6-C for the purchase and deliver on
October 16, 1974, and Exhibits 7 to 7-C, for the purchase and delivery
on November 6, 1974. The revocation of agency effected by the parties
with mutual consent on October 17, 1974, therefore, forecloses the
respondent's claim of 30% commission on the second transaction; and
last, there was no basis for the granting of attorney's fees and moral
damages because there was no showing of bad faith on the part of the
petitioner. It was respondent who showed bad faith in denying having
received her commission on the first delivery. The petitioner's
counterclaim, therefore, should have been granted.
This petition was initially dismissed for lack of merit in a minute
resolution.On a motion for reconsideration, however,this Court give
due course to the petition on November 14, 1984.
After a careful review of the records, we are constrained to sustain with
some modifications the decision of the appellate court.
We find respondent's argument regarding respondent's incapacity to
represent them in the transaction with the Department untenable. There
are several kinds of agents. To quote a commentator on the matter:
An agent may be (1) universal: (2) general, or (3)
special. A universal; agent is one authorized to do
all acts for his principal which can lawfully be
delegated to an agent. So far as such a condition is
possible, such an agent may be said to have
universal authority. (Mec. Sec. 58).
A general agent is one authorized to do all acts
pertaining to a business of a certain kind or at a
 particular place, or all acts pertaining to a
business of a particular class or series. He has
usually authority either expressly conferred in
general terms or in effect made general by the
usages, customs or nature of the business
which he is authorized to transact.
An agent, therefore, who is empowered to
transact all the business of his principal of a
particular kind or in a particular place, would,
for this reason, be ordinarily deemed a general
agent. (Mec Sec. ,30).
A special agent is one authorized to do some
particular act or to act upon some particular
occasion. lie acts usually in accordance with
specific instructions or under limitations
necessarily implied from the nature of the act
to be done. (Mec. Sec. 61) (Padilla, Civil Law
The Civil Code Annotated, Vol. VI, 1969
Edition, p. 204).
One does not have to undertake a close scrutiny of the document
embodying the agreement between the petitioners and the
respondent to deduce that the 'latter was instituted as a general
agent. Indeed, it can easily be seen by the way general words
were employed in the agreement that no restrictions were
intended as to the manner the agency was to be carried out or in
the place where it was to be executed. The power granted to the
respondent was so broad that it practically covers the negotiations
leading to, and the execution of, a contract of sale of petitioners'
merchandise with any entity or organization.
There is no merit in petitioners' allegations that the contract of
agency between the parties was entered into under fraudulent
representation because respondent "would not disclose the agency
with which she was supposed to transact and made the petitioner
believe that she would be dealing with The Visayas", and that
"the petitioner had known of the transactions and/or project for
the said purchase of the Philippine flags by the Department of
Education and Culture and precisely it was the one being
followed up also by the petitioner."
If the circumstances were as claimed by the petitioners, they
would have exerted efforts to protect their interests by limiting
the respondent's authority. There was nothing to prevent the
petitioners from stating in the contract of agency that the
respondent could represent them only in the Visayas. Or to state
that the Department of Education and Culture and the Department
of National Defense, which alone would need a million pesos
worth of flags, are outside the scope of the agency. As the trial
17
court opined, it is incredible that they could be so careless after were issued were mere indorsements for the release of funds and
being in the business for fifteen years. authorization for the next purchase.
A cardinal rule of evidence embodied in Section 7 Rule 130 of our Since only one transaction was involved, we deny the petitioners'
Revised Rules of Court states that "when the terms of an contention that respondent Nacianceno is not entitled to the stipulated
agreement have been reduced to writing, it is to be considered as commission on the second delivery because of the revocation of the
containing all such terms, and, therefore, there can be between the agency effected after the first delivery. The revocation of agency could
parties and their successors-in-interest, no evidence of the terms of not prevent the respondent from earning her commission because as the
the agreement other than the contents of the writing", except in trial court opined, it came too late, the contract of sale having been
cases specifically mentioned in the same rule. Petitioners have already perfected and partly executed.
failed to show that their agreement falls under any of these In Macondray & Co. v. Sellner (33 Phil. 370, 377), a case analogous to
exceptions. The respondent was given ample authority to transact this one in principle, this Court held:
with the Department in behalf of the petitioners. Equally without
merit is the petitioners' proposition that the transaction involved We do not mean to question the general doctrine as
to the power of a principal to revoke the authority of
two separate contracts because there were two purchase orders and
two deliveries. The petitioners' evidence is overcome by other his agent at will, in the absence of a contract fixing
the duration of the agency (subject, however, to
pieces of evidence proving that there was only one transaction.
some well defined exceptions). Our ruling is that at
The indorsement of then Assistant Executive Secretary Roberto the time fixed by the manager of the plaintiff
Reyes to the Budget Commission on September 3, 1974 (Exhibit company for the termination of the negotiations, the
"C") attests to the fact that out of the total budget of the defendant real estate agent had already earned the
Department for the fiscal year 1975, "P1,000,000.00 is for the commissions agreed upon, and could not be
purchase of national flags." This is also reflected in the Financial deprived thereof by the arbitrary action of the
and Work Plan Request for Allotment (Exhibit "F") submitted by plaintiff company in declining to execute the
Secretary Juan Manuel for fiscal year 1975 which however, contract of sale for some reason personal to itself.
divided the allocation and release of the funds into three,
corresponding to the second, third, and fourth quarters of the said The principal cannot deprive his agent of the commission agreed upon
by cancelling the agency and, thereafter, dealing directly with the
year. Later correspondence between the Department and the
Budget Commission (Exhibits "D" and "E") show that the first buyer. (Infante v. Cunanan, 93 Phil. 691).
allotment of P500.000.00 was released during the second quarter. The appellate courts citation of its previous ruling in Heimbrod et al. v.
However, due to the necessity of furnishing all of the public Ledesma (C.A. 49 O.G. 1507) is correct:
schools in the country with the Philippine flag, Secretary Manuel The appellee is entitled to recovery. No citation is
requested for the immediate release of the programmed allotments
necessary to show that the general law of contracts
intended for the third and fourth quarters. These circumstances the equitable principle of estoppel. and the expense
explain why two purchase orders and two deliveries had to be
of another, uphold payment of compensation for
made on one transaction. services rendered.
The petitioners' evidence does not necessarily prove that there There is merit, however, in the petitioners' contention that the agent's
were two separate transactions. Exhibit "6" is a general commission on the first delivery was fully paid. The evidence does not
indorsement made by Secretary Manuel for the purchase of the sustain the respondent's claim that the petitioners paid her only 5% and
national flags for public schools. It contains no reference to the that their right to collect another 25% commission on the first delivery
number of flags to be ordered or the amount of funds to be must be upheld.
released. Exhibit "7" is a letter request for a "similar authority" to
purchase flags from the United Flag Industry. This was, however, When respondent Nacianceno asked the Malacanang Complaints and
written by Dr. Narciso Albarracin who was appointed Acting Investigation Office to help her collect her commission, her statement
Secretary of the Department after Secretary Manuel's tenure, and under oath referred exclusively to the 30% commission on the second
who may not have known the real nature of the transaction. delivery. The statement was emphatic that "now" her demand was for
the 30% commission on the (second) release of P469,980.00. The
If the contracts were separate and distinct from one another, the demand letter of the respondent's lawyer dated November 13, 1984
whole or at least a substantial part of the government's supply asked petitioner Siasat only for the 30% commission due from the
procurement process would have been repeated. In this case, what second delivery. The fact that the respondent demanded only the
commission on the second delivery without reference to the
alleged unpaid balance which was only slightly less than the
amount claimed can only mean that the commission on the first
delivery was already fully paid, Considering the sizeable sum
involved, such an omission is too glaringly remiss to be regarded
as an oversight.
Moreover, the respondent's authorization letter (Exhibit "5") bears
her signature with the handwritten words "Fully Paid", inscribed
above it.
The respondent contested her signature as a forgery, Handwriting
experts from two government agencies testified on the matter.
The reason given by the trial court in ruling for the respondent is
too flimsy to warrant a finding of forgery.
The court stated that in thirteen documents presented as exhibits,
the private respondent signed her name as "Tessie Nacianceno"
while in this particular instance, she signed as "T. Nacianceno."
The stated basis is inadequate to sustain the respondent's
allegation of forgery. A variance in the manner the respondent
signed her name can not be considered as conclusive proof that
the questioned signature is a forgery. The mere fact that the
respondent signed thirteen documents using her full name does
not rule out the possibility of her having signed the notation
"Fully Paid", with her initial for the given came and the surname
written in full. What she was signing was a mere
acknowledgment.
This leaves the expert testimony as the sole basis for the verdict
of forgery.
In support of their allegation of full payment as evidenced by the
signed authorization letter (Exhibit "5-A"), the petitioners
presented as witness Mr. Francisco Cruz. Jr., a senior document
examiner of the Philippine Constabulary Crime laboratory. In
rebuttal, the respondent presented Mr. Arcadio Ramos, a junior
document examiner of the National Bureau of Investigation.
While the experts testified in a civil case, the principles in
criminal cases involving forgery are applicable. Forgery cannot
be presumed. It must be proved.
In Borromeo v. Court of Appeals (131 SCRA 318, 326) we held
that:
xxx xxx xxx
... Where the evidence, as here, gives rise to
two probabilities, one consistent with the
defendant's innocence and another indicative
of his guilt, that which is favorable to the
accused should be considered. The
constitutional presumption of innocence
continues until overthrown by proof of guilt
18
beyond reasonable doubt, which requires officials handling the purchase of Philippine flags. They had reason to
moral certainty which convinces and satisfies sincerely believe they did not have to pay a commission for the second
the reason and conscience of those who are to delivery of flags.
act upon it. (People v. Clores, et al., 125 We cannot close this case without commenting adversely on the
SCRA 67; People v. Bautista, 81 Phil. 78). inexplicably strange procurement policies of the Department of
We ruled in another case that where the supposed expert's Education and Culture in its purchase of Philippine flags. There is no
testimony would constitute the sole ground for conviction and reason why a shocking 30% of the taxpayers' money should go to an
there is equally convincing expert testimony to the contrary, the agent or facilitator who had no flags to sell and whose only work was to
constitutional presumption of innocence must prevail. (Lorenzo secure and handcarry the indorsements of education and budget
Ga. Cesar v. Hon. Sandiganbayan and People of the Philippines, officials. There are only a few manufacturers of flags in our country
134 SCRA 105). In the present case, the circumstances earlier with the petitioners claiming to have supplied flags for our public
mentioned taken with the testimony of the PC senior document schools on earlier occasions. If public bidding was deemed
examiner lead us to rule against forgery. unnecessary, the Department should have negotiated directly with flag
We also rule against the respondent's allegation that the petitioners manufacturers. Considering the sad plight of underpaid and overworked
classroom teachers whose pitiful salaries and allowances cannot
acted in bad faith when they revoked the agency given to the
respondent. sometimes be paid on time, a P300,000.00 fee for a P1,000,000.00
purchase of flags is not only clearly unnecessary but a scandalous waste
Fraud and bad faith are matters not to be presumed but matters to of public funds as well.
be alleged with sufficient facts. To support a judgment for
damages, facts which justify the inference of a lack or absence of WHEREFORE, the decision of the respondent court is hereby
good faith must be alleged and proven. (Bacolod-Murcia Milling MODIFIED. The petitioners are ordered to pay the respondent the
Co., Inc. vs. First Farmers Milling Co., Inc., Etc., 103 SCRA 436). amount of ONE HUNDRED FOURTY THOUSAND NINE
HUNDRED AND NINETY FOUR PESOS (P140,994.00) as her
There is no evidence on record from which to conclude that the commission on the second delivery of flags with legal interest from the
revocation of the agency was deliberately effected by the date of the trial court's decision. No pronouncement as to costs.
petitioners to avoid payment of the respondent's commission.
What appears before us is only the petitioner's use in court of such SO ORDERED.
a factual allegation as a defense against the respondent's claim. G.R. No. L-439 November 11, 1901
This alone does not per se make the petitioners guilty of bad faith GERMANN & CO., plaintiff-appellees,
for that defense should have been fully litigated. vs.
Moral damages cannot be awarded in the absence of a wrongful DONALDSON, SIM & CO., defendants-appellants.
act or omission or of fraud or bad faith. (R & B Surety & Fernando de la Cantera, for appellants.
Insurance Co., Inc. vs. Intermediate Appellate Court, 129 SCRA Francisco Ortigas, for appellees.
736).
We therefore, rule that the award of P25,000.00 as moral damages
is without basis. LADD, J.:
The additional award of P25,000.00 damages by way of attorney's This is an incident of want of personality of the plaintiff's attorney. The
fees, was given by the courts below on the basis of Article 2208, action is to recover a sum claimed to be due for freight under a charter
Paragraph 2, of the Civil Code, which provides: "When the party. It was brought by virtue of a general power for suits, executed in
defendant's act or omission has compelled the plaintiff to litigate Manila October 27, 1900, by Fernando Kammerzell, and purporting to
with third persons or to incur expenses to protect his interests;" be a substitution in favor of several attorneys of powers conferred upon
attorney's fees may be awarded as damages. (Pirovano et al. v. De Kammerzell in an instrument executed in Berlin, Germany, February 5,
la Rama Steamship Co., 96 Phil. 335). 1900, by Max Leonard Tornow, the sole owner of the business carried
on in Berlin and Manila under the name of Gemann & Co. The first-
The underlying circumstances of this case lead us to rule out any named instrument was authenticated by a notary with the formalities
award of attorney's fees. For one thing, the respondent did not required by the domestic laws. The other was not so authenticated. Both
come to court with completely clean hands. For another, the Tornow and Kammerzell are citizens of Germany. Tornow is a resident
petitioners apparently believed they could legally revoke the of Berlin and Kammerzell of Manila.
agency in the manner they did and deal directly with education
The defendants claim that the original power is invalid under
article 1280, No. 5, of the Civil Code, which provides that powers
for suits must be contained in a public instrument. No claim is
made that the document was not executed with the formalities
required by the German law in the case of such an instrument. We
see no reason why the general principle that the formal validity of
contracts is to be tested by the laws of the country where they are
executed should not apply. (Civil Code, art. 11.)
The defendants also claim that the original power can not be
construed as conferring upon Kammerzell authority to institute or
defend suits, from which contention, if correct, it would of course
follow that the delegated power is invalid. In support of this
contention reliance is placed upon article 1713 of the Civil Code,
by which it is provided that "an agency stated in general terms
only includes acts of administration," and that "in order to
compromise, alienate, mortgage, or to execute any other act of
strict ownership an express commission is required."
It has been argued by counsel for the plaintiff that these
provisions of the domestic law are not applicable to the case of an
agency conferred, as was that in question, by one foreigner upon
another in an instrument executed in the country of which both
were citizens. We shall not pass upon this question, since we are
clearly of opinion that the instrument contains an explicit grant of
a power broad enough to authorize the bringing of the present
action, even assuming the applicability of the domestic law as
claimed by the defendants.lawphil.net
By this instrument Tornow constitutes Kammerzell his "true and
lawful attorney with full power to enter the firm name of
Germann & Co. in the Commercial Registry of the city of Manila
as a branch of the house of Germann & Co. in Berlin, it being the
purpose of this power to invest said attorney will full legal
powers and authorization to direct and administer in the city of
Manila for us and in our name a branch of our general
commercial business of important and exportation, for which
purpose he may make contracts of lease and employ suitable
assistants, as well as sign every kind of documents, accounts, and
obligations connected with the business which may be necessary,
take charge in general of the receipt and delivery of merchandise
connected with the business, sign all receipts for sums of money
and collect them and exact their payment by legal means, and in
general execute all the acts and things necessary for the perfect
carrying on of the business committed to his charge in the same
manner as we could do ourselves if we were present in the same
place."
We should not be inclined to regard in institution of a suit like the
present, which appears to be brought to collect a claim accruing
in the ordinary course of the plaintiff's business, as properly
belonging to the class of acts described in article 1713 of the
19
Civil Code as acts "of strict ownership." It seems rather to be the plaintiff is also ordered to deposit said sum in a local bank
something which is necessarily a part of the mere administration within the period of ninety days from the time this judgment
of such a business as that described in the instrument in question shall become final, at the disposal of the aforesaid Mauricio
and only incidentally, if at all, involving a power to dispose of the Cruz & Co. Inc., and in case that the plaintiff shall not make
title to property. such deposit in the manner indicated, said amount shall bear
But whether regarded as an act of strict ownership or not, it the legal interest of six percent per annum from the date when
appears to be expressly and specially authorized by the clause the plaintiff shall fail to make the deposit within the period
conferring the power to "exact the payment" of sums of money herein set forth, until fully paid.
"by legal means." This must mean the power to exact the payment Without special pronouncement of costs.
of debts due the concern by means of the institution of suits for In support of its appeal, the appellant assigns the following alleged
their recovery. If there could be any doubt as to the meaning of errors as committed by the trial court in its decision, to wit:
this language taken by itself, it would be removed by a
consideration of the general scope and purpose of the instrument 1. The lower court erred in rejecting as evidence Exhibit 4-A,
in which it occurs. (See Civil Code, art. 1286.) The main object of Tan Toco, and Exhibit 4-B, Tan Toco.
the instrument is clearly to make Kammerzell the manager of the 2. The lower court erred in sustaining the validity of the deed
Manila branch of the plaintiff's business, with the same general of assignment of the credit, Exhibit 2-Cruz, instead of finding
authority with reference to its conduct which his principal would that said assignment made by Tan Buntiong to Attorney
himself possess if he were personally directing it. It can not be Antero Soriano was null and void.
reasonably supposed, in the absence of very clear language to that 3. The lower court erred in upholding the assignment of that
effect, that it was the intention of the principal to withhold from credit by Antero Soriano to Mauricio Cruz & Co., Inc.,
his agent a power so essential to the efficient management of the instead of declaring it null and void.
business entrusted to his control as that to sue for the collection of
debts. 4. The court below erred in holding that the balance of the
credit against the municipality of Iloilo should be adjudicated
to the appellant herein, Tan Toco's widow.
G.R. No. L-32977 November 17, 1930
5. The lower court erred in denying the motion for a new trial
THE MUNICIPAL COUNCIL OF ILOILO, plaintiff-appellee, filed by the defendant-appellant.
vs.
The facts of the case are as follows:
JOSE EVANGELISTA, ET AL., defendants-appellees.
TAN ONG SZE VDA. DE TAN TOCO, appellant. On March 20, 1924, the Court of First Instance of Iloilo rendered
judgment in civil case No. 3514 thereof, wherein the appellant herein,
Trenas & Laserna for defendant-appellant. Tan Ong Sze Vda. de Tan Toco was the plaintiff, and the municipality
Provincial Fiscal Blanco of Iloilo for plaintiff-appellees. of Iloilo the defendant, and the former sought to recover of the latter the
Felipe Ysmael for appellee Mauricio Cruz & Co. value of a strip of land belonging to said plaintiff taken by the
No appearance for other appellees. defendant to widen a public street; the judgment entitled the plaintiff to
recover P42,966.40, representing the value of said strip of land, from
VILLA-REAL, J.: the defendant (Exhibit A). On appeal to this court (G. R. No
.22617) 1 the judgment was affirmed on November 28, 1924 (Exhibit
This is an appeal taken by the defendant Tan Ong Sze Vda. de Tan B).
Toco from the judgment of the Court of First Instance of Iloilo,
providing as follows: After the case was remanded to the court of origin, and the judgment
rendered therein had become final and executory, Attorney Jose
Wherefore, judgment is hereby rendered, declaring valid Evangelista, in his own behalf and as counsel for the administratrix of
and binding the deed of assignment of the credit Jose Ma .Arroyo's intestate estate, filed a claim in the same case for
executed by Tan Toco's widow, through her attorney-in- professional services rendered by him, which the court, acting with the
fact Tan Buntiong, in favor of late Antero Soriano; consent of the appellant widow, fixed at 15 per cent of the amount of
likewise the assignment executed by the latter during his the judgment (Exhibit 22 — Soriano).
lifetime in favor of the defendant Mauricio Cruz & Co.,
Inc., and the plaintiff is hereby ordered to pay the said At the hearing on said claim, the claimants appeared, as did also the
Mauricio Cruz & Co., Inc., the balance of P30,966.40; Philippine National Bank, which prayed that the amount of the
judgment be turned over to it because the land taken over had
been mortgaged to it. Antero Soriano also appeared claiming the
amount of the judgment as it had been assigned to him, and by
him, in turn, assigned to Mauricio Cruz & Co., Inc.
After hearing all the adverse claims on the amount of the
judgment the court ordered that the attorney's lien in the amount
of 15 per cent of the judgment, be recorded in favor of Attorney
Jose Evangelista, in his own behalf and as counsel for the
administratrix of the deceased Jose Ma .Arroyo, and directed the
municipality of Iloilo to file an action of interpleading against the
adverse claimants, the Philippine National Bank, Antero Soriano,
Mauricio Cruz & Co., Jose Evangelista and Jose Arroyo, as was
done, the case being filed in the Court of First Instance of Iloilo
as civil case No. 7702.
After due hearing, the court rendered the decision quoted from at
the beginning.
On March 29, 1928, the municipal treasurer of Iloilo, with the
approval of the auditor of the provincial treasurer of Iloilo and of
the Executive Bureau, paid the late Antero Soriano the amount of
P6,000 in part payment of the judgment mentioned above,
assigned to him by Tan Boon Tiong, acting as attorney-in-fact of
the appellant herein, Tan Ong Sze Vda. de Tan Toco.
On December 18, 1928, the municipal treasurer of Iloilo
deposited with the clerk of the Court of First Instance of Iloilo the
amount of P6,000 on account of the judgment rendered in said
civil case No. 3514. In pursuance of the resolution of the court
below ordering that the attorney's lien in the amount of 15 per
cent of the judgment be recorded in favor of Attorney Jose
Evangelista, in his own behalf and as counsel for the late Jose
Ma. Arroyo, the said clerk of court delivered on the same date to
said Attorney Jose Evangelista the said amount of P6,000. At the
hearing of the instant case, the codefendants of Attorney Jose
Evangelista agreed not to discuss the payment made to the latter
by the clerk of the Court of First Instance of Iloilo of the amount
of P6,000 mentioned above in consideration of said lawyer's
waiver of the remainder of the 15 per cent of said judgment
amounting to P444.69.
With these two payments of P6,000 each making a total of
P12,000, the judgment for P42,966.44 against the municipality of
Iloilo was reduced to P30,966.40, which was adjudicated by said
court to Mauricio Cruz & Co.
This appeal, then, is confined to the claim of Mauricio Cruz &
Co. as alleged assignee of the rights of the late Attorney Antero
Soriano by virtue of the said judgment in payment of professional
services rendered by him to the said widow and her coheirs.
The only question to be decided in this appeal is the legality of
the assignment made by Tan Boon Tiong as attorney-in-fact of
20
the appellant Tan Ong Sze Viuda de Tan Toco, to Attorney Antero considering that said attorney had won several of those cases for his
Soriano, of all the credits, rights and interests belonging to said clients, the sum of P10,000 to date paid to him for professional services
appellant Tan Ong Sze Viuda de Tan Toco by virtue of the is wholly inadequate, and shows, even if indirectly, that the
judgment rendered in civil case No .3514 of the Court of First assignments of the appellant's rights and interests made to the late
Instance of Iloilo, entitled Viuda de Tan Toco vs. The Municipal Antero Soriano and determined in the judgment aforementioned, was
Council of Iloilo, adjudicating to said widow the amount of made in consideration of the professional services rendered by the latter
P42,966.40, plus the costs of court, against said municipal council to the aforesaid widow and her coheirs.
of Iloilo, in consideration of the professional services rendered by The defendant-appellant also contends that the deed of assignment
said attorney to said widow of Tan Toco and her coheirs, by virtue Exhibit 2-Cruz was drawn up in contravention of the prohibition
of the deed Exhibit 2. contained in article 1459, case 5, of the Civil Code, which reads as
The appellant contends, in the first place, that said assignments follows:
was not made in consideration of professional services by ART. 1459. The following persons cannot take by purchase,
Attorney Antero Soriano, for they had already been satisfied even at a public or judicial auction, either in person or
before the execution of said deed of assignment, but in order to through the mediation of another:
facilitate the collection of the amount of said judgment in favor of
the appellant, for the reason that, being Chinese, she had xxx xxx xxx
encountered many difficulties in trying to collect.lawphil.net 5. Justices, judges, members of the department of public
prosecution, clerks of superior and inferior courts, and other
In support of her contention on this point, the appellant alleges
that the payments admitted by the court in its judgment, as made officers of such courts, the property and rights in litigation
before the court within whose jurisdiction or territory they
by Tan Toco's widow to Attorney Antero Soriano for professional
services rendered to her and to her coheirs, amounting to P2,900, perform their respective duties .This prohibition shall include
the acquisition of such property by assignment.
must be added to the P700 evidenced by Exhibits 4-A, Tan Toco,
and 4-B Tan Toco, respectively, which exhibits the court below Actions between co-heirs concerning the hereditary property,
rejected as evidence, on the ground that they were considered as assignments in payment of debts, or to secure the property of
payments made for professional services rendered, not by Antero such persons, shall be excluded from this rule.
Soriano personally, by the firm of Soriano & Arroyo.
The prohibition contained in this paragraph shall include
A glance at these receipts shows that those amounts were received lawyers and solicitors with respect to any property or rights
by Attorney Antero Soriano for the firm of Soriano & Arroyo, involved in any litigation in which they may take part by
which is borne out by the stamp on said receipts reading, "Befete virtue of their profession and office.
Soriano & Arroyo," and the manner in which said attorney It does not appear that the Attorney Antero Soriano was counsel for the
receipted for them, "Soriano & Arroyo, by A. Soriano." herein appellant in civil case No. 3514 of the Court of First Instance of
Therefore, the appellant's contention that the amounts of P200 and Iloilo, which she instituted against the municipality of Iloilo, Iloilo, for
P500 evidence by said receipts should be considered as payments the recovery of the value of a strip of land expropriated by said
made to Attorney Antero Soriano for professional services municipality for the widening of a certain public street. The only
rendered by him personally to the interests of the widow of Tan lawyers who appear to have represented her in that case were Arroyo
Toco, is untenable. and Evangelista, who filed a claim for their professional fees .When the
Besides, if at the time of the assignments to the late Antero appellant's credit, right, and interests in that case were assigned by her
Soriano his professional services to the appellant widow of Tan attorney-in-fact Tan Boon Tiong, to Attorney Antero Soriano in
Toco had already been paid for, no reason can be given why it was payment of professional services rendered by the latter to the appellant
necessary to write him money in payment of professional services and her coheirs in connection with other cases, that particular case had
on March 14, 1928 (Exhibit 5-G Tan Toco) and December 15, of been decided, and the only thing left to do was to collect the judgment.
the same year (Exhibit 5-H Tan Toco) after the deed of There was no relation of attorney and client, then, between Antero
assignment, (Exhibit 2-Cruz) dated September 27, 1927, had been Soriano and the appellant, in the case where that judgment was
executed. In view of the fact that the amounts involved in the rendered; and therefore the assignment of her credit, right and interests
cases prosecuted by Attorney Antero Soriano as counsel for Tan to said lawyer did not violate the prohibition cited above.
Toco's widow, some of which cases have been appealed to this As to whether Tan Boon Tiong as attorney-in-fact of the appellant, was
court, run into the hundreds of thousands of pesos, and empowered by his principal to make as assignment of credits, rights and
interests, in payment of debts for professional services rendered
by lawyers, in paragraph VI of the power of attorney, Exhibit 5-
Cruz, Tan Boon Tiong is authorized to employ and contract for
the services of lawyers upon such conditions as he may deem
convenient, to take charge of any actions necessary or expedient
for the interests of his principal, and to defend suits brought
against her. This power necessarily implies the authority to pay
for the professional services thus engaged. In the present case, the
assignment made by Tan Boon Tiong, as Attorney-in-fact for the
appellant, in favor of Attorney Antero Soriano for professional
services rendered in other cases in the interests of the appellant
and her coheirs, was that credit which she had against the
municipality of Iloilo, and such assignment was equivalent to the
payment of the amount of said credit to Antero Soriano for
professional services.
With regard to the failure of the other attorney-in-fact of the
appellant, Tan Montano, authorized by Exhibit 1 — Tan Toco, to
consent to the deed of assignment, the latter being also authorized
to pay, in the name and behalf of the principal, all her debts and
the liens and encumbrances her property, the very fact that
different letters of attorney were given to each of these two
representatives shows that it was not the principal's intention that
they should act jointly in order to make their acts valid.
Furthermore, the appellant was aware of that assignment and she
not only did not repudiate it, but she continued employing
Attorney Antero Soriano to represent her in court.
For the foregoing considerations, the court is of opinion and so
holds: (1) That an agent of attorney-in -fact empowered to pay the
debts of the principal, and to employ lawyers to defend the latter's
interests, is impliedly empowered to pay the lawyer's fees for
services rendered in the interests of said principal, and may
satisfy them by an assignment of a judgment rendered in favor of
said principal; (2) that when a person appoints two attorneys-in-
fact independently, the consent of the one will not be required to
validate the acts of the other unless that appears positively to have
been the principal's attention; and (3) that the assignment of the
amount of a judgment made by a person to his attorney, who has
not taken any part in the case wherein said judgment was
rendered, made in payment of professional services in other
cases, does not contravene the prohibition of article 1459, case 5,
of the Civil Code.
By virtue whereof, and finding no error in the judgment appealed
from, the same is affirmed in its entirety, with costs against the
appellant. So ordered.
G.R. No. L-30181 July 12, 1929
THE DIRECTOR OF PUBLIC WORKS, plaintiff-appellee,
vs.
21
SING JUCO, ET AL., defendants. contempted improvement, upon the lot of the land, already described as
SING JUCO, SING BENGCO and PHILIPPINE NATIONAL covered by certificate No. 1359, at a price to be determined at the actual
BANK, appellants. cost of the filling, with certain surcharges to be determined by the
Roman J. Lacson for appellant National Bank. Director of Public Works. It was contemplated in the original draft of
Soriano and Nepomuceno for appellants Sing Juco and Sing the contract that the Bureau would be able to furnish some 250,000
Bengco. cubic meters of dredged material for filling in the land, was limited to
Attorney-General Jaranilla for appellee. the material which should be dredged from the river as a result of the
proposed improvement. To this stipulation the four owners of the
STREET, J.: property assented on March 14, 1921.
From Torrens certificate of title No. 1359 relating to land in the (2) With respect to the compensation it was agreed that the amount due
municipality of Iloilo, it appears that on September 28, 1920, the should be determined by the Director of Public Works, under certain
title of the property described therein was owned, in undivided conditions mentioned in the contract, of an amount of not less that 20
shares, by Mariano de la Rama, Gonzalo Mariano Tanboontien, nor more than 75 centavos per cubic meter. It was further agreed that,
Sing Juco and Sing Bengco. The interest vested by said certificate when the work should be finished, the cost thereof should be paid by
in Mariano de la Rama was subsequently transferred to sale to the owners in 5 annual installments and that for failure to pay such
Enrique Enchaus. It further appears that on November 23, 1020, installment the whole of the amount thereafter to accrue should become
the owners of the property covered by the said certificate at once due. This contract was noted in the Torrens certificate of title on
conveyed it by way of a mortgage to the Philippine National Bank January 8, 1924.
for the purpose of securing a credit in current account in a mount
not in excess of P170,000, with interest at a rate of 12 percent per In connection with the making of the contract abovementioned, the,
Director of Public Works required a bond to be supplied by the owners
annum. The indebtedness covered by this mortgage has not been
satisfied, and upon the date of the decision of the court below it in the penal amount of P150,000, approximately twice the estimated
cost of the filling, conditioned for the payment of the amount due from
amounted to the sum of P170,000, plus interest at 12 percent per
annum from November 24, 1920. the owners. This bond was executed contemporaneously with the main
contract; and in connection therewith it should be noted that one of the
The land above referred to contains an area of nearly 16 hectares, names appearing upon said contract was that of "Casa Viuda de Tan
or to be exact, 158,589.44 square meters according to the Toco," purporting to be signed by M. de la Rama.
certificate. It is located on "Point Llorente" at the mouth of Iloilo
river, near the City of Iloilo, and it is of so low a level that, prior The dredging operation were conducted by the Bureau of Public Works
to the improvement to which reference is to be made, it was in substantial accomplice, we find, with the terms of said agreement;
subject to frequent flooding. In 1921, the Government of the and after the account with the owners were liquidated and the amount
Philippine Islands was planning extensive harbor improvements in due from them determined, demand was made upon them for the
this vicinity, requiring extensive dredging by the Bureau of Public payment of the first installment. No such payment was, however, made
Works in the mouth of said river. The conduct of these dredging as a consequence this action was instituted by the Director of Public
operations made it necessary for the Director of Public Works to Works on October 14, 1926, for the purpose of recovering the amount
find a place of deposit for the dirt and mud taken from the place, due to the Government under the contract from the original owners of
or places, dredged. As the land already referred to was low and the property from the sureties whose names were signed to the contract
easily accessible to the spot where dredging was to be conducted, of suretyship, and to enforce the obligation as a real lien upon the
it was obviously for the interest of the Government and the said property. In said action the Philippine National Bank was made a party
owners of the land that the material taken out by the dredges defendant, as having an interest under its prior mortgage upon the
should be deposited on the said property. Accordingly, after property, while Enrique Enchaus was made defendant as successor in
preliminary negotiations to this effect have been conducted, a interest of M. de la Rama, and Tan Ong Sze widow of Tan Toco, was
contract was made between the Director of Public Works, also made defendant by reason of her supposed liability derived from
representing the Government of the Philippine Islands, and the the act of De la Rama in signing the firm "Casa Viuda de Tan Toco" as
four owners, M. de la Rama, Sing Juco, G. M. Tanboontien, and a surety on bond. It was noteworthy that in the complaint it was asked
Seng Bengco, of which, as modified by some respects by that, in the enforcement of the government's lien, the property should be
subsequent agreement, the following features are noteworthy. sold "subject to the first mortgage in favor of the Philippine National
Bank."
(1) The Bureau of Public Works agreed to deposit the material to
be dredged by it from the Iloilo River, in connection with the To this complaint different defenses were set up, as follows: On behalf
of the owners of the property, it was contended that the government has
not complied with that contract, in that dredged material
deposited on the land had not been sufficient in quantity to raise
the level of the land above high water, and that, as a consequence,
the land had not been much benefited. It is therefore asserted that
the owners of the property are not obligated to pay the filling
operation. These defendants sought to recover further damages by
way of cross-complaint for the same supposed breach of contract
on the part of the Government. On the part of Viuda de Tan Toco
the defense was interposed that the name "Casa Viuda de Tan
Toco" signed to the contract of suretyship by Mariano de la Rama
was signed without authority; while on the part of the Philippine
National Bank was asserted that the mortgage credit pertaining to
the bank is superior to the Governments lien for improvement,
and by way of counterclaim the bank asked that its mortgage be
foreclosed for the amount of its mortgage credit, and that the four
mortgagors, Sing Juco, Sing Bengco, M. de la Rama and G.M.
Tanboontien, be required to pay the amount due to the bank, and
that in case of their failure to do so the mortgaged property
should be sold and the proceeds paid preferentially to the bank
upon its mortgage.
Upon hearing the cause the trial court, ignoring that part of the
original complaint wherein the Government seeks to enforce its
lien in subordination to its first mortgage, made pronouncements:
(1) Declaring Sing Juco, Sing Bengco, M. de la Rama
and G. M. Tanboontien indebted to the Government in
the amount of P70, 938, with interest from the date of
the filing of the complaint, and requiring them to pay
the said sum to the plaintiff;
(2) Declaring, in effect, that the lien of the Government
for the filing improvement was superior to the mortgage
of the Philippine National Bank; and finally
(3) Declaring the defendant Tan Ong Sze, Viuda de Tan
Toco, personally liable upon the contract of suretyship,
in case the four principal obligors should not satisfy
their indebtedness to the Government, or if the land
should not sell enough to satisfy the same.
From this judgment various parties defendant appealed as
follows: All of the defendants, except the Philippine National
Bank, appealed from so much of the decision as held that the
defendant owners and signatories to the contract of suretyship has
not been released by non-performance of the contract on the part
of the Bureau of Public Works, and from the refusal of the court
to give to the defendant owners damages for breach of contract on
the part of the Government. On the part of Tan Ong Sze, Viuda
de Tan Toco, error is assigned to the action of the court in
holding said defendant liable upon the contract of suretyship.
Finally, the Philippine National Bank appealed from so much of
22
the decision as gave the lien of the Government for improvement has exhibited no power of attorney which would authorize the creation,
priority over the mortgagee executed in favor of the bank. by the attorney-in-fact, of an obligation in the nature of suretyship
Dealing with these contentions in the order indicated, we find the binding upon this principal.
contention of the appellants (except the Philippine National Bank), It is true that the Government introduced in evidence 2 documents
to the effect that the Director of Public Works has failed to comply exhibiting powers of attorney, conferred by these documents (Exhibit
with the obligations imposed upon the government by the contract, K, identical with Exhibit 5) Mariano de la Rama was given the power
is wholly untenable. By said contract, the Government was not which reads as follows:
obligated to raise the land on which the dredged material was
. . . and also for me and in my name to sign, seal and execute,
deposited to any specified level. The Government only obligated and as my act and deed deliver, any lease or any other deed
itself upon said land the material should be dredged from the
for the conveying any real or personal property or the other
mouth of the Iloilo River in the course of the improvement matter or thing wherein I am or may be personally interested
undertaken by the Government in and near that place. Under the
or concerned. And I do hereby further authorize and empower
original contract as originally drafted, the Government agreed to my said attorney to substitute and point any other attorney or
furnish 250,000 cubic meters, more or less, of dredged material;
attorneys under him for the purposes aforesaid, and the same
but on Mar. 14, 1921, the owners of the property indicated their again and pleasure to revoke; and generally for me and in my
acceptance of a modification of the contract effected by the
name to do, perform, and execute all and any other lawful and
Director of Public Works and the Secretary of Commerce and reasonable acts and things whatsoever as fully and effectually
Communications, in which it was made clear that the material to
as I, the said Tan Ong Sze might or could do if personally
be supplied would be such only as should be dredged from the present.
river as a result of the proposed improvement. In the endorsement
of the Director of Public Works, thus accepted by the owners, it In another document, (Exhibits L and M), executed in favor of the same
was made clear that the Bureau of Public Works did not undertake Mariano de la Rama by his uncle Tan Lien Co, attorney-in-fact of Tan
to furnish material to complete the filling of the land to any Ong Sze, with power of substitution, there appears the following:
specified level. Proof submitted on the part of the owners tends to . . . and also for her and for her name to sign, seal and
show that parts of the filled land are still subject to inundation in execute, and as her act and deed deliver, any lease, release,
rainy weather; and it is contended, that the owners have, for this bargain, sale, assignment, conveyance or assurance, any other
reason, been able to sell in lots the property to individual deed for the conveying any real or personal property or other
occupants. the sum of P15,000, which is claimed upon this matter or thing wherein she or may be personally interested or
account, as damages by the owners, is the amount of interest concerned.
alleged to have been accrued upon their investment, owing to their
Neither of these powers officially confers upon Mariano de la Rama the
inability to place the land advantageously upon the market. The power to bind a principal by a contract of suretyship. The clauses noted
claim is, as already suggested, untenable. There has been no relate more specifically to the execution of contracts relating to
breach on the part of the Government in fulfilling the contract. In property; and the more general words at the close of the quoted clauses
fact it appears that the Government deposited in the period should be interpreted, under the general rule ejusdem generis, as
covered by the contract 236,460 cubic meters, and after the referring to the contracts of like character. Power to execute a contract
amount thus deposited had been reduced by 21,840 cubic meters, so exceptional a nature as a contract of suretyship or guaranty cannot be
owing to the natural process of drying, the Bureau of Public inferred from the general words contained in these powers.
Works further deposited 53,000 cubic meters on the same land. In
In article 1827 of the Civil Code it is declared that guaranty shall not be
this connection, the district engineer testified that the filling which
presumed; it must be expressed and cannot be extended beyond its
has been charged to the owners at P70,938 actually cost the
Government the amount of P88,297.85. The charge made for the specified limits. By analogy a power of attorney to execute a contract of
guaranty should not be inferred from vague or general words, especially
work was evidently computed on a very moderate basis; and the
owners of the property have no just ground of complaint whatever. when such words have their origin and explanation in particular powers
of a wholly different nature. It results that the trial court was in error in
The contention of Tan Ong Sze, widow of Tan Toco, to the effect giving personal judgment against Tan Ong Sze upon the bond upon
that she was not, and is not, bound by the contract of suretyship, is which she was sued in this case.
our pinion, well-founded. It will be remembered that said contract
purports to have been signed by Mariano de la Rama, acting for We now proceed to consider the last important disputed question
this defendant under the power of attorney. But the Government involved in this case, which is, whether the indebtedness owing to the
Government under the contract for filling the parcel of land already
mentioned is entitled to preference over the mortgage credit due
to the Philippine National Bank, as the trial judge held, or
whether on the contrary, the latter claim is entitled to priority
over the claim of the Government Upon entering into the
discussion of the feature of the case it is well to recall the fact that
the bank's mortgage was registered in the office of the Register of
Deeds of the province of Iloilo on November 26, 1920, while the
filing contract was registered on January 8, 1924, that is to say,
there is a priority of more than three years, in point of time, in the
inscription of the mortgage credit under the filling contract was
made an express lien upon the property which was the subject of
improvement.
In the brief submitted in behalf of the bank it appears to be
assumed that the Government credit under the filling contract is a
true refectionary credit (credito refacionario) under subsection 2
of Article 1923 of the Civil Code. It may be observed, however,
that in a precise and technical sense, this credit is not exactly of
the nature of the refectionary credit as known to the civil law. In
the civil law the refectionary credit is primarily an indebtedness
incurred in the repair or reconstruction of something previously
made, such repair or reconstruction being made necessary by the
deterioration or destruction as it formerly existed. The conception
does not ordinarily include an entirely new work, though Spanish
jurisprudence appears to have sanctioned this broader conception
in certain cases as may be gathered from the decision in
the Enciclopedia Juridica Espanola (vol. 26, pp. 888-890) s.
v. Refaccionario. The question whether the credit we are
considering falls precisely under the conception of the
refectionary credit in the civil law is in this case academic rather
than practical, for the reason that by the express terms of the
filling contract the credit was constituted a lien upon the
improved property. But assuming, as might be tenable in the state
of jurisprudence, that said credit is a refectionary credit enjoying
preference under subsection 3 or article 1923 of the Civil code ,
then the mortgage credit must be given priority under subsection
2 of the article 1927 of the same code, for the reason that the
mortgage was registered first.
Possibly the simpler view of the situation is to consider the
Government's right under the stipulation expressly making the
credit a lien upon the property, for it was certainly lawful for the
parties to the filling contract to declare the credit a lien upon the
property to be improved — to the extent hereinafter define —
whether the credit precisely fulfills the conception of refectionary
credit or not. In this aspect we have before us a competition
between the real lien created by the filling contract of the later
registration. The true solution to the problem is, in our opinion,
not open to doubt; and again the result is that priority must be
conceded to the mortgage. The mortgage was created by the
23
lawful owners at a time when no other competing interest existed
in the property. The lien of the mortgage therefore attached to the
fee, or unlimited interest of the owners in the property. On the
other hand, the lien created by the filling contract was created after
the mortgage had been made and registered, and therefore, after
the owners of the property had parted with the interest created by
the mortgage. The Government's lien owes its origin to the
contract, and derives its efficacy from the volition of the
contracting parties. But no party can by contract create a right in
another intrinsically greater than that which he himself possess.
The owners, at the time this contract was made, were owners of
the equity of redemption only and not of the entire interest in the
property, and the lien created by the contract could only operate
upon the equity of redemption.
In this connection, we observed that, as the new material was
deposited from the Government dredges upon the property in
question, it became an integral part of the soil and an irremovable
fixture; and the deposit having been made under contract between
the Government and the owners of the equity of redemption,
without the concurrence of the mortgage creditor in said contract
the latter could not be prejudiced thereby. The trial court, in
declaring that the Government's lien should have preference over
the mortgage, seems to have proceeded upon the idea that, at the
time the mortgage was created, the new soil had yet been
deposited under the filling contract and that as a consequence the
mortgage lien should not been considered as attaching to the value
added by deposit of the additional material. This proposition,
however, overlooks the fact that the deposited material became an
irremovable fixture, by the act and intention of the parties to the
filling contract, and the lien of the mortgage undoubtedly attached
to the increment thus spread over and affixed to the mortgaged
land. If the idea which prevailed in the trial court should be
accepted as law upon this point, the result would be that a
mortgage creditor could, by the act of strangers, be entirely proved
out of his property by making of improvements to which he has
not assented. This cannot be accepted as good law.
We may add that the case cannot, on this point, be resolved
favorably to the contention of the Director of Public Works, upon
the authority of Unson vs. Urquijo, Zuluoaga and Escubi (50 Phil.,
160), for the reason that upon the deposit of the dredged material
on the land such material lost its identity. In the case cited the
machinery in respect to which the vendor's preference was upheld
by this court retained its separate existence and remained perfectly
capable of identification at all times.
From what it has been said it results that the appealed judgment
must be affirmed, and the same is hereby affirmed, in dismissing,
in effect, the cross-complaint filed by some of the defendants
against the plaintiff, the Director of Public Works. Such judgment
is further affirmed in its findings, which are not dispute, with respect to
the amount of the Government's claim under the filling contract and the
amount of mortgage credit of the bank, as it is also affirmed in respect
to the joint and several judgment entered in favor of the plaintiff against
Sing Juco, Sing Bengco, Tanboontien and Mariano de la Rama
Tanbunco (alias Mariano de la Rama) for the amount due to the
Government
Said judgment, however, must be reversed and the same is being
reversed in so far as it holds that Tan Ong Sze, Viuda de Tan Toco, is
liable upon the contract of suretyship, and she is hereby absolved from
the complaint. The judgment must also be reversed in so far as it
declares that the Government's lien under the filling contract is entitled
to priority over the bank's mortgage. On the contrary it is hereby
declared that the bank's credit is entitled to priority out of the proceeds
of the foreclosure sale, the residue, if any, to be applied to the
Government's lien created by the filling contract and otherwise in
accordance with law. For further proceedings in conformity with this
opinion, the cause is hereby remanded to the cause of origin, without
pronouncements as to costs. So ordered.
G.R. No. L-39037 October 30, 1933
THE PHILIPPINE NATIONAL BANK, plaintiff-appellee,
vs.
PAZ AGUDELO Y GONZAGA, ET AL., defendants.
PAZ AGUDELO Y GONZAGA, appellant.
Hilado and Hilado and Norberto Romualdez for appellant.
Roman J. Lacson for appellee.
VILLA-REAL, J.:
The defendant Paz Agudelo y Gonzaga appeals to this court from the
judgment rendered by the Court of First Instance of Occidental Negros,
the dispositive part of which reads as follows:
Wherefore, judgment is rendered herein absolving the
defendant Mauro A. Garrucho from the complaint and
ordering the defendant Paz Agudelo y Gonzaga to pay to the
plaintiff the sum of P31,091.55, Philippine currency, together
with the interest on the balance of P20,774.73 at 8 per
cent per annum of P4.55 daily from July 16, 1929, until fully
paid, plus the sum of P1,500 as attorney's fees, and the costs
of this suit.
It is hereby ordered that in case the above sums adjudged in
favor of the defendant by virtue of this judgment are not paid
to the Philippine National Bank or deposited in the office of
the clerk of this court, for delivery to the plaintiff, within
three months from the date of this decision, the provincial
sheriff of Occidental Negros shall set at public auction the
mortgaged properties described in annex E of the second
 amended complaint, and apply the proceeds thereof to
the payment of the sums in question.
It is further ordered that in case the proceeds of the
mortgaged properties are not sufficient to cover the
amount of this judgment, a writ of execution be issued
against any other property belonging to the defendant
Paz Agudelo y Gonzaga, not otherwise exempt from
execution, to cover the balance resulting therefrom.
In support of her appeal, the appellant assigns six alleged errors
as committed by the trial court, which we shall discuss in the
course of this decision.
The following pertinent facts, which have been proven without
dispute during the trial, are necessary for the decision of the
questions raised in the present appeal, to wit:
On November 9, 1920, the defendant-appellant Paz Agudelo y
Gonzaga executed in favor of her nephew, Mauro A. Garrucho,
the document Exhibit K conferring upon him a special power of
attorney sufficiently broad in scope to enable him to sell, alienate
and mortgage in the manner and form he might deem convenient,
all her real estate situated in the municipalities of Murcia and
Bacolod, Occidental Negros, consisting in lots Nos. 61 and 207 of
the cadastral survey of Bacolod, Occidental Negros, together with
the improvement thereon.
On December 22, 1920, Amparo A. Garrucho executed the
document Exhibit H whereby she conferred upon her brother
Mauro A Garrucho a special power of attorney sufficiently broad
in scope to enable him to sell, alienate, mortgage or otherwise
encumber, in the manner and form he might deem convenient, all
her real estate situated in the municipalities of Murcia and Bago,
Occidental Negros.
Nothing in the aforesaid powers of attorney expressly authorized
Mauro A. Garrucho to contract any loan nor to constitute a
mortgage on the properties belonging to the respective principals,
to secure his obligations.
On December 23, 1920, Mauro A. Garrucho executed in the favor
of the plaintiff entity, the Philippine National bank, the document
Exhibit G, whereby he constituted a mortgage on lot No. 878 of
the cadastral survey of Murcia, Occidental Negros, with all the
improvements thereon, described in transfer certificate of title
No. 2415 issued in the name of Amparo A. Garrucho, to secure
the payment of credits, loans, commercial overdrafts, etc., not
exceeding P6,000, together with interest thereon, which he might
obtain from the aforesaid plaintiff entity, issuing the
corresponding promissory note to that effect.
During certain months of the year 1921 and 1922, Mauro A.
Garrucho maintained a personal current account with the plaintiff
24
bank in the form of a commercial credit withdrawable through cancelled the mortgages constituted on lots Nos. 61, 207 and 878
checks (Exhibits S, 1 and T). described in Torrens titles Nos. 2216, 1148 and 2415, respectively.
On August 24, 1931, the said Mauro A. Garrucho executed in On November 25, 1925, Amparo A. Garrucho sold lot No. 878
favor of the plaintiff entity, the Philippine National Bank, the described in certificate of title No. 2415, to Paz Agudelo y Gonzaga
document Exhibit J whereby he constituted a mortgage on lots (Exhibit M).
Nos. 61 and 207 of the cadastral survey of Bacolod together with On January 15, 1926, in the City of Manila, Paz Agudelo y Gonzaga
the buildings and improvements thereon, described in original signed the affidavit, Exhibit N, which reads as follows:
certificates of title Nos. 2216 and 1148, respectively, issued in the
name of Paz Agudelo y Gonzaga, to secure the payment of credits, Know all men by these presents: That I, Paz Agudelo y
Gonzaga, single, of age, and resident of the City of Manila, P.
loans and commercial overdrafts which the said bank might
furnish him to the amount of P16,00, payable on August 24, 1922, I., by these present do hereby agree and consent to the transfer
in my favor of lot No. 878 of the Cadastre of Murcia,
executing the corresponding promissory note to that effect.
Occidental Negros, P. I., by Miss Amparo A. Garrucho, as
The mortgage deeds Exhibit G and J as well as the corresponding evidenced by the public instrument dated November 25, 1925,
promissory notes for P6,000 and P16,000, respectively, were executed before the notary public Mr. Genaro B. Benedicto,
executed in Mauro A. Garrucho's own name and signed by him in and do hereby further agree to the amount of the lien thereon
his personal capacity, authorizing the mortgage creditor, the
stated in the mortgage deed executed by Miss Amparo A.
Philippine National Bank, to take possession of the mortgaged Garrucho in favor of the Philippine National Bank.
properties, by means of force if necessary, in case he failed to
comply with any of the conditions stipulated therein. In testimony whereof, I hereunto affix my signature in the
City of Manila, P.I., this 15th of January, 1926.
On January 4, 1922, the manager of the Iloilo branch of the
Philippine National Bank notified Mauro A. Garrucho that his (Sgd.) PAZ AGUDELO Y GONZAGA.
promissory note for P6,000 of 10 days within which to make Pursuant to the sale made by Amparo A. Garrucho in favor of Paz
payment thereof (Exhibit O).1awphil.net Agudelo y Gonzaga, of lot No. 878 of the cadastral survey of Murcia,
On May 9, 1922, the said manager notified Mauro A. Garrucho described in certificate of title No. 2145 issued in the name of said
that his commercial credit was closed from that date (Exhibit S). Amparo A. Garrucho, and to the affidavit, Exhibit N, transfer certificate
of title No. 5369 was issued in the name of Paz Agudelo y Gonzaga.
Inasmuch as Mauro A. Garrucho had overdrawn his credit with
the plaintiff-appellee, the said manager thereof, in a letter dated Without discussing and passing upon whether or not the powers of
June 27, 1922 (Exhibit T), requested him to liquidate his account attorney issued in favor of Mauro A. Garrucho by his sister, Amparo A.
amounting to P15,148.15, at the same time notifying him that his Garrucho, and by his aunt, Paz Agudelo y Gonzaga, respectively, to
promissory note for P16,000 giving as security for the commercial mortgage their respective real estate, authorized him to obtain loans
overdraft in question, had fallen due some time since. secured by mortgage in the properties in question, we shall consider the
question of whether or not Paz Agudelo y Gonzaga is liable for the
On July 15, 1922, Mauro A. Garrucho, executed in favor of the payment of the loans obtained by Mauro A. Garrucho from the
plaintiff entity the deed Exhibit C whereby he constituted a Philippine National Bank for the security of which he constituted a
mortgage on lots Nos. 61 and 207 of the cadastral survey of mortgage on the aforesaid real estate belonging to the defendant-
Bacolod, together with the improvements thereon, described in appellant Paz Agudelo y Gonzaga.
transfer certificates of title Nos. 2216 and 1148, respectively,
issued in the name of Paz Agudelo y Gonzaga, and on lot No. 878 Article 1709 of the Civil Code provides the following:
of the cadastral survey of Murcia, described in transfer certificate ART. 1709. By the contract of agency, one person binds
of title No. 2415, issued in the name of Amparo A. Garrucho. himself to render some service, or to do something for the
In connection of the credits, loans, and commercial overdrafts account or at the request of another.
amounting to P21,000 which had been granted him, Mauro A. And article 1717 of the same Code provides as follows:
Garrucho, on the said date July 15, 1922, executed the promissory ART. 1717. When an agent acts in his own name, the
note, Exhibit B, for P21,000 as a novation of the former principal shall have no right of action against the persons with
promissory notes for P6,000 and P16,000, respectively. whom the agent has contracted, or such persons against the
In view of the aforesaid consolidated mortgage, Exhibit C, the principal.
Philippine National Bank, on the said date of July 15, 1922,
 In such case, the agent is directly liable to the person
with whom he has contracted, as if the transaction were
his own. Cases involving things belonging to the
principal are excepted.
The provisions of this article shall be understood to be
without prejudice to actions between principal and
agent.
Aside from the phrases "attorney in fact of his sister, Amparo A.
Garrucho, as evidenced by the power of attorney attached hereto"
and "attorney in fact of Paz Agudelo y Gonzaga" written after the
name of Mauro A. Garrucho in the mortgage deeds, Exhibits G.
and J, respectively, there is nothing in the said mortgage deeds to
show that Mauro A. Garrucho is attorney in fact of Amparo A.
Garrucho and of Paz Agudelo y Gonzaga, and that he obtained
the loans mentioned in the aforesaid mortgage deeds and
constituted said mortgages as security for the payment of said
loans, for the account and at the request of said Amparo A.
Garrucho and Paz Agudelo y Gonzaga. The above-quoted phrases
which simply described his legal personality, did not mean that
Mauro A. Garrucho obtained the said loans and constituted the
mortgages in question for the account, and at the request, of his
principals. From the titles as well as from the signatures therein,
Mauro A. Garrucho, appears to have acted in his personal
capacity. In the aforesaid mortgage deeds, Mauro A. Garrucho, in
his capacity as mortgage debtor, appointed the mortgage creditor
Philippine National Bank as his attorney in fact so that it might
take actual and full possession of the mortgaged properties by
means of force in case of violation of any of the conditions
stipulated in the respective mortgage contracts. If Mauro A.
Garrucho acted in his capacity as mere attorney in fact of Amparo
A. Garrucho and of Paz Agudelo y Gonzaga, he could not
delegate his power, in view of the legal principle of "delegata
potestas delegare non potest" (a delegated power cannot be
delegated), inasmuch as there is nothing in the records to show
that he has been expressly authorized to do so.
He executed the promissory notes evidencing the aforesaid loans,
under his own signature, without authority from his principal and,
therefore, were not binding upon the latter (2 Corpus Juris, pp.
630-637, par. 280). Neither is there anything to show that he
executed the promissory notes in question for the account, and at
the request, of his respective principals (8 Corpus Juris, pp. 157-
158).
Furthermore, it is noted that the mortgage deeds, Exhibits C and
J, were cancelled by the documents, Exhibits I and L, on July 15,
1922, and in their stead the mortgage deed, Exhibit C, was
executed, in which there is absolutely no mention of Mauro A.
Garrucho being attorney in fact of anybody, and which shows that
he obtained such credit fro himself in his personal capacity and
25
secured the payment thereof by mortgage constituted by him in his to the free will of the parties or to the decision of the courts.
personal capacity, although on properties belonging to his However, the evident intention which prevails against the
principal Paz Agudelo y Gonzaga. defective wording thereof is not that of one of the parties, but
Furthermore, the promissory notes executed by Mauro A. the general intent, which, being so, is to a certain extent
Garrucho in favor of the Philippine National Bank, evidencing equivalent to mutual consent, inasmuch as it was the result
loans of P6,000 and P16,000 have been novated by the promissory desired and intended by the contracting parties. (8 Manresa,
notes for P21,000 (Exhibit B) executed by Mauro A. Garrucho, 3d edition, pp. 726 and 727.)
not only without express authority from his principal Paz Agudelo Furthermore, the records do not show that the loan obtained by Mauro
y Gonzaga but also under his own signature. A. Garrucho, evidenced by the promissory note, Exhibit B, was for his
In the case of National Bank vs. Palma Gil (55 Phil., 639), this principal Paz Agudelo y Gonzaga. The special power of attorney,
court laid down the following doctrine: Exhibit K, does not authorize Mauro A. Garrucho to constitute a
A promissory note and two mortgages executed by the mortgage on the real estate of his principal to secure his personal
agent for and on behalf of his principal, in accordance obligations. Therefore, in doing so by virtue of the document, Exhibit
with a power of attorney executed by the principal in C, he exceeded the scope if his authority and his principal is not liable
favor of the agent, are valid, and as provided by article for his acts. (2 Corpus Juris, p. 651; article 1714, Civil Code.)
1727 of contracted by the agent; but a mortgage on real It is further claimed that inasmuch as the properties mortgaged by
property of the principal not made and signed in the Mauro A. Garrucho belong to Paz Agudelo y Gonzaga, the latter is
name of the principal is not valid as to the principal. responsible for the acts of the former although he acted in his own
It has been intimated, and the trial judge so stated. that it was the name, in accordance with the exception contained in article 1717 of the
intention of the parties that Mauro A. Garrucho would execute the Civil Code. It would be an exception with the properties of his own
promissory note, Exhibit B, and the mortgage deed, Exhibit C, in name in connection with the properties of his principal, does so within
his capacity as attorney in facts of Paz Agudelo y Gonzaga, and the scope of his authority. It is noted that Mauro A. Garrucho was not
that although the terms of the aforesaid documents appear to be authorized to execute promissory notes even in the name of his
contrary to the intention of the parties, such intention should principal Paz Agudelo y Gonzaga, nor to constitute a mortgage on her
prevail in accordance with article 1281 of the Civil Code. real properties to secure such promissory notes. The plaintiff Philippine
National Bank should know this inasmuch as it is in duty bound to
Commenting on article 1281 of the Civil Code, Manresa, in his ascertain the extent of the agent's authority before dealing with him.
Commentaries to the Civil Code, says the following: Therefore, Mauro A. Garrucho and not Paz Agudelo y Gonzaga is
IV. Intention of the contracting parties; its appreciation. personally liable for the amount of the promissory note Exhibit B. (2
— In order that the intention may prevail, it is necessary Corpus Juris, pp. 563-564.)
that the question of interpretation be raised, either However, Paz Agudelo y Gonzaga in an affidavit dated January 15,
because the words used appear to be contrary thereto, or 1926 (Exhibit AA), and in a letter dated January 16, 1926 (Exhibit Z),
by the existence of overt acts opposed to such words, in gave her consent to the lien on lot No. 878 of the cadastre of Murcia,
which the intention of the contracting parties is made Occidental Negros, described in Torrens title No. 5369, the ownership
manifest. Furthermore, in order that it may prevail of which was transferred to her by her niece Amparo A. Garrucho. This
against the terms of the contract, it must be clear or, in acknowledgment, however, does not extend to lots Nos. 207 and 61 of
other words, besides the fact that such intention should the cadastral survey of Bacolod, described in transfer certificates of title
be proven by admissible evidence, the latter must be of Nos. 1148 and 2216, respectively, inasmuch as, although it is true that a
such charter as to carry in the mind of the judge an mortgage is indivisible as to the contracting parties and as top their
unequivocal conviction. This requisite as to the kind of successors in interest (article 1860, Civil Code), it is not so with respect
evidence is laid down in the decision relative to the to a third person who did not take part in the constitution thereof either
Mortgage Law of September 30, 1891, declaring that personally or through an agent, inasmuch as he can make the
article 1281 of the Civil Code gives preference to acknowledgment thereof in the form and to the extent he may deem
intention only when it is clear. When the aforesaid convenient, on the ground that he is not in duty bound to acknowledge
circumstances is not present in a document, the only the said mortgage. Therefore, the only liability of the defendant-
thing left for the register of deeds to do is to suspend the appellant Paz Agudelo y Gonzaga is that which arises from the
registration thereof, leaving the solution of the problem aforesaid acknowledgment, but only with respect to the lien and not to
the principal obligation secured by the mortgage acknowledged by her
to have been constituted on said lot No. 878 of the cadastral
survey of Murcia, Occidental Negros. Such liability is not direct
but a subsidiary one.
Having reach this contention, it is unnecessary to pass upon the
other questions of law raised by the defendant- appellant in her
brief and upon the law cited therein.
In view of the foregoing consideration, we are of the opinion and
so hold that when an agent negotiates a loan in his personal
capacity and executes a promissory note under his own signature,
without express authority from his principal, giving as security
therefor real estate belonging to the letter, also in his own name
and not in the name and representation of the said principal, the
obligation do constructed by him is personal and does not bind
his aforesaid principal.
Wherefore, it is hereby held that the liability constructed by the
aforesaid defendant-appellant Paz Agudelo y Gonzaga is merely
subsidiary to that of Mauro A. Garrucho, limited lot No. 878 of
the cadastral survey of Murcia, Occidental Negros, described in
Torrens title No. 2415. However, inasmuch as the principal
obligator, Mauro A. Garrucho, has been absolved from the
complaint and the plaintiff- appellee has not appealed from the
judgment absolving him, the law does not afford any remedy
whereby Paz Agudelo y Gonzaga may be required to comply with
the said subsidiary obligation in view of the legal maxim that the
accessory follows the principal. Wherefore, the defendant herein
should also be absolved from the complaint which is hereby
dismissed, with the costs against the appellee. So ordered.
G.R. No. L-13471 January 12, 1920
VICENTE SY-JUCO and CIPRIANA VIARDO, plaintiffs-
appellants,
vs.
SANTIAGO V. SY-JUCO, defendant-appellant.
Sumulong and Estrada for plaintiffs and appellants.
Delgado and Delgado for defendant and appellant.
AVANCEÑA, J.:
In 1902 the defendant was appointed by the plaintiffs
administrator of their property and acted as such until June 30,
1916, when his authority was cancelled. The plaintiffs are
defendant's father and mother who allege that during his
administration the defendant acquired the property claimed in the
complaint in his capacity as plaintiffs' administrator with their
money and for their benefit. After hearing the case the trial court
rendered his decision, the dispositive part of which is the
following:
Wherefore, the court give judgment for the plaintiffs
and orders:
26
1. That the defendant return to the plaintiffs the
launch Malabon, in question, and execute all the
necessary documents and instruments for such delivery
and the registration in the records of the Custom House
of said launch as plaintiffs' property;
2. That the defendant return to the plaintiffs
the casco No. 2584, or pay to them the value thereof
which has been fixed at the sum of P3,000, and should
the return of said casco be made, execute all the
necessary instruments and documents for its registration
in plaintiffs' name at the Custom House; and
3. That the defendant return to the plaintiffs the
automobile No. 2060 and execute the necessary
instruments and documents for its registration at the
Bureau of Public Works. And judgment is hereby given
for the defendant absolving him from the complaint so
far concerns:
1. The rendition of accounts of his administration of
plaintiffs property;
2. The return of the casco No. 2545;
3. The return of the typewriting machine;
4. The return of the house occupied by the defendant;
and
5. The return of the price of the piano in question.
Both parties appealed from this judgment.
In this instance defendant assigns three errors alleged to have been
committed by the lower court in connection with the three items of
the dispositive part of the judgment unfavorable to him. We are of
the opinion that the evidence sufficiently justifies the judgment
against the defendant.
Regarding the launch Malabon, it appears that in July, 1914, the
defendant bought it in his own name from the Pacific Commercial
Co., and afterwards registered it at the Custom House. But his
does not necessarily show that the defendant bought it for himself
and with his own money, as he claims. This transaction was within
the agency which he had received from the plaintiffs. The fact that
he has acted in his own name may be only, as we believe it was, a
violation of the agency on his part. As the plaintiffs' counsel truly
say, the question is not in whose favor the document of sale of the
launch is executed nor in whose name same was registered, but
with whose money was said launch bought. The plaintiffs'
testimony that it was bought with their money and for them is
supported by the fact that, immediately after its purchase, the
launch had to be repaired at their expense, although said expense
was collected from the defendant. I the launch was not bought for
the plaintiffs and with their money, it is not explained why they had to
pay for its repairs.
The defendant invokes the decision of this Court in the case of Martinez
vs. Martinez (1 Phil. Rep., 647), which we do not believe is applicable
to the present case. In said case, Martinez, Jr., bought a vessel in his
own name and in his name registered it at the Custom House. This court
then said that although the funds with which the vessel was bought
belonged to Martinez Sr., Martinez Jr. is its sole and exclusive owner.
But in said case the relation of principal and agent, which exists
between the plaintiffs and the defendant in the present case, did not
exist between Martinez, Sr., and Martinez, Jr. By this agency the
plaintiffs herein clothed the defendant with their representation in order
to purchase the launch in question. However, the defendant acted
without this representation and bought the launch in his own name
thereby violating the agency. If the result of this transaction should be
that the defendant has acquired for himself the ownership of the launch,
it would be equivalent to sanctioning this violation and accepting its
consequences. But not only must the consequences of the violation of
this agency not be accepted, but the effects of the agency itself must be
sought. If the defendant contracted the obligation to but the launch for
the plaintiffs and in their representation, but virtue of the agency,
notwithstanding the fact that he bought it in his own name, he is obliged
to transfer to the plaintiffs the rights he received from the vendor, and
the plaintiffs are entitled to be subrogated in these rights.
There is another point of view leading us to the same conclusion. From
the rule established in article 1717 of the Civil Code that, when an
agency acts in his own name, the principal shall have no right of action
against the person with whom the agent has contracted, cases involving
things belonging to the principal are excepted. According to this
exception (when things belonging to the principal are dealt with) the
agent is bound to the principal although he does not assume the
character of such agent and appears acting in his own name (Decision
of the Supreme Court of Spain, May 1, 1900). This means that in the
case of this exception the agent's apparent representation yields to the
principal's true representation and that, in reality and in effect, the
contract must be considered as entered into between the principal and
the third person; and, consequently, if the obligations belong to the
former, to him alone must also belong the rights arising from the
contract. The money with which the launch was bough having come
from the plaintiff, the exception established in article 1717 is applicable
to the instant case.
Concerning the casco No. 2584, the defendant admits it was
constructed by the plaintiff himself in the latter's ship-yard. Defendant's
allegation that it was constructed at his instance and with his money is
not supported by the evidence. In fact the only proof presented to
support this allegation is his own testimony contradicted, on the on
hand, by the plaintiffs' testimony and, on the other hand, rebutted by the
fact that, on the date this casco was constructed, he did not have
sufficient money with which to pay the expense of this
construction.
As to the automobile No. 2060, there is sufficient evidence to
show that its prices was paid with plaintiffs' money. Defendant's
adverse allegation that it was paid with his own money is not
supported by the evidence. The circumstances under which, he
says, this payment has been made, in order to show that it was
made with his own money, rather indicate the contrary. He
presented in evidence his check-book wherein it appears that on
March 24, 1916, he issued a check for P300 and on the 27th of
same month another for P400 and he says that the first installment
was paid with said checks. But it results that, in order to issue the
check for P300 on March 24 of that year, he had to deposit P310
on that same day; and in order to issue the other check for P400
on the 27th of the same month, he deposited P390 on that same
day. It was necessary for the defendant to make these deposits for
on those dates he had not sufficient money in the bank for which
he could issue those checks. But, in order to pay for the price of
the automobile, he could have made these payments directly with
the money he deposited without the necessity of depositing and
withdrawing it on the same day. If this action shows something, it
shows defendant's preconceived purpose of making it appear that
he made the payment with his own funds deposited in the bank.
The plaintiffs, in turn, assign in this instance the following three
errors alleged to have been committed by the lower court:
1. The court erred in not declaring that the plaintiffs did
not sell to the defendant the casco No. 2545 and that
they were its owners until it was sunk in June, 1916.
2. The court erred in absolving the defendant from his
obligation to render an account of his administration to
the plaintiffs, and to pay to the latter the amount of the
balance due in their favor.
3. The court erred in not condemning the defendant to
pay to the plaintiffs the value of the woods, windows
and doors taken from their lumber-year by the
defendant and used in the construction of the house on
calle Real of the barrio of La Concepcion, municipality
of Malabon, Rizal.
Concerning the casco No. 2545, the lower court refrained from
making any declaration about its ownership in view of the fact
that this casco had been leased and was sunk while in the lessee's
hands before the complaint in this case was filed. The lower
court, therefore, considered it unnecessary to pass upon this point.
We agree with the plaintiffs that the trial court should have made
a pronouncement upon this casco. The lessee may be responsible
in damages for its loss, and it is of interest to the litigants in this
27
case that it be determined who is the owner of said casco that may
enforce this responsibility of the lessee.
Upon an examination of the evidence relative to this casco, we
find that it belonged to the plaintiffs and that the latter sold it
afterwards to the defendant by means of a public instrument.
Notwithstanding plaintiffs' allegation that when they signed this
instrument they were deceived, believing it not to be an instrument
of sale in favor of the defendant, nevertheless, they have not
adduced sufficient proof of such deceit which would destroy the
presumption of truth which a public document carries with it.
Attorney Sevilla, who acted as the notary in the execution of this
instrument, testifying as a witness in the case, said that he never
verified any document without first inquiring whether the parties
knew its content. Our conclusion is that this casco was lawfully
sold to the defendant by the plaintiffs.
Concerning the wood, windows and doors given by the plaintiffs
to the defendant and used in the construction of the latter's house
on calle Real of the barrio of La Concepcion of the municipality of
Malabon, Rizal, we find correct the trial Court's decision that they
were given to the defendant as his and his wife's property.
Concerning the rendition of accounts which the plaintiffs require
of the defendant, we likewise find correct the trial court's decision
absolving the latter from this petition, for it appears, from the
plaintiffs' own evidence, that the defendant used to render
accounts of his agency after each transactions, to the plaintiffs'
satisfaction.
From the foregoing considerations, we affirm the judgment
appealed from in all its parts except in so far as the casco No.
2545 is concerned, and as to this we declare that, it having been
sold by the plaintiffs to the defendant, the latter is absolved. No
special findings as to costs. So ordered.