LIM TIU v.

RUIZ y REMENTERIA (1910) Legal Doctrine OCC 1717 (now, 1883): When an agent acts in his own name, the principal shall have no right of action against the persons with whom the agent has contracted, nor the said persons against the principal. Facts * Lim Tiu, etc. plaintiffs * Ruiz y Rementeria defendants * It appears that the defendants had been buying merchandise from Domingo Tim Bun Liu for a period covering several months, and paying for said merchandise by selling to Domingo Tim Bun Liu certain merchandise in exchange. * The defendants claim that they had no knowledge or information that the merchandise which they were receiving from Domingo Tim Bun Liu (DTBL) was the merchandise of the plaintiffs, and that DTBL was merely an agent of the plaintiffs. * On July 16, 1908, the plaintiffs commenced an action in CFI Manila against the defendants alleging that they sold to defendants certain merchandise which were due but unpaid, and prayed judgment for P 1,043.57 (amount of the merchandise). * The defendants answered that they had paid the said

merchandise to DTBL. * The lower court rendered a judgment in favor of the defendants. Issue W/N the plaintiffs should be entitled to payments from the defendant. Held No. Ratio OCC 1717 (now, 1883): When an agent acts in his own name, the principal shall have no right of action against the persons with whom the agent has contracted, nor the said persons against the principal. Reasoning * It is established by a preponderance of the evidence that DTBL acted in his own name in selling the merchandise to the defendants, and that defendants fully believed that they were dealing with the said DTBL w/o any knowledge of the fact that he was the agent of the plaintiffs, and having paid him in full for the merchandise purchased. * A fair preponderance of evidence shows that the defendants, in their dealings with DTBL, believed that they were dealing with him and not the plaintiffs.

* There is no proof that DTBL ever notified the defendants that he was acting as the agent of the plaintiffs. * Neither does the proof show that the plaintiffs ever notified the defendants that DTBL was acting as their agent in selling the merchandise in question. NATIONAL BANK v. AGUDELO (1933) Legal Doctrine The exception to the general rule in OCC 1717 (now 1883) is applicable only when the agent, acting in his own name in connection with the properties of his principal, does so within the scope of his authority. Facts * Paz Agudelo y Gonzaga and Amparo Garrucho both executed separately special powers of attorney in favor of Mauro Garrucho to sell, alienate and mortgage in the manner and form he might deem convenient all their real estate situated in Murcia, Bacolod and Bago in Occidental Negros. * Nothing in the said powers of attorney expressly authorized Mauro Garrucho to contract any loan nor to constitute a mortgage on the properties belonging to the respective principals, to secure his [own] obligations. * Subsequently, Mauro Garrucho contracted loans with

Philippine National Bank (PNB), whereby constituted mortgages on properties included in the aforementioned special powers of attorney. * However, Mauro failed to pay his loans to PNB, and thus, PNB instituted an action. * The lower court ruled that since Paz Agudelo is the owner of the subject properties mortgaged to PNB, she is liable to the former for Mauros outstanding loans. Issue W/N Paz Agudelo is liable for the payment of the loans obtained by Mauro Garrucho from PNB for the security of which he constituted a mortgage on a real estate belonging to Paz. Held No. Ratio OCC 1717 (now, 1883): When an agent acts in his own name, the principal shall have no right of action against the persons with whom the agent has contracted, nor the said persons against the principal. 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. Reasoning * He executed the promissory notes evidencing the aforesaid loans, under his own signature, without authority from his principals and, therefore, were not binding upon the latter. * 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. * It is further claimed that inasmuch as the properties mortgaged by Mauro belong to Paz Agudelo, the latter is responsible for the acts of the former although he acted in his own name, in accordance with the exception contained in OCC 1717. It would be an exception if the agent, acting in his own name in connection with the properties of his principal, does so within the scope of his authority. * The special power of attorney does not authorize Mauro to constitute a mortgage on the real estate of his principal to secure his personal obligations. Therefore, in doing so, he exceeded the scope of his authority and his principal is not liable for his acts. Disposition However, the court held that Paz Agudelo is still liable subsidiarily to PNB because she gave consent to the lien on her real estate.

SY-JUCO & VIARDO v. SY-JUCO (1920) Legal Doctrine * Decision by the Supreme Court of Spain, May 1, 1900: From the rule established in OCC 1717, that when an agent 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, the agent is bound to the principal although he does not assume the character of such agent and appears acting in his own name. Facts * In 1902, Santiago Sy-juco (defendant) was appointed as administrator of properties belonging to his parents, Vicente Sy-juco and Cipriana Viardo (plaintiffs). * In July 1914, defendant bought the launch Malabon in his own name from Pacific Commercial Co., and afterwards registered it at the Customs House. But this does not necessarily show that he 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. * However, the plaintiffs testify that the launch Malabon was bouth with their money and this is supported by the fact that, immediately after its purchase, the launch had to be repaired at their expense.

* The plaintiffs then instituted this action to recover the launch Malabon from the defendant. * The defendant invokes the case of Martinez v. Martinez wherein it was decided that a vessel registered in the name of a person belongs to him even though the money used for the purchase belongs to another. Issue W/N Martinez v. Martinez applies to the instant case. Held & Ratio No. The relation of principal and agent, which exists between the plaintiffs and defendant in the present case, did not exist in the case of Martinez v. Martinez. Therefore, the latter does not apply to the former. Issue W/N the launch Malabon should belong to the defendant. Held No. Ratio * Decision by the Supreme Court of Spain, May 1, 1900: From the rule established in OCC 1717, that when an agent 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, the agent is bound to the principal although he does not assume the character of such agent and appears acting in his own name. * This means that in the case of this exception, the agents apparent representation yields to the principals 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. Reasoning * The money with which the launch was bought having come from the plaintiffs, the exception established in OCC 1717 is applicable to the instant case. NATIONAL FOOD AUTHORITY v. IAC (1990) Legal Doctrine * 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. In other words, the agents apparent representation yields to the principals true representation and that, in reality and in effect, the contract must be considered as entered into between the principal and the third person (Sy-

juco v. Sy-juco). Facts * On September 6, 1979, Gil Medalla, as commission agent of plaintiff Superior Shipping Corp., entered into a contract with defendant National Grains Authority. Under said contract, Medalla obligated to transport on the MV Sea Runner (owned by plaintiff) 8550 sacks of rice belonging to defendant from San Jose, Occidental Mindoro to Malabon, Metro Manila. * Upon completion of delivery, plaintiff wrote a letter to defendant requesting that it be allowed to collect amount stated in its statement account, which included not only a claim for freightage but also claims for demurrage and stevedoring charges amounting to P93,538.70. * On November 5, 1979, plaintiff wrote again to defendant, this time requesting that the payment for freightage and other charges be made to it and not to Medalla because plaintiff was the owner of the vessel. * In reply, defendant on November 16, 1979 informed plaintiff that it could not grant its request because the contract to trccansport the rice was entered into by defendant and Medalla, who did not disclose that he was acting as a mere agent of plaintiff. * It was only on November 19, 1979 when defendant paid Medalla the sum of P25,974.90 for freight charges.

* Plaintiff then filed the instant complaint. * TC: in favor of plaintiff. * Defendant appealed to IAC on the sole issue of w/n he is jointly and severally liable with Medalla for freightage. * IAC affirmed judgment. Issue W/N the instant case falls within the exception of the general rule provided for in NCC 1883. Defendants Contention * It is not liable since it had no knowledge of the fact of agency between plaintiff and Medalla. Held Yes. Defendants contention holds no water. Ratio * When things belonging to the principal (in this case, the plaintiff) 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. In other words, the agents apparent representation yields to the principals true representation and that, in reality and in effect, the contract must be considered as entered into between the principal and the third person (Sy-juco v. Sy-juco).