1. SERONA, VIRGIE VS.

CA · Virgie argued that the prosecution failed to establish elements of estafa as penalized in RPC
GR NO. 130423 315(1b). She submitted that she neither abused the confidence reposed upon her by Leonida
NOVEMBER 18, 2002 nor did she misappropriated the jewelry or that the jewelry entrusted to Marichu, as sub-
BY: Ryan agent, did not violate any undertaking with Leonida. She delivered the jewelry under the
____________________________________________________________________________ same terms and she did not derived any personal benefit from the loss.
TOPIC: OBLIGATIONS OF THE AGENT
PETITIONERS: SERONA - WINNER ISSUE: WON there was an abuse of confidence on Virgie’s part in entrusting the jewelry to a
RESPONDENTS: CA and PEOPLE OF PH; QUILATAN AS COMPLAINANT - LOSER sub-agent
PONENTE: YNARES-SANTIAGO, J.
____________________________________________________________________________ HELD/RATIO: NO
DOCTRINE: · Elements of estafa through misappropriation in RPC 315 (1b):
o The law on agency allows the appointment by an agent of a substitute or sub-agent in the o (1) that the money, good or other personal property is received by the offender in trust,
absence of an express agreement to the contrary between agent and principal…an agent who or on commission, or for administration, or under any other obligation involving the duty to
is not prohibited from appointing a sub-agent but does so without express authority is make delivery of, or to return, the same; - YES
responsible for the acts of the sub-agent. o (2) that there be misappropriation or conversion of such money or property by the
offender or denial on his part of such receipt; - NO
SUMMARY: Serona was an agent of Quilatan to sell jewelry. Serona was either to return the o (3) that such misappropriation or conversion or denial is to the prejudice of another - YES;
unsold jewelry or remit the proceeds of it. Unknown to Quilatan, Serona got Labrador as sub- and
agent to do the same job as hers. However, Labrador’s customer did not pay her hence Serona o (4) that there is a demand made by the offended party on the offender. - YES
was unable to pay Quilatan the full amount of the entrusted jewelry. Serona was accused of · The law on agency allows the appointment by an agent of a substitute or sub-agent in the
estafa but was acquitted as she did not derive any benefit from the jewelry or its proceeds as absence of an express agreement to the contrary between agent and principal.
she remitted them to Quilatan. There was no express stipulation that prohibited Serona to get · In this case, Marichu’s appointment as Virgie’s sub-agent was not expressly prohibited by
a sub-agent hence there was no abuse of confidence. She is civilly liable and still had to pay Leonida as the acknowledgement receipt had no such stipulation. She was not verbally
Quilatan for the unpaid jewelry forbidden by Leondia from passing jewelry to another before the receipt was executed
hence it cannot be said that what Virgie did in entrusting the jewelry is an abuse of
FACTS: confidence as such act was not proscribed and in fact legal.
· In 1992, Leonida Quilatan delivered pieces of jewelry to Virgie Serona to be sold on a · The essence of estafa under RPC 315 (1Bb) is the misappropriation/conversion of
commission basis. They orally agreed that Virgie will either remit payment or return said money/property received to the owner’s prejudice. Such words connote an act of
jewelry if unsold to Quilatan in 30 days upon receipt of the items. using/disposing of another’s property for one’s own benefit or using it for a different
· Virgie failed to pay hence Leonida required her to execute an acknowledgement receipt purpose. To misappropriate for one’s own use includes not only conversion to one’s benefit,
indicating their agreement and total amount due of P567,750.00. but also attempts to dispose of another’s property w/o right.
· The receipt was signed by Virgie and was witnessed by Rufina Navarette. Unknown to · In this case, it was established that Virgie’s inability to comply as agent to return said items
Leonida, Virgie had entrusted the items to a certain Marichu Labrador for her the latter sell or remit the proceeds was due to Marichu’s inability to do the same. No conversion
on commission basis. Virgie was unable to collect payment from Marichu which led to failing happened and it cannot be said that Virgie misappropriated the jewelry or delivered them
to pay Leonida. to Marichu w/o right. No condition was imposed on the manner of selling the items and is
· Leonida sent a demand letter to Virgie for failing to settle her dues. She filed a complaint consistent to the usual practice for a seller to part with the items in order to find a buyer.
before the Asst. Provincial Prosecutor and an information was filed for estafa under RPC · Marichu admitted that she received the items from Virgie and sold it to a 3rd person and that
315(1b) before RTC Las Pinas. she owed Virgie P441,035 hence negating any criminal intent on Virgie’s part. Virgie did not
· Leonida averred that Virgie was able to remit P100,000 and returned P43,000 worth of get any personal benefit nor conspired to deprive Leonida of her property hence no estafa.
jewelry at the start but eventually the remittances were late and Virgie still owed Leonida · SC held her only civilly liable. It further held that an agent who is not prohibited from
PhP424,750.00 appointing a sub-agent but does so without express authority is responsible for the acts of
· Virgie claims that she indeed received and failed to pay the same. She claimed that she the sub-agent. She is to pay Leonida for the unpaid pieces of jewelry
entrusted said jewelry to Marichu but also failed to pay causing her default. She presented
receipts as proof of payments made to Leonida. DISPOSITIVE PORTION: WHEREFORE, the petition is GRANTED. The decision of the Court of
· Marichu confirmed Virgie’s manifestations and she received P441,035 worth of jewelry from Appeals in CA-G.R. CR No. 17222 dated April 30,1997 and its resolution dated August 28,
Virgie. She was unable to pay Virgie as her customer absconded with the sold jewelry without 1997 are REVERSED and SET ASIDE. Petitioner Virgie Serona is ACQUITTED of the crime
payment. She admitted she once dealt with Leonida but because of unpaid balances, she charged, but is held civilly liable in the amount of P424,750.00 as actual damages, plus legal
went to Virgie instead. RTC found Virgie guilty which the CA also affirmed. interest, without subsidiary imprisonment in case of insolvency.
 2. ESCUETA v. LIM · Rubio and Escueta allege that Rufina has no cause of action because Rubio has NOT
G.R. NO. 137162 entered into a contract of sale with her.
JANUARY 24, 2007 · That he has appointed his daughter Patricia Llamas to be his attorney in
BY: YEN fact and not Virginia Laygo Lim
Topic: OBLIGATIONS OF THE AGENT · That the Php100k respondent claimed as down payment for the lots is a
Petitioners: CORAZON L. ESCUETA, assisted by her husband EDGAR ESCUETA, IGNACIO E. simple transaction by way of a loan with Lim
RUBIO, HEIRS OF LUZ R. BALOLOY, namely, ALEJANDRINO R. BALOLOY and BAYANI R.
BALOLOY ISSUES:
Respondent: RUFINA LIM 1. WON the SPA granted by Rubio to Llamas prohibited the latter to appoint a sub-
Ponente: CASTRO, J. agent? NO, the sale executed by Virginia as a sub-agent is binding upon Rubio.
2. WON the contract of sale between Lim and Rubio & Baloloy heirs is valid? YES.
DOCTRINE:
Art. 1892. The agent may appoint a substitute if the principal has not prohibited him from HELD:
doing so; but he shall be responsible for the acts of the substitute: Article 1892: The agent may appoint a substitute if the principal has not prohibited him from
(1) When he was not given the power to appoint one doing so; but he shall be responsible for the acts of the substitute:
(1) When he was not given the power to appoint one
Art. 1317. A contract entered into by a person without authority to do so is merely
unenforceable, not void. Ratification can be done, either implied or express, anytime before · Applying the provision to the SPA executed by Rubio in favor Llamas, it is CLEAR that
action for rescission becomes final. she is not prohibited from appointing a substitute.
· By authorizing Virginia Lim to sell the subject properties, Llamas merely acted within
PARTIES: the limits of the authority given by her father, but she will be “responsible for the
1. Corazon Escueta – 2nd buyer of Rubio acts of the sub-agent”; in the case at bar, the validity of the sale of the properties in
2. Ignacio Rubio & Baloloy Heirs (vendors) – sellers of 10 lots favor of Rufina.
3. Patricia Llamas – authorized via SPA to sell lots · Even assuming that Virginia Lim has no authority to sell the subject properties, the
4. Virginia Laygo Lim – sub-agent of Patricia; the one who sold the lot to Rufina contract she executed in favor of respondent is not void, but simply unenforceable.
Lim o Art. 1317: A contract entered into in the name of another by one who has no
5. Rufina Lim – 1st buyer of Ignacio & Baloloy authority or legal representation, or who has acted beyond his powers,
shall be unenforceable, unless it is ratified, expressly or impliedly, by the
FACTS: person on whose behalf it has been executed, before it is revoked by the
· Respondent Rufina Lim filed an action to remove cloud on, or quiet title to real other contracting party.
property against Ignacio Rubio. Rufina amended her complaint to include specific
performance and damages. SC: Rubio did not rescind the contract of sale. Subsequent acts of the vendors ratified the
· Rufina alleged that she bought 10 lots (hereditary shares) of Ignacio Rubio & Heirs of supposed unenforceable contract entered by Virginia Lim.
Baloloy with the following terms: Proof:
· That Rubio and Baloloy heirs received 2 down payments · Rubio already accepted and encashed the check given as payment, this action implies
· That vendors would secure certificates of title on respective shares that he waived his right of action to avoid the contract and implies his express
· That the balance of the purchase price would be paid to each heir upon confirmation of the said sale made by Virginia Lim in favor of respondent.
presentation of their individual certificates of title · The Baloloys ratified the contract when they accepted and enjoyed its benefits.
· That Rubio refused to receive the other half of the downpayment which is
Php100k and refused to deliver the certificates of title The first sale being valid, Ignacio Rubio could no longer sell the properties to Escueta.
· With respect to the heirs of Luz Baloloy, they also refused to deliver the · “In a contract of sale, the vendor loses ownership over the property and cannot
certificates of title recover it until and unless the contract is resolved or rescinded.”
· That respondent was willing to pay Rubio and heirs of Baloloy · Rubio did not ask for rescission; what he adduced was a belated revocation of the
· Rubio appointed his daughter, Patricia Llamas by virtue of a SPA to sell the property. SPA he executed in favor of Patricia Llamas
Patricia Llamas had a sub-agent, Virginia Laygo Lim who executed the sale with
Rufina Lim. DISPOSITIVE:
· Subsequently, another Deed of Sale, by Rubio, over the land was executed in favor Sale by sub-agent Virginia is binding upon Rubio.
of Corazon Escueta, creating a cloud on the title Thus, sale between Rubio & Lim is valid.
Sale between Rubio and Escueta is null and void. WHO WON: Rufina Lim
 #3 Sps. Villaluz vs LandBank · Art. 1892: The agent may appoint a substitute if the principal has not prohibited him
GR # 192602 from doing so; but he shall be responsible for the acts of the substitute:
DATE: January 18, 2017 (1) When he was not given the power to appoint one;
By: Julpha Policina (2) When he was given such power, but without designating the person,
Topic: and the person appointed was notoriously incompetent or insolvent.
Petitioners: Sps. May Villaluz and Johnny Villaluz, Jr. All acts of the substitute appointed against the prohibition of the principal
Respondents: Land Bank of the Philippines, Register of Deeds for Davao City shall be void.
Ponente: Jardeleza, J. · Art. 1893: In the cases mentioned in Nos. 1 and 2 of the preceding article, the principal
SUMMARY: Agbisit asked May, her daughter, to give a collateral because she was intending to may furthermore bring an action against the substitute with respect to the obligations
obtain a loan for her business. May and Johnny (husband) made an SPA in favor of Agbisit with which the latter has contracted under the substitution.
regard to their property. Agbisit then executed another SPA appointing Milflores Cooperative · SC RULING: CA is correct - Agent has power to appoint a substitute and the SPA
as atty-in-fact in obtaining loan and executing REM with Landbank. Milflores executed REM for executed by the Sps. Villaluz contains no restrictive language inidicative of an intention to
P3M. Milflores failed to pay so the property was foreclosed. Sps. Villaluz then contends prohibit Agbisit from appointing a substitute or sub-agent – Agbisit’s appointment of
regarding the foreclosure and that acts of Milflores is not valid, not being their agent. RTC and Milflores Cooperative was valid.
CA ruled that Milflores’ acts were binding since delegation as substitute of Agbisit is valid. OTHER RULING:
DOCTRINE: Agent has the power to assign a substitute if there is no stipulation between the · Also SC held rule that the security contract (REM) is conditioned upon release of the
principal and the agent that he is not allowed to do so. loan amount and that suspensive condition was satisified when Landbank partially
FACTS: released the loan so the contention that the mortgage was void for being executed even
· Paula Agbisit [chairperson of Milflores Cooperative and mother of May] (mother of before the perfection of loan is incorrect.
May Villaluz) needed to loan P600-650k for expansion of her backyard cut flowers · Also, the execution of Deed of Assignment of the Produce/Inventory by Milflores
business; she request May to provide her with collateral for the planned loan Cooperative did not extinguish the loan obligation since the assignment was not intended
· May convinced Johnny (husband) to allow Agbisit to use their land as collateral to substitute the payment of sums of money but merely to secure the loan (as collateral)
· Sps. Villaluz executed SPA in favor of Agbisit authorizing her to negotiate for the sale,
mortgage, or other forms of disposition of their property (no conditions were specified
nor amounts on how much the land may be sold/mortgaged)
· Agbisit executed her own SPA appointing Milflores Cooperative as atty-in-fact in
obtaining loan and executing REM in favor of Land Bank
· Milflores Cooperative executed REM in consideration for P3M loan; also executed
deed of assignment of the produce/inventory as additional collateral
· Landbank partially released P995k to Milflores
· Agbisit borrowed the P604k of said amount from Milflores
· Landbank then released the remaining balance
· Milflores wasn’t able to pay
· Landbank filed petition for extra-judicial foreclosure sale
· Sps. Villaluz then learned that an auction sale covering their land had been set –
Landbank as winner
· Sps. Villaluz filed complaint seeking annulment of foreclosure sale
· RTC – dismissed – delegation of Agibisit was valid since SPA executed by Sps. Villaluz
has no specific prohibition against Agbisit appointing a substitute, in pursuant with Art.
1892
· CA – affirmed – Art. 1892 is applicable and that rule is that an agent is allowed
to appoint a sub-agent in the absence of express agreement to the contrary and
that “scrutiny of SPA executed by Sps. Villaluz in favor of Agbisit contained no
prohibition for the latter to appoint a sub-agent”. THEREFORE, Agbisit is allowed
to appoint Milflores Cooperative as sub-agent
ISSUE: WON Agbisit could have validly delegated her authority as atty-in-fact to Milflores
Cooperative - YESSSS
HELD/RATIO:
4.) De Borja vs. De Borja
GR NO. 38479 Dispositive Portion
November 20, 1933 There is nothing in the records of the case to justify reversing the judgment
By: Martin rendered therein. The judgment appealed from being, in our opinion, in accordance
Petitioners: Quintin De Borja, judicial administrator of the intestate estate of the deceased with the law and sufficiently supported by a preponderance of the evidence
Marcelo De Borja presented therein, it is hereby affirmed
Respondents: Francisco De Borja
Ponente: Imperial
DOCTRINE:
Neither is the plaintiff entitled to the interest claimed by him upon the alleged sums loaned to
and collected by the defendant from various persons for his deceased father. In all the
aforementioned transactions the defendant acted in his capacity as attorney-in-fact of his
deceased father, and there being no evidence showing that he converted the money entrusted
to him to his own use he is not liable for interest thereon, in accordance with the provisions of
article 1724 of the Civil Code
FACTS
● The plaintiff herein, in his capacity as judicial administrator of the estate of the
deceased Marcelo de Borja, instituted this action in the Court of First Instance of
Rizal, to recover from the defendant the sum of P61, 376.56 which, according to
the amended complaint, the said defendant owed the aforesaid deceased, for
certain sums of money loaned to and collected by him from other persons with the
obligation to render an accounting thereof to the said deceased.
● In his amended answer, the defendant interposed various counterclaims for alleged
sums of money owed him by the aforesaid deceased.
● After the trial thereof and the presentation of voluminous evidence therein, the
trial court reached the conclusion and held that, from his various causes of action,
the plaintiff was entitled to recover the sum of P33,218.86 from the defendant, and
that, by way of counterclaim, the said defendant, in turn, was entitled to collect the
sum of P39,683 from the plaintiff, and rendered judgment in favor of the defendant
in the sum of P6,464.14 with legal interest thereon from the date of the
counterclaim.
● Both parties appealed therefrom.
ISSUE
● Whether plaintiff is entitled to interest
HELD/RATIO
No
● Neither is the plaintiff entitled to the interest claimed by him upon the alleged
sums loaned to and collected by the defendant from various persons for his
deceased father. In all the aforementioned transactions the defendant acted in
his capacity as attorney-in-fact of his deceased father, and there being no
evidence showing that he converted the money entrusted to him to his own use
he is not liable for interest thereon, in accordance with the provisions of article
1724 of the Civil Code. The defendant-appellant's claim to the effect that he is
entitled to collect the rents for the use of the earthen jar factory and the
buildings thereof, is, likewise, unfounded. The trial court held that all there
existed between the parties was a mere gratuitous commodatum and that the
most that the deceased bound himself to do was to pay the taxes on the
properties in question.
 5. Yuseco v. Simmons Simmons, but by the National City Bank of New York, of which said defendant
97 PHIL 487 happened to be the general manager.
AUG. 30, 1955 ● CFI ruled that if at all, that is, if by reason of the termination of her employment
By: JANINE contract with the bank, plaintiff Hortensia Zialcita had any cause of action, the
Topic: Art. 1897 action should have been directed, not against the defendant herein, William H,
Petitioners: HORTENSIA ZIALCITA-YUSECO assisted by her husband JOAQUIN P. YUSECO, Jr. Simmons, but against the National City Bank of New York."
Respondents: WILLIAM SIMMONS
Ponente: PERALTA, J. ISSUE: WON plaintiff has the right to compel the manager of the National City Bank to pay
___________________________________________________________________ damages by reason of her separation.
SUMMARY: Hortensia is employed by the National City Bank of New York. Her contract of
employment states that in the event of marriage, the bank may terminate her employment. HELD: NO
Since she was about to get married, she filed her resignation which was accepted. After getting According to the complaint itself, in requiring her to sign the contract, defendant
married, she filed a suit for damages against Simmons, the general manager of the bank for acted as manager of the Bank, and in requiring her to comply with the contract and in
forcing her to sign the letter of resignation in implementation of the agreement in the contract accepting her resignation he also acted as manager of the Bank. There is no allegation that he
of employment. CFI absolved SImmons. SC held that there is no allegation that Simmons exceeded his power as manager or that his actuation was repudiated by his principal, the
exceeded his power as manager or that his actuation was repudiated by his principal, the Bank. Bank. Consequently any claim for damages supposedly resulting from his acts as manager
Any claim for damages supposedly resulting from his acts as manager should be directed should be directed against his principal, the Bank — not against him personally.
against his principal, the Bank — not against him personally. "The agent who acts as such is not personally liable to the party with whom he
____________________________________________________________________ contracts, unless he expressly binds himself or exceeds the limits of his authority . . ." "The
DOCTRINE: Any claim for damages supposedly resulting from one’s acts as manager should principal must comply with all the obligations which the agent may have contracted within
be directed against his principal — not against him personally. the scope of his authority." (Arts. 1897 and 1910 New Civil Code.)

FACTS:
● In June 1952, Hortensia Zialcita was employed by the National City Bank of New
York, a foreign banking corporation doing business in the Philippines, under a
contract of employment, signed by her, including the following clause:
o "I understand that I am being hired as a single female employee. In the
event of my marriage you may terminate this employment in which case I
shall be entitled to no other benefits except my salary through the last
day on which I worked."
● Because she intended to marry soon, and pursuant to the above stipulation,
plaintiff filed her written resignation — which was accepted.
● In July 1952, she married her co-plaintiff.
● In August 1952 she commenced in CFI Manila this suit against William Simmons,
the general manager of the National City Bank of New York asserting that said
defendant "urged by his distorted notion of a new policy" in the said bank "as
manager thereof, forced the herein plaintiff to sign" the above letter of resignation
"in implementation of the aforementioned immoral and illegal agreement in the
contract of employment."
● She demanded that said defendant be ordered to pay her damages.
● Simmons averred that plaintiff signed the contract voluntarily, the above condition
of employment was valid, and before marriage, plaintiff resigned her position.
● CFI Manila absolved Simmons for the reason that Hortensia had signed the contract
voluntarily and clause in question was a valid condition of employment not
repugnant to public policy.
● CFI also held that plaintiff had no cause of action "taking into consideration the
undeniable fact that said plaintiff was not employed by the defendant William
 6. E. Macaias V. Warner Barnes o "That defendant was at all times ready and willing to pay, on behalf of the
GR No. L-16492 insurance companies by whom said policies were issued, and to the extent
March 9, 1922 for which each was proportionately liable, the actual damage to plaintiff's
By: JUS goods covered by the risks insured against, upon compliance within the
Topic: time limited, with the terms of the clause of the contracts of insurance
Petitioners: E. MACIAS & Co., importers and exporters above set forth."
Respondents: Warner, Barnes & Co., in its capacity as agents of "The China Fire Insurance Co.," ● Defendants prays judgment for costs.
of "The Yang-Tsze" and of "The State Assurance Co., Ltd.," ● Before the trial, counsel for the defendant was saying plaintiff has had no contractual
Ponente: JOHNS, J relations with the defendant, and that the action has not been brought against the real
party in interest."
SUMMARY: There was a fire on E. Macaias Co. properties insured by foreign companies. ● After trial the court found that there was due the plaintiff from the three insurance
Warner, Barnes & CO. was an agent of the foreign insurance companies. There was only a companies P18,492.29, with interest thereon at the rate of 6 per cent per annum, from
contract between E. Macaias and the foreign companies, and none between E. Macaias Co the date of the commencement of the action, and costs, and rendered the following
& WBC. WBC said that they were at all times ready and willing to pay, on behalf of the judgment:
insurance companies by whom said policies were issued, and to the extent for which each ● RTC: in favor of E. Macias Co.
was proportionately liable, the actual damage to plaintiff's goods covered by the risks insured ISSUE
against, upon compliance within the time limited, with the terms of the clause of the (1) WON there was a contract between E. Macias V. Warner Barnes & Co? None
contracts of insurance above set forth." HELD/RATIO
What is said by WBC cannot be binding between them and E. Macaias because there is no ● Nne.
ex contractu. Therefore they are not liable to E. Macaias. ● Warner, Barnes & Co., as principal or agent, did not make any contract, either
oral or written, with the plaintiff. The contracts were made between the
DOCTRINE: A resident agent of a foreign insurance company doing business in the Philippine respective insurance companies, through Warner, Barnes & Co., as their agent.
Islands is not liable, as principal or agent, on insurance contracts issued in the name of the ● It was the insurance companies, acting through Warner, Barnes & Co. as their
company. agent, that made the written contracts with the insured.
● There is no breach of contract by W. B. & Co., either as agent or principal, for
FACTS the very simple reason that W. B. & Co. did not make any contract with plaintiff,
● E. Macias Co. is a corporation duly registered and domiciled in Manila and an importer either as agent or principal.
of textures and commercial articles for wholesale. ● In the admission of Warner , Barnes & Co. nothing more than a statement that
● Warner Barnes is a corporation duly licensed to do business in the Philippine Islands, and the companies were ready and willing to prorate the amount when the losses
is the resident agent of insurance companies "The China Fire Insurance Company, were legally ascertained.
Limited, of Hong Kong," "The Yang-Tsze Insurance Company, Limited, of Liverpool." ● there is no claim or pretense that Warner, Barnes & Co. had any authority to
● In the ordinary course of business it applied and obtained policies against loss by fire. act for, and represent the, insurance companies in the pending action, or to
● E. Macias Co. made a claim for damages under its policies, but could not agree as to the appear for them or make any admission which would bind them.
amount of loss sustained. It sold the insured property in its then damaged condition, and ● As a local agent, it could not do that without express authority. That power
brought this action against Warner, Barnes & Co., in its capacity as agents, to recover the could only be exercised by an executive officer of the company, or a person,
difference between the amount of the policies and the amount realized from the sale of who was duly authorized to act for, and represent, the company in legal
the property, and in the cause of action, it prayed for judgment for P23,052.99 and in proceedings, and there is no claim or pretense, either express or implied, that
the second cause of action P9,857.15. the defendant had any such authority.
● The answer admits that the defendant is the resident agent of the insurance companies, ● E. Macaias Co.’s cause of action, if any, is direct against the insurance companies
the issuance of the policies, and that a fire occurred on March 25, 1919, in the building that issued the policies and agreed to pay the losses.
in which the goods covered by the insurance policies were stored, and that to extinguish ● The only defendant in the instant case is "Warner, Barnes & Co., in its capacity
the fire three packages of goods were all other material allegations of the complaint. as agents of" the insurance companies. Warner, Barnes & Co. did not make any
● the defendant pleads certain provisions in the policies, among which was a written notice contract with the plaintiff, and are not liable to the plaintiff on any contract,
of loss, and all other insurance and certain detailed information. either as principal or agent. For such reason, plaintiff is not entitled to recover
o plaintiff failed and refused to deliver to defendant or to any other person its loses from Warner, Barnes & Co., either as principal or agent. There is no
authorized to receive it, any claim in writing specifying the articles or items breach of any contract, oral or written, with the plaintiff. This defense was
of property damaged caused thereto. promptly raised before the taking of the testimony, and again renewed on the
motion to set aside the judgment.
● Plaintiff's own evidence shows that any cause of action may have is against the
insurance companies which issued the policies.
● The complaint is dismissed, and the judgment of the lower court is reversed,
and one will be entered here in favor of Warner, Barnes & Co., Ltd., against the
plaintiff, for costs in both this and the lower court. So ordered.
 7 JOVITO SALONGA vs WARNER, BARNES AND CO., LTD. settlement, and when apparently no action was taken on this claim, plaintiff
G.R. No. L-2246 demanded payment thereof from Warner, Barnes and Co., Ltd., as agent of the
DATE: January 31, 1951 insurance company in the Philippines.
By: Enzo 5. Warner, Barnes refused to pay contending that they have no contractual relation
Topic: with either the plaintiff or his consignor. Hence, it could not be held liable.
Plaintiff-Appellee: JOVITO R. SALONGA
Defendant-Appellant: WARNER, BARNES AND CO., LTD ISSUE: WON RESP WARNER BARNES COULD BE HELD LIABLE? NO
Ponente: Bautista Angelo, J.
HELD:
6. Whether an agent, who acts within the scope of his authority, can assume personal
SUMMARY: Pet Salonga was a consignee of shipments that were transported from US.
liability for a contract entered into by him in behalf of his principal; we said that
The shipment were insured by Westchester Fire Insurance Company of New York wherein
the agent did not assume personal liability because the only party bound was the
the latter agreed to insure the shipments and pay the sender (consignor) or the consignee
principal.
the damages that the shipments may suffer. Upon arrival of shipments in Manila, Pet
7. Every cause of action excontractu must be founded upon a contract, oral or written,
Jovito saw that there was a shortage in the shipments amounting to 1.7K. Hence, it filed
either express or implied.
a collection against Westchester. Nothing happened with the action. Hence, Salonga filed
8. In the case, we find that the defendant has not taken part, directly or indirectly, in
a claim against resp Warner Bros since it is the adjustment or settlement agent of the
the contract in question. The evidence shows that the defendant did not enter
Westchester here in the PH. Westchester contended. HENCE, THE ISSUE OF WON
into any contract either with the plaintiff or his consignor — Tina J. Gamboa. The
WARNER BROS, BEING THE AGENT OF WESTCHESTER SHOULD PAY THE CONSIGNEE (PET
contract of marine insurance, Exhibit C, was made and executed only by and
JOVITO) OR WHETHER AN AGENT, WHO ACTS WITHIN THE SCOPE OF HIS AUTHORITY,
between the Westchester Fire Insurance Company of New York and Tina J.
CAN ASSUME PERSONAL LIABILITY FOR A CONTRACT ENTERED INTO BY HIM IN BEHALF
Gamboa
OF HIS PRINCIPAL? The SC said NO because the agent who acts as such is not personally
9. That contract is purely bilateral, binding only upon Gamboa and the
liable to the party with whom he contracts. The only party bound was the principal. In
insurancecompany.
the case, the defendant has not taken part, directly or indirectly, in the contract in
question. The evidence shows that the defendant did not enter into any contract either
RULING: Wherefore, the decision appealed from is hereby reversed. The complaint is hereby
with the plaintiff or his consignor. Hence, it cannot be made liable to answer for its
dismissed, with costs against
Principal. Pet Salonga lost.
the appellee.

DOCTRINES:
1. The agent who acts as such is not personally liable to the party with whom he
contracts. The only party bound was the principal
2. Every cause of action excontractu must be founded upon a contract, oral or
written, either express or implied.

FACTS
1. Westchester Fire Insurance Company of New York entered into a contract with
Tina J. Gamboa whereby said company insured one case of rayon yardage which
said Tina J. Gamboa shipped from San Francisco, California to Manila, Philippines
and consigned to Jovito Salonga, plaintiff herein.
2. According to the contract of insurance, the insurance company undertook to pay
to the sender or her consignee the damages that may be caused to the goods
shipped subject to the condition that the liability of the company will be limited
to the actual loss which the insured may suffer not to the exceed the sum of
(2,000)
3. The ship arrived in Manila and the shipment was examined by C. B. Nelson and
Co., marine surveyors, at the request of the plaintiff, and in their examination the
surveyors found a shortage in the shipment in the amount of P1,723,12.
4. On October 9, plaintiff filed a claim for damages in the amount of P1,723.12 against
the American President Lines, agents of the ship Clovis Victory, demanding
 8 Philippine Products Company v Primateria Inc., Alexander Baylin and Jose Crame 1. Whether PZ may be considered a foreign corporation within the meaning of the
GR NO.L-17160 Corporation Law? No
November 29, 1965 2. Whether its agents may be held personally liable on contracts made in the name of the
By: Iñigo Untalan entity with third persons in the Philippines? No
Topic: Obligations of the Agent
Petitioners: Phil. Products Co. HELD/RATIO:
Respondents: Primateria Inc., Alexander Baylin and Jose Crame
Ponente: Justice Bengzon Status as Foreign Corporation
● PZ was not duly proven to be a foreign corporation
DOCTRINE: There should be proof that the agents acted beyond their authority for them to be
o Nor that a societe anonyme (socieded anomima) is a corporation
held liable. Even if agent acted in excess of authority, it does not mean both agent and principal
● Failing such proof, the societe cannot be deemed to fall within the proscription of Sec. 68
are liable for the contracting party.
of the Corporation Law
o The Societe cannot be deemed to fall within the proscription of Sec. 68 of the
FACTS:
Corporation Law
● Defendant, Primateria Societe Anonyme Pour Le Commerce Exterier (Primateria Zurich;
● The Corporation law recognized the difference between sociedades anonimas and
PZ) is a foreign juridical entity whose head office is at Zurich, Switzerland
corporations
o Primateria was engaged in international trade with agricultural products (Oils,
Fats and Oil-seeds and related products)
Liability of Agents
● Primateria Zurich through co-defendant Alexander Baylin entered into an agreement with
● Plaintiff can not recover from both the principal and its agents
plaintiff Philippine Products Company (PPC)
o It had already been given judgment against the principal for the hwole amount
o PPC undertook to buy copra in the Philippines of the account of PZ during a
ART. 1897. The agent who acts as such is not personally liable to the party with whom he
tentative experimental period of one month from date (Oct 24, 1951)
contracts, unless he expressly binds himself or exceeds the limits of his authority without
▪ The agreement was thereafter extended up to Feb 24, 1953
giving such party sufficient notice of his power.
● During such period, PPC caused the shipment of copra to foreign countries in accordance
with instructions from PZ ● There is no proof that Baylin and Crame expressly bound themselves to be personally
o Instructions were coursed through Alexander Baylin and Jose Crame, officers of liable
Primateria Philippine (PP) ● There is no proof that, as agents, Baylin and Crame exceeded their authority
o Total amount due to plaintiff as of May 30, 1955 was Php 33,009.71 o If anyone should have raised the point of excess in the exercise of authority it
● It was proven at the trial before the CFI of Manila, that the amount due from PZ, on should have been PZ—they never raised it
account of the various shipments was Php 31,009.71 ▪ They never raised it, or denied liability on the ground of excess of
o It had already paid Php 2,000 of the original claim of plaintiff authority
● Baylin and Crame acted as duly authorized agents of PZ in the Philppines ● The article does not also state that in case of excess of authority, both the agent and the
o Baylein acted indiscriminately in the transactions in the dual capacities of agent principal are liable to the other contracting party
of PZ and the executive Vice-Preseident of PP – PP also acted as agent of PZ
o PZ had no license to transact business in the Philippines
● PZ was declared in default for failure to answer within the reglementary period
o CFI Manila rendered a decision holding PZ liable to PPC for the Php 31,009.71
with legal interst fromdate of the filing of the complaint, and Php 2,000 as
attorney’s fees
▪ It absolved Baylin and Crame from any and all liability
● PPC appealed the judgment as to the absolving of Baylin and Crame from any and all
liability
o It is PPC’s theory that PZ is a foreign corporation within the meaning of the
Corporation law
o Since it had transacted business in the Philippines without the necessary
license, its agents here are personally liable for contracts made in its behalf
● PPC alleges that the agents of PZ are liable under Art. 1897 NCC

ISSUE:
 9. Eurotech v Cuizon · Applying the foregoing to the present case, we hold that Edwin Cuizon acted well within
GR NO. 167552 his authority when he signed the Deed of Assignment. To recall, petitioner refused to deliver
April 23, 2007 the one unit of sludge pump unless it received, in full, the payment for Impact Systems'
By: Yrreverre indebtedness. 36 We may very well assume that Impact Systems desperately needed the
Topic: Obligations of the Agent sludge pump for its business since after it paid the amount of P50,000.00 as down payment on
Petitioners: Eurotech Industrial Technologies Inc 3 March 1995, 37 it still persisted in negotiating with petitioner which culminated in the
Respondents: ERWIN CUIZON and EDWIN CUIZON execution of the Deed of Assignment of its receivables from Toledo Power Company on 28
Ponente: CHICO-NAZARIO, J. June 1995. 38 The significant amount of time spent on the negotiation for the sale of the sludge
DOCTRINE: An agent may only be liable when he expressly binds himself to the obligation pump underscores Impact Systems' perseverance to get hold of the said equipment. There is,
and when he exceeds his authority therefore, no doubt in our mind that respondent EDWIN's participation in the Deed of
Assignment was "reasonably necessary" or was required in order for him to protect the
FACTS: business of his principal. Had he not acted in the way he did, the business of his principal would
· Eurotech is engaged in the business of importation and distribution of various European have been adversely affected and he would have violated his fiduciary relation with his
industrial equipment for customers here in the Philippines. It has as one of its customers principal.
Impact Systems which is a sole proprietorship owned by respondent ERWIN Cuizon (ERWIN). · In this case, petitioner is seeking to recover both from respondents ERWIN, the principal,
Respondent EDWIN is the sales manager of Impact Systems and was impleaded in the court a and EDWIN, the agent. It is well to state here that Article 1897 of the New Civil Code upon
quo in said capacity. which petitioner anchors its claim against respondent EDWIN "does not hold that in case of
· Eurotech sold to Impact Systems various products allegedly amounting to P91,338.00. excess of authority, both the agent and the principal are liable to the other contracting party."
Subsequently, respondents sought to buy from petitioner one unit of sludge pump valued at To reiterate, the first part of Article 1897 declares that the principal is liable in cases when the
P250,000.00 with respondents making a down payment of P50,000.00. agent acted within the bounds of his authority. Under this, the agent is completely absolved
· When the sludge pump arrived from the United Kingdom, Eurotech refused to deliver the of any liability. The second part of the said provision presents the situations when the agent
same to respondents without their having fully settled their indebtedness to petitioner. himself becomes liable to a third party when he expressly binds himself or he exceeds the limits
· Thus, respondent EDWIN and Alberto de Jesus, general manager of Eurotech, executed a of his authority without giving notice of his powers to the third person. However, it must be
Deed of Assignment of receivables in favor of Eurotech. Following the execution of the Deed pointed out that in case of excess of authority by the agent, like what petitioner claims exists
of Assignment, Eurotech delivered to respondents the sludge pump. here, the law does not say that a third person can recover from both the principal and the
· Unknown to Eurotech, respondents, despite the existence of the Deed of Assignment, agent.
proceeded to collect from Toledo Power Company the amount of P365,135.29 · As we declare that respondent EDWIN acted within his authority as an agent, who did not
· As a result Eurotech made several demands upon respondents to pay their obligations. acquire any right nor incur any liability arising from the Deed of Assignment, it follows that he
Respondents were able to make partial payments to petitioner. Eurotech’s counsel sent is not a real party in interest who should be impleaded in this case. A real party in interest is
respondents a final demand letter however they failed to pay. one who "stands to be benefited or injured by the judgment in the suit, or the party entitled
· Eurotech filed a complaint for sum of money, damages, with application for preliminary to the avails of the suit."
attachment in the RTC.
· By way of special and affirmative defenses, Respondent EDWIN alleged that he is not a
real party in interest in this case and he was acting as mere agent of his principal, which was
the Impact Systems, in his transaction with Eurotech and they knew about it. Eurotch opposed
to this motion.
· RTC - Edwin B. Cuizon be dropped as party defendant.
· CA - Affirmed
· Hence, this petition.

ISSUE:
1. W/N Edwin Cuizon, as an agent, is personally liable - No

HELD/RATIO:
· In this case, the parties do not dispute the existence of the agency relationship between
respondents ERWIN as principal and EDWIN as agent. The only cause of the present dispute is
whether respondent EDWIN exceeded his authority when he signed the Deed of Assignment
thereby binding himself personally to pay the obligations to petitioner. The SC held that EDWIN
did not act beyond the scope of his authority.
 10. Vda. de Salvatierra v. Garlitos authority on another to act in its behalf; thus, those who act or purport to acts as its
GR No. L-11442 representatives or agents do so without authority and at their own risk.
May 23, 1958 It is an elementary principle of law that a person who acts as an agent without
By: Lyka authority or without a principal is himself regarded as the principal, possessed of all the rights
and subject to all the liabilities of a principal, a person acting or purporting to act on behalf of
Topic: Obligations of the Agent a corporation which has no valid existence assumes such privileges and obligations and comes
Petitioners: MANUELA T. VDA. DE SALVATIERRA personally liable for contracts entered into or for other acts performed as such, agent (Fay vs.
Respondents: HON. LORENZO C. GARLITOS, in his capacity as Judge of the Court of First Noble, 7 Cushing [Mass.] 188. Cited in II Tolentino's Commercial Laws of the Philippines, Fifth
Instance of Leyte, Branch II, and SEGUNDINO REFUERZO Ed., P. 689-690). Considering that defendant Refuerzo, as president of the unregistered
Ponente: Felix corporation Philippine Fibers Producers Co., Inc., was the moving spirit behind the
consummation of the lease agreement by acting as its representative, his liability cannot be
DOCTRINE: it is an elementary principle of law that a person who acts as an agent without limited or restricted that imposed upon corporate shareholders. In acting on behalf of a
authority or without a principal is himself regarded as the principal, possessed of all the rights corporation which he knew to be unregistered, he assumed the risk of reaping the
and subject to all the liabilities of a principal, a person acting or purporting to act on behalf of consequential damages or resultant rights, if any, arising out of such transaction.
a corporation which has no valid existence assumes such privileges and obligations and comes
personally liable for contracts entered into or for other acts performed as such.

FACTS:
● Manuela T. Vda. de Salvatierra appeared to be the owner of a parcel of land.
● Manuela entered into a contract of lease with the Philippine Fibers Producers Co. (not
registered in the SEC and not a corporation), represented by Mr. Reguerzo (President). It
was provided that the lease would be for 10 years; the land would be planted to kenaf,
ramie, or other crops suitable to the soil; the lessor would be entitled to 30% of the net
income accruing from the harvest of any crop without being responsible for the cost of
production thereof; and that after every harvest, the lessee was bound to declare at the
earliest possible time the income derived and to deliver the corresponding share due the
lessor.
● Manuela filed a complaint with the CFI because these conditions were not met. The lower
court sided with Manuela and a writ of execution was later issued (for Manuela’s share of
profits). Three parcels of land under the name of Refuerzo was attached since the
corporation does not have a property available for attachment.
● Refuerzo claims that the decision should only be focused under the name of Refuerzo was
attached since the corporation does not have a property available for attachment.
● Refuerzo claims that the decision should only be focused on the corporation and not him.
Court agreed and released his property.

ISSUE: Whether Refuerzo is correct that the subject corporation should be the one shoulder
the liabilities and not him.

HELD/RATIO: No. A corporation when registered has a juridical personality and distinct from
its component members or stockholders and officers, such that a corporation cannot be held
liable for the personal indebtedness of a stockholder even if he should be its president and
conversely, a stockholder cannot be held personally liable for any financial obligation by the
corporation in excess of his unpaid subscription. But this rule is understood to refer merely to
registered corporation and cannot be made applicable to the liability of members of an
unincorporated association. The reason behind this doctrine is obvious - an unincorporated
association has no personality and would be incompetent to act and appropriate for itself the
power and attributes of a corporation as provided by law, it cannot create agents or confer
 11 Albert v University Publishing Co upon his wilful misrepresentation that a corporation was duly organized and existing
January 30, 1965 under the law, cannot thereafter set up against his victim the principle of corporation
Shang by estoppel
3. in Salvatiera vs. Garlitos, supra, p. 3073, we ruled: "A person acting or purporting to
Doctrine: In a suit against a corporation with no valid existence the person who had and act on behalf of a corporation which has no valid existence assumes such privileges
exercised the rights to control the proceedings, to make defense, to adduce and cross-examine and obligations and becomes personally liable for contracts entered into or for other
witnesses, and to appeal from a decision, is the real defendant, and the enforcement of a acts performed as such agent".
judgment against the corporation upon him is substantial observance of due process of law 4. In this connection, it must be realized that parties to a suit are "persons who have a
right to control the proceedings, to make defense, to adduce and cross-examine
Facts: Parties have appealed to this Court three times witnesses, and to appeal from a decision" (67 C.J.S. 887) - and Aruego was, in reality,
1. 15 years ago, Mariano Albert sued University Publishing Co. It claimed that the person who had and exercised these rights. Clearly, then, Aruego had his day in
defendant Aruego, its President, entered into a contract with plaintiff. The defendant court as the real defendant; and due process of law has been substantially observed.
agreed to pay plaintiff P30,000 for the exclusive right to publish his revised 5. The evidence is patently clear that Jose M. Aruego, acting as representative of a non-
Commentaries on the Revised Penal Code and for his share in the previous sales of existent principal, was the real party to the contract sued upon; that he was the one
the book’s first edition; that defendant had undertaken to pay in eight quarterly who reaped the benefits resulting from it, so much so that partial payments of the
installments of P3,750; that per contract, failure to pay one installment would render consideration were made by him; that he violated its terms, thereby precipitating
the rest due; and that defendant had failed to pay the second installment the suit in question; and that in the litigation he was the real defendant. Perforce, in
2. Defendant admitted plaintiff’s allegations but alleged that plaintiff breached their line with the ends of justice, responsibility under the judgment falls on him.
contract by failing to deliver his manuscript. Furthermore, defendant counterclaimed 6. In a suit against a corporation with no valid existence the person who had and
for damages. exercised the rights to control the proceedings, to make defense, to adduce and
3. Plaintiff died before trial and Justo Albert, his estate’s administrator, was substituted cross-examine witnesses, and to appeal from a decision, is the real defendant, and
for him the enforcement of a judgment against the corporation upon him is substantial
4. CFI Manila rendered a decision in favor of plaintiff, ordering defendant to pay the observance of due process of law
administrator of P23,000 with legal interest. 7. We need hardly state that should there be persons who under the law are liable to
5. The court ordered a writ of execution against Uni Publishing Co. Plaintiff, however, Aruego for reimbursement or contribution with respect to the payment he makes
petitioned for a writ of execution against President Aruego, stating that plaintiff’s under the judgment in question, he may, of course, proceed against them through
counsel and the Sheriff of Manila discovered that there is no such entity as Uni proper remedial measures.
Publishing Co.
6. “Uni Publishing Co.” and that it was not registered in Securities and Exchange
Commission (SEC) countered that President Aruego is not a party to this case and
that, therefore, petition should be denied.
7. Court denied the petition. Thus, plaintiff appealed.

Issue: Whether or not Albert can sue the President of “University Publishing Co.”

Held: YES. The order appealed from is hereby set aside and the case remanded ordering the
lower court to hold supplementary proceedings for the purpose of carrying the judgment into
effect against University Publishing Co., Inc. and/or Jose M. Aruego. So ordered.
1. The fact of non-registration of University Publishing Co., Inc., in the Securities and
Exchange Commission has not been disputed. Defendant would only raise the point
that "University Publishing Co., Inc.," and not Jose M. Aruego, is the party defendant;
thereby assuming that "University Publishing Co., Inc." is an existing corporation with
an independent juridical personality. Precisely, however, on account of the non-
registration it cannot be considered a corporation, not even a corporation de facto
2. Aruego represented a non-existent entity and induced not only the plaintiff but even
the court to believe in such representation. He signed the contract as "President" of
"University Publishing Co., Inc.," stating that this was "a corporation duly organized
and existing under the laws of the Philippines," and obviously misled plaintiff
(Mariano A. Albert) into believing the same. One who has induced another to act
 12. DBP v. CA 7. Candida filed a complaint for collection of sum of money with damages. She alleged
GR NO.109937 that her husband became insured by DBP-MRI when DBP required him to apply for
March 21, 1994 MRI.
By: Joshua 8. RTC (on summary judgement) rendered a decision in favor of Dans Estate and
Candida. (DBP lost in the RTC). RTC absolved DBP-MRI since there was no privity of
Topic: obligations of an agent contract between DBP-MRI and Juan (being that he was not approved)
Petitioners: Development Bank of the Philippines 9. DBP was liable since they knew that Juan was not eligible yet they led him to apply
Respondents: Court Of Appeals and the Estate of the Late Juan B. Dans, DBP Mortgage for MRI, even collecting a premium and service fee (so they are estopped from
Redemption Insurance Pool saying otherwise)
Ponente: Quiason, J. 10. Court of Appeals affirmed RTC. DBP filed MR but CA denied MR. Hence, DBP filed a
petition for certiorari under Rule 45 of the RoC.
RECIT-READY/SUMMARY: Juan applied for a loan with DBP. DBP advised Juan to apply for
ISSUE:
Mortgage Redemption Insurance (MRI). The limit for such was only 60 years old, but Juan
1. Whether DBP was wrong to deduct insurance premium and in collecting service
was already 76 years old - still DBP made him apply. DBP approved of the loan and
fees and agent’s comission
deducted insurance premium already even if Juan had not yet applied for the MRI. 4 days
after, Juan applied for the MRI with DBP-MRI Pool - after which DBP got service fee and
HELD/RATIO
agent’s commission already even if the application was still pending approval. DBP knew
1. Yes DBP was wrong in this case. DBP exceeded its authority. In their ruling, the SC
that the application would not be approved because of the age limit. 19 days after, Juan
discussed the ff:
died of cardiac arrest. Juan’s estate was notified that his application was disapproved.
Juan’s wife seeks for the coverage value of the MRI since she believes her husband was
When MRI coverage shall take effect
already insured since DBP already deducted a premium and also received service fees and
MRI coverage shall take effect when: 1) application is approved by the insurance pool; 2) full
commissions. RTC held DBP liable (DBP-MRI pool not liable). CA affirmed RTC. SC held that
premium is paid during the continued good health of the applicant. These conditions must
DBP exceeded its scope of authority when it deducted a premium and recieved service
concur.
fees and agent’s commission as it had no power to approve applications (such power was
with DBP-MRI only).
No contract between DBP-MRI and Juan
Only DBP-MRI could approve applications for the MRI coverage. DBP does not have this
DOCTRINE: General rule: Agent is not personally liable to the party whom he contracts power. Because DBP-MRI did not approve Juan’s application, it cannot be said that there was
Exception: 1) expressly binds himself; 2) exceeds limits of authority ever a contract between DBP-MRI and Juan - and it follows that DBP-MRI cannot be made
liable
FACTS:
1. Juan Dans applied for a loan worth P500,000.00 with DBP. Note that Juan was DBP exceeded its scope of authority
already 76 years old. DBP advised Juan to obtain a Mortgage Redemption Insurance DBP acted as both 1) lender and 2) insurance agent. As an insurance agent DBP led Juan to
(MRI) with the DBP Mortgage Redemption Insurance Pool. (DBP-MRI) apply for the MRI coverage. DBP made the Dans believe that their application would be
2. DBP approved the reduced loan of P300,000.00. From the proceeds of this loan, approved knowing full well that it would not as Juan’s age exceeded the limit.
DBP deducted an amount for payment of the MRI premium (even tho Juan had not
yet even applied for MRI from DBP-MRI. “Agent who acts as such is not personally liable to the party whom he contracts, unless he
3. 4 days after the release of the loan (and DBP’s deduction of payment for MRI expressly binds himself or exceeds the limits of his authority without giving such party
premium) Juan accomplished and submitted his MRI application. (remember DBP sufficient notice of his powers”
already subtracted premium prior to Juan’s submission of application)
4. DBP credited to the savings account of DBP-MRI a 10% service fee. DBP despite not having the power to approve MRI applications, accepted Juan’s application
5. 19 days after, Juan died of cardiac arrest. DBP-MRI then notified that Juan was not by collecting the insurance premium (even before they applied) and deducted agent’s
eligible for MRI coverage (limit was 60 years old kasi, but Juan was already 76 when commission and service fee after it accomplished and submitted the application (even
he applied) when it was still pending approval of DBP-MRI)
6. Candida Dans (Juan’s wife and adminx of Juan’s estate) was notified that Juan’s
MRI app was disapproved. DBP offered to refund the premium deducted prior to DBP’s liability cannot be for the entire insurance policy
Juan’s MRI application + P30,000.00 anex gratia settlement. Candida refused and It is speculative to think that Juan would have secured MRI coverage from a different
demanded payment of the face value of the MRI or an amount equivalent to the company, given his age. Also noted was that Juan died almost immediately after applying (19
loan.
days after). Damages to be recoverable must be capable of proof and proved by reasonable
certainty. Hence, DBP is not liable for compensatory damages.

DBP is liable for moral damages

Even if DBP cannot be made liable for compensatory damages, DBP can still be made liable
for moral damages as no proof of pecuniary loss is required in the assessment of this kind of
damages. The assessment of moral damages is left to the discretion of the court according to
the circumstances of each case

DBP is ordered to REIMBURSE the premium deducted (w/ legal interest from date of filing of
complaint) and PAY P50,000.00 as moral damages and P10,000.00 as Atty fees. Costs against
DBP
 13.) HARRY KEELER ELECTRIC v. RODRIGUEZ the expenses of the mechanic.
GR No. L-19001 • Montelibano had no authority to receive or receipt for money. His services were
NOVEMBER 11, 1922 limited and confined to the finding of purchasers for the "Matthews" plant.
By: DEINLA • Montelibano was not an electrician and could not install the plant and did not
Topic: OBLIGATIONS OF THE AGENT know anything about its mechanism.
Petitioners: HARRY E. KEELER ELECTRIC CO., INC. Juan Cenar
Respondents: DOMINGO RODRIGUEZ • Cenar testified that he went with shipment of the plant from Manila to Iloilo, for
Ponente: JOHNS, J. installing, testing it, and to see that everything was satisfactory. That he was there about nine
days, and that he installed the plant, and that it was tested and approved by the defendant.
DOCTRINE: • He personally took with him the statement of account of Keeler Electric against
Rodriguez, and that after he was there a few days, Rodriguez asked to see the statement, and
In approaching the consideration of the inquiry whether an assumed authority exist in a that he gave it to him, and then said, "he was going to keep it."
given case, there are certain fundamental principles which must not be overlooked. Among • Cenar said that was all right. "I made no effort at all to collect the amount from him
these are, as has been seen, because Mr. Rodriguez told me he was going to pay for the plant here in Manila."
(1) that the law indulges in no bare presumptions that an agency exists: it must be proved or • Cenar also claims that after his return to Manila, he wrote a letter to the defendant
presumed from facts; requesting the payment of its account, where Rodriguez answered: “Electric plant
(2) that the agent cannot establish his own authority, either by his representations or by accessories and installation are paid to Montelibano about three weeks. Keeler Company did
assuming to exercise it; not present bill.”
(3) that an authority cannot be established by mere rumor or general reputation; Domingo Rodriguez
(4) that even a general authority is not an unlimited one; and • Montelibano sold and delivered the plant to him, and "was the one who ordered
(5) that every authority must find its ultimate source in some act or omission of the principal. the installation of that electrical plant," and he introduced in evidence as part of his
An assumption of authority to act as agent for another of itself challenges inquiry. Like a deposition a statement and receipt which Montelibano signed to whom he paid the money.
railroad crossing, it should be in itself a sign of danger and suggest the duty to "stop, look, o Contrary to the telegram he sent that alleges he had already paid but no bill came.
and listen." It is therefore declared to be a fundamental rule, never to be lost sight of and not • When asked why he paid the money to Montelibano, the witness says “Because he
easily to be overestimated, that persons dealing with an assumed agent, whether the was the one who sold, delivered, and installed the electrical plant, and he presented to me
assumed agency be a general or special one, are bound at their peril, if they would hold the the account, Exhibits A and A-I, and he assured me that he was duly authorized to collect the
principal, to ascertain not only the fact of the agency but the nature and extent of the value of the electrical plant.”
authority, and in case either is controverted, the burden of proof is upon them to establish it.
ISSUE: Whether Montelibano had authority to collect payment for the Matthews Plant. NO.
FACTS:
• Keeler Electric is a domestic corporation engaged in the electrical business, and HELD/RATIO:
among other things in the sale of what is known as the "Matthews" electric plant. • Rodriguez testified that “Montelibano assured me that he was duly authorized to
• Montelibano approached Keeler Electric at its Manila office, claiming that he could collect the value of the electrical plant."
find a purchaser for the "Matthews" plant. • This shows upon its face that the question of Montelibano's authority to receive
• Through Montelibano’s efforts, one of the plants was sold to Rodriguez, and was the money must have been discussed between them, and that, in making the payment,
shipped from Manila to Iloilo, and later installed on his premises after which defendant relied upon Montelibano's own statements and representation, as to his
• Without the knowledge of Keeler Electric, Rodriguez paid the purchase price to authority, to receipt for the money.
Montelibano. • There is no evidence that the plaintiff ever delivered any statements to
• Keeler Electric commenced this action against Rodriguez, alleging that it sold and Montelibano, or that he was authorized to receive or receipt for the money, and defendant's
delivered to Rodriguez the electric plant at the agreed price of P2,513.55 no part of which own telegram shows that the plaintiff "did not present bill" to defendant. He now claims that
has been paid. at the very time this telegram was sent, he had the receipt of Montelibano for the money
• Rodriguez answers that he had already paid through Montelibano as Keeler Electric upon the identical statement of account which it is admitted the plaintiff did render to the
had held out the former as an agent authorized to collect. defendant.
• Article 1162 of the Civil Code provides: Payment must be made to the persons in
TESTIMONIES: whose favor the obligation is constituted, or to another authorized to receive it in his name.
Keeler Electric • And article 1727 provides: The principal shall be liable as to matters with respect to
• At the time of the shipment, Keeler Electric sent Juan Cenar, one of its employees, which the agent has exceeded his authority only when he ratifies the same expressly or by
with the shipment, for the purpose of installing the plant. implication.
• Keeler Electric gave Cenar a statement of the account, including some extras and • Applying the above rules, plaintiff never authorized Montelibano to receive or
receipt for money in its behalf, and that the defendant had no right to assume by any act or
deed of the plaintiff that Montelibano was authorized to receive the money, and that the
defendant made the payment at his own risk and on the sole representations of Montelibano
that he was authorized to receipt for the money.
• The testimony is conclusive that Rodriguez paid the amount of Keeler Electric’s
claim to Montelibano, and that no part of the money was ever paid to Keeler Electric.
• Rodriguez, having alleged that the plaintiff sold and delivered the plant to him, and
that he paid the plaintiff the purchase price, it devolved upon the defendant to prove the
payment to the plaintiff by a preponderance of the evidence.
 14. VELOSO v LA URBANA · As has been noted at the beginning, the court reserved to La Urbana any right of
GR NO. L-38384 action it might have against Del Mar and the Insular Treasurer under the provisions of
NOVEMBER 3, 1933 sections 99 to 107 of Act No. 496. At all events, La Urbana may exercise such right of
By: CHESKA DOMINGUEZ action without the necessity of such reservation if the facts of the case so warrant.
Topic: OBLIGATIONS OF THE AGENT
Petitioners: Corazon Ch. Veloso y RicaBlanca and Robustiano M. Rosales Wherefore, the judgment appealed from is hereby affirmed, with the costs against the
Respondents: La Urbana, Mutual Building and Loan Association and Jose Maria Del Mar appellant. So ordered.
Ponente: IMPERIAL, J.

DOCTRINE: The forged powers of attorney prepared by an agent are without force and effect,
and the record of the mortgages constituted by virtue thereof are likewise null and void and
without force and effect, and that they could not in any way prejudice the rights of the principal
as the registered owner in the properties in question.

FACTS:
· Petitioner Corazon Veloso was the owner of five parcels of land in Manila. In May
1929, Jose del Mar, Veloso’s brother-in-law, forged two powers of attorney, purporting
to have been executed by husband and wife petitioners, conferring upon him ample
authority to mortgage the said properties. These powers of attorney were duly registered
in the office of the Register of Deeds.
· Acting under these powers, Del Mar succeeded in mortgaging the properties to La
Previsora Filipina. He cancelled it and transferred it to La Urbana which granted him a loan
of P10, 600. He contracted another loan for P2, 875 and executed another mortgage deed.
Del Mar violated the conditions of the mortgages which resulted to La Urbana’s
foreclosure of the properties.
· Veloso learned of Del Mar’s fraudulent transactions through the advertisement of
the sale. In addition to this civil action, they filed the crime of Falsification against him,
which resulted to his conviction.

ISSUE:
(1) Whether or not Veloso’s properties may be subjected to the mortgage through the forged
powers of attorney

HELD/RATIO:
(1) NO.
· Inasmuch as Del Mar was not the registered owner of the mortgaged properties, and
La Urbana was fully aware of the fact that it was dealing with Del Mar on the strength of
the alleged powers of attorney, it was La Urbana’s duty to ascertain the genuineness of
said instruments and not rely absolutely and exclusively upon the facts that the said
powers of attorney appeared to have been registered. In view of its failure to proceed in
this manner, it acted negligently and should suffer the consequences and damages
resulting from such transactions.

· "Persons dealing with an assumed agent, whether the assumed agency be a general
or special one, are bound at their peril, if they would hold the principal, to ascertain not
only the fact of the agency but the nature and extent of the authority, and in case either
is controverted, the burden of proof is upon them to establish it." (Harry E. Keeler Electric
Co. vs. Rodriguez, 44 Phil., 19.)
 15. CERVANTES vs CA ● Since the PAL agents are not privy to the said agreement and Cervantes knew that a
G.R. No. 125138. March 2, 1999 written request to the legal counsel of PAL was necessary, he cannot use what the
By: Shanon PAL agents did to his advantage. The said agents acted without authority when they
Topic: OBLIGATIONS OF THE AGENT confirmed the flights of Cervantes.
Petitioners: NICHOLAS CERVANTES ● An award of damages is improper because Cervantes failed to show that PAL acted
Respondents: CA and the PHILIPPINE AIRLINES (PAL) in bad faith in refusing to allow him to board its plane in San Francisco, and pursuant
Doctrine: The acts of an agent beyond the scope of his authority do not bind the principal, to Article 1898 (11) of NCC.
unless the latter ratifies the same expressly or impliedly. ● WHEREFOR: Petition denied.

Facts:
● PAL issued to Cervantes a round trip plane ticket for MNL-HNL-LA-HNL-MNL, which
expressly provided an expiry of date of one year from issuance (Valid until March
27).
o The issuance of the said plane ticket was in compliance with a Compromise
Agreement entered into between the contending parties in two previous
suits.
● 4 days before the expiry date of subject ticket, Cervantes used it. Upon his arrival in
LA on the same day, he immediately booked his LA-MNL return ticket with the PAL
office, and it was confirmed for April 2.
● Upon learning that the same PAL plane would make a stop-over in San Francisco, and
considering that he would be there on April 2, Cervantes made arrangements with
PAL for him to board the flight in San Francisco instead of boarding in LA.
● When Cervantes checked in at the PAL counter in San Francisco, he was not allowed
to board. The PAL personnel marked the following notation on his ticket: TICKET NOT
ACCEPTED DUE EXPIRATION OF VALIDITY.
● Cervantes filed a Complaint for Damages, for breach of contract of carriage before
RTC Surigao. But this was dismissed. He appealed. CA affirmed dismissal. Hence, this
petition for review.

Issue: Whether the act of the PAL agents, in confirming the subject ticket, extended the period
of its validity. (NO)

Ruling:
● Article 1898[11] NCC
o The acts of an agent beyond the scope of his authority do not bind the
principal, unless the latter ratifies the same expressly or impliedly.
Furthermore, when the third person (Cervantes) knows that the agent was
acting beyond his power or authority, the principal cannot be held liable for
the acts of the agent. If the said third person is aware of such limits of
authority, he (third person) is to blame, and is not entitled to recover
damages from the agent, unless the latter undertook to secure the
principal’s ratification.
● PAL agents had no authority to extend the validity of the subject ticket.
● Cervantes knew this from the very start when he called up the Legal Department of
PAL before he left. He had first hand knowledge that the ticket would expire on
March 27 and that to secure an extension, he would have to file a written request
for extension at the PAL’s office. Despite this knowledge, he persisted to use the
ticket.
 16. Bacaltos Coal Mines v CA ● A Trip Charter Party was executed by and between Bacaltos Coal Mines, represented by
GR No. 114091 it Chief Operating Officer, Rene Savellon, and private respondent SMC, represented by
June 29, 1995 Francisco Manzon , its SAVP and Director, Plant-Operation Mandaue.
By: HAPPY ● Savellon claims that Bacalton Coal Mines is the owner of M/V Premship II and that
Topic: P650,000 to be paid within 7 days after the execution of the contract, it “lets, demises”
Petitioners: Bacaltos Coal Mines and German A. Bacaltos the vessel to charterer SMC “for 3 round trips to Davao.
Respondents: Hon. CA and SMC ● As payment of the aforesaid consideration, SMC issued a check payable to RENE
Ponente: Davide, Jr., J SAVELLON IS TRUST FOR BCM for which Savellon issued a receipt under the heading of
BACALTOS COAL MINES
● The vessel was able to make only 1 trip. SMC filed against petitioners and Rene Savellon
RECIT-READY/SUMMARY: Petitioner Bacaltos authorized Savellon to use the coal operating
a complaint for specific performance and damages.
contract of Bacaltos Coal Mines (BCM) for any legitimate purpose that it may serve. Namely,
● In their answer, petitioners alleged that Savellon was the COO and that the powers
but not by way of limitation, as follows:
granted to him are only those clearly expressed in the Authorization which do not
1. acquire purchase orders
include the power to enter into any contract with SMC.
2. engage in trading
● They further claimed that if it is true that SMC entered into a contract with them, it
3. collect receivables
should have issued the check in their favor.
4. extend to any person/ company by substitution the same
● Savellon did not file his Answer and he was declared in default.
extent of authority granted to Savellon
● After trial, lower court decided in favor of SMC.
5. in connection with the preceding paragraphs to execute and
o Authorization given by German Bacaltos to Savellon necessarily included the
sign documents, contracts, and other pertinent papers
power to enter into the trip Charter Party
Savellon executed a Trip Charter Party with SMC, represented by Francisco Monzon, wherein
o did not give credence to the petitioners' claim that the authorization refers only
they agreed that BCM lets/demises a vessel to SMC for 3 round trips to Davao. The vessel was
to coal or coal mining and not to shipping because, according to it, "the business
only able to make one trip. SMC filed a complaint for specific performance against the
of coal mining may also involve the shipping of products" and "a company such as
petitioners and Rene Savellon. BCM denies liability on the contention that Savellon was not
a coal mining company is not prohibited to engage in entering into a Trip Charter
the Chief Operating Officer and did not have authorization to enter into a Trip Charter Party
Party contract."
Contract with SMC. RTC and CA both ruled against petitioners. But SC said Savellon acted
● CA affirmed in toto the judgment of RTC
beyond his authority. Savellon’s authority was interpreted as a SPA and that the clause “but
● MR was denied. Hence, this instant petition.
not by way of limitation” should be understood as contemplating other prerogatives which
must exclusively pertain to the power to use the coal operating contract because BCM doesn’t
ISSUE: W/N Savellon was duly authorized by the petitioners to enter into the Trip Charter Party
own the vessels and their main business is coal mining. SC also said there is negligence on the
under and by virtue of an Authorization
part of SMC. Apart from their negligence in drawing the check payable to Rene Savellon, they
were also negligent for failure to inquire upon the authority of the agent. As they did not make
RULING: NO.
such inquiry, they are chargeable with knowledge of his authority despite ignorance thereof.
● Since the agency of Savellon is based on a written document, the Authorization, the
extent and scope of his powers must be determined on the basis thereof. The language
of the Authorization is clear. It pertinently states as follows:
DOCTRINE: Third person dealing with a known agent must act with ordinary prudence and o I, GERMAN A. BACALTOS . . . do hereby authorize RENE R. SAVELLON . . . to use the
reasonable diligence. 'coal operating contract' of BACALTOS COAL MINES, of which I am the proprietor,
for any legitimate purpose that it may serve. Namely, but not by the way of
The person dealing with the agent must also act with ordinary prudence and reasonable limitation, as follows: . . .
diligence. Obviously, if he knows or has good reason to believe that the agent is exceeding his ● There is only one express power granted to Savellon, viz., to use the coal operating
authority, he cannot claim protection. So if the suggestions of probable limitations be of such contract for any legitimate purpose it may serve. The enumerated "five prerogatives "
a clear and reasonable quality, or if the character assumed by the agent is of such a suspicious — to employ the term used by the Court of Appeals — are nothing but the specific
or unreasonable nature, or if the authority which he seeks to exercise is of such an unusual or prerogatives subsumed under or classified as part of or as examples of the power to use
improbable character, as would suffice to put an ordinarily prudent man upon his guard, the the coal operating contract. The clause "but not by the way of limitation" which precedes
party dealing with him may not be shut his eyes to the real state of the case, but should either the enumeration could only refer to or contemplate other prerogatives which must
refuse to deal with the agent at all, or should ascertain from the principal the true conditions exclusively pertain or relate or be germane to the power to use the coal operating
of affairs. contract.

FACTS:
 ● The conclusion then of the Court of Appeals that the Authorization includes the power
to enter into the Trip Charter Party because the "five prerogatives" are prefaced by such
clause, is seriously awed.
● It fails to note that the broadest scope of Savellon's authority is limited to the use of the
coal operating contract and the clause cannot contemplate any other power not
included in the enumeration or which are unrelated either to the power to use the coal
operating contract or to those already enumerated.
● In short, while the clause allows some room for flexibility, it can comprehend only
additional prerogatives falling within the primary power and within the same class as
those enumerated.
● The trial court, however, went further by hastily making a sweeping conclusion that "a
company such as a coal mining company is not prohibited to engage in entering into a
Trip Charter Party contract."
● But what the trial court failed to consider was that there is no evidence at all that
Bacaltos Coal Mines as a coal mining company owns and operates vessels, and even if it
owned any such vessels, that it was allowed to charter or lease them.
● The trial court also failed to note that the Authorization is not a general power of
attorney. It is a special power of attorney for it refers to a clear mandate specifically
authorizing the performance of a specific power and of express acts subsumed therein.
● In short, both courts below unreasonably expanded the express terms of or otherwise
gave unrestricted meaning to a clause which was precisely intended to prevent
unwarranted and unlimited expansion of the powers entrusted to Savellon. The
suggestion of the Court of Appeals that there is obscurity in the Authorization which
must be construed against German Bacaltos because he prepared the Authorization has
no leg to stand on inasmuch as there is no obscurity or ambiguity in the instrument. If
any obscurity or ambiguity indeed existed, then there will be more reason to place SMC
on guard and for it to exercise due diligence in seeking clarification or enlightenment
thereon, for that was part of its duty to discover upon its peril the nature and extent of
Savellon's written agency. Unfortunately, it did not.
● Had SMC exercised due diligence and prudence, it should have known in no time that
there is absolutely nothing on the face of the Authorization that confers upon Savellon
the authority to enter into any Trip Charter Party. Since the principal subject of the
Authorization is the coal operating contract, SMC should have required its presentation
to determine what it is and how it may be used by Savellon. Such a determination is
indispensable to an inquiry into the extent or scope of his authority.
Petition: GRANTED
 17. FILIPINAS LIFE ASSURANCE COMPANY v. PEDROSO o They went to the Escolta Branch with their lawyer to collect the money,
G.R. NO. 159489 and to inquire why they had not seen Valle for a while. However, they
FEBRUARY 4, 2008 were not able to collect the money.
BY: BL o Hence, respondents filed an action for the recovery of a sum of money.
Topic: OBLIGATIONS OF THE AGENT · RTC Manila held Filipinas Life and its co-defendants Valle, Apertrior and Alcantara
Petitioners: FILIPINAS LIFE ASSURANCE COMPANY (now AYALA LIFE ASSURANCE INC.) jointly and solidarily liable to the respondents.
Respondents: CLEMENTE PEDROSO, TERESITA PEDROSO, and JENNIFER PALACIO, thru her · CA affirmed and denied the MR.
Attorney-in-fact PONCIANO MARQUEZ
Ponente: QUISUMBING, J. ISSUE:
Whether Filipinas Life, Valle, Apertrior and Alcantara are jointly and severally liable
DOCTRINE: to the respondents.
General Rule: Principal is responsible for the acts of its agent done within the scope
of its authority, and should bear the damage caused to third persons. When the agent exceeds HELD:
his authority, the agent becomes personally liable for the damage. · Filipinas Life, as the principal, is liable for obligations contracted by its agent Valle.
The acts of an agent beyond the scope of his authority do not bind the principal, o By the contract of agency, a person binds himself to render some service
unless the principal ratifies them, expressly or impliedly. or to do something in representation or on behalf of another, with the
consent or authority of the latter.
PARTIES: · The general rule is that the principal is responsible for the acts of its agent done
Principal: Filipinas Life Assurance Company within the scope of its authority, and should bear the damage caused to third persons.
Agent: Renato Valle When the agent exceeds his authority, the agent becomes personally liable for the
3rd Party: Clemente Pedroso, Teresita Pedroso, and Jennifer Palacio damage.
o But even when the agent exceeds his authority, the principal is still
FACTS: solidarily liable together with the agent if the principal allowed the
· Teresita Pedroso was a policyholder of a 20-year endowment life insurance issued by agent to act as though the agent had full powers.
petitioner Filipinas Life. o In other words, the acts of an agent beyond the scope of his authority
· Teresita claimed that Renato Valle was her insurance agent since 1972 and Valle do not bind the principal, unless the principal ratifies them, expressly
collected her monthly premiums. or impliedly.
o In 1977, Valle told Teresita the Filipinas Life Escolta Office was holding o Ratification in agency is the adoption or confirmation by one person of
a promotional investment program for policyholders. an act performed on his behalf by another without authority.
o Teresita invested and issued a post-dated check of P10, 000. Valle · Even if Valle's representations were beyond his authority as a debit/insurance agent,
issued Pedroso his personal check for P800 for the 8% prepaid interest Filipinas Life thru Alcantara and Apetrior expressly and knowingly ratified Valle's acts.
and a Filipinas Life "Agent's Receipt." o It cannot even be denied that Filipinas Life benefited from the
· Teresita called the Escolta Office and talked to Francisco Escolta (Administrative investments deposited by Valle in the account of Filipinas Life.
assistant) and Angel Apertrior (Branch Manager) who confirmed that there was such a o Filipinas Life had clothed Valle with apparent authority; hence, it is now
promotion, and said she could push through with the check. The check was then estopped to deny said authority.
deposited to Commercial Bank and Trust Company (CBTC). o Innocent third persons should not be prejudiced if the principal failed
· A month after, Teresita made a written request for refund of the P10,000. The formal to adopt the needed measures to prevent misrepresentation, much
written request was prepared by Alcantara. She personally went to the Escolta Branch more so if the principal ratified his agent's acts beyond the latter's
where Alcantara gave her the P10, 000 in cash. authority.
· Pedroso made 7 to 8 more investments in Filipinas Life, totaling to P37, 000 at a rate
of 5% prepaid interest a month. Upon maturity of Pedroso's subsequent investments, WHEREFORE, the petition is DENIED for lack of merit. The Decision and Resolution, dated
Valle would take back from Pedroso the corresponding yellow-colored agent's receipt he November 29, 2002 and August 5, 2003, respectively, of the Court of Appeals in CA-G.R. CV
issued to the latter. No. 33568 are AFFIRMED. Costs against the petitioner.
· Pedroso told Jennifer Palacio, also a Filipina Life insurance policy holder about the
investment plan, and made investments as well.
· Pedroso tried to withdraw her investment, but Valle did not want to return P17, 000.
Palacio also tried to withdraw hers, but Filipinas Life refused to return her money.
 18. GREEN VALLEY POULTRY V. IAC the goods but had not been able to collect from their purchasers, the
GR NO. L-49395 action was premature.
DECEMBER 26, 1984 ● CONTENTION OF SQUIBB
By: JUSTINE LIMJOCO ○ Contract was one of sale and Green Valley was obligated to pay for the
goods received upon the expiration of the 60-day credit period.
Petitioners: GREEN VALLEY POULTRY & ALLIED PRODUCTS, INC. ● The trial court gave judgment in favor of Squibb. The CA affirmed.
Respondents: IAC and E.R. SQUIBB & SONS PHILIPPINE CORPORATION
Ponente: ABAD SANTOS, J. ISSUE:
___________________________________________________________________________ Whether or not Green Valley is liable to Squibb. YES

SUMMARY: Green Valley Poultry and E.R. Squibb & Sons entered into a letter agreement. The HELD:
agreement states that Green Valley will be the non-exclusive distributor of the products of The Court held that categorizing the contract into one of sale or agency is unnecessary.
Squibb. Squibb delivered products but goods were unpaid. Squibb filed suit to collect. Green Whether viewed as an agency to sell or as a contract of sale, Green Valley is liable.
Valley said it was not liable because the contract is an agency to sell. The Supreme Court held
it was unnecessary to categorize contract. However, even if the contract was an agent to sell, If the contract is an agency to sell, it is still liable because it sold on credit without authority
Green Valley would still be liable to Squibb because in such contract, the agent is liable to pay from its principal.
the principal for goods sold by the agent without the principal’s consent.
Art. 1905. The commission agent cannot, without the express or implied consent of the
DOCTRINE: In an agency to sell, the agent is liable to pay the principal for goods sold by the principal, sell on credit. Should he do so, the principal may demand from him payment in cash,
agent without the principal’s consent. The commission agent cannot without the express or but the commission agent shall be entitled to any interest or benefit, which may result from
implied consent of the principal, sell on credit. Should he do so, the principal may demand such sale.
from him payment in cash, but the commission agent shall be entitled to any interest or
benefit, which may result from such sale. Petition dismissed.

FACTS WINNING PARTY: SQUIBB

● On November 3, 1969, Squibb and Green Valley entered into a letter agreement, which
stipulates the following:
○ E.R. Squibb & Sons Phil Corp. appoints Green Valley Poultry as a non-
exclusive distributor for Squibb Veterinary Products.
○ As a distributor, Green Valley will be entitled to discounts.
○ Green Valley Poultry will distribute only for the Central Luzon and Northern
Luzon, including Cagayan Valley areas.
○ Transfer of stocks from Central Luzon and Northern Luzon to other areas,
which are covered by other distributors, will not be allowed.
○ The maximum discount Green Valley can give to their accounts will not go
beyond 10%.
○ Green Valley will accept turn over orders from Squibb representatives.
○ Payment for purchases of Squibb products will be due 60 days from date
of invoice.
○ It is mutually agreed that this non-exclusive distribution agreement can be
terminated by either Green Valley or Squibb on 30 days notice.
● Goods were delivered to Green Valley. Goods were left unpaid. Squibb filed suit to
collect.
● CONTENTION OF GREEN VALLEY
○ The contract with Squibb was a mere agency to sell, and that it never
purchased goods from Squibb
○ Argued that goods received were on consignment only with obligation to
turn over proceeds or to return the goods if not sold. But since it had sold
 19. Voluntad-Ramirez vs. Bautista - Yes. Bautista is guilty of violating Rule 18.03: a lawyer shall not neglect a legal
A.C. No. 6377 matter entrusted to him, and his negligence in connection therewith shall render him liable”.
Oct. 10, 2012 - Once a lawyer receives the acceptance fee for his legal services, he is expected to
By: Madrid serve his client with competence, and to attend to his client’s cause with diligence,
care, and devotion.
Topic: Rule 18.03 CPR - In this case, respondent attributes his delay in filing the appropriate criminal case to the
Petitioners: Hermania Voluntad-Ramirez absence of conciliation proceedings between complainant and her siblings before the
Respondents: Atty. Rosario Bautista barangay as required under Article 222 of the Civil Code and the Local Government Code.
Ponente: Madrid, J. - However, this excuse is belied by the Certification to File Action by the Office of the Lupong
Tagapamayapa, Office of the Barangay Council, Barangay Daanghari, Navotas. The Certification
to File Action was issued on 1 July 2002, which was more than four months before complainant
RECIT-READY/SUMMARY: :D
engaged respondents legal services on 25 November 2002. Respondents allegation that
complainant failed to inform him about the existence of the Certification to File Action is hard
to believe considering complainants determination to file the case against her siblings. Clearly,
DOCTRINE: Once a lawyer receives the acceptance fee for his legal services, he is respondent has been negligent in handling complainants case.
expected to serve his client with competence, and to attend to his client’s cause with diligence,
care, and devotion.

FACTS:
- Ramirez filed a complaint against Bautista for violation of Rule 18.02 (dapat 18.03)
- Ramirez engaged the services of Bautista to file a complaint against
Ramirez’ siblings for encroachment of her right of way.
- Bautista demanded 15k acceptance fee plus 1k court appearance.
- Ramirez paid the 15k.
- After 6 months, Ramirez terminated the services of Bautista because she was dissatisfied with
the way he handled the case. (since only after 6 months did Bautista sent a letter to the Office
of the City Engineer regarding her complaint)
- Ramirez sent a letter to Bautista requesting for a refund of the 14k out of the 15k acceptance
fee.
- In the letter Ramirez noted that due to his failure to institute the desired complaint on time,
she was compelled to hire another lawyer.
- Bautista failed to return the 14k so Ramirez filed a complaint with the Office of the Bar
Confidant.
- Bautista’s defense is that he advised Ramirez toward a compromise in accordance with Art.
222 of the CC and that the parties should submit to barangay conciliation. After he was hired,
he sent a letter to the City Engineer immediately; made several follow ups and even filed a
case against the City Engineer for nonfeasance. When Ramirez demanded for the 14k refund
Bautista stated that it was non refundable because it covers the time and cost of research
made immediately before and after acceptance of the case. However, his firm was willing to
give her a 50% refund.
- Ramirez argued that even before she contracted Bautista’s services, barangay conciliation
proceedings already took place but because of her sibling’s non appearance, she filed an action
against then.
- IBP Board of Governors ordered Bautista’s suspension for 6 months and restitution of 14k.
Bautista filed a MR. It was lowered from 6 months to admonition (warning).
ISSUE:
W/N Bautista is guilty of negligence in handling this case.

HELD/RATIO:
 20. Hernandez v. Atty. Padilla
AC NO. 9387 Acceptance of money from a client establishes an attorney-client relationship and gives rise to
June 20, 2012 the duty of fidelity to the clients cause.Once a lawyer agrees to handle a case, it is that lawyers
duty to serve the client with competence and diligence. Respondent has failed to fulfill this
Topic:ATP duty. It was Atty. Padilla`s responsibility to know the proper pleadings required
Petitioners:Hernandez
Respondents: Atty. Padilla When the RTC ruled against complainant and her husband, they filed a Notice of Appeal.
Ponente: DAVIDE, J Consequently, what should apply is the rule on ordinary appealed cases or Rule 44 of the Rules
on Civil Procedure. Rule 44 requires that the appellants brief be filed after the records of the
DOCTRINE: Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to him, and his case have been elevated to the CA. Respondent, as a litigator, was expected to know this
negligence in connection therewith shall render him liable. procedure.

FACTS Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to him, and his negligence in
connection therewith shall render him liable.
● Emilia Hernandez filed a disbarment case against Atty. Padilla for his alleged negligence Lawyers should not neglect legal matters entrusted to them, otherwise their negligence in
in the handling of her case. Atty. Padillia was petitioner`s layer in an ejectment case filed fulfilling their duty would render them liable for disciplinary action
against them in the RTC. The got a adverse decision wherein the DoS executed in favor of them
were cancelled and was ordered to pay Duigan damages. On appeal, they got Atty. Padilla and Respondent has failed to live up to his duties as a lawyer. When a lawyer violates his duties to
he followed the wrong procedure on appeal to the CA. his client, he engages in unethical and unprofessional conduct for which he should be held
accountable.
● Complainant and her husband filed their Notice of Appeal with the RTC. Thereafter,
the Court of Appeals (CA) ordered them to file their Appellants Brief. They chose respondent Atty is suspended for 6 months
to represent them in the case. On their behalf, he filed a Memorandum on Appeal instead of
an Appellants Brief. Thus, it was dismissed by the CA

● Complainant claims that because respondent ignored the Resolution, he acted with
deceit, unfaithfulness amounting to malpractice of law. Complainant and her husband failed
to file an appeal, because respondent never informed them of the adverse decision.
Complainant further claims that she asked respondent several times about the status of the
appeal, but despite inquiries he deliberately withheld response , to the damage and prejudice
of the spouses.

ISSUE
(1) W/N Padilla acted negligently in handling the case of Hernandez

HELD/RATIO
(1) YES
Repondent explains that he was not the lawyer from the start and that he did not have enough
time to study the factual antecedents of the case. Another reason he gives is that he had never
met complainant prior to the mandatory conference set for the disbarment Complaint she filed
against him. However, a perusal of the Memorandum of Appeal filed in the appellate court
revealed that he had signed as counsel for the defendant-appellants therein, including
complainant and her husband.

Complainant pointed out that respondent was her lawyer, because he accepted her case and
an acceptance fee in the amount of ₱7,000.
According to respondent, however, contrary to the complainants claim that he charged ₱7,000
as acceptance fee, the fee was only for the preparation of the pleading which is even low for a
Memorandum of Appeal
 21. DEL MUNDO v. CAPISTRANO ● In his Comment/Answer, Atty. Capistrano acknowledged receipt of the amount of
A.C. No. 6903 PhP78,500.00 from Suzette and his undertaking to return the agreed sum of
April 16, 2012 PhP63,000.00. He also admitted responsibility for his failure to file Suzette's petition and
By: Bea Nicor cited as justification his heavy workload and busy schedule as then City Legal Officer of
Topic: AGENCY – V. Obligations of the agent Manila and lack of available funds to immediately refund the money received.
Petitioners: SUZETTE DEL MUNDO ● The Court refered the case to IBP. IBP-CDB found that:
Respondents: ATTY. ARNEL C. CAPISTRANO o Capistrano had neglected his client's interest by his failure to inform Suzette of the
Ponente: PERLAS-BERNABE, J status of her case and to file the agreed petition for declaration of nullity of
marriage.
o his inability to refund the amount he had promised Suzette showed deficiency in
RECIT-READY: Suzette and Tuparan engaged the legal services of Capistrano to handle their his moral character, honesty, probity and good demeanor.
respective annulment. They each paid Capistrano for the services. When Suzette asked for an ● Hence, he was held guilty of violating Rule 18.03, and Rule 18.04, Canon 18 of the CPR
update on her annulment, Capistrano told her that only Tuparan’s case was filed because he and recommended the penalty of suspension for 2 years from the practice of law.
was busy. Suzette then asked to just be reimbursed instead. However, Capistrano was only ● The IBP-BOG adopted the same. However, upon appeal by Capistrano, it reduced the
able to return 5k out of the 78,500. Hence, this administrative complaint. The IBP found penalty to 1 year suspension.
Capistrano guilty of violation of CPR and recommended 2 year suspension. Capistrano
appealed, and the penalty was reduced to 1y suspension. The SC upheld the decision of IBP. ISSUE:
(1) WON Capistrano violated the CPR
DOCTRINE: A lawyer is obliged to hold in trust money of his client that may come to his
possession. HELD/RATIO:
(1) YES. Atty. Capistrano committed acts in violation of his sworn duty as a member of
FACTS: the bar.
● On January 8, 2005, Suzette del Mundo and her friend Ricky S. Tuparan (Tuparan) ● He himself admitted liability for his failure to act on Suzette's case as well as to account
engaged the legal services of Atty. Capistrano to handle the judicial declaration of nullity and return the funds she entrusted to him. He only pleaded for the mitigation of his
of their respective marriages allegedly for a fee of PhP140,000.00 each. On the same day, penalty citing the lack of intention to breach his lawyer's oath; that this is his first offense;
a Special Retainer Agreement was entered into by and between Suzette and Atty. and that his profession is the only means of his and his family's livelihood. He also prayed
Capistrano which required an acceptance fee of PhP30,000.00, appearance fee of that the adjudged amount of PhP140,000.00 be reduced to PhP73,500.00 representing
PhP2,500.00 per hearing and another PhP2,500.00 per pleading. In addition, Atty. the amount of PhP78,500.00 he received less his payment of the sum of PhP5,000.00.
Capistrano allegedly advised her to prepare 75,000 for other expenses (filing fees,
summons, fiscal, psychiatrist, commissioner). ● When a lawyer takes a client's cause, he covenants that he will exercise due diligence in
● In accordance with their agreement, Suzette gave Atty. Capistrano the total amount of protecting the latter's rights. Failure to exercise that degree of vigilance and attention
PhP78,500.00 in increments. For every payment that Suzette made, she would inquire expected of a good father of a family makes the lawyer unworthy of the trust reposed
from Atty. Capistrano on the status of her case. on him by his client and makes him answerable not just to his client but also to the legal
● In response, the latter made her believe that the two cases were already filed before the profession, the courts and society. His workload does not justify neglect in handling one's
RTC of Malabon City and awaiting notice of hearing. case because it is settled that a lawyer must only accept cases as much as he can
● Sometime in July 2005, when she could hardly reach Atty. Capistrano, she verified her efficiently handle.
case from the Clerk of Court of Malabon and discovered that while the case of Tuparan ● Moreover, a lawyer is obliged to hold in trust money of his client that may come to his
had been filed on January 27, 2005, no petition has yet been filed for her. possession. As trustee of such funds, he is bound to keep them separate and apart from
● Suzette called for a conference, which was set on July 28, 2005, where she demanded his own. Money entrusted to a lawyer for a specific purpose such as for the filing and
the refund of the total amount of PhP78,500.00, but Atty. Capistrano instead offered to processing of a case if not utilized, must be returned immediately upon demand. Failure
return the amount of PhP63,000.00 on staggered basis claiming to have incurred to return gives rise to a presumption that he has misappropriated it in violation of the
expenses in the filing of Tuparan's case, to which she agreed. On the same occasion, Atty. trust reposed on him. And the conversion of funds entrusted to him constitutes gross
Capistrano handed to her copies of her unfiled petition, Tuparan's petition and his violation of professional ethics and betrayal of public confidence in the legal profession.
Withdrawal of Appearance in Tuparan's case with instructions to file them in court, as
well as a list containing the expenses he incurred and the schedule of payment of the WHEREFORE, respondent Atty. Arnel C. Capistrano, having clearly violated Canons 16 and 18
amount of PhP63,000.00 of the Code of Professional Responsibility, is SUSPENDED from the practice of law for one
● However, Atty. Capistrano only returned the amount of PhP5,000.00 and thereafter, year with a stern warning that a repetition of the same or similar acts shall be dealt with
refused to communicate with her, prompting the institution of this administrative more severely. He is ORDERED to return to Suzette Del Mundo the full amount of
complaint.
PhP73,500.00 within 30 days from notice hereof and DIRECTEDto submit to the Court proof
of such payment.

Let copies of this Decision be entered in the personal record of respondent as a member of
the Philippine Bar and furnished the Office of the Bar Confidant, the Integrated Bar of the
Philippines and the Court Administrator for circulation to all courts in the country.
SO ORDERED.

NOTES:
CANON 16 — A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT
THAT MAY COME INTO HIS POSSESSION.

RULE 16.01 — A lawyer shall account for all money or property collected or received for or
from the client.

RULE 16.02 — A lawyer shall keep the funds of each client separate and apart from his own
and those of others kept by him.

xxx xxx xxx

CANON 18 — A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.

xxx xxx xxx

RULE 18.03 — A lawyer shall not neglect a legal matter entrusted to him, and his negligence in
connection therewith shall render him liable.

RULE 18.04 — A lawyer shall keep the client informed of the status of his case and shall respond
within a reasonable time to the client's request for information.
 22. MILLARE VS. ATTY. MONTERO order was issued with grave abuse of discretion amounting to lack of jurisdiction since the
A.C. No. 3283 petition to annul the decision are pending with the CA.
JULY 13, 1995 · The sheriff deferred the implementation of the execution until the pending case with the CA
BY: Ryan was resolved. The CA denied the petition in the special civil action case. From said decision,
____________________________________________________________________________ the RTC Abra denied the also said special civil action.
TOPIC: OBLIGATIONS OF THE AGENT
PETITIONERS: RODOLFO MILLARE ISSUE: WON Atty. Montero violated Rule 19.03 of the CPR
RESPONDENTS: ATTY. EUSTAQUIO MONTERO
PONENTE: QUIASON, J. HELD/RATIO: YES
____________________________________________________________________________ · Under Canon 19 of the CPR, lawyer is required to represent his client "within the bounds of
DOCTRINE: Under Canon 19 of the CPR, lawyer is required to represent his client "within the the law." The Code enjoins a lawyer to employ only fair and honest means to attain the lawful
bounds of the law." The Code enjoins a lawyer to employ only fair and honest means to attain objectives of his client (Rule 19.01) and warns him not to allow his client to dictate the
the lawful objectives of his client (Rule 19.01) and warns him not to allow his client to dictate procedure in handling the case (Rule 19.03). In short, a lawyer is not a gun for hire.
the procedure in handling the case (Rule 19.03). In short, a lawyer is not a gun for hire · Advocacy, within the law’s bounds, permits a lawyer to use any arguable construction of the
laws in his client’s favor. But a lawyer is not allowed to knowingly advance a claim that is
SUMMARY: Pacifica Millare got a favorable decision from the MTC which ordered the unwarranted under the law. He cannot prosecute meritless appeals or institute groundless
ejectment of Elsa Co. Atty. Montero appealed this with the RTC and CA but was denied. The actios.
MTC became final and executory but he still tried to negate the decisions of the courts as being · Under Canon 12 of the CPR, a lawyer is required to exert every effort and consider it his duty
contrary to law. He filed more actions in order to obtain a favorable judgement but all were to assist in the speedy and efficient administration of justice.
denied. He violated Canon 19 as his continuous efforts to frustrate Millare’s rights and court o Rule 12.02 – A lawyer shall not file multiple actions arising from the same cause
decisions were detrimental in serving substantial justice. His abuse of procedural rights led to o Rule 12.04 – A lawyer shall not unduly delay a case, impede the execution of a
his suspension. judgement or misuse court processes.
· The CA ordered that the records of the case be remanded and Atty Montero knew that the
FACTS: MTC decision was ripe for execution.
· Pacifica Millare, complainant’s mother, got a favorable judgement from MTC Abra which · Atty. Montero filed 6 appeals, complaints and petitions to frustrate the MTC execution of
ordered Elsa Dy Co to vacate the premises subject of an ejectment case. Elsa, through Atty. judgement over the ejectment case. Judging from the number of action filed by Atty. Montero
Montero, appealed the decision to the RTC. Elsa neither fled a supersedeas bond nor paid to forestall the same judgement, Atty. Montero was guilty of forum shopping.
rentals adjudged by the MTC. The RTC affirmed the MTC. · By willfully and knowingly abuse his rights of recourse in his effort to obtain a favorable
· The CA dismissed Elsa appeal for failure to comply with Sec. 22 of B.P. Blg. 129 and Sec. 22 of judgement which all failed, Atty. Montero violated the duty as a member of the bar to
the Interim Rules and Guidelines. The CA held that Elsa should have filed a petition for review institute actions only which are just and put up such defenses as he perceives to be truly
and not an ordinary appeal. The MTC judgement was final and executory contestable under the laws.
· Atty. Montero filed a motion and manifestation arguing that the MTC and RTC decisions were · In filing a number of pleadings, actions and petitions, Atty. Montero has made a mockery of
void for being contrary to law and equity for allowing the lessor to increase the rentals by the judicial processes and disregarded the CPR for intentionally frustrating Millare’s rights in
300%. Atty. Montero admitted to his procedural mistake and prayed that he be allowed to whose favor a judgement was rendered thus abused the procedural rules to defeat ends of
file an action for annulment. substantial justice.
· He filed such action and reformation/novation of the decision of the lower courts before the
CA insisting that the decisions were not in accordance with law but the CA dismissed it since DISPOSITIVE PORTION: WHEREFORE, respondent is SUSPENDED for one year.
there was no allegation in the present complaint to effect the judgements in the former cases
were secured through fraud.
· Atty. Montero filed an MR and for oral arguments but were also denied which prompted him
to file for petition for review on certiorari with the SC which questioned the decisions of the
lower courts which was denied by the SC and also his MR. Atty. Montero filed for a TRO
· Pacifica filed to execute the judgement of the said case which Atty. Montero opposed on the
ground that the case was still pending for review by the CA. MTC ordered the execution to
which Atty. Montero filed an MR but was denied. The RTC affirmed the MTC’s decision to
execute.
· Atty. Montero filed a special civil action in RTC Abra for certiorari, prohibition and mandamus
with preliminary injunction against the MTC and sought to annul the execution order as such