ATP BUSORG MODULE 1

Bordador vs. Luz Contracts; Agency; The basis for agency is representation. —

The basis for agency is representation. Here, there is no showing that Brigida consented to the acts of Deganos or authorized him to act on her behalf, much less with respect to the particular transactions involved. Petitioners' attempt to foist liability on respondent spouses through the supposed agency relation with Deganos is groundless and ill-advised.

Virata vs. Ng Wee Board of Directors; The board of directors is expected to be more than mere rubber stamps of the corporation and its subordinate departments; Being stewards of the company, the board is primarily charged with protecting the assets of the corporation proper ties and the conduct of its business in behalf of its stakeholders. —

Cua and the Cualopings cannot effectively distance themselves from liability by raising the defenses they did. As ratiocinated by the CA: Such submission creates a loophole, especially in this age of compartmentalization, that would create a nearly foolproof scheme whereby well-organized enterprises can evade liability for financial fraud. Behind the veil of compartmentalized departments, such enterprise could induce the investing public to invest in a corporation which is financially unable to pay with promises of definite returns on investment. If we follow the reasoning of defendants-appellants,we allow the masterminds and profiteers from the scheme to take the money and run without fear of liability from law simply because the defrauded investor would be hard -pressed to identify or pinpoint from among the various departments of a corporation which directly enticed him to part with his money. Petitioners Cua and the Cualopings bewail that the above quoted statement is overarching, sweeping, and bereft of legal or factual basis. But as per the records, the totality of circumstances in this case proves that they are either complicit to the fraud, or at the very least guilty of gross negligence, as regards the " sans recourse " transactions from the Power Merge account. The board of directors is expected to be more than mere rubber stamps of the corporation and its subordinate departments. It wields all corporate powers bestowed by the Corporation Code, including the control over its properties and the conduct of its business. Being stewards of the company, the board is primarily charged with protecting the assets of the corporation in behalf of its stakeholders.

Virata vs. Ng Wee Remedial Law; Civil Procedure; Cause of Action; Words and Phrases; A cause of action is the act or omission by which a party violates a right of another. —

A cause of action is the act or omission by which a party violates a right of another. The essential elements of a cause of action are (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief.

Virata vs. Ng Wee Mercantile Law; Negotiable Instruments Law; Promissory Notes; A promissory note is a specie of negotiable instruments. Under Section 60 of the Negotiable Instruments Law, the maker of a promissory note engages that he will pay it according to its tenor. —

A promissory note is a specie of negotiable instruments. Under Section 60 of the Negotiable Instruments Law, the maker of a promissory note engages that he will pay it according to its tenor.

Republic vs. Bañez Actions; Prescription; An action based on a written contract must be brought within ten (10) years from the time the right of action accrued .—

An action based on a written contract must be brought within ten (10) years from the time the right of action accrued. Accordingly, a cause of action on a written contract accrues only when an actual breach or violation thereof occurs. A cause of action has three elements, to wit: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff.

Orient-Air Services and Hotel Representatives vs. CA Any ambiguity in the contract, the stipulations of which are susceptible of various interpretations, shall be construed against the party who drafted it. —

An additional point before finally disposing of this issue. It is clear from the records that American Air was the party responsible for the preparation of the Agreement. Consequently, any ambiguity in this "contract of adhesion" is to be taken "contra proferentem", i.e., construed against the party who caused the ambiguity and could have avoided it by the exercise of a little more care. Thus, Article 1377 of the Civil Code provides that the interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity. To put it differently, when several interpretations of a provision are otherwise equally proper, that interpretation or construction is to be adopted which is most favorable to the party in whose favor the provision was made and who did not cause the ambiguity. We therefore agree with the respondent appellate court's declaration that: "Any ambiguity in a contract, whose terms are susceptible of different interpretations, must be read against the party who drafted it."

Virata vs. Ng Wee Mercantile Law; Investment House; Words and Phrases; An investment house is an enterprise that engages in the underwriting of securities of other corporations. —

An investment house is an enterprise that engages in the underwriting of securities of other corporations. Securities underwriting, in turn, refers to the process by which underwriters raise capital investments on behalf of the corporation issuing the securities. Thus, aside from performing the regular powers of a corporation under the Corporation Code, a duly licensed investment house is granted additional powers under Sec. 7 of Presidential Decree (PD) No. 129.

Virata vs. Ng Wee Liquidated Damages; Words and Phrases; Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof. —

Anent the twenty percent (20%) liquidated damages, the Court sees the need to reduce the amount. Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof. Although it can conclusively be deduced from the contracts that the parties intended to impose such additional charges, the Court nevertheless, by express provision in Article 2227 of the New Civil Code, has the right to temper them if they are unconscionable. Considering that the base amount of the indebtedness in this case is by itself already staggering, imposing an additional twenty percent (20%) interest against the persons liable would prove to be too cumbersome. The Court therefore sees the need to reduce the amount to only ten percent (10%) of the total maturity value of Ng Wee's investment in Power Merge.

Patrimonio vs. Gutierrez A contract of loan, like any other contract, is subject to the rules governing the requisites and validity of contracts in general. —

Another significant point that the lower courts failed to consider is that a contract of loan, like any other contract, is subject to the rules governing the requisites and validity of contracts in general. Article 1318 of the Civil Code enumerates the essential requisites for a valid contract, namely: 1. consent of the contracting parties ; 2. object certain which is the subject matter of the contract; and 3. cause of the obligation which is established. In this case, the petitioner denied liability on the ground that the contract lacked the essential element of consent. We agree with the petitioner. As we explained above, Gutierrez did not have the petitioner's written/verbal authority to enter into a contract of loan. While there may be a meeting of the minds between Gutierrez and Marasigan, such agreement cannot bind the petitioner whose consent was not obtained and who was not privy to the loan agreement. Hence, only Gutierrez is bound by the contract of loan.

Patrimonio vs. Gutierrez Civil Law; Contracts; Agency; As a general rule, a contract of agency may be oral. However, it must be written when the law requires a specific form, for example, in a sale of a piece of land or any interest therein through an agent. —

Article 1868 of the Civil Code defines a contract of agency as a contract whereby a person "binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter." Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. As a general rule, a contract of agency may be oral. However, it must be written when the law requires a specific form, for example, in a sale of a piece of land or any interest therein through an agent .

Yoshizaki vs. Joy Training Center of Aurora, Inc. Civil Law; Agency; Words and Phrases; Article 1868 of the Civil Code defines a contract of agency as a contract whereby a person "binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter." —

Article 1868 of the Civil Code defines a contract of agency as a contract whereby a person "binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter." It may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. As a general rule, a contract of agency may be oral. However, it must be written when the law requires a specific form. Specifically, Article 1874 of the Civil Code provides that the contract of agency must be written for the validity of the sale of a piece of land or any interest therein. Otherwise, the sale shall be void. A related provision, Article 1878 of the Civil Code, states that special powers of attorney are necessary to convey real rights over immovable properties.

Yoshizaki vs. Joy Training Center of Aurora, Inc. Agency couched in general terms comprises only acts of administration, even if the principal should state that he withholds no power or that the agent may execute such acts as he may consider appropriate, or even though the agency should authorize a general and unlimited management." —

Article 1877 of the Civil Code clearly states that "[a]n agency couched in general terms comprises only acts of administration, even if the principal should state that he withholds no power or that the agent may execute such acts as he may consider appropriate, or even though the agency should authorize a general and unlimited management. "

Patrimonio vs. Gutierrez Loans; Special Power of Attorney; Article 1878, paragraph 7 of the Civil Code expressly requires a special power of authority before an agent can loan or borrow money in behalf of the principal. —

Article 1878, paragraph 7 of the Civil Code expressly requires a special power of authority before an agent can loan or borrow money in behalf of the principal, to wit: Art. 1878. Special powers of attorney are necessary in the following cases : x x x x (7) To loan or borrow money , unless the latter act be urgent and indispensable for the preservation of the things which are under administration (emphasis supplied) Article 1878 does not state that the authority be in writing. As long as the mandate is express, such authority may be either oral or written. We unequivocably declared in Lim Pin v. Liao Tian, et al., 115 SCRA 290 (1982), that the requirement under Article 1878 of the Civil Code refers to the nature of the authorization and not to its form. Be that as it may, the authority must be duly established by competent and convincing evidence other than the self-serving assertion of the party claiming that such authority was verbally given.

Country Bankers Insurance Corporation vs. Keppel Cebu Shipyard Agency by Estoppel; The principal is solidarily liable with the agent even when the latter has exceeded his authority, if the principal allowed him to act as though he had full powers. —

Article 1911, on the other hand, is based on the principle of estoppel, which is necessary for the protection of third persons. It states that the principal is solidarily liable with the agent even when the latter has exceeded his authority, if the principal allowed him to act as though he had full powers. However, for an agency by estoppel to exist, the following must be established: 1. The principal manifested a representation of the agent's authority or knowingly allowed the agent to assume such authority; 2. The third person, in good faith, relied upon such representation; and 3. Relying upon such representation, such third person has changed his position to his detriment.

Virata vs. Ng Wee Remedial Law; Civil Procedure; Real Party-in-Interest; Section 2, Rule 3 of the Rules of Court defines a real party-in-interest as "the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit." —

As a general rule, every action must bep rosecuted or defended in the name of the real party-in-interest. Section 2, Rule 3 of the Rules of Court defines a real party-in-interest as " the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit . " In this case, it is worth recalling that the procedural issue on whether or not Ng Wee is the real party-in-interest had already been resolved by this Court in G.R. No. 162928. There, the Court found neither abuse of discretion on the part of the RTC nor reversible error on the CA when they ruled that Ng Wee had the legal personality to file the Complaint to recover his investments. The resolutions by the CA and this Court sustaining the October 4, 2001 Order had already attained finality and could no longer be modified. Concomitantly, the parties are barred from reraising the issues settled therein, pursuant to the law of the case doctrine.

Salvador vs. Rabaja Remedial Law; Civil Procedure; Supreme Court; Jurisdiction; As a general rule, the Supreme Court's (SC's) jurisdiction in a Rule 45 petition is limited to the review of pure questions of law .—

As a general rule, the Court's jurisdiction in a Rule 45 petition is limited to the review of pure questions of law. A question of law arises when the doubt or difference exists as to what the law is on a certain state of facts. Negatively put, Rule 45 does not allow the review of questions of fact. A question of fact exists when the doubt or difference arises as to the truth or falsity of the allegations.

Country Bankers Insurance Corporation vs. Keppel Cebu Shipyard Persons dealing with an assumed agent are bound at their peril, and if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to prove it. —

As this Court held in Litonjua, Jr. v. Eternit Corp. , 490 SCRA 204, 224-225 (2006): A person dealing with a known agent is not authorized, under any circumstances, blindly to trust the agents; statements as to the extent of his powers; such person must not act negligently but must use reasonable diligence and prudence to ascertain whether the agent acts within the scope of his authority. The settled rule is that, persons dealing with an assumed agent are bound at their peril, and if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to prove it. In this case, the petitioners failed to discharge their burden; hence, petitioners are not entitled to damages from respondent EC.

Salvador vs. Rabaja Exemplary Damages; As to the award of exemplary damages, Article 2229 of the New Civil Code provides that exemplary damages may be imposed by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages .—

As to the award of exemplary damages, Article 2229 of the New Civil Code provides that exemplary damages may be imposed by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. The claimant must first establish his right to moral, temperate, liquidated or compensatory damages. In this case, considering that Spouses Rabaja failed to prove moral or compensatory damages, then there could be no award of exemplary damages.

Virata vs. Ng Wee Ascribing liability to a corporate director, trustee, or officer by invoking Sec. 31 of the Corporation Code is distinct from the remedial concept of piercing the corporate veil. —

Ascribing liability to a corporate director, trustee, or officer by invoking Sec. 31 of the Corporation Code is distinct from the remedial concept of piercing the corporate veil. While Sec. 31 expressly lays down specific instances wherein the mentioned personalities can be held liable in their personal capacities, the doctrine of piercing the corporate veil, on the other hand, is an equitable remedy resorted to only when the corporate fiction is used, among others, to defeat public convenience, justify wrong, protect fraud or defend a crime. Applying the doctrine, petitioner cannot escape liability by claiming that he was merely performing his function as Vice President for Operations and was duly authorized to sign the Side Agreements in Wincorp's behalf. The Credit Line Agreement is patently contradictory if not irreconcilable with the Side Agreements, which he executed on the same day as the representative for Wincorp. The execution of the Side Agreements was the precursor to the fraud. Taken with Wincorp's subsequent offer to its clients of the " sans recourse " transactions allegedly secured by the Promissory Notes, it is a clear indicia of fraud for which Reyes must be held accountable.

Virata vs. Ng Wee Warranties; Just as in any other contracts of sale,the vendor of securities is likewise bound by certain warranties, including those contained in Article 1628 of the New Civil Code on assignment of credits. —

Aside from its liability arising from its fraudulent transactions, Wincorp is also liable to Ng Wee for breach of warranty. It cannot be emphasized enough that Wincorp is not the mere agent that it claims to be; its operations ought not be reduced to the mere matching of investors withcorporate borrowers. Instead, it must be borne in mind that it not only performed the functions of a financial intermediary duly registered and licensed to perform the powers of an investment house, it is also engaged in the selling of securities, albeit in violation of various commercial laws. And just as in any other contracts of sale, the vendor of securities is likewise bound by certain warranties, including those contained in Article 1628 ofthe New Civil Code on assignment of credits, to wit: Article 1628. The vendor in good faith shall be responsible for the existence and legality of the credit at the time of the sale , unless it should have been sold as doubtful; but not for the solvency of the debtor, unless it has been so expressly stipulated or unless the insolvency was prior to the sale and of common knowledge. x x x x The vendor in bad faith shall always be answerable for the payment of all expenses, and for damages .

Republic vs. Bañez Agency by Estoppel; In an agency by estoppel or apparent authority, "[t]he principal is bound by the acts of his agent with the apparent authority which he knowingly permits the agent to assume, or which he holds the agent out to the public as possessing."

Assuming further that Hojilla exceeded his authority, the respondents are still solidarily liable because they allowed Hojilla to act as though he had full powers by impliedly ratifying Hojilla's actions — through action by omission. This is the import of the principle of agency by estoppel or the doctrine of apparent authority. In an agency by estoppel or apparent authority, "[t]he principal is bound by the acts of his agent with the apparent authority which he knowingly permits the agent to assume, or which he holds the agent out tothe public as possessing." The respondents' acquiescence of Hojilla's acts was made when they failed to repudiate the latter's acts. They knowingly permitted Hojilla to represent them and petitioners were clearly misled into believing Hojilla's authority. Thus, the respondents are now estopped from repudiating Hojilla's authority, and Hojilla's actions are binding upon the respondents.

Manotok Brothers, Inc. vs. CA Civil Law; Agency; Private respondent, as efficient procuring cause in bringing about sale, is entitled to agent's commission. —

At first sight, it would seem that private respondent is not entitled to any commission as he was not successful in consummating the sale between the parties, for the sole reason that when the Deed of Sale was finally executed, his extended authority had already expired. By this alone, one might be misled to believe that this case squarely falls within the ambit of the established principle that a broker or agent is not entitled to any commission until he has successfully done the job given to him. Going deeper however into the case would reveal that it is within the coverage of the exception rather than of the general rule, the exception being that enunciated in the case of Prats vs. Court ofAppeals. In the said case, this Court ruled in favor of claimant-agent, despite the expiration of his authority, when a sale was finally consummated. In its decision in the abovecited case, this Court said, that while it was respondent court's (referring to the Court of Appeals) factual findings that petitioner Prats (claimant-agent) was not the efficient procuring cause in bringing about the sale (prescinding from the fact of expiration of his exclusive authority), still petitioner was awarded compensation for his services. And We quote: "In equity, however, the Court notes that petitioner had diligently taken steps to bring back together respondent Doronila andthe SSS. x x x x x x Under the circumstances, the Court grants in equity the sum of One Hundred Thousand Pesos (P100,000.00) by way of compensation for his efforts and assistance in the transaction, which however was finalized and consummated after the expiration of his exclusive authority x x x." (Italics supplied.) From the foregoing, it follows then that private respondent herein, with more reason, should be paid his commission.

Virata vs. Ng Wee Appeals; Petition for Review on Certiorari; As a general rule, only questions of law may be raised in a Petition for Review on Certiorari under Rule 45 of the Rules of Court. —

Axiomatic in this jurisdiction is that, as a general rule, only questions of law may be raised in a Petition for Review on Certiorari under Rule 45 of the Rules of Court. The appellate court's findings of fact being conclusive, the jurisdiction of this Court in appealed cases is limited to reviewing and revising the errors of law. As We have emphatically declared in a long line of cases, " it is not the function of the Supreme Court to analyze or weigh such evidence all over again, its jurisdiction being limited to reviewing errors of law that might have been committed by the lower court ."

Ticong vs. Malim Contracts; Basic is the principle that a contract (the Memorandum of Agreement [MOA] in this case) is the law between the parties, and its stipulations are binding on them, unless the contract is contrary to law, morals, good customs, public order or public policy. —

Basic is the principle that a contract (the MOA in this case) is the law between the parties, and its stipulations are binding on them, unless the contract is contrary to law, morals, good customs, public order or public policy. The Ticongs, having freely and willingly entered into a contract by executing the MOA, cannot renege on their obligation to pay the overprice commission on the flimsy excuse that the respondents were not licensed brokers who did not spend much money in partially negotiating with the Buyer.

Virata vs. Ng Wee Mercantile Law; Corporations; Liability of Corporate Officers; Separate Legal Personality; Obligations incurred by the corporation, acting through its directors, officers and employees, are its sole liabilities, and said personalities are generally not held personally liable thereon; By way of exception, a corporate director, a trustee or an officer, may be held solidarily liable with the corporation under Sec. 31 of the CorporationCode. —

Basic is the rule that a corporation is invested by law with a personality separate and distinct from that of the persons composing it as well as from that of any other legal entity to which it may be related. Following this, obligations incurred by the corporation, acting through its directors, officers and employees, are its sole liabilities, and said personalities are generally not held personally liable thereon. By way of exception, a corporate director, a trustee or an officer, may be held solidarily liable with the corporation under Sec. 31 of the Corporation Code which reads: Section 31. Liability of directors, trustees or officers .— Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons. When a director, trustee or officer attempts to acquire or acquire, in violation of his duty, any interest adverse to the corporation in respect of any matter which has been reposed in him in confidence, as to which equity imposes a disability upon him to deal in his own behalf, he shall be liable as a trustee for the corporation and must account for the profits which otherwise would have accrued to the corporation.

Bordador vs. Luz A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. —

Besides, it was grossly and inexcusably negligent of petitioners to entrust to Deganos, not once or twice but on at least six occasions as evidenced by six receipts, several pieces of jewelry of substantial value without requiring a written authorization from his alleged principal. A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent.

Orient-Air Services and Hotel Representatives vs. CA Agency ; An agent-principal relationship can only be effected with the consent of the principal, and must not, in any way be compelled by law or by any court. —

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

Dominion Insurance Corporation vs. CA Civil Law; Contracts; Agency; The basis for agency is representation; There must be an actual intention by the principal to appoint and on the part of the agent an intention to accept the appointment and act on it, otherwise there is generally no agency. —

By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. The basis for agency is representation. On the part of the principal, there must be an actual intention to appoint or an intention naturally inferrable from his words or actions; and on the part of the agent, there must be an intention to accept the appointment and act on it, and in the absence of such intent, there is generally no agency.

Rallos vs. Felix Go Chan & Sons Realty Corporation Agency, its concept, essential elements and characteristics. —

By the relationship of agency, one party called the principal authorizes another called the agent to act for and in his behalf in transactions with third persons. The essential elements of agency are: (1) there is consent, express or implied, of the parties to establish the relationship: (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for himself; and (4) the agent acts within the scope of his authority. Agency is basically personal, representative, and derivative in nature. The authority of the agent to act emanates from the powers granted to him by his principal; his act is the act of the principal if done within the scope of the authority. "He who acts through another acts himself."

Rallos vs. Felix Go Chan & Sons Realty Corporation FACTS

Concepcion and Gerundia Rallos were sisters and registered co-owners of a parcel of land located at Cebu. On April 21 , 1954, the sisters executed a special power of attorney in favor of their brother, Simeon Rallos , authorizing him to sell for and in their Behalf the said lot. On March 3, 1955, Concepcion Rallos died . On September 12, 1955, S imeon Rallos sold the undivided shares of his sisters Concepcion and Gerundia to Felix Go Chan & Sons Realty Corporation for the sum of P10,686.90. The deed of sale was registered in the Registry of Deeds of Cebu and a new Transfer Certificate of Title was issued in the name of the vendee. Ramon Rallos (petitioner) as administrator of the Intestate Estate of Concepcion Rallos filed a complaint in CFI of Cebu, praying that the sale of the undivided share of the deceased Concepcion Rallos be declared unenforceable, and said share be reconveyed to her estate. Court ruled in favor of the administrator of the estate. Declaring the deed of sale, null and void insofar as the one-half pro indiviso share of Concepcion Rallos is concerned. CA reversed the RTC. It upheld the validity of the sale and dismissed the complaint.

Virata vs. Ng Wee Corporations; Separate Legal Personality; Piercing the Veil of Corporate Fiction; When the notion of separate juridical personality is used (1) to defeat public convenience, justify wrong, protect fraud or defend crime; (2) as a device to defeat the labor laws; or (3) when the corporation is merely an adjunct, a business conduit or an alter ego of another corporation, this separate personality of the corporation may be disregarded or the veil of corporate fiction pierced. —

Concept Builders, Inc. v. NLRC , 257 SCRA 149 (1996), instructs that as a fundamental principle of corporation law, a corporation is an entity separate and distinct from its stockholders and from other corporations to which it may be connected. But, this separate and distinct personality of a corporation is merely a fiction created by law for convenience and to promote justice. Thus, authorities discuss that when the notion of separate juridical personality is used (1) to defeat public convenience, justify wrong, protect fraud or defend crime; (2) as a device to defeat the labor laws; or (3) when the corporation is merely an adjunct, a business conduit or an alterego of another corporation, this separate personality of the corporation maybe disregarded or the veil of corporate fiction pierced.

Virata vs. Ng Wee Quasi-Banking Functions; Conspicuously absent in the enumerated additional powers of an investment house is the authority to perform quasi-banking functions. —

Conspicuously absent in the enumerated additional powers of an investment house, however, is the authority to perform quasi-banking functions. Even as a financial intermediary, investment houses are not allowed to engage in quasi-banking functions, unless authorized by the Monetary Board through the issuance of a Certificate of Authority. The Omnibus Rules and Regulations for Investment Houses and Universal Banks Registered as Underwriters defines "quasi-banking function " as the function of "borrowing funds for the borrower's own account from 20 or more persons or corporate lenders at any one time, through the issuance, endorsement or acceptance of debt instruments of any kind other than deposits which may include but need not be limited to acceptances, promissory notes, participations, certificates of assignment or similar instruments with recourse, trust certificates or of repurchase agreements for purposes of relending or purchasing of receivables and other obligations ."

Patrimonio vs. Gutierrez RULING

Contracts of Agency May be Oral Unless The Law Requires a Specific Form Article 1868 of the Civil Code defines a contract of agency as a contract whereby a person "binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter." Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. As a general rule, a contract of agency may be oral. However, it must be written when the law requires a specific form, for example, in a sale of a piece of land or any interest therein through an agent. Article 1878 paragraph 7 of the Civil Code expressly requires a special power of authority before an agent can loan or borrow money in behalf of the principal, to wit: Art. 1878. Special powers of attorney are necessary in the following cases: xxxx (7) To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration. (emphasis supplied) Article 1878 does not state that the authority be in writing. As long as the mandate is express, such authority may be either oral or written. We unequivocably declared in Lim Pin v. Liao Tian, et al.,that the requirement under Article 1878 of the Civil Code refers to the nature of the authorization and not to its form. Be that as it may, the authority must be duly established by competent and convincing evidence other than the self serving assertion of the party claiming that such authority was verbally given, thus: The requirements of a special power of attorney in Article 1878 of the Civil Code and of a special authority in Rule 138 of the Rules of Court refer to the nature of the authorization and not its form. The requirements are met if there is a clear mandate from the principal specifically authorizing the performance of the act. As early as 1906, this Court in Strong v. Gutierrez-Repide (6 Phil. 680) stated that such a mandate may be either oral or written, the one vital thing being that it shall be express. And more recently, We stated that, if the special authority is not written, then it must be duly established by evidence. The Contract of Loan Entered Into by Gutierrez in Behalf of the Petitioner Should be Nullified for Being Void; Petitioner is Not Bound by the Contract of Loan. A review of the records reveals that Gutierrez did not have any authority to borrow money in behalf of the petitioner.Records do not show that the petitioner executed any special power of attorney (SPA) in favor of Gutierrez. In fact, the petitioner's testimony confirmed that he never authorized Gutierrez (or anyone for that matter), whether verbally or in writing, to borrow money in his behalf, nor was he aware of any such transaction. The records show that Marasigan merely relied on the words of Gutierrez without securing a copy of the SPA in favor of the latter and without verifying from the petitioner whether he had authorized the borrowing of money or release of the check. He was thus bound by the risk accompanying his trust on the mere assurances of Gutierrez.

Republic vs. Bañez Agency; In a contract of agency, the agent acts for and in behalf of the principal on matters within the scope of the authority conferred upon him, such that, the acts of the agent have the same legal effect as if they were personally done by the principal .—

Contrary to the findings of the lower court, the present case is a case of an express agency, where, Hojilla, the agent, binds himself to represent another, the principal, who are herein respondents, with the latter's express consent or authority. In a contract of agency, the agent acts for and in behalf of the principal on matters within the scope of the authority conferred upon him, such that, the acts of the agent have the same legal effect as if they were personally done by the principal. Because there is an express authority granted upon Hojilla to represent the respondents as evidenced by the SPA, Hojilla's actions bind the respondents.

Manotok Brothers, Inc. vs. CA Civil Law; Agency; Private respondent, as efficient procuring cause in bringing about sale, is entitled to agent's commissionn. —

Contrary to what petitioner advances, the case of Danon vs. Brimo, on which it heavily anchors its justification for the denial of private respondent's claim, does not apply squarely to the instant petition. Claimant-agent in said case fully comprehended the possibility that he may not realize the agent's commission as he was informed that another agent was also negotiating the sale and thus, compensation will pertain to the one who finds a purchaser and eventually effects the sale. Such is not the case herein. On the contrary, private respondent pursued with his goal of seeing that the parties reach an agreement, on the belief that he alone was transacting the business with the City Government as this was what petitioner made it to appear.

Virata vs. Ng Wee It would appear on paper that offering the "sans recourse" transactions does not qualify as the performance of a quasi-banking function specifically because it is "sans recourse" against Wincorp. —

Given the definition, it would appear on paper that offering the " sans recourse " transactions does not qualify as the performance of a quasi-banking function specifically because it is " sans recourse " against Wincorp. As provided under S4101Q.3 of the Manual of Regulations for Non-bank Financial Institutions: S4101Q.3. Transactions not considered quasi-banking. The following shall not constitute quasi-banking: x x x x a. The mere buying and selling without recourse of instruments mentioned in Sec. 4101Q: Provided, that : (1) The institution selling without recourse shall indicate or stamp in conspicuous print on the instrument/s, as well as on the confirmation of sale (COS), the phrase without recourse or sans recourse and the following statement: (name of financial intermediary) assumes no liability for the payment directly or indirectly, of the instrument (2) In the absence of the phrase without recourse or sans recourse and without the above required accompanying statement, the instrument so issued, endorsed or accepted shall automatically be considered as falling within the purview of the rules on quasi-banking. (emphasis added) However, the Court affirms the appellate court's finding that the true nature of the " sans recourse "transactions contradicts Wincorp's averment. A perusal of the records would show that Wincorp engaged in practices that rendered the transactions to be "with recourse " and, consequently, within the ambit of quasi-banking rules.

Rallos vs. Felix Go Chan & Sons Realty Corporation No parallel can be drawn between the case of attorney-in-fact who after death of his principal sold the latter's share in the land pursuant to a special power of attorney which the principal had executed in his favor and that of an innocent purchaser for value of registered land. —

Holding that the good faith of a third person in dealing with an agent affords the former sufficient protection, respondent court drew a "parallel" between the instant case and that of an innocent purchaser for value of a registered land, stating that if a person purchases a registered land from one who acquired it in bad faith—even to the extent of forging or falsifying the deed of sale in his favor—the registered owner has no recourse against such innocent purchaser for value but only against the forger. To support the correctness of this "parallelism", respondent corporation, in its brief, cites the case of Blondeau, et al. vs. Nano and Vallejo, 61 Phil. 625. x x x The Blondeau decision, however, is not on all fours with the case before Us because here We are confronted with one who admittedly was an agent of his sister and who sold the property of the latter after her death with full knowledge of such death. The situation is expressly covered by a provision of law on agency the terms of which are clear and unmistakable leaving no room for an interpretation contrary to its tenor, in the same manner that the ruling in Blondeau and the cases cited therein found a basis in Section 55 of the Land Registration Law.

Virata vs. Ng Wee Dismissal of Actions; Failure to State a Cause of Action; Hornbook doctrine is that when the affirmative defense of dismissal is grounded on the failure to state a cause of action, a ruling thereon should be based on the facts alleged in the complaint. —

Hornbook doctrine is that when the affirmative defense of dismissal is grounded on the failure to state a cause of action, a ruling thereon should be based on the facts alleged in the complaint. Otherwise stated, whether or not Ng Wee successfully stated a cause of action requires hypothetically admitting and scrutinizing the allegations in his Complaint.

Lim vs. CA A contract of agency to sell on commission basis does not belong to any of the three categories, hence it is valid and enforceable in whatever form it may be entered into. —

However, there are some provisions of the law which require certain formalities for particular contracts. The first is when the form is required for the validity of the contract; the second is when it is required to make the contract effective as against third parties such as those mentioned in Articles 1357 and 1358; and the third is when the form is required for the purpose of proving the existence of the contract, such as those provided in the Statute of Frauds in Article 1403. A contract of agency to sell on commission basis does not belong to any of these three categories, hence it is valid and enforceable in whatever form it may be entered into.

Republic vs. Bañez FACTS

In 1976, Antonio Banez and the other respondents offered for sale a parcel of land with an area of 2,000sqm in Brgy. Calaba, Abra to Cellophil Resources Corp. (CRC). Pursuant to the offer to sell, respondents executed a Letter Agreement irrevocably giving CRC option to purchase the subject property, which CRC accepted. The purchase price shall be 20 pesos per sqm or a total of P400K. Respondents asked for several cash advances which reached the total amount of, more or less, P217K to be deducted from the purchase price of P400K. After paying the cash advances to respondents, CRC constructed staff houses and introduced improvements on the subject property. As respondents would be staying abroad for a time, they executed an SPA in favor of Egardo Hojilla, authorizing him to (1) take all necessary steps to cause a portion of the lot to be brought under the operation of RA 496, and to cause the issuance in the respondents' name of the corresponding original certificate of title and (2) to do all acts and things and to execute all papers and documents of whatever nature or kind required for the accomplishments of the aforesaid purpose. CRC stopped its operation. The DBP and National Development Company took over CRC's operation and turned over CRC's equity to Asset Privatization Trust (APT) which is a gov't agency created by virtue of Proc. No. 50. APT's function is to take title to and possession of, provisionally manage and dispose of nonperforming assets of government financial institutions. Upon the expiration of APT's term on Dec. 31, 2000, the gov't issued EO No. 323, which created the Privatization and Management Office (PMO). By virtue of the EO, the powers, functions and the APT were transferred to the PMO. Alleged by the petitioner (PMO), respondents declared afterwards the subject property as Urbano Banez property, rented out to third parties the staff houses petitioner constructed, and ordered its guards to prohibit the petitioner from entering the compound, which impelled the petitioner to file a complaint for specific performance, recovery of possession and damages against respondents, including Hojilla (agent). The complaint prayed for respondents to surrender and deliver the title of the subject property, and execute a Deed of Absolute Sale in favor of the petitioner upon full payment. Hojilla filed a Motion to Dismiss on the grounds that he was not a real party-in-interest and that the action was barred by the Statute of Limitations. According to the RTC, the letters petitioner sent to respondents were not demands for respondents to comply with their obligation to deliver the title as to interrupt the running of the prescriptive period. The RTC held that because the written contract was executed on Dec. 7, 1981, then the complaint that was filed was more than 18 years since the contract was executed beyond the 10 year prescriptive period. Within that 18 year period, there was no act on the part of the petitioner, whether judicial or extrajudicial, to interrupt prescription. It likewise held that while petitioner paid cash advances to respondents for the processing of the registration of the title, which totaled more or less P217K, petitioner has not demanded compliance by respondents of their obligation to execute the absolute deed of sale and the delivery of the OCT to the property to petitioner upon payment of the purchase price stipulated. There were letters addressed to respondents but these were not demands for compliance sufficient under the law to interrupt the prescriptive period. On appeal, the CA affirmed the ruling of the RTC on the ground that the complaint was barred by the Statute of Limitations. The CA found that the extrajudicial demand to respondents did not serve to toll the running of the prescriptive period; that these letters simply called the attention of Hojilla to return the properties and unlock the gates. As regards the letter dated on July 6, 1999, the CA ruled that because the letter was addressed to Hojilla, who was only an attorney-in fact authorized to register the property, it was not binding upon the respondents. On the issue of running of prescriptive period, the CA opined that because the subject property is a patrimonial property of the State when APT became the controlling stockholder of the CRC, prescription may run against the state. Thus, the reasonable period within which to register the property is 3 years; that the cause of action of the petitioner accrued 3 years from the time the Contract was executed on 7 Dec. 1981. The petitioner argues that although there is a 10 year limitation within which to file a case based on a written contract, the period was interrupted due to a written acknowledgement of respondent's obligation and demand by petitioner. The petitioner referred to the letters sent by Hojilla. In a letter dated Aug. 15, 1984, respondents affirmed their undertaking that they will claim full payment of the property upon presentation of a clean title and the execution of the Absolute Deed of Sale. Based on Hojilla's representation as stated in the letter, petitioners argue that Hohilla is estopped by his own acts and for misleading the petitioner.

Virata vs. Ng Wee Accommodation Party; In Gonzales v. Philippine Commercial and International Bank, 644 SCRA 180 (2011), the SupremeCourt (SC) held that an accommodation party lends his name to enable the accommodated party to obtain credit or to raise money; he receives no part of the consideration for the instrument but assumes liability to the other party or parties thereto. —

In Gonzales v. Philippine Commercial and International Bank , 644 SCRA 180 (2011), the Court held that an accommodation party lends his name to enable the accommodated party to obtain credit or to raise money; he receives no part of the consideration for the instrument but assumes liability to the other party or parties thereto. Prescinding from the foregoing, an accommodation party is one who meets all the following three requisites, viz .: (1) he must be a party to the instrument, signing as maker, drawer, acceptor, or indorser; (2) he must not receive value therefor; and (3) he must sign for the purpose of lending his name or credit to some other person.

Republic vs. Bañez Civil Law; Loans; Prescription; In Philippine National Railways v. NLRC, 177 SCRA 740 (1989), it was stated that a written acknowledgment of debt or obligation effectively interrupts the running of the prescriptive period and sets the same running anew .—

In Philippine National Railways v. NLRC , 177 SCRA 740 (1989), it was stated that a written acknowledgment of debt or obligation effectively interrupts the running of the prescriptive period and sets the same running anew. Hence, because Hojilla's letter dated 15 August 1984 served as a written acknowledgment of the respondents' debt or obligation, it interrupted the running of the prescriptive period and set the same running anew with a new expiry period of 15 August 1994.

Tan vs. Gullas Civil Law; Contracts; "Broker" defined . —

In Schmid and Oberly v. RJL Martinez Fishing Corporation , we defined a "broker" as "one who is engaged, for others, on a commission, negotiating contracts relative to property with the custody of which he has no concern; the negotiator between other parties, never acting in his own name but in the name of those who employed him. x x x a broker is one whose occupation is to bring the parties together, in matters of trade, commerce or navigation." (Emphasis supplied)

Country Bankers Insurance Corporation vs. Keppel Cebu Shipyard Civil Law; Agency; In a contract of agency, a person, the agent, binds himself to represent another, the principal, with the latter's consent or authority; By this legal fiction of representation, the actual or legal absence of the principal is converted into his legal or juridical presence. —

In a contract of agency, a person, the agent, binds himself to represent another, the principal, with the latter's consent or authority. Thus, agency is based on representation, where the agent acts for and in behalf of the principal on matters within the scope of the authority conferred upon him. Such "acts have the same legal effect as if they were personally done by the principal. By this legal fiction of representation, the actual or legal absence of the principal is converted into his legal or juridical presence."

Country Bankers Insurance Corporation vs. Keppel Cebu Shipyard RULING

In a contract of agency, a person, the agent, binds himself to represent another, the principal, with the latter's consent or authority. Thus, agency is based on representation, where the agent acts for and in behalf of the principal on matters within the scope of the authority conferred upon him. Such "acts have the same legal effect as if they were personally done by the principal. By this legal fiction of representation, the actual or legal absence of the principal is converted into his legal or juridical presence." Our law mandates an agent to act within the scope of his authority. The scope of an agent's authority is what appears in the written terms of the power of attorney granted upon him. Under Article 1878 (11) of the Civil Code, a special power of attorney is necessary to obligate the principal as a guarantor or surety. In the case at bar, CBIC could be held liable even if Quinain exceeded the scope of his authority only if Quinain's act of issuing Surety Bond is deemed to have been performed within the written terms of the power of attorney he was granted. The Special Power of Attorney accorded to Quinain clearly states the limits of his authority and particularly provides that in case of surety bonds, it can only be issued in favor of the Department of Public Works and Highways, the National Power Corporation, and other government agencies; furthermore, the amount of the surety bond is limited to P500,000.00. This Court finds that the terms of the foregoing contract specifically provided for the extent and scope of Quinain's authority, and Quinain has indeed exceeded them. The CBIC is released from its liability on the Surety Bond and Endorsement.

Virata vs. Ng Wee Sureties; The basis for the liability under Section 29 is the underlying relation between the accommodated party and the accommodation party, which is one of principal and surety. In a contract of surety, a person binds himself solidarily liable with the principal debtor of an obligation. —

In gratia argumenti that the above elements are established facts herein, liability will still attach to the accommodation parties pursuant to Sec. 29 of the Negotiable Instruments Law. The provision states: Sec. 29. Liability of accommodation party . —An accommodation party is one who has signed the instrument as maker, drawer, acceptor, or indorser, without receiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder for value, notwithstanding such holder, at the time of taking the instrument, knew him to be only an accommodation party . (emphasis added) The basis for the liability under Section 29 is the underlying relation between the accommodated party and the accommodation party, which is one of principal and surety. In a contract of surety, a person binds himself solidarily liable with the principal debtor of an obligation. But though a suretyship agreement is, in essence, accessory or collateral to a valid principal obligation, the surety's liability to the creditor is immediate, primary, and absolute. He is directly and equally bound with the principal. In a similar fashion, the accommodation party cum surety in a negotiable instrument is deemed an original promisor and debtor from the beginning; he is considered in law as the same party as the debtor in relation to whatever is adjudged touching the obligation of the latter since their liabilities are so interwoven as to be inseparable. It is beyond cavil then that Power Merge and Virata can be held liable for the amounts stated in the Promissory Notes. Consequently, they are also liable for the assignment to Ng Wee of portions thereof as embodied in the Confirmation Advices.

Rallos vs. Felix Go Chan & Sons Realty Corporation General rule is that an act of agent after death of his principal is void ab initio unless the same falls under exceptions in Arts. 1930 and 1931 of the Civil Code; Art 1931 being an exception to the general rule is to be strictly construed . —

In sustaining the validity of the sale to respondent corporation, the Court of Appeals reasoned out that there is no provision in the Civil Code which provides that whatever is done by an agent having knowledge of the death of his principal is void even with respect to third persons who may have contracted with him in good faith and without knowledge of the death of the principal. We cannot see the merits of the foregoing argument as it ignores the existence of the general rule enunciated in Art. 1919 that the death of the principal extinguishes the agency. That being the general rule it follows a fortiori that any act of an agent after the death of his principal is void ab initio unless the same falls under the exceptions provided for in the aforementioned Articles 1930 and 1931. Article 1931, being an exception to the general rule, is to be strictly construed; it is not to be given an interpretation or application beyond the clear import of its terms for otherwise the courts will be involved in a process of legislation outside of their judicial function.

Rallos vs. Felix Go Chan & Sons Realty Corporation Art. 1930 and Art. 1931 of the Civil Code exceptions to general rule provided in Art. 1919 of the Civil Code, that death of principal revokes ipso jure the agency. —

Is the general rule provided for in Art. 1919 that the death of the principal or of the agent extinguishes the agency, subject to any exception, and if so, is the instant case within that exception? That is the determinative point in issue in this litigation x x x Articles 1930 and 1931 of the Civil Code provide the exceptions to the general rule aforementioned.

Virata vs. Ng Wee Investment Contracts; Words and Phrases; Included in the list of securities that require registration prior to offer sale, or distribution are investment contracts. An investment contract refers to a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others. —

Included in the list of securities that require registration prior to offer, sale, or distribution are investment contracts. An investment contract refers to a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others. It is presumed to exist whenever a person seeks to use the money or property of others on the promise of profits. In this jurisdiction, the Court employs the Howey test, named after the landmark case of Securities and Exchange Commission v. W.J. Howey Co., 328 US293 (1946), to determine whether or not the security being offered takes the form of an investment contract. The case served as the foundation for the domestic definition of the said security. Under the Howey test, the following must concur for an investment contract to exist: (1) a contract, transaction, or scheme; (2) an investment of money; (3) investment is made in a common enterprise; (4) expectation of profits; and (5) profits arising primarily from the efforts of others. Indubitably, all of the elements are present in the extant case.

Orient-Air Services and Hotel Representatives vs. CA Contracts; The various stipulation in the contract must be read together to give effect to all. —

It is a well settled legal principle that in the interpretation of a contract, the entirety thereof must be taken into consideration to ascertain the meaning of its provisions. The various stipulations in the contract must be read together to give effect to all. After a careful examination of the records, the Court finds merit in the contention of Orient Air that the Agreement, when interpreted in accordance with the foregoing principles, entitles it to the 3% overriding commission based on total revenue, or as referred to by the parties, "total flown revenue."

Bordador vs. Luz Courts; Speedy Disposition of Cases; It is ironic that while some litigants malign the judiciary for being supposedly slothful in disposing of cases, petitioners are making a show of calling out for justice because the Court of Appeals issued a resolution disposing of a case sooner than expected of it. —

It is ironic that while some litigants malign the judiciary for being supposedly slothful in disposing of cases, petitioners are making a show of calling out for justice because the Court of Appeals issued a resolution disposing of a case sooner than expected of it. They would even deny the exercise of discretion by the appellate court to prioritize its action on cases in line with the procedure it has adopted in disposing thereof and in declogging its dockets. It is definitely not for the parties to determine and dictate when and how a tribunal should act upon those cases since they are not even aware of the status of the dockets and the internal rules and policies for acting thereon.

Yoshizaki vs. Joy Training Center of Aurora, Inc. Remedial Law; Civil Procedure; Courts; Jurisdiction; Jurisdiction over the subject matter is the power to hear and determine cases of the general class to which the proceedings before a court belong. —

Jurisdiction over the subject matter is the power to hear and determine cases of the general class to which the proceedings before a court belong. It is conferred by law. The allegations in the complaint and the status or relationship of the parties determine which court has jurisdiction over the nature of an action. The same test applies in ascertaining whether a case involves an intra-corporate controversy.

Virata vs. Ng Wee Fraud; In its general sense, fraud is deemed to comprise anything calculated to deceive, including all acts and omissions and concealment involving a breach of legal or equitable duty, trust, or confidence justly reposed, resulting in damage to another, or by which an undue and unconscientious advantage is taken of another. —

Jurisprudence defines "fraud" as the voluntary execution of a wrongful act, or a willful omission, knowing and intending the effects which naturally and necessarily arise from such act or omission. In its general sense, fraud is deemed to comprise anything calculated to deceive, including all acts and omissions and concealment involving a breach of legal or equitable duty, trust, or confidence justly reposed, resulting in damage to another, or by which an undue and unconscientious advantage is taken of another. Fraud is also described as embracing all multifarious means which human ingenuity can device, and which are resorted to by one individual to secure an advantage over another by false suggestions or by suppression of truth and includes all surprise, trick, cunning, dissembling, and any unfair way by which another is cheated.

Ticong vs. Malim FACTS

Manuel Malim was a realty broker/dealer who presented himself as the authorized representative of the Ticongs. He sent a letter of "formal intent to sell" to Jainus Perez, the real estate field supervisor of the Church of Jesus Christ of Latter-Day Saints, offering to sell several parcels of land in Digos, Davao del Sur—owned by petitioners Lorzenzo, Patrocinio and Wilma Ticong—for Php 2,000 per sqm. Malim et. Al averred that they signed a Memorandum of Agreement authorizing them to "look, negotiate and sell to any prospective buyer" for their properties on a commission basis and that they were also authorized by the Ticongs to charge an overprice on top of the per sqm price. The Ticongs point out that Malim et. Al were not even licensed realty brokers and considering the queationable nature of the MOA pertaining to the overprice commission and 5% finders' fee were not binding and valid against them. The RTC ruled in favor of Malim. The CA denied the appeal and upheld the RTC decision. Ma. Lorena, as one of the children and heirs of Lorenzo Ticong, filed a motion for reconsideration which was denied by the CA. RTC RULING: The RTC upheld the validity of the MOA as the parties' expression of their intention to enter into a real estate brokerage. It debunked the Ticongs' allegation of fraud in signing the MOA for want of sufficient proof. Lastly, the RTC stressed that it was through the efforts of Malim, et al. that the Ticongs and the Buyer had come together for the finalization of the sale. CA RULING: The CA denied the appeal, upholding the RTC decision. CA held that the fact that Malim et.al were not licensed realty brokers did not result in the nullification or invalidation of the MOA and that Malim, et al. were entitled to their commission because they were the procuring cause of the sale of the subject properties to the Buyer and, without their intervention, the sale would not have been consummated. PETITIONER: Malim, et al. were not the efficient procuring cause in the consummation of the sale. She stated that although it was admitted that the respondents were the ones who introduced and brought the parties together for negotiations, their meager efforts did not contribute to the conclusion of the transaction. Since respondents were not the efficient procuring cause, they were not entitled to the Broker's Finder's Fee. RESPONDENT: they were the ones who caused the sale of the subject property. Documentary evidence such as the letter of intent; and that they were entitled to the overprice based on the clear import of the valid MOA executed by the parties.

Virata vs. Ng Wee FACTS

Ng Wee was a valued client of Westmont Bank. Sometime in 1998, he was enticed by the bank manager to make money placements with Westmont Investment Corporation (Wincorp), a domestic corporation organized and licensed to operate as an investment house. Offered to him were "sans recourse" transactions with the following mechanics: A corporate borrower who needs financial assistance or funding to run its business or to serve as working capital is screened by Wincorp. Once it qualifies as an accredited borrower, Wincorp enters into a Credit Line Agreement for a specific amount with the corporation. The corporation can draw upon the credit line in a series of availments over a period of time. Every drawdown by the accredited borrower shall be evidenced by a promissory note executed in favor of Wincorp and/or the investor/s who has/have agreed to extend the credit facility. Wincorp then scouts for investors willing to provide the funds needed by the accredited borrower. The investor is matched with the accredited borrower. An investor who provides the fund is issued a Confirmation Advice which indicates the amount of his investment, the due date, the term, the yield, the maturity and the name of the borrower. Lured by representations that the "sans recourse" transactions are safe, stable, high-yielding, and involve little to no risk, Ng Wee, placed investments thereon under accounts in his own name, or in those of his trustees. Ng Wee's initial investments were matched with Hottick Holdings Corporation (Hottick), one of Wincorp's accredited borrowers, the majority shares of which was owned by a Malaysian national by the name of Tan Sri Halim Saad (Halim Saad). Halim Saad was then the controlling shareowner of UEM-MARA. Hottick was extended a credit facility with a maximum drawdown of ₱l,500,908,026.87 in consideration of the following securities it issued in favor of Wincorp: (1) a Suretyship Agreement executed by herein petitioner Luis Juan Virata (Virata); (2) a Suretyship Agreement executed by YBHG Tan Sri Halim Saad; and (3) a Third Party Real Estate Mortgage executed by National Steel Corporation (NSC). Hottick fully availed of the loan facility extended by Wincorp, but it defaulted in paying its outstanding obligations when the Asian financial crisis struck. As a result, Wincorp filed a collection suit against Hottick, Halim Saad, and NSC for the repayment of the loan and related costs. To induce the parties to settle, petitioner Virata offered to guarantee the full payment of the loan. The guarantee was embodied in a Memorandum of Agreement between him and Wincorp. Virata was then able to broker a compromise between Wincorp and Halim Saad that paved the way for the execution of a Settlement Agreement. In the Settlement Agreement, Halim Saad agreed to pay USDl,000,000.00 to Wincorp in satisfaction of any and all claims the latter may have against the former under the Surety Agreement that secured Hottick's loan. Thereafter, Wincorp executed a Waiver and Quitclaim in favor of Virata, releasing the latter from any obligation arising from the Memorandum of Agreement, except for his obligation to transfer forty percent (40%) equity of UEM Development Philippines, Inc. (UPDI). Alarmed by the news of Hottick's default and financial distress, Ng Wee confronted Wincorp and inquired about the status of his investments. Wincorp assured him that the losses from the Hottick account will be absorbed by the company and that his investments would be transferred instead to a new borrower account. In view of these representations, Ng Wee continued making money placements, rolling over his previous investments in Hottick and even increased his stakes in the new borrower account - Power Merge Corporation (Power Merge). Incorporated on August 4, 1997, Power Merge is a domestic corporation, the primary purpose of which is to "invest in, purchase, or othe-rwise acquire and own, hold, use, sell, assign, transfer, mortgage, pledge, exchange or otherwise dispose of real or personal property of every kind and description." Petitioner Virata is the majority stockholder of the corporation, owning 374 ,996 out of its 375, 000 subscribed capital stock. In a special meeting of Wincorp's board of directors held on February 9, 1999, the investment house resolved to file the collection case against Halim Saad and Hottick, and, on even date, approved Power Merge' s application for a credit line, extending a credit facility to the latter in the maximum amount of ₱l,300,000,000. Barely a month later, on March 11, 1999, Wincorp, through another board meeting allegedly attended by the same personalities, increased Power Merge's maximum credit limit to ₱2,500,000,000.00. Power Merge made a total of six (6) drawdowns from the amended Credit Line Agreement in the aggregate amount of P2,183,755,253.11. Following protocol, Power Merge issued Promissory Notes in favor of Wincorp for each drawdown. After receiving the promissory notes from Power Merge, Wincorp, in turn, issued Confirmation Advices to Ng Wee and his trustees, as well as to the other investors who were matched with Power Merge. A summary of the said Confirmation Advices reveals that out of the ₱2,183,755,253.11 drawn by Power Merge, the aggregate amount of ₱213,290,410.36 was sourced from Ng Wee's money placements under the names of his trustees Unknown to Ng Wee, however, was that on the very same dates the Credit Line Agreement and its subsequent Amendment were entered into by Wincorp and Power Merge, additional contracts (Side Agreements) were likewise executed by the two corporations absolving Power Merge of liability as regards the Promissory Notes it issued. By virtue of these contracts, Wincorp was able to assign its rights to the uncollected Hottick obligations and hold Power Merge papers instead. However, this also meant that if Power Merge subsequently defaults in the payment of its obligations, it would refuse, as it did in fact refuse, payment to its investors. Despite repeated demands, Ng Wee was not able to collect Power Merge's outstanding obligation under the Confirmation Advices in the amount of ₱213,290,410.36. This prompted Ng Wee to institute a Complaint for Sum of Money with Damages In his Complaint, Ng Wee claimed that he fell prey to the intricate scheme of fraud and deceit that was hatched by Wincorp and Power Merge. As he later discovered, Power Merge's default was inevitable from the very start since it only had subscribed capital in the amount of ₱37,500,000.00, of which only ₱9,375,000.00 is actually paid up. He then attributed gross negligence, if not fraud and bad faith, on the part of Wincorp and its directors for approving Power Merge's credit line application and its subsequent increase to the amount of ₱2,500,000,000.00 despite its glaring inability to pay. Wincorp officers Ong and Reyes were likewise impleaded for signing the Side Agreements that would allow Power Merge to avoid paying its obligations to the investors. Wincorp admitted that it brokered Power Merge Promissory Notes to investors through "sans recourse" transactions. It contended, however, that its only role was to match an investor with corporate borrowers and, hence, assumed no liability for the monies that Ng Wee loaned to Power Merge. "Sans recourse" transactions, Wincorp added, are perfectly legal under Presidential Decree No. 129 (PD 129), otherwise known as the Investment Houses Law, and forms part of the brokering functions of an investment house. As a duly licensed investment house, it was authorized to offer the "sans recourse" transactions to the public, even without a license to perform quasi-banking functions. For their part, the Wincorp directors argued that they canonly be held liable under Section 31 of the Corporation Code, if they assented to a patently unlawful act, or are guilty of either gross negligence or bad faith in directing the affairs of the corporation. They explained that the provision is inapplicable since the approval of Power Merge's credit line application was done in good faith and that they merely relied on the vetting done by the various departments of the company. Petitioners Virata and UEM-MARA harped on the underlying arrangement between Hottick, Power Merge, and Wincorp. Under the framework, Hottick will issue Promissory Notes to Wincorp, which will then transfer the same to Power Merge. In exchange for the transfer, Power Merge will issue its own Promissory Notes to Wincorp. That way, Wincorp will be holding Power Merge papers, instead of Hottick. To implement this arrangement, Wincorp and Power Merge entered into a Credit Line Agreement with the understanding that Power Merge and Virata's only obligation thereunder would be to collect payments on the Hottick papers. The Credit Line Agreement and the issuance of the promissory notes, according to Virata, were mere accommodations to help Wincorp enforce the outstanding obligations of Hottick. It was then contrary to their agreement for Wincorp to have offered the Power Merge papers to investors since it was allegedly agreed upon that Power Merge would incur no liability to pay the promissory notes it issued Wincorp. RTC RULING: On July 8, 2011, the RTC rendered a Decision50 in Civil Case No. 00- 99006 in favor of Ng Wee. The RTC rendered a Decision in favor of Ng Wee ordering the defendants Luis L. Virata, UEM- MARA Philippines Corporation, Westmont Investment Corporation (Wincorp), Antonio T. Ong, Anthony T. Reyes, Simeon Cua, Vicente and Henry Cualoping, Mariza Santos-Tan, and Manuel Estrella to jointly and severally pay plaintiff The sum of P213,290,410.36 CA RULING: On September 30, 2014, the CA promulgated the challenged ruling substantially affirming the findings of the trial court.

Virata vs. Ng Wee The license requirement to operate as an investment houses is separate and distinct from the registration requirement for the securities they are offering, if any. —

No error can then be attributed to the CA when it designated the " sans recourse " transactions as investment contracts. No fault can also be ascribed to the appellate court in finding that Wincorp virtually purchased and resold securities, and not just brokered a loan. The most telling circumstance that negate Wincorp's claim of mere brokerage, as mentioned earlier, isthe fact that it paid for the interest payments due from the corporate borrowers that defaulted. This effectively estopped Wincorp from denying liability from its investors in this case. Wincorp cannot hide behind its license to operate as an investment house when it offered the " sans recourse " transactions to the public. For though investment houses are authorized to do the following: x x x x 6. Act as financial consultant, investment adviser, or broker; 7. Act as portfolio manager, and/or financial agent x x x; 8. Encourage companies to go public, and initiate and/or promote, whenever warranted, the formation, merger, consolidation, reorganization, or recapitalization of productive enterprises, by providing assistance or participation in the form of debt or equity financing or through the extension of financial or technical advice or service. x x x their license to perform investment house functions does not excuse them from complying with the security registration requirements under the law. For clarity, the license requirement to operate as an investment houses is separate and distinct from the registration requirement for the securities they are offering, if any. In dealing in securities, Wincorp was under legal obligation to comply with the statutory registration and disclosure requirements. Under BP 178, otherwise known as the Revised Securities Act , which was still in force at the time material in this case, investment contracts are securities, and their sale, transactions that are not exempt from these requirements. As such, adherence to Sections 4 and 8 of BP 178 must be strictly observed.

Orient-Air Services and Hotel Representatives vs. CA FACTS

On January 15, 1977, American Airlines authorized Orient Air Services and Hotel Representatives to act as its exclusive general sales agent within the Philippines for the sale of air passenger transportation. Among the provisions of the General Sales Agency Agreement, was the obligation of petitioner to remit in US dollars to American the ticket stock or exchange orders, less commissions to which Orient Air Services is entitled hereunder, not less frequently than semi-monthly, on the 15th and last days of each month for sales made during the preceding half month. All monies collected by Orient Air Services for transportation sold hereunder on American's ticket stock or on exchange orders, less applicable commissions to which Orient Air Services is entitled hereunder, are the property of American and shall be held in trust by Orient Air Services until satisfactorily accounted for to American. Almost four years after the agreement, the petitioner was alleged to have failed to remit the net proceeds of sales amounting to $254,400.40 which American Air by itself collected and forthwith terminated the agreement. RTC RULING: In favor of Orient Air. The termination is illegal and improper. CA RULING: AFFIRMED with modifications. PETITIONER (OA): American Air in fact still owed petitioner a balance in unpaid overriding commissions. AA's act of terminating the contract was untenable. As to the 3% overriding commission, Orient Air contends that the contractual stipulation of a 3% overriding commission covers the total revenue of American Air and not merely that derived from ticketed sales undertaken by Orient Air. RESPONDENT (AA): Such commission is based only on sales of its services actually negotiated or transacted by Orient Air with the use of AA's ticket stocks referred to as "ticketed sales"

Lim vs. CA FACTS

On January 26, 1989, an Information for Estafa was filed against petitioner Rosa Lim before the RTC of Quezon City. The Information reads: "That on or about the 8th day of October 1987, in Quezon City, Philippines and within the jurisdiction of this Honorable Court, the said accused with intent to gain, with unfaithfulness and/or abuse of confidence, did, then and there, wilfully, unlawfully and feloniously defraud one VICTORIA SUAREZ, in the following manner, to wit: on the date and place aforementioned said accused got and received in trust from said complainant one (1) ring 3.35 solo worth P169,000.00, Philippine Currency, with the obligation to sell the same on commission basis and to turn over the proceeds of the sale to said complainant or to return said jewelry if unsold, but the said accused once in possession thereof and far from complying with her obligation despite repeated demands therefor, misapplied, misappropriated and converted the same to her own personal use and benefit, to the damage and prejudice of the said offended party in the amount aforementioned and in such other amount as may be awarded under the provisions of the Civil Code" RTC RULING: Finding accused Rosa Lim GUILTY beyond reasonable doubt of the offense of estafa as defined and penalized under Article 315, paragraph 1 (b) of the Revised Penal Code; Sentencing her to suffer the Indeterminate penalty of FOUR (4) YEARS and TWO (2) MONTHS of prision correccional as minimum, to TEN (10) YEARS of prision mayor as maximum; CA RULING: Affirmed the Judgment of conviction with the modification that the penalty imposed shall be six (6) years, eight (8) months and twentyone (21) days to twenty (20) years in accordance with Article 315, paragraph 1 of the Revised Penal Code. PETITIONER (ROSA LIM): Petitioner maintains that she cannot be liable for estafa since she never received the jewelries in trust or on commission basis from Vicky Suarez. The real agreement between her and the private respondent was a sale on credit with Mrs. Suarez as the owner-seller and petitioner as the buyer, as indicated by the fact that petitioner did not sign on the blank space provided for the signature of the person receiving the jewelry but at the upper portion thereof immediately below the description of the items taken.

Salvador vs. Rabaja Default; The failure to attend the pretrial conference does not result in the default of an absent party. Under the 1997 Rules of Civil Procedure, a defendant is only declared in default if he fails to file his Answer within the reglementary period .—

On the procedural aspect, the Court reiterates the rule that the failure to attend the pretrial conference does not result in the default of an absent party. Under the 1997 Rules of Civil Procedure, a defendant is only declared in default if he fails to file his Answer within the reglementary period. On the other hand, if a defendant fails to attend the pretrial conference, the plaintiff can present his evidence ex parte. Sections 4 and 5, Rule 18 of the Rules of Court provide: Sec. 4. Appearance of parties .—It shall be the duty of the parties and their counsel to appear at the pretrial. The nonappearance of a party may be excused only if a valid cause is shown therefor or if a representative shall appear in his behalf fully authorized in writing to enter into an amicable settlement, to submit to alternative modes of dispute resolution, and to enter into stipulations or admissions of facts and of documents. Sec. 5. Effect of failure to appear .—The failure of the plaintiff to appear when so required pursuant to the next preceding section shall be cause for dismissal of the action. The dismissal shall be with prejudice, unless otherwise ordered by the court. A similar failure on the part of the defendant shall be cause to allow the plaintiff to present his evidence ex parte and the court to render judgment on the basis thereof .

Rallos vs. Felix Go Chan & Sons Realty Corporation Conflict of legal opinion in American jurisprudence does not hold true in Philippine law; Civil Code of the Philippines expressly provides for two exceptions to general rule that death of the principal revokes the agency; Agent's act of executing the sale of property despite notice of death of his principal is unenforceable against the estate of the principal. —

One last point raised by respondent corporation in support of the appealed decision is an 1842 ruling of the Supreme Court of Pennsylvania in Cassiday v. McKenzie wherein payments made to an agent after the death of the principal were held to be "good", "the parties being ignorant of the death." Let us take note that the Opinion of Justice Rogers was premised on the statement that the parties were ignorant of the death of the principal. x x x To avoid any wrong impression which the Opinion in Cassiday v. McKenzie may evoke, mention may be made that the above represents the minority view in American jurisprudence. x x x Whatever conflict of legal opinion was generated by Cassiday v. McKenzie in American jurisprudence, no such conflict exists in our own for the simple reason that our statute, the Civil Code, expressly provides for two exceptions to the general rule that death of the principal revokes ipso jure the agency, to wit: (1) that the agency is coupled with an interest (Art. 1930), and (2) that the act of the agent was executed without knowledge of the death of the principal and the third person who contracted with the agent acted also in good faith (Art. 1931). Exception No. 2 is the doctrine followed in Cassiday, and again We stress the indispensable requirement—that the agent acted without knowledge or notice of the death of the principal. In the case before Us the agent Ramon Rallos executed the sale notwithstanding notice of the death of his principal. Accordingly, the agent's act is unenforceable against the estate of his principal.

Salvador vs. Rabaja Civil Law; Agency; A third person with whom the agent wishes to contract on behalf of the principal may require the presentation of the power of attorney, or the instructions as regards the agency .—

Persons dealing with an agent must ascertain not only the fact of agency, but also the nature and extent of the agent's authority. A third person with whom the agent wishes to contract on behalf of the principal may require the presentation of the power of attorney, or the instructions as regards the agency. The basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover on his own peril the authority ofthe agent. According to Article 1990 of the New Civil Code, insofar as third persons are concerned, an act is deemed to have been performed within the scope of the agent's authority, if such act is within the terms of the power of attorney, as written. In this case, Spouses Rabaja did not recklessly enter into a contract to sell with Gonzales. They required her presentation of the power of attorney before they transacted with her principal. And when Gonzales presented the SPA to Spouses Rabaja, the latter had no reason not to rely on it.

Yoshizaki vs. Joy Training Center of Aurora, Inc. Agency; Persons dealing with an agent must ascertain not onlythe fact of agency, but also the nature and extent of the agent's authority. —

Persons dealing with an agent must ascertain not only the fact of agency, butalso the nature and extent of the agent's authority. A third person withwhom the agent wishes to contract on behalf of the principal may requirethe presentation of the power of attorney, or the instructions as regards theagency. The basis for agency is representation and a person dealing with anagent is put upon inquiry and must discover on his own peril the authority ofthe agent. Thus, Sally bought the real properties at her own risk; she bearsthe risk of injury occasioned by her transaction with the spouses Johnson.

Manotok Brothers, Inc. vs. CA FACTS

Petitioner is the owner of a certain parcel of land and building which were formerly leased by the City of Manila and used by the Claro M. Recto High School. Petitioner authorized private respondent Salvador Saligumba to negotiate with the City of Manila the sale of the aforementioned property. Petitioner agreed to pay private respondent a 5% commission in the event the sale is finally consummated and paid. Petitioner executed another letter extending the authority of private respondent for 120 days. Thereafter, another extension was granted to him for 120 more days. Finally, the corporation with Rufino Manotok, its President, as signatory, authorized private respondent to finalize and consummate the sale of the property to the City of Manila. With this letter came another extension of 180 days. The Municipal Board of the City of Manila eventually passed Ordinance No. 6603, appropriating the sum for the purchase of the property which private respondent was authorized to sell. Said ordinance however, was signed by the City Mayor only 183 days after the last letter of authorization. The parties signed the deed of sale of the subject property. Notwithstanding the realization of the sale, private respondent never received any commission, which should have amounted to P20,554.50 due to the refusal of petitioner to pay private respondent said amount as former does not recognize the latter's role as agent in the transaction. Private respondent filed a complaint alleging that he had successfully negotiated the sale of the property. He claimed that it was because of his efforts that the Municipal Board of Manila passed Ordinance No. 6603 which appropriated the sum for the payment of the property subject of the sale. Petitioner claimed otherwise. It denied the claim of private respondent on the following grounds: (1) private respondent would be entitled to a commission only if the sale was consummated and the price paid within the period given in the respective letters of authority; and (2) private respondent was not the person responsible for the negotiation and consummation of the sale, instead it was Filomeno Huelgas, the PTA president for 1967-1968 of the Claro M. Recto High School. It is petitioner's contention that as a broker, private respondent's job is to bring together the parties to a transaction. Accordingly, if the broker does not succeed in bringing the minds of the purchaser and the vendor to an agreement with respect to the sale, he is not entitled to a commission. Private respondent, on the other hand, opposes petitioner's position maintaining that it was because of his efforts that a purchase actually materialized between the parties. RTC RULING: Rendered judgment sentencing petitioner and/or Rufino Manotok to pay unto private respondent the sum of P20,540.00 by way of his commission fees with legal interest thereon from the date of the filing of the complaint until payment. CA RULING: Affirmed the said ruling of the trial court. PETITIONER MANOTOK BROTHERS, INC - Huelgas testified to the effect that after being inducted as PTA president in August, 1967 he followed up the sale from the start with Councilor Magsalin until after it was approved by the Mayor on May 17, 1968. He. also said that he came to know Rufino Manotok only in August, 1968, at which meeting the latter told him that he would be given a "gratification" in the amount of P20,000.00 if the sale was expedited. Rufino Manotok confirmed that he knew Huelgas and there was an agreement between them regarding the "gratification". RESPONDENT SALVADOR SALIGUMBA Private respondent testified as to the efforts undertaken by him to ensure the consummation of the sale. He recounted that it first began at a meeting with Rufino Manotok at the office of Fructuoso Ancheta, principal of C.M. Recto High School. Atty. Dominador Bisbal, then president of PTA, was also present. The meeting was set precisely to ask private respondent to negotiate the sale of the school lot and building to the City of Manila. Private respondent then went to Councilor Magsalin, the author of the Ordinance which appropriated the money for the purchase of said property, to present the project. He also went to the Assessor's Office for appraisal of the value of the property. While these transpired and his letters of authority expired, Rufino Manotok always renewed the former's authorization until the last was given, which was to remain in force until May 14, 1968. After securing the report of the appraisal committee, he went to the City Mayor's Office, which indorsed the matter to Superintendent of City Schools of Manila. The latter office approved the report and so private respondent went back to the City Mayor's Office, which thereafter indorsed the same to the Municipal Board for appropriation. Subsequently, on April 26, 1968, Ordinance No. 6603 was passed by Municipal Board for appropriation of the sum corresponding to the purchase price. Petitioner received the full payment of the purchase price, but private respondent did not receive a single centavo as commission. Fructuoso Ancheta and Atty. Bisbal both testified acknowledging the authority of private respondent On rebuttal, Atty. Bisbal said that Huelgas was present in the PTA meetings from 1965 to 1967 but he never offered to help in the acquisition of said property. Moreover, he testified that Huelgas was aware of the fact that it was private respondent who was negotiating the sale of the subject property.

Bordador vs. Luz FACTS

Petitioners Jose and Lydia Bordador were engaged in the business of purchase and sale of jewelry and respondent Brigida D. Luz, aka Aida D. Luz, was their regular customer. On several occasions from April 27 to September 4, 1987, respondent Narciso Deganos, (brother of Brigida D. Luz) received pieces of gold and jewelry from petitioners (P382,816.00). Eleven of the receipts stated that they were received for a "Evelyn Aquino" (a niece of Deganos) and the remaining six indicated that they were received for Brigida D. Luz. Deganos was to sell the items at a profit and remit the proceeds and return the unsold items to petitioners. Deganos remitted only the sum of P53,207.00. He neither paid the balance of the sales proceeds, nor did he return any unsold item to petitioners. The total of his unpaid account to petitioners, including interest, reached the sum of P725,463.98. Petitioners eventually filed a complaint in the barangay against Deganos to recover. Petitioners filed Civil Case in the RTC of Malolos against Deganos and Luz for recovery and damages, with an application for preliminary attachment. Ernesto Luz was impleaded therein as the spouse of Brigida. RTC: After trial, the court below found that it was petitioner Lydia Bordador who indicated in the receipts that the items were received by Deganos for Evelyn Aquino and Brigida D. Luz. Said court was persuaded that Brigida D. Luz was behind Deganos, but because there was no memorandum to his effect, the agreement between the parties was unenforceable under the Statute of Frauds CA: As stated at the outset, petitioners appealed the judgment of the court to the CA which affirmed said judgment. PETITIONER: Petitioners claimed that Deganos acted as the agent of Brigida Luz when he received the subject items of jewelry and, because he failed to pay for the same, Brigida, as principal, and her spouse are solidarily liable with him therefor. Petitioners insist that Deganos was the agent of Brigida D. Luz as the latter clothed him with apparent authority as her agent and held him out to the public as such, hence Brigida cannot be permitted to deny said authority to innocent third parties who dealt with Deganos under such belief. Petitioners further represent that the Court of Appeals recognized in its decision that Deganos was an agent of Brigida RESPONDENT: Deganos admitted that he had an unpaid obligation to petitioners, he claimed that the same was only in the sum of P382,816.00 and not P725,463.98. He further asserted that it was he alone who was involved in the transaction with the petitioners

Bordador vs. Luz Actions; Appeals; Judgments; Concurrent factual findings of the trial court and the Court of Appeals are entitled to great weight. —

Petitioners argue that the Court of Appeals erred in adopting the findings of the court a quo that respondent spouses are not liable to them, as said conclusion of the trial court is contradicted by the finding of fact of the appellate court that"(Deganos) acted as agent of his sister (Brigida Luz)." In support of this contention, petitioners quoted several letters sent to them by Brigida D. Luz wherein the latter acknowledged her obligation to petitioners and requested for more time to fulfill the same. They likewise aver that Brigida testified in the trial court that Deganos took some gold articles from petitioners and delivered the same to her. Both the Court of Appeals and the trial court, however, found as a fact that the aforementioned letters concerned the previous obligations of Brigida to petitioners, and had nothing to do with the money sought to be recovered in the instant case. Such concurrent factual findings are entitled to great weight, hence, petitioners cannot plausibly claim in this appellate review that the letters were in the nature of acknowledgements by Brigida that she was the principal of Deganos in the subject transactions.

Bordador vs. Luz Actions; Independent Civil Actions; Judgments; A final judgment rendered in a civil case absolving the defendant from civil liability is no bar to a criminal action. —

Petitioners have apparently lost sight of Article 33 of the Civil Code which provides that in cases involving alleged fraudulent acts, a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution and shall require only a preponderance of evidence. It is worth noting that this civil case was instituted four years before the criminal case for estafa was filed, and that although there was a move to consolidate both cases, the same was denied by the trial court. Consequently, it was the duty of the two branches of the Regional Trial Court concerned to independently proceed with the civil and criminal cases. It will also be observed that a final judgment rendered in acivil action absolving the defendant from civil liability is no bar to a criminal action.

Ticong vs. Malim Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; In petitions for review on certiorari under Rule 45 of the Rules of Court, only questions of law may be put into issue. —

Preliminarily, the Court cannot overemphasize the principle that in petitions for review on certiorari under Rule 45 of the Rules of Court, only questions of law may be put into issue. Questions of fact are not cognizable by this Court. Notably, the issues raised by the petitioner in this case, such as whether the respondents were the procuring cause of the sale which entitled them to the broker's overprice commission, are factual in nature as they would require this Court to delve into the records of the case and review the evidence presented by the parties in order to properly resolve the dispute.

Tan vs. Gullas FACTS

Private Respondents Spouses Eduardo Gullas and Norma Gullas were the registered owners of a parcel of land in Cebu. They executed a special power of attorney authorizing petitioners Manuel Tan a licensed broker and his associates Tecson and Saldana to negotiate for the sale of parcel of land at 550 pesos per square meter at commission 3% of gross price. Power of attorney was non- exclusive and effective for one month from June 29, 1992. Tan contacted Edsel Ledesma (construction manager of Mary Banneaux) interested in acquiring property. Next morning Tan and Ledesma visited the land then later accompanied sisters Kim and Gaviola representatives of Sisters of Mary to see Eduardo Gullas- sisters requested reduction of price to 530- Eduardo referred them to his wife. On July 3, 1992, private respondents agreed to sell the property to them and subsequently executed a special power of attorney in favor of Eufemia Canete- special authority to sell for 200 pesos per square meter. Petitioners went to claim their commission but Gullas refused to give them the same. Petitioners filed a complaint against the defendants for recovery of their broker's fee- 1, 655, 412.60. Alleged that they are efficient in procuring cause in bringing about the sale of the property. Lower Court ruled in favor of petitioners. CA reversed and set aside the ruling of the lower court.

Rallos vs. Felix Go Chan & Sons Realty Corporation Art. 1930 and Art. 1931 of the Civil Code providing that death of principal or agent extinguishing agency is only a general rule; Rationale for the provision. —

Reason of the very nature of the relationship between principal and agent, agency is extinguished by the death of the principal. Manresa explains that the rationale for the law is found in the juridical basis of agency which is representation. Laurent says that the juridical tie between the principal and the agent is severed ipso jure upon the death of either without necessity for the heirs of the principal to notify the agent of the fact of death of the former. The same rule prevails at common law—the death of the principal effects instantaneous and absolute revocation of the authority of the agent unless the power be coupled with an interest. This is the prevalent rule in American jurisprudence where it is well-settled that a power without an interest conferred upon an agent is dissolved by the principal's death, and any attempted execution of the power afterwards is not binding on the heirs or representatives of the deceased.

Inland Realty Investment Service, Inc. vs. CA FACTS

Respondent Araneta, Inc, through its Asst. Gen. Mngr. Eduque, granted petitioner Inland Realty authority to sell 9,800 shares of stock in Architects' Bldg., Inc. for PhP 1,500 per share, as evidenced by a letter dated September 16, 1975. Plaintiffs introduced prospective buyer Stanford Microsystems, Inc, who counter-proposed to buy said shares at PhP 1,000 per share or for a total of PhP 9,800,000.00. Upon receipt of the counter-proposal, Inland Realty immediately wrote Araneta Inc. a letter to register Stanford Microsystems as one of its prospective buyers. However, Araneta, Inc. replied that the price offered was too low and suggested that Inland Realty see if the price and terms of payment can be improved upon by Stanford. On July 8, 1977, plaintiffs finally sold the 9,800 shares of stock to Stanford Microsystems, Inc. for P13,500,000.00. Inland Realty then formally demanded from respondent payment of their 5% broker['s] commission or a total amount of P675,000.00. This, however, was declined by Araneta, Inc. on the ground that the claim has no factual or legal basis. RTC RULING: Ruled in favor of respondents on the ground that after their authority to sell expired thirty (30) days from December 2, 1975, or on January 1, 1976, petitioners abandoned the sales transaction and were no longer privy to the consummation and documentation thereo CA RULING: Affirmed RTC decision saying: The resolution would seem to hinge on the question of whether plaintiff was instrumental in the final consummation of the sale to Stanford which was the same name of the company submitted to defendants as a prospective buyer although their price was considered by defendant to be too low and defendants wrote to plaintiff if the price may be improved upon by Stanford. This was on October 13, 1975. After that, there was an extension for 30 days from October 28, 1975 of the authority and another on December 2, 1975 for another 30 days from the said date. There is nothing in the record or in the testimonial evidence that the authority extended 30 days from the last date of extension was ever reserved nor extended, nor has there been any communication made to defendants that the plaintiff was actually negotiating with Stanford a better price than what was previously offered by it.

Yoshizaki vs. Joy Training Center of Aurora, Inc. FACTS

Respondent Joy Training Center of Aurora, Inc. (Joy Training) is a non-stock, nonprofit religious educational institution. It was the registered owner of a parcel of land and the building thereon (real properties), located in San Luis Extension, Purok No. 1, Barangay Buhangin, Baler, Aurora. The said land was designated as Lot No. 125-L. November 10, 1998 → The spouses Richard and Linda Johnson sold the real properties, a Wrangler jeep, and other personal properties in favor of the spouses Sally and Yoshio Yoshizaki. On the same date, a Deed of Absolute Sale and a Deed of Sale of Motor Vehicle were executed in favor of the spouses Yoshizaki. The spouses Johnson were members of Joy's training board of trustees at the time of sale. December 8, 1998 → Joy Training, represented by Acting Chairperson Reuben Rubio, filed an action for Cancellation of Sales and Damages Joy Training, in its complaint, alleged that the spouses Johnson sold its properties without the requisite authority from the board of directors. It assailed the validity of a board resolution dated September 1, 1998, which granted the spouses Johnson the authority to sell its real properties. It averred that only a minority of the board, composed of the spouses Johnson and Alexander Abadayan, authorized the sale through the resolution. According to the Articles of Incorporation, the board of trustees consists of seven members. The spouses Yoshizaki filed their Answer with Compulsory Counterclaims. They claimed that Joy Training authorized the spouses Johnson to sell the parcel of land. They asserted that majority of the board of trustees approved the resolution. Connie Dayot, the corporate secretary, issued a certification dated February 20, 1998, authorizing the spouses Johnson to act on Joy training's behalf. They highlighted that the Wrangler jeep and other personal properties were registered in the name of the spouses Johnson. The jurisdiction of the RTC over the case was assailed, positing that the case is an intra-corporate dispute cognizable by the SEC. Respondent Joy Training Center of Aurora, Inc. (Joy Training) is a non-stock, nonprofit religious educational institution. It was the registered owner of a parcel of land and the building thereon (real properties), located in San Luis Extension, Purok No. 1, Barangay Buhangin, Baler, Aurora. The said land was designated as Lot No. 125-L. November 10, 1998 → The spouses Richard and Linda Johnson sold the real properties, a Wrangler jeep, and other personal properties in favor of the spouses Sally and Yoshio Yoshizaki. On the same date, a Deed of Absolute Sale and a Deed of Sale of Motor Vehicle were executed in favor of the spouses Yoshizaki. The spouses Johnson were members of Joy's training board of trustees at the time of sale. December 8, 1998 → Joy Training, represented by Acting Chairperson Reuben Rubio, filed an action for Cancellation of Sales and Damages Joy Training, in its complaint, alleged that the spouses Johnson sold its properties without the requisite authority from the board of directors. It assailed the validity of a board resolution dated September 1, 1998, which granted the spouses Johnson the authority to sell its real properties. It averred that only a minority of the board, composed of the spouses Johnson and Alexander Abadayan, authorized the sale through the resolution. According to the Articles of Incorporation, the board of trustees consists of seven members. The spouses Yoshizaki filed their Answer with Compulsory Counterclaims. They claimed that Joy Training authorized the spouses Johnson to sell the parcel of land. They asserted that majority of the board of trustees approved the resolution. Connie Dayot, the corporate secretary, issued a certification dated February 20, 1998, authorizing the spouses Johnson to act on Joy training's behalf. They highlighted that the Wrangler jeep and other personal properties were registered in the name of the spouses Johnson. The jurisdiction of the RTC over the case was assailed, positing that the case is an intra-corporate dispute cognizable by the SEC. RTC RULING: RULED IN FAVOR OF THE SPOUSES YOSHIZAKI. It found that Joy Training owned the real properties. However, it held that the sale was valid, because Joy Training authorized the spouses Johnson to sell the real properties. It recognized that there were only five actual members of the board of trustees; consequently, a majority of the board of trustees validly authorized the sale. It also ruled that the sale of personal properties was valid because they were registered in the spouses Johnson's name. CA RULING: RESOLUTION IS VOID, BECAUSE IT WAS NOT APPROVED BY A MAJORITY OF THE BOARD OF TRUSTEES. The CA upheld the RTC's jurisdiction over the case, but reversed its ruling with respect to the sale of real properties. It also ruled that the resolution is void, because it was not approved by a majority of the board of trustees. Under Section 25 of the Corporation Code, the basis for determining the composition of the board of trustees is the list fixed in the Articles of Incorporation. Section 23 of the Corporation Code also provides that the board of trustees shall hold office for one year and until their successors are elected and qualified. The CA did not also give any probative value to the certification. It stated that the certification failed to indicate the date and the names of the trustees present in the meeting. PETITIONER (Sally Yoshizaki): • Sally maintained that the RTC has no jurisdiction over the case. • The spouses Johnson were authorized to sell the parcel of land and that she was a buyer in good faith, because she merely relied on TCT No. T-25334. • She also argues that it is a basic principle that a party dealing with a registered land need not go beyond RESPONDENT (Joy Training Center of Aurora): • Joy Training maintains that it did not authorize the spouses Johnson to sell its real properties. • TCT No. T-25332 did not specifically grant the authority to sell the parcel of land to the spouses Johnson. • The resolution and the certification should not be given any probative value, because they were not admitted in evidence by the RTC. • Resolution is void for failure to comply with the voting requirements under Section 40 of the Corporation Code.

Rallos vs. Felix Go Chan & Sons Realty Corporation Revocation by an act of the principal as a mode of terminating agency distinguished from revocation by operation of law such as death of principal . —

Revocation by an act of the principal as a mode of terminating an agency is to be distinguished from revocation by operation of law such as death of the principal which obtains in this case. The decision stressed that by reason of the very nature of the relationship between principal and agent, agency is extinguished ipso jure upon the death of either principal or agent. Although a revocation of a power of attorney to be effective must be communicated to the parties concerned, yet a revocationby operation of law, such as by death of the principal is, as a rule, instantaneously effective inasmuch as "by legal fiction the agent's exercise of authority is regarded as an execution of the principal's continuing will. "With death, the principal's will ceases or is terminated; the source of authority is extinguished.

Dominion Insurance Corporation vs. CA FACTS

Rodolfo Guevarra instituted Civil Case No. 8855 for sum of money against Dominion Insurance Corporation, seeking to recover thereunder the sum of P156,473.90 which he claimed to have advanced in his capacity as manager of defendant to satisfy certain claims filed by defendant's clients. Thereafter, Dominion filed a third-party complaint against Fernando Austria, who, at the time relevant to the case, was its Regional Manager for Central Luzon area. The case was then called for pre-trial conference, however, only plaintiff and counsel were present. Despite due notice, defendant and counsel did not appear, prompting the judge to declare them in default and the plaintiff was allowed to present his evidence. The trial court then ruled in favor of Guevarra, ordering Dominion to pay plaintiff the sum of P156,473.90. On appeal, the CA affirmed the ruling of the lower court. RTC RULING: ORDERED Dominion to pay plaintiff the sum of P156,473.90 representing the total amount advanced by plaintiff in the payment of the claims of defendant's clients. It also dismissed the counter-claim of the defendant and the third-party complaint. CA RULING: AFFIRMED the ruling of the lower court.

Lim vs. CA Civil Law; Contracts; Fact that accused's signature appears on the upper portion of the receipt does not have the effect of altering the terms of the transaction from a contract of agency to sell on commission basis to a contract of sale . —

Rosa Lim's signature indeed appears on the upper portion of the receipt immediately below the description of the items taken. We find that this fact does not have the effect of altering the terms of the transaction from a contract of agency to sell on commission basis to a contract of sale. Neither does it indicate absence or vitiation of consent thereto on the part of Rosa Lim which would make the contract void or voidable. The moment she affixed her signature thereon, petitioner became bound by all the terms stipulated in the receipt. She, thus, opened herself to all the legal obligations that may arise from their breach.

Lim vs. CA RULING

Rosa Lim's signature indeed appears on the upper portion of the receipt immediately below the description of the items taken. We find that this fact does not have the effect of altering the terms of the transaction from a contract of agency to sell on commission basis to a contract of sale. Neither does it indicate absence or vitiation of consent thereto on the part of Rosa Lim which would make the contract void or voidable. The moment she affixed her signature thereon, petitioner became bound by all the terms stipulated in the receipt . She, thus, opened herself to all the legal obligations that may arise from their breach. This is clear from Article 1356 of the New Civil Code which provides: "Contracts shall be obligatory in whatever form they may have been entered into, provided all the essential requisites for their validity are present." . . ." However, there are some provisions of the law which require certain formalities for particular contracts. The first is when the form is required for the validity of the contract; the second is when it is required to make the contract effective as against third parties such as those mentioned in Articles 1357 and 1358; and the third is when the form is required for the purpose of proving the existence of the contract, such as those provided in the Statute of Frauds in Article 1403. A contract of agency to sell on commission basis does not belong to any of these three categories, hence it is valid and enforceable in whatever form it may be entered into. Furthermore, there is only one type of legal instrument where the law strictly prescribes the location of the signature of the parties thereto. This is in the case of notarial wills found in Article 805 of the Civil Code, to wit: "Every will, other than a holographic will, must be subscribed at the end thereof by the testator himself . . . . The testator or the person requested by him to write his name and the instrumental witnesses of the will, shall also sign, as aforesaid, each and every page thereof, except the last, on the left margin . . . ." In the case before us, the parties did not execute a notarial will but a simple contract of agency to sell on commission basis , thus making the position of petitioner's signature thereto immaterial.

Patrimonio vs. Gutierrez Holder in Due Course; Section 52(c) of the Negotiable Instruments Law (NIL) states that a holder in due course is one who takes the instrument "in good faith and for value." —

Section 52(c) of the NIL states that a holder in due course is one who takes the instrument "in good faith and for value." It also provides in Section 52(d) that in order that one may be a holder in due course, it is necessary that at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it. Acquisition in good faith means taking without knowledge or notice of equities of any sort which could be set up against a prior holder of the instrument. It means that he does not have any knowledge of fact which would render it dishonest for him to take a negotiable paper. The absence of the defense, when the instrument was taken, is the essential element of good faith.

Virata vs. Ng Wee Securities; As a general rule, securities are not to be sold or offered for sale or distribution without due registration, and provided that information on the securities shall be made available to prospective purchasers. —

Securities are shares, participation or interests in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instruments, whether written or electronic in character. As a general rule, securities are not to be sold or offered for sale or distribution without due registration, and provided that information on the securities shall be made available to prospective purchasers.

Patrimonio vs. Gutierrez The Negotiable Instruments Law (NIL) does not provide that a holder who is not a holder in due course may not in any case recover on the instrument. The only disadvantage of a holder who is not in due course is that the negotiable instrument is subject to defenses as if it were non-negotiable. —

Since he knew that the underlying obligation was not actually for the petitioner, the rule that a possessor of the instrument is prima facie a holder in due course is inapplicable. As correctly noted by theCA, his inaction and failure to verify, despite knowledge of that the petitioner was not a party to the loan, may be construed as gross negligence amounting to bad faith. Yet, it does not follow that simply because he is not a holder in due course, Marasigan is already totally barred from recovery. The NIL does not provide that a holder who is not a holder in due course may not in any case recover on the instrument. The only disadvantage of a holder who is not in due course is that the negotiable instrument is subject to defenses as if itwere non-negotiable. Among such defenses is the filling up blank not within the authority.

Salvador vs. Rabaja FACTS

Sometime in July 1998, Spouses Rabaja learned that Spouses Salvador were looking for a buyer of the subject property. Petitioner Herminia Salvador (Herminia) personally introduced Gonzales to them as the administrator of the said property. Spouses Salvador even handed to Gonzales the owner's duplicate certificate of title over a parcel of land situated at No. 25, Merryland Village, 375 Jose Rizal Street, Mandaluyong City (subject property). On July 3, 1998, Spouses Rabaja made an initial payment of P48,000.00 to Gonzales in the presence of Herminia. Gonzales then presented the Special Power of Attorney (SPA), executed by Rolando Salvador (Rolando) and dated July 24, 1998. On the same day, the parties executed the Contract to Sell which stipulated that for a consideration of P5,000,000.00, Spouses Salvador sold, transferred and conveyed in favor of Spouses Rabaja the subject property. Spouses Rabaja made several payments totalling P950,000.00, which were received by Gonzales pursuant to the SPA provided earlier as evidenced by the check vouchers signed by Gonzales and the improvised receipts signed by Herminia. Sometime in June 1999, however, Spouses Salvador complained to Spouses Rabaja that they did not receive any payment from Gonzales. This prompted Spouses Rabaja to suspend further payment of the purchase price; and as a consequence, they received a notice to vacate the subject property from Spouses Salvador for non-payment of rentals. Thereafter, Spouses Salvador instituted an action for ejectment against Spouses Rabaja. In turn, Spouses Rabaja filed an action for rescission of contract against Spouses Salvador and Gonzales, the subject matter of the present petition. Summary of courts' ruling in the action for ejectment: The complaint was filed before the MeTC of Mandaluyong City which ruled in favor of Spouses Salvador finding that valid grounds existed for the eviction of Spouses Rabaja from the subject property and ordering them to pay back rentals. Spouses Salvador were able to garnish the amount of P593,400.00 6 from Spouses Rabaja's time deposit account pursuant to a writ of execution issued by the MeTC. RTC reversed the MeTC ruling stating that no lease agreement existed between the parties. Thereafter, CA ruled in favor of Spouses Salvador and reinstated the MeTC ruling ejecting Spouses Rabaja. Meanwhile, the rescission case filed by Spouses Rabaja against Spouses Salvador and Gonzales, in their complaint, Spouses Rabaja demanded the rescission of the contract to sell praying that the amount of P950,000.00 they previously paid to Spouses Salvador be returned to them. RTC RULING: The RTC rendered a decision in favor of Spouses Rabaja and ordered the rescission of the contract. The contract was one of contract of sale not a contract to sell, which can appropriately be rescinded, being a contract with reciprocal obligations. The RTC also stated that Gonzales was undoubtedly the attorney-in-fact of Spouses Salvador absent any taint of irregularity. Spouses Rabaja could not be faulted in dealing with Gonzales who was duly equipped with the SPA from Spouses Salvador. In its ruling in favor of respondents, it ordered the return of the garnished amount and the 950,000 pesos which represents the purchase price. CA RULING: On appeal, CA AFFIRMED the RTC's decision, MODIFYING that Gonzales was not solidarily liable with Spouses Salvador. The agent must expressly bind himself or exceed the limit of his authority in order to be solidarily liable. It was not shown that Gonzales as agent of Spouses Salvador exceeded her authority or expressly bound herself to be solidarily liable. Hence, this petition. PETITIONERS: SPOUSES ROLANDO and HERMINIA SALVADOR Spouses Salvador raise in issue the veracity of the receipts given by Gonzales, the SPA and the validity of the contract to sell. They claim that the improvised receipts should not be given credence because these were crude and suspicious, measuring only by 2 x 2 inches which showed that Gonzales misappropriated the payments of Spouses Rabaja for herself and did not remit the amount of P950,000.00 to them. As there was no consideration, then no valid contract to sell existed.

Rallos vs. Felix Go Chan & Sons Realty Corporation Law does not impose a duty on the heirs of principal to notify agent of death of principal; If agent dies, his heirs must notify principal thereof . —

The Civil Code does not impose a duty on the heirs of the principal to notify the agent of the death of said principal. What the Code provides in Article 1932 is that, if the agent dies, his heirs must notify the principal thereof, and in the meantime adopt such measures as the circumstances may demand in the interest of the latter. Hence, the fact that no notice of the death of the principal was registered on the certificate of title of the property in the Office of the Register of Deeds, is not fatal to the cause of the estate of the principal.

Ticong vs. Malim RULING

The Court is in complete accord with the RTC and the CA in concluding that the respondents were the procuring cause of the sale. At the very least, the respondents were able to bring together the Ticongs and the Buyer to negotiate and lay the groundwork for a sale transaction. The term "procuring cause," in describing a broker's activity, refers to a cause originating a series of events which, without break in their continuity, results in the accomplishment of the prime objective of employing the broker — to produce a purchaser ready, willing and able to buy real estate on the owner's terms. To be regarded as the procuring cause of a sale, a broker's efforts must have been the foundation of the negotiations which subsequently resulted in a sale." The broker must be the efficient agent or the procuring cause of the sale. The means employed by him and his efforts must result in the sale. He must find the purchaser, and the sale must proceed from his efforts acting as broker." In this case, the role of the respondents in the successful consummation of the sale transaction is undisputed. Indeed, the evidence on record shows that the respondents were instrumental in the sale of the properties of the Ticongs. Without their intervention, no sale would have been consummated. They were the ones who set the sale of the said lots in motion. If not for the respondents, the Buyer would not have known about the lots being sold by the Ticongs. On the issue of whether the respondents are entitled to the overprice commission or to the 5% finders' fee only, the Court finds that the CA correctly upheld the award of P2.8 million as overprice commission. Basic is the principle that a contract (the MOA in this case) is the law between the parties, and its stipulations are binding on them, unless the contract is contrary to law, morals, good customs, public order or public policy. The Ticongs, having freely and willingly entered into a contract by executing the MOA, cannot renege on their obligation to pay the overprice commission on the flimsy excuse that the respondents were not licensed brokers who did not spend much money in partially negotiating with the Buyer.

Inland Realty Investment Service, Inc. vs. CA Sales; Agency; Broker's Commissions; Where a party is not the efficient procuring cause in bringing about a sale, he is not entitled to the stipulated broker's commission. —

The Court of Appeals cannot be faulted for emphasizing the lapse of more than one (1) year and five (5) months between the expiration of petitioners' authority to sell and the consummation of the sale to Stanford, to be a significant index of petitioners' non-participation in the really critical events leading to the consummation of said sale, i.e., the negotiations to convince Stanford to sell at Araneta, Inc.'s asking price, the finalization of the terms and conditions of the sale, the drafting of the deed of sale, the processing of pertinent documents, and the delivery of the shares of stock to Stanford. Certainly, when the lapse of the period of more than one (1) year and five (5) months between the expiration of petitioners' authority to sell and the consummation of the sale, is viewed in the context of the utter lack of evidence of petitioners' involvement in the negotiations between Araneta, Inc. and Stanford during that period and in the subsequent processing of the documents pertinent to said sale, it becomes undeniable that the respondent Court of Appeals did not at all err in affirming the trial court's dismissal of petitioners' claim for unpaid brokerage commission. Petitioners were not the efficient procuring cause in bringing about the sale in question on July 8,1977 and are, therefore, not entitled to the stipulated broker's commission of "5% on the total price."

Yoshizaki vs. Joy Training Center of Aurora, Inc. Land Registration; Certificate of Title; Persons dealing with aregistered land have the legal right to rely on the face of the title and todispense with the need to inquire further, except when the party concernedhas actual knowledge of facts and circumstances that would impel areasonably cautious man to make such inquiry. —

The absence of a contractof agency renders the contract of sale unenforceable; Joy Trainingeffectively did not enter into a valid contract of sale with the spousesYoshizaki. Sally cannot also claim that she was a buyer in good faith. Shemisapprehended the rule that persons dealing with a registered land have thelegal right to rely on the face of the title and to dispense with the need toinquire further, except when the party concerned has actual knowledge offacts and circumstances that would impel a reasonably cautious man tomake such inquiry. This rule applies when the ownership of a parcel of landis disputed and not when the fact of agency is contested .

Republic vs. Bañez The prescription of actions is interrupted when they are filed before the court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor .—

The accrual of the cause of action to demand the titling of the land cannot be earlier than 15 August 1984. So that, the petitioner can sue on the contract until 15 August 1994. Prior to the expiration of the aforesaid period, the petitioner sent a demand letter to Hojilla dated 29 May 1991. A few months thereafter, petitioner sent another demand letter to Hojilla dated 24 October 1991. The prescriptive period was interrupted on 29 May 1991. The consequence is stated in Article 1155 of the Civil Code. It states, "[t]he prescription of actions is interrupted when they are filed before the court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor."

Virata vs. Ng Wee Civil Law; Agency; Through the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. —

The argument that Wincorp is a mere agent that could not be held liable for Power Merge's unpaid loan is equally unavailing. For even if the Court were to accede to the argument and undercut the significance of Wincorp's participation from vendor of securities to purely attorney-in-fact, the investment house would still not be immune. Agency, in Wincorp's case, is not a veritable defense. Through the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. As the basis of agency is representation, there must be, on the part of the principal, an actual intention to appoint, an intention naturally inferable from the principal's words or actions. In the same manner, there must be an intention on the part of the agent to accept the appointment and act upon it. Absent such mutual intent, there is generally no agency.

Salvador vs. Rabaja Breach of Contract; Moral Damages; Article 2220 of the New Civil Code provides that to award moral damages in a breach of contract, the defendant must act fraudulently or in bad faith .—

The award of damages to Spouses Rabaja cannot be sustained by this Court. The filing alone of a civil action should not be a ground for an award of moral damages in the same way that a clearly unfounded civil action is not among the grounds for moral damages. Article 2220 of the New Civil Code provides that to award moral damages in a breach of contract, the defendant must act fraudulently or in bad faith. In this case, Spouses Rabaja failed to sufficiently show that Spouses Salvador acted in a fraudulent manner or with bad faith when it breached the contract of sale. Thus, the award of moral damages cannot be warranted.

Virata vs. Ng Wee Contracts; Relativity of Contracts; The basic principle of relativity of contracts is that, as a general rule, contracts take effect only between the parties, their assigns and heirs. —

The basic principle of relativity of contracts is that, as a general rule, contracts take effect only between the parties, their assigns and heirs. The sound reason for the exclusion of nonparties to an agreement is the absence of a vinculum or juridical tie which is the efficient cause for the establishment of an obligation. Needless to state, Ng Wee does not fall under any of the classes that are deemed privy as far as the Side Agreements are concerned. At most, he only authorized Wincorp, through the SPAs, to " agree, deliver, sign, [and] execute loan documents " relative to the borrowing of Power Merge. This authority does not extend to excusing Power Merge from paying its obligations under the Promissory Notes that it issued for the benefit of the investors. Thus, even if we were to assume that the execution of the Side Agreements was with the imprimatur of the Wincorp board of directors, Power Merge would still have been able to determine, based on a cursory reading of the SPAs, that Wincorp's acquiescence to the Side Agreements is an ultra vires act insofar as its principals, Ng Wee included, are concerned.

Bordador vs. Luz Presumption of Regularity; It is a legal presumption, born of wisdom and experience, that official duty has been regularly performed; that the proceedings of a judicial tribunal are regular and valid, and that judicial acts and duties have been and will be duly and properly performed. —

The fact that a resolution was issued by said court within a relatively short period of time after the records of the case were elevated to the office of the ponente cannot, by itself, be deemed irregular. There is no showing whatsoever that the resolution was issued without considering the reply filed by petitioners. In fact, that brief pleading filed by petitioners does not exhibit any esoteric or ponderous argument which could not be analyzed within an hour. It is a legal presumption, born of wisdom and experience, that official duty has been regularly performed; that the proceedings of a judicial tribunal are regular and valid, and that judicial acts and duties have been and will be duly and properly performed. The burden of proving irregularity in official conduct is on the part of petitioners and they have utterly failed to do so. It is thus reprehensible for them to cast as persions on a court of law on the bases of conjectures or surmises, especially since one of the petitioners appears to be a member of the Philippine Bar.

Salvador vs. Rabaja Pre-Trial; If the absent party at the pretrial is the plaintiff, then his case shall be dismissed. If it is the defendant who fails to appear, then the plaintiff is allowed to present his evidence ex parte and the court shall render judgment based on the evidence presented .—

The failure of a party to appear at the pretrial has indeed adverse consequences. If the absent party is the plaintiff, then his case shall be dismissed. If it is the defendant who fails to appear, then the plaintiff is allowed to present his evidence ex parte and the court shall render judgment based on the evidence presented. Thus, the plaintiff is given the privilege to present his evidence without objection from the defendant, the likelihood being that the court will decide in favor of the plaintiff, the defendant having forfeited the opportunity to rebut or present its own evidence. The stringent application of the rules on pretrial is necessitated from the significant role of the pretrial stage in the litigation process. Pretrial is an answer to the clarion call for the speedy disposition of cases. Although it was discretionary under the 1940 Rules of Court, it was made mandatory under the 1964 Rules and the subsequent amendments in 1997. "The importance of pretrial in civil actions cannot be overemphasized."

Virata vs. Ng Wee Civil Law; Contracts; Interest Rate; Article 1306 of the Civil Code precludes the contracting parties from establishing stipulations, clauses, terms, and conditions that are contrary to law, morals, good customs, public order, and public policy. —

The freedom to contract is not absolute. And one of the more general restrictions thereon is enshrined in Article 1306 of the Civil Code which precludes the contracting parties from establishing stipulations, clauses, terms, and conditions that are contrary to law, morals, good customs, public order, and public policy. In this jurisdiction, the Court has never shied away from striking down iniquitous and unconscionable interest rates for failing to meet this standard. We see no reason to depart from the practice in this case.

Lim vs. CA Criminal Procedure; Evidence; Credibility of Witnesses; Weight of evidence is not determined mathematically by the numerical superiority of the witnesses testifying to a given fact. —

The issue as to the return of the ring boils down to one of credibility. Weight of evidence is not determined mathematically by the numerical superiority of the witnesses testifying to a given fact. It depends upon its practical effect in inducing belief on the part of the judge trying the case. In the case at bench, both the trial court and the Court of Appeals gave weight to the testimony of Vicky Suarez that she did not authorize Rosa Lim to return the pieces of jewelry to Nadera.

Virata vs. Ng Wee Judgments; Law of the Case Doctrine; The law of the case doctrine applies in a situation where an appellate court has made a ruling on a question on appeal and thereafter remands the case to the lower court for further proceedings; the question settled by the appellate court becomes the law of the case at the lower court and in any subsequent appeal. —

The law of the case doctrine applies in a situation where an appellate court has made a ruling on a question on appeal and thereafter remands the case to the lower court for further proceedings; the question settled by the appellate court becomes the law of the case at the lower court and in any subsequent appeal. It means that whatever is irrevocably established as the controlling legal rule or decision between the same parties in the same case continues to be the law of the case, whether correct on general principles or not, so long as the facts on which the legal rule or decision was predicated continue to be the facts of the case before the court.

Virata vs. Ng Wee Attorney's Fees; In all cases, the attorney's fees and expenses of litigation must be reasonable. —

The same downward modification is in order as regards the award of attorney's fees. Although Ng Wee finds justification for the entitlement to the award under Article 2208 of the New Civil Code, the same provision mandates that " in all cases, the attorney's fees and expenses of litigation must be reasonable ." Just as We have reduced the rate for liquidated damages, the Court likewise tempers the stipulated rate of attorney's fees to five percent (5%) of the total amount due on Ng Wee's investment.

Country Bankers Insurance Corporation vs. Keppel Cebu Shipyard Guaranty; Suretyship; Special Power of Attorney; Under Article 1878 (11) of the Civil Code, a special power of attorney is necessary to obligate the principal as a guarantor or surety. —

The scope of an agent's authority is what appears in the written terms of the power of attorney granted upon him. Under Article 1878 (11) of the Civil Code, a special power of attorney is necessary to obligate the principal as a guarantor or surety.

Patrimonio vs. Gutierrez FACTS

The petitioner and the respondent Napoleon Gutierrez (Gutierrez) entered into a business venture under the name of Slam Dunk Corporation (Slum Dunk), a production outfit that produced mini- concerts and shows related to basketball. Petitioner was already then a decorated professional basketball player while Gutierrez was a well-known sports columnist. In the course of their business, the petitioner pre-signed several checks to answer for the expenses of Slam Dunk. Although signed, these checks had no payee's name, date or amount. The blank checks were entrusted to Gutierrez with the specific instruction not to fill them out without previous notification to and approval by the petitioner. Without the petitioner's knowledge and consent, Gutierrez went to Marasigan (the petitioner's former teammate), to secure a loan in the amount of ₱200,000.00 on the excuse that the petitioner needed the money for the construction of his house. After much contemplation and taking into account his relationship with the petitioner and Gutierrez, Marasigan acceded to Gutierrez' request and gave him ₱200,000.00. Gutierrez simultaneously delivered to Marasigan one of the blank checks the petitioner pre-signed with the blank portions filled out with the words "Cash" "Two Hundred Thousand Pesos Only", and the amount of "₱200,000.00". Marasigan deposited the check but it was dishonored for the reason "ACCOUNT CLOSED." It was later revealed that petitioner's account with the bank had been closed since May 28, 1993. Marasigan sought recovery from Gutierrez, to no avail. He thereafter sent several demand letters to the petitioner asking for the payment of ₱200,000.00, but his demands likewise went unheeded. Consequently, he filed a criminal case for violation of B.P. 22 against the petitioner. RTC RULING: The RTC ruled in favor of Marasigan. It found that the petitioner, in issuing the pre-signed blank checks, had the intention of issuing a negotiable instrument, albeit with specific instructions to Gutierrez not to negotiate or issue the check without his approval. CA RULING: affirmed the RTC ruling PETITIONER (NAME): PATRIMONIO He points to Article 1878, paragraph 7 of the Civil Code, which explicitly requires a written authority when the loan is contracted through an agent. The petitioner contends that absent such authority in writing, he should not be held liable for the face value of the check because he was not a party or privy to the agreement.

Virata vs. Ng Wee The fiduciary duty of a company director cannot conveniently be separated from the position he occupies on the trifling argument that no monetarybenefit was being derived therefrom. The gratuitous performance of his duties and functions is not sufficient justification to do a poor job at steering the company away from foreseeable pitfalls and perils. —

The practice of installing undiscerning directors cannot be tolerated, let alone allowed to perpetuate. This must be curbed by holding accountable those who fraudulently and negligently perform their duties as corporate directors, regardless of the accident by which they acquired their respective positions. In this case, the fact remains that petitioner Estrella accepted the directorship in the Wincorp board, along with the obligations attached to the position, without question or qualification. The fiduciary duty of a company director cannot conveniently be separated from the position he occupies on the trifling argument that no monetary benefit was being derived therefrom. The gratuitous performance of his duties and functions is not sufficient justification to do a poor job at steering the company away from foreseeable pitfalls and perils. The careless management of corporate affairs, in itself, amounts to a betrayal of the trust reposed by the corporate investors, clients, and stakeholders, regardless of whether or not the board or its individualmembers are being paid. The RTC and the CA, therefore, correctly disregarded the defense of Estrella that he is a mere nominee.

Ticong vs. Malim Agency; Commission; When there is a close, proximate and causal connection between the agent's efforts and the sale of the property, the agents are entitled to their commission. —

The respondents' actions indeed constituted the procuring cause of the sale. When there is a close, proximate and causal connection between the agent's efforts and the sale of the property, the agents are entitled to their commission. On the issue of whether the respondents are entitled to the overprice commission or to the 5% finders' fee only, the Court finds that the CA correctly upheld the award of P2.8 million as overprice commission in favor of the respondents.

Patrimonio vs. Gutierrez Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; The rule that questions of fact are not the proper subject of an appeal by certiorari, as a petition for review under Rule 45 is limited only to questions of law, is not an absolute rule that admits of no exceptions. —

The rule that questions of fact are not the proper subject of an appeal by certiorari , as a petition for review under Rule 45 is limited only to questions of law, is not an absolute rule that admits of no exceptions. One notable exception is when the findings of fact of both the trial court and the CA are conflicting, making their review necessary. In the present case, the tribunals below arrived at two conflicting factual findings, albeit with the same conclusion, i.e. , dismissal of the complaint for nullity of the loan . Accordingly, we will examine the parties' evidence presented.

Yoshizaki vs. Joy Training Center of Aurora, Inc. The purpose of the law in requiring a special power of attorney in the disposition of immovable property is to protect the interest of an unsuspecting owner from being prejudiced by the unwarranted act of another and to caution the buyer to assure himself of the specific authorization of the putative agent. —

The special power of attorney mandated by law must be one that expressly mentions a sale or that includes a sale as a necessary ingredient of the authorized act . We unequivocably declared in Cosmic Lumber Corporation v. Court of Appeals , 265 SCRA 168 91996), that a special power of attorney must express the powers of the agent in clear and unmistakable language for the principal to confer the right upon an agent to sell real estate. When there is any reasonable doubt that the language so used conveys such power, no such construction shall be given the document. The purpose of the law in requiring a special power of attorney in the disposition of immovable property is to protect the interest of an unsuspecting owner from being prejudiced by the unwarranted act of another and to caution the buyer to assure himself of the specific authorization of the putative agent.

Ticong vs. Malim Civil Law; Sales; Procuring Cause; Words and Phrases; The term "procuring cause," in describing a broker's activity, refers to a cause originating a series of events which, without break in their continuity, results in the accomplishment of the prime objective of employing the broker— to produce a purchaser ready, willing and able to buy real estate on the owner's terms. —

The term "procuring cause," in describing a broker's activity, refers to a cause originating a series of events which, without breaking their continuity, results in the accomplishment of the prime objective of employing the broker — to produce a purchaser ready, willing and able to buy real estate on the owner's terms. To be regarded as the procuring cause of a sale, a broker's efforts must have been the foundation of the negotiations which subsequently resulted in a sale. "The broker must be the efficient agent or the procuring cause of the sale. The means employed by him and his efforts must result in the sale. He must find the purchaser, and the sale must proceed from his efforts acting as broker."

Tan vs. Gullas Evidence; The trial court's evaluation of the witnesses is accorded great respect and finality . —

The trial court's evaluation of the witnesses is accorded great respect and finality in the absence of any indication that it overlooked certain facts or circumstances of weight and influence, which if reconsidered, would alter the result of the case.

Virata vs. Ng Wee Though he may perform acts in a manner more advantageous to the principal than that specified by him, in no case shall the agent carry out the agency if its execution would manifestly result or damage to the principal. —

There is no dearth of statutory provisions in the New Civil Code that aim to preserve the fiduciary character of the relationship between principal and agent. Of the established rules under the code, one cannot be more basic than the obligation of the agent to carry out the purpose of the agency within the bounds of his authority. Though he may perform acts in a manner more advantageous to the principal than that specified by him, in no case shall the agent carry out the agency if its execution would manifestly result or damage to the principal.

Inland Realty Investment Service, Inc. vs. CA Contempt; A party's blatant attempt to mislead the Supreme Court is contemptuous conduct that the Court sternly condemns. —

This claim is a blatant lie. In the first place, petitioners have conspicuously failed to attach a certified copy of this Letter dated October 28,1976. They have, in fact, not attached even a machine copy thereof. All they gave this court is their word that said Letter dated October 28, 1976 does exist, and on that basis, they expect us to accordingly rule in their favor. Such naivety, this court will not tolerate. We will not treat lightly petitioners' attempt to mislead this court by claiming that the Letter dated October 28, 1976 was marked as Exhibit "L" by the trial court, when the truth is that the trial court marked as Exhibit "L," and the respondent Court of Appeals considered as Exhibit "L," private respondent Araneta, Inc.'s Letter dated October 28, 1975, not 1976. Needless to say, this blatant attempt to mislead this court, is contemptuous conduct that we sternly condemn.

Patrimonio vs. Gutierrez Mercantile Law; Negotiable Instruments Law; Incomplete But Delivered Instruments; In order that one who is not a holder in due course can enforce the instrument against a party prior to the instrument's completion, two requisites must exist: (1) that the blank must be filled strictly in accordance with the authority given; and (2) it must be filled up within a reasonable time. —

This provision applies to an incomplete but delivered instrument. Under this rule, if the maker or drawer delivers a pre-signed blank paper to another person for the purpose of converting it into a negotiable instrument, that person is deemed to have prima facie authority to fill it up. It merely requires that the instrument be in the possession of a person other than the drawer or maker and from such possession, together with the fact that the instrument is wanting in a material particular, the law presumes agency to fill up the blanks. In order however that one who is not a holder in due course can enforce the instrument against a party prior to the instrument's completion, two requisites must exist: (1) that the blank must be filled strictly in accordance with the authority given; and (2) it must be filled up within a reasonable time. If it was proven that the instrument had not been filled up strictly in accordance with the authority given and within a reasonable time, the maker can set this up as a personal defense and avoid liability. However, if the holder is a holder in due course, there is a conclusive presumption that authority to fill it up had been given and that the same was not in excess of authority.

Rallos vs. Felix Go Chan & Sons Realty Corporation Contention that despite death of principal the act of attorney-in-fact in selling his principal's share of the disputed property is valid and enforceable since the buyer acted in good faith is untenable because of the established knowledge of the attorney-in-fact of the death of his principal; Requisites of Art. 1931 that despite death of principal and of agent is valid not complied with. —

Under Art. 1931 of the Civil Code, an act done by the agent after the death of his principal is valid and effective only under two conditions, viz: (1) that the agent acted without knowledge of the death of the principal, and (2) that the third person who contracted with the agent himself acted in good faith. Good faith here means that the third person was not aware of the death of the principal at the time he contracted with said agent. These two requisites must concur: the absence of one will render the act of the agent invalid and unenforceable. In the instant case, it cannot be questioned that the agent Simeon Rallos knew of the death of his principal at the time he sold the latter's share in Lot No. 5983 to respondent corporation. x x x On the basis of the established knowledge of Simeon Rallos concerning the death of his principal, Concepcion Rallos, Article 1931 of the Civil Code is inapplicable. The law expressly requires for its application lack of knowledge on the part of the agent of the death of his principal; it is not enough that the third person acted in good faith.

Republic vs. Bañez Remedial Law; Civil Procedure; Courts; Supreme Court; The jurisdiction of the Supreme Court (SC) is limited to reviewing errors of law and findings of fact of the Court of Appeals (CA) are conclusive because it is not the Court's function to review, examine, and evaluate or weigh the evidence all over again; Exceptions .—

Time and time again, this Court has reiterated it is not a trier of facts and parties may raise only questions of law. The jurisdiction of the Court is limited to reviewing errors of law and findings of fact of the Court of Appeals are conclusive because it is not the Court's function to review, examine, and evaluate or weigh the evidence all over again. The rule, however, is not without exceptions, viz. : (1) [W]hen the [conclusion is a finding] grounded entirely on speculations, surmises [and] conjectures; (2) [W]hen the inference made is manifestly mistaken, absurd or impossible; (3) [W]hen there is grave abuse of discretion; (4) [W]hen the judgment is based on a misapprehension of facts ; (5) [W]hen the findings of fact are conflicting ; (6) [W]hen x x x the Court ofAppeals [, in making its findings,] went beyond the issues of the case [and the same is] contrary to the admissions of both the appellant and the appellee; (7) [W]hen the findings are contrary to [those] of the trial court ; (8) [W]hen the findings [of fact] are conclusions without citation of specific evidence on which they are based; (9) [W]hen the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondents; (10) [W]hen the findings of fact [of theCourt of Appeals] are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) [When] the Court of Appeals manifestly overlooked certain irrelevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.

Virata vs. Ng Wee Under Article 1170 of the New Civil Code, those who in the performance of their obligations are guilty of fraud are liable for damages. —

Under Article 1170 of the New Civil Code, those who in the performance of their obligations are guilty of fraud are liable for damages. The fraud referred to in this Article is the deliberate and intentional evasion of the normal fulfillment of obligation. Clearly, this provision is applicable in the case at bar. It is beyond quibble that Wincorp foisted insidious machinations upon Ng Wee in order to inveigle the latter into investing a significant amount of his wealth into a mere empty shell of a corporation. And instead of guarding the investments of its clients, Wincorp executed Side Agreements that virtually exonerated Power Merge of liability to them; Side Agreements that the investors could not have been aware of, let alone authorize.

Country Bankers Insurance Corporation vs. Keppel Cebu Shipyard An agent's act, even if done beyond the scope of his authority, may bind the principal if he ratifies them, whether expressly or tacitly. —

Under Articles 1898 and 1910, an agent's act, even if done beyond the scope of his authority, may bind the principal if he ratifies them, whether expressly or tacitly. It must be stressed though that only the principal, and not the agent, can ratify the unauthorized acts, which the principal must have knowledge of.

Country Bankers Insurance Corporation vs. Keppel Cebu Shipyard FACTS

Unimarine Shipping Lines Inc. (Unimarine), a corporation engaged in the shipping industry, contracted the services of Keppel Cebu Shipyard (Cebu Shipyard), for dry docking and ship repair works on its vessel, the M/V Pacific Fortune. Unimarine, through Paul Rodriguez, secured from Country Bankers Insurance Corp. (CBIC), through the latter's agent, Quinain, a CBIC Surety Bond. It obtained another bond from Plaridel Surety and Insurance Co. (Plaridel), a PSIC Bond. Because Unimarine failed to remit the first installment when it became due, Cebu Shipyard was constrained to deposit the peso heck corresponding to the initial installment. It was however, dishonored by the bank due to insufficient funds. Due to Unimarine's failure to heed Cebu Shipyard's repeated demands, Cebu Shipyard, through counsel, wrote the sureties CBIC and Plaridel to inform them to fulfill their obligations as sureties. However, even the sureties failed to discharge their obligations and so Cebu Shipyard filed a Complaint against Unimarine, CBIC, and Plaridel. RTC RULING: Ruled in favor of Cebu Shipyard. The CBIC, "in its capacity as surety is bound with its principal jointly and severally to the extent of the surety bond it issued in favor of [Cebu Shipyard]" because "although the contract of surety is in essence secondary only to a valid principal obligation, his liability to [the] creditor is said to be direct, primary[,] and absolute, in other words, he is bound by the principal." The RTC found CBIC's contention that Quinain acted in excess of his authority in issuing the surety bond untenable. The RTC held that CBIC is bound by the surety bond issued by its agent who acted within the apparent scope of his authority. CA RULING: Affirmed the RTC Decision. It was duly proven that Unimarine was liable to Cebu Shipyard for the ship repair works it did on the former's M/V Pacific Fortune. CBIC was held liable under the surety bond as there was no novation on the agreement between Unimarine and Cebu Shipyard that would discharge CBIC from its obligation. The CA did not allow CBIC to disclaim liability on the ground that Quinain exceeded his authority because third persons had relied upon Quinain's representation, as CBIC's agent. Quinain was, however, held solidarily liable with CBIC under Article 1911 of the Civil Code. Paul Rodriguez, Peter Rodriguez, and Albert Hontanosas jointly and severally liable. The lone petitioner in this case is CBIC. PETITIONER COUNTRY BANKERS INSURANCE COROP (CBIC): The CA erred in interpreting and applying the rules governing the contract of agency The Special Power of Attorney granted to Quinain clearly set forth the extent and limits of his authority with regard to businesses he can transact for and in behalf of CBIC. It was incumbent upon Cebu Shipyard to inquire and look into the power of authority conferred to Quinain

Republic vs. Bañez RULING

W/N the complaint for specific performance was filed beyond the prescriptive period. We rule in favor of the petitioner. PRESCRIPTIVE PERIOD : In Hojilla's letter to petitioners (Aug. 15, 1984), he updated the status of the subject property's title, stating that a certain Atty. Valera is in the process of preparing the petitioner papers of the Calaba property for submission to the local court. It was an acknowledgement of respondents' commitment under the contract. It served to update the petitioner on the status of the subject property's title, an obligation agreed upon by the parties in the Contract. In Philippine National Railways v. NLRC, it was held that a written acknowledgement of debt or obligation effectively interrupts the running of a prescriptive period and sets the same running a new. Thus, Hojilla's letter interrupted the running of the prescriptive period and set the same running with a new expiry period of 15 Aug. 1994. Furthermore, the May 29, 1991 and Oct. 24, 1991 letters demanded respondents to return the properties, discontinue the construction, repair, demolition and occupancy of several staff houses, and unlock the gates, which is to enforce respondent's obligations pursuant to Par. 7 of the Contract. Regarding Hojilla's SPA : the SPA appeared to have no representative to fulfill respondent's obligations in the Contract on their behalf except Hojilla's authority to register the subject property. This was read simply by the lower courts as limiting Hojilla's authority to the registration of the subject property under the name of his principal, and all the necessary acts for such purpose. It observed that nowhere in the SPA was Hojilla authorized as administrator In this case, the petitioners pray the execution of the Contract such as delivery of the subject title, recovery of possession of the subject property, execution of the deed of sale or transfer of absolute ownership upon full payment of the balance, and damages for alleged violation of respondents of the contract for nondelivery of the title and refusal to vacate the subject property. Following the reading of lower courts of the scope of Hojilla's authority, Hojilla is neither the proper party to execute the Contract nor the proper party to receive the demand letters on behalf of the respondents. This strict construction of the tenor of the SPA will render the obligatory Contract ineffective. Construction is not a tool to prejudice or commit fraud or to obstruct, but to attain justice. To favor the lower court's interpretation of the scope of Hojilla's authority is to defeat the juridical tie of the contract. As no one was authorized to represent the respondent in the contract, the petitioner cannot enforce the contract, as it were. This is an absurd interpretation of the SPA. It renders the Contract ineffective for lack of a party to execute the contract. Contrary to the findings of the lower court, the present case is a case of express agency, where, Hojilla, the agent, binds himself to represent another, the principal (respondents), with the latter's express consent or authority. Because there is an express authority granted upon Hojilla to represent the respondents as evidenced by the SPA, Hojilla's actions bind the respondents. As agent, the representations and guarantees of Hojilla are considered representations and guarantees of the principal. This is the principle of agency by promissory estoppel. o It was Hojilla who administered and/or managed the subject property. Hojilla made the representation (in his letters) that besides being the attorney-in-fact of the respondents with limited authority to register the property, he was also their agent with regard to respondent's other obligations related to the Contract. Also, Hojilla's representation and guarantee that petitioner's obligation will only arise upon presentation of a clean title and execution of a Deed of Sale signed by the respondents' heirs: "The Banez heirs will only claim for the full payment of the property upon presentation of a clean title and execution of a Deed of Sale." If Hojilla knew that he had no authority to execute the contract and receive letters on behalf of respondents, he should have opposed the petitioner's demand letters. However, upon receiving several demands from the petitioner, Hojilla continuously represented himself as the duly authorized agent of the respondents, authorized not only to administer/manage the property, but also represent the respondents with regard to the latter's obligations in the contract. Hojilla also assured the petitioner that their obligation to pay will arise only upon presentation of the title. Clearly, respondents are estopped by the acts and representations of their agent. "Having given that assurance, [Hojilla] may not turn around and do the exact opposite of what [he] said [he] would do. One may not take inconsistent positions. A party may not go back on his own acts and representations to the prejudice of the other party who relied upon them." Assuming further that Hojilla exceeded his authority, the respondents are still solidarily liable because they allowed Hojilla to act as though he had full powers by impliedly ratifying Hojilla's actions - through action by omission. The respondents' acquiescence of Hojilla's acts was made when they failed to repudiate the latter's acts. They knowingly permitted Hojilla to represent them and petitioners were clearly misled into believing Hojilla's authority. Thus, respondents are now estopped from repudiating Hojilla's authority, and Hojilla's actions are binding upon the respondents.

Yoshizaki vs. Joy Training Center of Aurora, Inc. Appeals; Petition for Review on Certiorari; As a general rule, a petition for review on certiorari precludes this Court from entertaining factual issues; we are not duty-bound to analyze again and weigh the evidence introduced in and considered by the lower courts. —

We are aware that the issues at hand require us to review the pieces of evidence presented by the parties before the lower courts. As a general rule, a petition for review on certiorari precludes this Court from entertaining factual issues; we are not duty-bound to analyze again and weigh the evidence introduced in and considered by the lower courts. However, the present case falls under the recognized exception that a review of the facts is warranted when the findings of the lower courts are conflicting. Accordingly, we will examine the relevant pieces of evidence presented to the lower court.

Lim vs. CA Court should not interfere with the judgment of the trial court in determining the credibility of witnesses . —

We shall not disturb this finding of the respondent court. It is well settled that we should not interfere with the judgment of the trial court in determining the credibility of witnesses, unless there appears in the record some fact or circumstance of weight and influence which has been overlooked or the significance of which has been misinterpreted. The reason is that the trial court is in a better position to determine questions involving credibility having heard the witnesses and having observed their deportment and manner of testifying during the trial.

Bordador vs. Luz RULING

Whether Degano was an agent of Luz No. No evidence was enough to conclude that Deganos was an agent of Brigida D. Luz and that the latter should consequently be held solidarily liable with Deganos in his obligation to petitioners. Even assuming arguendo that Deganos acted as an agent of Brigida, the latter never authorized him to act on her behalf with regard to the transactions subject of this case. no showing that Brigida consented to the acts of Deganos or authorized him to act on her behalf, much less with respect to the particular transactions involved. Art. 1868. By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. The basis for agency is representation. Petitioners' attempt to foist liability on respondent spouses through the supposed agency relation with Deganos is groundless and ill-advised. It was grossly and inexcusably negligent of petitioners to entrust to Deganos, on at least six occasions, several pieces of jewelry of substantial value without requiring a written authorization from his alleged principal. A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. Petitioners, who were negligent in their transactions with Deganos, cannot seek relief from the effects of their negligence by conjuring a supposed agency relation between the two respondents where no evidence supports such claim. The records show that neither an express nor an implied agency was proven to have existed between Deganos and Brigida D. Luz. Evidently, Petitioners, who were negligent in their transactions with Deganos, cannot seek relief from the effects of their negligence by conjuring a supposed agency relation between the two respondents where no evidence supports such claim. Besides, it was grossly and inexcusably negligent of petitioners to entrust to Deganos, not once or twice but on at least six occasions as evidenced by six receipts, several pieces of jewelry of substantial value without requiring a written authorization from his alleged principal. A person dealing with an agent is upon inquiry and must discover upon his peril the authority of the agent. WHEREFORE, no error having been committed by the Court of Appeals in affirming the judgment of the court a quo, its challenged decision and resolution are hereby AFFIRMED and the instant petition is DENIED,with double costs against petitioners

Dominion Insurance Corporation vs. CA RULING

Whether or not Guevarra acted within his authority as agent for petitioner. - NO. NO. Guevarra's authority to settle claims is embodied in the Memorandum of Management Agreement which enumerates the scope of respondent Guevarra's duties and responsibilities as agency manager for San Fernando, Pampanga, which are: (1) to settle and dispose of all motor car claims in the amount of P5,000 with prior approval of the Regional Office; and (2) full authority is given on TPPI claims settlement. In settling the claims mentioned above, Guevarra's authority is further limited by the written standard authority to pay, which states that the payment shall come from respondent Guevarra's revolving fund or collection. The instruction of petitioner as the principal could not be any clearer. Guevarra was authorized to pay the claim of the insured, but the payment shall come from the revolving fund or collection in his possession. Having deviated from the instructions of the principal, the expenses that respondent Guevarra incurred in the settlement of the claims of the insured may not be reimbursed from Dominion. This conclusion is in accord with Article 1918 of the Civil Code (see notes). Whether or not Guevarra is entitled to reimbursement of amounts he paid out of his personal money in settling the claims of several insured. - NO. NO. Having deviated from the instructions of the principal, the expenses that Guevarra incurred may not be reimbursed from Dominion. However, while the law on agency prohibits Guevarra from obtaining reimbursement, his right to recover may still be justified under the general law on obligations and contracts. Pursuant to Article 1236 (2) of the Civil Code (see notes), when the risk insured against occurred, petitioner's liability as insurer arose. This obligation was extinguished when Guevarra paid the claims and obtained Release of Claim Loss and Subrogation Receipts from the insured who were paid. Thus, to the extent that the obligation of the petitioner has been extinguished, Guevarra may demand for reimbursement from his principal. To rule otherwise would result in unjust enrichment of Dominion.

Virata vs. Ng Wee RULING

Whether or not Ng Wee can recover the PHP 213, 290, 410.36 - YES. YES. Ng Wee can recover to Wincorp due to fraud. Wincorp is liable to Ng Wee for perpetrating an elaborate scheme to defraud its investors. Ng Wee would not have placed funds or invested in the "sans recourse" transactions under the Power Merge borrower account had he not been deceived into believing that Power Merge is financially capable of paying the returns of his investments/money placements. Wincorp accredited Power Merge as a borrower, given it a credit line in the maximum amount of ₱2,500,000,000.00, Philippine Currency, allowed it to make drawdowns up to ₱2,183,755,253.ll, Philippine Currency, matched it with [Ng Wee's] investments/ money placements to the extent of ₱213,290,410.36, Philippine Currency, notwithstanding telling signs which immediately cast doubt on its ability to perform its obligations under the Credit Line Agreements, Promissory Notes and Confirmation Advices, to wit: (1) Power Merge had only been in existence as a corporation for barely two (2) years when it was accredited as borrower by Wincorp; (2) Power Merge is a thinly capitalized corporation with only ₱37,500,000.00 subscribed capital stock; (3) Power Merge is not an ongoing concern because (a) Despite the fact that Power Merge's principal place of business is at 151 Paseo de Roxas St., Makati City, it has neither registered nor conducted any business at Makati City as evident from the Certification dated January 3, 2006 issued by the Business Permits Office Of Makati City; (b) it is not engaged in any lucrative business to finance its operation; Despite the fact that its primary purpose is to "invest in, purchase, or otherwise acquire and own, hold, use, sell, assign, transfer, mortgage, pledge, exchange, or otherwise dispose of real or personal property of every kind and description ... ," no proof was adduced to show that it was carrying out or has carried out this mandate in accordance with the law; (c) From the time of its incorporation until the revocation of its Certificate of Incorporation on March 15, 2004, Power Merge has failed to file annual reports required by the SEC such as General Information Sheets and Financial Statements; (4) No security whatsoever was demanded by Wincorp or furnished by Power Merge in relation to its credit line and drawdowns. Indeed, no person in his proper frame of mind would venture to lend hundreds of millions of pesos to a business entity having such a financial setup. Power Merge and Virata were not active parties in defrauding Ng Wee. Instead, the company was used as a mere conduit in order for Wincorp to be able to conceal its act of directly borrowing funds for its own account. Power Merge is liable to Ng Wee under its Promissory Notes. It is crystal clear that Power Merge, through Virata, obligated itself to pay Wincorp and those who invested through it the values stated in the Promissory Notes. Power Merge cannot escape liability to Ng Wee under the Credit Line Agreement. That Power Merge did not directly transact with Ng Wee and the other investors does not exonerate it from civil liability, for its liability also finds basis on the language of the Credit Line Agreement.

Orient-Air Services and Hotel Representatives vs. CA RULING

Whether or not Orient Air is entitled to 3% overriding commission based on total revenue? 1. YES. As the designated exclusive General Sales Agent of American Air, Orient Air was responsible for the promotion and marketing of American Air's services for air passenger transportation, and the solicitation of sales therefor. In return for such efforts and services, Orient Air was to be paid commissions of two (2) kinds: first, a sales agency commission, ranging from 7-8% of tariff fares and charges from sales by Orient Air when made on American Air ticket stock; and second, an overriding commission of 3% of tariff fares and charges for all sales of passenger transportation over American Air services. It is immediately observed that the precondition attached to the first type of commission does not obtain for the second type of commissions. The latter type of commissions would accrue for sales of American Air services made not on its ticket stock but on the ticket stock of other air carriers sold by such carriers or other authorized ticketing facilities or travel agents. To rule otherwise, i.e., to limit the basis of such overriding commissions to sales from American Air ticket stock would erase any distinction between the two (2) types of commissions and would lead to the absurd conclusion that the parties had entered into a contract with meaningless provisions. Such an interpretation must at all times be avoided with every effort exerted to harmonize the entire Agreement. 2. Whether or not the termination of the agreement by American Air is proper? NO. Orient Air was clearly justified in retaining and refusing to remit the sums claimed by American Air. The latter's termination of the Agreement was, therefore, without cause and basis, for which it should be held liable to Orient Air. CA erred in deciding to "reinstate defendant as its general sales agent for passenger transportation in the Philippines in accordance with said GSA Agreement" because it would be violative of the principles and essence of agency defined by law as a contract whereby "a person binds himself to render some service or to do something in representation or on behalf of another, WITH THE CONSENT OR AUTHORITY OF THE LATTER. In an agent-principal relationship, the personality of the principal is extended through the facility of the agent. In so doing, the agent, by legal fiction, becomes the principal, authorized to perform all acts which the latter would have him do. Such a relationship can only be effected with the consent of the principal, which must not, in any way, be compelled by law or by any court. The Agreement itself between the parties states that "either party may terminate the Agreement without cause by giving the other 30 days' notice by letter, telegram or cable." We, therefore, set aside the portion of the ruling of the respondent appellate court reinstating Orient Air as general sales agent of American Air.

Rallos vs. Felix Go Chan & Sons Realty Corporation RULING

Whether or not Simeon Rallos, the atty-in-fact of Concepcion Rallos, could validly sell the property of Concepcion after her death - NO. Agency is whereby one party, called the principal (mandante), authorizes another, called the agent (mandatario), to act to find on his behalf in transactions with third persons. And as provided in paragraph 3 of Art. 1919 of the Civil Code: "Art. 1919. Agency is extinguished: 3. By the death , civil interdiction, insanity or insolvency of the principal or of the agent; . . . ." Hence, the general rule is that agency is extinguished by the death of the principal or the agent . However, Art. 1930 - 1931 of the Civil Code provides for the exception: ART. 1930. The agency shall remain in full force and effect even after the death of the principal, if it has been constituted in the common interest of the latter and of the agent, or in the interest of a third person who has accepted the stipulation in his favor. ART. 1931 . Anything done by the agent, without knowledge the death of the principal or of any other cause which extinguishes the agency, is valid and shall be fully effective with respect to third persons who may have contracted with him in good faith. In this case Art 1931 may be applicable since the SPA executed in favor Simeon Rallos was not coupled with an interest. Under Art. 1931, an act done by the agent after the death of his principal is valid and effective only under two conditions, viz : (1 ) that the agent acted without knowledge of the death of the principal, and (2) that the third person who contracted with the agent himself acted in good faith. In the instant case, Simeon Rallos knew of the death of his sister Concepcion and yet he proceeded with the sale of the lot in the name of both his sisters Concepcion and Gerundia Rallos without informing appellant (the realty corporation) of the death of the former. Thus, on the basis of the established knowledge of Simeon Rallos concerning the death of his principal, Concepcion Rallos, Article 1931 of the Civil Code is inapplicable. The law expressly requires for its application lack of knowledge on the part of the agent of the death of his principal; it is not enough that the third person acted in good faith. IN VIEW OF ALL THE FOREGOING, We set aside the decision of respondent appellate court, and We affirm en toto the judgment of CFI of Cebu.

Inland Realty Investment Service, Inc. vs. CA RULING

Whether or not petitioner was still the agent of respondent at the time of sale of the shares of stock to Stanford Microsystems, thus entitling the former to the claimed broker's commission No. Petitioners did nothing but submit Stanford's name as prospective buyer. Petitioners did not succeed in outrightly selling said shares under the predetermined terms and conditions set out by Araneta, Inc., e.g., that the price per share is P1,500.00. They admit that they could not dissuade Stanford from haggling for the price of P1,000.00 per share with the balance of 50% of the total purchase price payable in five (5) years at 12% interest per annum. From September 16, 1975 to January 1, 1976, when petitioners' authority to sell was subsisting, if at all, petitioners had nothing to show that they actively served their principal's interests, pursued to sell the shares in accordance with their principal's terms and conditions, and performed substantial acts that proximately and causatively led to the consummation of the sale to Stanford of Araneta, Inc.'s 9,800 shares in Architects'.

Manotok Brothers, Inc. vs. CA RULING

Whether or not private respondent is entitled to the 5% agent's commission - Y YES. At first sight, it would seem that private respondent is not entitled to any commission as he was not successful in consummating the sale between the parties, for the sole reason that when the Deed of Sale was finally executed, his extended authority had already expired. By this alone, one might be misled to believe that this case squarely falls within the ambit of the established principle that a broker or agent is not entitled to any commission until he has successfully done the job given to him. Going deeper however into the case would reveal that it is within the coverage of the exception rather than of the general rule, the exception being that enunciated in the case of Prats vs. Court of Appeals. In the said case, this Court ruled in favor of claimant-agent, despite the expiration of his authority, when a sale was finally consummated. This Court said, that while it was respondent court's factual findings that petitioner Prats (claimant -agent) was not the efficient procuring cause in bringing about the sale (prescinding from the fact of expiration of his exclusive authority), still petitioner was awarded compensation for his services. "In equity, however, the Court notes that petitioner had diligently taken steps to bring back together respondent Doronila and the SSS. The court has noted on the other hand that Doronila finally sold the property to the Social Security System at P3.25 per square meter which was the very same price counter-offered by the Social Security System and accepted by him in July, 1967 when he alone was dealing exclusively with the said buyer long before Prats came into the picture but that on the other hand Prats' efforts somehow were instrumental in bringing them together again and finally consummating the transaction at the same price of P3.25 per square meter, although such finalization was after the expiration of Prats' extended exclusive authority. Under the circumstances, the Court grants in equity the sum of One hundred Thousand Pesos (P100,000.00) by way of compensation for his efforts and assistance in the transaction, which however was finalized and consummated after the expiration of his exclusive authority . . ." From the foregoing, it follows then that private respondent herein, with more reason, should be paid his commission, While in Prats vs. Court of Appeals, the agent was not even the efficient procuring cause in bringing about the sale, unlike in the case at bar, it was still held therein that the agent was entitled to compensation. In the case at bar, private respondent is the efficient procuring cause for without his efforts, the municipality would not have anything to pass and the Mayor would not have anything to approve. In an earlier case, this Court ruled that when there is a close, proximate and causal connection between the agent's efforts and labor and the principal's sale of his property, the agent is entitled to a commission. We agree with respondent Court that the City of Manila ultimately became the purchaser of petitioner's property mainly through the efforts of private respondent. Without discounting the fact that when Municipal Ordinance No. 6603 was signed by the City Mayor on May 17, 1968, private respondent's authority had already expired, it is to be noted that the ordinance was approved on April 26, 1968 when private respondent's authorization was still in force. Moreover, the approval by the City Mayor came only three days after the expiration of private respondent's authority. It is also worth emphasizing that from the records, only party given a written authority by petitioner to negotiate the sale from July 5, 1966 to May 14, 1968 was private respondent. Contrary to what petitioner advances, the case of Danon vs. Brimo, on which it heavily anchors its justification for the denial of private respondent's claim, does not apply squarely to the instant petition. Claimant-agent in said case fully comprehended the possibility that he may not realize the agent's commission as he was informed that another agent was also negotiating the sale and thus, compensation will pertain to the one who finds a purchaser and eventually effects the sale. Such is not the case herein. On the contrary, private respondent pursued with his goal of seeing that the parties reach an agreement, on the belief that he alone was transacting the business with the City Government as this was what petitioner made it to appear. While it may be true that Filomeno Huelgas followed up the matter with Councilor Magsalin, the author of Municipal Ordinance No. 6603 and Mayor Villegas, his intervention regarding the purchase came only after the ordinance had already been passed — when the buyer has already agreed to the purchase and to the price for which said property is to be paid. Without the efforts of private respondent then, Mayor Villegas would have nothing to approve in the first place. It was actually private respondent's labor that had set in motion the intervention of the third party that produced the sale, hence he should be amply compensated.

Tan vs. Gullas RULING

Whether or not the petitioners are entitled to commission Yes. Broker is one engaged for others, on a commission, negotiating contracts relative to property with the custody of which he has no concern; the negotiator between other parties, never acting in his own name but in the name of those who employed him- broker is one whose occupation is to bring parties together in matters of trade commerce or navigation Petitioners as brokers were authorized by private respondents to negotiate for the sale of their land within a period of one month. Non- exclusive means that private respondents were not precluded from granting the same authority to other agents with respect to the sale of the same property. Thus, it is not prohibited that other agents are selling the same property. However, Pacana- the one claiming as agent who first negotiated with the sisters of Mary did not establish the existence of such negotiation. An agent receives a commission upon the successful conclusion of a sale. On the other hand, a broker earns his pay merely by bringing the buyer and the seller together, even if no sale is eventually made. Therefore, petitioners as brokers, should be entitled to the commission whether or not the sale of the property subject matter of the contract was concluded through their efforts. As to value of commission: 3% of the sale of the land- actual price at which it was sold should be the basis.

Yoshizaki vs. Joy Training Center of Aurora, Inc. RULING

Whether or not there was a contract of agency to sell the real properties between Joy Training and the spouses Johnson. - NO. NO. There was no contract of agency between Joy Training and the spouses Johnson to sell the parcel of land with its improvements. Article 1868 of the Civil Code defines a contract of agency as a contract whereby a person "binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter." It may be express or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. As a general rule, a contract of agency may be oral. It must be written when the law required a specific form. Article 1874 of the Civil Code provides that the contract of agency must be written for the validity of the sale of a piece of land or any interest therein. Otherwise, the sale shall be void. A related provision, Article 1878 of the Civil Code, states that special powers of attorney are necessary to convey real rights over immovable properties. The special power of attorney mandated by law must be one that expressly mentions a sale or that includes a sale as a necessary ingredient of the authorized act. The Court unequivocably declared in Cosmic Lumber Corporation vs. Court of Appeals that a special power of attorney must express the powers of the agent in clear and unmistakable language for the principal to confer the right upon an agent to sell real estate. When there is any reasonable doubt that the language so used conveys such power, no such construction shall be given the document. The purpose of the law in requiring a special power of attorney in the disposition of immovable property is to protect the interest of an unsuspecting owner from being prejudiced by the unwarranted act of another and to caution the buyer to assure himself of the specific authorization of the putative agent. In this case, Sally presented three pieces of evidence, which allegedly proved that Joy Training specifically authorized the spouses Johnson to sell the real properties: (1) TCT No. T- 25334; (2) The resolution; (3) And the certification. The said documents did not convince the Court of the existence of the contract of agency to sell the real properties. TCT No. T-25334 merely states that Joy Training is represented by the spouses Johnson. The title does not explicitly confer to the spouses Johnson the authority to sell the parcel of land and the building thereon. Moreover, the phrase "Rep. by Sps. RICHARD A. JOHNSON and LINDA S. JOHNSON" only means that the spouses Johnson represented Joy Training in land registration. The resolution which purportedly grants the spouses Johnson a special power of attorney is negated by the phrase "land and building owned by spouses Richard A. and Linda J[.] Johnson." Even if we disregard such phrase, the resolution must be given scant consideration. We adhere to the CA's position that the basis for determining the board of trustees' composition is the trustees as fixed in the articles of incorporation and not the actual members of the board. Moreover, the certification is a mere general power of attorney which comprises all of Joy Training's business. Article 1877 of the Civil Code clearly states that "[a]n agency couched in general terms comprises only acts of administration, even if the principal should state that he withholds no power or that the agent may execute such acts as he may consider appropriate, or even though the agency should authorize a general and unlimited management." As a consequence of the second issue, whether or not there was a valid contract of sale of the real properties between Joy Training and the Spouses Yoshizaki. - NO. NO. Necessarily, the absence of a contract of agency renders the contract of sale is unenforceable. Joy Training effectively did not enter into a valid contract of sale with the spouses Yoshizaki. Sally cannot also claim to be a buyer in good faith. She misapprehended the rule that persons dealing with a registered land have the legal right to rely on the face of the title and to dispense with the need to inquire further, except when the party concerned has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry. This rule applies when the ownership of a parcel of land is disputed and not when the fact of agency is contested. The Court reiterated that the basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover on his own peril the authority of the agent. Thus, Sally bought the properties at her own risk; she bears the risk of injury occasioned by her transaction with the spouses Johnson.

Patrimonio vs. Gutierrez While under the law, Gutierrez had a prima facie authority to complete the check, such prima facie authority does not extend to its use (i.e., subsequent transfer or negotiation) once the check is completed. —

While under the law, Gutierrez had a prima facie authority to complete the check , such prima facie authority does not extend to its use ( i.e. , subsequent transfer or negotiation) once the check is completed. In other words, only the authority to complete the check is presumed. Further, the law used the term " prima facie " to underscore the fact that the authority which the law accords to a holder is a presumption juris tantum only; hence, subject to subject to contrary proof. Thus, evidence that there was no authority or that the authority granted has been exceeded may be presented by the maker in order to avoid liability under the instrument.

Salvador vs. Rabaja Attorney's Fees; The settled rule is that no premium should be placed on the right to litigate and that not every winning party is entitled to an automatic grant of attorney's fees .—

With regard to attorney's fees,neither Spouses Rabaja nor Gonzales is entitled to the award. The settled rule is that no premium should be placed on the right to litigate and that not every winning party is entitled to an automatic grant of attorney's fees. The RTC reasoned that Gonzales was forced to litigate due to the acts of Spouses Salvador. The Court does not agree. Gonzales, as agent of Spouses Salvador, should have expected that she would be called to litigation in connection with her fiduciary duties to the principal.

Salvador vs. Rabaja RULING

YES. The Supreme Court ruled that Gonzales, as agent of Spouses Salvador, could validly receive the payments of Spouses Rabaja. The Court agrees with the courts below in finding that the contract entered into by the parties was essentially a contract of sale which could be validly rescinded. Spouses Salvador insist that they did not receive the payments made by Spouses Rabaja from Gonzales which totalled P950,000.00 and that Gonzales was not their duly authorized agent. These contentions, however, must fail in light of the applicable provisions of the New Civil Code (See Notes). Persons dealing with an agent must ascertain not only the fact of agency, but also the nature and extent of the agent's authority. A third person with whom the agent wishes to contract on behalf of the principal may require the presentation of the power of attorney, or the instructions as regards the agency. The basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover on his own peril the authority of the agent. According to Article 1990 of the New Civil Code, insofar as third persons are concerned, an act is deemed to have been performed within the scope of the agent's authority, if such act is within the terms of the power of attorney, as written. In this case, Spouses Rabaja did not recklessly enter into a contract to sell with Gonzales. They required her presentation of the power of attorney before they transacted with her principal. And when Gonzales presented the SPA to Spouses Rabaja, the latter had no reason not to rely on it. The law mandates an agent to act within the scope of his authority which what appears in the written terms of the power of attorney granted upon him. The Court holds that, indeed, Gonzales acted within the scope of her authority. The SPA precisely stated that she could administer the property, negotiate the sale and collect any document and all payments related to the subject property. As the agent acted within the scope of his authority, the principal must comply with all the obligations. As correctly held by the CA, considering that it was not shown that Gonzales exceeded her authority or that she expressly bound herself to be liable, then she could not be considered personally and solidarily liable with the principal, Spouses Salvador. Perhaps the most significant point which defeats the petition would be the fact that it was Herminia herself who personally introduced Gonzalez to Spouses Rabaja as the administrator of the subject property. By their own ostensible acts, Spouses Salvador made third persons believe that Gonzales was duly authorized to administer, negotiate and sell the subject property. This fact was even affirmed by Spouses Salvador themselves in their petition where they stated that they had authorized Gonzales to look for a buyer of their property. As correctly held by the CA and the RTC, considering that there was a valid SPA, then Spouses Rabaja properly made payments to Gonzales, as agent of Spouses Salvador; and it was as if they paid to Spouses Salvador. It is of no moment, insofar as Spouses Rabaja are concerned, whether or not the payments were actually remitted to Spouses Salvador. Any internal matter, arrangement, grievance or strife between the principal and the agent is theirs alone and should not affect third persons. If Spouses Salvador did not receive the payments or they wish to specifically revoke the SPA, then their recourse is to institute a separate action against Gonzales. Such action, however, is not any more covered by the present proceeding. Moreover, no award of actual, moral and exemplary damages should be awarded to Spouses Rabaja because they failed to prove such damages. Thus, the contract to sell was rescinded and the amount of P950,000.00 should be paid to Spouses Rabaja by Spouses Salvador. However, the amount of P593,400.00 should not be returned by Spouses Salvador.