Professional Documents
Culture Documents
WILLIAM SIMMONS
DOCTRINE: A person, merely acting as an agent, is not personally liable to the
party with whom he contracts, unless he expressly binds himself or exceeds the
limits of his authority
FACTS:
Petitioner Hortensia Zialcita, single at the time, was employed by the National
City Bank of New York. In the contract of employment she signed, a no
marriage clause was included.
The clause states: I understand that I am being hired as a single female
employee. In the event of my marriage you may terminate this
employment in which case I shall be entitled to no other benefits
except my salary through the last day on which I worked.
She intended to marry soon, so she filed her resignation, which was accepted
and made effective.
Petitioner filed for damages against Respondent William Simmons, the
General Manager of the National City Bank, for forcing her to sign the letter of
resignation in implementation of the clause stated.
The Trial Court held in favor of respondent. The court held that her signing of
the contract was voluntary, and the clause in question was valid condition of
employment.
Furthermore, the trial court held that she had no cause of action against
respondent, since it was not the respondent who employed her. If she had
any cause of action, it would have been against the Bank, her employer.
Petitioner appealed.
ISSUE: Can the respondent be made personally liable for petitioners termination?
HELD: NO
When respondent hired petitioner and required her to sign the contract of
employment, respondent was acting as the manager of the Bank. Similarly,
respondent was acting as the manager of the Bank when he asked petitioner
to sign the letter of resignation.
No allegation was made that Respondent exceeded his power as an agent of
the Bank, nor was any allegation made that the Bank, respondents principal,
repudiated his action.
Consequently, merely acting as manager, the claim for damages should be
against the principal and not the agent in his personal capacity.
"The agent who acts as such is not personally liable to the party with whom
he contracts, unless he expressly binds himself or exceeds the limits of his
authority
"The principal must comply with all the obligations which the agent may have
contracted within the scope of his authority."
Case #2
G.R. No. L-2246
FACTS:
1
2
3
4
5
6
Westchester Fire Insurance Company of New York entered into a contract with
Tina J. Gamboa whereby said company insured one case of rayon
yardage which said Tina J. Gamboa shipped from San Francisco, California,
on steamer Clovis Victory, to Manila, Philippines and consigned to Jovito
Salonga.
The contract of insurance: the insurance company undertook to pay to the
sender or her consignee the damages that may be caused to the goods
shipped subject (not exceeding Php 2000).
Upon arrival of the ship, and the surveying of the delivered goods, it appears
that there is shortage in the shipment in the amount of P1,723,12.
SALONGA filed a claim for damages in the amount of P1,723.12 against the
American President Lines, agents of the ship Clovis Victory, demanding
settlement, and when apparently no action was taken on this claim,
SALONGA demanded payment from Warner, Barnes and Co., Ltd., as
agent of the insurance company (WESTCHESTER) in the Philippines,
and this agent having refused to pay the claim, on April 17, 1947,
plaintiff instituted the present action.
Trial court decided in favor of Salonga; Warner, Barnes filed this recourse.
WARNER CLAIMS: (1) said defendant has no contractual relation with
either the plaintiff or his consignor; (2) the defendant is not the real
party in interest against whom the suit should be brought; and (3) a
judgment for or against an agent in no way binds the real party in
interest.
HELD/RULING:
1
The evidence shows that the defendant did not enter into any contract either
with the plaintiff or his consignor Tina J. Gamboa. The contract of marine
insurance, Exhibit C, was made and executed only by and between the
Westchester Fire Insurance Company of New York and Tina J. Gamboa. The
contract was entered in New York. There is nothing therein which may affect,
in favor or adversely, the defendant, the fulfillment of which may be
demanded by or against it.
That contract is purely bilateral, binding only upon Gamboa and the
insurance company. When the lower court, therefore, imposed upon the
defendant an obligation which it has never assumed, either expressly or
impliedly, or when it extended to the defendant the effects of a contract
which was entered into exclusively by and between the Westchester Fire
Insurance Company of New York and Tina J. Gamboa, the error it has
committed is evident.
The defendant (WARNER) is a settlement and adjustment agent of the
foreign insurance company (WESTCHESTER) and that as such agent it has the
authority to settle all the losses and claims that may arise under the policies
that may be issued by or in behalf of said company in accordance with the
instructions it may receive from time to time from its principal, but we
disagree with counsel in his contention that as such adjustment and
settlement agent, the defendant has assumed personal liability under said
policies, and, therefore, it can be sued in its own right.
An adjustment and settlement agent is no different from any other agent
from the point of view of his responsibility, for he also acts in a representative
capacity. Whenever he adjusts or settles a claim, he does it in behalf of his
principal, and his action is binding not upon himself but upon his principal.
And here again, the ordinary rule of agency applies.
It, therefore, clearly appears that the scope and extent of the
functions of an adjustment and settlement agent do not include
personal liability.
His functions are merely to settle and adjusts claims in behalf of his
principal if those claims are proven and undisputed, and if the claim
is disputed or is disapproved by the principal, like in the instant
case, the agent does not assume any personal liability. The recourse
of the insured is to press his claim against the principal.
A judgment, for or against an agent, in no way binds the real party in interest.
The reason is obvious. An action is brought for a practical purpose, nay to
obtain actual and positive relief. If the party sued upon is not the proper
party, any decision that may be rendered against him would be futile, for it
cannot be enforced or executed.
the sales manager of Impact Systems and was impleaded in the court a quo in said
capacity.
Petitioner sold to Impact Systems various products allegedly amounting to
P91,338.00. Subsequently, respondents sought to buy from petitioner one unit of
sludge pump valued at P250,000.00 with respondents making a down payment of
P50,000.00.When the sludge pump arrived from the United Kingdom, petitioner
refused to deliver the same to respondents without their having fully settled their
indebtedness to petitioner. Thus, on 28 June 1995, respondent EDWIN and Alberto
de Jesus, general manager of petitioner, executed a Deed of Assignment of
receivables in favor of petitioner. The deed states that Impact Systems obligates
itself to convey to Eurotech its recievables from Toledo Power Corporation
amounting to P365,000.00.
Unknown to petitioner, respondents, despite the existence of the Deed of
Assignment, proceeded to collect from Toledo Power Company the amount
of P365,135.29 as evidenced by Check Voucher No. 0933 prepared by said power
company and an official receipt dated 15 August 1995 issued by Impact Systems.
Alarmed by this development, petitioner made several demands upon respondents
to pay their obligations. As a result, respondents were able to make partial
payments to petitioner. On 7 October 1996, petitioners counsel sent respondents a
final demand letter wherein it was stated that as of 11 June 1996, respondents total
obligations stood at P295,000.00 excluding interests and attorneys fees. Because of
respondents failure to abide by said final demand letter, petitioner instituted a
complaint for sum of money, damages, with application for preliminary attachment
against herein respondents.
By way of special and affirmative defenses, respondent EDWIN alleged that he is not
a real party in interest in this case. According to him, he was acting as mere agent
of his principal, which was the Impact Systems, in his transaction with petitioner
and the latter was very much aware of this fact. The trial court ruled that EDWIN
should not be a part of the complaint and was dropped from the case.
The CA affirmed the decision. Hence, this appeal.
Issue/s:
1.) Should EDWIN be impleaded in the case?
Held: No.
In this case, the parties do not dispute the existence of the agency relationship
between respondents ERWIN as principal and EDWIN as agent. The only cause of
the present dispute is whether respondent EDWIN exceeded his authority when he
signed the Deed of Assignment thereby binding himself personally to pay the
obligations to petitioner. Petitioner firmly believes that respondent EDWIN acted
beyond the authority granted by his principal and he should therefore bear the
effect of his deed pursuant to Article 1897 of the New Civil Code.
Article 1897 reinforces the familiar doctrine that an agent, who acts as such, is not
personally liable to the party with whom he contracts. The same provision, however,
presents two instances when an agent becomes personally liable to a third person.
The first is when he expressly binds himself to the obligation and the second is
when he exceeds his authority. In the last instance, the agent can be held liable if
he does not give the third party sufficient notice of his powers. EDWIN does not fall
within any of the exceptions contained in this provision.
As a general manager, EDWIN is vested with general powers including the power to
enter into a deed of assignment which ERWIN approved. EDWIN acted within his
authority as an agent, who did not acquire any right nor incur any liability arising
from the Deed of Assignment, it follows that he is not a real party in interest who
should be impleaded in this case. A real party in interest is one who "stands to be
benefited or injured by the judgment in the suit, or the party entitled to the avails of
the suit."
2.) Can Petitioner collect from both EDWIN and ERWIN?
Held: No.
It is well to state here that Article 1897 of the New Civil Code upon which petitioner
anchors its claim against respondent EDWIN "does not hold that in case of excess of
authority, both the agent and the principal are liable to the other contracting party."
To reiterate, the first part of Article 1897 declares that the principal is liable in cases
when the agent acted within the bounds of his authority. Under this, the agent is
completely absolved of any liability. The second part of the said provision presents
the situations when the agent himself becomes liable to a third party when he
expressly binds himself or he exceeds the limits of his authority without giving
notice of his powers to the third person. However, it must be pointed out that in
case of excess of authority by the agent, like what petitioner claims exists here, the
law does not say that a third person can recover from both the principal and the
agent.
Dispositive Portion: WHEREFORE, premises considered, the present petition is
DENIED and the Decision dated 10 August 2004 and Resolution dated 17 March
2005 of the Court of Appeals in CA-G.R. SP No. 71397, affirming the Order dated 29
January 2002 of the Regional Trial Court, Branch 8, Cebu City, is AFFIRMED.
Facts
Manuela T. Vda. de Salvatierra appeared to be the owner of a parcel of land located
at Maghobas, Poblacion, Burauen, Teyte. Philippine Fibers Producers Co., Inc. is
represented in this instance by Mr. Segundino Q. Refuerzo, the President.
She entered into a contract of 10 year lease with the said corporation. The
stipulation was that that the land would be planted to kenaf, ramie or other crops
suitable to the soil,and that the lessor would be entitled to 30 per cent of the net
income accruing from the harvest of any
Salvatierra filed a complaint against Phil Fibers Producers Co. The claim was that
defendants refused to render an accounting of the income derived therefrom and to
deliver the lessor's share. The lower court ruled in favor of Salvatierra. There was no
appeal; judgment became final.
Sheriff of Leyte caused the attachment of 3 parcels of land registered in the name of
Segundino Refuerzo. This is because No property of the Philippine Fibers Producers
Co., Inc., was found available for attachment.
defendant Segundino Refuerzo filed a motion claiming that the decision rendered in
said Civil Case No. 1912 was null and void as to him. His contention was that only
the corporation was liable,being a separate juridical entity, and that the liability of
the corp. doesnt extend to him. The lower court granted it.
Issue:
Whether Rafuerzo is liable
Held:Yes if there was no principal, the purported agent will be deemed the
principal of the contract
Ratio
Extra facts: motion filed by respondent Refuerzo was beyond the prescriptive
period.
Facts show that Refuerzo gave the impression that the Philippine Fibers Producers
Co., Inc. was a duly registered corporation as appearing in the contract, but ,in fact,
it was not registered with the SEC.
The general rule is that a person who has contracted or dealt with an association
in such a way as to recognize its existence as a corporate body is estopped from
denying the same in an action arising out of such transaction or dealing. An
exception is that where fraud takes a part in the said transaction. In the instant
case, on plaintiff's charge that she was unaware of the fact that the Philippine Fibers
Producers Co., Inc., had no juridical personality.
acting as its representative, his liability cannot be limited or restricted that imposed
upon corporate shareholders. In acting on behalf of a corporation which he knew to
be unregistered, he assumed the risk of reaping the consequential damages or
resultant rights
ISSUE: W/N Jose Aruego can be made personally liable for the contract
HELD: YES
Respondent Corporation is in fact not a corporation due to its nonregistration. Thus, it has no independent personality from Jose Aruego.
Having no separate personality from Aruego the doctrine in Salvatierra vs.
Garlitos applies: "A person acting or purporting to act on behalf of a
corporation which has no valid existence assumes such privileges
and obligations and becomes personally liable for contracts entered
into or for other acts performed as such agent."
The evidence is clear that Jose M. Aruego, acting as representative of a nonexistent principal, was the real party to the contract sued upon;
He was the one who reaped the benefits resulting from it; in fact, even
making partial payments of the consideration;
Evidence shows that he violated its terms by not paying the second
installment; and that in the litigation he was the real defendant.
Perforce, in line with the ends of justice, responsibility under the judgment
falls on him.
DISPOSITIVE: PREMISES CONSIDERED, the order appealed from is hereby set aside
and the case remanded ordering the lower court to hold supplementary proceedings
for the purpose of carrying the judgment into effect against University Publishing
Co., Inc. and/or Jose M. Aruego. So ordered.
FACTOIDS: The present case is already the third appeal to the Supreme Court.
DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,
vs.
COURT OF APPEALS and the ESTATE OF THE LATE JUAN B. DANS,
represented by CANDIDA G. DANS, and the DBP MORTGAGE REDEMPTION
INSURANCE POOL, respondents.
DOCTRINE: "the agent who acts as such is not personally liable to the party with
whom he contracts, unless he expressly binds himself or exceeds the limits of his
authority without giving such party sufficient notice of his powers." (NCC 1897)
FACTS:
1
2
Juan B. Dans, together with his wife Candida, his son and daughter-in-law,
applied for a loan of P500,000.00 with the Development Bank of the
Philippines (DBP), Basilan Branch.
As the principal mortgagor, Dans, then 76 years of age, was advised by
DBP to obtain a mortgage redemption insurance (MRI) (//sidenote: MRI- upon
death of the person , the insurance company will pay for the remaining
outstanding obligations of the decedent, provided that he paid premiums)
with the DBP Mortgage Redemption Insurance Pool (DBP MRI Pool).
A loan, in the reduced amount of P300,000.00, was approved by DBP on
August 4, 1987 and released on August 11, 1987. From the proceeds of the
loan, DBP deducted the amount of P1,476.00 as payment for the MRI
premium. On August 15, 1987, Dans accomplished and submitted the "MRI
Application for Insurance" and the "Health Statement for DBP MRI Pool."
JUAN DANS eventually died due to cardiac arrest; DBP MRI Pool notified the
DBP that DANS was ineligible for MRI coverage, because the
acceptance limit was only 60 y/o at the time of the application (based
from Art. 1, Group Mortgage Redemption INsurance Policy signed by all
insurance companies concerned).
DBP apprised Candida Dans of the disapproval of her late husband's MRI
application. The DBP offered to refund the premium of P1,476.00 which the
deceased had paid, but Candida Dans refused to accept the same,
demanding payment of the face value of the MRI or an amount equivalent to
the loan. DBP offered to settle for Php30000, she refused.
RESPONDENT CLAIMS: Dans became insured by the DBP MRI Pool when DBP,
with full knowledge of Dans' age at the time of application, required him to
apply for MRI, and later collected the insurance premium thereon.
TC favored respondents; ordering DBP to reimburse the estate Php 139500
and to consider the mortgage loan Php 300000 settled or set off by virtue of
the insurance coverage of the late Juan B. Dans. CA affirmed in toto.
NOTE: DBP MRI pool was absolved, as it is proved that the pool did not
approve the application of DANS. No showing that DBP MRI Pool accepted the
premium paid by DANS hence, no perfected contract of insurance. -> SC
upheld this view.
HELD/RULING:
1
3
4
It was DBP, as a matter of policy and practice, that required Dans, the
borrower, to secure MRI coverage. Instead of allowing Dans to look for his
own insurance carrier or some other form of insurance policy, DBP compelled
him to apply with the DBP MRI Pool for MRI coverage.
When Dan's loan was released on August 11, 1987, DBP already deducted
from the proceeds thereof the MRI premium. Four days latter, DBP made
Dans fill up and sign his application for MRI, as well as his health statement.
The DBP later submitted both the application form and health statement to
the DBP MRI Pool at the DBP Main Building, Makati Metro Manila. As service
fee, DBP deducted 10 percent of the premium collected by it from Dans.
DBP assumed 2 legal responsibilities: a. as lender; b. as insurance agent.
As an insurance agent, DBP made Dans go through the motion of applying for
said insurance, thereby leading him and his family to believe that they had
already fulfilled all the requirements for the MRI and that the issuance of their
policy was forthcoming. Apparently, DBP had full knowledge that Dan's
application was never going to be approved.
Under Article 1897 of the Civil Code of the Philippines, "the agent who acts as
such is not personally liable to the party with whom he contracts, unless he
expressly binds himself or exceeds the limits of his authority without giving
such party sufficient notice of his powers."
6 The DBP is not authorized to accept applications for MRI when its
clients are more than 60 years of age (Exh. "1-Pool"). Knowing all
the while that Dans was ineligible for MRI coverage because of his
advanced age, DBP exceeded the scope of its authority when it
accepted Dan's application for MRI by collecting the insurance
premium, and deducting its agent's commission and service fee.
7 The liability of an agent who exceeds the scope of his authority depends upon
whether the third person is aware of the limits of the agent's powers. There
is no showing that Dans knew of the limitation on DBP's authority to
solicit applications for MRI.
8 If the third person dealing with an agent is unaware of the limits of the
authority conferred by the principal on the agent and he (third person) has
been deceived by the non-disclosure thereof by the agent, then the latter is
liable for damages to him.
9 The DBP's liability, however, cannot be for the entire value of the insurance
policy. To assume that were it not for DBP's concealment of the limits of its
authority, Dans would have secured an MRI from another insurance company,
and therefore would have been fully insured by the time he died, is highly
speculative.
10 Considering his advanced age, there is no absolute certainty that Dans could
obtain an insurance coverage from another company. It must also be noted
that Dans died almost immediately, i.e., on the nineteenth day after applying
for the MRI, and on the twenty-third day from the date of release of his loan.
DISPOSITIVE:
SC affirms the decision of the Court of Appeals with modification. WHEREFORE, the
decision of the Court of Appeals in CA G.R.-CV No. 26434 is MODIFIED and petitioner
DBP is ORDERED: (1) to REIMBURSE respondent Estate of Juan B. Dans the amount
of P1,476.00 with legal interest from the date of the filing of the complaint until fully
paid; and (2) to PAY said Estate the amount of Fifty Thousand Pesos (P50,000.00) as
moral damages and the amount of Ten Thousand Pesos (P10,000.00) as attorney's
fees. With costs against petitioner.
P2,513.55 with interest at the legal rate from January 10, 1921, with costs in favor
of the appellant. So ordered.
Cervantes v. CA
DOCTRINE: the acts of an agent beyond the scope of his authority do not bind the
principal, unless the latter ratifies the same expressly or impliedly. Furthermore,
when the third person (herein petitioner) knows that the agent was acting beyond
his power or authority, the principal cannot be held liable for the acts of the agent.
If the said third person is aware of such limits of authority, he is to blame, and is not
entitled to recover damages from the agent, unless the latter undertook to secure
the principal's ratification.
Facts:
On March 27, 1989, private respondent PAL issued to herein petitioner Nicholas
Cervantes a round trip ticket for Manila-Honolulu-Los Angeles-Honolulu-Manila,
which is valid until March 27, 1990. On March 23, 1990, petitioner used it. Upon his
arrival in Los Angeles, he immediately booked a flight to Manila, which was
confirmed on April 2. Upon learning that the plane would make a stop-over in San
Francisco, and because he would be there on April 2, petitioner made arrangements
to board in San Francisco. On April 2, he was not allowed to board due to the
expiration of his ticket. He filed a complaint for damages. It was not given due
course by both the trial court and the Court of Appeals.
Issues:
(1) Whether or not the act of the PAL agents in confirming subject ticket extended
the period of validity of petitioner's ticket
(2) Whether or not the denial of the award for damages was proper
Held:
(1) From the facts, it can be gleaned that the petitioner was fully aware that there
was a need to send a letter to the legal counsel of PAL for the extension of the
period of validity of his ticket. Under Article 1898 11 of the New Civil Code, the acts
of an agent beyond the scope of his authority do not bind the principal, unless the
latter ratifies the same expressly or impliedly. Furthermore, when the third person
(herein petitioner) knows that the agent was acting beyond his power or authority,
the principal cannot be held liable for the acts of the agent. If the said third person
is aware of such limits of authority, he is to blame, and is not entitled to recover
damages from the agent, unless the latter undertook to secure the principal's
ratification.
(2) An award of damages is improper because petitioner failed to show that PAL
acted in bad faith in refusing to allow him to board its plane in San Francisco. In
awarding moral damages for breach of contract of carriage, the breach must be
wanton and deliberately injurious or the one responsible acted fraudulently or with
malice or bad faith. Petitioner knew there was a strong possibility that he could not
use the subject ticket, so much so that he bought a back-up ticket to ensure his
departure. Should there be a finding of bad faith, we are of the opinion that it should
be on the petitioner. What the employees of PAL did was one of simple negligence.
No injury resulted on the part of petitioner because he had a back-up ticket should
PAL refuse to accommodate him with the use of subject ticket.
Neither can the claim for exemplary damages be upheld. Such kind of damages is
imposed by way of example or correction for the public good, and the existence of
bad faith is established. The wrongful act must be accompanied by bad faith, and an
award of damages would be allowed only if the guilty party acted in a wanton,
fraudulent, reckless or malevolent manner. Here, there is no showing that PAL acted
in such a manner. An award for attorney's fees is also improper.
Veloso vs La urbana
Doctrine: It is a rule that every person dealing with an agent is put upon inquiry,
and must discover upon his peril the authority of the agent, and this is specially true
where the act of the agent is of an unusual nature.If a person makes no inquiry, he
is chargeable with knowledge of the agent's authority, and his ignorance of that
authority will not be any excuse
Facts:The plaintiff Corazon Ch. Veloso was the owner of certain undivided portions of
the five parcels of land. The defendants are La urbana building and mutual loan
association and Jose Maria Del Mar
Jose Maria del Mar, plaintiff's brother-in-law, forged two powers of attorney
purporting to have been executed by the plaintiffs, as husband and wife, conferring
upon him ample authority to mortgage the plaintiff's participation 1 in the
aforementioned properties described in said certificates of title.Del Mar mortgaged
the plaintiff's participation and ,after, the properties to herein defendant La Urbana
for a loan. Later,Del Mar delivered to the mortgage creditor the owner's duplicates
of the certificates of title whereon the mortgage in question was noted.
Del mar violated the terms of the loan. This resulted in La urbana foreclosing and
buying the properties in question.
Ratio:
the forged powers of attorney prepared by Del Mar were without force and effects
and that the registration of the mortgages constituted by virtue thereof were
likewise null and void and without force and effect, and that they could not in any
way prejudice the rights of the plaintiff as the registered owners of her
participations in the properties in question.
It is a rule that every person dealing with an agent is put upon inquiry, and must
discover upon his peril the authority of the agent, and this is specially true where
the act of the agent is of an unusual nature.If a person makes no inquiry, he is
chargeable with knowledge of the agent's authority, and his ignorance of that
authority will not be any excuse. Persons dealing with an assumed agent, whether
the assumed agency be a general or special one, are bound at their peril, if they
would hold the principal, to ascertain not only the fact of the agency but the nature
and extent of the authority. If the extend or the fact of authority is denied, they
should prove it.
Considering that Del Mar is not the registered owner of the mortgaged properties
and inasmuch as the appellant was fully aware of the fact that it was dealing with
him on the strength of the alleged powers of attorney purporting to have been
conferred upon him by the plaintiff, it was its duty to ascertain the genuineness of
said instruments and not the said powers of attorney appeared to have been
registered. In view of its failure to proceed in this manner, it acted negligently and
should suffer the consequences and damages resulting from such transactions.
Since he didnt inquire upon the extent and fact of inquiry, He should be held liable.
If a person makes no inquiry, he is chargeable with knowledge of the agent's
authority.
Dispositive: forclosure sale and mortgag
BACALTOS COAL MINES AND GERMAN BACALTOS VS. CA AND SAN MIGUEL
CORPORATION
DOCTRINE: The other party to a contract that did not inquire about the
authority of the agent, cannot make the principal liable for the contract.
FACTS:
ISSUE: W/N Savellon was duly authorized by Petitioners to enter into the
Trip Charter Party
HELD: NO
Every person dealing with an agent is put upon inquiry and must discover
upon his peril the authority of the agent. If he does not make such inquiry, he
is chargeable with knowledge of the agent's authority, and his ignorance of
that authority will not be any excuse
There is only one express power granted to Savellon, to use the coal
operating contract for any legitimate purpose it may serve
The clause "but not by way of limitation" which precedes the enumeration
could only refer to or contemplate other prerogatives which must exclusively
pertain or relate or be germane to the power to use the coal operating
contract.
Furthermore, had SMC exercised due diligence and prudence, it should have
known in no time that there is absolutely nothing on the face of the
Authorization that confers upon Savellon the authority to enter into any Trip
Charter Party.
Since the principal subject of the Authorization is the coal operating contract,
SMC should have required its presentation to determine what it is and how it
may be used by Savellon. Such a determination is indispensable to an inquiry
into the extent or scope of his authority.
If SMC scrutinized the Coal Operating Contract of Petitioners, they would have
discovered which activities are germane to that kind of contract
The Authorization itself does not state that Bacaltos Coal Mines owns any
vessel, and since it is clear therefrom that it is not engaged in shipping but in
coal mining or in coal business, SMC should have required the presentation of
pertinent documentary proof of ownership of the vessel to be chartered
DISPOSITIVE:
WHEREFORE, the instant petition is GRANTED and the challenged decision of 30
September 1993 of the Court of Appeals in CA-G.R. CV No. 35180 is hereby
REVERSED and SET ASIDE and another judgment is hereby rendered MODIFYING the
judgment of the Regional Trial Court of Cebu, Branch 9, in Civil Case No. CEB-8187
by setting aside the declaration of solidary liability, holding defendant RENE R.
SAVELLON solely liable for the amounts adjudged, and ordering the dismissal of the
case as against herein petitioners.
SO ORDERED.
FACTOIDS:
DOCTRINE: The acts of an agent beyond the scope of his authority do not bind the
principal, unless the principal ratifies them, expressly or impliedly. Ratification in
agency is the adoption or confirmation by one person of an act performed on his
behalf by another without authority.
FACTS:
1
2
3
5
6
PETITIONER CLAIMS: Filipinas Life does not dispute that Valle was its
agent, but claims that it was only a life insurance company and
was not engaged in the business of collecting investment money.
It further claims that the investment scheme was outside the
scope of their authority. FILIPINAS LIFE, as PRINCIPAL, cannot be
held liable to the respondents.
RESPONDENT CLAIMS: Filipinas Life authorized Valle to solicit investments
from them. These transactions, according to respondents, were confirmed
by its officers Apetrior and Alcantara. Respondents assert they exercised
all the diligence required of them in ascertaining the authority of
petitioners agents; and it is Filipinas Life that failed in its duty to ensure
that its agents act within the scope of their authority.
ISSUE:Is the petitioner, together with its co-defendants jointly and severally liable to
the respondents? -YES.
HELD/RULING:
DISPOSITIVE: WHEREFORE, the petition is DENIED for lack of merit. The Decision
and Resolution, dated November 29, 2002 and August 5, 2003, respectively, of the
Court of Appeals in CA-G.R. CV No. 33568 are AFFIRMED.
Gregorio did not see Oscar for several weeks thus sensing that something fishy
might be going on. So, he went to Vicentes house where he read a portion of the
agreement to the effect that Vicente was still willing to pay him 5% commission,
P5,450.
Thereafter, Gregorio went to the Register of Deeds of QC, where he discovered that
a Deed of sale was executed by Amparo de Leon, Oscars wife, over their house and
lot in favor of Vicente. After discovering that Vicente sold his lot to Oscars wife,
Gregorio demanded in writing the payment of his commission.
Gregorio also conferred with Oscar. Oscar told him that Vicente went to him and
asked him to eliminate Gregorio in the transaction and that he would sell his
property to him for P104,000.
Vicente Gregorio in his reply, Vicente stated that Gregorio is not entitled to the 5%
commission because he sold the property not to Gregorio's buyer, Oscar de Leon,
but to another buyer, Amparo Diaz, wife of Oscar de Leon.
CA: exclusive agency contract is genuine. The sale of the lot to Amparo de Leon is
practically a sale to Oscar.
Issues: Is Gregorios act of accepting the gift or propina from Oscar constitutes a
fraud which would cause the forfeiture of his 5% commission?
Held: Yes.
Gregorio Domingo as the broker, received a gift or propina from the prospective
buyer Oscar de Leon, without the knowledge and consent of his principal, Vicente
Domingo. His acceptance of said substantial monetary gift corrupted his duty to
serve the interests only of his principal and undermined his loyalty to his principal,
who gave him partial advance of P3000 on his commission. As a consequence,
instead of exerting his best to persuade his prospective buyer to purchase the
property on the most advantageous terms desired by his principal, Gregorio
Domingo, succeeded in persuading his principal to accept the counter-offer of the
prospective buyer to purchase the property at P1.20 per sq. m.
The duties and liabilities of a broker to his employer are essentially those which an
agent owes to his principal.
An agent who takes a secret profit in the nature of a bonus, gratuity or personal
benefit from the vendee, without revealing the same to his principal, the vendor, is
guilty of a breach of his loyalty to the principal and forfeits his right to collect the
commission from his principal, even if the principal does not suffer any injury by
reason of such breach of fidelity, or that he obtained better results or that the
agency is a gratuitous one, or that usage or custom allows it.
Rationale: To prevent the possibility of any wrong not to remedy or repair an actual
damage
The agent thereby assumes a position wholly inconsistent with that of being an
agent for hisprincipal, who has a right to treat him, insofar as his commission is
concerned, as if no agency had existed
The fact that the principal may have been benefited by the valuable services of the
said agent does not exculpate the agent who has only himself to blame for such a
result by reason of his treachery or perfidy.
As a necessary consequence of such breach of trust, Gregorio Domingo must forfeit
his right to the commission and must return the part of the commission he received
from his principal.
Dispositive Portion: WHEREFORE, the judgment is hereby rendered, reversing the
decision of the Court of Appeals and directing defendant-appellee Gregorio
Domingo: (1) to pay to the heirs of Vicente Domingo the sum of One Thousand
Pesos (P1,000.00) as moral damages and One Thousand Pesos (P1,000.00) as
attorney's fees; (2) to pay Teofilo Purisima the sum of Six Hundred Fifty Pesos
(P650.00); and (3) to pay the costs.