RALLOS v FELIX GO CHAN & REALTY COPR.

, Munoz-Palma
Plaintiff:
Ramon Rallos
Defendant:
Felix Go Chan & Sons Realty Corporation
Facts:
•
Concepcion and Gerundia Rallos were sisters and registered co-
owners of a parcel of land known as Lot No. 5983 of the Cadastral Survey of Cebu covered by TransferC
ertificate of Title No. 11116 of the Registry of Cebu.
•
They executed a special power of attorney in favor of their brother, Simeon Rallos,authorizing him to sell
such land for and in their behalf.
•
After Concepcion died, Simeon Rallos sold the undivided shares of his sistersConcepcion and Gerundia t
o Felix Go Chan & Sons Realty Corporation for the sum of P10,686.90. New TCTs were issued to the latt
er.
•
Petitioner Ramon Rallos, administrator of the Intestate Estate of Concepcion filed acomplaint praying (1)
that the sale of the undivided share of the deceasedConcepcion Rallos in lot 5983 be unenforceable, and s
aid share be reconveyed to herestate; (2) that the Certificate of 'title issued in the name of Felix Go Chan
& SonsRealty Corporation be cancelled and another title be issued in the names of thecorporation and the
"Intestate estate of Concepcion Rallos" in equal undivided and(3) that plaintiff be indemnified by way of
attorney's fees and payment of costs of suit.
CFI:
[Plaintiff’s Complaint]
•
Sale of land was null and void insofar as the one-half pro-indiviso share of ConcepcionRallos
•
Ordered the issuance of new TCTs to respondent corporation and the estate of Concepcion in the proporti
on of ½ share each pro-
indiviso and the payment of attorney’s fees and cost of litigation[Respondent filed cross claim against Si
mon Rallos(*Simon and Gerundia died duringpendency of case)]
•
Juan T. Borromeo, administrator of the Estate of Simeon Rallos was ordered to paydefendant the price of
the ½ share of the land (P5,343.45) plus attorney’s fees[Borromeo filed a third party complaint against Jo
sefina Rallos, special administratrix of theEstate of Gerundia]
•
Dismissed without prejudice to filing either a complaint against the regularadministrator of the Estate of
Gerundia Rallos or a claim in the Intestate-Estate of Cerundia Rallos, covering the same subject-matter
CA:
CFI Decision reversed, upheld the sale of Concepcion’s share.
MR:
denied.
Issues:
1)WON sale was valid although it was executed after the death of the principal,Concepcion.2)WON sale f
ell within the exception to the general rule that death extinguishes theauthority of the agent
3)
WON agent’s knowledge of the principal’s death is a material factor.
4)
WON petitioner must suffer the consequence of failing to annotate a notice of deathin the title (thus there
was good faith on the part of the Respondent vendee)
AGENCY TRUST AND PARTNERSHIPCASE DIGEST
Orient-Air Services and Hotel Representatives vs. Court of Appeals
May 29, 1991
FACTS:
American Air entered into a General Sales Agency Agreement between Orient Air Services andHotel Re
presentatives (Orient Air) whereby the former authorized the latter to act as itsexclusive general sales age
nt within the Philippines for the sale of air passenger transportation.In 1981, Orient Air reneged in its obli
gations by failing to promptly remit the net proceeds ofsales for the months of January to March 1981 am
ounting to $254,400. American Air instituted a suit against Orient Air with CFI Manila for Accounting wi
th Preliminary Attachment/Garnishment, Mandatory Injuction and Restraining Order.Orient Air answered
with counterclaim denying the material allegation and contends thefollowing:
-
American Air still owed Orient Air a balance in unpaid overriding commission. Orient Aircontends that t
he
contractual stipulation of a 3%
overriding commission
covers thetotal revenue of American Air
and
not merely that derived from the ticketed sales
undertaken by the former.
-
The termination of the contract is untenable
-

American Air’s precipitous conduct had occasioned prejudice to its business interests.
Trial Court ruled in favor of Orient Air ordering American Air to
“reinstate defendant as its
general sales agent for passenger transportation in the Philippines in accordance with the said
GSA Agreement.”
Court of Appeals affirmed the decision of the Trial Court
G.R. No. 119000 July 28, 1997ROSA UY,
petitioner,vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES,
respondents.Facts:1)

Rosa Uy was employed as an accountant in Don Tim Shipping Company owned by the husband ofcomplaining witness
Consolacion Leong. When Rosa resigned from work, her friendly realtion withConsolacion continued and
they later agreed to form a partnership for the expansion of Rosa's lumber business and the latter as indus
trial partner. Various sums of money amounting to P500,000.00 were claimedto have been given by Cons
olacion for the business. No receipt was issued.2)

A warehouse for the lumber business was funded by Consolacion. But when the friendship collapsed,Con
solacion demanded the return of her investment. Rosa gave her checks, but they were dishonored because
of insufficiency of fund.3)

Consolacion filed file a complaint for estafa and for violation of the Bouncing Checks Law before the RT
Cof Manila.4)
The trial court acquitted petitioner of estafa but convicted her of the charges under B.P. Bldg. 22. Onappe
al, respondent appellate court affirmed the decision of the trial court.Issues:1)

Whether the RTC of Manila acquired jurisdiction over the violations of the Bouncing Checks Law.Held:1
)

For jurisdiction to be acquired by courts in criminal cases the offense should have been committed or any
one of its essential ingredients took place within the territorial jurisdiction of the court. It is incorrect forre
spondent People to conclude that inasmuch as the Regional Trial Court of Manila acquired jurisdictionove
r the estafa case then it also acquired jurisdiction over the violations of B.P. Blg. 22. The crime of estafaa
nd the violation of B.P. Blg. 22 have to be treated as separate offenses. There is no scintilla of evidence to
show that jurisdiction over the violation of B.P. Blg. 22 had been acquired. The argument by the responde
ntthat the petitioner is estopped from questioning the jurisdiction of the court was not given merit.
Macke v. Camps, G.R. No. L-2962, [February 27, 1907], 7 PHIL 553-556

FACTS:
Macke and Chandler are business partners under the firm name of Macke, Chandler &Company. They sold various goods for
the Washington Café to Ricardo Flores, whorepresented himself as the agent of Jose Camps. Flores paid a P174 leaving a bala
nceand informed them that he does not have the necessary funds on hand and that hewould have to wait for the return of Jose C
amps. However, Jose Camps failed to paythe said balance denying the authority of Flores. A written contract was introduced as
evidence. The written contract shows that Galmes (owner of the building) hadsubrented the building where the business was co
nducted which Jose Camps signed as
“sublessee” and Ricardo Flores’ signed as “managing agent.”
ISSUE: Whether or not Ricardo Flores is an agent of Jose Camps.
DECISION:YES.One who clothes another with apparent authority as his agent and holds him out to the p
ublic as such,can not be permitted to deny the authority of such person to act as his agent to the prejudice
of innocentthird parties dealing with such agent in good faith and in the honest belief that he is what he ap
pears tobe.

Prudential Bank v CA (1993)

Cruz, J.

FACTS:
Private respondent Aurora Cruz invested P200,000 with petitioner bank at its Quezon Avenue Branch. Th
eplacement was for 63 days at 13.75% annual interest. The amount of P196,122.88 was withdrawn on Jun
e 23,1986 from the savings account and applied to the investment, the difference of P3,877.07 representin
g the pre-paid investment.

The transaction was evidence by a Confirmation Sale and Debit Memo delivered to Cruz after two days.
Bankemployee Susan Quimbo issued the documents.

Upon maturity of the placement on Aug 25, 1986, Cruz returned to the bank to renew her investment. Qui
mboagain issued the same documents but now asked Cruz to sign a Withdrawal Slip for P196,122.98, rep
resentingthe amount to be re-invested. Quimbo explained that this was a new requirement of the bank.

On Oct 27, 1986, Cruz returned to the Bank to withdraw P200,000 but was informed that according to the
irrecords, she had already withdrawn the money of Aug 25, 1986. The bank had no copy of the Confirmat
ion Saleor Debit Memo issued by Quimbo, Quimbo also stopped reporting to the bank.

Cruz made several demands for the return of the money but was told by bank officials to defer court actio
n.Subsequently, the Bank denied the request of Cruz because she allegedly had withdrawn the money alre
ady.

Cruz filed an action for breach of contract. The bank denied liability and instituted a third-
party suit againstQuimbo. Trial court and CA decided in favor of Cruz.

Petitioner claims that the documents presented by Cruz were fake and she did not deny signing the Withdr
awalSlip. On the other hand, Cruz states that she merely signed as part of the new procedure for re-
investment buthas not received the amount.
ISSUES + RULING:
WoN the bank, as principal, should be held liable for the acts of Quimbo, its agent.
YES.

The amount in the Withdrawal Slip relied on by petitioner is an irregular figure which corresponded to the
verysame amount Cruz was re-investing after the deduction of the pre-
paid interest. If the intention of Cruz were towithdraw her money, she would have done so in round figure
s.

The bank failed to impugn the authenticity of the documents presented by Cruz. Even if authorized officia
ls did notsign the documents, Cruz had no obligation to verify the authority of Quimbo who handed the sa
me to her. Shehad the right to presume the authenticity of the documents.

Cruz
had no reason to not accept Quimbo’s authority to act in behalf of her employer.

The Court also took note of the fact that although the bank filed a third-
party claim against Quimbo, it did notpursue the case. The bank also did not present Quimbo to testify.

The bases of the petitioner’s liability are Arts. 1910 and 1911 of the Civil Code. The agent’s apparent
representati
on yields to the principal’s true representation and the contract is
considered as entered into betweenthe principal and the third person.

The Court also had previously held that banks are liable to innocent 3
rd
persons where the representation is madein the course of its business by an agent acting within the genera
l scope of his authority, notwithstanding the factthat the latter may already be abusing his authority in ord
er to commit fraud.

The bank’s relationship with the public is fiduciary. The ban

k should have immediately repaired the injury causedto Cruz. The misdeeds of employees must be readily
acknowledged and rectified.

DISPOSITION:
Petition denied. Appealed decision affirmed
Sevilla vs. CA
A contract by and between Noguera and Tourist World Service (TWS), represented by Canilao, wherein TWSleased the pr
emises belonging to Noguera as branch office of TWS. When the branch office was opened, it was runby
appellant Sevilla payable to TWS by any airline for any fare brought in on the efforts of Mrs. Sevilla, 4%
was togo to Sevilla and 3% was to be withheld by the TWS.Later, TWS was informed that Sevilla was co
nnected with rival firm, and since the branch office was losing, TWS considered closing down its office.O
n January 3, 1962, the contract with appellee for the use of the branch office premises was terminatedand
while the effectivity thereof was January 31, 1962, the appellees no longer used it. Because of this, Canila
o, thesecretary of TWS, went over to the branch office, and finding the premises locked, he
padlocked the premises.When neither appellant Sevilla nor any of his employees could en
ter, a complaint was filed by the appellantsagainst the appellees. TWS insisted that Sevilla was a
mere employee, being the “branch manager” of its branch office and thatshe had no say on the lease exec
uted with the private respondent, Noguera.
ISSUE:
W/N ER-EE relationship exists between Sevilla and TWS
HELD:
The records show that petitioner, Sevilla, was not subject to control by the private respondent TWS. In th
ef i r s t p l a c e , u n d e r t h e c o n t r a c t o f l e a s e , s h e h a d b o u n d h e r s e l f i n s o l i d u m a s a n
d f o r r e n t a l p a y m e n t s , a n arrangement that would belie claims of a master-
servant relationship. That does not make her an employee of TWS,since a true employee cannot be made to p
art with his own money in pursuance of his employer’s business, orotherwise, assume any liability t
hereof.In the second place, when the branch office was opened, the same was run by the appellant Sevilla p
ayableto TWS by any airline for any fare brought in on the effort of Sevilla. Thus, it cannot be said that S
evilla was underthe control of TWS. Sevilla in pursuing the business, relied on her own capabilities.It is further admi
tted that Sevilla was not in the company’s payroll. For her efforts, she retained 4% incomm
issions from airline bookings, the remaining 3% going to TWS. Unlike an employee, who earns a fixed sa
lary,she earned compensation in fluctuating amount depending on her booking successes. The fact that
Sevilla had been designated “branch manager” does not make her a TWS employee. Itappea
rs that Sevilla is a bona fide travel agent herself, and she acquired an interest in the business entrusted toh
er. She also had assumed personal obligation for the operation thereof, holding herself soli
dary liable for thepayment of rentals.Wherefore, TWS and Canilao are jointly and severally liable to indemnify the
petitioner, Sevilla
Eduardo Litonjua, Jr. and Antonio Litonjua v. Eternit Corp. (now Eterton Multi-
ResourcesCorp.), Eteroutremer, S.A. and Far East Bank & Trust Co.
G.R. No. 144805 June 8, 2006Callejo, Sr.
FACTS:

Eternit Corp. is engaged in the manufacture of roofing materials and p

i p e p r o d u c t s . I t s manufacturing operations were conducted on 8 parcels of land located in Mandal
uyong City, coveredby TCTs with Far East Bank & Trust Company, as trustee. 90% of the shares of stock
s of Eternit Corp.were owned by Eteroutremer S.A. Corporation (ESAC), a corporation organized and reg
istered underthe laws of Belgium. Jack Glanville, an Australian citizen, was the General Manager and Pre
sident of Eternit Corp., while Claude Frederick Delsaux was the Regional Director for Asia of ESAC.

In 1986, the management of ESAC grew concerned about the political situation in the Philippines andwa
nted to stop its operations in the country. The Committee for Asia of ESAC instructed Mic
haelAdams, a member of Eternit Corp.’s Board of Directors, to dispose of the eight parcels
of land.Adams engaged the services of realtor/broker Lauro G. Marquez so that the proper
ties could beoffered for sale to prospective buyers.

Marquez offered the parcels of land and the improvements thereon to Eduardo B. Litonjua, Jr. of theL i t o
njua & Company, Inc. Marquez declared that he was authorized to sell the prop
e r t i e s f o r P27,000,000.00 and that the terms of the sale were subject to negotiation.

Eduardo Litonjua, Jr. responded to the offer. Marquez showed the property to Eduardo Litonjua, Jr.,a n d
his brother Antonio K. Litonjua. The Litonjua siblings offered to buy
t h e p r o p e r t y f o r P20,000,000.00 cash. Marquez apprised Glanville of the Litonjua siblings’ offer
and relayed the sameto Delsaux in Belgium, but the latter did not respond. Glanville telexed Delsaux in B
elgium, inquiringon his position/ counterproposal to the offer of the Litonjua siblings. Delsaux sent a tele
x to Glanvillestating that, based on the “Belgian/Swiss decision,” the final offer was “US$1,
000,000.00 andP2,500,000.00 to cover all existing obligations prior to final liquidation.

Litonjua, Jr. accepted the counterproposal of Delsaux. Marquez conferred with

G l a n v i l l e , a n d confirmed that the Litonjua siblings had accepted the counter-
proposal of Delsaux. He also statedthat the Litonjua siblings would confirm full payment within 90 days a
fter execution and preparationof all documents of sale, together with the necessary governmental clearanc
es.

The Litonjua brothers deposited the amount of US$1,000,000.00 with the Security Bank &
TrustCompany, Ermita Branch, and drafted an Escrow Agreement to expedite the sale.

With the assumption of Corazon Aquino as President of RP, the political situation in the Philippineshad i
mproved. Marquez received a telephone call from Glanville, advising that the sale would n
olonger proceed. Glanville followed it up with a letter, confirming that he had been instructed by hisprin
cipal to inform Marquez that the decision has been taken at a Board Meeting not to sell the
properties on which Eternit Corp. is situated.

When apprised of this development, the Litonjuas, through counsel, wrote Eternit Corp., demandingpaym
ent for damages they had suffered on account of the aborted sale. EC, however, rejected theirdemand.
ISSUE:
WON Marquez, Glanville, and Delsaux were authorized by respondent Eternit Corp. to act as itsagents rel
ative to the sale of the properties of Eternit Corp., and if so, what are the boundaries of theirauthority as a
gents
HELD:
No.

A corporation is a juridical person separate and distinct from its members or stockholders and is notaffect
ed by the personal rights, obligations and transactions of the latter. It may act only through itsboard of d
irectors or, when authorized either by its by-
laws or by its board resolution, through itsofficers or agents in the normal course of busin
ess. The general principles of agency govern therelation between the corporation and its officers o
r agents, subject to the articles of incorporation, by-laws, or relevant provisions of law.

The property of a corporation is not the property of the stockholders or members, and as such, maynot be
sold without express authority from the board of directors. Physical acts, like the offering of theproperties
of the corporation for sale, or the acceptance of a counter-
offer of prospective buyers of such properties and the execution of the deed of sale covering such propert
y, can be performed by thecorporation only by officers or agents duly authorized for the purpo
se by corporate by-
laws or byspecific acts of the board of directors. Absent such valid delegation/authorization, the rule is t
hat thedeclarations of an individual director relating to the affairs of the corporation, but not in the course
of
8. Search

8. Spouses Viloria vs. Continental AirlinesGR No. 188288Facts:

On or about July 21, 1997 and while in the United States, Fernando purchased for himself and his wife, L
ourdes, two 2! round trip airline tic"ets from San #ie$o, %alifornia to &ewar", &ew Jersey on board %o
ntinental 'irlines( Fernando purchased the tic"ets from a tra)el a$encycalled *+oliday ra)el- and wa
s attended by .ara$ret .a$er .a$er!( 'ccordin$ to Spouses/iloria, Fernando a$reed to buy t
he said tic"ets after .a$er informed them that there were noa)ailable seats at 'mtra"(Subse0uentl
y, Fernando re0uested to reschedule their fli$ht to an earlier date but .a$er informed him that fli$hts t
o &ewar" was fully boo"ed and offered fli$ht )ia Frontier 'ir but itwas a hi$her fare so Fernand
o opted to re0uest a refund( .a$er denied his re0uest as the sub ectt i c " e t s a r e n o n r e f u n d a b l e a
n d t h e o n l y o p t i o n t h a t % o n t i n e n t a l ' i r l i n e s c a n o f f e r i s t h e r e issuance of new ti
c"ets within one 1! year from the date the sub ect tic"ets were issued andconse0uently res
er)ed two seats with Frontier 'ir('s he was ha)in$ second thou$hts on tra)elin$ )ia Frontier 'ir, F
ernando went to the3reyhound Station where he saw an 'mtra" station nearby and made in0
uiries( 'mtra" toldFernando that there are seats a)ailable and he can tra)el on 'mtra" anytim
e and any day he pleased so he purchased two tic"ets for 4ashin$ton(Upon returnin$ to 5hilippines, Fer
nando sent a letter to %'6 demandin$ a refund but wasdenied and was ad)ised for re issuance of tic"et wi
thin two years from the date they were issued(Fernando a)ailed of re issuance of Lourdes tic"et but wa
s informed that it was non transferable(S p o u s e s / i l o r i a f i l e d a c o m p l a i n t a $ a i n s t % ' 6 p r a
y i n $ f o r t h e i r r e f u n d , m o r a l a n d e8emplary dama$es( hey claim that the misrepresentation of .
a$er, a$ent of %'6, lead him toa)ail the tic"et and that %'6 is liable for her misrepresentation( rial %our
t rendered an order in fa)or of the Spouses declarin$ that .a$er of +oliday i c " e t i s a n a $
e n t o f % ' 6 a n d w a s i n b a d f a i t h w h e n s h e w a s l e s s c a n d i d a n d d i l i $ e n t i n presenti
n$ to plaintiffs spouses their boo"in$ option( On appeal %' re)ersed % s decision,holdin$ that %6'
cannot be liable to be held liable for .a$er s act in the absence of any proof that a principal
a$ent relationship e8isted between them( +ence this petition for re)iew(
Issue:
4hether or not .a$er is an a$ent of %'6 and %'6 should be held liable for her ne$li$entact(
Held:

+oliday ra)el is one of the a$ent of %'6( 'll the elements of a$ency e8ist( he first andsecond elements a
re present as %'6 does not deny that it concluded an a$reement with +oliday ra)el, whereby +oliday
ra)el would enter into contracts of carria$e with third persons on%'6 s behalf( he thir
d element is also present as it is undisputed that +oliday ra)el merelyacted in a represent
ati)e capacity and it is %'6 and not +oliday ra)el who is bound by thecontracts of carria$
e entered into by +oliday ra)el on its behalf( he fourth element is also present considerin$
that %'6 has not made any alle$ation that +oliday ra)el e8ceeded theauthority that was $ranted to it( 6n
fact, %'6 consistently maintains the )alidity of the contracts of carria$e that +oliday ra)el e8ecuted with
Spouses /iloria and that .a$er was not $uilty of anyfraudulent misrepresentation(
G.R. No. L-8169 January 29, 1957
THE SHELL COMPANY OF THE PHILIPPINES, LTD.,
vs.
FIREMEN'S INSURANCE COMPANY OFNEWARK, NEW JERSEY COMMERCIAL CASUAL
TY INSURANCE CO., SALVADOR SISON,PORFIRIO DE LA FUENTE and THE COURT OF A
PPEALS (First Division)

FACTS:
This case is about an action for recovery of sum of money, based on the alleged negligence ofthe defenda
nts.A car was brought to a Shell gasoline station owned by Dela Fuente for washing and greasing.The car
was placed on a hydraulic lifter for greasing. As some parts of the car
couldn’t
bereached by the greaseman, the lifter was lowered. Unfortunately, for unknown reasons(probably due to
mechanical failure or human error), while the lifter was being lowered, the carswung and fell from the pl
atform. Said car was insured against loss or damage by Firemen'sInsurance Company of Newark, New Jer
sey, and Commercial Casualty Insurance Company jointly for the sum of P10,000. The insurance compan
ies after paying the sum of P1,651.38 forthe damage and charging the balance of P100.00 to Salvador Sis
on, in accordance with theterms of the insurance contract, filed this action together with said Salvador Sis
on for therecovery of the total amount of the damage from the defendants on the ground of negligence.
ISSUE:
WON Dela Fuente is merely an agent of Shell Co.
HELD:
Yes. De la Fuente was the operator of the station "by grace" of the Defendant Company whichcould and
did remove him as it pleased; that all the equipments needed to operate the station