SPECIAL POWER OF ATTORNEY

FLORENTINA BAUTISTA-SPILLE represented by Her Attorney-in-fact,

Manuel B. Flores, Jr. vs. Nicorp Management and Development Corporation,
Benjamin G. Bautista and International Exchange Bank
GR No. 214057, October 19, 2015
Second Division
MENDOZA, J.

DOCTRINE:
A special power of attorney is necessary to enter into any contract by which the
ownership of an immovable is transmitted or acquired either gratuitously or for a
valuable consideration.

FACTS:
Petitioner Florentina Bautista-Spille (petitioner) is the registered owner of a parcel of
land located in Imus City, Cavite. On June 20, 1996, petitioner and her spouse, Harold E.
Spille, executed a document denominated as General Power of Attorney in favor of her
brother, respondent Benjamin Bautista (Benjamin), authorizing the latter to administer all
her businesses and properties in the Philippines. The said document was notarized before
the Consulate General of the Philippines, New York, United States of America.

On August 13, 2004, Benjamin and NICORP Management and Development Corporation
(NJCORP) entered into a contract to sell which pertained to the land. Pending full
payment of the purchase price, the certificate of title was deposited in escrow with the
International Exchange Bank (IE Bank). When petitioner discovered the sale, her lawyer
immediately sent demand letters to NICORP and Benjamin, informing them that she was
opposing the sale of the subject property and that Benjamin was not clothed with
authority to enter into a contract to sell. NICORP, Benjamin and IE Bank, however,
failed and refused to return the title of the subject property.

Consequently, petitioner filed a complaint before the RTC against Benjamin, NICORP
and IE Bank for declaration of nullity of the contract to sell. The RTC rendered its
judgment, declaring the contract to sell null and void. It explained that the general power
of authority only pertained to acts of administration over petitioner's businesses and
properties in the Philippines and did not include authority to sell the subject property. On
appeal, the Court of Appeals reversed the decision of the RTC explaining that the general
power of attorney executed by petitioner in favor of Benjamin authorized the latter not
only to perform acts of administration over her properties but also to perform acts of
dominion which included, among others, the power to dispose the subject property.
ISSUE:
Whether or not the General Power of Attorney authorized Benjamin to enter into a
contract to sell with the respondent corporation?

RULING:
The well-established rule is when a sale of a parcel of land or any interest therein is
through an agent, the authority of the latter shall be in writing, otherwise, the sale shall be
void. Thus, the authority of an agent to execute a contract for the sale of real estate must
be conferred in writing and must give him specific authority, either to conduct the general
business of the principal or to execute a binding contract containing terms and conditions
which are in the contract he did execute.

Art. 1878 of the Civil Code also provides that a Special power of attorney is necessary to
enter into any contract by which the ownership of an immovable is transmitted or
acquired either gratuitously or for a valuable consideration. For the principal to confer the
right upon an agent to sell real estate, a power of attorney must so express the powers of
the agent in clear and unmistakable language. When there is any reasonable doubt that
the language so used conveys such power, no such construction shall be given the
document. It is a general rule that a power of attorney must be strictly construed, and
courts will not infer or presume broad powers from deeds which do not sufficiently
include property or subject under which the agent is to deal. Thus, when the authority is
couched in general terms, without mentioning any specific power to sell or mortgage or
to do other specific acts of strict dominion, then only acts of administration are deemed
conferred.

Doubtless, there was no perfected contract to sell between petitioner and NICORP.
Nowhere in the General Power of Attorney was Benjamin granted, expressly or
impliedly, any power to sell the subject property or a portion thereof. The authority
expressed in the General Power of Attorney was couched in very broad terms covering
petitioner's businesses and properties. Time and again, this Court has stressed that the
power of administration does not include acts of disposition, which are acts of strict
ownership. As such, an authority to dispose cannot proceed from an authority to
administer, and vice versa, for the two powers may only be exercised by an agent by
following the provisions on agency of the Civil Code.
 V-GENT, INC. vs. Morning Star Travel and Tours, Inc.
GR No. 186305, July 22, 2015
Second Division
BRION, J.

DOCTRINE:
A duly appointed agent has no power to exercise any act of strict dominion on behalf of
the principal unless authorized by a special power of attorney.

FACTS:
Petitioner V-Gent, Inc. (V-Gent) bought twenty-six (26) 2 two-way plane tickets from the
respondent Morning Star Travel and Tours, Inc. (Morning Star). Subsequently, V-Gent
returned a total of fifteen (15) unused tickets. Of the 15, Morning Star refunded only six
(6) tickets. Morning Star refused to refund the remaining nine (9) unused tickets despite
repeated demands.

Petitioner V-Gent then filed a money claim against Morning Star for payment of the
unrefunded tickets. Morning Star countered that V-Gent was not entitled to a refund
because the tickets were bought on the airline company's "buy one, take one" promo.
Morning Star also questioned V-Gent's personality to file the suit. It asserted that the
passengers, in whose names the tickets were issued, are the real parties-in-interest.
Citing Rule 3, Section 3 of the Rules of Court, the MeTC declared that, as agent of the
passengers who paid for the tickets, V-Gent stood as the real party-in-interest. On appeal,
the CA held that V-Gent is not a real party in-interest because it merely acted as an agent
of the passengers who bought the tickets from Morning Star with their own money.

ISSUE:
Whether or not V-Gent can file the suit.

RULING:
The power to collect and receive payments on behalf of the principal is an ordinary act of
administration covered by the general powers of an agent. On the other hand, the filing of
suits is an act of strict dominion. Under Article 1878 (15) of the Civil Code, a duly
appointed agent has no power to exercise any act of strict dominion on behalf of the
principal unless authorized by a special power of attorney. An agent's authority to file suit
cannot be inferred from his authority to collect or receive payments; the grant of special
powers cannot be presumed from the grant of general powers.
PHILIPPINE INTERNATIONAL TRADING CORPORATION vs. THRESHOLD
PACIFIC CORPORATION and EDGAR REY A. CUALES
G.R. No. 209119, October 3, 2018
First Division
LEONARDO-DE CASTRO, CJ.

DOCTRINE:
While the special power of attorney may be either oral or written, the authority given
must be express.

FACTS:
The parties, Philippine International trading Corporation (PITC), represented by its
President, Jose Luis U. Yulo, Jr. (Yulo), and Threshold Pacific Corporation (TPC),
represented by its Managing Director, respondent Edgar Rey Cuales (Cuales), executed
an International Financing Agreement (IFA) whereby PITC agreed to assist TPC
financially in the amount of P50,000,000.00 for the latter's importation of urea fertilizers
for resale on credit terms to the Allied Sugarcane Planters Association, Inc. (ASPAI), an
association of sugarcane planters. To facilitate the loan, PITC shall open the necessary
letter of credit in favor of the TPC's fertilizer supplier upon receipt by the PITC of a true
copy of the Sales Contract between the TPC and ASPAI covering the sale of the urea
fertilizer, subject of this import financing agreement. As a security, ASPAI shall issue
post-dated checks in favor of PITC.

Due to the delay in the importation of the fertilizers and the urgent need of ASPAI to the
same, the parties agreed to the release of the loan in tranches to enable TPC to purchase
the fertilizers from domestic sources. During the 2nd disbursement, instead of opening
another letter of credit, PITC issued a check in the amount of P5,000,000.00 directly
payable to TPC for the aforementioned amount. Upon receipt of the proceeds, TPC
issued a promissory note undertaking "to pay solidarily to the order of PITC" the
principal amount on April 15, 1994.

On July 7, 1994, claiming that TPC failed to pay the outstanding loan obligation, PITC
filed a Complaint for Sum of Money before the RTC. The RTC found RTC and Cuales
directly liable for the loan. On appeal, the Court of Appeals concluded that TPC and
Cuales were mere agents of ASPAI and should not be held liable for their principal's
default in the loan payments.

ISSUE:
Who is liable for the loan?
RULING:
In general, an agency may be express or implied. However, an agent must possess a
special power of attorney if he intends to borrow money in his principal's behalf, to bind
him as a guarantor or surety, or to create or convey real rights over immovable property,
including real estate mortgages. While the special power of attorney may be either oral or
written, the authority given must be express. In other words, there must be "a clear
mandate from the principal specifically authorizing the performance of the act," not
merely overt acts from which an agency may be inferred. Consequently, the agent's
"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." In the
present case, respondents TPC and Cuales failed to prove their allegation that they were
authorized to perform the act in behalf of ASPAI. Being their personal acts, TPC and
Cuales are liable.

APPARENT AUTHORITY/ AGENCY BY ESTOPPEL

REMAN RECIO vs. HEIRS OF THE SPOUSES AGUE DO and MARIA

ALTAMIRANO, namely: ALEJANDRO, ADELAIDA, CATALINA, ALFREDO,
FRANCISCO, all surnamed ALTAMIRANO; VIOLETAALTAMIRANO
OLFATO, and LORETAALTAMIRANO VDA. DE MARALIT and SPOUSES
LAURO and MARCELINA LAJARCA
G.R. No. 182349, July 24, 2013
First Division
REYES, J.

DOCTRINE:
Persons dealing with an assumed agency, whether the assumed agency be a general or
special one, are bound at their peril, if they would hold the principal liable, to ascertain
not only the fact of agency but also the nature and extent of authority.
FACTS:

In 1988, the respondents offered to sell a parcel of land to the petitioner’s mother which
the latter accepted. However, the sale did not materialize at that time due to the fault of
the respondents. Nonetheless, the mother continued to occupy and use the property with
the consent of the respondents. In 1994, the petitioner renewed his mother’s option to buy
the subject property. The petitioner conducted a series of negotiations with respondent
Alejandro who introduced himself as representing the other heirs. After the said
negotiations, the respondents through Alejandro entered into an oral contract of sale with
the petitioner over the subject property. In view of the said oral contract of sale, partial
payments were made which Alejandro duly received and acknowledged. Subsequently
however, Alejandro kept on avoiding the petitioner. Because of this, the petitioner
demanded the execution of a Deed of Absolute Sale in exchange for the full payment of
the agreed price. Thus, the petitioner filed a complaint for Specific Performance with
Damages. Pending the return of service of summons to the respondents, the petitioner
discovered that the subject property has been subsequently sold to respondents Spouses
Lajarca. Thereafter, trial ensued. The trial court found in favor of petitioner. On appeal,
the CA found that there was a valid contract of sale entered into by Alejandro and the
petitioner. However, the sale shall be valid only insofar as the aliquot part of Alejandro
since Alejandro’s sale of the land did not bind his co-owners because a sale of real
property by one purporting to be an agent of the owner without any written authority
from the latter is null and void. Further, the summons to Alejandro is not summons to the
other respondents since Alejandro’s authority to represent his co-heirs is disputed for lack
of a written special power of attorney (SPA).

ISSUE:
Whether or not the sale between the petitioner and respondent Alejandro valid as to the
share of the other respondents.

RULING:
Persons dealing with an assumed agency, whether the assumed agency be a general or
special one, are bound at their peril, 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 establish it. Apparent authority of an
agent arises only from acts or conduct on the part of the principal and such acts or
conduct of the principal must have been known and relied upon in good faith and as a
result of the exercise of reasonable prudence by a third person as claimant and such must
have produced a change of position to its detriment. Indeed, the petitioner can only apply
the principle of apparent authority if he is able to prove the acts of the respondents which
justify his belief in Alejandro’s agency, that the respondents had such knowledge thereof
and if the petitioner relied upon those acts and conduct, consistent with ordinary care and
prudence.

Absent the consent of Alejandro's co-owners, the Court holds that the sale between the
other respondents and the petitioner is null and void. But as held by the appellate court,
the sale between the petitioner and Alejandro is valid insofar as the aliquot share of
respondent Alejandro is concerned.
 ARTURO C. CALUBAD vs RICARCEN DEVELOPMENT CORPORATION
G.R. No. 202364, August 30, 2017
Third Division
LEONEN, J.

DOCTRINE:
When a corporation intentionally or negligently clothes its agent with apparent authority
to act in its behalf, it is estopped from denying its agent's apparent authority as to
innocent third parties who dealt with this agent in good faith.

FACTS:
Respondent Ricarcen Development Corporation (Ricarcen) was a domestic corporation
engaged in renting out real estate. It was the registered owner of a parcel of land located
at 53 Linaw St., Sta. Mesa Heights, Quezon City. On October 15, 2001, Marilyn, acting
on Ricarcen's behalf as its president, took out a loan from Calubad. This loan was secured
by a real estate mortgage over Ricarcen's Quezon City property covered by TCT No. RT-
84937 (166018).

To prove her authority to execute the mortgage contracts in Ricarcen's behalf, Marilyn
presented Calubad with a Board Resolution empowering her to borrow money and use
the Quezon City property as collateral for the loans. Marilyn also presented two (2)
Secretary's Certificates. Sometime in 2003, after Ricarcen failed to pay its loan, Calubad
initiated extrajudicial foreclosure proceedings on the real estate mortgage. The Regional
Trial Court granted Ricarcen's complaint and annulled the mortgage contracts. The Court
held that Marilyn failed to present a special power of attorney as evidence of her
authority from Ricarcen.

ISSUE:
Whether or not Ricarcen Development Corporation is estopped from denying or
disowning the authority of Marilyn R. Soliman, its former President, from entering into a
contract of loan and mortgage with Arturo C. Calubad.

RULING:
As a corporation, Ricarcen exercises its powers and conducts its business through its
board of directors. However, the board of directors may validly delegate its functions and
powers to its officers or agents. The authority to bind the corporation is derived from law,
its corporate by-laws, or directly from the board of directors, either expressly or
impliedly by habit, custom or acquiescence in the general course of business.
The general principles of agency govern the relationship between a corporation and its
representatives. Article 1317 of the Civil Code similarly provides that the principal must
delegate the necessary authority before anyone can act on his or her behalf. Nonetheless,
law and jurisprudence recognize actual authority and apparent authority as the two (2)
types of authorities conferred upon a corporate officer or agent in dealing with third
persons. Actual authority can either be express or implied. Express actual authority refers
to the power delegated to the agent by the corporation, while an agent's implied authority
can be measured by his or her prior acts which have been ratified by the corporation or
whose benefits have been accepted by the corporation.

On the other hand, apparent authority is based on the principle of estoppel. The doctrine
of apparent authority provides that even if no actual authority has been conferred on an
agent, his or her acts, as long as they are within his or her apparent scope of authority,
bind the principal. However, the principal's liability is limited to third persons who are
reasonably led to believe that the agent was authorized to act for the principal due to the
principal's conduct. Apparent authority is determined by the acts of the principal and not
by the acts of the agent. Thus, it is incumbent upon Calubad to prove how Ricarcen 's acts
led him to believe that Marilyn was duly authorized to represent it.

As the former president of Ricarcen, it was within Marilyn's scope of authority to act for
and enter into contracts in Ricarcen's behalf. Her broad authority from Ricarcen can be
seen with how the corporate secretary entrusted her with blank yet signed sheets of paper
to be used at her discretion. She also had possession of the owner's duplicate copy of the
land title covering the property mortgaged to Calubad, further proving her authority from
Ricarcen.

AYALA LAND, INC. vs ASB REALTY CORPORATION

and E.M. RAMOS & SONS, INC.
G.R. No. 210043, September 26, 2018
First Division
DEL CASTILLO, J.

DOCTRINE:
Persons dealing with an agent are bound at their peril, if they would hold the principal
liable, to ascertain not only the fact of agency but also the nature and extent of the agent's
authority.

FACTS:
Ayala Land, Inc. (ALI) and ASB Realty Corporation (ASBRC) are domestic corporations
engaged in real estate development. On the other hand, E.M. Ramos & Sons, Inc.
(EMRASON) is a domestic corporation principally organized to manage a 372-hectare
property. ALI claimed that, sometime in August 1992, EMRASON's brokers sent a
proposal for a joint venture agreement (JVA) between ALI and EMRASON for the
development of EMRASON's property. ALI initially declined but eventually negotiated
with Ramos, Jr., Antonio B. Ramos (Antonio), and Januario to discuss the terms of the
JVA. According to ALI, EMRASON made it appear that Ramos, Jr., Antonio, and
Januario had full authority to act on EMRASON's behalf in relation to the JVA. ALI
alleged that Emerita Ramos, Sr. (Ramos, Sr.), then EMRASON's President and Chairman,
wrote to ALI and therein acknowledged that Ramos, Jr. and Antonio were fully
authorized to represent EMRASON in the JVA, as shown in Ramos, Sr.'s letter dated
August 3, 1993. ALI and the Ramos children subsequently entered into a Contract to Sell
dated May 18, 1994, under which ALl agreed to purchase the property.

ALI alleged that it came to know that a Letter-Agreement and a Real Estate Mortgage
respecting the property had been executed by Ramos, Sr. and Antonio for and in behalf of
EMRASON, on one hand, and ASBRC on the other. It also alleged that the Ramos
children wrote to Luke C. Roxas, ASBRC's President, informing the latter of the Contract
to Sell between ALI and EMRASON.

For their part, respondents averred that ALI submitted to EMRASON and Ramos, Sr. its
proposal to purchase the property which proposal was however rejected. EMRASON,
through Ramos, Sr., informed ALI that it had decided to accept the proposal of ASBRC
because the latter's terms were more beneficial and advantageous to EMRASON. As a
result, ASBRC and EMRASON entered into a Letter Agreement which was approved and
ratified by the stockholers . After ASBRC learned about the Contract to Sell executed
between ALI and the Ramos children and the annotation of the Contract to Sell on the
transfer certificates of title (TCTs) covering the property, ASBRC and EMRASON filed a
Complaint for the nullification of the Contract to sell and the cancellation of the
annotations on the TCTs property. The trial court declared the Contract to Sell between
ALI and the Ramos children void because of the latter's lack of authority to sign the
Contract to Sell on behalf of EMRASON. On appeal, the Court of Appeals affirmed the
RTC's findings.

ISSUE:
Whether the principal has by his/her voluntary act placed the agent in such a situation
that a person of ordinary prudence, conversant with business usages and the nature of the
particular business, is justified in presuming that such agent has authority to perform the
particular act in question.

RULING:
ALI insists that the letter of Ramos, Sr. to ALI was proof that EMRASON had
acknowledged the authority of the Ramos children to transact with ALI. A perusal of the
letter shows that EMRASON, through Ramos, Sr. authorized Ramos, Jr. and Antonio
merely to collaborate and continue negotiating and discussing with ALI terms and
conditions that are mutually beneficial to the parties therein. Nothing more, nothing less.
To construe the letter as a virtual carte blanche for the Ramos children to enter into a
Contract to Sell regarding the Dasmarifias Property would be unduly stretching one's
imagination. Acts done by the corporate officers beyond the scope of their authority
cannot bind the corporation unless it has ratified such acts expressly or is estopped from
denying them. What is clear from the letter is that EMRASON authorized the Ramos
children only to negotiate the terms of a potential sale over the Property, and not to sell
the property in an absolute way or act as signatories in the contract.

THIRD PARTY DEALING WITH AGENT

SPOUSES ROLANDO and HERMINIA SALVADOR vs ROGELIO and

ELIZABETH RABAJA and ROSARIO GONZALES
G.R. No. 199990, February 4, 2015
Second Division
MENDOZA, J.:

DOCTRINE:
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.

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 the 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). 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.

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 trial court held that Gonzales was undoubtedly the attorney-in-fact of Spouses
Salvador absent any taint of irregularity and ordered the rescission of the contract.
Spouses Rabaja could not be faulted in dealing with Gonzales who was duly equipped
with the SPA from Spouses Salvador. The same was affirmed by the Court of Appeals.

ISSUE:
Whether or not the SPA is valid.

RULING:
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.40 It is already too late in the day for Spouses Salvador to
retract the representation to unjustifiably escape their principal obligation.

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.

AGENT ACTS IN OWN NAME:

NICANORA G. BUCTON (deceased), substituted by REQUILDA B. YRAY, vs.

RURAL BANK OF EL SALVADOR, INC., MISAMIS ORIENTAL, and
REYNALDO CUYONG, vs. ERLINDA CONCEPCION and HER HUSBAND AND
AGNES BUCTON LUGOD, Third Party Defendants.
G.R. No. 179625, February 24, 2014
Second Division
DEL CASTILLO, J.

DOCTRINE:
A mortgage executed by an authorized agent who signed in his own name without
indicating that he acted for and on behalf of his principal binds only the agent and not the
principal.

FACTS:
Petitioner is the owner of a parcel of land located in Cagayan de Oro City. On June 6,
1982, Concepcion borrowed the title on the pretext that she was going to show it to an
interested buyer. However, Concepcion obtained a loan in the amount of P30,000.00 from
respondent bank offering as security the subject property. Concepcion mortgaged
petitioner’s house and lot to respondent bank using a SPA allegedly executed by
petitioner in favor of Concepcion. Since Concepcion failed to pay the loan, the mortage
was foreclosed and eventually sold at public auction. Hence, this petition.
ISSUE:
Whether or not the SPA automatically made the petitioners liable for the loan.

RULING:
In order to bind the principal by a deed executed by an agent, the deed must upon its face
purport to be made, signed and sealed in the name of the principal. In other words, the
mere fact that the agent was authorized to mortgage the property is not sufficient to bind
the principal, unless the deed was executed and signed by the agent for and on behalf of
his principal. In this case, the authorized agent failed to indicate in the mortgage that she
was acting for and on behalf of her principal. The Real Estate Mortgage, explicitly shows
on its face, that it was signed by Concepcion in her own name and in her own personal
capacity. In fact, there is nothing in the document to show that she was acting or signing
as an agent of petitioner. Thus, consistent with the law on agency and established
jurisprudence, petitioner cannot be bound by the acts of Concepcion.

DEATH OF PRINCIPAL:

MARCELINO E. LOPEZ, FELIZA LOPEZ, ZOILO LOPEZ, LEONARDO

LOPEZ, and SERGIO F. ANGELES vs. THE HON. COURT OF APPEALS and
PRIMEX CORPORATION
G.R. Nos. 163959, August 1, 2018
Third Division
BERSAMIN, J

DOCTRINE:
An agency is extinguished by the death of the principal. Any act by the agent subsequent
to the principal's death is void ab initio, unless any of the exceptions expressly recognized
in Article 1930 and Article 1931 of the Civil Code is applicable.

FACTS:
The parties, PRIMEX, vendee and Marcelino Lopez et al., vendor entered into a Deed of
Conditional Sale (DCS) relative to a portion of land located in Antipolo, Rizal. PRIMEX
claimed that from the time of the execution of the DCS, it had dutifully complied with all
its monetary obligations under the said contract and was again ready to pay upon
presentation by the defendants-appellees, among others, of a valid certificate of title in
the name of one or all of the vendors. However, instead of delivering a valid title to
PRIMEX, the defendants-appellees delivered to the former Transfer a Certificate of Title.
The problem with this certificate according to PRIMEX was that while it was indeed
registered under the name of one of the vendors -Marcelino Lopez, among several others,
the title was nonetheless derived from an Original Certificate of Title which had been
declared by the Supreme Court in as null and void together with all the other TCTs
emanating from the said OCT. Consequently, PRIMEX refused to accept delivery of TCT
as a valid and sufficient compliance with the terms of the DCS which would warrant the
release of payment in accordance with the schedule of payments stipulated by the parties
in their written covenant. Despite its failure to deliver a valid title to PRIMEX, the latter
averred that the defendants-appellees threatened to sell or mortgage the subject property
to other parties on account of PRIMEX's ostensible refusal to pay part of the purchase
price as scheduled. Hence, PRIMEX's a complaint for specific performance and
preliminary injunction.

The trial court rendered a Decision in favor of the defendants-appellees and ordered
PRIMEX to pay the balance of the purchase price of the subject property, plus interests,
damages and costs of suit. Pending appeal, the parties submitted a Compromise
Agreement with Joint Motion to Dismiss and Withdrawal of Petition. The same was
granted. Thereafter, the heirs of Marcelino Lopez filed their oppositions arguing that Atty.
Angeles no longer had the authority to enter into and submit the Compromise Agreement
because the special power of attorney in his favor had ceased to have force and effect
upon the death of Marcelino Lopez.

ISSUE:
Whether or not the authority of Atty. Angeles was terminated upon the death of
Marcelino Lopez.

RULING:
One of the modes of extinguishing a contract of agency is by the death of either the
principal or the agent. In Rallos v. Felix Go Chan & Sons Realty Corporation, the Court
declared that because death of the principal extinguished the agency, it should follow a
fortiori that any act of the agent after the death of his principal should be held void ab
initio unless the act fell under the exceptions established under Article 1930 and Article
1931 of the Civil Code. The exceptions should be strictly construed. In other words, the
general rule is that the death of the principal or, by analogy, the agent extinguishes the
contract of agency, unless any of the circumstances provided for under Article 193 0 or
Article 1931 obtains. In which case, notwithstanding the death of either principal or
agent, the contract of agency continues to exist.

The want of authority in favor of Atty. Angeles was aggravated by the fact that he did not
disclose the death of the late Marcelino Lopez to the Court. His omission reflected the
height of unprofessionalism on his part, for it engendered the suspicion that he thereby
tried to pass off the Compromise Agreement as genuine and valid despite his authority
under the special power of attorney having terminated for all legal purposes.
REVOCATION:

INTERNATIONAL EXCHANGE BANK (NOW UNION BANK OF THE PHIL.), vs

SPOUSES JEROME AND QUINNIE BRIONES, AND JOHN DOE,
GR. No. 205657 , March 29, 2017
Second Dvision
LEONEN,J.

DOCTRINE:
Upon accepting an agency, the agent becomes bound to carry out the agency and shall be
held liable for the damages, which the principal may incur due to the agent's non-
performance.

FACTS:
On July 2, 2003, spouses Jerome and Quinnie Briones (Spouses Briones) took out a loan
on installment basis from iBank to purchase a car. The Spouses Briones executed a
promissory note with chattel mortgage that required them to take out an insurance policy
on the vehicle. The promissory note also gave iBank, as the Spouses Briones' attomey-
infact, irrevocable authority to file an insurance claim in case of loss or damage to the
vehicle. The insurance proceeds were to be made payable to iBank.

On November 5, 2003, the mortgaged car was camapped. Jerome Briones (Jerome)
immediately reported the incident to the Philippine National Police Traffic Management
Group. The Spouses Briones declared the loss to iBank, which instructed them to
continue paying the next three (3) monthly installments as a sign of good faith, a directive
they complied with. On March 26, 2004, or after the Spouses Briones finished paying the
three (3)-month installment, iBank sent them a letter demanding full payment of the lost
vehicle. On April 30, 2004, the Spouses Briones submitted a notice of claim with their
insurance company, which denied the claim on June 29, 2004 due to the delayed
reporting of the lost vehicle. On May 14, 2004, iBank filed a complaint for replevin
and/or sum of money against the Spouses Briones and a person named John Doe alleging
default in paying the monthly amortizations of the mortgaged vehicle. The court
dismissed the complaint.

ISSUE:
Whether an agency relationship existed between the parties.

RULING:
In a 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.
Furthermore, Article 1884 of the Civil Code provides that the agent is bound by his
acceptance to carry out the agency, and is liable for the damages which, through his non-
performance, the principal may suffer.

All the elements of agency exist in this case. Under the promissory note with chattel
mortgage, Spouses Briones appointed iBank as their attorney-in-fact, authorizing it to file
a claim with the insurance company if the mortgaged vehicle was lost or damaged.
Petitioner was also authorized to collect the insurance proceeds as the beneficiary of the
insurance policy.

Article 1370 of the Civil Code is categorical that when the terms of a contract are clear
and leave no doubt upon the intention of the contracting parties, the literal meaning of its
stipulations shall control.The determination of agency is ultimately factual in nature and
this Court sees no reason to reverse the findings of the Regional Trial Court and the Court
of Appeals. They both found the existence of an agency relationship between the Spouses
Briones and iBank, based on the clear wording of Sections 6 and 22 of the promissory
note with chattel mortgage, which petitioner prepared and respondents signed.

CONCURRENCE AND PREFERENCE OF CREDIT:

PHILIPPINE DEPOSIT INSURANCE CORPORATION vs BUREAU OF

INTERNAL REVENUE
G.R. No. 172892, June 13, 2013
First Division
LEONARDO-DE CASTRO, J.

DOCTRINE:
The law expressly provides that debts and liabilities of the bank under liquidation are to
be paid in accordance with the rules on concurrence and preference of credit under the
Civil Code.

FACTS:
In a resolution, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) prohibited
the Rural Bank of Tuba (Benguet), Inc. (RBTI) from doing business in the Philippines,
placed it under receivership and designated the Philippine Deposit Insurance Corporation
(PDIC) as receiver. Subsequently, PDIC conducted an evaluation of RBTI’s financial
condition and determined that RBTI remained insolvent. Thus, the Monetary Board
issued a resolution directing PDIC to proceed with the liquidation of RBTI. Accordingly,
PDIC filed in the Regional Trial Court (RTC) of La Trinidad, Benguet a petition for
assistance in the liquidation of RBTI. In an Order dated September 4, 1997, the trial
court gave the petition due course and approved it. As an incident of the proceedings, the
Bureau of Internal Revenue (BIR) intervened as one of the creditors of RBTI. The BIR
prayed that the proceedings be suspended until PDIC has secured a tax clearance required
under Section 52(C) of Republic Act No. 8424. The motion was granted. PDIC appealed
but the same was denied. Hence, this petition.

ISSUE:
Whether a bank placed under liquidation has to secure a tax clearance from the BIR
before the project of distribution of the assets of the bank can be approved by the
liquidation court.

RULING:
This Court has already resolved the issue of whether Section 52(C) of the Tax Code of
1997 applies to banks ordered placed under liquidation by the Monetary Board, that is,
whether a bank placed under liquidation has to secure a tax clearance from the BIR
before the project of distribution of the assets of the bank can be approved by the
liquidation court.

In Re: Petition for Assistance in the Liquidation of the Rural Bank of Bokod (Benguet),
Inc., Philippine Deposit Insurance Corporation v. Bureau of Internal Revenue ruled that
Section 52(C) of the Tax Code of 1997 is not applicable to banks ordered placed under
liquidation by the Monetary Board and a tax clearance is not a prerequisite to the
approval of the project of distribution of the assets of a bank under liquidation by the
PDIC.

The law expressly provides that debts and liabilities of the bank under liquidation are to
be paid in accordance with the rules on concurrence and preference of credit under the
Civil Code. Duties, taxes, and fees due the Government enjoy priority only when they
are with reference to a specific movable property, under Article 2241(1) of the Civil
Code, or immovable property, under Article 2242(1) of the same Code. However, with
reference to the other real and personal property of the debtor, sometimes referred to as
“free property,” the taxes and assessments due the National Government, other than those
in Articles 2241(1) and 2242(1) of the Civil Code, such as the corporate income tax, will
come only in ninth place in the order of preference.