NA
NATURE, FORM AND TURE, FORM AND KINDS OF AGENCY KINDS OF AGENCY
Art. 1868. By the contract of agency a person binds himself Art. 1868. By the contract of agency a person binds himself to render some service or to do something in representation to render some service or to do something in representation or on behalf of another, with the consent or authority of the or on behalf of another, with the consent or authority of the latter
latter. . (17!a"(17!a"
Art. 186!. Agency may be e#press, or implied from the acts Art. 186!. Agency may be e#press, or implied from the acts of the principal, from his silence or lac$ of action, or his of the principal, from his silence or lac$ of action, or his failure to repudiate the agency, $nowing that another person failure to repudiate the agency, $nowing that another person is acting on his
is acting on his behalf without authoritybehalf without authority..
Agency may be oral, unless the law re%uires a speci&c form. Agency may be oral, unless the law re%uires a speci&c form. (171a"
(171a"
Art. 187. Acceptance by the agent may also be e#press, or Art. 187. Acceptance by the agent may also be e#press, or implied from his acts which carry out the agency, or from his implied from his acts which carry out the agency, or from his silence or inaction according to the circumstances. (n"
silence or inaction according to the circumstances. (n"
Art. 1871. Between persons who are present, the acceptance Art. 1871. Between persons who are present, the acceptance of the agency may also be implied if the principal delivers his of the agency may also be implied if the principal delivers his power of attorney to the agent and the latter receives it power of attorney to the agent and the latter receives it without any ob'ection. (n"
without any ob'ection. (n"
Art. 187. Between persons who are absent, the acceptance Art. 187. Between persons who are absent, the acceptance of the agency cannot be implied from the silence of the of the agency cannot be implied from the silence of the agent, e#cept)
agent, e#cept) (1
(1" " *h*hen en ththe e prprinincipcipal al trtranansmsmitits s hihis s popowewer r of of attorney to the agent, who receives it without any attorney to the agent, who receives it without any ob'ection+
ob'ection+
(" *hen the principal entrusts to him by letter or (" *hen the principal entrusts to him by letter or telegram a power of attorney with respect to the telegram a power of attorney with respect to the business in which he is habitually engaged as an business in which he is habitually engaged as an agent, and he did not
agent, and he did not reply to the letter or telegram.reply to the letter or telegram. Art. 187. -f a person specially informs another or states by Art. 187. -f a person specially informs another or states by publi
public c adveradvertisetisement that he ment that he has given a has given a power of power of attorattorneyney to
to a a ththirird d pepersrsonon, , ththe e latlatteter r ththererebeby y bebecomcomes es a a dudulyly aut
authorhorieied d ageagent, nt, in in the formethe former r cascase e witwith h rerespespect ct to to thethe person who received the special information, and in the latter person who received the special information, and in the latter case with regard to any person.
case with regard to any person. /he power
/he power shall shall continue to continue to be ibe in full n full force until force until thethe notice is rescinded in the same manner in which it was given. notice is rescinded in the same manner in which it was given. Art. 1870. *hen a sale of a piece of land or any interest Art. 1870. *hen a sale of a piece of land or any interest ther
therein is ein is thrthrough an ough an agentagent, , the authoritthe authority y of the of the lattelatter r shallshall be in writing+ otherwise, the sale shall be void.
be in writing+ otherwise, the sale shall be void.
Art. 187. Agency is presumed to be for a compensation, Art. 187. Agency is presumed to be for a compensation, unless there is proof to
unless there is proof to the contrarythe contrary. (n". (n"
Art. 1876. An agency is either general or special. Art. 1876. An agency is either general or special.
/he
/he former former comprises comprises all all the the business business of of thethe pri
princincipalpal. . /he /he latlatterter, , one one or or mormore e spespeci&c ci&c tratransansactictionsons.. (171"
(171"
Art. 1877. An agency couched in general terms comprises Art. 1877. An agency couched in general terms comprises only acts of administration, even if the principal should state only acts of administration, even if the principal should state that he withholds no power or that the agent may e#ecute that he withholds no power or that the agent may e#ecute such acts as he may consider appropriate, or even though such acts as he may consider appropriate, or even though th
the e agagenency cy shshouould ld auauththororie ie a a gegeneneraral l anand d ununlimlimititeded management. (n"
management. (n"
Art. 1878. 2pecial powers of attorney are necessary in the Art. 1878. 2pecial powers of attorney are necessary in the following cases)
following cases) (1
(1" " //o o mama$$e e susuch ch papaymymenents ts as as arare e nonot t ususuauallylly considered as acts of administration+
considered as acts of administration+ (
(" " //o o ee3e3ect ct nonovavattioions ns whwhicich h puput t an an eend nd toto obl
obligaigationtions s alralreadeady y in in e#e#ististencence e at at the the timtime e thethe agency was constituted+
agency was constituted+
(
(" " //o o cocompmprroomimisse, e, tto o ssububmmit it %%ueueststioions ns ttoo arbitration, to renounce the right to appeal from a arbitration, to renounce the right to appeal from a 'udgment,
'udgment, to to waive waive ob'ections ob'ections to to the the venue venue of of anan action or to abandon a prescription already ac%uired+ action or to abandon a prescription already ac%uired+ (0" /
(0" /o waive any o waive any obligation gratuitously+obligation gratuitously+ (
(" " //o o enentteer r inintto o anany y cocontntraract ct bby y whwhicich h tthehe ow
ownenersrshihip p of of an an imimmomovavablble e is is trtranansmsmititteted d oror ac%
ac%uiuirered d eieithther er grgratatuituitououslsly y or or fofor r a a vavaluluabablele consideration+
consideration+
(6" /o ma$e gifts, e#cept customary ones for charity (6" /o ma$e gifts, e#cept customary ones for charity or
or ththosose e mamade de to to ememplployoyeeees s in in ththe e bubussininesesss managed by the agent+
managed by the agent+
(7" /o loan or borrow money, unless the latter act be (7" /o loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the urgent and indispensable for the preservation of the things which are under administration+
things which are under administration+
(8" /o lease any real property to another person for (8" /o lease any real property to another person for more than one year+
more than one year+ (!"
(!" //o o binbind d the princthe principaipal l to to rerendender r somsome e seservicrvicee without compensation+
without compensation+
((11" " //o o bbiinnd d tthhe e pprrinincicippal al in in a a ccoonnttrraact ct oof f partnership+
partnership+ (11
(11" " //o o oblobligatigate e the princthe principaipal l as as a a guguaranarantor tor oror surety+
surety+
(1" /o create or convey real rights over immovable (1" /o create or convey real rights over immovable property+
property+ (1" /
(1" /o accept o accept or repudiate an inheritance+or repudiate an inheritance+ (10"
(10" //o o ratifratify y or or recogrecognie obligations contractenie obligations contractedd before the agency+
before the agency+
(1" Any other act of strict dominion. (n" (1" Any other act of strict dominion. (n"
Art. 187!. A special power to sell e#cludes the power to Art. 187!. A special power to sell e#cludes the power to mortgage+ and a special power to mortgage does not include mortgage+ and a special power to mortgage does not include the power to sell. (n"
the power to sell. (n"
Art. 188. A special power to compromise does not authorie Art. 188. A special power to compromise does not authorie submission to arbitration. (171a"
submission to arbitration. (171a" Ar
Art. t. 18188181. . /h/he e agagenent t mumust st act withact within in ththe e scscopope e of of hishis authority. 4e may do such acts as may be conducive to the authority. 4e may do such acts as may be conducive to the accomplishment of the purpose of
accomplishment of the purpose of the agencythe agency. (1710a". (1710a"
Art. 188. /he limits of the agent5s authority shall not be Art. 188. /he limits of the agent5s authority shall not be considered e#ceeded should it have been performed in a considered e#ceeded should it have been performed in a man
mannener r momore re adadvavantntagageoeous us to to ththe e prprinincipcipal al ththan an ththatat speci&ed by him. (171"
speci&ed by him. (171"
Art. 188. -f an agent acts in his own name, the principal has Art. 188. -f an agent acts in his own name, the principal has no right of action against the persons with whom the agent no right of action against the persons with whom the agent has
has concontratractected+ d+ neineithether r havhave e sucsuch h perpersonsons s agaiagainst nst thethe principal.
principal.
-n such case the agent is the one directly bound in favor of -n such case the agent is the one directly bound in favor of th
the e pepersrson on wiwitth h whwhoom m hhe e hhas as coconntrtracacteted, d, as as if if tthehe transaction were his own, e#cept when the contract involves transaction were his own, e#cept when the contract involves things belonging to the principal.
things belonging to the principal. /he
/he provisions provisions of of this this article article shall shall be be understood understood toto be without pre'udice to the actions between the principal and be without pre'udice to the actions between the principal and agent.
agent.
SPOUSES YU ENG CHO & FRANCISCO TAO YU v. PAN SPOUSES YU ENG CHO & FRANCISCO TAO YU v. PAN
AMERICAN WORLD
AMERICAN WORLD AIRWAAIRWAYS, INC.YS, INC. (GR 12356, M!"#$ 2%, 2 (GR 12356, M!"#$ 2%, 2 A/2)
A/2)
lainti3 9u :ng ho is the owner of 9oung 4ardware lainti3 9u :ng ho is the owner of 9oung 4ardware o. and Achilles ;ar$eting. -n connection with <this= business, o. and Achilles ;ar$eting. -n connection with <this= business, he
he trtravavelels s frfrom om ttimime e to to titime me to to ;a;alalaysysiaia, , //aiaipepei i anandd 4ong$ong. >n ?uly 1, 1!76, plainti3s bought plane tic$ets 4ong$ong. >n ?uly 1, 1!76, plainti3s bought plane tic$ets (:
(:#h#hs. s. A A @ @ B" B" frfrom om dedefefendndanant t llauaudidia a //agagununicaicar r whwhoo
-:2/ C1
-:2/ C1
represented herself to be an agent of defendant /ourist *orld represented herself to be an agent of defendant /ourist *orld 2ervices, -nc. (/*2-".
2ervices, -nc. (/*2-". /he destination<s= are 4ong$ong, //he destination<s= are 4ong$ong, /o$yo,o$yo, 2an
2an ranranciscisco, co, E.2E.2.A.A., ., for for the the amoamount unt of of ,,.. perper computation of said defendant laudia /agunicar (:#hs. @ computation of said defendant laudia /agunicar (:#hs. @ F1". /he purpose of this trip is to go to air&eld, Dew ?ersey, F1". /he purpose of this trip is to go to air&eld, Dew ?ersey, E.2.A. to buy to two (" lines of infrared heating system E.2.A. to buy to two (" lines of infrared heating system processing te#ture
processing te#tured plastic d plastic articlearticle
A few days before the scheduled Gight of plainti3s, A few days before the scheduled Gight of plainti3s, their son, Adrian 9u, called the an Am oHce to verify the their son, Adrian 9u, called the an Am oHce to verify the status of the Gight. According to said Adrian 9u, personnel of status of the Gight. According to said Adrian 9u, personnel of defendant an Am told him over the phone that plainti3s5 defendant an Am told him over the phone that plainti3s5 boo$ing<s= are con&rmed.
boo$ing<s= are con&rmed. >n
>n ?uly , ?uly , 1!71!78, 8, plaplaintinti3s i3s lefleft t for 4ong$for 4ong$ong ong andand stayed there for &ve (" days. /hey left 4ong$ong for /o$yo stayed there for &ve (" days. /hey left 4ong$ong for /o$yo on ?uly 8, 1!78. Epon their arrival in /o$yo, they called up on ?uly 8, 1!78. Epon their arrival in /o$yo, they called up
ananFAFAm m oHoHce ce fofor r rerecocon&rn&rmamatition on of of ththeieir r GigGight ht to to 2a2ann ranciscrancisco. o. 2aid oHce, 2aid oHce, howevehowever, r, inforinformed med them that them that theirtheir names are not in
names are not in the manifest. 2ince plainti3s were supposedthe manifest. 2ince plainti3s were supposed to leave on the !th of ?uly, 1!78, and could not remain in to leave on the !th of ?uly, 1!78, and could not remain in ?apan for more than 7 hours, t
?apan for more than 7 hours, they were constrained to agrhey were constrained to agreeee to accept airline tic$ets for /aipei instead, per advise of ?AI to accept airline tic$ets for /aipei instead, per advise of ?AI oH
oHciacialsls. . /h/his is is is ththe e ononly ly opoptition on leleft ft to to ththem em bebecaucausese Dorthwest Airlines was then on stri$e, hence, there was no Dorthwest Airlines was then on stri$e, hence, there was no chance for the plainti3s to
chance for the plainti3s to obtain airline seatobtain airline seats s to the to the EniteEnitedd 2tates within 7 hours. lainti3s pai
2tates within 7 hours. lainti3s pai d for these tic$ets.d for these tic$ets. Ep
Epon on rereachaching ing //aipaipeiei, , ththerere e wewere re no no GiGighght<t<s=s= available for plainti3s, thus, they were forced to return bac$ available for plainti3s, thus, they were forced to return bac$ to ;anila on August , 1!78, instead of proceeding to the to ;anila on August , 1!78, instead of proceeding to the Enited 2tates. <?apan= Air Iines (?AI" refunded the plainti3s Enited 2tates. <?apan= Air Iines (?AI" refunded the plainti3s the di3erence of the price for /o$yoF/aipei <and= /o$yoF2an the di3erence of the price for /o$yoF/aipei <and= /o$yoF2an rancisco (:#hs. - @ ?" in the total amount of ,6..
rancisco (:#hs. - @ ?" in the total amount of ,6.. -n view of their failure to reach air&eld, Dew ?ersey, -n view of their failure to reach air&eld, Dew ?ersey, Jadiant 4eat :nterprises, -nc. cancelled 9u :ng ho5s option Jadiant 4eat :nterprises, -nc. cancelled 9u :ng ho5s option to buy the two lines of infraFred heating system (:#h. K". /he to buy the two lines of infraFred heating system (:#h. K". /he agreement was for him to inspect the e%uipment and ma$e agreement was for him to inspect the e%uipment and ma$e &nal arrangement<s= with the said company not later than &nal arrangement<s= with the said company not later than August 7, 1!78. rom this business transaction, plainti3 9u August 7, 1!78. rom this business transaction, plainti3 9u :n
:ng g hho o e#e#pepectcted ed to to rerealialie e a a prpro&t o&t of of ,,.. toto 0,..
0,..
efendant /agunicar claims that on ?uly 1, 1!78, a efendant /agunicar claims that on ?uly 1, 1!78, a few days before the scheduled Gight, plainti3 9u :ng ho few days before the scheduled Gight, plainti3 9u :ng ho personally went to her oHce, pressing her about their Gight. personally went to her oHce, pressing her about their Gight. 2he called up defendant ?ulieta anilao, and the latter told 2he called up defendant ?ulieta anilao, and the latter told her Lo sige laudia, con&rm na.L 2he even noted this in her her Lo sige laudia, con&rm na.L 2he even noted this in her inde# card (:#h. I", that it was ?ulieta who con&rmed the inde# card (:#h. I", that it was ?ulieta who con&rmed the boo$ing (:#h. IF1". -t was then that she allegedly attached boo$ing (:#h. IF1". -t was then that she allegedly attached the con&rmation stic$ers (:#hs. , FB /*2-" to the tic$ets. the con&rmation stic$ers (:#hs. , FB /*2-" to the tic$ets. /hese stic$er
/hese stic$ers came from /*2-.s came from /*2-.
efendant /agunicar alleges that it was only in the efendant /agunicar alleges that it was only in the &rst wee$ of August, 1!78 that she learned from Adrian 9u, &rst wee$ of August, 1!78 that she learned from Adrian 9u, son of plainti3s, that the latter were not able to ta$e the son of plainti3s, that the latter were not able to ta$e the Gight from /o$yo to 2an rancisco, E.2.A. After a few days, Gight from /o$yo to 2an rancisco, E.2.A. After a few days, said Adrian 9u came over with a gentleman and a lady, who said Adrian 9u came over with a gentleman and a lady, who tur
turned out ned out to to be be a a lawylawyer er and his and his sesecrecretartaryy. . efefendendantant /
/agunicar agunicar claims claims that that plainti3s plainti3s were were as$ing as$ing for for her her help help soso that they could &le an action against anFAm. Because of that they could &le an action against anFAm. Because of plainti3s5 promise she will not be involved, she agreed to sign plainti3s5 promise she will not be involved, she agreed to sign the aHdavit prepared by the
the aHdavit prepared by the lawyerlawyer..
A complaint for damages was &led by petitioners A complaint for damages was &led by petitioners agains
against t privatprivate e resrespondepondents nts an American an American *or*orld ld AirwayAirways,s, -nc. (an
-nc. (an Am", Am", //ourisourist t *o*orld 2ervices, -nc. rld 2ervices, -nc. (/*2-", ?ulieta(/*2-", ?ulieta an
anilao ilao (a(anilanilao", o", and and laulaudia dia //aguagunicanicar r (/(/aguagunicanicar" r" forfor e#penses allegedly incurred such as costs of
e#penses allegedly incurred such as costs of tic$ets and hoteltic$ets and hotel accommodations when petitioners were compelled to stay in accommodations when petitioners were compelled to stay in 4o
4ongng$$onong g anand d ththen en in in //o$o$yo yo by by rreaeasoson n of of ththe e nononFnF con
con&rm&rmatiation on of of thetheir ir booboo$in$ing g witwith h anFanFAm. -n Am. -n a a ececisioisionn dated Dovember 10, 1!!1, the Jegional /rial ourt of ;anila, dated Dovember 10, 1!!1, the Jegional /rial ourt of ;anila, Branch , held the defendants 'ointly and severally liable, Branch , held the defendants 'ointly and severally liable, e#cept defendant ?ulieta anilao
e#cept defendant ?ulieta anilao
>nly respondents an Am a
>nly respondents an Am and /nd /agunicar appealed agunicar appealed toto the ourt of Appeals. >n 11 August 1!!, the appellate court the ourt of Appeals. >n 11 August 1!!, the appellate court re
rendenderered d 'ud'udgmegment nt modmodifyifying ing the the amoamount unt of of damdamageagess awarded, holding private respondent /agunicar solely liable awarded, holding private respondent /agunicar solely liable therefor, and absolving respondents an Am and /*2- from therefor, and absolving respondents an Am and /*2- from any and
any and all liabiliall liabilityty.. -22E:)
-22E:)
*hether here is no agency relationship among ADF *hether here is no agency relationship among ADF A;
A;, , /*/*2- 2- anand d //agagununicicar ar arare e cocontntrarary ry to to ththe e 'u'udidicicialal admi
admississions ons of of ADFADFA;, A;, /*2/*2- - and and //aguagunicanicar r and and li$li$ewiewisese contrary to the &ndings of fact of the trial court.
contrary to the &ndings of fact of the trial court. 4:I)
4:I)
By the contract of agency, a person binds himself to By the contract of agency, a person binds himself to render some service or to do something in representation or render some service or to do something in representation or on behalf of another, with the consent or authority of the on behalf of another, with the consent or authority of the latter.
latter. %% /he elements of agency are) (1" consent, e#press or /he elements of agency are) (1" consent, e#press or
implied, of the parties to establish the relationship+ (" the implied, of the parties to establish the relationship+ (" the ob'ect is the e#ecution of a 'uridical act in relation to a third ob'ect is the e#ecution of a 'uridical act in relation to a third person+ (" the agent acts as a representative and not for person+ (" the agent acts as a representative and not for himself+ (0" the agent acts within the scope of his authority. himself+ (0" the agent acts within the scope of his authority. ''
-t is a settled rule that persons dealing with an assumed -t is a settled rule that persons dealing with an assumed agent are bound at their peril, if they would hold
agent are bound at their peril, if they would hold the principalthe principal liable, to ascertain not only the fact of agency but also the liable, to ascertain not only the fact of agency but also the na
natuturre e anand d ee#t#tenent t of of auauththororitity, y, anand d in in cacase se eieithther er isis contr
controvertoverted, the ed, the burdburden of en of proof is proof is upon them to upon them to estaestablishblish it.
it.
-n the case at bar, petitioners rely on the aHdavit of -n the case at bar, petitioners rely on the aHdavit of re
respsponondedent nt //aguagunicnicar ar whwherere e shshe e ststatated ed ththat at shshe e is is anan author
authoried agent of ied agent of /*2-. /his aHdavit, however/*2-. /his aHdavit, however, has , has wea$wea$ probative value in light of respondent /agunicar5s testimony probative value in light of respondent /agunicar5s testimony in court to the contrary. AHdavits, being ta$en
in court to the contrary. AHdavits, being ta$en ex parteex parte, are, are
almost always incomplete and often inaccurate, sometimes almost always incomplete and often inaccurate, sometimes fr
from om papartrtial ial susuggggesestitionon, , or or fofor r wanwant t of of susuggggesestition on anandd in%uiries. /heir in&rmity as a species of evidence is a matter in%uiries. /heir in&rmity as a species of evidence is a matter of 'udicial e#perience and are thus considered inferior to the of 'udicial e#perience and are thus considered inferior to the te
teststimoimony ny gigiveven n in in coucourtrt.. 11 uurthrther, er, aHdaHdavitavits s are notare not complete reproductions of what the declarant has in mind complete reproductions of what the declarant has in mind because they are generally prepared by the administering because they are generally prepared by the administering oHcer and the aHant simply signs them after the same have oHcer and the aHant simply signs them after the same have been read to her.
been read to her. 1111 Jespondent / Jespondent /agunicar testi&ed agunicar testi&ed that herthat her aHdavit was prepared and typewritten by the secretary of aHdavit was prepared and typewritten by the secretary of pet
petitiitioneoners5 rs5 lawylawyer, er, AtAttyty. . AceAcebedbedo, o, who who botboth h came came witwithh Adrian 9u, son of petitioners, when the latter went to see her Adrian 9u, son of petitioners, when the latter went to see her at her oHce. /his was con&rmed by Adrian 9u who testi&ed at her oHce. /his was con&rmed by Adrian 9u who testi&ed that Atty
that Atty. Acebedo brought his . Acebedo brought his notarial seal notarial seal and notaried theand notaried the aHdavit of the same day.
aHdavit of the same day. 1212 /he circumstances under which /he circumstances under which said aHdavit was prepared put in doubt petitioners5 claim said aHdavit was prepared put in doubt petitioners5 claim that it was e#ecuted voluntarily by respondent /agunicar. -t that it was e#ecuted voluntarily by respondent /agunicar. -t appears that the aHdavit was prepared and was based on appears that the aHdavit was prepared and was based on th
the e ananswswerers s whwhich ich rerespsponondedent nt //agagununicaicar r gagave ve to to ththee %ue
%uestistions ons prpropoopoundunded ed to to her her by by AtAttyty. . AceAcebedbedo.o. 1313 /hey /hey never told her that the aHdavit would be used in a case to be never told her that the aHdavit would be used in a case to be &led against her
&led against her.. 11 /hey even assured her that she would /hey even assured her that she would not be included as defendant if she agreed to e#ecute the not be included as defendant if she agreed to e#ecute the aHda
aHdavitvit.. 1515 Jespondent /agunicar was prevailed upon by Jespondent /agunicar was prevailed upon by petitioners5 son and their lawyer to sign the aHdavit despite petitioners5 son and their lawyer to sign the aHdavit despite her ob'ection to the statement therein that she was an agent her ob'ection to the statement therein that she was an agent of /*2-. /hey assured her that Lit is immaterialL
of /*2-. /hey assured her that Lit is immaterialL 1616 and thatand that
Lif we &le a suit against you we cannot get anything from Lif we &le a suit against you we cannot get anything from you
you.L.L 1%1% /his purported admission of respondent /agunicar /his purported admission of respondent /agunicar can
cannonot t be be usused ed by by pepetitititiononerers s to to prprovove e ththeieir r agagenencycy relationship. At any rate, even if such aHdavit is to be given relationship. At any rate, even if such aHdavit is to be given any probative value, the e#istence of the agency relationship any probative value, the e#istence of the agency relationship cannot be established on its sole basis. /he declarations of cannot be established on its sole basis. /he declarations of the agent alone are generally insuHcient to establish the fact the agent alone are generally insuHcient to establish the fact or
negat
negative ive allegaallegation tion of of resrespondepondents nts anilao and anilao and //aguniagunicarcar that neither is an agent nor principal of the other, and the that neither is an agent nor principal of the other, and the aH
aHrrmamatitive ve alallelegagatition on of of pepetitititiononerers s ththat at an an agagenencycy relationship e#ists, it is the latter who have the burden of relationship e#ists, it is the latter who have the burden of evide
evidence to nce to prove their allegatioprove their allegation,n, 1)1) failing in which, their failing in which, their claim must necessarily fail.
claim must necessarily fail.
*e stress that respondent /agunicar categorically denied in *e stress that respondent /agunicar categorically denied in open court that she is a duly authoried agent of /*2-, and open court that she is a duly authoried agent of /*2-, and declared that she is an independent travel agent.
declared that she is an independent travel agent. 22 *e have *e have
consistently ruled that in case of
consistently ruled that in case of conGict between statementsconGict between statements in
in the the aHdaHdavit avit and and tetestistimonmonial ial decdeclarlaratioations, ns, the the lattlatterer command greater weight.
command greater weight. 2121
As
As furfurthether r prproofs of oofs of ageagencyncy, , petpetitioitionerners s call call ourour attention to /*2-5s :#hibits L7L, L7FAL, and L8L which show attention to /*2-5s :#hibits L7L, L7FAL, and L8L which show that /agunicar and /*2- received sales commissions from that /agunicar and /*2- received sales commissions from an Am. :#hibit L7L
an Am. :#hibit L7L 2222 is the /ic$et 2ales is the /ic$et 2ales Jeport submitteJeport submitted byd by
to an Am reGecting the commissions received by to an Am reGecting the commissions received by
/*2-as an
as an ageagent of nt of aan Am. n Am. :#h:#hibiibit L7FAt L7FALL 2323 is a listing of the is a listing of the
routes ta$e
routes ta$en by passengers who were audited to /n by passengers who were audited to / *2-5s sales*2-5s sales report. :#hibit L8L
report. :#hibit L8L 22 is a receipt issued by /*2- covering the is a receipt issued by /*2- covering the
payment made by /agunicar for the tic$ets she bought from payment made by /agunicar for the tic$ets she bought from /*2-.
/*2-. /hese /hese documents documents cannot cannot 'ustify 'ustify the the decision decision thatthat /
/agunicar agunicar was was paid a paid a commission commission either by either by /*2- or /*2- or an Am.an Am. >n the contrary,
>n the contrary, //agunicar testi&ed that agunicar testi&ed that when she pays when she pays /*2-,/*2-, she already deducts in advance her commission and merely she already deducts in advance her commission and merely gives the net amount to /*2-.
gives the net amount to /*2-. 2525 rom all sides of the legal rom all sides of the legal
prism, the transaction is simply a contract of sale wherein prism, the transaction is simply a contract of sale wherein /
/agunicar buys airline agunicar buys airline tic$ets from /*2- and then tic$ets from /*2- and then sells it at sells it at aa premium to her clients.
premium to her clients.
*4:J:>J:, the decision appealed from is hereby *4:J:>J:, the decision appealed from is hereby A-J;:. ost against petitioners. 2> >J:J:.
A-J;:. ost against petitioners. 2> >J:J:. CONSTANTE AMOR DE CASTRO v. CA CONSTANTE AMOR DE CASTRO v. CA
(GR 115'3', *+- '
(GR 115'3', *+- ' 2222 A/2)
A/2)
Appellants
Appellants were coFowners of four (0" lots located at were coFowners of four (0" lots located at
:2A corner Dew 9or$ and enver 2treets in ubao, Mueon :2A corner Dew 9or$ and enver 2treets in ubao, Mueon ity. -n a letter dated ?anuary 0, 1!80 (:#hibit LAF1, p. 100, ity. -n a letter dated ?anuary 0, 1!80 (:#hibit LAF1, p. 100, Jecords", appellee
Jecords", appellee66 was authoried by appellants to act as was authoried by appellants to act as
re
real al estestate ate brbro$o$er er in in the sale the sale of of thethese se prpropeopertirties es for for thethe amount of ,,., &ve percent (N" of which will be amount of ,,., &ve percent (N" of which will be given to the agent as commission. -t was appellee who &rst given to the agent as commission. -t was appellee who &rst found /imes /ransit orporation, represented by its
found /imes /ransit orporation, represented by its presidentpresident ;r. Jondaris, as prospective buyer which desired to buy two ;r. Jondaris, as prospective buyer which desired to buy two (
(" " lolots ts ononlyly, , spspececi&i&cacalllly y lolots ts 10 10 anand d 11. . :v:venentutualallyly,, sometime in ;ay of 1!8, the sale of lots 10 and 1 was sometime in ;ay of 1!8, the sale of lots 10 and 1 was consummated. Appellee received from appellants
consummated. Appellee received from appellants 08,8!.7608,8!.76 as commission.
as commission.
-t was then that the rift between the contending parties soon -t was then that the rift between the contending parties soon emer
emerged. ged. AppeAppellee llee apparapparently felt ently felt short changed short changed becausbecausee ac
accocorrddining g to to hhimim, , hhis is totottal al cocommmmisisssioion n sshohoululd d bbee ,. which is &ve percent (N" of the agreed price of ,. which is &ve percent (N" of the agreed price of 7
7,,,,.. papaid id by by /i/imemes s //raransnsit it oorprpororatation ion toto ap
appepellallantnts s fofor r ththe e twtwo o ((" " lolotsts, , anand d ththat at it it was he was he whwhoo in
intrtrododucuced ed ththe e bubuyeyer r to to apappepellllanants ts anand d ununceceasasininglglyy fa
facicilitlitatated ed ththe e nenegogotitiatation ion whwhich ich ulultitimamatetely ly leled d to to ththee consummation of the sale. 4ence, he sued below to collect consummation of the sale. 4ence, he sued below to collect the balance of ,66.0 after having received 08,8!.76 the balance of ,66.0 after having received 08,8!.76 in advance.
in advance.
>n the other hand, appellants completely traverse >n the other hand, appellants completely traverse app
appelleellee5s e5s claiclaims ms and and essessententially ially argargue ue thathat t appappelleellee e isis se
sel&shl&shly ly as$as$ing ing for more for more thathan n whawhat t he he trutruly ly desdeserverved ed asas commission to the pre'udice of other agents who were more commission to the pre'udice of other agents who were more ins
instrutrumenmental tal in in the the conconsumsummatmation ion of of the the salsale. e. AltAlthouhoughgh app
appellaellants nts rereadiladily y conconcedcede e thathat t it it was was appappellellee ee who who &rs&rstt introduced /imes /ransit orp. to them, appellee was not introduced /imes /ransit orp. to them, appellee was not designated by them as their e#clusive real estate agent but designated by them as their e#clusive real estate agent but that in fact there were more or less eighteen (18" others that in fact there were more or less eighteen (18" others whose collective e3orts in the long run dwarfed those of whose collective e3orts in the long run dwarfed those of appellee5s, considering that the &rst negotiation for the sale appellee5s, considering that the &rst negotiation for the sale
where appellee too$ active participation failed and it was where appellee too$ active participation failed and it was these other agents who successfully bro$ered in the second these other agents who successfully bro$ered in the second negotiation. But despite this and out of appellants5 Lpure negotiation. But despite this and out of appellants5 Lpure li
libeberaralilityty, , bebenene&c&cenence ce anand d mamagngnananimimitityLyL, , appeappelllleeee nevertheless was given the largest cut in the commission nevertheless was given the largest cut in the commission (08,8!.76", although on the principle of
(08,8!.76", although on the principle of quantum meruit quantum meruit he he
wou
would ld havhave e cercertaitainly nly beebeen n ententitleitled d to to lesless. s. 2o 2o appappellelleeee should not have been heard to complain of getting only a should not have been heard to complain of getting only a pit
pittatancnce e whwhen en he he acactutuallally y gogot t ththe e liolion5n5s s shsharare e of of ththee commission and worse, he should not have been allowed to commission and worse, he should not have been allowed to get the entire commission. urthermore, the purchase price get the entire commission. urthermore, the purchase price for the two
for the two lots was only lots was only ..6 6 millmillion as ion as appappearearing in ing in thethe deed of sale
deed of sale and not and not 7. million as alleged by appellee.7. million as alleged by appellee. /hus,
/hus, even even assuming assuming that that appellee appellee is is entitled entitled to to the the entireentire commission, he would only be getting N of the .6 million, commission, he would only be getting N of the .6 million, or 18,..L
or 18,..L r
rivaivate te rerespospondendent nt ranranciscisco co ArtArtigo igo (LA(LArtirtigoL goL forfor brevity" sued petitioners onstante A. e astro (LonstanteL brevity" sued petitioners onstante A. e astro (LonstanteL for brevity" and oraon A. e astro (LoraonL for brevity" for brevity" and oraon A. e astro (LoraonL for brevity" to collect the unpaid balance of his bro$er5s commission from to collect the unpaid balance of his bro$er5s commission from the e astros. /he /rial ourt &nds defendants onstante the e astros. /he /rial ourt &nds defendants onstante and oraon Amor de astro 'ointly and solidarily liable to and oraon Amor de astro 'ointly and solidarily liable to plainti3.
plainti3.
/he ourt o
/he ourt of Appeals aHrmed f Appeals aHrmed in toto in toto the decision the decision of of the J/. 4ence, this petition.
the J/. 4ence, this petition. -22E:)
-22E:)
*hether the complaint merits dismissal for failure to *hether the complaint merits dismissal for failure to implead other coFowners as indispensable parties
implead other coFowners as indispensable parties 4:I)
4:I)
/he e
/he e astros argue astros argue that Artigo5s that Artigo5s complaint shouldcomplaint should have been dismissed for failure to implead all the coFowners have been dismissed for failure to implead all the coFowners of the two lots. /he e astros claim that Artigo always $new of the two lots. /he e astros claim that Artigo always $new that the two lots were coFowned by onstante and oraon that the two lots were coFowned by onstante and oraon with their other siblings ?ose and armela whom onstante with their other siblings ?ose and armela whom onstante merely represented. /he e astros contend that failure to merely represented. /he e astros contend that failure to implea
implead d such indispesuch indispensablnsable e partparties is ies is fatal to fatal to the complaintthe complaint since Artigo, as agent of all the four coFowners, would be since Artigo, as agent of all the four coFowners, would be paid with funds coFowned by the four coFowners.
paid with funds coFowned by the four coFowners. /he
/he e e astros5 astros5 contentions contentions are are devoid devoid of of legallegal basis.
basis.
An indispensable party is one whose interest will be An indispensable party is one whose interest will be a3ected by the court5s action in the litigation, and without a3ected by the court5s action in the litigation, and without whom no &nal determination of the case can be had. whom no &nal determination of the case can be had.77 /he/he
'oinder
'oinder of of indispensable indispensable parties parties is is mandatory mandatory and and courtscourts cannot proceed without their presence.
cannot proceed without their presence.88 *henever it appears *henever it appears
to
to tthe he cocoururt t in in tthe he cocoururse se of of a a pprrococeeeediding ng tthahat t anan indispensable party has not been 'oined, it is the duty of the indispensable party has not been 'oined, it is the duty of the court to stop the trial
court to stop the trial and order the inclusion of and order the inclusion of such partysuch party..!!
4owe
4oweverver, , the the rulrule e on on manmandatdatory ory 'oin'oinder der of of indindispispensensableable parties is not applicable to the instant case.
parties is not applicable to the instant case. /here
/here is is no no dispute dispute that that onstante onstante appointed appointed Artigo Artigo in in aa ha
handndwrwrititteten n nonote te dadateted d ?a?anunuarary y 00, , 1!1!80 80 to to sesell ll ththee properties of the e astros for million at a percent properties of the e astros for million at a percent commission. /he authority was on a &rst come, &rst serve commission. /he authority was on a &rst come, &rst serve basis.
basis.
ononststanantte e ssigignened d ththe e nonotte e as as oownwner er anand d asas repr
represenesentative of tative of the other coFowners. Ender this the other coFowners. Ender this note, anote, a co
contntraract ct of of agagenency cy wawas s clcleaearlrly y coconsnstititututeted d bebetwtweeeenn onstante and Artigo. *hether onstante appointed Artigo onstante and Artigo. *hether onstante appointed Artigo as
as agagenent, t, in in oonsnstatantnte5e5s s inindidivividudual al or or rereprpresesenentatatitiveve capacity, or both, the e astros cannot see$ the dismissal capacity, or both, the e astros cannot see$ the dismissal of the case for failure to implead the other coFowners as of the case for failure to implead the other coFowners as ind
indispispensensable able parpartieties.s. The De CaThe De Castrstros os admadmit it thathat t thethe ot
otheher r coco-o-ownwnerers s arare e sosolilidadaririly ly liliabable le unundeder r ththee contract of agency
contract of agency ,,11 citing Article 1!1 of the ivil ode, citing Article 1!1 of the ivil ode,
which reads) which reads)
-:2/ C
-:2/ C
Art. 1!1. -f two or more persons have appointed an Art. 1!1. -f two or more persons have appointed an agent for a common
agent for a common transaction or underta$ing, theytransaction or underta$ing, they sh
shall all be be sosolilidadaririly ly lialiablble e to to ththe e agagenent t for for alall l ththee conse%uences of the agency.
conse%uences of the agency.
/he solidary liability of the four coFowners, however, militates /he solidary liability of the four coFowners, however, militates
aga
againsinst t the the e e asastrtros5 os5 thetheory ory thathat t the the othother er coFowcoFownernerss should be impleaded as indispensable parties.
should be impleaded as indispensable parties.
*hen the law e#pressly provides for solidarity of the *hen the law e#pressly provides for solidarity of the obligation, as in the liability of coFprincipals in a contract of obligation, as in the liability of coFprincipals in a contract of agency, each obligor may be compelled to pay the entire agency, each obligor may be compelled to pay the entire obligation.
obligation.11 /he agent may recover the whole compensation /he agent may recover the whole compensation
from any one of the coFprincipals, as in this case. from any one of the coFprincipals, as in this case.
-ndeed, Article 116 of the ivil ode provides that a -ndeed, Article 116 of the ivil ode provides that a cr
credieditor may suetor may sue any any of the solidary debtors. /his articleof the solidary debtors. /his article reads)
reads)
Art. 116. /he creditor may proceed against any one Art. 116. /he creditor may proceed against any one of
of ththe e sosolidlidarary y dedebtbtorors s or or sosome me or or alall l of of ththemem simult
simultaneouaneouslysly. . /he demand /he demand made against made against one of one of them shall not be an obstacle to those which may them shall not be an obstacle to those which may subse%uently be directed against the others, so long subse%uently be directed against the others, so long as the debt has not been fully collected.
as the debt has not been fully collected. /hus, the
/hus, the ourt has ourt has ruled inruled in Operators Operators IncorporatIncorporateded vs. American Biscuit Co., Inc.
vs. American Biscuit Co., Inc. that that
LL# # ## # # sosolidlidariarity ty dodoes es not not mamake ke a a sosolidlidarary y obligor an indispensable party in a suit led obligor an indispensable party in a suit led by the creditor
by the creditor . Article 116 of the ivil ode says. Article 116 of the ivil ode says
that the creditor Omay proceed against anyone that the creditor Omay proceed against anyone of theof the ssoolliiddaarry y ddeebbttoorrs s oor r ssoomme e oor r aalll l oof f tthheemm simultaneously5.L (:mphasis supplied"
simultaneously5.L (:mphasis supplied"
A FINANCE CORPORATION v. CA A FINANCE CORPORATION v. CA
GR )566, *+- 1))2 GR )566, *+- 1))2 A/2)
A/2) >n
>n ececembember er 17, 17, 1!81!8, , JJenaenato to ayaytantano, o, doidoingng busin
business under ess under the name the name ebbebbs s -nter-nternationnational, al, applieapplied d forfor and was granted a loan with respondent /raders Joyal Ban$ and was granted a loan with respondent /raders Joyal Ban$ in the amount of 6,.. As security for the payment of in the amount of 6,.. As security for the payment of sa
said id loloanan, , ththe e aaytytanano o spspououseses s ee##ececututed ed a a dedeed ed of of suretyship whereby they agreed to pay 'ointly and severally suretyship whereby they agreed to pay 'ointly and severally to
to rerespsponondedent nt baban$ n$ ththe e amamouount nt of of ththe e loloan an ininclclududiningg interests
interests, penalty , penalty and other ban$ and other ban$ charges.charges.
-n a letter dated ecember , 1!8 addressed to -n a letter dated ecember , 1!8 addressed to respondent ban$, hilip *ong as credit administrator of BA respondent ban$, hilip *ong as credit administrator of BA inance orporation for and in behalf of the latter, undertoo$ inance orporation for and in behalf of the latter, undertoo$ to guarantee the loan of
to guarantee the loan of the aytano spouses.the aytano spouses.
artial payments were made on the loan leaving an unpaid artial payments were made on the loan leaving an unpaid balance in the amount of 8,87.. 2ince the aytano balance in the amount of 8,87.. 2ince the aytano spous
spouses es refurefused to sed to pay their pay their obligatobligation, respondion, respondent ban$ent ban$ &led with the trial court complaint for sum of money against &led with the trial court complaint for sum of money against th
the e aaytytanano o spspououseses s anand d pepetitititiononer er cocorprpororatatioion n asas alternative defendant.
alternative defendant. /he
/he aytano aytano spouses spouses did did not not present present evidence evidence forfor the
their ir defdefensense. e. etietitiotioner ner corcorporporatiation, on, on on the the othother er hanhand,d, ra
raisised ed ththe e dedefefensnse e of of lalac$ c$ of of auauththororitity y of of itits s crcrededitit administrator to bind the corporation.
administrator to bind the corporation.
>n ecember 1, 1!88, the trial court rendered a >n ecember 1, 1!88, the trial court rendered a decision in favor of plainti3 and against defendantsPaytano decision in favor of plainti3 and against defendantsPaytano spouses, ordering the latter to 'ointly and severally pay the spouses, ordering the latter to 'ointly and severally pay the plainti3.
plainti3. Dot
Dot satsatis&is&ed ed witwith h the the decdecisiision, on, rerespospondendent nt banban$$ appealed with the ourt of Appeals. >n ;arch 1, 1!!, appealed with the ourt of Appeals. >n ;arch 1, 1!!, respondent appellate court rendered 'udgment modifying respondent appellate court rendered 'udgment modifying thethe decision of the trial court. 4ence, this petition.
decision of the trial court. 4ence, this petition. -22E:)
-22E:)
*hether the letter of guaranty is ultra vires and thus *hether the letter of guaranty is ultra vires and thus invalid andPor unenforceable.
invalid andPor unenforceable.
4:I) 4:I)
-t
-t is is a a sesettttleled d rurule le ththat at pepersrsonons s dedealalining g witwith h anan assumed agent, whether the assumed agency be a general assumed agent, whether the assumed agency be a general or special one are bound at their peril, if they would hold the or special one are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but principal liable, to ascertain not only the fact of agency but also the nature and e#tent of authority, and in case either is also the nature and e#tent of authority, and in case either is controverted, the burden of proof is upon them to establish it controverted, the burden of proof is upon them to establish it (4arry Keeler v. Jodrigue, 0 hil. 1!". 4ence, the burden is (4arry Keeler v. Jodrigue, 0 hil. 1!". 4ence, the burden is on respondent ban$ to satisfactorily prove that the credit on respondent ban$ to satisfactorily prove that the credit administrator with whom they transacted acted within the administrator with whom they transacted acted within the authority given to him by his principal, petitioner corporation. authority given to him by his principal, petitioner corporation. /he
/he only only evidence evidence presentepresented d by by respondent respondent ban$ ban$ was was thethe testimony of hilip *ong, credit administrator, who testi&ed testimony of hilip *ong, credit administrator, who testi&ed that he had authority to issue guarantees as can be deduced that he had authority to issue guarantees as can be deduced fr
from om ththe e wowordrdining g of of ththe e mememomorarandndum um gigiveven n to to hihim m byby pet
petitiitioneoner r corpcorporaoratiotion n on on his his lenlendinding g autauthorhorityity. . /he /he saisaidd memorandum which allegedly authoried *ong not only to memorandum which allegedly authoried *ong not only to approve and grant loans but also to enter into contracts of approve and grant loans but also to enter into contracts of guaranty in behalf of the corporation.
guaranty in behalf of the corporation.
Although *ong was clearly authoried to approve Although *ong was clearly authoried to approve lo
loanans s eveven en up up to to ,,.. wiwiththouout t anany y sesecucurirityty re%uirement, which is far above the amount sub'ect of the re%uirement, which is far above the amount sub'ect of the guaranty in the amount
guaranty in the amount of 6,., nothing in the saidof 6,., nothing in the said memora
memorandum ndum e#pre#pressly essly vestvests s on on the the credcredit it adminisadministratotratorr po
powewer r tto o isisssue ue gguauararantnteeees. s. **e e cacannnnot ot agagrreee e wiwitthh re
respsponondedentnt5s 5s cocontntenentition on ththat at ththe e phphrarase se LcLconontitingngenentt co
commmmititmementntL L seset t fofortrth h in in ththe e mememomorarandndum um memeananss guarantees. -t has been held that a power of attorney or guarantees. -t has been held that a power of attorney or authority of an agent should not be inferred from the use of authority of an agent should not be inferred from the use of vague or general words. uaranty is not presumed, it must vague or general words. uaranty is not presumed, it must be e#pressed and cannot be e#tended beyond its speci&ed be e#pressed and cannot be e#tended beyond its speci&ed limits (irector v. 2ing ?uco, hil. ". -n one case, where limits (irector v. 2ing ?uco, hil. ". -n one case, where it appears that a wife gave her husband power of attorney to it appears that a wife gave her husband power of attorney to loan money, this ourt ruled that such fact did not authorie loan money, this ourt ruled that such fact did not authorie him to ma$e her liable as a surety for the payment of the him to ma$e her liable as a surety for the payment of the debt of a third person (Ban$ of hilippine
-debt of a third person (Ban$ of hilippine - slands v. osterslands v. oster, 07, 07 hil. !0".
hil. !0". /he sole all
/he sole allegation of the cegation of the credit administrator in the absenceredit administrator in the absence of any other proof that he i
of any other proof that he is authoried to bind petitioner in as authoried to bind petitioner in a contra
contract ct of guaranty with of guaranty with thirthird persons should not d persons should not be givenbe given weight. /he representation of one who acts as agent cannot weight. /he representation of one who acts as agent cannot by itself serve as proof of his authority to act as agent or of by itself serve as proof of his authority to act as agent or of the e#tent of his authority as agent (Qelasco v. Ia Erbana, 8 the e#tent of his authority as agent (Qelasco v. Ia Erbana, 8 hil. 681". *ong5s testimony that he had entered into similar hil. 681". *ong5s testimony that he had entered into similar transactions of guaranty in the past for and in behalf of the transactions of guaranty in the past for and in behalf of the pe
petitititiononerer, , lalac$c$s s crcrededenence ce dudue e to to hihis s fafailuilure re to to shshowow documents or records of the alleged past transactions. /he documents or records of the alleged past transactions. /he actuation of *ong in claiming and testifying that he has the actuation of *ong in claiming and testifying that he has the authority is understandable. 4e would naturally ta$e steps to authority is understandable. 4e would naturally ta$e steps to sa
save ve hihimsmselelf f frfrom om pepersrsononal al liliababililitity y fofor r dadamamageges s toto re
respospondendent nt banban$ $ consconsideidering ring thathat t he he had had e#e#ceeceeded ded hishis authority. /he rule is clear that an agent who e#ceeds his authority. /he rule is clear that an agent who e#ceeds his authority is personally liable for damages (Dational ower authority is personally liable for damages (Dational ower orporation v. Dational ;erchandising orporation, Dos. IF orporation v. Dational ;erchandising orporation, Dos. IF
8811!! aanndd
IF8!7, >ctober , 1!8, 117 2JA 78!". IF8!7, >ctober , 1!8, 117 2JA 78!". Ane
Anent nt the the conconclusclusion ion of of rerespospondendent nt appappellellate ate coucourt rt thathatt petit
petitioner is ioner is estoestopped from alleging lac$ pped from alleging lac$ of authority due toof authority due to its failure to cancel or disallow the guaranty, *e &nd that the its failure to cancel or disallow the guaranty, *e &nd that the said conclusion has no basis in fact. Jespondent ban$ had said conclusion has no basis in fact. Jespondent ban$ had not shown any evidence aside from the testimony of the not shown any evidence aside from the testimony of the credit administrator that the disputed transaction o
credit administrator that the disputed transaction o f guarantyf guaranty was
was in in fafact ct enenteterered d ininto to ththe e oHoHciacial l rerecorcords ds or or &le&les s of of petitioner corporation, which will show notice or $nowledge petitioner corporation, which will show notice or $nowledge on the latter5s part and its conse%uent rati&cation of the said on the latter5s part and its conse%uent rati&cation of the said transaction. -n the absence of clear proof, it would be unfair transaction. -n the absence of clear proof, it would be unfair
to hold petitioner corporation guilty of estoppel in allowing its to hold petitioner corporation guilty of estoppel in allowing its credit administrator to act as though the latter had power to credit administrator to act as though the latter had power to guarantee.
guarantee. A
A>J-D>J-DII9, 9, the the petitpetition ion is is JJAD/: and AD/: and the assailedthe assailed decision of the respondent appellate court dated ;arch 1, decision of the respondent appellate court dated ;arch 1, 1!! is hereby J:Q:J2: and 2:/ A2-: and another one is 1!! is hereby J:Q:J2: and 2:/ A2-: and another one is rendered dismissing the complaint for sum of money against rendered dismissing the complaint for sum of money against BA inance orporation. 2>
BA inance orporation. 2> >J:J:.>J:J:. /UIROGA v
/UIROGA v PPARSONS HARDWARE COARSONS HARDWARE CO 3' P$0
3' P$0 A/2)
A/2)
>n ?anuary 0, 1!11, in this city of manila, a contract >n ?anuary 0, 1!11, in this city of manila, a contract was entered into by and between the plainti3, as party of the was entered into by and between the plainti3, as party of the &rst part, and ?. arsons (to whose rights and obligations the &rst part, and ?. arsons (to whose rights and obligations the present defendant later subrogated itself", as party of the present defendant later subrogated itself", as party of the second part.
second part.
>f the three causes of action alleged by the plainti3 >f the three causes of action alleged by the plainti3 in his complaint, only two of them constitute the sub'ect in his complaint, only two of them constitute the sub'ect matter of this appeal and both substantially amount to the matter of this appeal and both substantially amount to the av
averermement nt ththat at ththe e dedefefendndanant t viviololatated ed ththe e fofollllowowiningg obligations) not to sell the
obligations) not to sell the beds at higher prices than those of beds at higher prices than those of the invoices+ to have an open establishment in -loilo+ itself to the invoices+ to have an open establishment in -loilo+ itself to conduct the agency+ to $eep the beds on public e#hibition, conduct the agency+ to $eep the beds on public e#hibition, and to pay for
and to pay for the advertisement e#penses for the same+ andthe advertisement e#penses for the same+ and to order the beds by the doen and in no other manner. As to order the beds by the doen and in no other manner. As may be seen, with the e#ception of the obligation on the part may be seen, with the e#ception of the obligation on the part of the defendant to order the beds by the doen and in no of the defendant to order the beds by the doen and in no ot
otheher r mamannnnerer, , nonone ne of of ththe e obobligligatationions s imimpuputeted d to to ththee defendant in the two causes of action are e#pressly set forth defendant in the two causes of action are e#pressly set forth in the contract. But the plainti3 alleged that the defendant in the contract. But the plainti3 alleged that the defendant was his agent for the sale of his beds in -loilo, and that said was his agent for the sale of his beds in -loilo, and that said obligations are implied in a
obligations are implied in a contract of commercial acontract of commercial agencygency.. -22E:)
-22E:)
whether the defendant, by reason of the contract whether the defendant, by reason of the contract hereinbefore transcribed, was a purchaser or an agent of the hereinbefore transcribed, was a purchaser or an agent of the plainti3 for the sale of his beds..
plainti3 for the sale of his beds.. 4:I)
4:I)
-n order to classify a contract, due regard must be -n order to classify a contract, due regard must be given to its essential clauses. -n the contract in %uestion, given to its essential clauses. -n the contract in %uestion, what was essential, as constituting its cause and sub'ect what was essential, as constituting its cause and sub'ect matter, is that the plainti3 was to furnish the defendant with matter, is that the plainti3 was to furnish the defendant with the beds which the latter might order, at the price stipulated, the beds which the latter might order, at the price stipulated, and that the defendant was to pay the price in the manner and that the defendant was to pay the price in the manner stipulated. /he price agreed upon was
stipulated. /he price agreed upon was the one determined bythe one determined by the plainti3 for the sale of these beds in ;anila, with a the plainti3 for the sale of these beds in ;anila, with a discount of from to per cent, according to their class. discount of from to per cent, according to their class. ayment was to be made at the end of si#ty days, or before, ayment was to be made at the end of si#ty days, or before, at
at the plainthe plainti3ti35s 5s rere%ue%uest, or st, or in in cascash, h, if if the defenthe defendandant t soso preferred, and in these last two cases an additional discount preferred, and in these last two cases an additional discount was to be allowed for prompt payment. /hese are precisely was to be allowed for prompt payment. /hese are precisely the essential features of a contract of purchase and sale. the essential features of a contract of purchase and sale. /here was the obligation
/here was the obligation on the part on the part of the plainti3 of the plainti3 to supplyto supply the beds, and, on the part of the defendant, to pay their the beds, and, on the part of the defendant, to pay their pri
price. ce. /he/hese se feafeaturtures es e#e#cludclude e the the leglegal al conconcepceptiotion n of of anan age
agency ncy or or ordorder er to to sesell ll whewherereby by the mandatthe mandatory ory or or ageagentnt received the thing to sell it, and does not pay its price, but received the thing to sell it, and does not pay its price, but delivers to the principal the price he obtains from the sale of delivers to the principal the price he obtains from the sale of the thing to a third person, and if he does not succeed in the thing to a third person, and if he does not succeed in selling it, he returns it. By virtue of the contract between the selling it, he returns it. By virtue of the contract between the plainti3 and the defendant, the latter, on receiving the beds, plainti3 and the defendant, the latter, on receiving the beds, was necessarily obliged to pay their price within the term was necessarily obliged to pay their price within the term &#ed, without any other consideration and regardless as to &#ed, without any other consideration and regardless as to whether he had or had not
whether he had or had not sold the beds.sold the beds. -t
-t wowoululd d be enoube enough gh to holdto hold, , as as we do, we do, ththat at ththee contract by and between the defendant and the plainti3 is contract by and between the defendant and the plainti3 is one of purchase and sale, in order to show that it was not one of purchase and sale, in order to show that it was not
one made on the basis of a commission on sales, as the one made on the basis of a commission on sales, as the plainti3 claims it was, for these contracts are incompatible plainti3 claims it was, for these contracts are incompatible with each other. But, besides, e#amining the clauses of this with each other. But, besides, e#amining the clauses of this contract, none of them is found that substantially supports contract, none of them is found that substantially supports the plainti35s contention. Dot a single one of these clauses the plainti35s contention. Dot a single one of these clauses ne
nececessssararily ily conconveveys ys ththe e ididea ea of of an an agagenencycy. . /h/he e wowordrdss
com
commismissiosion n on on salsaleses used in clause (A" of article 1 meanused in clause (A" of article 1 mean
nothing else, as stated in the contract itself, than a mere nothing else, as stated in the contract itself, than a mere discount on the invoice price. /he word
discount on the invoice price. /he word agency agency , also used in, also used in articles and , only e#presses that the defendant was the articles and , only e#presses that the defendant was the only one that could sell the plainti35s beds in the Qisayan only one that could sell the plainti35s beds in the Qisayan -slands. *ith regard to the remaining clauses, the least that -slands. *ith regard to the remaining clauses, the least that can
can be be sasaid id is is ththat at ththey ey arare e nonot t inincomcompapatitiblble e witwith h ththee contract of purchase and sale.
contract of purchase and sale. /he
/he plainti3 plainti3 calls calls attention attention to to the the testimony testimony of of :r
:rnesnesto to QiQidal, dal, a a forformer mer viceviceFprFpresesideident nt of of the the defdefendendantant corporation and who established and managed the latter5s corporation and who established and managed the latter5s business in -loilo. -t appears that this witness, prior to the business in -loilo. -t appears that this witness, prior to the ti
time me of of hihis s teteststimimonony, y, hahad d seseririouous s trtrououblble e wiwith th ththee defendant, had maintained a civil suit against it, and had defendant, had maintained a civil suit against it, and had eve
even n accuaccused sed one one of of its its parpartnetners, rs, uiuillellermrmo o arsarsonsons, , of of fals
falsi&cai&cationtion. . 4e 4e testesti&eti&ed d thathat t it it was he was he who draftwho drafted ed thethe contract :#hibit A, and, when %uestioned as to what was his contract :#hibit A, and, when %uestioned as to what was his purpose in contracting with the plainti3,
purpose in contracting with the plainti3, replied that it wasreplied that it was toto be an agent for his beds and to collect a commission on be an agent for his beds and to collect a commission on sales
sales. . 4owev4owever, according to er, according to the defendathe defendant5s evidencent5s evidence, , itit was ;ariano Iope 2antos, a director of the corporation, who was ;ariano Iope 2antos, a director of the corporation, who prepared :#hibit A. But, even supposing that :rnesto Qidal prepared :#hibit A. But, even supposing that :rnesto Qidal has stated the truth, his statement as to what was his idea in has stated the truth, his statement as to what was his idea in contracting with the plainti3 is of no importance, inasmuch contracting with the plainti3 is of no importance, inasmuch as the agreements contained in :#hibit A which he claims to as the agreements contained in :#hibit A which he claims to hav
have e dradraftfted, consted, constituitute, as te, as we we havhave e saisaid, d, a a contcontract of ract of purchase and sale, and not one of commercial agency. /his purchase and sale, and not one of commercial agency. /his on
only ly memeanans s ththat at :r:rneneststo o QiQidadal l wawas s mimiststa$a$en en in in hihiss classi&cation of the contract. But it must be understood that classi&cation of the contract. But it must be understood that a contract is what the law de&nes it to be, and not what it is a contract is what the law de&nes it to be, and not what it is called by the contracting parties.
called by the contracting parties. /he
/he plainti3 plainti3 also also endeavored endeavored to to prove prove that that thethe def
defendendant ant had had rereturturned beds ned beds thathat t it it coucould ld not sell+ not sell+ thathat,t, without previous notice, it forwarded to the defendant the without previous notice, it forwarded to the defendant the beds that it wanted+ and that the defendant received its beds that it wanted+ and that the defendant received its comm
commissission ion for for the beds the beds solsold d by by the plainthe plainti3 ti3 dirdirectectly ly toto persons in -loilo. But all this, at the most only shows that, on persons in -loilo. But all this, at the most only shows that, on the part of both of them, there was mutual tolerance in the the part of both of them, there was mutual tolerance in the performance of the contract in disregard of its terms+ and it performance of the contract in disregard of its terms+ and it gives no right to have the contract considered, not as the gives no right to have the contract considered, not as the parties stipulated it, but as they performed it. >nly the acts parties stipulated it, but as they performed it. >nly the acts of the contracting parties, subse%uent to, and in connection of the contracting parties, subse%uent to, and in connection with, the e#ecution of the contract, must be considered for with, the e#ecution of the contract, must be considered for th
the e pupurprposose e of of ininteterprprretetining g ththe e cocontntraractct, , whwhen en susuchch interpretation is necessary, but not when, as in the instant interpretation is necessary, but not when, as in the instant case
case, , its its essessentential ial agragreeeemenments ts arare e cleclearlarly y set set forforth th andand plainly show that the contract belongs to a certain $ind and plainly show that the contract belongs to a certain $ind and not to another. urthermore, the return made was of certain not to another. urthermore, the return made was of certain brass beds, and was not e3ected in e#change for the price brass beds, and was not e3ected in e#change for the price paid for them, but was for other beds of another $ind+ and for paid for them, but was for other beds of another $ind+ and for the letter :#hibit IF1, re%uested the plainti35s prior consent the letter :#hibit IF1, re%uested the plainti35s prior consent wit
with h rerespspecect t to to sasaid id bebedsds, , whwhicich h shshowows s ththat at it it was notwas not considered that the defendant had a right, by virtue of the considered that the defendant had a right, by virtue of the contract, to ma$e this return. As regards the shipment of contract, to ma$e this return. As regards the shipment of beds without previous notice, it is insinuated in the record beds without previous notice, it is insinuated in the record that these brass beds were precisely the ones so shipped, that these brass beds were precisely the ones so shipped, and that, for this very reason, the plainti3 agreed to their and that, for this very reason, the plainti3 agreed to their return. And with respect to the soFcalled commissions, we return. And with respect to the soFcalled commissions, we have said that they merely constituted a discount on the have said that they merely constituted a discount on the invoice price, and the reason for applying this bene&t to the invoice price, and the reason for applying this bene&t to the beds sold directly by the plainti3 to persons in -loilo was beds sold directly by the plainti3 to persons in -loilo was because, as the defendant obligated itself in the contract to because, as the defendant obligated itself in the contract to
