PARTNERSHIP, AGENCY AND TRUSTS

Case Digest
Friday / 5:00-:00 P!
Atty" Ara#e$i G" %i&at'#
(y: !a" F$'r Iris F" (ati$$er
S)'*ses Fer&a&d' +i$'ria a&d %'*rdes +i$'ria ,s C'&ti&e&ta$ Air$i&es, I&#"
G.R. No. 188288 January 16, 2012
FACTS: While the spouses Viloria were in the United States, they purhased ti!ets at "oliday #ra$el, a
tra$el a%eny wor!in% &or 'ontinental (irlines. #hey were attended to )y a ertain *ar%aret *a%er
+*a%er, who ad$ised the- that they annot tra$el )y train )eause it is &ully )oo!ed and that they -ust
purhase plane ti!ets &or 'ontinental (irlines otherwise they.ll ne$er reah their destination in ti-e.
#he ouple )elie$ed suh representations and so they purhased two plane ti!ets worth /800.00. 0ater
howe$er, the spouses &ound out that the train trip isn.t &ully )oo!ed and so they purhased train ti!ets
and went to their destination )y train instead. (s the ouple are now in the 1hilippines, they &iled their
re2uest with 'ontinental (irline.s o&&ie in (yala. #he spouses alle%ed that they were -isled into
)elie$in% that the only way to tra$el was )y plane and so they were &ooled into )uyin% e3pensi$e ti!ets.
'ontinental (irlines re&used to re&und the a-ount o& the ti!et and so the spouses sued the airline
o-pany. 4n its de&ense, 'ontinental (irlines lai-ed that the ti!et sold to the- is non5re&unda)le6 that,
i& any, they are not )ound )y the -isrepresentations o& *a%er )eause there.s no a%eny e3istin%
)etween 'ontinental (irlines and *a%er. #he trial ourt ruled in &a$or o& spouses Viloria )ut the 'ourt
o& (ppeals re$ersed the rulin% o& the R#'.
ISSUE: Whether or not a ontrat o& a%eny e3ists )etween 'ontinental (irlines and "oliday #ra$el7
(nd (ssu-in% that suh a%eny relationship e3ists, is 'ontinental (irlines )ound )y the ats o& "oliday
#ra$el.s a%ents and e-ployees7
HE%D: 8es. 9or a ontrat o& a%eny to )e $alid there -ust )e onsent, e3press or i-plied o&
the parties to esta)lish the relationship, the o):et is the e3eution o& a :uridial at in relation to a third
person, the a%ent ats as a representati$e and not &or hi-sel&, and the a%ent ats within the sope o& his
authority. #he &irst and seond ele-ents are present as 'ontinental (irlines does not deny that it
onluded an a%ree-ent with "oliday #ra$el to whih *a%er is part o&, where)y "oliday #ra$el would
enter into ontrats o& arria%e with third persons on the airlines. )ehal&. #he third ele-ent is also
present as it is undisputed that "oliday #ra$el -erely ated in a representati$e apaity and it is
'ontinental (irlines and not "oliday #ra$el who is )ound )y the ontrats o& arria%e entered into )y
"oliday #ra$el on its )ehal&. #he &ourth ele-ent is also present onsiderin% that 'ontinental (irlines has
not -ade any alle%ation that "oliday #ra$el e3eeded the authority that was %ranted to it.
'ontinental (irlines also ne$er 2uestioned the $alidity o& the transation )etween *a%er and the spouses
and is there&ore held in estoppel. 'ontinental (irlines annot )e allowed to ta!e an alto%ether di&&erent
position and deny that "oliday #ra$el is its a%ent without ondonin% or %i$in% i-pri-atur to whate$er
da-a%e or pre:udie that -ay result &ro- suh denial or retration to Spouses Viloria, who relied on
%ood &aith on 'ontinental (irlines. ats in reo%nition o& "oliday #ra$el.s authority. ;stoppel is
pri-arily )ased on the dotrine o& %ood &aith and the a$oidane o& har- that will )e&all an innoent
party due to its in:urious reliane, the &ailure to apply it in this ase would result in %ross tra$esty o&
:ustie.

P-i$i))i&e Rea$ty A&d H'$di&gs C'r)'rati'& +s" %ey C'&str*#ti'& A&d De,e$').e&t C'r)'rati'&
G. R. No. 16<<=8 June 1>, 2011

FACTS: 0ey 'onstrution and ?e$elop-ent 'orporation +0'?', was the pro:et ontrator &or the
onstrution o& se$eral )uildin%s &or 1hilippine Realty @ "oldin%s 'orporation +1R"',, the pro:et
owner. #he two orporations entered into &our -a:or onstrution pro:ets, as e$idened )y &our duly
notariAed Bonstrution a%ree-ents.C #he onstrution a%ree-ents, inludin% the #e!tite Duildin%
a%ree-ent, e3pressly prohi)it any inrease in the ontrated prie. ?ue -ainly to the sudden,
une3peted hi!e in the pries o& e-ent and other onstrution -aterials 0'?' lai-ed that, without a
orrespondin% inrease in the &i3ed pries &ound in the a%ree-ents, it would )e i-possi)le &or it to &inish
the onstrution o& the #e!tite Duildin%. ()ede +pro:et onstrution -ana%er o& 1R"', as!ed 0'?'
to ad$ane the a-ount neessary to o-plete onstrution. 4ts president aeded, on the a)solute
ondition that it )e allowed to esalate the ontrat prie. ()ede later sent a &or-al letter to 0'?',
as!in% &or its on&or-ity, to the e&&et that should it in&use 1>6 -illion into the pro:et, a ontrat prie
esalation &or the sa-e a-ount would )e %ranted in its &a$or )y 1R"'.
Said letter was si%ned )y ()ede a)o$e the title B'onstrution *ana%er,C as well as )y 0'?'. ( plain
readin% o& the letter5a%ree-ent will re$eal that the )lan! a)o$e the words B1"40. R;(0#8 @
"E0?4NGS 'ER1.C was ne$er si%ned. Notwithstandin% the a)sene o& a si%nature a)o$e 1R"'.s
na-e, 0'?' proeeded with the onstrution o& the #e!tite Duildin%, e3pendin% the entire a-ount
neessary to o-plete the pro:et.
0'?', throu%h ounsel, de-anded pay-ent o& the a%reed esalation prie o& 1 >6 -illion. 4n its reply,
1R"' suddenly denied any lia)ility &or the esalation prie. 1R"' lai-s that sine its )oard o&
diretors ne$er aeded to the proposed esalation a%ree-ent, the pro$ision in the -ain a%ree-ent
prohi)itin% any inrease in the ontrat prie stands. 0'?', on the other hand, lai-s that the &at that
any inrease in the ontrat prie is prohi)ited under the #e!tite Duildin% a%ree-ent does not in$alidate
the parties. su)se2uent deision to supersede or disre%ard this prohi)ition. 4t ar%ues that all the
dou-entary and testi-onial e$idene it presented learly esta)lished the e3istene o& a 1 >6 -illion
esalation a%ree-ent.
ISSUE: Whether or not a $alid esalation a%ree-ent was entered into )y the parties.
HE%D: 8;S. #he 'ourt &inds that the si%nature o& ()ede is su&&iient to )ind 1R"'. (s its
onstrution -ana%er, his $ery at o& si%nin% a letter e-)odyin% the 1 >6 -illion esalation a%ree-ent
produed le%al e&&et, e$en i& there was a )lan! spae &or a hi%her o&&ier o& 1"R' to indiate appro$al
thereo&. (t the $ery least, he indiated authority to -a!e suh representation on )ehal& o& 1R"'. En
diret e3a-ination, ()ede ad-itted that, as the onstrution -ana%er, he represented 1R"' in runnin%
its a&&airs with re%ard to the e3eution o& the a&oresaid pro:ets. ()ede had si%ned, on )ehal& o& 1R"',
other dou-ents that were al-ost idential to the 2uestioned letter5a%ree-ent. 1R"' does not 2uestion
the $alidity o& these a%ree-ents6 it there)y e&&eti$ely ad-its that this indi$idual had atual authority to
si%n on its )ehal& with respet to these onstrution pro:ets.