064 [CORNELIA M.

HERNANDEZ, Petitioner,
vs.
CECILIO F. HERNANDEZ, Respondent.]
[G.R. No. 158576 March 9, 2011]
TOPIC: Powers and Obligations of an Agent
PONENTE: PEREZ, J.

AUTHOR: Kikoy
NOTES:

FACTS:
1. The controversy between the parties began when the Republic of the Philippines, through the Department of Public
Works and Highways (DPWH), offered to purchase a portion of a parcel of land.
2. The land is pro-indiviso owned by Cornelia M. Hernandez (Cornelia), petitioner herein, Atty. Jose M. Hernandez,
deceased father of respondent Cecilio F. Hernandez (Cecilio), represented by Paciencia Hernandez (Paciencia) and
Mena Hernandez (Mena), also deceased and represented by her heirs.
3. They appointed Cecilio to be the agent in dealing with the sale of the land to DPWH. In the said agreement Cecilio
is to be paid (20%) percent of any amount in excess of Seventy (P70.00), and Whatever excess beyond Three
Hundred (P300.00) Pesos per square meter of the area shall likewise be given to him as additional incentive.
4. The sale did not prosper, Instead of purchasing the land, the DPWH filed an expropriation case to acquire the land.
5. The Hernandezes appointed Cecilio hernandez(Note that this is a different agreement) via an SPA to represent
them in the expropriation proceedings.
6. The SPA stated that the authority shall be irrevocable and continue to be binding all throughout the negotiation. It
further stated that the authority shall bind all successors and assigns in regard to any negotiation with the
government until its consummation and binding transfer of a portion to be sold to that entity with Cecilio as the
sole signatory in regard to the rights and interests of the signatories therein. There was no mention of the
compensation scheme for Cecilio, the attorney-in-fact.
7. On January 1998, the court decided that the Hernandez land be valued at P1,500.00 per square meter. The total
area that was condemned for the Hernandez family was Fourteen Thousand Six Hundred Forty-Three (14,643)
square meters. Thus, multiplying the values given, the Hernandez family will get a total of Twenty One Million,
Nine Hundred Sixty-Four Thousand Five Hundred Pesos (P21,964,500.00) as just compensation.
8. On 6 October 1999, petitioner executed a Revocation of the SPA withdrawing the authority earlier granted to
Cecilio in the SPA dated 18 October 1996. After the revocation, on 28 December 1999, without the termination of
counsel on record, Cornelia, with a new lawyer, moved for the withdrawal of her one-third (1/3) share of the just
compensation, which is equivalent to Seven Million Three Hundred Twenty-One Thousand Five Hundred Pesos
(P7,321,500.00) the amount a pro-indiviso owner is to receive.
9. Motion of the petitioner was granted by the court with the condition that the money shall be released only to the
attorney-in-fact, Mr. Cecilio F. Hernandez. The trial court took cognizance of the irrevocable nature of the SPA
dated 18 October 1996.19 Cecilio, therefore, was able to get not just one-third (1/3) of, but the entire sum of
Twenty One Million, Nine Hundred Sixty-Four Thousand Five Hundred Pesos (P21,964,500.00).
10. Cornelia only received a chech in the amount of One Million One Hundred Twenty-Three Thousand Pesos
(P1,123,000.00).20 The check was however accompanied by a Receipt and Quitclaim21 document in favor of
Cecilio. In essence it states that: (1) the amount received will be the share of Cornelia in the just compensation
paid by the government in the expropriated property; (2) in consideration of the payment, it will release and
forever discharge Cecilio from any action, damages, claims or demands; and (3) Cornelia will not institute any
action and will not pursue her complaint or opposition to the release to Cecilio or his heirs or assigns, of the entire
amount deposited in the Land Bank of the Philippines, Tanauan, Batangas, or in any other account with any bank,
deposited or will be deposited therein, in connection with Civil Case No C-023, representing the total just
compensation of expropriated properties under the aforementioned case.
11. Moreover, Cornelia averred that after a few days from her receipt of the check, she sought the help of her niece,
Daisy Castillo, to get the decision in Civil Case No. C-022.23 It was only then, when her niece got hold of the
decision and explained its contents, that she learned that she was entitled to receive Seven Million Three Hundred
Twenty-One Thousand Five Hundred Pesos (P7,321,500.00).
12. Cornelia demanded the remaining balance of her share but Cecilio refused to pay hence the case.
13. The Trial Court ruled in favor of the plaintiff due to the default of the rspondent, ordering the respondent to pay.
14. The CA reversed the RTC decision.
15. Cornelia contends that she is entitled to the full amount of her share.
16. Cecilio contends that he is the agent of the owners of the property.32 He bound himself to render service on behalf
of her cousins, aunt and mother, by virtue of the request of the latter.33 As an agent, Cecilio insists that he be
given the compensation he deserves based on the agreement made in the letter dated 11 November 1993, also
called as the service contract,34 which was signed by all the parties. This is the contract to which Cecilio anchors
his claim of validity of the receipt and quitclaim that was signed in his favor.

ISSUE(S):
1. Is Cecilio entitled to the amount that he is claiming?
HELD:
1. NO
RATIO:
The compensation scheme of 20% of any amount over P70.00 per square meter and everything above P300.00 per square
meter was granted in favor of Cecilio by the Hernandezes on 11 November 1993. At that time, the Hernandezes had just
rejected the governments offer of P35.00 per square meter, which offer last stood at P70.00 per square meter. It was the
rejection likewise of the last offer that led to the filing of the expropriation case on 9 August 1993. It was in this case, and
for Cecilios representation in it of the Hernandezes, that he was granted the compensation scheme. Clear as day, the
conditions that moved the parties to the contract were the base price at P70.00 per square meter, the increase of which
would be compensated by 20% of whatever may be added to the base price; and the ceiling price of P300.00 per square
meter, which was considerably high reckoned from the base at P70.00, which would therefore, allow Cecilio to get all that
which would be in excess of the elevated ceiling. The ceiling was, from the base, extraordinarily high, justifying the
extraordinary grant to Cornelio of all that would exceed the ceiling.

Cecilios position would give him 83.07% of the just compensation due Cornelia as a co-owner of the land. No evidence
on record would show that Cornelia agreed, by way of the 11 November 1993 letter, to give Cecilio 83.07% of the
proceeds of the sale of her land.

What is on record is that Cornelia asked for an accounting of the just compensation from Cecilio several times, but the
request remained unheeded. Right at that point, it can be already said that Cecilio violated the fiduciary relationship of an
agent and a principal. The relation of an agent to his principal is fiduciary and it is elementary that in regard to property
subject matter of the agency, an agent is estopped from acquiring or asserting a title adverse to that of the principal. His
position is analogous to that of a trustee and he cannot, consistently with the principles of good faith, be allowed to create
in himself an interest in opposition to that of his principal or cestui que trust.

Instead of an accounting, what Cornelia received was a receipt and quitclaim document that was ready for signing. As
testified to by Cornelia, due to her frail condition and urgent need of money in order to buy medicines, she nevertheless
signed the quitclaim in Cornelios favor. Quitclaims are also contracts and can be voided if there was fraud or intimidation
that leads to lack of consent. The facts show that a simple accounting of the proceeds of the just compensation will be
enough to satisfy the curiosity of Cornelia. However, Cecilio did not disclose the truth and instead of coming up with the
request of his aunt, he made a contract intended to bar Cornelia from recovering any further sum of money from the sale of
her property.

The preparation by Cecilio of the receipt and quitclaim document which he asked Cornelia to sign, indicate that even
Cecilio doubted that he could validly claim 83.07% of the price of Cornelias land on the basis of the 11 November 1993
agreement. Based on the attending circumstances, the receipt and quitclaim document is an act of fraud perpetuated by
Cecilio. Very clearly, both the service contract of 11 November 1993 letter- agreement, and the later receipt and quitclaim
document, the first vitiated by mistake and the second being fraudulent, are void.

CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):
(If any)