Doles v.

Angeles (2006)

Ponente: Justice Alicia Austria-Martinez

Facts:
 Respondent alleged that petitioner was indebted to the former in the concept of a personal
loan amounting to P405,430.00 representing the principal amount and interest; that on
October 5, 1996, by virtue of a "Deed of Absolute Sale",3petitioner, as seller, ceded to
respondent, as buyer, a parcel of land, as well as the improvements thereon, with an area
of 42 square meters, in order to satisfy her personal loan with respondent.

 Petitioner, denied that she borrowed money from respondent, and averred that from June
to September 1995, she referred her friends to respondent whom she knew to be engaged
in the business of lending money in exchange for personal checks through her capitalist
Arsenio Pua. She alleged that her friends, borrowed money from respondent and issued
personal checks in payment of the loan; that the checks bounced for insufficiency of funds;
that despite her efforts to assist respondent to collect from the borrowers, she could no
longer locate them; that she was forced to issue eight checks amounting to P350,000 to
answer for the bounced checks of the borrowers she referred; that prior to the issuance of
the checks she informed respondent that they were not sufficiently funded but the latter
nonetheless deposited the checks and for which reason they were subsequently
dishonored, that she was forced by respondent to execute an "Absolute Deed of Sale"
over her property in Bacoor, Cavite, to avoid criminal prosecution.

Ruling of RTC:

RTC ordered the dismissal of the complaint for insufficiency of evidence and held the sale void
for lack of consideration. Plaintiff Angeles’ admission that the borrowers are the friends of
defendant Doles and further admission that the checks issued by these borrowers in payment of
the loan obligation negates the cause or consideration of the contract of sale executed by and
between plaintiff and defendant.

Ruling of CA:

The ruling of RTC is reversed. The CA concluded that petitioner was the borrower and, in turn,
would "re-lend" the amount borrowed from the respondent to her friends. Hence, the Deed of
Absolute Sale was supported by a valid consideration, which is the sum of money petitioner owed
respondent amounting to P405,430.00, representing both principal and interest. CA cited four
instances in the record to support its holding that petitioner "re-lends" the amount borrowed from
respondent to her friends:
(1) the friends of petitioner never presented themselves to respondent and that all
transactions were made by and between petitioner and respondent;
(2) the money passed through the bank accounts of petitioner and respondent;
(3) third, petitioner herself admitted that she was "re-lending" the money loaned to other
individuals for profit; and
(4) the documentary evidence shows that the actual borrowers, the friends of petitioner,
consider her as their creditor and not the respondent.
Issues:

(1) Whether or not the petitioner can be considered as a debtor of the respondent.
(2) Whether or not an agent who was not authorized by the principal to collect debt in his
behalf could directly collect payment from the debtor.

Ruling of Supreme Court:

 The basis of agency is representation; The question of whether an agency has

been created is ordinarily a question which may be established in the same way
as any other fact, either by direct or circumstantial evidence; Though that fact or
extent of authority of the agents may not, as a general rule, be established from
the declarations of the agents alone, if one professes to act as agent for another,
she maybe estopped to deny her agency both as against the asserted principal
and the third persons interested in the transaction in which he or she is engaged

 The CA is incorrect when it considered the fact that the "supposed friends of [petitioner],
the actual borrowers, did not present themselves to [respondent]" as evidence that
negates the agency relationship—it is sufficient that petitioner disclosed to respondent
that the former was acting in behalf of her principals, her friends whom she referred to
respondent. For an agency to arise, it is not necessary that the principal personally
encounter the third person with whom the agent interacts. The law in fact contemplates,
and to a great degree, impersonal dealings where the principal need not personally know
or meet the third person with whom her agent transacts: precisely, the purpose of agency
is to extend the personality of the principal through the facility of the agent.

 In the case at bar, both petitioner and respondent have undeniably disclosed to each other
that they are representing someone else, and so both of them are estopped to deny the
same. It is evident from the record that petitioner merely refers actual borrowers and then
collects and disburses the amounts of the loan upon which she received a commission;
and that respondent transacts on behalf of her "principal financier", a certain Arsenio Pua.
If their respective principals do not actually and personally know each other, such
ignorance does not affect their juridical standing as agents, especially since the very
purpose of agency is to extend the personality of the principal through the facility of the
agent.

 With respect to the admission of petitioner that she is "re-lending" the money loaned from
respondent to other individuals for profit, it must be stressed that the manner in which the
parties designate the relationship is not controlling. If an act done by one person in behalf
of another is in its essential nature one of agency, the former is the agent of the latter
notwithstanding he or she is not so called The question is to be determined by the fact
that one represents and is acting for another, and if relations exist which will constitute an
agency, it will be an agency whether the parties understood the exact nature of the relation
or not
  In view of the two agency relationships, petitioner and respondent are not privy to the
contract of loan between their principals. Since the sale is predicated on that loan, then
the sale is void for lack of consideration.

Disposition: Petition granted.

Lim v. CA (1996)

Ponente: Justice Regino C. Hermosisima

Facts:

 On January 26, 1989, an Information for Estafa was filed against petitioner Rosa Lim
before Branch 92 of the Regional Trial Court of Quezon City. After trial, the court found
petitioner guilty of Estafa. The appeal to the CA was affirmed.

Two versions of stories are alleged:

 For the Prosecution:

Petitioner Rosa Lim who had come from Cebu received from private respondent Victoria
Suarez the following two pieces of jewelry; one (1) 3.35 carat diamond ring worth
P169,000.00 and one (1) bracelet worth P170,000.00, to be sold on commission basis.

Later, petitioner returned the bracelet to Vicky Suarez, but failed to return the diamond
ring or to turn over the proceeds thereof if sold. As a result, private complainant, aside
from making verbal demands, wrote a demand letter to petitioner asking for the return of
said ring or the proceeds of the sale thereof. In response, petitioner, thru counsel, wrote
a letter to private respondent's counsel alleging that Rosa Lim had returned both ring and
bracelet to Vicky Suarez sometime in September, 1987, for which reason, petitioner had
no longer any liability to Mrs. Suarez insofar as the pieces of jewelry were concerned.
Irked, Vicky Suarez filed a complaint for estafa under Article 315, par l(b) of the Revised
Penal Code for which the petitioner herein stands convicted.

 For Petitioner:
Rosa Lim admitted in court that she arrived in Manila from Cebu sometime in October
1987, together with one Aurelia Nadera, who introduced petitioner to private respondent,
and that they were lodged at the Williams Apartelle in Timog, Quezon City. Petitioner
denied that the transaction was for her to sell the two pieces of jewelry on commission
basis. She told Mrs. Suarez that she would consider buying the pieces of jewelry far her
own use and that she would inform the private complainant of such decision before she
goes back to Cebu. Thereafter, the petitioner took the pieces of jewelry and told Mrs.
Suarez to prepare the "necessary paper for me to sign because I was not yet prepare (d)
to buy it." After the document was prepared, petitioner signed it. To prove that she did not
agree to the terms of the receipt regarding the sale on commission basis, petitioner insists
that she signed the aforesaid document on the upper portion thereof and not at the bottom
where a space is provided for the signature of the person(s) receiving the jewelry.
 On October 12, 1987 before departing for Cebu, petitioner called up Mrs. Suarez by
telephone in order to inform her that she was no longer interested in the ring and bracelet.
Mrs. Suarez replied that she was busy at the time and so, she instructed the petitioner to
give the pieces of jewelry to Aurelia Nadera who would in turn give them back to the private
complainant. The petitioner did as she was told and gave the two pieces of jewelry to
Nadera as evidenced by a handwritten receipt, dated October 12, 1987.

Ruling of RTC:

Petitioner was found guilty of Estafa

Ruling of CA:

Affirmed the conviction of petitioner.

Issues:

(1) What was the real transaction between Rosa Lim and Vicky Suarez a contract of agency
to sell on commission basis as set out in the receipt or a sale on credit; and
(2) Was the subject diamond ring returned to Mrs. Suarez through Aurelia Nadera?

Ruling of Supreme Court:

CONTRACT OF AGENCY; NO FORMALITIES REQUIRED.

The Court dismissed the contentions of the Petitioner that she cannot be liable for Estafa
since she never received the jewelries in trust or on commission basis from Vicky Suarez. The
real agreement between her and the private respondent was a sale on credit with Mrs. Suarez as
the owner-seller and petitioner as the buyer, as indicated by the bet that petitioner did not sign on
the blank space provided for the signature of the person receiving the jewelry but at the upper
portion thereof immediately below the description of the items taken.

Indeed, the Court found that Petitioner’s signature appears on the upper portion of the receipt
immediately below the description of the items taken BUT such fact does not have the effect of
altering the terms of the transaction from a contract of agency to sell on commission basis to a
contract of sale. Neither does it indicate absence or vitiation of consent thereto on the part of
Rosa Lim which would make the contract void or voidable. The moment she affixed her signature
thereon, petitioner became bound by all the terms stipulated in the receipt. She, thus, opened
herself to all the legal obligations that may arise from their breach.

However, there are some provisions of the law which require certain formalities for particular
contracts. The first is when the form is required for the validity of the contract; the second is when
it is required to make the contract effective as against the third parties such as those mentioned
in Articles 1357 and 1358; and the third is when the form is required for the purpose of proving
the existence of the contract, such as those provided in the Statute of Frauds in Article 1403. A
contract of agency to sell on commission basis does not belong to any of these three categories,
hence, it is valid and enforceable in whatever form it may be entered into.
Disposition: Petition Denied.