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1. MERCADO vs. ALLIED BANKING CORP.

RP. - The subject property is not among those enumerated in the literal terms of the SPA.
GR NO. 171460 There is no obvious reference to the subject property. Such alleged intention to Perla who
July 24, 2007 executed the SPA when the language of the instrument is bare of any indication
By: Madrid suggestive of such intention. Therefore, the REM’s are unenforceable since it was not
executed in accordance with the SPA.
Topic: Extinguishment of Agency - An agency is extinguished, among others, by its revocation. The principal may revoke
Petitioners: Lillian Mercado, Cynthia Fekaris, and Julian Mercado Jr. the agency at will, and compel the agent to return the document evidencing the agency.
Respondents: Allied Banking Corp. Such revocation may be express or implied.
Ponente: - In this case, the revocation was expressed by a public document which was the
Revocation of SPA made by Perla. The Registry of Deeds was even notified that any
DOCTRINE: An agency may be extinguished by revocation. attempt to mortgage the property must have the full-consented document in the form of
an SPA made before the Phil. Consulate General in NY.
FACTS:
- Perla Mercado, mother of the petitioners, owned several parcels of land.
- Perla executed an SPA in favor of her husband Julian Mercado Sr. over parcels of land
under her name, authorizing the latter “to sell, alienate, mortgage, lease, and deal
otherwise” such properties and even further authorizing him “to exercise any or all acts
of strict dominion or ownership” over the same.
- Julian, under the SPA, obtained a loan worth P3 million from respondent ABC and
secured such with a REM on TCT 18206 which covers a land registered in QC. Another
loan was secured worth P5 million.
- However, the said land was not identified in the SPA.
- Julian defaulted in the payment. Thus respondent ABC foreclosed the property and was
auctioned.
- Lillian filed an action for annulment of the REM and the foreclosure proceedings since
the subject property was not covered by the SPA, and at the time the loan obligations
were contracted, the SPA no longer had force and effect since it was previously revoked.
This was evidenced by the Revocation of the SPA by Perla.
- Furthermore, Perla notified the Registry of Deeds that any attempt to mortgage or sell
the property must be with Perla’s consent that is documented in the form of an SPA duly
authenticated before the Phil. Consulate General in New York.
- Respondent ABC stated that property was included in the SPA although it was covered
by a different TCT and was registered in Pasig. This discrepancy is an apparent error which
must not prevail over the real intent of Perla to include the property in the SPA.
- RTC declared the REM void since Julian was not authorized by the SPA to mortgage the
same.
- CA reversed. Perla intended to include the property in the SPA. Furthermore, her
subsequent revocation of the SPA, not being contained in a public document, is not
binding to third persons.

ISSUE:
W/N the REM’s over the subject property are void considering that the SPA was revoked
by Perla.

HELD/RATIO:
No. It is unenforceable, not void.
2. International Exchange Bank vs. Sps. Briones ● Moreover, petitioner posits that respondent Jerome's direct dealing with the
GR NO. 205657 insurance company was a revocation of the agency relationship between petitioner
March 29, 2017 and respondents

Topic:ATP ISSUE
Petitioners:International Exchange Bank (1) whether the agency relationship was revoked or terminated? (No)
Respondents: SPS. BRIONES
Ponente: LEONEN, J HELD/RATIO
(1) No. The Spouses Briones' claim for loss cannot be seen as an implied revocation
DOCTRINE: Revocation as a form of extinguishing an agency under Article 1924 of the Civil of the agency or their way of excluding petitioner. They did not disregard or bypass
Code only applies in cases of incompatibility, such as when the principal disregards or petitioner when they made an insurance claim; rather, they had no choice but to
bypasses the agent in order to deal with a third person in a way that excludes the agent. personally do it because of their agent's negligence. This is not the implied
termination or revocation of an agency provided for under Article 1924 of the Civil
FACTS Code.
● Sps. Briones contracted a loan in the amount of 3.8m with Ibank with a monthly
amortization of 79k. They used it to buy a BMW Z4 Roadster. (2) While a contract of agency is generally revocable at will as it is primarily based
on trust and confidence, Article 1927 of the Civil Code provides the instances when
● The Spouses Briones executed a promissory note with chattel mortgage that an agency becomes irrevocable:
required them to take out an insurance policy on the vehicle.The promissory note “Article 1927. An agency cannot be revoked if a bilateral contract depends upon it, or if
also gave iBank, as the Spouses Briones' attomey-infact, irrevocable authority to it is the means of fulfilling an obligation already contracted, or if a partner is
file an insurance claim in case of loss or damage to the vehicle. The insurance appointed manager of a partnership in the contract of partnership and his removal
proceeds were to be made payable to iBank. from the management is unjustifiable. “
● The BMW was carnapped and it was reported by Briones to the Police and (3) A bilateral contract that depends upon the agency is considered an agency
eventually declared the loss to ibank. As a proof of good faith, ibank told them to coupled with an interest, making it an exception to the general rule of revocability
continue paying the installments for the next 3 months. at will.Lim v. Sabanemphasizes that when an agency is established for both the
● After 3 months, ibank sent them a letter demanding the full payment of the lost principal and the agent, an agency coupled with an interest is created and the
vehicle principal cannot revoke the agency at will.

● On April 30, 2004, the Spouses Briones submitted a notice of claim with their (4) In the promissory note with chattel mortgage, the Spouses Briones authorized
insurance company, which denied the claim on June 29, 2004 due to the delayed petitioner to claim, collect, and apply· the insurance proceeds towards the full
reporting of the lost vehicle. satisfaction of their loan if the mortgaged vehicle were lost or damaged. Clearly, a
● RTC dismissed iBank's complaint. It ruled that as the duly constituted attorney- bilateral contract existed between the parties, making the agency irrevocable.
in- fact of the Spouses Briones, iBank had the obligation to facilitate the filing of Petitioner was also aware of the bilateral contract; thus, it included the designation
the notice of claim and then to pursue the release of the insurance proceeds. of an irrevocable agency in the promissory note with chattel mortgage that it
● The Regional Trial Court also pointed out that as the Spouses Briones' agent, prepared for the Spouses Briones to sign.
iBank prioritized its interest over that of its principal when it failed to file the notice
of claim with the insurance company and demanded full payment from the
spouses.

● Petitioner maintains that the insurance coverage taken on the vehicle is "only
an aleatory alternative that respondents are entitled to" if their claim is granted by
the insurance company. Petitioner asserts that it was the duty of Briones to file a
claim with the insurance company. Thus, they should not be allowed to pass on
that responsibility and they should be held liable for the loan taken out on the lost
vehicle.
3. DANON v. BRIMO ● Where no time for the continuance of the contract is fixed by its terms either party
GR NO. 15823 is at liberty to terminate it at will, subject only to the ordinary requirements of good
September 12, 1921 faith.
By: Bea Nicor ● Usually the broker is entitled to a fair and reasonable opportunity to perform his
Topic: AGENCY – Extinguishment of Agency obligation, subject of course to the right of the seller to sell independently. But
Petitioners: JULIO DANON having been granted him, the right of the principal to terminate his authority is
Respondents: ANTONIO A. BRIMO & Co., absolute and unrestricted, except only that he may not do it in bad faith, and as a
Ponente: JOHNSON, J mere device to escape the payment of the broker's commissions.
● There is bad faith when, in the midst of negotiations instituted by the broker, and
which were plainly and evidently approaching success, the seller should revoke the
DOCTRINE: Where no time for the continuance of the contract is fixed by its terms either
authority of the broker, with the view of concluding the bargain without his aid and
party is at liberty to terminate it at will, subject only to the ordinary requirements of good
faith. avoiding the payment of commission about to be earned, it might be well said that
the due performance his obligation by the broker was purposely prevented by the
principal.
FACTS:
● But if the latter acts in good faith, not seeking to escape the payment of
● Antonio A Brimo informed the Julio Danon that he desired to sell his factory, the
commissions, but moved fairly by a view of his own interest, he has the absolute
Holland American Oil Co., for the sum of P1,200,000. He agreed and promised to
right before a bargain is made while negotiations remain unsuccessful, before
pay to the Danon a 5% commission provided the latter could sell said factory for
commissions are earned, to revoke the broker's authority, and the latter cannot
that amoun. No definite period of time was fixed within which the plaintiff should
thereafter claim compensation for a sale made by the principal.
effect the sale.
● Immediately thereafter, Danon went to see Mauro Prieto and offered to sell Brimo’s
For the foregoing reasons the judgment appealed from is hereby revoked and the
property for 1.2M. Prieto then instructed his employee to make an appointment
defendant is hereby absolved from all liability under the plaintiff's complaint, with costs
with Brimo to perfect the negotiation.
in both instances against the plaintiff. So ordered
● However, it seems that another broker, Sellner, was also negotiating the sale. He
was able to find a purchaser for the same property, who ultimately bought it for
P1,300,000.
● For that reason, Prieto, the would-be purchaser found by the plaintiff, never came
to see Brimo to perfect the proposed negotiation.
● Danon then filed a case for damages for breach of contract.
● The trial court ruled in favor of Danon and ordered Brimo pay.
● Hence, this appeal.

ISSUE:
(1) WON Brimo breached the contract by terminating the agency at will

HELD/RATIO:
(1) NO. There is no breach of contract.

● Although Danon could probably have effected the sale of the defendant's factory
had not the defendant sold it to someone else, he is not entitled to the commissions
agreed upon because he had no intervention whatever in, and much sale in
question. It must be borne in mind that no definite period was fixed by the
defendant within which the plaintiff might effect the sale of its factory. Nor was the
plaintiff given by the defendant the exclusive agency of such sale. Therefore, the
plaintiff cannot complain of the defendant's conduct in selling the property through
another agent before the plaintiff's efforts were crowned with success.
4. CMS LOGGING INC VS. CA and D.R. AGUINALDO CORP. o “I informed you that if you wanted to pay me for the service, then it would be no
GR NO. L-41420 more than at the standard rate of 5% commission because in our own case, we pay
JULY 10, 1992 our Japanese agents 2-1/2%. Accordingly, we would only add a similar amount of 2-
BY: Ryan 1/2% for the service which we would render you in the Philippines.
TOPIC: EXTINGUISHMENT OF AGENCY
PETITIONERS: CMS LOGGING CORP. ISSUE: WON DRACOR is entitled to the commission from CMS’s direct selling of its logs
RESPONDENTS: CA and D.R. AGUINALDO
PONENTE: NOCON, J. HELD/RATIO: NO
● While its true that the evidenced establishes the fact that SHINKO is DRACOR’s agent
DOCTRINE: The principal may revoke a contract of agency at will, and such revocation
in Japan, there is no proof which established that SHINKO received the amount of $77K
may be express, or implied, and may be availed of even if the period fixed in the contract
as commission which allegedly arose from the sale of CMS’s logs.
of agency as not yet expired. As the principal has this absolute right to revoke the agency,
the agent cannot object thereto; neither may he claim damages arising from such ● The fact that SHINKO received the subject commissions was not established by the
testimony of Dominguez (CMS’s GM/counsel) to the effect that SHINKO’s President told
revocation, unless it is shown that such was done in order to evade the payment of agent's
Dominguez that SHINKO received a commission of $1/1,000 board feet of logs it sold
commission.
since the same is hearsay.
● In the correspondence between the CMS and DRACOR, DRACOR’s response to CMS’s
FACTS:
demand letter cannot be categorized as admissions that SHINKO did not receive the
● CMS is engaged in logging while D.R. AGUINALDO CORP. (DRACOR) is engaged in selling
commissions in question.
limber entered into a contract of agency wherein CMS appointed DRACOR as its
o The letters were statements in the context of questioning CMS’s tally of logs
exclusive export and sales agent for all logs that CMS’s produces for 5 years with
delivered in Japan; and
DRACOR with a 5% commission. Due to this agreement, CMS was able to sell through
o Neither did the letters categorically state that SHINKO received said commission
DRACOR 77M board feet in Japan for several years.
which arose from the sale CMS’s logs.
● However, 6 months before contract expiration, CMS found that DRACOR had used
● CMS’s contention that DRACOR’s silence meant that SHINKO received commission is
Shinko Trading Ltd (SHINKO) as agent for selling their logs in Japan. SHINKO earned
untenable when it fact, DRACOR replied that it had no record of payments to SHINKO.
$1/1,000 board feet from buyers and overall, SHINKO was able to collect more than
Just because SHINKO got $77K does not mean that it was from the sale of CMS’s logs.
$77K.
● Even if indeed SHINKOO received said commissions, CMS is not entitled to it since it
● CMS averred that the commission earned by SHINKO violated the agreement with
was SHINKO’s buyers paid for it for arranging the sale hence formed no part of CMS’s
DRACOR hence CMS was had the right with respect to the proceeds of the sales. CMS
argued that since DRACOR has a 5% commission under the agreement, it is not entitled gross sales.
● However, DRACOR was not entitled to its commissions from the sales done by CMS
to additional commission paid to SHINKO as this was tantamount to double
directly to Japanese firms.
compensation. This prompted CMS to sell the logs directly in Japan w/o DRACOR’s aid.
o The principal may revoke a contract of agency at will, and such revocation may be
● CMS sued DRACOR for the commission received by SHINKO while DRACOR
express, or implied, and may be availed of even if the period fixed in the contract
counterclaimed of P144K for its commission from the sales CMS made by selling logs to
of agency as not yet expired. As the principal has this absolute right to revoke the
Japanese firms w/o DRACOR’s aid.
agency, the agent cannot object thereto; neither may he claim damages arising
● CMS replied that DRACOR’s counterclaim constitutes its commission hence CMS
from such revocation, unless it is shown that such was done in order to evade the
demanded DRACOR return the money it unlawfully retained. DRACOR amended its
payment of agent's commission.
counterclaim to P42K thus impliedly admitting that it retained the amount alleged by
o In this case, CMS appointed DRACOR as its agent yet during the agency’s existence,
CMS.
DRACOR admitted that CMS sold its logs directly to Japanese firms.
● TC: No proof was shown that SHINKO received commission arising from the sale of
o This act is an implied revocation of agency under NCC 1924: The agency is revoked
CMS’s logs even though it stated that SHINKO was able to collect $77K. DRACOR’s
if the principal directly manages the business entrusted to the agent, dealing
counterclaim was dismissed as it was shown that DRACOR waived its rights to the
directly with third persons.
balance of its commission as evidenced by its letter to CMS.
● Since the contract of agency was revoked by CMS by directly selling the logs w/o
● CA: Affirmed the dismissal since the TC could not find that SHINKO indeed collected
DRACOR’s aid hence DRACOR is has not right to its commission from said proceeds and
commissions from CMS’s buyer hence CMS was not entitled to recover the amount
is not entitled to retain whatever money it may have received as its commission for said
from DRACOR.
deals. DRACOR has no right to damages from CMS since said damages are generally not
o CA believed that SHINKO was paid by DRACOR out of its own 5% commission as
awarded to the agent for the revocation of the agency
indicated in a letter of DRACOR to CMS.
DISPOSITIVE PORTION: In fine, We affirm the ruling of the Court of Appeals that there is
no evidence to support CMS's contention that Shinko earned a separate commission of
U.S. $1.00 for every 1,000 board feet of logs from the buyer of CMS's logs. However, we
reverse the ruling of the Court of Appeals with regard to DRACOR's right to retain the
amount of P101,536.77 as part of its commission from the sale of logs by CMS, and hold
that DRACOR has no right to its commission. Consequently, DRACOR is hereby ordered to
remit to CMS the amount of P101,536.77. WHEREFORE, the decision appealed from is
hereby MODIFIED as stated in the preceding paragraph. Costs de officio. SO ORDERED.
5 Sanchez v Medicard Phil ● In order not to prejudice its personnel by the termination of their health
GR # 141525 insurance, Unilab, through respondent Ejercito, negotiated with Dr. Montoya and other
Date: Sept 2, 2005 officers of Medicard, to discuss ways in order to continue the insurance coverage of
By: Yen those personnel
Topic: ARTICLE 1924 ● Under the new scheme, Unilab shall pay Medicard only the amount
Petitioner: Carlos Sanchez corresponding to the actual hospitalization expenses incurred by each personnel plus
Respondent: Medicard Philippines, Inc., Dr. Nicanor Montoya and Carlos 15% service fee for using Medicard facilities, which amount shall not be less than
Ejercito P780,000.00.
Ponente: Sandoval-Gutierrez, J. ● Medicard did not give Carlos any commission under the new scheme
Summary: ● Carlos demanded from Medicard payment of P338,000.00 as his commission
Medicard appointed Carlos as its special corporate agent and gave him commission based plus damages, but the latter refused to heed his demand
on the “cash brought in”. Through Carlos’ efforts, Medicard and Unilab executed a Health ● Thus, Carlos filed a complaint for sum of money against Medicard and its co-
Care Program Contract. Carlos was given commission due to this transaction. Upon respondents
expiration of the contract, Medicard proposed to Unilab an increase of the premium for ● RTC: dismissed the complaint
the next year but Unilab rejected the proposal since it was too expensive. Thus, Nicanor, ● CA: affirmed RTC’s decision
Medicard’s president and general manager, asked Carlos to reduce his commission but o Held that there is no proof that the execution of the new contract between the
Carlos refused. In turn, Unilab also decided not to renew the health program. In order not parties under the "cost plus" system is a strategy to deprive petitioner of his
to prejudice its personnel by the termination of their health insurance, Unilab and Nicanor commission
discussed other ways to continue the insurance coverage of those personnel. For this o That when Unilab rejected Medicard's proposal for an increase of premium,
transaction, Medicard did not give any commission to Carlos. Carlos demanded his their Health Care Program Contract on its third year was effectively revoked; and that
commission but Medicard refused to give it to him. Thus, Carlos filed a complaint for sum where the contract is ineffectual, then the agent is not entitled to a commission
of money against Medicard. RTC dismissed the complaint and CA affirmed. SC: It is clear ● Hence this petition
that since Carlos refused to reduce his commission, Medicard directly negotiated with
Unilab, thus revoking its agency contract with Carlos ISSUE: Whether the contract of agency has been revoked by Medicard, hence, petitioner is not
DOCTRINE: entitled to a commission.
"Art. 1924. The agency is revoked if the principal directly manages the business
entrusted to the agent, dealing directly with third persons." RATIO/ HELD: YES!
FACTS: ● In order for an agent to be entitled to a commission, he must be the procuring
● Medicard Philippines, Inc. (Medicard), respondent, appointed Carlos as its cause of the sale, which simply means that the measures employed by him and the
special corporate agent. efforts he exerted must result in a sale.
o As such agent, Medicard gave him a commission based on the "cash brought in." ● In other words, an agent receives his commission only upon the successful
● Through Carlos' efforts, Medicard and United Laboratories Group of Companies conclusion of a sale.
(Unilab) executed a Health Care Program Contract. ● Conversely, it follows that where his efforts are unsuccessful, or there was no
o Under this contract, Unilab shall pay Medicard a fixed monthly premium for the effort on his part, he is not entitled to a commission.
health insurance of its personnel. ● It is clear that since Carlos refused to reduce his commission, Medicard directly
● Unilab paid Medicard P4,148,005.00 representing the premium for one (1) year. negotiated with Unilab, thus revoking its agency contract with Carlos
● Medicard then handed Carlos 18% of said amount or P746,640.90 representing ● We hold that such revocation is authorized by Article 1924 of the Civil Code
his commission. which provides:
● Prior to the expiration of the contract, Medicard proposed to Unilab, through o "Art. 1924. The agency is revoked if the principal directly manages the business
Carlos, an increase of the premium for the next year. entrusted to the agent, dealing directly with third persons."
● Unilab rejected the proposal "for the reason that it was too high," prompting Dr. ● Moreover, Carlos did not render services to Medicard, his principal, to entitle
Nicanor Montoya (Medicard's president and general manager), also a respondent, to him to a commission.
request Carlos to reduce his commission, but the latter refused. ● There is no indication from the records that he exerted any effort in order that
● In a letter, Unilab, through Carlos Ejercito, another respondent, confirmed its Unilab and Medicard, after the expiration of the Health Care Program Contract, can
decision not to renew the health program contract with Medicard. renew it for the third time.
● In fact, his refusal to reduce his commission constrained Medicard to negotiate
directly with Unilab.
● We find no reason in law or in equity to rule that he is entitled to a commission.
● Obviously, he was not the agent or the "procuring cause" of the third Health
Care Program Contract between Medicard and Unilab.
● WHEREFORE, the petition is DENIED. The challenged Decision and Resolution of
the Court of Appeals in CA-G.R. CV No. 47681 are AFFIRMED I N T O T O . Costs against
petitioner.
#6 INFANTE vs. CUNANAN should the property be sold to Noche, they would be given the commission agreed
GR # L-5180 upon
DATE: August 31, 1953 Ø However, it is a well settled rule that “"When the terms of an agreement have
By: Julpha Policina been reduced to writing, it is to be considered as containing all those terms, and,
Topic: therefore, there can be, between the parties and their successors in interest, no
Petitioners: Consejo Infante evidence of the terms of the agreement other than the contents of the writing."
Respondents: Jose Cunanan, Juan Mijares, CA 2nd Division Ø There are exceptions to this rule but this case doesn’t fall to any of the exceptions.
Ponente: Bautista Angelo, J. Ø YET, the court still held that perhaps it is by way of stratagem that Infante advised
SUMMARY: that she was no longer selling the property and made them sign the document for
Infante asked services of Cunana and Mijares to sell her lot on a commission basis. They cancellation of authority then selling it to same prospective buyer.
found Noche as interested buyer but upon introduction to each other, Infante expressed Ø This constitutes of taking advantage of the benevolence of the other and acts in a
that she is not interested to sell the property anymore and made Cunanan and Mijares manner that would promote her own selfish interest.
sign deed of cancellation of authority. After some time, Infante then sold her property to Ø This act amounts to bad faith. She took advantage of the services rendered by
the same Noche. Hence, the action for collection of commission of Cunanan and Mijares. Cunanan and Mijares believing she could evade payment of commission by inducing
SC ruled that even though there was a cancellation of the authority already, it could be them to sign the cancellation.
conculed that it was a strategy of Infante for her selfish interest. Infante still liable to pay.
DOCTRINE:
Act of subversion cannot serve as basis to escape payment of commission agreed upon
by the principal to the agent.
FACTS:
Ø Infante was the owner of 2 parcels of land with a house built thereon
Ø Infante contracted services of Cunanan and Mijares to sell the property for P30k
subject to condition that the purchaser would assume the mortgage existing in favor
of Rehabilitation Finance Corp. infant to pay 5% commission on the purchase price
plus whatever overprice they may obtain for the property
Ø Cunanan and Mijares found Pio Noche but upon introducing Noche to Infante,
Infante informed them that she is not selling the property anymore and made them
sign a document cancelling the authority to sell
Ø After some time, Infante dealt directly with Noche selling to him the property for
P31k
Ø Cunanan and Mijares, upon learning about the sale, demanded for payment of
their commission but Infante refused
Ø Cunanan and Mijares brought action for the sum of money
Ø Infante: admitted having contracted services of Cunanan and Mijares
o Stated she only agreed to pay P1.2k commission only when they
buy a property somewhere in Taft Ave. after selling her property
o That even they sold her property, they sold the property at Taft
Ave. to another party therefore not entitled to commission
Ø RTC: In favor of Cunanan and Mijares and ordered Infante to pay P2.5k
Ø CA affirmed.
ISSUE: WON Cunanan and Mijares are still entitled of commission even after signing a
document which involved the cancellation of their authority - YES
HELD/RATIO:
Ø Cunanan and Mijares claim that while they agreed to cancel the written authority
given to them, they did so merely upon the verbal assurance given by Infante that
7.) Republic vs. Evangelista HELD/RATIO
GR NO.156015 NO
August 11, 2005 · Petitioners claim that the special power of attorney of Gutierrez to represent
By: Martin Legaspi has already been revoked by the latter. Private respondent Gutierrez,
Petitioner: Republic of the Philippines, represented by lt. gen. Jose m. Calimlim, in his however, contends that the unilateral revocation is invalid as his agency is coupled
capacity as former chief of the intelligence service, armed forces of the philippines with interest.
(isafp), and former commanding general, presidential security group (psg), and maj. · A contract of agency is generally revocable as it is a personal contract of
david b. diciano, in his capacity as an officer of isafp and former member of the psg, representation based on trust and confidence reposed by the principal on his
Respondent: Hon. victorino evangelista, in his capacity as presiding judge, regional trial agent. As the power of the agent to act depends on the will and license of the
court, branch 223, quezon city, and Dante Legaspi, represented by his attorney-in- principal he represents, the power of the agent ceases when the will or
fact, Paul Gutierrez permission is withdrawn by the principal. Thus, generally, the agency may be
DOCTRINE/LAWS revoked by the principal at will.
When an agency is constituted as a clause in a bilateral contract, that is, when the · However, an exception to the revocability of a contract of agency is when it is
agency is inserted in another agreement, the agency ceases to be revocable at the coupled with interest, i.e., if a bilateral contract depends upon the agency.The
pleasure of the principal as the agency shall now follow the condition of the reason for its irrevocability is because the agency becomes part of another
bilateral agreement. obligation or agreement. It is not solely the rights of the principal but also that of
FACTS the agent and third persons which are affected. Hence, the law provides that in
· Respondent Legaspi is the owner of a land located in Bigte, Norzagaray, Bulacan. such cases, the agency cannot be revoked at the sole will of the principal.
Petitioner Calimlim, representing the Republic of the Philippines, and as then head · In the case at bar, we agree with the finding of the trial and appellate courts that
of the ISAFP and the PSG, entered into a Memorandum of Agreement (MOA) with the agency granted by Legaspi to Gutierrez is coupled with interest as a bilateral
one Ciriaco Reyes. The MOA granted Reyes a permit to hunt for treasure in a land in contract depends on it. It is clear from the records that Gutierrez was given by
Bigte, Norzagaray, Bulacan. Legaspi, inter alia, the power to manage the treasure hunting activities in the
· Reyes, together with petitioners, started, digging, tunneling and blasting works on subject land; to file any case against anyone who enters the land without
the said land of Legaspi. authority from Legaspi; to engage the services of lawyers to carry out the agency;
· petitioner Calimlim assigned about 80 military personnel to guard the area and and, to dig for any treasure within the land and enter into agreements relative
encamp thereon to intimidate Legaspi and other occupants of the area from going thereto. It was likewise agreed upon that Gutierrez shall be entitled to 40% of
near the subject land. whatever treasure may be found in the land.
· Legaspi executed a SPA appointing his nephew, private respondent Gutierrez, as his · Pursuant to this authority and to protect Legaspis land from the alleged illegal entry
attorney-in-fact. Gutierrez was given the power to deal with the treasure hunting of petitioners, agent Gutierrez hired the services of Atty. Adaza to prosecute the
activities on Legaspis land and to file charges against those who may enter it case for damages and injunction against petitioners. As payment for legal services,
without the latters authority. Legaspi agreed to give Gutierrez 40% of the treasure Gutierrez agreed to assign to Atty. Adaza 30% of Legaspis share in whatever
that may be found in the land. treasure may be recovered in the subject land.
· Gutierrez filed a case for damages and injunction against petitioners for illegally · It is clear that the treasure that may be found in the land is the subject matter of
entering Legaspis land. He hired the legal services of Atty. Homobono Adaza. Their the agency; that under the SPA, Gutierrez can enter into contract for the legal
contract provided that as legal fees, Atty. Adaza shall be entitled to 30% of Legaspis services of Atty. Adaza; and, thus Gutierrez and Atty. Adaza have an interest in the
share in whatever treasure may be found in the land. In addition, Gutierrez agreed subject matter of the agency, i.e., in the treasures that may be found in the land.
to pay Atty. Adaza P5,000.00 as appearance fee per court hearing and defray all This bilateral contract depends on the agency and thus renders it as one coupled
expenses for the cost of the litigation. with interest, irrevocable at the sole will of the principal Legaspi.
· Petitioners filed a Motion to Dismiss contending: first, there is no real party-in- · When an agency is constituted as a clause in a bilateral contract, that is, when the
interest as the SPA of Gutierrez to bring the suit was already revoked by Legaspi on agency is inserted in another agreement, the agency ceases to be revocable at the
March 7, 2000, as evidenced by a Deed of Revocation, pleasure of the principal as the agency shall now follow the condition of the
· RTC ruled in favor of the private respondents. CA affirmed the decision. bilateral agreement. Consequently, the Deed of Revocation executed by Legaspi
has no effect. The authority of Gutierrez to file and continue with the prosecution
ISSUE of the case at bar is unaffected.
Whether the contract of agency between Legaspi and Gutierrez has been effectively · Winner: Legaspi
revoked by Legaspi.
8. Del Rosario v. Abad original certificate of title in the name of Tiburcio del Rosario and issued a TCT
104 PHIL 648 in favor of Teodorico.
SEPT. 30, 1958 ● Plaintiffs brought suit against the defendants to recover possession and
By: JANINE ownership of the parcel of land, damages, attorney's fees and costs.
Topic: Extinguishment of Agency ● Trial Court held that the deed of sale executed by Primitivo in favor of
Petitioners: EULOGIO DEL ROSARIO, AURELIO DEL ROSARIO, BENITO DEL ROSARIO, Teodorico is null and void and ordered Teodorico to execute a deed of
BERNARDO DEL ROSARIO, ISIDRA DEL ROSARIO, DOMINGA DEL ROSARIO and reconveyance of the land in favor of the plaintiffs.
CONCEPCION BORROMEO
Respondents: PRIMITIVO ABAD and TEODORICO ABAD ISSUE: WON Primitivo can convey the property to Teodorico.
Ponente: PADILLA, J.
________________________________________________________________________ HELD: NO
____ The power of attorney executed by Tiburcio del Rosario in favor of Primitivo
SUMMARY: Tiburcio was issued a homestead patent. He then obtained a loan from Abad providing, among others, that is coupled with an interest in the subject matter
Primitivo. As security, he mortgaged the improvements of the land in favor of Primitivo. thereof in favor of the said attorney and are therefore irrevocable, and . . . conferring
Tiburcio executed an 'irrevocable special power of attorney coupled with interest" in upon my said attorney full and ample power and authority to do and perform all things
favor of Primitivo, authorizing him to sell and convey the parcel of land. After Tiburcio reasonably necessary and proper for the due carrying out of the said powers according
died, Primitivo sold the land to Teodorico. Plaintiffs, as heirs of Tiburcio, filed a suit against to the true tenor and purport of the same, . . ." does not create an agency coupled with
Primitivo and Teodorico. Trial Court held that the sale was null and void. SC affirmed the an interest nor does it clothe the agency with an irrevocable character. A mere
Trial Court and held that the agency terminated upon the death of Tiburcio, the principal, statement in the power of attorney that it is coupled with an interest is not enough. In
and Primitivo, the agent, could no longer validly convey the parcel of land to Teodorico. what does such interest consist must be stated in the power of attorney. The fact that
________________________________________________________________________ Tiburcio del Rosario, the principal, had mortgaged the improvements of the parcel of
____ land to Primitivo Abad, the agent is not such an interest as could render irrevocable the
DOCTRINE: A mere statement in the power of attorney that it is coupled with an interest power of attorney executed by the principal in favor of the agent. In fact no mention of
is not enough. In what does such interest consist must be stated in the power of attorney. it is made in the power of attorney. The mortgage on the improvements of the parcel of
land has nothing to do with the power of attorney and may be foreclosed by the
FACTS: mortgagee upon failure of the mortgagor to comply with his obligation. As the agency
● Plaintiffs are the children and heirs of the late Tiburcio del Rosario. was not coupled with an interest, it was terminated upon the death of Tiburcio del
● In December 1936, the Secretary of Agriculture and Commerce issued under Rosario, the principal, sometime in December 1945, and Primitivo Abad, the agent,
the Public Land Act homestead patent to Tiburcio. The homestead is in San could no longer validly convey the parcel of land to Teodorico Abad on 9 June 1947.
José, Nueva Ecija.
● In February 1937, the Registrar of Deeds issued an original certificate of title in The judgment appealed from is affirmed, with costs against the appellants.
the name of Tiburcio.
● Tiburcio then obtained a loan from Primitivo Abad in the sum of P2,000 with
interest at the rate of 12% per annum, payable in December 1941.
● As security for the payment, he mortgaged the improvements of the parcel of
land in favor of the Primitivo.
● Tiburcio executed an 'irrevocable special power of attorney coupled with
interest" in favor of Primitivo, authorizing him, among others, to sell and
convey the parcel of land.
● In December 1945, Tiburcio died leaving the mortgage debt unpaid.
● Primitivo Abad, acting as attorney-in-fact of Tiburcio, sold the parcel of land to
his son Teodorico Abad for and in consideration of the token sum of P1.00 and
the payment by the vendee of the mortgage debt of Tiburcio to Primitivo.
● Teodorico took possession of the parcel of land. Upon the filing and
registration of the last deed of sale, the Registrar of Deeds cancelled the
#9 LIM vs. SABAN ➢ Lim: she was not privy to the agreement between Ybañez and Saban; that she
GR # 163720 agreed with Ybañez for a purchase price of P200k only – reason for cancelling
DATE: Dec. 16, 2004 the checks and since Ybañez requested to directly pay him instead of Saban
By: Jus ➢ Yabñez died during pendency
Topic: ➢ RTC: dismissed Saban’s complaint
Petitioners: Genevieve Lim
➢ CA reversed – Saban entitle of commission amounting to P236k
Respondents: Florencio Saban o Ybanez’s revocation of contract of agency was invalid because the
Ponente: Tinga, J. agency was coupled with an interest and Ybanez effected the
SUMMARY:
revocation in bad faith in order to deprive Saban of his commission and
Ybanez authorized Saban to look for a buyer of his lot for P200k and mark up for taxes to keep the profits for himself
and his commission. Consummation of sale was done with Lim and Sps. Lim wherein Lim
o Ybanez and Lim connived to deprive Saban of his commission
remitted to Saban P600k constituting P200k for the lot, others for taxes and his o Lim liable to pay Saban since she knew that the checks were for Saban’s
commission. But the Ybanez asked Lim to cancel the postdated checks. Upon encashment,
commission as agent of Ybanez therefore Lim acted as accommodation
checks were dishonored. Saban then filed for collection including Lim as the defendant
party
for conniving with Ybanez. SC held that Saban is still entitled of the commission; Lim is
➢ Lim filed MR – DENIED
liable also to pay for conniving.
DOCTRINE: Seller’s withdrawal in bad faith of the broker’s authority cannot unjustly ➢ Hence, this petition.
deprive the brokers of their commissions as the seller’s duly constituted agents ISSUE:
FACTS: 1. WON SABAN IS ENTITLED OF THE COMMISSION – YES
2. WON LIM IS LIABLE TO PAY SABAN HIS SALES COMMISSION CONSIDERING THE
➢ Feb. 8, 1994: Late Eduardo Ybañez – owner of 1k-sqm lot – entered into
AGENCY AGREEMENT WAS BETWEEN YBANEZ AND SABAN - YES
Agreement and Authority to Negotiate and Sell [Agency Agreement] with Saban
HELD/RATIO:
o Ybañez authorized Saban to look for a buyer of the lot for P200k and
1. SC held that the agency was not revoked since Ybanez requested Lim to stop
mark up the selling price to include the amounts needed for payment
payment orders for the checks payable to Saban only after the consummation
of taxes, transfer of title and other expenses incident to the sale
of the sale and at that time, Saban had already performed his obligation as
including Saban’s commission
Ybanez’s agent
➢ March 10, 1994: Able to sell to Genevieve Lim and Sps. Benjamin and Lourdes
➢ To deprive Saban of his commission after sale has been consummated
Lim; agreed to purchase the lot for P600k inclusive of the mentioned expenses
would constitute breach of contract
➢ After sale, Lim remitted to Saban P113k for payment of taxes and P50k as
➢ It would be injustice to permit the principal to terminate the contract of
broker’s commission; also issued 4 post-dated checks total of P236k in the name
agency to the prejudice of the broker when had already reaped the
of Saban
benefits of the broker’s efforts.
➢ June 10, 1994: Ybañez sent letter to Lim asking to cancel all the checks issued
➢ Seller’s withdrawal in bad faith of the broker’s authority cannot unjustly
and to “extend another partial payment” in his (Ybañez’s) favor.
deprive the brokers of their commissions as the seller’s duly constituted
➢ Saban then presented the checks but were dishonored
agents
➢ Saban filed complaint for collection of sum of money and damages against
➢ ART 1927: an agency cannot be revoked if a bilateral contract depends
Ybañez and Lim alleging upon it, or if it is the means of fulfilling an obligation already contracted,
o That Ybañez told Lim that Saban was not entitled for commission for
or if a partner is appointed manager of a partnership in the contract of
concealing the actual selling price from Ybañez and because he was
partnership and his removal from the management is unjustifiable.
not licensed real estate broker therefore was able to convince to 2. Lim is not a party to the contract but record reveals that she had knowledge that
cancel the 4 checks
Ybanez set the price of the lot at P200k and that the P600k includes the amount
o That Ybañez and Lim connived to deprive him of his sales commission
for payment of taxes and Saban’s commission as broker of Ybanez.
by withholding payment of the checks
➢ The change of mind of Lim that even after issuing the checks then
➢ Ybañez: Saban was not entitled to any commission because he concealed the cancelling it resulted to the prejudice of Saban whose efforts led to the
actual selling price from him and for not being a licensed real estate broker completion of the sale between Ybanez and Lim
➢ It was concluded that Lim and Ybanez connived to deprive Saban of his
commission by dealing with each other directly and reducing the purchase
price of the lot and leaving nothing to compensate Saban
➢ Court ruled it is just and proper that Saban would pay the balance which
would constitute as Saban’s compensation
10 Coleongco v Claparols · Claparols learned that the execution had been procured because of derogatory
GR # L-18616 information against him that had reached the bank from his associate Coleongco
Date: March 31, 1964 · Claparols managed to arrange matters with the bank and to have the execution levy
By: Enzo lifted
· Claparols revoked the power of attorney and informed Coleongco
Topic: · Coleongco filed a suit against Claparols charging him of breach of contract
Plaintiff-Appellant: Vicente Coleongco · Claparols answered, denying the charge, and counterclaiming for the rescission of the
Defendant-Appellee: Eduardo Claparols agreement with Coleongco
Ponente: Reyes, J.B.L., J · CFI: ruled in favor of Claparols and ordered Coleongco to pay Claparols
· Hence, this direct appeal to the SC
Summary:
DOCTRINE: ISSUE: Whether Claparols had legal power to revoke the special power of attorney
A power of attorney although coupled with interest in a partnership can be revoked for a even though it was one coupled with an interest
just cause, such as when the attorney-in-fact betrays the interest of the principal as
happened in the case at bar. RATIO/ HELD: YES!
· It must not be forgotten that a power of attorney can be made irrevocable by contract
FACTS: only in the sense that the principal may not recall it at his pleasure; but coupled with
· Claparols, operated a factory for the manufacture of nails, under the style of "Claparols interest or not, the authority certainly can be revoked for a just cause, such as when the
Steel & Nail Plant" attorney- in-fact betrays the interest of the principal
o The raw material, nail wire, was imported from foreign sources · The irrevocability of the power of attorney may not be used to shield the perpetration
o The marketing of the nails was handled by the "ABCD Commercial" of Bacolod, which of acts in bad faith, breach of confidence, or betrayal of trust, by the agent, for that
was owned by a chinaman named Kho To. would amount to holding that a power, coupled with an interest authorizes the agent to
· Losses compelled Claparols to look for someone to finance his imports of nail wire commit frauds against the principal
· Kho To introduced his compadre, appellant Vicente Coleongco, to Claparols, · Coleongco bad faith towards his principal Claparols is unquestionable
recommending Coleongco to be the financier o His letters to the Philippine National Bank attempting to undermine the credit of the
· Claparols agreed and a contract was perfected between them whereby Coleongco principal and to acquire the factory of the latter, without the principal's knowledge;
undertook to finance and put up the funds required for the importation of the nail wire, o Coleongco's letter to his cousin, Kho To instructing the latter to reduce to one-half
which Claparols bound himself to convert into nails at his plant. the usual monthly advances to Claparols on account of nail sales in order to squeeze
· It was agreed: Claparols and compel him to extend the contract entitling Coleongco to share in the
o That Coleongco would have the exclusive distribution of the product, and the profits of the nail factory in better terms, and ultimately "own his factory", a plan
"absolute care in the marketing of these nails and the promotion of sales all over the carried out by Kho's letter" reducing the advances to Claparols
Philippines", except the Davao Agency; o Coleongco's attempt to have Romulo Agsam pour acid on the machinery
o That Coleongco would "share the control of all the cash" from sales or deposited in o His illegal diversion of the profits of the factory to his own benefit
banks; o And the surreptitious disposition of the Yates band resaw machine in favor of his
o That all contracts and transactions should be jointly approved by both parties; cousin's Hong Shing Lumber Yard, made while Claparols was in Baguio
· Claparols executed in favor of Coleongco a special power of attorney to open and · These are all plain acts of deliberate sabotage by the agent that fully justified the
negotiate letters of credit, to sign contracts, bills of lading, invoices, and papers covering revocation of the power of attorney by Claparols and his demand for an accounting from
transactions; to represent Claparols and the nail factory; and to accept payments and his agent Coleongco.
cash advances from dealers and distributors. IN VIEW OF THE FOREGOING, the decision appealed from is affirmed. Costs against
· Thereafter, Coleongco also became the assistant manager of the factory, and took over appellant Vicente Coleongco.
its business transactions, while Claparols devoted most of his time to the nail
manufacture processes.
· Claparols was surprised by service of an alias writ of execution to enforce a judgment
obtained against him by the Philippine National Bank, despite the fact that on the
preceding September he had submitted an amortization plan to settle the account
11 BUASON v. PANUYAS
G.R. No. 11415, Date HELD/RATIO:
By: Iñigo Untalan
Topic: Extinguishment of Agency Art. 1783, Old Civil Code: Anything done by the agent, without knowledge of the death
Petitioners: MANUEL BUASON & LOLITA REYES of the principal or of any other cause which extinguishes the agency, is valid and shall
Respondents: MARIANO PANUYAS be fully effective with respect to 3rd persons who may have contracted with him in
Ponente: Justice Padilla good faith.

● The sale of 8 hectares of the parcel of land by agent Bayuga to Panuyas and his wife
DOCTRINE: Anything done by the agent, without knowledge of the death of the was valid
principal or of any other cause which extinguishes the agency, is valid and shall be fully o It was not shown that the agent had known of his principal’s (Dayao)
effective with respect to 3rd persons who may have contracted with him in good faith. demise
● Moreover, it was found that the land was not registered by Spouses Buason &
PRINCIPAL: Dayao & Vega Reyes
AGENT: Bayuga ● Whereas, the power of attorney executed by Dayao authorizing Bayuga to sell the
3RD PARTIES: Panuyas, Buason & Reyes land and the sale executed by Bayuga in favor of Panuyas were annotated or
inscribed on the back of the OCT
FACTS: ● Also, it does not appear that Panuyas and his wife had knowledge of the previous
● This is a dispute over a parcel of land whereby plaintiffs and defendant claim sale
ownership over the the aforementioned. o In the absence of such knowledge, they have a right to rely on the
● A 14.8414-hectare parcel of land in Nueva Ecija was acquired by Buenaventura face of the certificate of title of the registered owners and of the
Dayao and Eugenia Vega by homestead (they are spouses). authority conferred by them upon the agent also recorded on the
● They executed a power of attorney authorizing Eustaquio Bayuga to prosecute their back of the certificate of title
case against Leonardo Gambito for annulment of a contract of sale of the parcel of ● This is a case of double sale of land registered under the Land Registration Act,
land, and after the termination of the case in their favor, to sell it, and from the which provides that he who recorded the sale in the Registry of Deeds has a better
proceeds of the sale, to deduct whatever litigation expenses he had incurred. right than he who did not Because the sale to Panuyas was registered, he has the
● Dayao died. All his four children executed a deed of sale conveying 12.8413 better right
hectares of the land to plaintiffs Spouses Buason & Reyes. Spouses Buason & Reyes
took possession of the land through their tenants. WINNER: Panuyas. Judgment appealed from is affirmed.
● After 5 years, agent Bayuga sold 8 hectares to herein defendant Spouses Mariano
Panuyas and Sotera Cruz.
● Plaintiffs Spouses Buason & Reyes and Defendant Panuyas claim ownership over
the same parcel of land. Arguments:
o Spouses Buason & Reyes: prayed that Panuyas be ordered to deliver the parcel
of land; that the deed of sale of the land held by Panuyas be declared null and
void as the death of Dayao ended the authority of Bayuga.
o Panuyas: he and his wife were buyers in good faith and for valuable
consideration; that plaintiffs are guilty of laches; and that there is no cause of
action. (Not expounded on)

o It was found that the land was not registered by Spouses Buason & Reyes.
Whereas, the power of attorney executed by Dayao authorizing Bayuga to sell
the land and the sale executed by Bayuga in favor of Panuyas were annotated
or inscribed on the back of the OCT.

ISSUE: WON the death of Dayao ended the authority of the agent Bayuga -> NO.
12. RALLOS v. FELIX GO CHAN the third person who contracted with the agent himself acted in good faith. Good
GR No. L-34332 faith here means that the third son was not aware of the death of the principal at the
January 31, 1978 time he contracted with said agent. These two requisites must concur: the absence
By: YRREVERRE of one will render the act of the agent invalid unenforceable.
____________________________________________________________________ · In the instant case, it cannot be questioned that the agent, Simeon Rallos, knew
Topic: Extinguishment of Agency of the death of his principal at the time he sold the latter's share in Lot No. 5983 to
Petitioners: RAMON RALLOS respondent corporation. The knowledge of the death is clearly to be inferred from
Respondents: FELIX GO CHAN & SONS REALTY CORPORATION and COURT OF APPEALS the pleadings filed by Simeon Rallos before the trial court. That Simeon Rallos knew
Ponente: MUNOZ-PALMA, J. of the death of his sister Concepcion is also a finding of fact of the court a quo and of
____________________________________________________________________ respondent appellate court when the latter stated that Simeon Rallos "must have
known of the death of his sister, and yet he proceeded with the sale of the lot in the
DOCTRINE: name of both his sisters Concepcion and Gerundia Rallos without informing appellant
(the realty corporation) of the death of the former."
FACTS · Since the agent already know the death of the principal and still proceeded with
· Concepcion and Gerundia both surnamed Rallos were sisters and registered co- the sale, making him no authority to enter such sale thus void.
owners of a parcel of land in Cebu · Petitioner won.
· On April 21, 1954, the sisters executed a special power of attorney in favor of
their brother, Simeon Rallos, authorizing him to sell for and in their behalf the land. IN VIEW OF ALL THE FOREGOING, We set aside the decision of respondent appellate
· On March 3, 1955, Concepcion Rallos died. court, and We affirm en toto the judgment rendered by then Hon. Amador E. Gomez of
· On September 12, 1955, Simeon Rallos sold the undivided shares of his sisters the Court of First Instance of Cebu, quoted in pages 2 and 3 of this Opinion, with costs
Concepcion and Gerundia of the land to Felix Go Chan for P10,686.90. against respondent realty corporation at all instances.
· On May 18, 1956 Ramon Rallos as administrator of the Intestate Estate of
Concepcion Rallos filed a complaint in the Court of First Instance of Cebu, praying (1)
that the sale of the undivided share of the deceased Concepcion Rallos in lot 5983
be declared unenforceable, and said share be reconveyed to her estate; (2) that the
Certificate of Title issued in the name of Felix Go Chan & Sons Realty Corporation
be cancelled and another title be issued in the names of the corporation and the
"Intestate estate of Concepcion Rallos" in equal undivided shares;
· RTC - Declaring the deed of sale null and void insofar as the share of Concepcion
Rallos
· CA - reversed. Deed of sale valid.

ISSUE: W/N the sale of the undivided share of Concepcion valid although it was executed
by the agent after the death of his principal - No

HELD:
· "ART. 1919. Agency is extinguished: "xxx xxx xxx
· "3. By the death, civil interdiction, insanity or insolvency of the principal or of
the agent; . . . ."
· ART. 1931. Anything done by the agent, without knowledge the death of the
principal or of any other cause which extinguishes the agency, is valid and shall be
fully effective with respect to third persons who may have contracted with him in
good faith.
· Article 1931 is the applicable law. Under this provision, an act done by the agent
after the death of his principal is valid and effective only under two conditions, viz:
(1) that the agent acted without knowledge of the death of the principal, and (2) that
13. MUNICIPALITY OF PILILLA V. CA ● Section 1683 of the Revised Administrative Code provides:
G.R. No. 15909 Section 1683. Duty of fiscal to represent provinces and provincial
June 28, 1994 subdivisions in litigation. — The provincial fiscal shall represent the province and
By: Lyka Benitez any municipality or municipal district thereof in any court, except in cases whereof
original jurisdiction is vested in the Supreme Court or in cases where the
Topic: Extinguishment of Agency municipality or municipal district in question is a party adverse to the provincial
Petitioners: MUNICIPALITY OF PILILLA, RIZAL government or to some other municipality or municipal district in the same
Respondents: HON. COURT OF APPEALS, HON. ARTURO A. MARAVE, as Presiding Judge, province. When the interests of a provincial government and of any political division
Regional Trial Court, Branch 78, Morong, Rizal, and PHILIPPINE PETROLEUM thereof are opposed, the provincial fiscal shall act on behalf of the province.
CORPORATION
Ponente: Regalado When the provincial fiscal is disqualified to serve any municipality or other political
subdivision of a province, a special attorney may be employed by its council.
DOCTRINE:
● Under the above provision, only the provincial fiscal and the municipal attorney can
A client may dismiss his lawyer at any time or at any stage of the proceedings, and there
represent a province or municipality in their lawsuits. The provision is mandatory.
is nothing to prevent a litigant from appearing before the court to conduct his own
The municipality's authority to employ a private lawyer is expressly limited only to
litigation.
situations where the provincial fiscal is disqualified to represent it.
● For the exception to apply, it must appear on record that the provincial fiscal was
A client, by appearing personally and presenting a motion by himself, is considered to
disqualified to handle the municipality's case. In the instant case, there is nothing in
have impliedly dismissed his lawyer.
the records to show that the provincial fiscal is disqualified to act as counsel for the
Municipality of Pililla on appeal, hence the appearance of herein private counsel is
FACTS:
without authority of law.
● Atty. Felix E. Mendiola served as counsel for the Municipality of Pililia in a
● The submission of Atty. Mendiola that the exception is broad enough to include
collection suit for unpaid business taxes, storage permit fee, mayor’s permit fee,
situations wherein the provincial fiscal refuses to handle the case cannot be
sanitary inspection fee, and the cost of the suit against private respondent
sustained. The fiscal's refusal to represent the municipality is not a legal justification
Philippine Petroleum Corporation (PPC). The municipality won in the trial court,
for employing the services of private counsel. Unlike a practicing lawyer who has the
and when PPC elevated thec ase to the Supreme Court, the SC affirmed the
right to decline employment, a fiscal cannot refuse to perform his functions on
aforesaid judgment. The judgment became final and executory and the records
were remanded to the trial court for execution. grounds not provided for by law without violating his oath of office. Instead of
engaging the services of a special attorney, the municipal council should request the
● In connection with the execution of said judgment, Atty. Felix E. Mendiola filed
Secretary of Justice to appoint an acting provincial fiscal in place of the provincial
a motion in behalf of the municipality for the examination of defendant
fiscal who has declined to handle and prosecute its case in court, pursuant to Section
corporation's gross sales for the years 1976 to 1978 and 1984 to 1991 for the
1679 of the Revised Administrative Code.
purpose of computing business tax. Defendant corporation filed a manifestation
that Pililla Mayor Nicomedes Patenia received from it the sum of P11,457,907.00
● Furthermore, even assuming that the representation of the municipality by Atty.
as full satisfaction of the above-mentioned judgment of the Supreme Court, as
Mendiola was duly authorized, said authority is deemed to have been revoked by
evidenced by the release and quitclaim documents executed by said mayor.
the municipality when the latter, through the municipal mayor and without said
● The RTC denied the municipality's motion for examination and execution of
counsel's participation, entered into a compromise agreement with herein private
judgment on the ground that the judgment had already been satisfied. It was
respondent with regard to the execution of the judgment in its favor and thereafter
when the case was only when the case was brought before to the CA that
filed personally with the court below two pleadings entitled and constitutive of a
respondent PPC filed a motion questioning Atty. Mendiola's authority to
"Satisfaction of Judgment" and a "Release and Quitclaim".
represent petitioner municipality.
● A client, by appearing personally and presenting a motion by himself, is considered
to have impliedly dismissed his lawyer. Herein counsel cannot pretend to be
ISSUE: Whether or not Atty. Mendiola can represent the Municipality of Pillila.
authorized to continue representing the municipality since the latter is entitled to
dispense with his services at any time. Both at common law and under Section 26,
HELD/RATIO: NO.
Rule 138 of the Rules of Court, a client may dismiss his lawyer at any time or at any
● The Court of Appeals is correct in holding that Atty. Mendiola has no authority to file
a petition in behalf of and in the name of the Municipality of Pililla.
stage of the proceedings, and there is nothing to prevent a litigant from appearing
before the court to conduct his own litigation.
● The client has also an undoubted right to compromise a suit without the intervention
of his lawyer. Even the lawyers' right to fees from their clients may not be invoked
by the lawyers themselves as a ground for disapproving or holding in abeyance the
approval of a compromise agreement. The lawyers concerned can enforce their
rights in the proper court in an appropriate proceeding in accordance with the Rules
of Court, but said rights may not be used to prevent the approval of the compromise
agreement.

WHEREFORE, the petition at bar is DENIED for lack of merit and the judgment of
respondent Court of Appeals is hereby AFFIRMED.
14 Real Bank, Inc. v Samsung Mabuhay Corporation del Rosario and Partners which had at that time already filed a notice of
October 13, 2010 withdrawal of appearance
Shang 13. Judge Umali, the presiding judge of the complaint, dismissed Samsung’s
complaint for failure to appear for failure to appear at the mediation
Topic: Change of Attorneys (ROC 138, Sec. 26 - Attorneys and Admission to Bar) conference.
Doctrine: The withdrawal of counsel with conformity of the client is completed once the 14. Respondent Samsung’s new counsel challenged the dismissal of Samsung’s
same is filed in court. complaint in a Motion for Reconsideration, alleging that the dismissal order is
improper and inappropriate as it was not notified of the scheduled mediation
Facts: conference. Besides, the notice of the schedule mediation was sent to the
1. Plaintiff Samsung Mabuhay Electronic Corporation (Samsung Mabuhay) is a previous counsel who had already withdrawn and not to the new lawyers.
joint venture between Samsung Electronics Co. Ltd (Samsung) and Mabuhay 15. Judge Umali denied the Motion for Reconsideration. Samsung then filed before
Electronics Corp (Mabuhay Elec Corp). As a result, Samsing Mabuhay became the CA a petition for certiorari. The CA rendered a decision in favor of Samsung
the exclusive distributor for Samsung products (through their Joint Venture and granted its petition. It decided that Judge Umali did not even peruse or
Agreement) verify the records of the case.
2. Dec 1996: Conpinco Trading, a regular dealer of Samsung Mabuhay in Davao 16. Petitioner Real Bank thus filed a petition before the SSC.
City, issued 5 postdated UCPB checks payable to Samsung Mabuhay
3. These 5 checks were picked up by Reynaldo Senson, former Collection Issue: Whether the trial court was right in dismissing the case for failure of Samsung and
Supervisor of Samsung Mabuhay Corporation for Visayas and Mindanao, at its counsel to attend the mediation conference
Conpinco Tradings’ place
4. These 5 checks were supposed to be deposited to Mabuhay Electronic’s Held: Ruling of CA is sustained. Case is remanded to the RTC for continuation of
Account. However, Senson, under alias Edgardo Bacea, deposited the said proceedings.
checks to his account with Real Bank-Bulacan, under the name of Mabuhay 1. RULE 138, Sec. 26 Change of attorneys
Electronics COMPANY. a business entity in NO WAY RELATED TO Mabuhay Elec An attorney may retire at any time from any action or special
CORPORATION. Mabuhay Elec Corp is a SINGLE proprietorship managed by proceeding, by the written consent of his client filed in court. He may also
Senson, alias Edgardo Bacea. (Note: Mabuhay Electronics CORPORATION vs retire at any time from an action or special proceeding, without the consent of
COMPANY are different) his client, should the court, on notice to the client and attorney, and on
5. Senson, through the negligence of Real Bank, indorsed the checks and hearing, determine that he ought to be allowed to retire. In case of
deposited all the 3 checks in the account of Mabuhay Elec Company and substitution, the name of the attorney newly employed shall be entered on the
Senson, alias Bacea, again through the negligence of Real Banks, was able to docket of the court in place of the former one, and written notice of the
withdraw the amount of the 3 checks. change shall be given to the advance party.
6. Despite Samsung Mabuhay’s demands, Real bank ignored and refused to 2. Under the first sentence of Sec. 26, the withdrawal of counsel with the
reimburse them with the value of the 3 checks. conformity of the client is completed once the same is filed in the court. Not
7. Thus, Samsung Mabuhay filed a complaint for damages against Real Bank Inc. further action thereon by the court is needed other than the mechanical act of
Real Bank filed its Answer, to which a Reply was filed by Samsung. Samsung the Clerk of Court of entering the name of the new counsel in the docket and
filed an Ex-Parte Motion to Set Case for pre-trial of giving written notice thereof to the adverse party
8. Meanwhile, Real Bank filed a Motion to Admit Third Party Complaint against 3. In this case, the withdrawal of Samsung’s original counsel was with the client’s
Senson alias Bacea to which was attached the Third Party Complaint consent. Thus, no approval thereof by the trial court was required because a
9. TC granted Real Bank’s Motion to Admit Third Party Complaint court’s approval is indispensable only if the withdrawal is without the client’s
10. However, on October 19 2000, the counsel of respondent Samsung, V.E. Del consent.
Rosario and Partners, filed a Notice of Withdrawal of Appearance with the 4. Samsung was not negligent in the conduct of its case, contrary to Real Bank’s
conformity of respondent Samsung argument. It has been documented that Samsung has been willing and able to
11. For its part, Real Bank filed a Motion to Declare Third-Party defendant Senson prosecute its case, Samsung had been promptly and religiously attending the
in Default hearings set by the RTC, except for the absence during the schedule mediation
12. The Trial Court then issued an order dated 17 March 2001 requiring both conference.
petitioner Real Bank and respondent Samsung to appear in a mediation
proceeding. This order was sent to respondent Samsung’s former counsel, V.E.
#15 Francisco v. Atty. Portugal 14. Respondent Atty. also argues that he had also decided to formally withdraw as counsel
AC No. 6155 for the accused. Allegedly he wrote a letter to the accused explaining his decision. With
Mar 14, 2006 this letter, he attached a notice to withdraw and also included instructions for the accused
By: Calags to follow in filing the notice to withdraw with the Court. (there was no proof of this as he
could not find the registry receipt issued for the letter)
Topic: Atty-client relationship 15. Investigating Commissioner found that Respondent Atty was guilty of violating the
Petitioners: Ma. Gina L. Francisco (relative of the accused) CPR
Respondents: Atty. Jaime Portugal
Ponente: Regalado, J. ISSUE:
1. whether Atty Portugal is guilty for violating the CPR
DOCTRINE: General Rule: An attorney may retire at any time provided there is a written For our topic: If Atty. Portugal could terminate the atty-client relationship (NO)
consent of his client filed in court
XPN: Attorney may retire at any time without consent of his client if the court, after notice HELD/RATIO:
to both client and attorney, determine that the attorney be allowed to retire Yes. Atty. Portugal is guilty of violation of the CPR and should be suspended from the
(also see: CPR Canon 22, Rules 22.01-2.02 for other instances when attorney may practice of law for 3 months
withdraw)
FACTS: Client has absolute right to terminate the attorney-client relationship
1. SP01 Tan and P03 Joaquin were involved in a shooting incident which resulted in the It is the client who had the right to terminate the attorney-client relationship at any
Sanidganbayan finding the 2 accused guilty of 2 counts of homicide and 1 count of time or without cause. The attorney has no right to withdraw or terminate the
attempted homicide relationship except when there is sufficient cause.
2. the accused engaged the services of Atty. Portugal (respondent)
3. Respondent Atty. filed a MR which was denied by the Sandiganbayan. A lawyer who undertakes to conduct an action impliedly stipulates to carry it to its
4. Respondent Atty. filed an urgent motion for leave to file a 2nd MR. conclusion. He cannot abandon the case without reasonable cause. A lawyer must first
5. While the 2nd MR was pending, Respondent Atty. also filed a Petition for Review on secure a written consent from the client.
Certiorari Ad Cautelam.
6. After which, Respondent Atty was unreachable by the accused. Respondent Atty. did It is also the responsibility of the lawyer to file the Notice of Withdrawal and not the
not return phone calls nor did he update the accused, his clients, with the case. accused.
7. Respondent Atty could not even be reached at his last known whereabout.
8. Sandiganbayan then issued a resolution denying the petition for late filing and non- Lawyer owes fidelity to his client as well to the cause
payment of docket fees. Due to the accused not being able to reach respondent atty, the Even if the lawyer feels that he is not sufficiently compensated, the lawyer still owes it to
accused found out of this resolution late and by then the resolution had already attained his client to do perform his duty with diligence and candor in order to serve the ends of
finality. justice.
9. Warrants of arrest had already been issued against the accused – partly due to
respondent Atty failing to do anything to prevent the reglementary period for seeking Besides, in this case it was proven that Respondent Atty was paid P15.5k for his services.
reconsideration from lapsing
10. As defense, Respondent Atty. argues that he was not the original counsel of the There was a formal engagement between the parties
accused. He was merely requested by the original counsel to be on hand, to assist, and to Written contract is not an essential element in the employment of an attorney, the
be present at the promulgation of the Sandiganbayan decision contract may be expressed or implied. In this case the Attorney’s undertaking of filing a
11. Respondent Atty. also did not undertake any formal agreement with the parties. motion for the accused was implied engagement between the parties.
12. Respondent Atty. further says asserts that because of the “herculean” efforts he put
into this case, he neglected his other obligations – much more that he was not properly WHEREFORE, premises considered, respondent is hereby SUSPENDED from the practice
renumirated for his efforts. of law for three (3) months. Let a copy of the Resolution be furnished the Bar Confidant
13. Respondent Atty. also asserts that the ad cautelam petition was filed on time since on for appropriate annotation in the record of respondent.
the last day of filing a petition he filed a motion for extension of time to file petition for
review and that within that 30 days extension he filed the petition for review.
16.) AUB vs GOODLAND COMPANY
GR NO. 188051 ISSUE: Whether the RTC was correct in denying due course to the notice of appeal filed
NOVEMBER 22, 2010 by Atty. Mondragon when no substitution of counsel was done. YES.
By: DEINLA
Topic: AGENCY; HELD/RATIO:
Petitioners: ASIA UNITED BANK ● Under Rule 138, Section 26 of the Rules of Court, for a substitution of attorney to be
Respondents: GOODLAND COMPANY, INC. effectual, the following essential requisites must concur:
Ponente: NACHURA, J. ○ (1) there must be a written application for substitution;
○ (2) it must be filed with the written consent of the client;
DOCTRINE: ○ (3) it must be with the written consent of the attorney substituted; and
Indeed, the primordial policy is a faithful observance of the Rules of Court, and their ○ 4) in case the consent of the attorney to be substituted cannot be obtained, there
relaxation or suspension should only be for persuasive reasons and only in meritorious must at least be proof of notice that the motion for substitution was served on him
cases, to relieve a litigant of an injustice not commensurate with the degree of his in the manner prescribed by the Rules of Court.
thoughtlessness in not complying with the procedure prescribed. Further, a bare ● The courts a quo were uniform and correct in Ending that Atty. Mondragon failed to
invocation of "the interest of substantial justice" will not sufEce to override a stringent observe the prescribed procedure and, thus, no valid substitution of counsel was
implementation of the rules. actualized.
● The RTC strictly imposed the rule on substitution of counsel and held that the notice of
FACTS: appeal filed by Atty. Mondragon was a mere scrap of paper. However, relying on our
● An Ex-Parte Application/Petition for the Issuance of Writ of Possession was filed by AUB pronouncement in Land Bank of the Philippines v. Pamintuan Development Co., the CA
over a lot in Makati with a TCT in AUB's name. The property was previously registered brushed aside the procedural lapse and took a liberal stance on considerations of
in the name of GOODLAND. substantial justice.
● The petition alleged that GOODLAND executed a Third-Party Real Estate Mortgage on ● Rules of procedure are in place to ensure the orderly, just, and speedy dispensation of
the property in favor of AUB to secure a credit accommodation extended by the latter cases; to this end, inKexibility or liberality must be weighed. The relaxation or
to Radiomarine Network Inc. (Radiomarine). suspension of procedural rules or the exemption of a case from their operation is
● When Radiomarine defaulted in the payment of its obligation, AUB instituted warranted only by compelling reasons or when the purpose of justice requires it.
extrajudicial foreclosure proceedings against the real estate mortgage. At the public ● Indeed, the primordial policy is a faithful observance of the Rules of Court, and their
auction, AUB was declared the highest bidder. relaxation or suspension should only be for persuasive reasons and only in meritorious
● On the same date, a Certificate of Sale was issued in its name and registered with the cases, to relieve a litigant of an injustice not commensurate with the degree of his
Registry of Deeds. thoughtlessness in not complying with the procedure prescribed. Further, a bare
● With the expiration of the redemption period, AUB proceeded to execute an Affidavit invocation of "the interest of substantial justice" will not sufEce to override a stringent
of Consolidation of Ownership. AUB thereafter secured a Certificate Authorizing implementation of the rules.
Registration from the BIR to facilitate the transfer of the title. ● A reading of the CA's Decision readily shows that the leniency it granted GOODLAND
● GOODLAND, through its counsel Atty. Bautista, opposed the petition, denying that it was merely anchored on substantial justice. The CA overlooked GOODLAND's failure to
executed the real estate mortgage. GOODLAND further averred that the signature of advance meritorious reasons to support its plea for the relaxation of Rule 138, Section
the notary public appearing on the deed was a forgery, and that no technical 26.
description of the property supposedly mortgaged was indicated therein.
● Concluding that AUB's title was derived from the foreclosure of a fake mortgage, How did it end?
GOODLAND prayed for the petition's denial. AUB's right of possession is founded on its right of ownership over the property which it
● The RTC issued the writ of possession sought by AUB. purchased at the auction sale. Upon expiration of the redemption period and
● GOODLAND, through its counsel on record, filed a motion for reconsideration and a consolidation of the title to the property, its possessory rights over the same became
supplemental motion for reconsideration, but both were denied. absolute.
● GOODLAND sought recourse with the CA by initially filing a Notice of Appeal with the
RTC, through a certain Atty. Mondragon of the Mondragon & Montoya Law Offices. WHEREFORE, premises considered, the petition is GRANTED. The February 16, 2009
● The RTC issued an Order denying due course to GOODLAND's notice of appeal for being Decision and the May 18, 2009 Resolution of the Court of Appeals are hereby ANNULLED
legally inutile due to Atty. Mondragon's failure to properly effect the substitution of and SET ASIDE; and the August 23, 2007 and February 15, 2008 Orders of the Regional
former counsel on record, Atty. Bautista. Trial Court of Makati City, Branch 150, are REINSTATED.
17. SALVADOR MOJAR v AGRO COMMERCIAL · The excuse that new lawyer, Atty. Aglipay, cannot enter his appearance is flimsy,
GR NO. 187188 because under Sec 26 of Rule 138 of the ROC:
JUNE 27, 2012 o a valid substitution of counsel has the following requirements:
By: CHESKA DOMINGUEZ (1) the filing of a written application for substitution;
Topic: EXTINGUISHMENT OF AGENCY (2) the client's written consent;
Petitioners: SALVADOR O. MOJAR, EDGAR B. BEGONIA, Heirs of the late JOSE M. CORTEZ, (3) the consent of the substituted lawyer if such consent can be obtained;
RESTITUTO GADDI, VIRGILIO M. MONANA, FREDDIE RANCES, and EDSON D. TOMAS and, in case such written consent cannot be procured,
Respondents: AGRO COMMERCIAL SECURITY SERVICE AGENCY, INC., ET AL. (4) a proof of service of notice of such motion on the attorney to be
Ponente: SERENO, J. substituted in the manner required by the Rules.
Where death of the previous attorney is the cause of substitution of the
DOCTRINE: Agency is extinguished by the death of the agent. counsel, a verified proof of the death of such attorney (usually a death
certificate) must accompany the notice of appearance of the new counsel
FACTS: · The proof of service upon the lawyer to be substituted will suffice where the
· Mojar et al. were employed security guards of respondent Agro Commercial. lawyers consent cannot be obtained.
They were assigned to the various branches of the Bank of Commerce in Pangasinan, · The court also found that the petitioner frequent the CA to inquire about the
La Union and Ilocos Sur. statues of their case. They knew about the pending case and that it was already
· The respondent agency gave them new assignments in Metro Manila and that submitted for resolution. It is questionable why, knowing these matters,
they were ordered to travel. However, the petitioners did not appear prompting petitioners did not seek the replacement of their counsel, if the latter was
respondent to send them a letter requiring a written explanation why no disciplinary unable to pursue their case.
action should be taken against them. Petitioners did not respond. · Petition denied. Agro won.
· Petitioners filed a complaint for illegal dismissal against respondent and Bank of
Commerce before the NLRC where they claimed that their reassignment was a
scheme to sever the employer-employee relationship
· NLRC Labor Arbiter decided in favor of petitioners, ordering respondents to
reinstate them to their former assignments with full backwages. On appeal, NLRC
affirmed the LA ruling
· Respondent agency appealed to the CA. Petitioners were not able to file their
comment. CA held in favor of respondent agency, saying that the transfer was a valid
order from management.
· Petitioners Mojar et al. filed manifestation before the CA saying that he and the
other petitioner had not been served a copy of the CA Petition because their lawyer,
Atty. Espinas had already been bedridden since the prior year and died. Their new
counsel, Atty. Aglipay, could not enter as new counsel because he failed to get the
folder from the office of atty. Espinas. Thereafter, petitioners filed a Motion to Annul
Proceedings on the ground of lack of jurisdiction. CA denied the motion. Hence, this
petition.
ISSUE:
(1) WON the agency between petitioners and Atty. Espinas was extinguished upon the
latter's death

HELD/RATIO:
(1) YES.
· Petitioners were negligent in the conduct of their litigation. Petitioners knew
that Espinas was already bedridden some months before he died. Upon knowing
this, they should have already obtained new counsel who could represent their
needs.
18. BRIONES vs ZAPANTA
Adm. Case No. 6266 / November 16, 2006 Issue: Whether Atty. Zapanta’s withdrawal was proper. (NO)
By yours truly, SG
Topic: EXTINGUISHMENT OF AGENCY Ruling:
Petitioners: ESTELA ANASTACIO-BRIONES ● Section 26, Rule 138 of the Rules of Court provides the proper procedure for a
Respondent: ATTY. ALFREDO A. ZAPANTA lawyer’s withdrawal as counsel in a case.
Doctrine: Until a lawyer’s withdrawal shall have been approved, he remains counsel of o Unless the procedure prescribed in the section is complied with, the
record and is expected by his client as well as by the court to do what the interests of his attorney of record is regarded as the counsel who should be served
client require. with copies of the judgments, orders and pleadings and who should be
held responsible for the case.
Facts: o For its part, the court could recognize no other representation on
● Briones engaged the services of Atty. Zapanta in three civil cases. behalf of the client except such counsel of record until a formal
● Briones showed Zapanta a copy of Discharge and Appearance of Counsels with substitution of attorney is effected.
Ex-parte Motion to Cancel the Hearing she intended to file that day. o Until a lawyer’s withdrawal shall have been approved, he remains
o Even prior to the hearing, she informed Zapanta of her joint venture counsel of record and is expected by his client as well as by the court
agreement with a real estate developer who offered the services of its to do what the interests of his client require.
own counsel. o He must still appear on the date of hearing for the attorney-client
o Zapanta requested her not to file it and he would submit a withdrawal relation does not terminate formally until there is a withdrawal of his
of appearance instead. appearance on record.
o Briones informed Zapanta that she could not attend the hearing on ● In this case, Zapanta admitted that he did not attend the hearing despite being
because of other commitments. notified by the court.
o Zapanta allegedly assured her that he would be present in the hearing. o His claim, that he was already discharged as counsel, was negated by
● Both Zapanta and Briones failed to appear in the hearing. the record that he withdrew his appearance only after the discharge.
o RTC declared them to have waived their right to present further ● Until his dismissal or withdrawal was made of record, any judicial notice sent to
witnesses and directed them to file their formal offer of evidence. him was binding upon his client even though as between them the professional
● Instead of filing a formal offer of evidence, Zapanta filed a withdrawal of relationship may have been terminated.
appearance. ● Thus, unless properly relieved, Zapanta is responsible for the conduct of the
● RTC dismissed the case with prejudice. cases and his failure to attend the hearing and comply with the RTC’s directive
● Briones learned that the cases were dismissed and that Zapanta did not attend to file a formal offer of evidence constitute inexcusable negligence.
the hearing and did not file a formal offer of evidence.
● Briones prayed that Zapanta be disbarred for abandoning her case and
withdrawing his appearance as counsel without her knowledge.
● Zapanta countered that he was discharged as Briones’ counsel after the hearing.
o He added that he prepared a withdrawal of appearance but Briones
ignored his several requests to sign it in his office.
o Nevertheless, he claimed he filed a withdrawal of appearance without
Briones’ conformity.
o He denied promising Briones that he would attend the hearing.
o According to him, Briones informed his secretary that her new lawyer
would attend.
o He claimed further that Briones’ new lawyer should be faulted for
belatedly filing an entry of appearance and a motion for
reconsideration.
● IBP found Zapanta liable for negligence in the performance of his duties as
counsel, and for violating CPR. It recommended Zapanta’s suspension for three
months from the practice of law.

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