Lim Pin v. Liao Tan, GR No.

L-47740, July 20, 1982

LIM PIN, petitioner, vs. SPS. CONCHITA LIAO TAN, and TAN CHO HUA, and HONORABLE CANCIO C. GARCIA, PRESIDING
JUDGE OF BRANCH I, CITY COURT OF CALOOCAN CITY, respondents

COMPROMISE - Entered by Lim Pin, represented by her son, George Hung and Conchita Liao Tan in relation to the
AGREEMENT unlawful detainer case filed by Liao Tan against Pin.
- It was stipulated in the agreement that Lim Pin acknowledge the existence of arrears in the
payment of her rental obligation since Apr 1977 and that he shall pay the rental in the total of
Php18,000.

April, 1977 P1,500.00

May, 1977 1,500.00
June, 1977 2,000.00
July, 1977 2,500.00
August, 1977 3,000.00
September, 1977 3,500.00
October, 1977 4,000.00
TOTAL P18,000.00
|||

CONCHITA LIAO - She was the owner of a parcel of land with improvements located Francisco Street, Caloocan City
TAN and had leased the portion of it to Lim Pin on a month to month basis.
- She alleged in her complaint that Pin did pay the rentals despite repeated demands.
(a) For the month of April, 1977 — P1,500.00; b) For the month of May, 1977 — P1,500.00; c)
Commencing on the month of June, 1977 and for each calendar month thereafter — P6,000.00
per month;

LIM PIN - the material allegations of the complaint and protesting the alleged highly "unconscionable and
unreasonable" increase of rental demanded by plaintiffs.

On the scheduled October 19, 1977 hearing, defendant Lim Pin was absent. Her son George Hung who attended with his
mother all the previous hearings was present together with the defendant's counsel. Plaintiff Conchita Liao Tan together
with her counsel was also present. Through the initiative of the court a quo, the subject compromise agreement was
formulated and executed and it finally became the basis of the October 19, 1977 judgment in Civil Case No. 11716.

MR PIN alleged that she never authorized her son nor her counsel on record to enter into such
compromise agreement and that has she been present when said agreement was prepared, she
would not have acceded thereto.
Conchita, on the other hand, had filed an Urgent Motion for Immediate Execution of Judgement.

RTC denied the MR and issued the writ of execution; SC issued a temporary restraining order in view of the petition filed by Pin .

PIN’S CONTENTION
- respondent Judge should not have allowed her son George Hung and her then counsel, Atty.
Pastor Mamaril in her absence to enter into the October 19, 1977 compromise agreement with the
private respondent Conchita Liao Tan assisted by her counsel.
- She further argues that ". . . considering that such compromise agreement would impose onerous
obligations upon Petitioner, such as a tremendous increase of rentals in the premises being leased
from Private Respondents from P1,500.00 a month to P5,000.00 a month," and that said
agreement contained admissions by petitioner, the respondent Judge should have required a
written authority and power of attorney from her son and counsel.
- Her objections to the validity of the compromise agreement are premised on Article 1878 of the
Civil Code and Rule 138, Section 23 of the Rules of Court.

RULING OF SC:
- Arguments are not well taken.
- Article 1878 is found in Title X of the Civil Code on Agency. It states that a special power of attorney is necessary to
compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the
venue of an action or to abandon a prescription already acquired.
- Section 23 of Rule 138 on Attorneys and Admission to the Bar governs the authority of attorneys to bind their clients and
provides that "Attorneys have authority to bind their clients in any case by any agreement in relation thereto made in writing,
and in taking appeal, and in all matters of ordinary Judicial Procedure, but they cannot, without special authority,
compromise their clients' litigation or receive anything in discharge of their clients' claims but the full amount in cash."
The requirements of a special power of attorney in Article 1878 of the Civil Code and of a special authority in Rule 138
of the Rules of Court refer to the nature of the authorization and not its form. The requirements are met if there is a clear
mandate from the principal specifically authorizing the performance of the act. As early as 1906, this Court in Strong v.
Gutierrez-Repide (6 Phil. 680) stated that such a mandate may be either oral or written, the one vital thing being that it
shall be express. And more recently, We stated that, if the special authority is not written, then it must be duly
established by evidence:
". . . the Rules require, for attorneys to compromise the litigation of their clients, a special authority. And
while the same does not state that the special authority be in writing the Court has every reason to expect that, if
not in writing, the same be duly established by evidence other than the self-serving assertion of counsel himself
that such authority was verbally given him. (Home Insurance Company vs. United States Lines Company, et al.,
21 SCRA 863; 866; Vicente vs. Geraldez, 52 SCRA 210; 225)."
There were other reasons which led the lower court to a finding that George Hung had the full authority to enter into the
compromise. The court itself observed during the earlier hearings and it is not disputed that ". . . defendant Lim Pin could not
decide on anything without first consulting her son."
 And finally, even assuming that George Hung and the petitioner's counsel acted without authority, the compromise
agreement itself was not null and void. It would be merely unenforceable, capable of being ratified. (Duñgo v. Lopena, 6 SCRA
1007). The compromise agreement was ratified by the petitioner when, on October 24, 1977, a few days after the promulgation of
the questioned judgment and before the filing of a motion for reconsideration, she filed an "Ex-Parte Motion To Withdraw Deposits"
in Civil Case No. 11709, a consignation case pending before the same court between the same parties. |||

Cosmic Lumber v. CA, GR No. 114311, November 29, 1996

COSMIC LUMBER CORPORATION, petitioner, vs. COURT OF APPEALS and ISIDRO PEREZ, respondents.

COSMIC - It executed, through its General MAnager a Special Power of Attorney appointing PAz G.
LUMBER Villamil-Estrada as attorney-in-fact -
CORPORATION
. . . to initiate, institute and file any court action for the ejectment of third persons and/or squatters of
the entire lot 9127 and 443 and covered by TCT Nos. 37648 and 37649, for the said squatters to remove their
houses and vacate the premises in order that the corporation may take material possession of the entire lot,
and for this purpose, to appear at the pre-trial conference and enter into any stipulation of facts and/or
compromise agreement so far as it shall protect the rights and interest of the corporation in the aforementioned
lots.
- On 11 March 1985 Paz G. Villamil-Estrada, by virtue of her power of attorney, instituted an action for the
ejectment of private respondent Isidro Perez and recover the possession of a portion of Lot No. 443
before the Regional Trial Court of Dagupan
- On Nov 25, 1985, Villamil-Estrada entered into a Compromise Agreement with Perez which was
approved by the court.
- By virtue of said agreement, Estrada paid for lot 443 and plaintiff thereby acknowledged the ownership
and possession of Estrada over the said property.

- Although the decision became final and executory it was not executed within the 5-year period from date of its finality
allegedly due to the failure of petitioner to produce the owner's duplicate copy of Title No. 37649 needed to segregate from
Lot No. 443 the portion sold by the attorney-in-fact, Paz G. Villamil-Estrada, to private respondent under the compromise
agreement. Thus on 25 January 1993 respondent filed a complaint to revive the judgment

ON THE - Cosmic lumber allege that it has no idea that there had been a Comprise Agreement entered by PAz G.
REVIVAL OF Villamil - Estrada and PErez;
JUDGEMENT - It the seek the annulment of the decision of the trial court before the CA on the ground that the
compromise agreement was void because: (Estrada has no authority to sell the property to Perez)
- the attorney-in-fact did not have the authority to dispose of, sell, encumber or divest the plaintiff
of its ownership over its real property or any portion thereof;
- (b) the authority of the attorney-in-fact was confined to the institution and filing of an ejectment
case against third persons/squatters on the property of the plaintiff, and to cause their eviction
therefrom;
- (c) while the special power of attorney made mention of an authority to enter into a
compromise agreement, such authority was in connection with, and limited to, the eviction of
third persons/squatters thereat, in order that "the corporation may take material possession
of the entire lot;"

CA RULING - Dismissed on the basis of its finding that not one of the grounds for annulment, namely, lack of
jurisdiction, fraud or illegality was shown to exist.
- the alleged nullity of the compromise judgment on the ground that petitioner's attorney-in-fact
Villamil-Estrada was not authorized to sell the subject property may be raised as a defense in the
execution of the compromise judgment as it does not bind petitioner, but not as a ground for annulment
of judgment because it does not affect the jurisdiction of the trial court over the action nor does it amount
to extrinsic fraud.

SC - Petitioner argued that the decision of the trial court is void because the compromise agreement
upon which it was based is void.
- Attorney-in-fact Villamil-Estrada did not possess the authority to sell or was she armed with a
Board Resolution authorizing the sale of its property.
- She was merely empowered to enter into a compromise agreement in the recovery suit she was
authorized to file against persons squatting on Lot No. 443, such authority being expressly confined
to the "ejectment of third persons or squatters of . . . lot . . . (No.) 443 . . . for the said squatters to
remove their houses and vacate the premises in order that the corporation may take material
possession of the entire lot . . ."

Petition is granted.
The authority granted Villamil-Estrada under the special power of attorney was explicit and exclusionary: for her to
institute any action in court to eject all persons found on Lots Nos. 9127 and 443 so that petitioner could take material possession
thereof, and for this purpose to appear at the pre-trial and enter into any stipulation of facts and/or compromise agreement but only
insofar as this was protective of the rights and interests of petitioner in the property. Nowhere in this authorization was
Villamil-Estrada granted expressly or impliedly any power to sell the subject property nor a portion thereof. Neither can a
conferment of the power to sell be validly inferred from the specific authority "to enter into a compromise agreement" because of
the explicit limitation fixed by the grantor that the compromise entered into shall only be "so far as it shall protect the rights and
interest of the corporation in the aforementioned lots." In the context of the specific investiture of powers to Villamil-Estrada,
alienation by sale of an immovable certainly cannot be deemed protective of the right of petitioner to physically possess the same,
more so when the land was being sold for a price of P80.00 per square meter, very much less than its assessed value of P250.00
per square meter, and considering further that petitioner never received the proceeds of the sale.
When the sale of a piece of land or any interest thereon is through an agent, the authority of the latter shall be in writing;
otherwise, the sale shall be void.
Thus the authority of an agent to execute a contract for the sale of real estate must be conferred in writing and must give him
specific authority, either to conduct the general business of the principal or to execute a binding contract containing terms and
conditions which are in the contract he did execute.
A special power of attorney is necessary to enter into any contract by which the ownership of an immovable is
transmitted or acquired either gratuitously or for a valuable consideration.
The express mandate required by law to enable an appointee of an agency (couched) in general terms to sell must
be one that expressly mentions a sale or that includes a sale as a necessary ingredient of the act mentioned.
 For the principal to confer the right upon an agent to sell real estate, a power of attorney must so express the
powers of the agent in clear and unmistakable language. When there is any reasonable doubt that the language so used
conveys such power, no such construction shall be given the document.

Lilian Mercado v. Allied Banking Corporation, GR No. 171460, July 27, 2007
LILLIAN N. MERCADO, CYNTHIA M. FEKARIS, and JULIAN MERCADO, JR., represented by their Attorney-In-Fact, ALFREDO
M. PEREZ, petitioners, vs. ALLIED BANKING CORPORATION, respondent

- DEED of Real Estate Mortgage constituted on TCT No. RT-18206 (106338) owned by _______________.
- A special power of attorney was executed by PErla in favor of his husband, Julian Mercado over several pieces of real
property registered under her name authoriing the latter to perform the following:
1. To act in my behalf, to sell, alienate, mortgage, lease and deal otherwise over the different parcels of
land described hereinafter, to wit:
a) Calapan, Oriental Mindoro Properties covered by Transfer Certificates of Title Nos. T-53618 —
3,522 Square Meters, T-46810 — 3,953 Square Meters, T-53140 — 177 Square Meters,
T-21403 — 263 Square Meters, T-46807 — 39 Square Meters of the Registry of Deeds of
Oriental Mindoro;
b) Susana Heights, Muntinlupa covered by Transfer Certificates of Title Nos. T-108954 — 600
Square Meters and RT-106338 — 805 Square Meters of the Registry of Deeds of Pasig
(now Makati);
c) Personal property — 1983 Car with Vehicle Registration No. R-16381; Model 1983; Make —
Toyota; Engine No. T-2464. IECcAT
2. To sign for and in my behalf any act of strict dominion or ownership, any sale, disposition, mortgage,
lease or any other transactions including quit-claims, waiver and relinquishment of rights in and
over the parcels of land situated in General Trias, Cavite, covered by Transfer Certificates of Title
Nos. T-112254 and T-112255 of the Registry of Deeds of Cavite, in conjunction with his co-owner
and in the person ATTY. AUGUSTO F. DEL ROSARIO;
3. To exercise any or all acts of strict dominion or ownership over the above-mentioned properties, rights
and interest therein. (Emphasis supplied.)
- On the strength of the aforesaid SPA, Julian, obtained a loan from the Allied Banking Corp. in the amount of
P3,000,000.00, secured by real estate mortgage constituted on TCT No. RT-18206 (106338) which covers a parcel
of land with an area of 805 square meters, registered with the Registry of Deeds of Quezon City.
- Still using the subject property as security, Julian obtained an additional loan from the respondent in the sum of
P5,000,000.00, evidenced by a Promissory Note he executed on 5 February 1997 as another real estate mortgage
(REM).
- Julian defaulted on the payment of his loan obligations. Thus, Allied Banking initiated an extrajudicial foreclosure
proceedings over the subject property which was subsequently sold at public bidding wherein Allied was declared as
the highest bidder and was issued a Certificate of Sale.

LILLIAN N. MERCADO,
CYNTHIA M. FEKARIS,
and JULIAN MERCADO,
JR., represented by their
Attorney-In-Fact,
ALFREDO M. PEREZ
- Petitioners initiated with the RTC an action for the annulment of REM constituted
over the subject property on the ground that:
- the same was not covered by the SPA
- the said SPA, at the time the loan obligations were contracted, no longer had
force and effect since it was previously revoked by Perla on 10 March 1993, as
evidenced by the Revocation of SPA signed by the latter.
- together with the copy of the Revocation of SPA, Perla, in a Letter dated 23
January 1996, notified the Registry of Deeds of Quezon City that any attempt to
mortgage or sell the subject property must be with her full consent documented
in the form of an SPA duly authenticated before the Philippine Consulate
General in New York.

ALLIED BANKING CORP
- the SPA in favor of Julian included the subject property, covered by one of the titles specified
in paragraph 1 (b) thereof, TCT No. RT-106338 registered with the Registry of Deeds of
Pasig (now Makati). The subject property was purportedly registered previously under TCT
No. T-106338, and was only subsequently reconstituted as TCT RT-18206 (106338).
Moreover, TCT No. T-106338 was actually registered with the Registry of Deeds of Quezon
City and not before the Registry of Deeds of Pasig (now Makati)
- the discrepancy in the designation of the Registry of Deeds in the SPA was merely an error
that must not prevail over the clear intention of Perla to include the subject property in
the said SPA.
-

RTC RULING - The REM constituted over the subject property null and void, for Julian was not authorized by
the terms of the SPA to mortgage the same. The court a quo likewise ordered that the
foreclosure proceedings and the auction sale conducted pursuant to the void REM, be
nullified.

CA - Allied appealed the decision and the CA reversed the RTC ruling and upheld the validity of the
REM constituted over the subject property on the strength of the SPA.
- The appellate court declared that Perla intended the subject property to be included in the
SPA she executed in favor of Julian, and that her subsequent revocation of the said SPA, not
being contained in a public instrument, cannot bind third persons.

SC RULING: Under Article 1878 of the Civil Code, a special power of attorney is necessary in cases
the contracts of real where real rights over immovable property are created or conveyed.
estate mortgage In the SPA executed by Perla in favor of Julian on 28 May 1992, the latter was conferred with
constituted over the the authority to "sell, alienate, mortgage, lease and deal otherwise" the different pieces of real and
subject property covered
by TCT No. RT-18206
(106338) registered with
the Registry of Deeds of
Quezon City are
unenforceable.
Consequently, the
foreclosure proceedings
and the auction sale of the
subject property conducted
in pursuance of these
unenforceable contracts
are null and void. This,
however, is without
prejudice to the right of the
respondent to proceed
against Julian, in his
personal capacity, for the
amount of the loans.|||
personal property registered in Perla's name. The SPA likewise authorized Julian "[t]o exercise any
or all acts of strict dominion or ownership" over the identified properties, and rights and interest
therein.
The existence and due execution of this SPA by Perla was not denied or challenged by
petitioners.|
There is no question therefore that Julian was vested with the power to mortgage the pieces of
property identified in the SPA. However, as to whether the subject property was among those
identified in the SPA, so as to render Julian's mortgage of the same valid, is a question we still must
resolve.
After an examination of the literal terms of the SPA, SC found that the subject property was
not among those enumerated therein. There is no obvious reference to the subject property
covered by TCT No. RT-18206 (106338) registered with the Registry of Deeds of Quezon City.
There was also nothing in the language of the SPA from which we could deduce the intention
of Perla to include the subject property therein. We cannot attribute such alleged intention to Perla
who executed the SPA when the language of the instrument is bare of any indication suggestive of
such intention. Contrariwise, to adopt the intent theory advanced by the respondent, in the absence of
clear and convincing evidence to that effect, would run afoul of the express tenor of the SPA and thus
defeat Perla's true intention.
In cases where the terms of the contract are clear as to leave no room for interpretation, resort
to circumstantial evidence to ascertain the true intent of the parties, is not countenanced.
Equally relevant is the rule that a power of attorney must be strictly construed and
pursued. The instrument will be held to grant only those powers which are specified therein, and
the agent may neither go beyond nor deviate from the power of attorney. Where powers and
duties are specified and defined in an instrument, all such powers and duties are limited and are
confined to those which are specified and defined, and all other powers and duties are excluded. This
is but in accord with the disinclination of courts to enlarge the authority granted beyond the powers
expressly given and those which incidentally flow or derive therefrom as being usual and reasonably
necessary and proper for the performance of such express powers. |||
Moreover, an agency is extinguished, among others, by its revocation (Article
1999, New Civil Code of the Philippines). The principal may revoke the agency at
will, and compel the agent to return the document evidencing the agency. Such
revocation may be express or implied (Article 1920, supra).
Given that Perla revoked the SPA as early as 10 March 1993, and that she informed
the Registry of Deeds of Quezon City of such revocation in a letter dated 23 January 1996 and
received by the latter on 7 February 1996, then third parties to the SPA are constructively
notified that the same had been revoked and Julian no longer had any authority to mortgage
the subject property.

Lily Elizabeth Bravo-Guerrero v. Edward Bravo, GR 152658, July 29, 2005

CASE PARTITION OF THE PROPERTIES OF MAURICIO AND SIMONA BRAVO to be divided among its surviving
heirs (grandchildren) and to annul the deed of absolute sale executed by Mauricio Bravo and his grandchildren,
Randy, elizabeth and ofelia.

● Simona and MAuricio Bravo owned 2 parcels of land located in MAkati City. The same were covered by
2 different TCT.
● On Jun 17, 1966, Simona executed a General Power of Attorney in favor of her husband MAuricio bravo
stating therein his authority to "mortgage or otherwise hypothecate, sell, assign and dispose of any and
all of my property, real, personal or mixed, of any kind whatsoever and wheresoever situated, or any
interest therein . . . ."
● Mauricio subsequently mortgaged the Properties to the Philippine National Bank (PNB) and
Development Bank of the Philippines (DBP) for P10,000 and P5,000, respectively.
● On Oct 1970, Mauricio and his 3 grand children executed a DOAS with Assumption of REM for the
subject properties.
● Mauricion died in Nov 1973 while Simona died in 1977.
● On 23 June 1997, Edward, represented by his wife, Fatima Bravo, filed an action for the judicial
partition of the Properties. Edward claimed that he and the other grandchildren of Mauricio and
Simona are co-owners of the Properties by succession. Despite this, petitioners refused to share
with him the possession and rental income of the Properties. Edward later amended his complaint to
include a prayer to annul the Deed of Sale, which he claimed was merely simulated to prejudice the
other heirs.
● In 1999, David Jr.,one of the grandchildren of the deceased, moved to intervene in the case. David Jr.
filed a complaint-in-intervention impugning the validity of the Deed of Sale and praying for the partition
of the Properties among the surviving heirs of Mauricio and Simona.
● The trial court allowed the intervention in its Order dated 5 May 1999.

TRIAL COURT The trial court upheld Mauricio's sale of the Properties to the vendees. The trial court ruled that the sale did not
RULING prejudice the compulsory heirs, as the Properties were conveyed for valuable consideration. The trial
court also noted that the Deed of Sale was duly notarized and was in existence for many years without question
about its validity.

CA RULING - IT declared the Deed of Sale void and ordered the partition of the Properties in its Decision of 21
December 2001.

- Citing Article 166 of the Civil Code ("Article 166"), the Court of Appeals declared the Deed of Sale void
for lack of Simona's consent. The appellate court held that the GPA executed by Simona in 1966 was
not sufficient to authorize Mauricio to sell the Properties because Article 1878 of the Civil Code ("Article
1878") requires a special power of attorney for such transactions. The appellate court reasoned that the
GPA was executed merely to enable Mauricio to mortgage the Properties, not to sell them.
 - The Court of Appeals also found that there was insufficient proof that the vendees made the mortgage
payments on the Properties, since the PNB and DBP receipts were issued in Mauricio's name. The
appellate court opined that the rental income of the Properties, which the vendees never shared with
respondents, was sufficient to cover the mortgage payments to PNB and DBP.

SC RULING:

The petition is partly meritorious.

the Court of Appeals erred when it declared the Deed of Sale void based on Article 166, which states:
Art. 166.Unless the wife has been declared a non compos mentis or a spendthrift, or is under civil
interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real property of the
conjugal partnership without the wife's consent. If she refuses unreasonably to give her consent, the court may
compel her to grant the same.
This article shall not apply to property acquired by the conjugal partnerships before the effective date of
this Code.
Article 166 expressly applies only to properties acquired by the conjugal partnership after the effectivity of the Civil Code of
the Philippines ("Civil Code"). The Civil Code came into force on 30 August 1950. Although there is no dispute that the Properties
were conjugal properties of Mauricio and Simona, the records do not show, and the parties did not stipulate, when the Properties
were acquired. Under Article 1413 of the old Spanish Civil Code, the husband could alienate conjugal partnership property for
valuable consideration without the wife's consent.
Even under the present Civil Code, however, the Deed of Sale is not void. It is well-settled that contracts alienating conjugal
real property without the wife's consent are merely voidable under the Civil Code — that is, binding on the parties unless annulled
by a competent court — and not void ab initio.
Article 166 must be read in conjunction with Article 173 of the Civil Code ("Article 173"). The latter prescribes certain
conditions before a sale of conjugal property can be annulled for lack of the wife's consent, as follows:
Art. 173.The wife may, during the marriage and within ten years from the transaction questioned, ask
the courts for the annulment of any contract of the husband entered into without her consent, when such consent
is required, or any act or contract of the husband which tends to defraud her or impair her interest in the conjugal
partnership property. Should the wife fail to exercise this right, she or her heirs after the dissolution of the
marriage, may demand the value of property fraudulently alienated by the husband. (Emphasis supplied)
Under the Civil Code, only the wife can ask to annul a contract that disposes of conjugal real property without her consent.
The wife must file the action for annulment during the marriage and within ten years from the questioned transaction. Article 173 is
explicit on the remedies available if the wife fails to exercise this right within the specified period. In such case, the wife or her heirs
can only demand the value of the property provided they prove that the husband fraudulently alienated the property. Fraud is never
presumed, but must be established by clear and convincing evidence.
Simona authorized Mauricio to dispose of the Properties when she executed the GPA. True, Article 1878 requires a special
power of attorney for an agent to execute a contract that transfers the ownership of an immovable. However, the Court has clarified
that Article 1878 refers to the nature of the authorization, not to its form. Even if a document is titled as a general power of
attorney, the requirement of a special power of attorney is met if there is a clear mandate from the principal specifically authorizing
the performance of the act.
In Veloso v. Court of Appeals, 24 the Court explained that a general power of attorney could contain a special power to
sell that satisfies the requirement of Article 1878, thus:
An examination of the records showed that the assailed power of attorney was valid and regular on its
face. It was notarized and as such, it carries the evidentiary weight conferred upon it with respect to its due
execution. While it is true that it was denominated as a general power of attorney, a perusal thereof revealed that it
stated an authority to sell, to wit:
"2.To buy or sell, hire or lease, mortgage or otherwise hypothecate lands, tenements and hereditaments or
other forms of real property, more specifically TCT No. 49138, upon such terms and conditions and under
such covenants as my said attorney shall deem fit and proper."
Thus, there was no need to execute a separate and special power of attorney since the general power of
attorney had expressly authorized the agent or attorney in fact the power to sell the subject property. The special
power of attorney can be included in the general power when it is specified therein the act or transaction
for which the special power is required. (Emphasis supplied)
In this case, Simona expressly authorized Mauricio in the GPA to "sell, assign and dispose of any and all of my
property, real, personal or mixed, of any kind whatsoever and wheresoever situated, or any interest therein . . ." as well as to "act
as my general representative and agent, with full authority to buy, sell, negotiate and contract for me and in my behalf." 25 Taken
together, these provisions constitute a clear and specific mandate to Mauricio to sell the Properties. Even if it is called a "general
power of attorney," the specific provisions in the GPA are sufficient for the purposes of Article 1878. These provisions in the GPA
likewise indicate that Simona consented to the sale of the Properties.

B. Formalities of Agency
1. How Constituted - Oral or Written - 1869, 1874
● Air France v. CA, GR No. L-57339, December 29, 1983

Jose G. Gana - Purchased from Air France through Imperial Travels, Inc., a duly authorized travel agent, 9
open-dated air passage tickets for the Manila/OSaka/Tokyo/ Manila route.
- Tickets were for him and his family members.
- Tickets were economy and first class fares.
- They were initially booked for 8 May 1970, and for the Tokyo/Manila return trip on AIR FRANCE
Flight 187 on 22 May 1970.
 - The aforesaid tickets were valid until 8 May 1971, the date written under the printed words "Non
valable apres de" (meaning, "not valid after the").
- The GANAS did not depart on 8 May 1970.
- Sometime in January, 1971, Jose Gana sought the assistance of Teresita Manucdoc, a Secretary of
the Sta. Clara Lumber Company where Jose Gana was the Director and Treasurer, for the extension
of the validity of their tickets, which were due to expire on 8 May 1971.
- Teresita enlisted the help of Lee Ella, Manager of the Philippine Travel Bureau, who used to handle
travel arrangements for the personnel of the Sta. Clara Lumber Company.
- Ella sent the tickets to Cesar Rillo, Office Manager of AIR FRANCE.
- The tickets were returned to Ella who was informed that extension was not possible unless the fare
differentials resulting from the increase in fares triggered by an increase of the exchange rate of the
US dollar to the Philippine peso and the increased travel tax were first paid.
- Ella then returned the tickets to Teresita and informed her of the impossibility of extension.
- The Ganas then schedule their flight on May 7, 1971 or one day before the expiration of their ticket.
- In the morning of the very day of their scheduled departure on the first leg of their trip, Teresita
requested travel agent Ella to arrange the revalidation of the tickets.
- Ella gave the same negative answer and warned her that although the tickets could be used by the
GANAS if they left on 7 May 1971, the tickets would no longer be valid for the rest of their trip
because the tickets would then have expired on 8 May 1971.
- Teresita replied that it will be up to the GANAS to make the arrangements.
- With that assurance, Ella, on his own, attached to the tickets validating stickers for the Osaka/Tokyo
flight, one a JAL sticker and the other an SAS (Scandinavian Airways System) sticker.
- The GANAS flight on May 7, 1971 proceeded however for the Osaka/Tokyo flight on 17 May 1971,
Japan Airlines refused to honor the tickets because of their expiration, and the GANAS had to
purchase new tickets.
- They encountered the same difficulty with respect to their return trip to Manila as AIR FRANCE also
refused to honor their tickets.
- They were able to return only after pre-payment in Manila, through their relatives, of the readjusted
rates. They finally flew back to Manila on separate Air France Flights on 19 May 1971 for Jose Gana
and 26 May 1971 for the rest of the family.
- Gana then filed an action for damages arising from breach of contract of carriage.

AIR FRANCE - alleged that the GANAS brought upon themselves the predicament they found themselves in and
assumed the consequential risks; that travel agent Ella's affixing of validating stickers on the
tickets without the knowledge and consent of AIR FRANCE, violated airline tariff rules and
regulations and was beyond the scope of his authority as a travel agent; and that AIR
FRANCE was not guilty of any fraudulent conduct or bad faith.

TRIAL COURT - Dismissed the complaunt

RULING

CA - Set aside RTC decision.

- Ordered Air France to pay damages.

SC RULING - Pursuant to tariff rules and regulations of the International Air Transportation Association (IATA),
included in paragraphs 9, 10, and 11 of the Stipulations of Fact between the parties in the Trial
Court, dated 31 March 1973,
1. an airplane ticket is valid for one year.
2. "The passenger must undertake the final portion of his journey by departing from the last
point at which he has made a voluntary stop before the expiry of this limit (parag. 3.1.2) . . .
3. That is the time allowed a passenger to begin and to complete his trip (parags. 3.2 and 3.3.).
...
4. A ticket can no longer be used for travel if its validity has expired before the passenger
completes his trip (parag. 3.5.1). . . .
5. To complete the trip, the passenger must purchase a new ticket for the remaining portion of
the journey"
Thus, t is clear that AIR FRANCE cannot be faulted for breach of contract when it dishonored the tickets of
the GANAS after 8 May 1971 since those tickets expired on said date; nor when it required the GANAS to
buy new tickets or have their tickets re-issued for the Tokyo/Manila segment of their trip. Neither can it be
said that, when upon sale of the new tickets, it imposed additional charges representing fare differentials, it
was motivated by self-interest or unjust enrichment considering that an increase of fares took effect, as
authorized by the Civil Aeronautics Board (CAB) in April, 1971. This procedure is well in accord with the
IATA tariff rules.

The GANAS cannot defend by contending lack of knowledge of those rules since the evidence bears out
that Teresita, who handled travel arrangements for the GANAS, was duly informed by travel agent Ella of
the advice of Rillo, the Office Manager of Air France, that the tickets in question could not be extended
beyond the period of their validity without paying the fare differentials and additional travel taxes brought
about by the increased fare rate and travel taxes.

The ruling relied on by respondent Appellate Court, therefore, in KLM vs. Court of Appeals, 65 SCRA 237
(1975), holding that it would be unfair to charge respondents therein with automatic knowledge or notice of
conditions in contracts of adhesion, is inapplicable. To all legal intents and purposes, Teresita was the agent
of the GANAS and notice to her of the rejection of the request for extension of the validity of the tickets was
notice to the GANAS, her principals.

The circumstance that AIR FRANCE personnel at the ticket counter in the airport allowed the GANAS to
leave is not tantamount to an implied ratification of travel agent Ella's irregular actuations.
 ● AF Realty v. Dieselman, GR No. 111448, January 16, 2002

Dieselman Freight - Domestic corporation and registered owner a parcel of commercial lot consisting of 2,094 square
Services Co. meters, located at 104 E. Rod Ave., Barrio Ugong, Pasig City.
Dieselman Freight Services Co. is the registered owner of a commercial lot and Manuel C. Cruz, Jr. is a
member of its board of directors. Although Cruz has no written authority from Dieselman to sell the lot, he
issued a letter authorizing Cristeta N. Politan to look for a buyer at P3,000.00 per square meter or
P6,282,000.00. Politan, in turn, authorized Felicisima Noble to sell the same lot. Noble then offered the lot
to AF Realty & Development, Inc. at P2,500.00 per square meter. Zenaida Ranullo, a board member and
vice-president of AF Realty, accepted the offer and issued a check in the amount of P330,000.00 payable
to Dieselman. Cruz, as president of Dieselman, acknowledged receipt of the check only as earnest money
and required AF Realty to finalize the sale at P4,000.00 per square meter. Later on, Cruz terminated the
offer and demanded the return of the title of the lot earlier delivered. AF Realty, claiming that the contract
was already perfected, filed a complaint for specific performance against Dieselman and Cruz. Meanwhile,
Dieselman and Midas Development Corporation executed a deed of absolute sale of the same property at
an agreed price of P2,800.00 per square meter and thereafter filed a motion for leave to intervene in the
case. After trial, the lower court held that the acts of Cruz bound Dieselman in the sale of the lot to AF
Realty. Consequently, the perfected contract of sale between Dieselman and AF Realty barred Midas's
intervention. Dissatisfied, all parties appealed to the Court of Appeals. The Court of Appeals reversed the
decision of the trial court. It held that since Cruz was not authorized in writing to sell the subject property to
AF Realty, the sale was not perfected. It also held that the Deed of Absolute Sale between Dieselman and
Midas is valid. Hence, petitioner filed the instant petition. The focal issue for consideration by the Supreme
Court is who between petitioner AF Realty and respondent Midas has a right over the subject lot.||| (AF
Realty & Development, Inc. v. Dieselman Freight Services Co., G.R. No. 111448, [January 16, 2002], 424
PHIL 446-456)

Manuel c. Cruz - Member of the board of directors of Dieselman, issued an “Authority To Sell Real Estate” Cristeta N.
Politan to look for a buyer at P3,000.00 per square meter or P6,282,000.00 for the lot in E.Rod.
- .He has no written authority from Dieselman to sell the lot.
- In turn, Cristeta authorized Felicisima Noble to sell the same lot.
- Felicisima then offered the lot to AF Realty & Development, Inc. at P2,500 per sqm.

AF Realty - Accepted the offer through Zenaida Ranullo, board member and vice-president of AF Realty,
Development, Inc. accepted and issued a check in the amount of P300,000.00 payable to the order of Dieselman.
- Cristeta received the check and signed an "Acknowledgment Receipt" indicating that the amount of
P300,000.00 represents the partial payment of the property but refundable within two weeks should
AF Realty disapprove Zenaida Ranullo's action on the matter.
- On August 2, 1988, Manuel F. Cruz, Sr., president of Dieselman, acknowledged receipt of the said
P300,000.00 as "earnest money" but required AF Realty to finalize the sale at P4,000.00 per square
meter. AF Realty replied that it has paid an initial down payment of P300,000.00 and is willing to
pay the balance.
- However, on August 13, 1988, Mr. Cruz, Sr. terminated the offer and demanded from AF Realty the
return of the title of the lot earlier delivered by Polintan.
- Claiming that there was a perfected contract of sale between them, AF Realty filed with the
Regional Trial Court, Branch 160, Pasig City a complaint for specific performance (Civil Case No.
56278) against Dieselman and Cruz, Jr. The complaint prays that Dieselman be ordered to execute
and deliver a final deed of sale in favor of AF Realty. 11 In its amended complaint, 12 AF Realty
asked for payment of P1,500,000.00 as compensatory damages; P400,000.00 as attorney's fees;
and P500,000.00 as exemplary damages.

DIESELMAN’S - Dieselman alleged that there was no meeting of the minds between the parties in the sale of the
ANSWER to the property and that it did not authorize any person to enter into such transaction on its behalf.
COMPLAINT - Meanwhile, it executed a DOAS of the same property with Midas Development Corp with the
agreed price of PhP2,800.00 per sqm. The dp was delivered and the balance eventually deposited
in an escrow account with the PCIBank.

MIDAS DEV’T - o protect its interest in the property, Midas filed on April 3, 1989 a Motion for Leave to Intervene in
CORP Civil Case No. 56278. Midas alleged that it has purchased the property and took possession
thereof, hence Dieselman cannot be compelled to sell and convey it to AF Realty. The trial court
granted Midas' motion.

RTC RULING - holding that the acts of Cruz, Jr. bound Dieselman in the sale of the lot to AF Realty.
- Consequently, the perfected contract of sale between Dieselman and AF Realty bars Midas'
intervention.
- The trial court also held that Midas acted in bad faith when it initially paid Dieselman P500,000.00
even without seeing the latter's title to the property.
- Moreover, the notarial report of the sale was not submitted to the Clerk of Court of the Quezon City
RTC and the balance of P5,300,000.00 purportedly deposited in escrow by Midas with a bank was
not established.

CA RULING - reversed the judgment of the trial court holding that since Cruz, Jr. was not authorized in writing by
Dieselman to sell the subject property to AF Realty, the sale was not perfected;
- and that the Deed of Absolute Sale between Dieselman and Midas is valid, there being no bad faith
on the part of the latter.
- The Court of Appeals then declared Dieselman and Cruz, Jr. jointly and severally liable to AF Realty
for P100,000.00 as moral damages; P100,000.00 as exemplary damages; and P100,000.00 as
attorney's fees.

SC RULING: - Agree with CA

Section 23 of the Corporation Code expressly provides that the corporate powers of
all corporations shall be exercised by the board of directors. Just as a natural person may
authorize another to do certain acts in his behalf, so may the board of directors of a
corporation validly delegate some of its functions to individual officers or agents appointed
by it. Thus, contracts or acts of a corporation must be made either by the board of directors
 or by a corporate agent duly authorized by the board. 20 Absent such valid
delegation/authorization, the rule is that the declarations of an individual director relating to
the affairs of the corporation, but not in the course of, or connected with, the performance
of authorized duties of such director, are held not binding on the corporation. 21
In the instant case, it is undisputed that respondent Cruz, Jr. has no written authority
from the board of directors of respondent Dieselman to sell or to negotiate the sale of the
lot, much less to appoint other persons for the same purpose. Respondent Cruz, Jr.'s lack
of such authority precludes him from conferring any authority to Polintan involving the
subject realty. Necessarily, neither could Polintan authorize Felicisima Noble. Clearly, the
collective acts of respondent Cruz, Jr., Polintan and Noble cannot bind Dieselman in the
purported contract of sale.
(AF Realty & Development, Inc. v. Dieselman Freight Services Co., G.R. No. 111448,
|||

[January 16, 2002], 424 PHIL 446-456)

● Cosmic Lumber V. CA, GR No. 114311, November 29, 1996

● Laureano Angeles v. PNR, GR No. 150128, August 31, 2006
● Pahud v. CA, supra

C. Rights and Obligations of the Agent - 1884 to 1909

1. Act within the Scope of Authority - 1881, 1882
● Woodchild v. Roxas, GR No. 140667, August 12, 2004

● Jaime Guinhawa v. People, GR No. 162822, August 25, 2005

JAIME - Jaime Guinhawa was engaged in the business of selling brand new motor vehicles, including
GUINHAWA Mitsubishi vans, under the business name of Guinrox Motor Sales. His office and display room
for cars were located along Panganiban Avenue, Naga City. He employed Gil Azotea as his
sales manager.
- He purchased a brand new Mitsubishi L-300 Versa Van from Union Motors whose office is in
Paco Manila.
- Guinhawa's driver, Leopoldo Olayan, drove the van from Manila to Naga City. However, while
the van was traveling along the highway in Labo, Daet, Camarines Norte, Olayan suffered a
heart attack.
- The van went out of control, traversed the highway onto the opposite lane, and was ditched into
the canal parallel to the highway. The van was damaged, and the left front tire had to be
replaced.
- The incident was reported to the local police authorities and was recorded in the police blotter.
The van was repaired and later offered for sale in Guinhawa's showroom.

SPOUSES - Bought the said L-300 Versa Van, unaware that the van had been damaged and repaired due to
RALPH and the accident in Daet.
Josephine Silo - They no longer inspected the under chassis since they presumed that the vehicle was brand
new.

GIL AZOTEA - Azotea suggested that the couple make a downpayment of P118,200.00, and pay the balance of
the purchase price by installments via a loan from the United Coconut Planters Bank
(UCPB),Naga Branch, with the L-300 Versa Van as collateral.
- Azotea offered to make the necessary arrangements with the UCPB for the consummation of
the loan transaction to which Sps. Silo Agreed.

- On October 11, 1995, the couple arrived in Guinhawa's office to take delivery of the van.
- Guinhawa executed the deed of sale, and the couple paid the P161,470.00 downpayment, for which they were
issued Receipt No. 0309.
- They were furnished a Service Manual which contained the warranty terms and conditions. Azotea instructed the
couple on how to start the van and to operate its radio. Ralph Silo no longer conducted a test drive; he and his wife
assumed that there were no defects in the van as it was brand new.
- On October 12, 1995, Josephine Silo, accompanied by Glenda Pingol, went to Manila on board
the L-300 Versa Van, with Glenda's husband, Bayani Pingol III, as the driver. Their trip to Manila
was uneventful. However, on the return trip to Naga from Manila on October 15 or 16, 1995,
Bayani Pingol heard a squeaking sound which seemed to be coming from underneath the van.
- They were in Calauag, Quezon, where there were no humps along the road. Pingol stopped the
van in Daet, Camarines Norte, and examined the van underneath, but found no abnormalities or
defects. But as he drove the van to Naga City, the squeaking sound persisted. Believing that the
van merely needed grease, Pingol stopped at a Shell gasoline station where it was examined.
- The mechanic discovered that some parts underneath the van had been welded.
- When Pingol complained to Guinhawa, the latter told him that the defects were mere factory
defects.
- As the defects persisted, the spouses Silo requested that Guinhawa change the van with
two Charade-Daihatsu vehicles within a week or two, with the additional costs to be taken
from their downpayment.
- Meanwhile, the couple stopped paying the monthly amortization on their loan, pending the
replacement of the van.
- Guinhawa initially agreed to the couple's proposal, but later changed his mind and told them that
he had to sell the van first. The spouses then brought the vehicle to the Rx Auto Clinic in Naga
 City for examination. Jesus Rex Raquitico, Jr.,the mechanic, examined the van and discovered
that it was the left front stabilizer that was producing the annoying sound, and that it had been
repaired.
- Josephine Silo files a complaint for rescission of the sale and refund of their money before the
DTI.
- During the confrontation between her and Guinhawa, Josephine learned that Guinhawa had
bought the van from UMC before it was sold to them, and after it was damaged in Daet.
Subsequently, the spouses Silo withdrew their complaint from the DTI.
- On February 14, 1996, Josephine Silo filed a criminal complaint for violation of paragraph 1,
Article 318 of the Revised Penal Code against Guinhawa in the Office of the City Prosecutor of
Naga City. After the requisite investigation, an Information was filed against Guinhawa in the
Municipal Trial Court (MTC) of Naga City.

RTC TRIAL GUINHAWA’ s contention:

- His sales manager, Azotea, informed him sometime in November 1995 that the spouses Silo
had complained about the defects under the left front portion of the van. By then, the van had a
kilometer reading of 4,000 kilometers.
- He insisted that he did not make any false statement or fraudulent misrepresentation to the
couple about the van, either before or simultaneous with its purchase.
- He posited that the defects noticed by the couple were not major ones, and could be repaired.
However, the couple refused to have the van repaired and insisted on a refund of their payment
for the van which he could not allow. He then had the defects repaired by the UMC.
- He claimed that the van was never involved in any accident, and denied that his driver, Olayan,
met an accident and sustained physical injuries when he drove the van from Manila to Naga
City.
- He even denied meeting Bayani Pingol.
AZOTEA’ contention
- Before the couple took delivery of the vehicle, Pingol inspected its exterior, interior, and
underside, and even drove it for the couple.
- He was present when the van was brought to the Rx Auto Clinic, where he noticed the dent on
its front side.
- He claimed that the van never figured in any vehicular accident in Labo, Daet, Camarines Norte
on March 17, 1995. In fact, he declared, he found no police record of a vehicular accident
involving the van on the said date.
- He admitted that Olayan was their driver, and was in charge of taking delivery of cars
purchased from the manufacturer in Manila.

Trial court rendered judgment convicting Guinhawa.

- The trial court declared that the accused made false pretenses or misrepresentations that the
van was a brand new one when, in fact, it had figured in an accident in Labo, Daet, Camarines
Norte, and sustained serious damages before it was sold to the private complainant.

CA - Guinhawa insisted that he never talked to the couple about the sale of the van; hence, could not
have made any false pretense or misrepresentation.

CA affirmed the ruling of the trial court.

- The CA ruled that the private complainant had the right to assume that the van was brand new
because Guinhawa held himself out as a dealer of brand new vans. According to the appellate
court, the act of displaying the van in the showroom without notice to any would-be buyer that it
was not a brand new unit was tantamount to deceit. Thus, in concealing the van's true condition
from the buyer, Guinhawa committed deceit.

SC RULING The petitioner cannot pin criminal liability for his fraudulent omission on his general manager, Azotea.
The two are equally liable for their collective fraudulent silence. Case law has it that wherever the doing
of a certain act or the transaction of a given affair, or the performance of certain business is confided to
an agent, the authority to so act will, in accordance with a general rule often referred to, carry with it by
implication the authority to do all of the collateral acts which are the natural and ordinary incidents of the
main act or business authorized.

2. Carry Out the Agency - 1884

● British Airways v. Court of Appeals, GR No. 121824, January 29, 1998

Parenthetically, the Court of Appeals should have been cognizant of the well-settled rule that an agent is also responsible
for any negligence in the performance of its function 33 and is liable for damages which the principal may suffer by reason
of its negligent act. 34 Hence, the Court of Appeals erred when it opined that BA, being the principal, had no cause of
action against PAL, its agent or sub-contractor.

Also, it is worth mentioning that both BA and PAL are members of the International Air Transport Association (IATA),
wherein member airlines are regarded as agents of each other in the issuance of the tickets and other matters pertaining to
their relationship. 35 Therefore, in the instant case, the contractual relationship between BA and PAL is one of agency, the
former being the principal, since it was the one which issued the confirmed ticket, and the latter the agent.

3. Declining the Agency - 1885

4. Advance Necessary Funds for the Agency - 1886
5. Diligence in Carrying Out the Agency - 1887, 1899
6. Not to Carry Out the Agency - 1888
7. Pay for Damages due to Conflict of Interest - 1889
8. Not to Extend any Loan unto Himself - 1890
● Severino v. Severino, supra
9. Render Accounting and Deliver to his Principal - 1891
● Pablito Murao v. People of the Philippines, GR No. 141485, June 30, 2005

All profits made and any advantage gained by an agent in the execution of his agency should belong to
the principal. 27 In the instant case, whether the transactions negotiated by the sales agent were for the
sale of brand new fire extinguishers or for the refill of empty tanks, evidently, the business belonged to
LMICE. Consequently, payments made by clients for the fire extinguishers pertained to LMICE. When
petitioner Huertazuela, as the Branch Manager of LMICE in Puerto Princesa City, with the permission of
petitioner Murao, the sole proprietor of LMICE, personally picked up Check No. 611437 from the City
Government of Puerto Princesa, and deposited the same under the Current Account of LMICE with
PCIBank, he was merely collecting what rightfully belonged to LMICE. Indeed, Check No. 611437
named LMICE as the lone payee. Private complainant Federico may claim commission, allegedly
equivalent to 50% of the payment received by LMICE from the City Government of Puerto Princesa,
based on his right to just compensation under his agency contract with LMICE, 28 but not as the
automatic owner of the 50% portion of the said payment. (Murao v. People, G.R. No. 141485, [June 30,
|||

2005], 501 PHIL 53-67)

● Vicente Domingo v. Gregorio Domingo, GR No. L-30673, October 29, 1971

The duties and liabilities of a broker to his employer are essentially those which an agent owes to his
principal. 1
Consequently, the decisive legal provisions are found in Articles 1891 and 1909 of the New Civil
Code.
"Art. 1891. Every agent is bound to render an account of his transactions and to deliver to the
principal whatever he may have received by virtue of the agency, even though it may not be owing to the
principal.
"Every stipulation exempting the agent from the obligation to render an account shall be void."
xxx xxx xxx
"Art. 1909. The agent is responsible not only for fraud, but also for negligence, which shall be
judged with more or less rigor by the courts, according to whether the agency was or was not for a
compensation."
Article 1891 of the New Civil Code amends Article 1720 of the old Spanish Civil Code which provides
that:
"Art. 1720. Every agent is bound to give an account of his transaction and to pay to the principal
whatever he may have received by virtue of the agency, even though what he has received is not due to
the principal."
The modification contained in the first paragraph of Article 1891 consists in changing the phrase "to
pay" to "to deliver", which latter term is more comprehensive than the former.
Paragraph 2 of Article 1891 is a new addition designed to stress the highest loyalty that is required to
an agent — condemning as void any stipulation exempting the agent from the duty and liability imposed on
him in paragraph one thereof.
Article 1909 of the New Civil Code is essentially a reinstatement of Article 1726 of the old Spanish
Civil Code which reads thus:
"Art. 1726. The agent is liable not only for fraud, but also for negligence, which shall be judged
with more or less severity by the courts, according to whether the agency was gratuitous or for a price or
reward."
The aforecited provisions demand the utmost good faith, fidelity, honesty, candor and fairness on the
part of the agent, the real estate broker in this case, to his principal, the vendor. The law imposes upon the
agent the absolute obligation to make a full disclosure or complete account to his principal of all his
transactions and other material facts relevant to the agency, so much so that the law as amended does not
countenance any stipulation exempting the agent from such an obligation and considers such an exemption
as void. The duty of an agent is likened to that of a trustee. This is not a technical or arbitrary rule but a rule
founded on the highest and truest principle of morality as well as of the strictest justice. 2
Hence, an agent who takes a secret profit in the nature of a bonus, gratuity or personal benefit from
the vendee, without revealing the same to his principal, the vendor, is guilty of a breach of his loyalty to the
principal and forfeits his right to collect the commission from his principal, even if the principal does not
suffer any injury by reason of such breach of fidelity, or that he obtained better results or that the agency is
a gratuitous one, or that usage or custom allows it; because the rule is to prevent the possibility of any
wrong, not to remedy or repair an actual damage. 3 By taking such profit or bonus or gift or propina from the
vendee, the agent thereby assumes a position wholly inconsistent with that of being an agent for his
principal, who has a right to treat him, insofar as his Commission is concerned, as if no agency had existed.
The fact that the principal may have been benefited by the valuable services of the said agent does not
exculpate the agent who has only himself to blame for such a result by reason of his treachery or perfidy.
||| (Domingo v. Domingo, G.R. No. L-30573, [October 29, 1971], 149 PHIL 183-196)

10. Appoint a Substitute and be responsible for Acts of Substitute - 1892

● International Films v. Lyric Film Exchange, GR No. 42465, November 19, 1936