TUBAL, GERALDINE BORJA

G.R. NO. 163553 December 11, 2009

YUN KWAN BYUNG,
VS.
PHILIPPINE AMUSEMENT AND GAMING CORPORATION.
FACTS:
PAGCOR is a government-owned and controlled corporation tasked to establish and operate gambling
clubs and casinos as a means to promote tourism and generate sources of revenue for the government. To
achieve these objectives, PAGCOR is vested with the power to enter into contracts of every kind and for
any lawful purpose that pertains to its business. Pursuant to this authority, PAGCOR launched its Foreign
Highroller Marketing Program (Program). The Program aims to invite patrons from foreign countries to
play at the dollar pit of designated PAGCOR-operated casinos under specified terms and conditions and in
accordance with industry practice.
The Korean-based ABS Corporation was one of the international groups that availed of the Program. In a
letter-agreement dated 25 April 1996 (Junket Agreement), ABS Corporation agreed to bring in foreign
players to play at the five designated gaming tables of the Casino Filipino Silahis at the Grand Boulevard
Hotel in Manila (Casino Filipino). Petitioner, a Korean national, alleges that from November 1996 to
March 1997, he came to the Philippines four times to play for high stakes at the Casino Filipino. Petitioner
claims that in the course of the games, he was able to accumulate gambling chips worth US$2.1 million.
Petitioner contends that when he presented the gambling chips for encashment with PAGCOR’s employees
or agents, PAGCOR refused to redeem them.
PAGCOR claims that petitioner, who was brought into the Philippines by ABS Corporation, is a junket
player who played in the dollar pit exclusively leased by ABS Corporation for its junket players. PAGCOR
alleges that it provided ABS Corporation with distinct junket chips. ABS Corporation distributed these
chips to its junket players. At the end of each playing period, the junket players would surrender the chips
to ABS Corporation. Only ABS Corporation would make an accounting of these chips to PAGCOR’s
casino treasury.
ISSUE:
Whether or not there is doctrine of implied agency, or agency by estoppel.
RULING:
NO, according to the Supreme Court, Petitioner’s argument is clearly misplaced. The basis for agency is
representation, that is, the agent acts for and on behalf of the principal on matters within the scope of his
authority and said acts have the same legal effect as if they were personally executed by the principal. On
the part of the principal, there must be an actual intention to appoint or an intention naturally inferable from
his words or actions, while on the part of the agent, there must be an intention to accept the appointment
and act on it. Absent such mutual intent, there is generally no agency.
There is no implied agency in this case because PAGCOR did not hold out to the public as the principal of
ABS Corporation. PAGCOR’s actions did not mislead the public into believing that an agency can be
implied from the arrangement with the junket operators, nor did it hold out ABS Corporation with any
apparent authority to represent it in any capacity. The Junket Agreement was merely a contract of lease of
facilities and services.
The players brought in by ABS Corporation were covered by a different set of rules in acquiring and
encashing chips. The players used a different kind of chip than what was used in the regular gaming areas
of PAGCOR, and that such junket players played specifically only in the third floor area and did not mingle
with the regular patrons of PAGCOR. Furthermore, PAGCOR, in posting notices stating that the players
are playing under special rules, exercised the necessary precaution to warn the gaming public that no
agency relationship exists.
TUBAL, GERALDINE BORJA

G.R. NO. L-21601 December 17, 1966

NIELSON & COMPANY, INC.,
VS.
LEPANTO CONSOLIDATED MINING COMPANY.
FACTS:
An operating agreement executed before World War II between the plaintiff and the defendant whereby the
former operated and managed the mining properties owned by the latter for a management fee of P2,500.00
a month and a 10% participation in the net profits resulting from the operation of the mining properties.
On January 30, 1937 for a period of five (5) years. In the latter part of 1941, the parties agreed to renew the
contract for another period of five (5) years, but in the meantime, the Pacific War broke out in December,
1941.
In January, 1942 operation of the mining properties was disrupted on account of the war. In February of
1942, the mill, power plant, supplies on hand, equipment, concentrates on hand and mines, were destroyed
upon orders of the United States Army, to prevent their utilization by the invading Japanese Army. The
Japanese forces thereafter occupied the mining properties, operated the mines during the continuance of the
war, and who were ousted from the mining properties only in August of 1945.
After the mining properties were liberated from the Japanese forces, LEPANTO took possession thereof
and embarked in rebuilding and reconstructing the mines and mill; setting up new organization; clearing the
mill site; repairing the mines; erecting staff quarters and bodegas and repairing existing structures;
installing new machinery and equipment; repairing roads and maintaining the same; salvaging equipment
and storing the same within the bodegas; doing police work necessary to take care of the materials and
equipment recovered; repairing and renewing the water system; and remembering. The rehabilitation and
reconstruction of the mine and mill was not completed until 1948. On June 26, 1948 the mines resumed
operation under the exclusive management of LEPANTO.
Shortly after the mines were liberated from the Japanese invaders in 1945, a disagreement arose between
NIELSON and LEPANTO over the status of the operating contract in question which as renewed expired in
1947. Under the terms thereof, the management contract shall remain in suspense in case fortuitous event
or force majeure, such as war or civil commotion, adversely affects the work of mining and milling.
NIELSON held the view that, on account of the war, the contract was suspended during the war; hence the
life of the contract should be considered extended for such time of the period of suspension. On the other
hand, LEPANTO contended that the contract should expire in 1947 as originally agreed upon because the
period of suspension accorded by virtue of the war did not operate to extend further the life of the contract.
ISSUE:
Whether or not the management contract was extended.
RULING:
YES, according to the Supreme Court, based on the foregoing facts and circumstances, and Our conclusion
that the management contract was extended, We believe that Nielson is entitled to the management fees for
the period of extension. Nielson should be awarded on this claim sixty times its monthly pay of P2,500.00,
or a total of P150,000.00.
In its sixth assignment of error Nielson contends that the lower court erred in not ordering Lepanto to pay it
(Nielson) the 10% share in the profits of operation realized during the period of five (5) years from the
resumption of its post-war operations of the Mankayan mines, in the total sum of P2,403,053.20 with
interest thereon at the rate of 6% per annum from February 6, 1958 until full payment.
The above claim of Nielson refers to four categories, namely: (1) cash dividends; (2) stock dividends; (3)
depletion reserves; and (4) amount expended on capital investment.
TUBAL, GERALDINE BORJA

G.R. NO. L-18058 January 16, 1923

FABIOLA SEVERINO,
VS.
GUILLERMO SEVERINO and FELICITAS VILLANUEVA.
FACTS:
Plaintiff Fabiola Severino as the acknowledged natural child of the said Melecio Severino, Melecio
Severino died on the 25th day of May, 1915; that some 428 hectares of the land were recorded in the
Mortgage Law Register in his name in the year 1901 by virtue of possessory information proceedings
instituted on the 9th day of May of that year by his brother Agapito Severino in his behalf; that during the
lifetime of Melecio Severino the land was worked by the defendant, Guillermo Severino, his brother, as
administrator for and on behalf of the said Melecio Severino; that after Melecio's death, the defendant
Guillermo Severino continued to occupy the land; that in 1916 a parcel survey was made of the lands in the
municipality of Silay, including the land here in question, and cadastral proceedings were instituted for the
registration of the lands titles within the surveyed area; that in the cadastral proceedings the land here in
question was described as four separate lots numbered as above stated; that Roque Hofileña, as lawyer for
Guillermo Severino, filed answers in behalf of the latter in said proceedings claiming the lots mentioned as
the property of his client; that no opposition was presented in the proceedings to the claims of Guillermo
Severino and the court therefore decreed the title in his favor, in pursuance of which decree certificates of
title were issued to him in the month of March, 1917.
It may be further observed that at the time of the cadastral proceedings the plaintiff Fabiola Severino was a
minor; that Guillermo Severino did not appear personally in the proceedings and did not there testify; that
the only testimony in support of his claims was that of his attorney Hofileña, who swore that he knew the
land and that he also knew that Guillermo Severino inherited the land from his father and that he, by
himself, and through his predecessors in interest, had possessed the land for thirty years.
ISSUE:
Whether or not Defendant as an agent can acquire for his own the property of his principal.
RULING:
NO, according to the Supreme Court, The relations of an agent to his principal are fiduciary and it is an
elementary and very old rule that in regard to property forming the subject-matter of the agency, he is
estopped from acquiring or asserting a title adverse to that of the principal. His position is analogous to that
of a trustee and he cannot consistently, with the principles of good faith, be allowed to create in himself an
interest in opposition to that of his principal or cestui que trust. Upon this ground, and substantially in
harmony with the principles of the Civil Law (see sentence of the supreme court of Spain of May 1, 1900),
the English Chancellors held that in general whatever a trustee does for the advantage of the trust estate
inures to the benefit of the cestui que trust.
The same principle has been consistently adhered to in so many American cases and is so well established
that exhaustive citations of authorities are superfluous and we shall therefore limit ourselves to quoting a
few of the numerous judicial expressions upon the subject. The principle is well stated in the case of
Gilbert vs. Hewetson.
A receiver, trustee, attorney, agent, or any other person occupying fiduciary relations respecting property or
persons, is utterly disabled from acquiring for his own benefit the property committed to his custody for
management. This rule is entirely independent of the fact whether any fraud has intervened. No fraud in
fact need be shown, and no excuse will be heard from the trustee. It is to avoid the necessity of any such
inquiry that the rule takes so general a form. The rule stands on the moral obligation to refrain from placing
one's self in positions which ordinarily excite conflicts between self-interest and integrity. It seeks to
remove the temptation that might arise out of such a relation to serve one's self-interest at the expense of
one's integrity and duty to another, by making it impossible to profit by yielding to temptation. It applies
universally to all who come within its principle.