NATURE, FORM AND KINDS OF AGENCY

CASE FACTS OF THE CASE DOCTRINE/RATIO DECIDENDI

Rallos vs. Felix Go Chan & Sons  This is a case of an attorney-in-fact, Simeon Rallos, who after of his death of his  Civil Code that no one may contract in the name of another
Realty Corp
G.R. L-24332, January 31, 1978
MUÑOZ PALMA, J.:
principal, Concepcion Rallos, sold the latter's undivided share in a parcel of land without being authorized by the latter, or unless he has by law
pursuant to a power of attorney which the principal had executed in favor. a right to represent him. 3 A contract entered into in the name
of another by one who has no authority or the legal
The administrator of the estate of the went to court to have the sale declared
uneanforceable and to recover the disposed share. The trial court granted the relief
prayed for, but upon appeal the Court of Appeals uphold the validity of the sale and
the complaint.
 Concepcion and Gerundia both surnamed Rallos were sisters and registered co-
owners of a parcel of land known as Lot No. 5983 of the Cadastral Survey of
Cebu covered by Transfer Certificate of Title No. 11116
 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 lot 5983.
 On March 3, 1955, Concepcion Rallos died. On September 12, 1955, Simeon Rallos
sold the undivided shares of his sisters Concepcion and Gerundia in lot 5983 to
Felix Go Chan & Sons Realty Corporation for the sum of P10,686.90.
 On May 18, 1956 Ramon Rallos as administrator of the Intestate Estate of
Concepcion Rallos filed a complaint docketed as Civil Case No. R-4530 of 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 unenforceable, and said share be
reconveyed to her estate
The trial Court ruled that:
 Declaring the deed of sale, Exh. "C", null and void insofar as the one-half pro-
indiviso share of Concepcion Rallos in the property in question.
 Ordering the Register of Deeds of Cebu City to cancel Transfer Certificate of Title
No. 12989 covering Lot 5983 and to issue in lieu thereof another in the names of
FELIX GO CHAN & SONS REALTY CORPORATION
 Ordering Felix Go Chan & Sons Realty Corporation to deliver the possession of an
undivided one-half (1/2) share of Lot 5983 to the herein plaintiff;
 Felix Go Chan & Sons Realty Corporation appealed in due time to the Court of
Appeals from the foregoing judgment insofar as it set aside the sale of the one-half
(1/2) share of Concepcion Rallos. The appellate tribunal, as adverted to earlier,
resolved the appeal on November 20, 1964 in favor of the appellant corporation
sustaining the sale in question.
 appellee administrator, Ramon Rallos, moved for a reconsider of the decision
but the same was denied in a resolution of March 4, 1965
WON the act performed by an agent after the death of his principal is binding
Is the fact of knowledge of the death of the principal a material factor in determining
the legal effect of an act performed after such death.
representation or who has acted beyond his powers, shall be
unenforceable, unless it is ratified, expressly or impliedly, by
the person on whose behalf it has been executed, before it is
revoked by the other contracting party.4 Article 1403 (1) of
the same Code also provides:
ART. 1403. The following contracts are unenforceable,
unless they are justified:
(1) Those entered into in the name of another person by
one who hi - been given no authority or legal
representation or who has acted beyond his powers;
Out of the above given principles, sprung the creation and
acceptance of the relationship of agency whereby one party,
caged the principal (mandante), authorizes another, called the
agent (mandatario), to act for and in his behalf in transactions
with third persons. The essential elements of agency are: (1)
there is consent, express or implied of the parties to establish
the relationship; (2) the object is the execution of a juridical
act in relation to a third person; (3) the agents acts as a
representative and not for himself, and (4) the agent acts
within the scope of his authority.
Agency is basically personal representative, and derivative in
nature. The authority of the agent to act emanates from the
powers granted to him by his principal; his act is the act of
the principal if done within the scope of the authority. Qui
facit per alium facit se. "He who acts through another acts
himself". 6
2. There are various ways of extinguishing agency, 7 but her
We are concerned only with one cause — death of the
principal Paragraph 3 of Art. 1919 of the Civil Code which
was taken from Art. 1709 of the Spanish Civil Code provides:
ART. 1919. Agency is extinguished.
xxx xxx xxx
3. By the death, civil interdiction, insanity or insolvency of
the principal or of the agent; ... (Emphasis supplied)
By reason of the very nature of the relationship between
Principal and agent, agency is extinguished by the death of
the principal or the agent. This is the law in this jurisdiction.
Articles 1930 and 1931 of the Civil Code provide the
exceptions to the general rule afore-mentioned.
ART. 1930. The agency shall remain in full force and effect
even after the death of the principal, if it has been constituted
in the common interest of the latter and of the agent, or in the
interest of a third person who has accepted the stipulation in
his favor.
ART. 1931. Anything done by the agent, without knowledge
of 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 the third person who contracted with the agent
himself acted in good faith. Good faith here means that the
third person was not aware of the death of the principal at the
time he contracted with said agent. These two requisites must
concur the absence of one will render the act of the agent
invalid and unenforceable.
Article 1931 of the Civil Code is inapplicable. The law
expressly requires for its application lack of knowledge on
the part of the agent of the death of his principal; it is not
enough that the third person acted in good faith Although a
revocation of a power of attorney to be effective must be
communicated to the parties concerned, yet a revocation by
operation of law, such as by death of the principal is, as a
rule, instantaneously effective inasmuch as "by legal fiction
the agent's exercise of authority is regarded as an execution
of the principal's continuing will. With death, the principal's
will ceases or is the of authority is extinguished.
If the agency has been granted for the purpose of contracting
with certain persons, the revocation must be made known to
them. But if the agency is general iii nature, without
reference to particular person with whom the agent is to
contract, it is sufficient that the principal exercise due
diligence to make the revocation of the agency publicity
known.
In case of a general power which does not specify the persons
to whom represents' on should be made, it is the general
opinion that all acts, executed with third persons who
contracted in good faith, Without knowledge of the
revocation, are valid. In such case, the principal may exercise
his right against the agent, who, knowing of the revocation,
continued to assume a personality which he no longer had.
(Manresa Vol. 11, pp. 561 and 575; pp. 15-16, rollo)

Macke vs. Camps,
G.R. L-2962, February 27, 1907
 The plaintiffs in this action, B. H. Macke and W. H. Chandler, partners doing
business under the firm name of Macke, Chandler & Company, allege that during the
months of February and March, 1905, they sold to the defendant and delivered at his
place of business, known as the "Washington Cafe," various bills of goods amounting
to P351.50; that the defendant has only paid on account of said accounts the sum of
P174; that there is still due them on account of said goods the sum of P177.50; that
before instituting this action they made demand for the payment thereof; and that
defendant had failed and refused to pay the said balance or any part of it up to the time
of the filing of the complaint
 one Ricardo Flores, who represented himself to be agent of the defendant, he
shipped the said goods to the defendants at the Washington Cafe; Flores later
acknowledged the receipt of said goods and made various payments
 that Flores acknowledged the bill for the goods furnished and the credits being
the amount set out in the complaint
 that the witness always believed and still believes that Flores was the agent of the
defendant; and that when he went to the Washington Cafe for the purpose of
collecting his bill he found Flores, in the absence of the defendant in the provinces,
apparently in charge of the business and claiming to be the business manager of the
 general principle, death revokes an agency and renders null
every act of the agent thereafter performed, yet that where a
payment has been made in ignorance of the death, such
payment will be good.
 in the case of Dick v. Page, 17 Mo. 234, 57 AmD 267; but in
this latter case it appeared that the estate of the deceased
principal had received the benefit of the money paid, and
therefore the representative of the estate might well have
been held to be estopped from suing for it again. These
cases, in so far, at least, as they announce the doctrine under
discussion, are exceptional. The Pennsylvania Case, supra
(Cassiday v. McKenzie 4 Watts & S. 282, 39 AmD 76), is
believed to stand almost, if not quite, alone in announcing the
principle in its broadest scope. (52, Misc. 353, 357, cited in 2
C.J. 549)
 the Civil Code, expressly provides for two exceptions to the
general rule that death of the principal revokes ipso jure the
agency, to wit: (1) that the agency is coupled with an interest
(Art 1930), and (2) that the act of the agent was executed
without knowledge of the death of the principal and the third
person who contracted with the agent acted also in good faith
(Art. 1931). Exception No. 2 is the doctrine followed in
Cassiday, and again We stress the indispensable requirement
that the agent acted without knowledge or notice of the death
of the principal In the case before Us the agent Ramon Rallos
executed the sale notwithstanding notice of the death of his
principal Accordingly, the agent's act is unenforceable against
the estate of his principal
 One who clothes another apparent authority as his agent, and
holds him out to the public as such, can not be permitted to
deny the authority of such person to act as his agent, to the
prejudice of innocent third parties dealing with such person in
good faith and in the following preassumptions or deductions,
which the law expressly directs to be made from particular
facts, are deemed conclusive:
 "Whenever a party has, by his own declaration, act, or
omission, intentionally and deliberately led another to believe
a particular thing true, and to act upon such belief, he can not,
in any litigation arising out such declaration, act, or omission,
be permitted to falsify it" (subsec. 1, sec. 333, Act no. 190);
and unless the contrary appears, the authority of an agent
must be presumed to include all the necessary and usual
means of carrying his agency into effect. (15 Conn., 347; 90
N. C. 101; 15 La. Ann, 247; 43 Mich., 364; 93 N. Y., 495; 87
Ind., 187.)
 The judgment of the trial court is affirmed with the costs of
 defendant
 A written contract dated May 25, 1904, was introduced in evidence, from which it
appears that one Galmes, the former owner of the business now know as the
"Washington Cafe," subrented the building wherein the business was conducted, to the
defendant for a period of one year, for the purpose of carrying on that business, the
defendant obligating himself not to sublet or subrent the building or the business
without the consent of the said Galmes.
 Galmes was called to the stand and identified the above- described document as
the contract and inventory delivered to him by the defendant
 Trial Court find Flores as an agent of Camps
WON: FLORES is an agent of Camps
Dela Peña vs. Hidalgo  On May 23, 1906, Jose dela Peña y de Ramon, and Vicenta de Ramon, in her own
G.R. 5486, August 17, 1910 behalf and as the legal guardian of her son Roberto de la Peña, filed in the Court of
First Instance of Manila a written complaint against of Federico Hidalgo, Antonio
Hidalgo, and Francisco Hidalgo, and, after the said complaint, already amended, had
been answered by the defendants Antonio and Francisco Hidalgo, and the other
defendant, Federico Hidalgo, had moved for the dismissal of this complaint, the
plaintiff, Jose de la Peña y de Ramon, as the judicial administrator of the estate of the
deceased Jose de la Peña y Gomiz, with the consent of the court filed a second
amended complaint prosecuting his action solely against Federico Hidalgo, who
answered the same in writing on the 21st of May and at the same time filed a
counterclaim, which was also answered by the defendant.
 On March 24, 1908, rendered judgment in favor of the plaintiff-administrator for
the sum of P13,606.19 and legal interest from the date of the filing of the complaint
on May 24, 1906, and the costs of the trial.
 Both the plaintiff and the defendant filed notice of appeal from this judgment and
also asked for the annulment of the same and for a new trial, on the ground that the
evidence did not justify the said judgment and that the latter was contrary to law
 defendant, on April 1, 1908, presented a written motion for new hearing, alleging
the discovery of new evidence favorable to him and which would necessarily
influence the decision such evidence or to introduce it at the trial of the case
 Jose de la Peña y Gomiz embarked for Spain, on November 12, 1887, he
executed before a notary a power of attorney in favor of Federico Hidalgo, Antonio L.
Rocha, Francisco Roxas and Isidro Llado, so that, as his agents, they might represent
him and administer, in the order in which they were appointed, various properties he
owned and possessed in Manila.
 The first agent, Federico Hidalgo, took charge of the administration of the said
property on the 18th of November, 1887.
 the former wrote to the latter requesting him to designate a person who might
substitute him in his said position in the event of his being obliged to absent himself
from these Islands, as one of those appointed in the said power of attorney had died
and the others did not wish to take charge of the administration of their principal's
property
 Federico Hidalgo, in which the latter requested the designation of a substitute,
because he had to leave this country for Spain, and also asked for the approval or
his instance against the appellant
 This notifications is of the greatest importance in the
decision of this case
 From the procedure followed by the agent, Federico
Hidalgo, it is logically inferred that he had definitely
renounced his agency was duly terminated, according to the
provisions of article 1732 of the Civil Code
 the word "renounce" was not employed in connection with
the agency or power of attorney executed in his favor, yet when
the agent informs his principal that for reasons of health and by
medical advice he is about to depart from the place where he is
exercising his trust and where the property subject to his
administration is situated, abandons the property, turns it over a
third party, without stating when he may return to take charge
of the administration, renders accounts of its revenues up to a
certain date
 transmits to his principal a general statement which
summarizes and embraces all the balances of his accounts since
he began to exercise his agency to the date when he ceased to
hold his trust, and asks that a power of attorney in due form in
due form be executed and transmitted to another person who
substituted him and took charge of the administration of the
principal's property, it is then reasonable and just to conclude
that the said agent expressly and definitely renounced his
agency
 Antonio Hidalgo administered the aforementioned
property of De la Peña y Gomiz, not in the character of
business manager, but as agent by virtue of an implied agency
vested in him by its owner who was not unaware of the fact,
who knew perfectly well that the said Antonio Hidalgo took
charge of the administration of that property on account of the
obligatory absence of his previous agent for whom it was an
impossibility to continue in the discharge of his duties.
 The administration and management, by virtue of an
implied agency, is essentially distinguished from that
disapproval of the accounts of his administration which had been transmitted to his
constituent, Peña y Gomiz
 Peña y Gomiz. In this letter the defendant informed the latter of the writer's
intended departure from this country and of his having provisionally turned over the
administration of the said property to his cousin, Antonio Hidalgo, upon whom the
writer had conferred a general power of attorney, but asking, in case that this was not
sufficient, that Peña send to Antonio Hidalgo a new power of attorney.
management of another's business, in this respect, that while
the former originated from a contract, the latter is derived
only from a qausi-contract.
 The implied agency is founded on the lack of
contradiction or opposition, which constitutes simultaneous
agreement on the part of the presumed principal to the
execution of the contract, while in the management of another's
business there is no simultaneous consent, either express or
implied, but a fiction or presumption of consent because of the
benefit received.
 delivery of the property and of his administration to
Antonio Hidalgo and gave notice of what he had done to his
constituent, Peña
 second administrator must be considered as a legitimate
agent of the said principal, as a result of the tacit agreement on
the latter's part, and the previous agent, who necessarily
abandoned and ceased to hold his position, as completely free
and clear from the consequences and results of the second
administration, continued by a third party and accepted by his
principal; for it is a fact, undenied nor even doubted, that the
said first administrator had to abandon this country and the
administration of Peña's property for reasons of health, which
made it possible for him to continue in the discharge of his
duties without serious detriment to himself, his conduct being
in accordance with the provisions of article 1736 of the Civil
Code.
 The defendant Federico Hidalgo, having ceased in his
administration of the property belonging to Peña y Gomiz, on
account of physical impossibility, which cessation he duly
reported to his principal and also informed him of the person
who relieved him as such administrator, and for whom he had
requested a new power of attorney, is only liable for the results
and consequences of his administration during the period when
the said property was in his charge, and therefore his liability
can not extend beyond the period of his management, as his
agency terminated by the tacit or implied approval of his
principal,
 Article 1755 of the Civil Code, interest shall only be owed
when it has been expressly stipulated
 Debtor, who is obliged to pay a certain sum of money, be
in default and fail to fulfill the agreement made with his
creditor, he must pay, as indemnity for losses and damages, the
interest agreed upon, and should there be no express
stipulation, the legal interest (art. 1108 of the Civil Code);
 in order that the debtor may be considered to be in default
and obliged to pay the indemnity, it is required, as a general
rule, that his creditor shall demand of such debtor the

Conde v CA, 119 SCRA 245
An appeal by certiorari from the
Decision of respondent Court of
Appeals (CA-G.R. No. 48133-
R) affirming the judgment of the
Court of First Instance of Leyte,
Branch IX, Tacloban City (Civil
Case No. B-110
fulfillment of his obligation, judicially or extrajudicially, except
in such cases as are limitedly specified in article 1100 of the
Civil Code.
On 7 April 1938. Margarita Conde, Bernardo Conde and the petitioner Dominga  an implied agency must be held to have been created from
Conde, as heirs of Santiago Conde, sold with right of repurchase, within ten (10) their silence or lack of action, or their failure to repudiate the
years from said date, a parcel of agricultural land located in Maghubas Burauen agency;
Leyte, (Lot 840), with an approximate area of one (1) hectare, to Casimira Pasagui,  If the contract is plain and unequivocal in its terms he is
married to Pio Altera (hereinafter referred to as the Alteras), for P165.00. The "Pacto ordinarily bound thereby. It is the duty of every contracting
de Retro Sale" further provided: (4) if at the end of 10 years the said land is not party to learn and know its contents before he signs and
repurchased, a new agreement shall be made between the parties and in no case title delivers
and ownership shall be vested in the hand of the party of the SECOND PART (the  The purpose of the rule is to give stability to written
Alteras). agreements, and to remove the temptation and possibility of
On 17 April 1941, the Cadastral Court of Leyte adjudicated Lot No. 840 to the perjury, which would be afforded if parol evidence was
Alteras "subject to the right of redemption by Dominga Conde, within ten (10) years admissible.
counting from April 7, 1983, after returning the amount of P165.00 and the amounts  the judgment of respondent Court of Appeals is hereby
paid by the spouses in concept of land tax ... " (Exhibit "1"). Original Certificate of
REVERSED and SET ASIDE,
Title No. N-534 in the name of the spouses Pio Altera and Casimira Pasagui, subject
to said right of repurchase
On 28 November 1945, private respondent Paciente Cordero, son-in-law of the
Alteras.
That we further covenant together with Paciente Cordero who is my son-in-law
that from this day the said Dominga Conde, Bernardo Conde and Margarita Conde
will again take possession of the aforementioned parcel of land because they
repurchased the same from me. If and when their possession over the said parcel of
land be disturbed by other persons, I and Paciente Cordero who is my son-in-law will
defend in behalf of the herein brother and sisters mentioned above, because the same
was already repurchased by them.
Petitioner's evidence is that Paciente Cordero signed the Memorandum of
Repurchase in representation of his father-in-law Pio Altera, who was seriously sick
on that occasion.
The lower Court rendered its Decision dismissing the Complaint and the
counterclaim and ordering petitioner "to vacate the property in dispute and deliver its
peaceful possession to the defendants Ramon Conde and Catalina T. Conde
On appeal, the Court of Appeals upheld the findings of the Court a quo that
petitioner had failed to validly exercise her right of repurchase in view of the fact that
the Memorandum of Repurchase was signed by Paciente Cordero and not by Pio
Altera, the vendee-a-retro, and that there is nothing in said document to show that
Cordero was specifically authorized to act for and on behalf of the vendee a retro, Pio
Altera
Reconsideration having been denied by the Appellate Court.

Danon v Brimo, 42 Phil. 133 August, 1918, the defendant company, through its manager, Antonio A. Brimo,
employed him to look for a purchaser of its factory known as "Holland American Oil
Co.," for the sum of P1,200,000, payable in cash; that the defendant promised to pay
the plaintiff, as compensation for his services, a commission of five per cent on the
said sum of P1,200,000, if the sale was consummated, or if the plaintiff should find a
purchaser ready, able and willing to buy said factory for the said sum of P1,200,000;
 But if the latter acts in good faith, not seeking to escape the
payment of commissions, but moved fairly by a view of his
own interest, he has the absolute right before a bargain is made
while negotiations remain unsuccessful, before commissions
are earned, to revoke the broker's authority, and the latter
cannot thereafter claim compensation for a sale made by the
that subsequently the plaintiff found such a purchaser, but that the defendant refused
to sell the said factory without any justifiable motive or reason therefor and without
having previously notified the plaintiff of its desistance or variation in the price and
terms of the sale.
Honorable Simplicio del Rosario, judge, after hearing and considering the evidence
adduced during the trial of the cause, rendered a judgment in favor of the plaintiff and
against the defendant for the sum of P60,000, with costs.
WON: the plaintiff entitled to recover the sum of P60,000, claimed by him as
compensation for his services
principal, even though it be to a customer with whom the
broker unsuccessfully negotiated, and even though, to some
extent, the seller might justly be said to have availed himself
of the fruits of the broker's labor.
 The undertaking to procure a purchaser requires of the party
so undertaking, not simply to name or introduce a person who
may be willing to make any sort of contract in reference to the
property, but to produce a party capable, and who ultimately
becomes the purchaser. (Kimberly vs. Henderson and Lupton,
29 Md., 512, 515
 It is clear from the foregoing authorities that, although the
present plaintiff 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.
 plaintiff cannot complaint of the defendant's conduct in
selling the property through another agent before the plaintiff's
efforts were crowned with success. "One who has employed a
broker can himself sell the property to a purchaser whom he
has procured
 The broker must be the efficient agent or the procuring
cause of sale. The means employed by him and his efforts
must result in the sale. He must find the purchaser, and the sale
must proceed from his efforts acting as broker.
(Wylie vs. Marine National Bank, 61 N. Y., 414; 416; citing:
McClure vs. Paine, 49 N. Y., 561; Lloyd vs. Mathews, 51 id.,
124
 the duty assumed by the broker is to bring the minds of the
buyer and seller to an agreement for a sale, and the price and
terms on which it is to be made, and until that is done his right
to commissions does not accrue. (McGavock vs. Woodlief
 It follows, as a necessary deduction from the established
rule, that a broker is never entitled to commissions for
unsuccessful efforts. The risk of a failure is wholly his. The
reward comes only with his success. That is the plain contract
and contemplation of the parties. The broker may devote his
time and labor, and expend his money with ever so much of
devotion to the interest of his employer, and yet if he fails, if
without effecting an agreement or accomplishing a bargain, he
abandons the effort, or his authority is fairly and in good faith
terminated, he gains no right to commissions. He loses the
labor and effort which was staked upon success. And in such
event it matters not that after his failure, and the termination of
his agency, what he has done proves of use and benefit to the
principal. In a multitude of cases that must necessarily result
 XPN: If the efforts of the broker are rendered a failure by
the fault of the employer; if capriciously he changes his mind

Domingo vs. Domingo, G.R.
L-30573, October 29, 1971
• Agustinos Recoletos vs. Lichauco,
G.R. 10934
Lim Chai Seng vs Trinidad, G.R. 16671,
March 30, 1921
Prudential Bank v CA, 223 SCRA 350
Cuison v CA, 227 SCRA 391
G.R. No. L-21601; December 28, 1968
NIELSON & COMPANY, INC.,
plaintiff-appellant,
vs.
LEPANTO CONSOLIDATED MINING
COMPANY, defendant-appellee.;
ZALDIVAR, J.:
OBLIGATIONS OF THE PRINCIPAL
An operating agreement was executed before World War II (on 30 January 1937)
between Nielson & Co. Inc. and the Lepanto Consolidated Mining Co. 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, for a period of 5 years. 
In the latter part of 1941, the parties agreed to renew the contract for another period of
5 years, but in the mean time, the Pacific War broke out in December 1941.
In January 1942 operation of the mining properties was disrupted on account of the
war. The mill, power plant, supplies on hand, equipment, concentrates on hand and
mines, were destroyed. The Japanese forces thereafter occupied the mining properties,
operated the mines during the continuance of the war.
After the mining properties were liberated from the Japanese forces, LEPANTO took
possession thereof and embarked in rebuilding and reconstructing the mines and mill.
On 26 June 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
after the purchaser, ready and willing, and consenting to the
prescribed terms, is produced; or if the latter declines to
complete the contract because of some defect of title in the
ownership of the seller, some unremoved incumbrance, some
defect which is the fault of the latter, then the broker does not
lose his commissions.
 no one can avail himself of the nonperformance of a
condition precedent, who has himself occasioned its
nonperformance
 Where no time for the continuance of the contract is fixed
by its terms either party is at liberty to terminate it at will,
subject only to the ordinary requirements of good faith
 right of the principal to terminate his authority is absolute
and unrestricted, except only that he may not do it in bad faith,
and as a mere device to escape the payment of the broker's
commissions
Contract of Agency v Contract of Lease of Services: Article
1709 of the Old Civil Code, defining contract of agency,
provides “By the contract of agency, one person binds himself
to render some service or do something for the account or at
the request of another."
Article 1544, defining contract of lease of service, provides "In
a lease of work or services, one of the parties binds himself to
make or construct something or to render a service to the other
for a price certain."
In both agency and lease of services one of the parties binds
himself to render some service to the other party. Agency,
however, is distinguished from lease of work or services in that
the basis of agency is representation, while in the lease of work
or services the basis is employment. The lessor of services does
not represent his employer, while the agent represents his
principal. Further, agency is a preparatory contract, as agency
"does not stop with the agency because the purpose is to enter
into other contracts."The most characteristic feature of an
agency relationship is the agent's power to bring about business
operating contract 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.
On 6 February 1958, NIELSON brought an action against LEPANTO to recover
certain sums of money representing damages allegedly suffered by the former in view
of the refusal of the latter to comply with the terms of a management contract.
The TC dismissed the complaint.
The SC reversed the decision. It held that the war suspended the contract by virtue of
the force majeure clause. And that the intention of the parties regarding the meaning
and usage concerning the force majeure clause meant the extension of the same for a
period equivalent to the suspension.
In this motion for reconsideration, LEPANTO advances a new theory. It now asserts
that the management contract in question is a contract of agency such that it has the
right to revoke and terminate the said contract, as it did terminate the same, under the
law of agency, and particularly pursuant to Article 1733 of the Old Civil Code (Article
1920 of the New Civil Code).
WON the management contract is a contract of agency or a contract of lease of
services.
relations between his principal and third persons. "The agent is
destined to execute juridical acts (creation, modification or
extinction of relations with third parties). Lease of services
contemplate only material (non-juridical) acts."
Neilson not executing juridical acts:
Herein, the principal and paramount undertaking of Nielson
under the management contract was the operation and
development of the mine and the operation of the mill. All the
other undertakings mentioned in the contract are necessary or
incidental to the principal undertaking. In the performance of
this principal undertaking Nielson was not in any way
executing juridical acts for Lepanto, destined to create, modify
or extinguish business relations between Lepanto and third
persons. In other words, in performing its principal undertaking
Nielson was not acting as an agent of Lepanto, in the sense that
the term agent is interpreted under the law of agency, but as
one who was performing material acts for an employer, for a
compensation.
Prior approval of LEPANTO required: It is true that the
management contract provides that Nielson would also act as
purchasing agent of supplies and enter into contracts regarding
the sale of mineral, but the contract also provides that Nielson
could not make any purchase, or sell the minerals, without the
prior approval of Lepanto. It is clear, therefore, that even in
these cases Nielson could not execute juridical acts which
would bind Lepanto without first securing the approval of
Lepanto. Nielson, then, was to act only as an intermediary, not
as an agent.
Detailed operating contract: The statements in the annual report
for 1936, and from the provision of paragraph XI of the
Management contract, that the employment by Lepanto of
Nielson to operate and manage its mines was principally in
consideration of the know-how and technical services that
Nielson offered Lepanto. The contract thus entered into
pursuant to the offer made by Nielson and accepted by Lepanto
was a "detailed operating contract". It was not a contract of
agency. Nowhere in the record is it shown that Lepanto
considered Nielson as its agent and that Lepanto terminated the
management contract because it had lost its trust and
confidence in Nielson.
Contract cannot be revoked at will: From the provision of
paragraph XI of the management contract, Lepanto could not

G.R. No. L-19265, May 29, 1964
MOISES SAN DIEGO, SR., petitioner,
vs.
ADELO NOMBRE and PEDRO
ESCANLAR, respondents.
ASSOCIATE JUSTICE JOSE MA.
PAREDES
On May 1, 1960, Nombre, in his capacity was judicial administrator of the intestate
estate subject of the Sp. Proc. stated above, leased one of the properties of the estate
(a fishpond identified as Lot No. 1617 of the cadastral survey of Kabankaban, Negros
Occidental), to Pedro Escanlar, the other respondent
The terms of the lease was for three (3) years, with a yearly rental of P3,000.00 to
expire on May 1, 1963, the transaction having been done, admittedly, without
previous authority or approval of the Court where the proceedings was pending.
On January 17, 1961, Nombre was removed as administrator by Order of the court
and one Sofronio Campillanos was appointed in his stead
The appeal on the Order of Nombre's removal is supposedly pending with the Court
of Appeals.
Respondent Escanlar was cited for contempt, allegedly for his refusal to surrender the
fishpond to the newly appointed administrator.
On March 20, 1961, Campillanos filed a motion asking for authority to execute a
lease contract of the same fishpond, in favor of petitioner herein, Moises San Diego,
Sr., for 5 years from 1961, at a yearly rental of P5,000.00.
Nombre, the deposed administrator, presented a written opposition to the motion of
Campillanos on April 11, 1964, pointing out that the fishpond had been leased by him
to Escanlar for 3 years, the period of which was going to expire on May 1, 1963.
the Court on April 8, 1961, in effect declared that the contract in favor of Escanlar
was null and void, for want of judicial authority and that unless he would offer the
same as or better conditions than the prospective lessee, San Diego, there was no
good reason why the motion for authority to lease the property to San Diego should
not be granted.
Nombre moved to reconsider the Order of April 8, stating that Escanlar was willing to
increase the rental of P5,000.00, but only after the termination of his original contract.
The motion for reconsideration was denied on April 24, 1961, the trial judge stating
that the contract in favor of Escanlar was executed in bad faith and was fraudulent
because of the imminence of Nombre's removal as administrator, one of the causes of
which was his indiscriminate pleasant, of the property with inadequate rentals.
a petition for Certiorari asking for the annulment of the Orders of April 8 and 24,
terminate the agreement at will. Lepanto could terminate or
cancel the agreement by giving notice of termination ninety
days in advance only in the event that Nielson should prosecute
in bad faith and not in accordance with approved mining
practice the operation and development of the mining
properties of Lepanto. Lepanto could not terminate the
agreement if Nielson should cease to prosecute the operation
and development of the mining properties by reason of acts of
God, strike and other causes beyond the control of Nielson.
The management contract in question is not revocable at the
will of Lepanto. It is not a contract of agency as defined in
Article 1709 of the old Civil Code, but a contract of lease of
services as defined in Article 1544 of the same Code. This
contract cannot be unilaterally revoked by Lepanto.
Dispositive: Lepanto to pay the appellant Nielson.
NO. The Court held that judicial administrators are not covered
by the provisions of Agency under the Civil Code.
It has been held that even in the absence of such special
powers, a contract or lease for more than 6 years is not entirely
invalid; it is invalid only in so far as it exceeds the six-year
limit (Enrique v. Watson Company, et al., 6 Phil. 84). 1
No such limitation on the power of a judicial administrator to
grant a lease of property placed under his custody is provided
for in the present law. Under Article 1647 of the present Civil
Code, it is only when the lease is to be recorded in the Registry
of Property that it cannot be instituted without special
authority. Thus, regardless of the period of lease, there is no
need of special authority unless the contract is to be recorded in
the Registry of Property. As to whether the contract in favor of
Escanlar is to be so recorded is not material to our inquiry.
Rule 85, Section 3, of the Rules of Court authorizes a judicial
administrator, among other things, to administer the estate of
the deceased not disposed of by will. Commenting on this
Section in the light of several Supreme Court decisions (Jocson
de Hilado v. Nava, 69 Phil. 1; Gamboa v. Gamboa, 68 Phil.
304; Ferraris v. Rodas, 65 Phil. 732; Rodriguez v. Borromeo,
43 Phil. 479
Under this provision, the executor or administrator has the
power of administering the estate of the deceased for purposes
of liquidation and distribution. He may, therefore, exercise all
acts of administration without special authority of the Court.
For instance, he may lease the property without securing
previously any permission from the court. And where the lease
has formally been entered into, the court cannot, in the same
1961 was presented by Nombre and Escanlar with the Court of Appeals. A Writ of
preliminary injunction was likewise prayed for to restrain the new administrator
Campillanos from possessing the fishpond and from executing a new lease contract
covering it; requiring him to return the possession thereof to Escanlar, plus damages
and attorney's fees in the amount of P10,000.00 and costs.
The Court of Appeals issued the injunctive writ and required respondents therein to
Answer. Campillanos insisted on the invalidity of the contract in favor of Escanlar;
the lower court alleged that it did not exactly annul or invalidate the lease in his
questioned orders but suggested merely that Escanlar "may file a separate ordinary
action in the Court of general jurisdiction."
Court of Appeals issued the injunctive writ and required respondents therein to
Answer
The Court of Appeals, in dismissing the petition for certiorari
The controlling issue in this case is the legality of the contract of lease entered into by
the former administrator Nombre, and Pedro Escanlar on May 1, 1960
WHETHER THE PROVISIONS OF THE NEW CIVIL CODE ON AGENCY
SHOULD APPLY TO JUDICIAL ADMINISTRATORS
proceeding, annul the same, to the prejudice of the lessee, over
whose person it had no jurisdiction. The proper remedy would
be a separate action by the administrator or the heirs to annul
the lease. ... .
The Rules of Court provide that —
An executor or administrator shall have the right to the
possession of the real as well as the personal estate of the
deceased so long as it is necessary for the payment of the debts
and the expenses of administration, and shall administer the
estate of the deceased not disposed of by his will. (Sec. 3, Rule
85, old Rules).
Lease has been considered an act of administration (Jocson v.
Nava; Gamboa v. Gamboa; Rodriguez v. Borromeo; Ferraris v.
Rodas, supra).
The Civil Code, on lease, provides:
If a lease is to be recorded in the Registry of Property, the
following persons cannot constitute the same without proper
authority, the husband with respect to the wife's paraphernal
real estate, the father or guardian as to the property of the
minor or ward, and the manager without special power. (Art.
1647).
The same Code, on Agency, states:
Special powers of attorneys are necessary in the following
cases:
(8) To lease any real property to another person for more than
one year. (Art. 1878)
While it may be admitted that the duties of a judicial
administrator and an agent (petitioner alleges that both act in
representative capacity), are in some respects, identical, the
provisions on agency (Art. 1878, C.C.), should not apply to a
judicial administrator. A judicial administrator is appointed by
the Court. He is not only the representative of said Court, but
also the heirs and creditors of the estate (Chua Tan v. Del
Rosario, 57 Phil. 411).
Judicial administrator before entering into his duties, is
required to file a bond. These circumstances are not true in case
of agency
The agent is only answerable to his principal. The protection
which the law gives the principal, in limiting the powers and
rights of an agent, stems from the fact that control by the
principal can only be thru agreements, whereas the acts of a
judicial administrator are SUBJECT TO SPECIFIC
PROVISIONS OF LAW AND ORDERS of the appointing
court
DECISION APPEALED FROM SHOULD BE, AS IT IS
HEREBY AFFIRMED, IN ALL RESPECTS, WITH COSTS

VICENTE M. DOMINGO, represented
by his heirs, ANTONINA RAYMUNDO
VDA. DE DOMINGO, RICARDO,
CESAR, AMELIA, VICENTE JR.,
SALVADOR, IRENE and JOSELITO,
all surnamed DOMINGO, petitioners-
appellants,
vs.
GREGORIO M. DOMINGO,
respondent-appellee, TEOFILO P.
PURISIMA, intervenor-respondent.
JUSTICE FELIX MAKASIAR
On June 2, 1956, VICENTE M. DOMINGO granted GREGORIO DOMINGO, a real
estate broker, the exclusive agency to sell his lot No. 883 of Piedad Estate with an
area of about 88,477 square meters at the rate of P2.00 per square meter (or for
P176,954.00) with a commission of 5% on the total price, if the property is sold by
Vicente or by anyone else during the 30-day duration of the agency or if the property
is sold by Vicente within three months from the termination of the agency to a
purchaser to whom it was submitted by Gregorio during the continuance of the
agency with notice to Vicente. The said agency contract was in triplicate, one copy
was given to Vicente, while the original and another copy were retained by Gregorio.
On June 3, 1956, Gregorio authorized the intervenor Teofilo P. Purisima to look for a
buyer, promising him one-half of the 5% commission
Thereafter, Teofilo Purisima introduced Oscar de Leon to Gregorio as a prospective
buyer.
After several conferences between Gregorio and Oscar de Leon, the latter raised his
offer to P109,000.00 on June 20, 1956 as evidenced by Exhibit "C", to which Vicente
agreed by signing Exhibit "C". Upon demand of Vicente, Oscar de Leon issued to him
a check in the amount of P1,000.00 as earnest money, after which Vicente advanced to
Gregorio the sum of P300.00. Oscar de Leon confirmed his former offer to pay for the
property at P1.20 per square meter in another letter, Exhibit "D". Subsequently,
Vicente asked for an additional amount of P1,000.00 as earnest money, which Oscar
de Leon promised to deliver to him. Thereafter, Exhibit "C" was amended to the effect
that Oscar de Leon will vacate on or about September 15, 1956 his house and lot at
Denver Street, Quezon City which is part of the purchase price. It was again amended
to the effect that Oscar will vacate his house and lot on December 1, 1956, because
his wife was on the family way and Vicente could stay in lot No. 883 of Piedad Estate
until June 1, 1957, in a document dated June 30, 1956 (the year 1957 therein is a mere
typographical error) and marked Exhibit "D". PURSUANT TO HIS PROMISE TO
GREGORIO, Oscar gave him as a gift or propina the sum of One Thousand Pesos
(P1,000.00) for succeeding in persuading Vicente to sell his lot at P1.20 per square
meter or a total in round figure of One Hundred Nine Thousand Pesos (P109,000.00).
This gift of One Thousand Pesos (P1,000.00) was not disclosed by Gregorio to
Vicente. Neither did Oscar pay Vicente the additional amount of One Thousand Pesos
(P1,000.00) by way of earnest money.
In the deed of sale was not executed on August 1, 1956 as stipulated in Exhibit "C"
nor on August 15, 1956 as extended by Vicente, Oscar told Gregorio that he did not
receive his money from his brother in the United States
Gregorio sensed something fishy. So, he went to Vicente and read a portion of Exhibit
"A" marked habit "A-1" to the effect that Vicente was still committed to pay him 5%
commission, if the sale is consummated within three months after the expiration of
the 30-day period of the exclusive agency in his favor from the execution of the
agency contract on June 2, 1956 to a purchaser brought by Gregorio to Vicente during
the said 30-day period
Gregorio proceeded to the office of the Register of Deeds of Quezon City, where he
discovered Exhibit "G' deed of sale executed on September 17, 1956 by Amparo Diaz,
wife of Oscar de Leon, over their house and lot No. 40 Denver Street, Cubao, Quezon
City, in favor Vicente as down payment by Oscar de Leon on the purchase price of
AGAINST PETITIONER MOISES SAN DIEGO, SR.
The Court held YES, in which in such case a violation in the
contract of agency.
The duties and liabilities of a broker to his employer are
essentially those which an agent owes to his principal.
Consequently, the decisive legal provisions are in found
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 less rigor by
the courts, according to whether the agency was or was not for
a compensation.
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.
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. By taking such profit or bonus or gift
Vicente's lot No. 883 of Piedad Estate
. Vicente stated that Gregorio is not entitled to the 5% commission because he sold the
property not to Gregorio's buyer, Oscar de Leon, but to another buyer, Amparo Diaz,
wife of Oscar de Leon.]
Court of Appeals found from the evidence that Exhibit "A", the exclusive agency
contract, is genuine; that Amparo Diaz, the vendee, being the wife of Oscar de Leon
the sale by Vicente of his property is practically a sale to Oscar de Leon since husband
and wife have common or identical interests; that Gregorio and intervenor Teofilo
Purisima were the efficient cause in the consummation of the sale in favor of the
spouses Oscar de Leon and Amparo Diaz;
WON the failure on the part of Gregorio to disclose to Vicente the payment to him by
Oscar de Leon of the amount of One Thousand Pesos (P1,000.00) as gift or "propina"
for having persuaded Vicente to reduce the purchase price from P2.00 to P1.20 per
square meter, so constitutes fraud as to cause a forfeiture of his commission on the
sale price
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.
The duty of a commission agent to render a full account his
operations to his principal was reiterated in Duhart, etc. vs.
Macias.
The American jurisprudence on this score is well-nigh
unanimous.
Where a principal has paid an agent or broker a commission
while ignorant of the fact that the latter has been unfaithful, the
principal may recover back the commission paid, since an
agent or broker who has been unfaithful is not entitled to any
compensation.
Parker vs. McKenna (1874) LR 10,Ch(Eng) 96,118 ... If the
agent does not conduct himself with entire fidelity towards his
principal, but is guilty of taking a secret profit or commission
in regard the matter in which he is employed, he loses his right
to compensation on the ground that he has taken a position
wholly inconsistent with that of agent for his employer, and
which gives his employer, upon discovering it, the right to treat
him so far as compensation, at least, is concerned as if no
agency had existed. This may operate to give to the principal
the benefit of valuable services rendered by the agent, but the
agent has only himself to blame for that result."
GENERAL RULE, it is a breach of good faith and loyalty to
his principal for an agent, while the agency exists, so to deal
with the subject matter thereof, or with information acquired
during the course of the agency, as to make a profit out of it for
himself in excess of his lawful compensation; and if he does so
he may be held as a trustee and may be compelled to account to
his principal for all profits, advantages, rights, or privileges
acquired by him in such dealings, whether in performance or in
violation of his duties, and be required to transfer them to his
principal upon being reimbursed for his expenditures for the
same, unless the principal has consented to or ratified the
transaction knowing that benefit or profit would accrue or had
accrued, to the agent, or unless with such knowledge he has
allowed the agent so as to change his condition that he cannot

LILY ELIZABETH BRAVO-
GUERRERO,
BEN MAURICIO P. BRAVO,1
ROLAND P. BRAVO, JR.,
OFELIA BRAVO-QUIESTAS and
CORPUSINIA BRAVO-NIOR to
include (6) (5 Sons and 1 daughter) of
her heirs (GERSON U. NIOR, MARK
GERRY B. NIOR, CLIFF RICHARD B.
NIOR, BRYAN B. NIOR, WIDMARK
B. NIOR, SHERRY ANNE B. NIOR,)
Lily Elizabeth Bravo-Guerrero
represented them as their Attorney-in-
fact,
VS
Fatima Bravo as attorney-in-fact of
Edward Bravo as respondent and David
Diaz Jr as intervenor-respondent
Spouses Mauricio and Simona Bravo owned properties of 2 parcels of land with 287
and 291 lot square meters in Evangelista St., Makati City. The properties contain a
large residential dwelling, a smaller house and other improvements.
Illustration:
Mauricio/Simona Bravo = had three children and they are Roland/+Cesar+/Lily Bravo
married David Diaz
Roland Bravo = also has (6) children namely Lily Elizabeth Bravo, Edward, Roland
Jr., Senia, Benjamin Mauricio Bravo and their half-sister Ofelia Bravo
Lily Bravo married David Diaz = David Diaz Jr
In 1966, Simona executed GPA (General Power of Attorney) appointed Mauricio as
her attorney-in-fact to “mortgage or dispose all of her properties” otherwise
hypothecate —: (to pledge as security without delivery of title or possession)
Mauricio mortgaged the properties to PNB for 10K and also to DBP for 5K
Mauricio sold the properties to Roland (son), Ofelia and Elizabeth Bravo
(grandchildren) as (vendees) by way of Deed of Sale with Assumption of Real Estate
Mortgage.
The sale was conditioned on the payment of 1K to include the assumption of the
mortgages over the properties of the PNB and DBP by the vendees.
However, the Deed of Sale was NOT annotated on Transfer Cetificate of Title Nos.
58999 and 59000. Neither was it presented to PNB and DBP.
Even after death of Mauricio in 1973, the mortgage loans together with the receipts
for loan payments issued by said banks still in his name. In 1977, his wife Simona
died
Fatima Bravo as attorney-in-fact in this case (wife of Edward) filed an action for the
judicial partition of the properties.
Edward together with the grandchildren of Spouses Mauricio and Simona claimed
that they are also co-owners of the Properties by succession
Lily Elizabeth Guerrero (daughter of Roland) as attorney-in-fact of the heirs of
Corpusinia refused to share with him the possession and rental income of the
be put in status quo.
In the case at bar, defendant-appellee Gregorio Domingo as the
broker, received a gift or propina in the amount of One
Thousand Pesos (P1,000.00) from the prospective buyer Oscar
de Leon, without the knowledge and consent of his principal,
herein petitioner-appellant Vicente Domingo. His acceptance of
said substantial monetary gift corrupted his duty to serve the
interests only of his principal and undermined his loyalty to his
principal, who gave him partial advance of Three Hundred
Pesos (P300.00) on his commission.
Contract of Agency
DEFINITION
By the contract of agency:
(1) A person binds himself to render some service or to do
something;
(2) In representation or on behalf of another;
(3) With the consent or authority of the latter (Principal) [Art.
1868]
General Power of Attorney vs. Special Power of Attorney
While a special power of attorney gives the agent authority for
a limited set of actions under a restricted set of circumstances
—such as buying or selling a home, withdrawing money from
an account, or running a business—a general power of attorney
is more broad.
A general power of attorney grants the agent the legal right to
make all financial and legal decisions on behalf of the
principal. An individual who will be out of the country for a
year may give an agent extensive powers to carry out
transactions such as personal and business financial
transactions, bill payments, life insurance purchases, charitable
donations, real estate management, and the filing of tax returns.
A special power of attorney is an instrument in writing by
which one person, as principal, appoints another as his agent
and confers upon him the authority to perform certain specified
acts or kinds of acts on behalf of the principal. The following
acts of strict dominion require special powers of attorney:
(1) To make such payments as are not usually considered as
acts of administration;
(2) To effect novations which put an end to obligations already
in existence at the time the agency was constituted;
(3) 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;
(4) To waive any obligation gratuitously;
properties.
Edward filed his complaint to annul the Deed of Sale
In 1944, David Jr, after death of his parents (Parents Lily Bravo and David Diaz Sr.)
moved to intervene the case and filed a complaint-in-intervention assailing the
validity of the Deed of Sale and claiming for the partition of the properties as heirs of
Spouses Mauricio and Simona
The RTC granted the intervention.
However, the RTC rendered judgment and ruled in favor of Lily Elizabeth Bravo-
Guerrero as attorney-in-fact for Roland, Ofelia and Elizabeth Bravo together with the
heirs of Corpusinia Bravo-Nior as petitioners
The RTC noted also the Deed of Sale was duly notarized and existing for many years
without questioning its validity
Thus, Respondents Edward and David Jr filed a joint appeal before the CA
The CA reversed the judgment of RTC declared the Deed of Sale void for lack of
consent from Simona. Also, that the GPA or the General Power of Attorney executed
by Simona was NOT SUFFICIENT to AUTHORIZE Mauricio to sell properties
considering that under the Civil Code it requires a SPECIAL POWER OF
ATTORNEY for such transactions and ordered the partition of the Properties
Hence, this petition
NOTE: 1/2 interest subject properties for Lily Bravo and David Diaz Jr
1/6 of the other half portion of the subject properties for Edward and the rest of the 5
siblings
ISSUES:
WON the sale of 2 parcels of land by Mauricio through General Power of Attorney is
valid? YES
Whether or NOT that the subject sale is VALID as to Mauricio’s share in the
properties
(5) To enter into any contract by which the ownership of an
immovable is transmitted or acquired either gratuitously or for
a valuable consideration;
(6) To make gifts, except customary ones for charity or those
made to employees in the business managed by the agent;
(7) To loan or borrow money, unless the latter act be urgent and
indispensable for the preservation of the things which are under
administration;
(8) To lease any real property to another person for more than
one year;
(9) To bind the principal to render some service without
compensation;
(10) To bind the principal in a contract of partnership;
(11) To obligate the principal as a guarantor or surety;
(12) To create or convey real rights over immovable property;
(13) To accept or repudiate an inheritance;
(14) To ratify or recognize obligations contracted before the
agency;
(15) Any other act of strict dominion
The requirement of special power of attorney refers to the
nature of the authorization, not to its form. Thus, 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 [BravoGuerrero v. Bravo (2005)]. A
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 [Veloso v. CA (1996)].
RULING: In this case, the SC ruled that the sale of 2 parcels of
land by Mauricio through General Power of Attorney is valid
and the petition is partly meritorious.
Under the New 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
(meaning it is VALID and it can be ratified only by the
principal) under the Civil Code – that is,
In this case, the GPA or the General Power of Attorney is
binding between Spouses Mauricio and Simona. However, it
can only be annulled by a competent court – and not void ab
initio.
As in this case, the remedies available if the wife fails to
exercise this right within the specified period. The wife or her
heirs can only demand the value of the property provided they
prove that the husband fraudulently alienated the property or if
the husband acted in bad faith through fraud, mistake or undue
influence. Therefore, they can assail the validity of the Deed of
Sale in a clear and convincing evidence.
In this case, only the wife can ask to annul a contract that
disposes of conjugal real property without her consent.
However, Simona died. Also, the wife must file the action for
annulment during the marriage and within ten years from the
questioned transaction. In this case, almost 20 years have
passed since the execution of the Deed of Sale. In addition,
Simona never assailed the validity of the Deed of Sale until her
death.
Moreover, the respondent Fatima Bravo as attorney in fact filed
an action to annul the Deed of Sale was file out of time
considering that the Marriage of Spouses Mauricio and Simona
was dissolved when Mauricio died in 1973.
Only Simona had the right to have the sale of the Properties
annulled on the ground that Mauricio sold the Properties
without her consent.
In this case, Simona authorized Mauricio to dispose of the
Properties when she executed the GPA. Under 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 held that it has clarified that Article 1878
refers to the nature and substance of the authorization, not to its
form.22 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.23

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.

G.R. No. 88539 October 26, 1993
KUE CUISON, doing business under
the firm name and style"KUE CUISON
PAPER SUPPLY," petitioner,
vs.
THE COURT OF APPEALS, VALIANT
INVESTMENT ASSOCIATES,
respondents.
Leighton R. Siazon for petitioner.
Melanio L. Zoreta for private
respondent.
BIDIN, J.:
This petition for review assails the decision of the respondent Court of Appeals
ordering petitioner (KUE CUISON) to pay private respondent, among others, the sum
of P297,482.30 with interest. Said decision reversed the appealed decision of the trial
court rendered in favor of petitioner.
The case involves an action for a sum of money filed by respondent against petitioner
anchored on the following antecedent facts:
FACTS
Petitioner Kue Cuison is a sole proprietorship engaged in the purchase and sale
(DOING BUSINESS OF BUY AND SELL) of newsprint, bond paper and scrap, with
places of business at Baesa, Quezon City, and Sto. Cristo, Binondo, Manila. Private
respondent Valiant Investment Associates, on the other hand, is a partnership duly
organized and existing under the laws of the Philippines with business address at
Kalookan City.
From December 4, 1979 to February 15, 1980, private respondent delivered various
kinds of paper products amounting to P297,487.30 to a certain Lilian Tan of LT
Trading. The deliveries were made by respondent pursuant to orders allegedly placed
by Tiu Huy Tiac who was then employed in the ( TO PETITIONER )IN Binondo
office of petitioner. It was likewise pursuant to Tiac's instructions that the
merchandise was delivered to Lilian Tan.
Upon delivery, Lilian Tan paid for the merchandise by issuing several checks payable
to cash at the specific request of Tiu Huy Tiac. In turn, Tiac issued nine (9) postdated
checks to private respondent as payment for the paper products. (but) Unfortunately,
the said checks were later dishonored by the drawee bank.
Thereafter, private respondent ( VALIANT INVESTMENT ASSOCIATES )made
several demands upon petitioner (KUE CUISON,) to pay for the merchandise in
question, claiming that Tiu Huy Tiac was duly authorized by petitioner as the manager
of his Binondo office, to enter into the questioned transactions with private
respondent and Lilian Tan. Petitioner denied any involvement in the transaction
entered into (made) by Tiu Huy Tiac and refused to pay private respondent the
(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 xxx" 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.
Therefore, the decision rendered by the CA was REVERSED.
The rendered decision of the RTC was REINSTATED.
The SC declared VALID the Deed of Sale with Assumption of
Mortgage with MODIFICATIONS
IT WAS HELD THAT THE PETITONER KUE CUISON IS
LIABLE TO PAY PRIVATE RESPONDENT
As to the merits of the case, it is a well-established rule that
one who clothes another with apparent authority as his agent
and holds him out to the public as such cannot be permitted to
deny the authority of such person to act as his agent, to the
prejudice of innocent third parties dealing with such person in
good faith and in the honest belief that he is what he appears to
be (Macke, et al, v. Camps, 7 Phil. 553 (1907]; Philippine
National Bank. v Court of Appeals, 94 SCRA 357 [1979]).
From the facts and the evidence on record, there is no doubt
that this rule obtains. The petition must therefore fail.
(So in this case ) It is evident from the records that by his own
acts and admission of the (petioner kue cusion), petitioner held
out Tiu Huy Tiac to the public as the manager of his store in
Sto. Cristo, Binondo, Manila. More particularly,(AND ALSO)
petitioner explicitly introduced Tiu Huy Tiac to Bernardino
Villanueva, respondent's manager, as his (petitioner's) branch
manager as testified to by Bernardino Villanueva. Secondly, (in
addition ) Lilian Tan, who has been doing business with
petitioner for quite a while, also testified that she knew Tiu
Huy Tiac to be the manager of petitioner's Sto. Cristo, Binondo
branch. This general perception of Tiu Huy Tiac as the manager
of petitioner's Sto. Cristo store is even made manifest by the
fact that, Tiu Huy Tiac is ALSO known in the community to be
the "kinakapatid" (godbrother) of petitioner. In fact, even
petitioner admitted his close relationship with Tiu Huy Tiac
when he said that they are "like brothers" (Rollo, p. 54). (SO)
There was thus no reason for anybody especially those

REPUBLIC OF THE PHILIPPINES,
represented by LT. GEN. JOSE M.
CALIMLIM, in his capacity as former
Chief of the Intelligence Service,
amount corresponding to the selling price of the subject merchandise.
Left with no recourse, private respondent filed an action against petitioner for the
collection of P297,487.30 representing the price of the merchandise. After due
hearing, the trial court dismissed the complaint against petitioner for lack of merit.
On appeal, however, the decision of the trial court was modified (THE DECISION),
but was in effect (WAS ALSO)reversed by the Court of Appeals, the dispositive
portion of which reads:
WHEREFORE, the decision appealed from is MODIFIED in that defendant-appellant
Kue Cuison is hereby ordered to pay plaintiff-appellant Valiant Investment Associates
the sum of P297,487.30 with 12% interest from the filing of the complaint until the
amount is fully paid, plus the sum of 7% of the total amount due as attorney's fees,
and to pay the costs. In all other respects, the decision appealed from is affirmed.
(Rollo, p. 55)
In this petition, petitioner contends that:
THE HONORABLE COURT ERRED IN FINDING TIU HUY TIAC AGENT OF
DEFENDANT-APPELLANT CONTRARY TO THE
UNDISPUTED/ESTABLISHED FACTS AND CIRCUMSTANCES.
THE HONORABLE COURT ERRED IN FINDING DEFENDANT-APPELLANT
LIABLE FOR AN OBLIGATION UNDISPUTEDLY BELONGING TO TIU HUY
TIAC.
THE HONORABLE COURT ERRED IN REVERSING THE WELL-FOUNDED
DECISION OF THE TRIAL COURT,
ISSUE
WON Tiu Huy Tiac possessed the required authority from petitioner (Kue Cuison)
sufficient to hold the latter liable for the disputed transaction.
Plaintiff Dante Legaspi (private res; owner of a land located in Bigte, Norzagaray,
Bulacan), through his Attorney-in-fact Paul Gutierrez, filed a complaint for
damages, with prayer for the issuance of a writ of preliminary injunction against
Defendants then Lt. Gen. Jose M. Calimlim et al. The Complaint alleged that
transacting business with petitioner to even doubt the authority
of Tiu Huy Tiac as his manager (OF THE PETIONER )in the
Sto. Cristo Binondo branch.
So with under ARTICLE 1911 of the new civil code provides
that. Even when the agent has exceeded his authority, the
principal is solidarily liable with the agent if the former
allowed the latter to act as though he had full powers.
This provision is intended to protect the rights of innocent
persons. In such a situation, both the principal and the agent
may be considered as joint tortfeasors whose liability is joint
and solidary.
(SO FROM THE petitioner’s own representations and
manifestations, and also from several demands made by the
respondent, it proved that the petitioner was aware of the
transaction made by manager tiac. SO IN THIS CASE TIAC
became an agent of petitioner by estoppel, AND admission or
representation is rendered conclusive upon the person making
it, and cannot be denied or disproved as against the person
relying thereon (Article 1431, Civil Code of the Philippines). A
party cannot be allowed to go back on his own acts and
representations to the prejudice of the other party who, in good
faith, relied upon them. Taken in this light,. petitioner is liable
for the transaction entered into by Tiac on his behalf. so, even
when the agent has exceeded his authority, the principal is
solidarily liable with the agent if the former allowed the latter
to fact as though he had full powers (Article 1911 Civil Code),
as in the case at bar.
Finally, although it may appear that Tiac defrauded his
principal (petitioner) in not turning over the proceeds of the
transaction to the latter, such fact cannot in any way relieve nor
exonerate petitioner of his liability to private respondent. For it
is an equitable maxim that as between two innocent parties, the
one who made it possible for the wrong to be done should be
the one to bear the resulting loss)
Inasmuch as the fundamental issue of the capacity or
incapacity of the purported agent Tiu Huy Tiac, has already
been resolved, the Court deems it unnecessary to resolve the
other peripheral issues raised by petitioner.
WHEREFORE, the instant petition in hereby DENIED for lack
of merit. Costs against petitioner
The Court held “NO”. The Contract of Agency has not been
validly revoked by Principal Legaspi.
Definition of “Agency” (Art. 1868); Parties in an Agency
 Armed Forces of the Philippines
(ISAFP), and former Commanding
General,
Presidential Security Group (PSG), and
MAJ. DAVID B. DICIANO, in his
capacity as an Officer of ISAFP and
former member of the PSG, petitioners,
vs.
HON. VICTORINO EVANGELISTA, in
his capacity as Presiding Judge,
Regional Trial Court, Branch 223,
Quezon City, and DANTE LEGASPI,
represented by his attorney-in-fact, Paul
Gutierrez, respondents
PUNO, J.
private respondent Legaspi is the owner of a land located in Bigte, Norzagaray,
Bulacan. In November 1999, petitioner Calimlim, representing the Republic of the
Philippines, and as then head of the Intelligence Service of the Armed Forces of
the Philippines and the Presidential Security Group, entered into a
Memorandum of Agreement (MOA) with one Ciriaco Reyes. The MOA granted
Reyes a permit to hunt for treasure in a land in Bigte, Norzagaray, Bulacan.
Petitioner Diciano signed the MOA as a witness. It was further alleged that
thereafter, Reyes, together with petitioners, started, digging, tunneling, and
blasting works on the said land of Legaspi. The complaint also alleged that
petitioner Calimlim assigned about 80 military personnel to guard the area and
encamp thereon to intimidate Legaspi and other occupants of the area from
going near the subject land. Previous thereto, February 15, 2000, Legaspi
executed a special power of attorney (SPA) appointing his nephew, private
respondent Gutierrez, as his attorney-in-fact..Based on records, “Gutierrez was
given by Legaspi, inter alia, the power: - to manage the treasure hunting
activities in the subject land; - to file any case against anyone who enters the land
without authority from Legaspi; - to engage the services of lawyers to carry out the
agency; and, - to dig for any treasure within the land and enter into agreements
relative thereto. It was likewise agreed upon that Gutierrez shall be entitled to
40% of whatever treasure may be found in the land. Pursuant to this authority and
to protect Legaspi’s land from the alleged illegal entry of petitioners, February 29,
2000, Gutierrez filed a case for damages and injunction against petitioners for
illegally entering Legaspi’s land. He hired the legal services of Atty. Homobono
Adaza, to prosecute the case for damages and injunction against [defendants who
were allegedly treasure hunting on Legaspi’s land, with 80 military personnel
detailed to guard and intimidate Legaspi’s group from going near the area of
operations]. As payment for legal services, Gutierrez agreed to assign to Atty.
Adaza 30% of Legaspi’s share in whatever treasure may be recovered in the
subject land.” Gutierrez then filed a case for damages and injunction against
petitioners for illegally entering Legaspi's land. Upon the filing of the complaint,
then Executive Judge Perlita J. Tria Tirona issued a 72-hour temporary
restraining order (TRO) against petitioners. The case was subsequently raffled
to the RTC of Quezon City, Branch 223, then presided by public respondent
Judge Victorino P. Evangelista. On March 2, 2000, respondent judge issued
another 72-hour TRO and a summary hearing for its extension was set on March
7, 2000.On a motion to dismiss, defendants cited the nullity of the complaint which
was filed by agent Gutierrez after his principal Legaspi subsequently executed a
Deed of Revocation, among others. - First, there is no real party-in-interest as the
SPA of Gutierrez to bring the suit was already revoked by Legaspi on March 7,
2000, as evidenced by a Deed of Revocation, and, - Second, Gutierrez failed to
establish that the alleged armed men guarding the area were acting on orders of
petitioners. The trial court denied the motion.
What is the transaction about?
In November 1999, petitioner Calimlim, representing the Republic of the Philippines,
and as then head of the Intelligence Service of the Armed Forces of the Philippines
and the Presidential Security Group, entered into a Memorandum of Agreement
(MOA) with one Ciriaco Reyes. The MOA granted Reyes a permit to hunt for treasure
Relationship
Under Article 1868 of Civil Code, a contract of agency is one
whereby “a person binds himself to render some service or
to do something in representation or on behalf of another,
with the consent or authority of the latter.
FIDUCIARY AND REVOCABLE
CONTRACT OF AGENCY IS GENERALLY
REVOCABLE AS IT IS A PERSONAL CONTRACT OF
REPRESENTATION BASED ON TRUST AND
CONFIDENCE REPOSED BY THE PRINCIPAL ON HIS
AGENT.
As the power of the agent to act depends on the will and
license of the principal he represents, the power of the
agent ceases when the will or permission is withdrawn by
the principal. Thus, generally, the agency may be revoked by
the principal at will.
Ruling
The contract of agency between principal Legaspi and agent
Gutierrez is not revocable at will. - “A contract of agency is
generally revocable as it is a personal contract of
representation based on trust and confidence reposed by
the principal on his agent. As the power of the agent to act
depends on the will and license of the principal he
represents, the power of the agent ceases when the will or
permission is withdrawn by the principal. Thus, generally, the
agency may be revoked by the principal at will.” - However,
an exception to the revocability of a contract of agency is
when it is COUPLED WITH INTEREST, i.e., if a bilateral
contract depends upon the agency. The reason for its
irrevocability is because the agency becomes part of
another obligation or agreement. It is not solely the rights
of the principal but also that of the agent and third persons
which are affected…” Here, the agency is coupled with
interest as a bilateral contract depends on it. “It is clear that
the treasure that may be found in the land is the subject matter
of the agency; that under the SPA, Gutierrez can enter into
contract for the legal services of Atty. Adaza; and, thus
Gutierrez and Atty. Adaza have an interest in the subject
matter of the agency, i.e., in the treasures that may be found
in the land. This bilateral contract depends on the agency and
thus renders it as one coupled with interest, irrevocable at the
sole will of the principal Legaspi. When an agency is
constituted as a clause in a bilateral contract, that is, when
the agency is inserted in another agreement, the agency
ceases to be revocable at the pleasure of the principal as the
agency shall now follow the condition of the bilateral

Topic: Extinguishment of Agency
G.R. No. L-18616March 31, 1964
VICENTE M.
COLEONGCO,Plaintiff-
appelant,vs.EDUARDO
V.CLAPAROLS,defendant-appellee
Principal:Claparols; Agent:Coleongco
in a land in Bigte, Norzagaray, Bulacan. Petitioner Diciano signed the MOA as a
witness. It was further alleged that thereafter, Reyes, together with petitioners, started,
digging, tunneling, and blasting works on the said land of Legaspi. (The complaint
also alleged that petitioner Calimlim assigned about 80 military personnel to guard
the area and encamp thereon to intimidate Legaspi and other occupants of the area
from going near the subject land. Basis for Claimed Agency February 15, 2000,
Legaspi executed a special power of attorney (SPA) Terms of Claimed Agency
Legaspi (owner of land) as principal executed a Special Power of Attorney (SPA)
in favor of his nephew Gutierrez. Based on records, “Gutierrez was given by
Legaspi, inter alia, the power: - to manage the treasure hunting activities in the
subject land; - to file any case against anyone who enters the land without
authority from Legaspi; - to engage the services of lawyers to carry out the agency;
and, to dig for any treasure within the land and enter into agreements relative thereto.
Legal Issues
WHETHER THE CONTRACT OF AGENCY BETWEEN LEGASPI AND
PRIVATE RESPONDENT GUTIERREZ HAS BEEN EFFECTIVELY
REVOKED BY LEGASPI.
1.Defendant Eduardo Claparols operated a nail factory named “Claparols Steel & Nail
Plant”. He needed someone to finance their imports of raw materials to make nails.
2.At first, Kho To agree to finance but Kho recommended plaintiff Coleongco to be
the financier instead.
3.Claparols agreed and a contract was perfected between them,stating that:
a. Coleongco would share the control of all the cash
b. All transactions should be jointly approved
c. Profits and losses would be shared on a 50-50 basis
4.Claparols then executed an SPA in favor of Coleongco,
authorizing Coleongco to represent Claparols and the factory;and to accept payments
and cash advances from dealers.
5.Around 3 years after, Claparols was surprised when a writ of execution to enforce
judgement was served against him by PNB, when he knows he had already submitted
plans to settle his account to PNB.
6.When Claparols talked to PNB, he found out that PNB issued such writ because
Coleongco has been writing letters to PNB,stating derogatory information against
Claparols (wala dawtalaga plano magbabayad si Claparols).
7.Fortunately, Claparols arranged matters with the bank and had the execution lifted.
8.Claparols, upon advice of lawyers, revoked the SPA. Claparols also asked auditors
to go over the books and records. It wasfound that Coleongco owed the factory P88K.
9.A revelation was then made by Romulo Agsam, factory superintendent, that
Coleongco proposed to Agsam that they should pour acid in the machinery to paralyze
the factory.
10.Claparols also found a letters between Coleongco and Kho To,stating that they
should take advantage of Claparols in order to own his factory in the future
11.COLEONGCO filed a suit against Claparols, charging him with breach of contract
and praying for P500K for damages. CLaparols counterclaimed the same.
12.CFI and CA found in favor of Claparols.
agreement. Consequently, the Deed of Revocation executed by
Legaspi has no effect. The authority of Gutierrez to file and
continue with the prosecution of the case at bar is
unaffected.”
When a contract of agency is at will, the principal may
compel the agent to return the document evidencing the
agency at any time. If the agency was constituted to
contract with specified persons, the revocation of the
agency does not prejudice the latter if they were not given
notice thereof.
Held: Yes! Claparols has the power.
1.The financing agreement itself already contained stipulations
to protect his interests and did not call for any SPA. But
assuming that SPA was made to protect his interest, his point
still cannot be sustained.
a.a power of attorney can be made irrevocable by contract only
in the sense that the principal may not recall it at his pleasure;
but coupled with interest or not,the authority certainly can be
revoked for a just cause, such as when the attorney-in-fact
betrays the interest of the principal, as happened in this case
irrevocability of the power of attorney may not be used to
shield acts in bad faith, breach of confidence, or betrayal of
trust, by the agent for that will mean that a power coupled with
an interest authorizes the agent to commit frauds against the
principal.
2.Clearly, Coleongco acted in bad faith, which is shown by the
letters he sent to PNB as well as his correspondence with Kho
To.
3.Coleongco said that he sent letters to PNB to secure the
factory from mal-administration of Claparols. But if that were
the case, he should have protested to Claparols first, which he
did not do. a.He also denies the letters to Kho To, as well as his
attempt to induce Agsam to damage machinery. However, all of
this has been proven and corroborated by Claparols evidence.
4.Coleongco also breached their contract. Instead of
contributing 50%, he only contributed 25%. He also initiated
transactions in behalf of Claparols, without Claparols’
knowledge.
5.Also, the books and records of the factory show that he failed
 13.Coleongco now argues that he should be awarded damages as the SPA was made to
protect his interest under the financing agreement and was one coupled with an
interest that Claparols has no legal power to revoke.
ISSUE:W/N CLAPAROLS HAD THE POWER TO REVOKE SPA
SEVERINO VS SEVERINO Fabiola Severino is a recognized natural daughter of the late Melencio Severino. She
filed an action to compel the defendant Guillermo Severino to convey to her four
parcels of land owned by her late father, or in default thereof to pay her the sum of
P800,000 in damages for wrongfully causing said land to be registered in his own
name.
During the lifetime of Melecio Severino the land was worked by the defendant,
Guillermo Severino, his brother, as administrator for and on behalf of Melecio. After
Melecio’s death, the defendant Guillermo Severino continued to occupy the land and
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.
In the cadastral proceedings the land in question was described as four separate lots.
Roque Hofileña, lawyer for Guillermo, filed answers claiming the lots mentioned as
the property of his client and that no opposition was presented in the proceedings to
the claims of Guillermo Severino.
The court therefore decreed the title in his favor, which at this time, the plaintiff
Fabiola Severino was a minor.
Issue:
Whether Guillermo can be compelled to convey the land to Fabiola, even if there is
already a title in Guillermo’s name.
to pay Claparols his half of the profits. And that he diverted
factory funds to his own benefit (he even bought to motor
vehicles with it).
CLAPAROLS WON. P81K +legal interest + P50K damages +
costs
DOCTRINE:
A power of attorney can be made irrevocable by contract only
in the sense that the principal may not recall it at his pleasure;
but coupled with interest or not,the authority certainly can be
revoked for a just cause, such as when the attorney-in-fact
betrays the interest of the principal.
Held:
Yes. The relations of an agent to his principal are fiduciary.
Guillermo’s position as agent 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. Whatever a trustee does for the
advantage of the trust estate inures to the benefit of the cestui
que trust.
RULING OF THE SC
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.
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.
The judgment of the trial court is in accordance with the facts
and the law. In order to prevent unnecessary delay and further
 litigation it may, however, be well to attach some additional
directions to its dipositive clauses. It will be observed that lots
Nos. 827, 828, and 834 of a total area of approximately 191
hectares, lie wholly within the area to be conveyed to the
plaintiff in intervention and these lots may, therefore, be so
conveyed without subdivision. The remaining 237 hectares to
be conveyed lie within the western part of lot No. 874 and
before a conveyance of this portion can be effected a
subdivision of that lot must be made and a technical description
of the portion to be conveyed, as well as of the remaining
portion of the lot, must be prepared. The subdivision shall be
made by an authorized surveyor and in accordance with the
provisions of Circular No. 31 of the General Land Registration
Office, and the subdivision and technical descriptions shall be
submitted to the Chief of that office for his approval. Within
thirty days after being notified of the approval of said
subdivision and technical descriptions, the defendant
Guillermo Severino shall execute good and sufficient deed or
deeds of conveyance in favor of the administratrix of the estate
of the deceased Melecio Severino for said lots Nos. 827, 828,
834, and the 237 hectares segregated from the western part of
lot No. 874 and shall deliver to the register of deeds his
duplicate certificates of title for all of the four lots in order that
said certificates may be cancelled and new certificates issued.
The cost of the subdivision and the fees of the register of deeds
will be paid by the plaintiff in intervention. It is so ordered
With these additional directions the judgment appealed from is
affirmed, with the costs against the appellant. The right of the
plaintiff Fabiola Severino to establish in the probate
proceedings of the estate of Melecio Severino her status as his
recognized natural child is reserved.