HEIRS OF TRANQUILINO LABISTE (petitioners) v.

HEIRS OF JOSE LABISTE (respondents)

G.R. NO. 162033 : May 8, 2009

Facts:
The late Epifanio Labiste, on his own and on behalf of his brothers and sisters, purchased
Lot No. 1054. Prior to the issuance of the deed of conveyance, Epifanio executed an Affidavit
affirming that he (one of Jose’s heirs) and Tranquilino (Jose’s brother) and petitioners'
predecessor-in-interest co-owned Lot No. 1054 since the money that was paid to the government
came from the two of them. Tranquilino and the heirs of Jose continued to hold the property jointly.
The lot was then divided. Half belonged to Epifanio, the other half to Tranquilino. On
October 1939, the heirs of Tranquilino (petitioners) purchased the one-half (1/2) interest of the
heirs of Jose (respondents) and took possession of the entire lot.
However, due to WWII, their homes were destroyed, and neither petitioners nor
respondents possess the lot. In 1993, respondents filed a petition for reconstitution of title over Lot
No. 1054. Petitioners opposed this but withdraw due to a compromise agreement where
petitioners will be allowed to file an action for reconveyance and to annotate a notice of lis
pendens. The reconstituted tile was issued in the name of Epifanio Labiste, and respondents did
not honor the agreement.
In 1995, petitioners filed a complaint for annulment of title seeking the reconveyance of
property. The RTC ruled in their favor holding that the Affidavit of Epifanio and the Calig-onan sa
Panagpalit were genuine and enforceable.
The CA reversed the RTC and held that petitioners' cause of action had prescribed for
the action must be brought within ten (10) years from the time the right of action accrues upon the
written contract which in this case was when petitioners' predecessors-in-interest lost possession
over the property after World War II. Also, the lapse of time to file the action constitutes neglect on
petitioners' part so the principle of laches is applicable. Petitioners filed a petition.

Issue:
Whether or not petitioners' cause of action has prescribed.

Ruling:
It has not.
The case involves an express trust.
The Affidavit of Epifanio is in the nature of a trust agreement. Epifanio affirmed that the
lot brought in his name was co-owned by him, as one of the heirs of Jose, and his uncle
Tranquilino. And by agreement, each of them has been in possession of half of the property.
Prescription and laches will run only from the time the express trust is repudiated.
For acquisitive prescription to bar the action of the beneficiary against the trustee it must be
shown that: (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster
of the cestui que trust; (b) such positive acts of repudiation have been made known to the cestui
que trust, and (c) the evidence thereon is clear and conclusive.
The rule requires a clear repudiation of the trust duly communicated to the beneficiary.
In this case, the only act that can be construed as repudiation was when respondents filed the
petition for reconstitution in October 1993. And since petitioners filed their complaint in January
1995, their cause of action has not yet prescribed, laches cannot be attributed to them.
However, petitioners can no longer recover half of the property sold to them by respondents
as evidenced by the Calig-onan sa Panagpalit. To recover it, petitioners should have filed an
action to compel respondents to execute a public deed of sale. Since the Calig-onan sa Panagpalit
was executed on 18 October 1939, the Old Civil Code applied and under it, action upon a written
contract must be filed within ten years. The Calig-onan sa Panagpalit was executed in 1939,
hence, any action arising from it has prescribed.
Petition is partly granted; petitioners are hereby DECLARED the absolute owners of one-
half of Lot No. 1054.
 ESTATE OF MARGARITA D. CABACUNGAN, REPRESENTED BY LUZ LAIGO-ALI,
(petitioner), vs. MARILOU LAIGO, PEDRO ROY LAIGO, STELLA BALAGOT AND SPOUSES
MARIO B. CAMPOS AND JULIA S. CAMPOS, (respondents).
G.R. No. 175073, August 15, 2011

Facts:

The complaint sought the annulment of real property sales, recovery of ownership, and
cancellation of tax declarations against respondents Marilou Laigo, Pedro Roy Laigo, Estella
Balagot, and the spouses Mario and Julia Campos.
Margarita initially owned three parcels of unregistered land. In 1968, she transferred the
properties to her son Roberto Laigo, Jr., allegedly to support his U.S. visa application. Roberto
later sold the properties to the respondents without Margarita's knowledge. Upon learning of the
sales in 1995, Margarita filed a complaint for annulment.
The trial court dismissed the complaint, stating that the 1968 transfer was a simple transfer
and no express trust existed. It argued that an implied or constructive trust was created but barred
recovery due to Margarita's inaction (laches) and the expiration of the ten-year prescriptive period.
The Court of Appeals affirmed the decision, citing laches and prescription. It held that
Margarita's cause of action accrued in 1968 and that the defense of innocent purchaser for value
applied to the buyers.
The petitioner, Margarita's estate, argues against the application of laches, emphasizing the
familial relationship. It disputes the finding of donation, asserts that the transfer was an
accommodation, and contends that prescription runs from Roberto's sale in 1992. The petitioner
also argues that the rule on innocent purchasers for value is not applicable to unregistered land.
Respondents maintain the Court of Appeals' ruling, asserting that the Affidavit of Transfer
effectively transferred the properties to Roberto. They argue against the existence of an unwritten
agreement and dispute the relevance of laches in the absence of a fiduciary relationship between
Margarita and the respondents.

Issue:

Whether there is an implied or constructive trust created between Margarita Cabacungan

and her son, Roberto Laigo, Jr., with respect to the transferred properties. (Yes)

Ruling:

The court acknowledges the merit of the petitioner's claim. The petitioner argues that an
implied trust exists regarding certain properties transferred to the respondent, Roberto Laigo. The
petitioner contends that the transfer was made for the specific purpose of supporting Roberto's
U.S. visa application, with the understanding that he would reconvey the properties after
accomplishing the purpose. The court emphasizes that implied trusts, such as constructive trusts
and resulting trusts, may arise by operation of law or based on equitable principles.
The court finds that the evidence presented by the petitioner, although not documentary, is
testimonial and supports the claim that the transfer was not meant to divest the petitioner of
ownership. The court disputes the Court of Appeals' conclusion that there was no evidence of an
implied trust, pointing to the credible testimony of witnesses who were present during the
execution of the Affidavit of Transfer.
The court rejects the respondents' arguments of good faith and the expiration of the
prescriptive period, emphasizing that the properties in question are unregistered lands. The court
applies the "trust pursuit rule," asserting that the petitioner, as the beneficiary of the implied trust,
has the right to pursue and recover the properties from the respondents. The court rules in favor of
the petitioner, directing the cancellation of tax declarations and nullifying the deeds of sale,
compelling the respondents to execute reconveyance in favor of the petitioner.
 Ocampo vs. Ocampo (G.R. No. 227894 / 2017 Jul 05)

Facts:
Brothers Jose S. Ocampo and Ricardo S. Ocampo, co-owners of a Manila property under TCT No.
36869, are in dispute. Ricardo alleges forgery in the property's transfer to Jose via an Extra-
Judicial Settlement with Waiver (ESW), leading to TCT No. 102822 issuance on November 24,
1970. The National Bureau of Investigation confirmed the forgery, resulting in legal action. Despite
forgery findings, Jose contends TCT No. 102822 became indefeasible one year post-issuance,
asserting prescription. He claims their parents executed a Deed of Donation Propter Nuptias,
justifying the transfer. Ricardo argues the property was conjugal, and Jose's title is based on a
void document.

Issue:
Whether the Court of Appeals erred in upholding the Regional Trial Court's findings on forgery,
implied trust, prescription, and the validity of the Torrens title.

Ruling:
The Court, affirming the lower courts, recognized the forgery through the NBI report, establishing
an implied trust. Despite Jose's prescription claim, the action for reconveyance based on the
implied trust was deemed not barred. The court treated it as an action for quieting of title due to
continuous possession, rejecting Jose's prescription argument. Emphasizing that the Torrens title
does not shield fraudulent acquisitions, the court upheld the validity of claims based on trust and
property rights, while also dismissing Jose's laches argument. The continuous efforts by Ricardo
to assert his rights through various legal actions were considered, and the court ordered the
partition of the property, cancelation of TCT No. 102822, and affirmed the co-ownership of the
parties.

Note:
Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of
any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective
but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to
said title, an action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to real property or any
interest therein.
Art. 477. The plaintiff must have legal or equitable title to, or interest in the real property which is
the subject-matter of the action. He need not be in possession of said property.

Philippine Stock Exchange vs. Litonjua, et. al.

Facts:
In April 1999, the Litonjua Group entered into a letter-agreement with Trendline Securities, Inc.
(Trendline) for the acquisition of an 85% majority equity in Trendline's membership seat in the
Philippine Stock Exchange (PSE). The PSE, through Atty. Almadro, accepted P19,000,000 as full
settlement of Trendline's outstanding obligations. The Litonjua Group delivered three checks to
PSE, representing an advance payment for the seat and settling Trendline's obligations. Despite
this, PSE failed to lift the suspension on Trendline's seat. The Litonjua Group, realizing the
impossibility of specific performance, requested PSE to reimburse the P19,000,000 with interest
and filed a Complaint for Collection of Sum of Money with Damages before the RTC Pasig.
PSE asserted that prior to its 2001 reorganization, it was a non-stock corporation with Trendline as
one of its 200 members. Trendline violated trading rules and failed to settle obligations, leading
PSE to assume Trendline's debt and suspend its trading privileges. During negotiations for the
sale of Trendline's seat, the Litonjua Group issued a letter-agreement without securing PSE's
consent. PSE received P19,000,000 as settlement, contending that the payment was from
Trendline and not the Litonjua Group. In its Answer Ad Cautelam, PSE argued that the Litonjua
Group's cause of action should be against Trendline, as the exchange was a non-party to the
letter agreement.

Issue:
W/N THE LITONJUA GROUP SHOULD BE REIMBURSED BY PSE – YES

Ruling:
The court addressed several key issues in its review of the case involving the Philippine Stock
Exchange (PSE), the Litonjua Group, and Trendline. Firstly, the court affirmed that PSE was not a
party to the letter-agreement between Trendline and the Litonjua Group due to the absence of a
board resolution authorizing such involvement. Consent in corporate matters is typically
manifested through a board resolution. Despite not being a party, the court invoked the principles
of unjust enrichment and estoppel, arguing that PSE, having benefited from the payment, should
return the money received.
Contrary to PSE's assertion that reimbursement should be sought from Trendline, the court
disagreed, stating that Litonjua Group is not a disinterested party and had the intention, from the
outset, to settle Trendline's obligation in consideration of acquiring a seat ownership. The court
held PSE liable to return the money based on unjust enrichment and estoppel principles.
The court further rejected PSE's argument that it had the right to accept the payment voluntarily
made by Litonjua Group, emphasizing the principles of unjust enrichment as outlined in the Civil
Code. Additionally, the court highlighted the doctrine of estoppel, noting that PSE's acceptance of
payment and participation in the transactions estopped it from claiming that Trendline still had
outstanding obligations.
Regarding exemplary damages, the court upheld the award, emphasizing PSE's continuous
refusal to return the money despite lacking a legal right to retain it. The court deemed PSE's
conduct as wanton, oppressive, and malevolent, justifying the award of exemplary damages.
Finally, the court addressed legal interest, applying the rate set by the Bangko Sentral ng Pilipinas.
The court affirmed the decision of the lower courts, with modifications, ordering PSE to pay the
Litonjua Group legal interest, exemplary damages, attorney's fees, and the cost of the suit.

People vs. Rosario Baladjay

Facts:
Baladjay was found guilty of Syndicated Estafa under Article 315 (2) (a) of the Revised
Penal Code in relation to Section 1 of Presidential Decree No. 1689. The case originated from an
Information dated August 6, 2003, accusing Baladjay and others of defrauding investors from May
2001 to October 2002 through false pretenses related to Multinational Telecom Investors
Corporation (Multitel). The prosecution presented witnesses who testified about investments,
promised returns, and subsequent losses when Multitel failed to deliver. Baladjay, the president of
Multitel, denied involvement. The Regional Trial Court (RTC) found her guilty, sentencing her to
life imprisonment and ordering restitution. The CA affirmed the decision with a modification in the
amount of moral damages. Baladjay appealed to the Supreme Court, contesting the sufficiency of
evidence to prove her guilt.
Issue:
Whether Rosario Baladjay, as the president of Multitel International Holdings, Inc. (MIHI),
can be held criminally liable for the actions of Multinational Telecom Investors Corporation
(Multitel). (Yes)

Ruling:
The elements of Syndicated Estafa, as specified in PD 1689, include committing estafa by a
syndicate consisting of five or more persons, with the defraudation resulting in the
misappropriation of funds. The modus operandi in this case resembles a Ponzi scheme, offering
high returns and using funds from new investors to pay earlier ones.

The court found that all elements of Syndicated Estafa were present, with Baladjay's active
involvement in Multitel's fraudulent scheme, where she falsely represented the authority to solicit
investments. The court rejected Baladjay's claim of separation from Multitel, as evidence showed
her direct connection, active participation, and signing of checks issued to investors. The court
affirmed the life imprisonment penalty, ordering Baladjay to pay actual damages to the victims with
interest and reduced moral damages. Alias warrants were issued for the arrest of other accused
individuals.

In conclusion, the Court affirmed the decision of the Court of Appeals with modifications, upholding
Baladjay's conviction for Syndicated Estafa and specifying the penalties and damages she is
required to pay to the victims.

Nenita Carganillo vs. People (G.R. No. 182424/2014 Sep 22)

Facts:

Teresita Lazaro, a rice trader... gave the petitioner the amount of P132,000.00 for the
purpose of buying palay. But if no palay is purchased and delivered on November 28, the
petitioner must return the P132,000.00 to Teresita. After failing to receive any palay or the
P132,000.00.Teresita made oral and written demands to the petitioner for the return of the
P132,000.00 She thus filed an affidavit-complaint for estafa petitioner pleaded not guilty to the
crime and denied that she entered into a "principal-agent" agreement with, and received the
P132,000.00 from, Teresita, she was made to sign a blank "Kasunduan" that reflected no written
date and amount.
RTC convicted the petitioner of the crime of estafa.
CA affirmed the petitioner's conviction.

Issues:

whether the CA erred in affirming (with modification) the judgment of conviction against her,
despite the prosecution's failure to prove her guilt of the crime of estafa beyond reasonable doubt.

Ruling:
Parole Evidence Rule... the petitioner alleges that the subject "Kasunduan" failed to express the
real agreement between her and Teresita; that theirs was a plain and simple loan agreement and
not that of a principal-agent relationship in the buy-and-sell of palay. The... documentary and
testimonial evidence presented by the petitioner, however, fail to support her claims.
The RTC found that the receipts presented by the petitioner to prove her loan obligation with
Teresita were vague, undated and unsigned. Also, the RTC observed that the witnesses who
testified that they saw the petitioner sign the "Kasunduan" were not even certain of the real
transaction between the petitioner and Teresita. These findings of fact and evidence, which were
affirmed by the CA, are accorded respect and finality by this Court. Where the factual findings of
the trial court are affirmed in toto by the Court of Appeals, there is great reason not to disturb
these findings and to regard them not reviewable by this Court.
Also, we cannot sustain the petitioner's claim that she had been the victim of a fraud because
Teresita deceived her into signing a blank document; that she signed the "Kasunduan," even if it
had no date and amount written on it, because Teresita led her to believe that the document would
be used merely for show purposes with the bank.
For fraud to vitiate consent, the deception employed must be the causal (dolo causante)
inducement to the making of the contract, and must be serious in character. It must be sufficient to
impress or lead an ordinarily prudent person into error, taking into account the circumstances of
each case.

In this case, we find no vitiated consent on the part of the petitioner. In her Memorandum to
this Court, she narrated that after she signed the "Kasunduan," Teresita subsequently made her
execute a deed of sale over her property, which deed she... refused to sign. This statement
negates the petitioner's self-serving allegation that she was tricked by Teresita into signing a blank
"Kasunduan," as she was fully aware of the possible implications of the act of signing a document.
WHEREFORE the Court affirmed the conviction, stating that all elements of estafa were
present. Carganillo received the money in trust for buying palay but failed to return it upon
demand, as stipulated. The "Kasunduan" was deemed credible evidence, and Carganillo's
defenses lacked support.

Principles:
Section 9, Rule 130 of the Rules of Court provides that a party to a written agreement may present
evidence to modify, explain or add to the terms of the agreement if he puts in issue in his pleading
the following:
(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;
(b) The failure of the written agreement to express the true intent and agreement of the parties
thereto;
(c) The validity of the written agreement; or
(d) The existence of other terms agreed to by the parties or their successors in interest after the
execution of the written agreement.

Article 315, paragraph 1(b) of the Revised Penal Code: the offense of estafa committed with
abuse of confidence requires the following elements
(a) that money, goods or other personal property is received by the offender in trust or on
commission, or for administration, or under any other obligation involving the duty to make delivery
of or to return the same
(b) that there be misappropriation or conversion of such money or property by the offender, or
denial on his part of such receipt

(c) that such misappropriation or conversion or denial is to the prejudice of another; and
(d) there is demand by the offended party to the offender.

INTERNATIONAL EXCHANGE BANK NOW UNION BANK OF PHILIPPINES v. SPS. JEROME,

GR No. 205657, 2017-03-29
Facts:
On July 2, 2003, Spouses Briones took out a loan of P3,789,216.00 from iBank to purchase a
BMW Z4 Roadster. The monthly amortization for two (2) years was P78,942.00. The Spouses
Briones executed a promissory note with chattel mortgage that required them to take out an
insurance policy on the vehicle. The promissory note also gave iBank, as the Spouses Briones'
attorney-in-fact, irrevocable authority to file an insurance claim in case of loss or damage to the
vehicle. The insurance proceeds were to be made payable to iBank. On November 5, 2003, at
about 10:50 p.m., the mortgaged BMW Z4 Roadster was carnapped by three (3) armed men in
front of Metrobank Banlat Branch in Tandang Sora, Quezon City. Jerome Briones (Jerome)
immediately reported the incident to the Philippine National Police Traffic Management Group. The
Spouses Briones declared the loss to iBank, which instructed them to continue paying the next
three (3) monthly installments "as a sign of good faith," a directive they complied with.
On March 26, 2004, or after the Spouses Briones finished paying the three (3)-month installment,
iBank sent them a letter demanding full payment of the lost vehicle. On April 30, 2004, the
Spouses Briones submitted a notice of claim with their insurance company, which denied the claim
on June 29, 2004 due to the delayed reporting of the lost vehicle. On May 14, 2004, iBank filed a
complaint for replevin and/or sum of money against the Spouses Briones and a person named
John Doe. The Complaint alleged that the Spouses Briones defaulted in paying the monthly
amortizations of the mortgaged vehicle. After no settlement was arrived at during the Pre-trial
Conference, the case was referred to Mediation and Judicial Dispute Resolution. However, the
parties still failed to agree on a compromise settlement. After pre-trial and trial on the merits, the
Regional Trial Court dismissed iBank's complaint. It ruled that as the duly constituted attorney-in-
fact of the Spouses Briones, iBank had the obligation to facilitate the filing of the notice of claim
and then to pursue the release of the insurance proceeds.
The Regional Trial Court's Decision was appealed by iBank to the Court of Appeals, which
dismissed.
Issues:
1. Whether an agency relationship existed between the parties
2. Whether the agency relationship was revoked or terminated
3. Whether petitioner is entitled to the return of the mortgaged vehicle or, in the alternative,
payment of the outstanding balance of the loan taken out for the mortgaged vehicle.
Ruling:
The Petition is devoid of merit.
In a contract of agency, "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." Furthermore,
Article 1884 of the Civil Code provides that "the agent is bound by his acceptance to carry out the
agency, and is liable for the damages which, through his non-performance, the principal may
suffer."
All the elements of agency exist in this case. Under the promissory note with chattel mortgage,
Spouses Briones appointed iBank as their attorney-in-fact, authorizing it to file a claim with the
insurance company if the mortgaged vehicle was lost or damaged. Petitioner was also authorized
to collect the insurance proceeds as the beneficiary of the insurance policy.
The determination of agency is ultimately factual in nature and this Court sees no reason to
reverse the findings of the Regional Trial Court and the Court of Appeals. They both found the
existence of an agency relationship between the Spouses Briones and iBank, based on the clear
wording of Sections 6 and 22 of the promissory note with chattel mortgage, which petitioner
prepared and respondents signed.
Petitioner asserts that the Spouses Briones effectively revoked the agency granted under the
promissory note when they filed a claim with the insurance company. Petitioner is mistaken.
Revocation as a form of extinguishing an agency under Article 1924 of the Civil Code only applies
in cases of incompatibility, such as when the principal disregards or bypasses the agent in order to
deal with a third person in a way that excludes the agent. In the case at bar, the mortgaged vehicle
was carnapped on November 5, 2003 and the Spouses Briones immediately informed petitioner
about the loss. The Spouses Briones continued paying the monthly installment for the next three
(3) months following the vehicle's loss to show their good faith.
However, on March 26, 2004, petitioner demanded full payment from Spouses Briones for the lost
vehicle. The Spouses Briones were thus constrained to file a claim for loss with the insurance
company on April 30, 2004, precisely because petitioner failed to do so despite being their agent
and being authorized to file a claim under the insurance policy. Not surprisingly, the insurance
company declined the claim for belated filing. The Spouses Briones' claim for loss cannot be seen
as an implied revocation of the agency or their way of excluding petitioner. They did not disregard
or bypass petitioner when they made an insurance claim; rather, they had no choice but to
personally do it because of their agent's negligence. This is not the implied termination or
revocation of an agency provided for under Article 1924 of the Civil Code.
In the promissory note with chattel mortgage, the Spouses Briones authorized petitioner to claim,
collect, and apply the insurance proceeds towards the full satisfaction of their loan if the
mortgaged vehicle were lost or damaged. Clearly, a bilateral contract existed between the parties,
making the agency irrevocable. Petitioner was also aware of the bilateral contract; thus, it included
the designation of an irrevocable agency in the promissory note with chattel mortgage that it
prepared for the Spouses Briones to sign.
Petitioner asserts that the insurance coverage is only an alternative available to the Spouses
Briones; and with the denial of the insurance claim, the Spouses Briones are obligated to pay the
remaining balance plus interest of the mortgaged vehicle. The petitioner is again mistaken. As the
agent, petitioner was mandated to look after the interests of the Spouses Briones. However,
instead of going after the insurance proceeds, as expected of it as the agent, petitioner opted to
claim the full amount from the Spouses Briones, disregard the established principal-agency
relationship, and put its own interests before those of its principal. The facts show that the
insurance policy was valid when the vehicle was lost, and that the insurance claim was only
denied because of the belated filing. Having been negligent in its duties as the duly constituted
agent, petitioner must be held liable for the damages suffered by the Spouses Briones because of
non-performance of its obligation as the agent, and because it prioritized its interests over that of
its principal. Furthermore, petitioner's bad faith was evident when it advised the Spouses Briones
to continue paying three (3) monthly installments after the loss, purportedly to show their good
faith. A principal and an agent enjoy a fiduciary relationship marked with trust and confidence,
therefore, the agent has the duty "to act in good faith [to advance] the interests of [its] principal." If
petitioner was indeed acting in good faith, it could have timely informed the Spouses Briones that it
was terminating the agency and its right to file an insurance claim, and could have advised them to
facilitate the insurance proceeds themselves. Petitioner's failure to do so only compounds its
negligence and underscores its bad faith. Thus, it will be inequitable now to compel the Spouses
Briones to pay the full amount of the lost property.

SPOUSES MAY S. VILLALUZ and JOHNNY VILLALUZ, JR., Petitioners vs. LAND BANK OF
THE PHILIPPINES and the REGISTER OF DEEDS FOR DAVAO CITY, Respondents

Facts:

In 1996, petitioner May Villaluz granted a Special Power of Attorney to her mother, Paula
Agbisit, allowing the use of their land as collateral for a loan needed by Milflores Cooperative.
Agbisit, in turn, appointed Milflores Cooperative as a substitute agent to secure a ₱3,000,000 loan
from Land Bank. The loan was secured by a Real Estate Mortgage executed on June 21, 1996.
Subsequently, Milflores Cooperative defaulted on its obligations, leading to the foreclosure of the
property.

Issue:

Whether or not Agbisit had the authority to appoint Milflores Cooperative as a substitute
agent, given the absence of an express prohibition in the Special Power of Attorney.

Ruling:

The Court applied Article 1892 of the Civil Code to determine the validity of Agbisit's
appointment of Milflores Cooperative as a substitute agent. Since the Special Power of Attorney
did not expressly prohibit such appointments, the Court affirmed the CA and RTC decisions,
holding the appointment to be valid. On the issue of the Real Estate Mortgage's validity, the Court
rejected the petitioners' argument that it was void due to the absence of a pre-existing loan. It
emphasized that the mortgage was conditioned on the release of the loan amount, which occurred
shortly after the mortgage's execution. Lastly, the Court dismissed the petitioners' claim that the
Deed of Assignment of Produce/Inventory extinguished the Special Power of Attorney, highlighting
that the assignment was intended as additional collateral and did not constitute payment for the
loan. The Court affirmed the CA and RTC decisions, emphasizing the principles of agency law,
particularly the presumption of an agent's authority to appoint a substitute and the responsibility of
the agent for the acts of the substitute.

CHERRY ANN M. BENABAYE, Petitioner vs. PEOPLE OF THE PHILIPPINES, Respondent.

G.R. No. 203466 February 25, 2015

Facts:
Petitioner Cherry Ann Benabaye (Benabaye) was the Loans Bookkeeper of Siam Bank Inc.
she was authorized to collect and/or accept loan payments of Siam Bank's clients and issue
provisional receipts, accomplish a cash transfer slip, and remit such payments to Jenkin U. Tupag
(Tupag), her supervisor.
In 2001, the Bank discovered non-remittance of some loan payments received from its
clients. She and Tupag were charged with estafa. The RTC found them guilty. This was affirmed
by the CA.

Issue:
Whether or not the CA erred in sustaining Benabaye's conviction for the crime of Estafa
through misappropriation.

Ruling:
Yes. Benabaye is a mere custodian only.
The first element of estafa which is “the offender's receipt of money, goods, or other
personal property in trust, or on commission, or for administration, or under any other obligation
involving the duty to deliver, or to return, the same,” was absent.
A sum of money received by an employee on behalf of an employer is considered to
be only in the material possession of the employee. So long as the juridical possession of the thing
appropriated did not pass to the employee-perpetrator, the offense committed remains to be theft,
qualified or otherwise. Hence, conversion of personal property in the case of an employee having
mere material possession of the said property constitutes theft, whereas in the case of an agent to
whom both material and juridical possession have been transferred, misappropriation of the same
property constitutes Estafa.
There is an essential distinction between the possession of a receiving teller of funds, and
an agent who receives the proceeds of sales of merchandise delivered to him in agency by his
principal. In the former case, payment by third persons to the teller is payment to the bank itself;
the teller is a mere custodian or keeper of the funds received, and has no independent right or title
to retain or possess the same as against the bank. An agent, on the other hand, can even assert,
as against his own principal, an independent, autonomous, right to retain the money or goods
received in consequence of the agency; as when the principal fails to reimburse him for advances,
he has made, and indemnify him for damages suffered without his fault.
Thus, being a mere custodian of the missing funds and not, in any manner, an agent who
could have asserted a right against Siam Bank over the same, Benabaye had only acquired
material and not juridical possession of such funds and consequently, cannot be convicted of the
crime of Estafa as charged.
The criminal charges against petitioner Cherry Ann M. Benabaye and her co-accused,
Jenkin U. Tupag are DISMISSED without prejudice.
 THE UNITED STATES, plaintiff-appellee, vs. EUSEBIO CLARIN, defendant-appellant.

Facts:

Pedro Larin gave P172 to Pedro Tarug, who, along with Eusebio Clarin and Carlos de Guzman,
engaged in buying and selling mangoes with the intention of sharing profits equally. Despite making P203
in the mango business, Tarug, Clarin, and Guzman did not fulfill the contract terms and failed to give Larin
his share. Larin accused them of estafa, but charges were only filed against Eusebio Clarin. The trial court
ruled that Larin's action was a civil matter related to partnership, not criminal estafa. The court acquitted
Eusebio Clarin and dismissed the estafa charge, emphasizing that Larin's remedy was a civil action for
partnership liquidation and recovery of his investment.

Issue:
Whether the failure of Pedro Tarug, Eusebio Clarin, and Carlos de Guzman to deliver Pedro
Larin's share of the profits constitutes a criminal offense of estafa or if it is a civil matter arising
from a breach of the partnership contract.

Ruling:
The court finds that the failure of Pedro Tarug, Eusebio Clarin, and Carlos de Guzman to
deliver Pedro Larin's share of the profits is not a criminal offense of estafa. Instead, the court
determines that it is a civil matter arising from a partnership contract. The court emphasizes that
when individuals form a partnership and contribute money with the intention of sharing profits, it
creates a contractual relationship. The ruling states that the appropriate action for Larin is a civil
lawsuit to recover his investment and pursue a liquidation of the partnership. As a result, Eusebio
Clarin is acquitted of the estafa charge, and the complaint is dismissed without prejudice to the
institution of a civil action by Larin.

Liwanag vs. CA (G.R. No. 114398 / 1997 Oct. 24)

Facts:
Petitioner Carmen Liwanag was charged with estafa for allegedly defrauding Isidora
Rosales. The accusation stemmed from a business arrangement where Rosales provided money
to Liwanag and another individual to buy and sell cigarettes, with a 40% commission for Rosales.
However, Liwanag was accused of misappropriating the funds for personal use. The trial court
found Liwanag guilty and imposed a prison sentence and restitution. The Court of Appeals
affirmed the decision, rejecting Liwanag's claims that the transaction was either a partnership or a
loan. The court emphasized that the funds were entrusted for a specific purpose, making Liwanag
liable for estafa. The decision was ultimately affirmed, with costs against Liwanag.

Issue:
Whether the business arrangement with Isidora Rosales, involving the purchase and sale of
cigarettes, was a partnership wherein Rosales contributed the funds, and Liwanag and another
individual acted as agents, with profits to be divided between them. (No)

Ruling:
The court rejected Liwanag's claim, emphasizing that even if a partnership existed, the specific
terms of the arrangement were outlined in a receipt. The receipt indicated that the money given to
Liwanag was for the specific purpose of purchasing cigarettes, and if the cigarettes could not be
sold, the money was to be returned to Rosales. Despite Liwanag's partnership argument, the court
concluded that misappropriating funds entrusted for a particular purpose constituted estafa, as the
fiduciary relationship between the parties was breached. The court upheld the conviction for
estafa, rejecting the partnership argument in light of the specific terms outlined in the receipt.

Tocao v. Court of Appeals

G.R. No. 127405, 4 October 2000

FACTS:
Petitioner seek to reverse the decision ordering them to pay the private respondent
damages, commissions, and to render an accounting of the partnership’s affairs.
She alleges that private respondent was a mere agent of the company, as there was no contract
of partnership, and as evidenced by her receiving commissions, such being the case she is not
entitled to ask for any audit of the partnership’s affairs.

ISSUE:
Were the petitioner’s allegations possessed of merit?

RULING:
No, they were void of any merit.
To be considered a juridical personality, a partnership must fulfill these requisites:
(1) two or more persons bind themselves to contribute money, property or industry to a common
fund; and
(2) intention on the part of the partners to divide the profits among themselves.15 It may be
constituted in any form; a public instrument is necessary only where immovable property or real
rights are contributed thereto.This implies that since a contract of partnership is consensual, an
oral contract of partnership is as good as a written one.
Petitioners admit that private respondent had the expertise to engage in the business of
distributorship of cookware.
Private respondent contributed such expertise to the partnership and hence, under the law, she
was the industrial or managing partner. It was through her reputation with the West Bend
Company that the partnership was able to open the business of distributorship of that company’s
cookware products; it was through the same efforts that the business was propelled to financial
success.
Petitioner Tocao herself admitted private respondent’s indispensable role in putting up the
business. By the set-up of the business, third persons were made to believe that a partnership had
indeed been forged between petitioners and private respondents.
The payment of commissions did not preclude the existence of the partnership inasmuch as such
practice is often resorted to in business circles as an impetus to bigger sales volume.
The right to choose with whom a person wishes to associate himself is the very foundation and
essence of that partnership. Its continued existence is, in turn, dependent on the constancy of that
mutual resolve, along with each partner’s capability to give it, and the absence of cause for
dissolution provided by the law itself. Verily, any one of the partners may, at his sole pleasure,
dictate a dissolution of the partnership at will. He must, however, act in good faith, not that the
attendance of bad faith can prevent the dissolution of the partnership but that it can result in a
liability for damages.
In this case, petitioner Tocao’s unilateral exclusion of private respondent from the partnership is
shown by her memo to the Cubao office plainly stating that private respondent was, as of October
9, 1987, no longer the vice-president for sales of Geminesse Enterprise.43 By that memo,
petitioner Tocao effected her own withdrawal from the partnership and considered herself as
having ceased to be associated with the partnership in the carrying on of the business.
Nevertheless, the partnership was not terminated thereby; it continues until the winding up of the
business.
The winding up of partnership affairs has not yet been undertaken by the partnership. This is
manifest in petitioners’ claim for stocks that had been entrusted to private respondent in the
pursuit of the partnership business. The determination of the amount of damages commensurate
with the factual findings upon which it is based is primarily the task of the trial court.

Saludo vs PNB

Facts:
Petitioner Aniceto G. Saludo, Jr. filed a petition, arguing that a law practice partnership,
established under Civil Code provisions, possesses legal personality separate from its partners.
The dispute involves a lease agreement between the law office and the Philippine National Bank
(PNB). PNB claims unpaid rent after the lease's expiration, while the law office contends it was
induced into the agreement and seeks a renegotiation. The court initially dismissed PNB's
counterclaims against the law office, stating it lacks legal entity status. The Court of Appeals
partially granted PNB's appeal, reinstating the counterclaims, asserting that the law office, despite
being a non-legal entity, can be sued under certain rules, and its involvement is crucial for
complete resolution of the case.

Issue:

Whether a law practice partnership, formed in accordance with the Civil Code provisions on
partnership, possesses legal personality separate from its individual partners.

Ruling:

In the given case, the court dismisses the petition, affirming that SAFA Law Office is indeed a
juridical entity and the actual party-in-interest in the lawsuit filed by Saludo against PNB. The
decision is based on a thorough analysis of the Civil Code provisions on partnerships, particularly
Articles 1767, 1771, and 1784. It emphasizes that SAFA Law Office was established as a
partnership, evident from the Articles of Partnership and subsequent SEC registration, defining the
roles of partners, profit-sharing, term, dissolution, and other partnership-related aspects.

Despite Saludo's claim that an MOU shifts liability to him, the court points out that this doesn't
change SAFA Law Office's nature as a partnership, citing Articles 1816 and 1817 regarding
partners' liability agreements.

Additionally, the court emphasizes that a partnership, under the Civil Code, gains a separate
juridical personality. The court rejects the argument that a law practice partnership isn't a legal
entity, disputing the reference to a prior case (Sycip case) and explaining that it was an obiter
dictum, not crucial to the case's decision. The court also contrasts Philippine law with American
law regarding partnerships' juridical personality.

Regarding the lawsuit, the court asserts that SAFA Law Office is the real party-in-interest and
should be joined as the plaintiff, as it's the entity primarily affected by the suit's outcome and holds
the liability under the contract with PNB. It highlights the subsidiary nature of partners' obligations
and directs the amendment of the complaint to include SAFA Law Office as the plaintiff in the
ongoing trial.

Ultimately, the court denies the petition and instructs Saludo to amend the complaint to include
SAFA Law Office as the real party-in-interest in the pending case before the Regional Trial Court
of Makati City, highlighting the urgency to proceed with the trial for a swift resolution of the matter.