2024 BAR REVIEW CIVIL LAW

Handout No. 24
AGENCY

NATURE, FORM, AND KINDS

By the 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.

By the contract of agency, a person binds himself to render some service or to do something in

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representation or on behalf of another, with the consent or authority of the latter. Agency may
be express, or implied from the acts of the principal, from his silence or lack of action, or his
failure to repudiate the agency, knowing that another person is acting on his behalf without

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authority. Acceptance by the agent may also be express, or implied from his acts which carry out
the agency, or from his silence or inaction according to the circumstances. A contract of agency
may be inferred from all the dealings between petitioner and respondent-spouses. The question

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of whether an agency has been created is ordinarily a question which may be established in the
same way as any other fact, either by direct or circumstantial evidence. The question is ultimately
one of intention. In this case, respondent-spouses communicated with petitioner as regards the
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purchase of the Las Piñas property and they remitted Three Million Pesos (P3,000,000.00) to
petitioner’s account for such purpose. For her part, petitioner made inquiries with the DOLE
Sheriff’s Office and even talked to the judgment creditor for the purchase of the said property.
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Also, she received Three Million Pesos (P3,000,000.00) from respondent-spouses to finalize the
transaction. Thus, it is beyond dispute that an implied agency existed between petitioner and
respondent-spouses for the purpose of purchasing the Las Piñas property. Gonzales-Saldana vs.
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Niamatali, 886 SCRA 479, G.R. No. 226587 November 21, 2018
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For a contract of agency to exist, the following requisites must concur, namely: (1) there must
be consent coming from persons or entities having the juridical capacity and capacity to act to
enter into such contract; (2) there must exist an object in the form of services to be undertaken
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by the agent in favor of the principal; and (3) there must be a cause or consideration for the
agency.

By the 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. For a contract
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of agency to exist, therefore, the following requisites must concur, namely: (1) there must be
consent coming from persons or entities having the juridical capacity and capacity to act to enter
into such contract; (2) there must exist an object in the form of services to be undertaken by the
agent in favor of the principal; and (3) there must be a cause or consideration for the agency.
Lopez vs. Court of Appeals, 876 SCRA 1, G.R. No. 163959 August 1, 2018

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 2024 BAR REVIEW CIVIL LAW
Handout No. 24
AGENCY

The relationship existing between principal and agent is a fiduciary one, demanding conditions
of trust and confidence.

The provision is clear that an agent is bound to carry out the agency. The relationship existing
between principal and agent is a fiduciary one, demanding conditions of trust and confidence. It
is the duty of the agent to act in good faith for the advancement of the interests of the principal.
In this case, BPI had the obligation to carry out the agency by informing the beneficiary, who
appeared before BPI to withdraw funds of the insured who was BPI’s depositor, not only of the

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existence of the insurance contract but also the accompanying terms and conditions of the
insurance policy in order for the beneficiary to be able to properly and timely claim the benefit.
Bank of the Philippine Islands vs. Laingo, 787 SCRA 541, G.R. No. 205206 March 16, 2016

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There is a rationale in the contract of agency, which flows from the “doctrine of

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representation,” that notice to the agent is notice to the principal.

There is a rationale in the contract of agency, which flows from the “doctrine of representation,”
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that notice to the agent is notice to the principal. Here, BPI had been informed of Rheozel’s death
by the latter’s family. Since BPI is the agent of FGU Insurance, then such notice of death to BPI is
considered as notice to FGU Insurance as well. FGU Insurance cannot now justify the denial of a
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beneficiary’s insurance claim for being filed out of time when notice of death had been
communicated to its agent within a few days after the death of the depositor-insured. In short,
there was timely notice of Rheozel’s death given to FGU Insurance within three months from
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Rheozel’s death as required by the insurance company. Bank of the Philippine Islands vs. Laingo,
787 SCRA 541, G.R. No. 205206 March 16, 2016
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Article 1317 of the Civil Code provides that no person could contract in the name of another
without being authorized by the latter, or unless he had by law a right to represent him; the
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contract entered into in the name of another by one who has no authority or legal
representation, or who has acted beyond his powers, is 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.
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Article 1317 of the Civil Code provides that no person could contract in the name of another
without being authorized by the latter, or unless he had by law a right to represent him; the
contract entered into in the name of another by one who has no authority or legal
representation, or who has acted beyond his powers, is 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. But the conveyance by Julian through the Deed had full force and
effect with respect to his share of 1/22 of the entire property consisting of 546 square meters by
virtue of its being a voluntary disposition of property on his part. Mactan Cebu International

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 2024 BAR REVIEW CIVIL LAW
Handout No. 24
AGENCY

Airport Authority (MCIAA) vs. Heirs of Gavina Ijordan, 778 SCRA 250, G.R. No. 173140 January
11, 2016

The general principles of agency govern the relationship between a corporation and its
representatives.

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The general principles of agency govern the relationship between a corporation and its
representatives. Article 1317 of the Civil Code similarly provides that the principal must delegate
the necessary authority before anyone can act on his or her behalf. Nonetheless, law and

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jurisprudence recognize actual authority and apparent authority as the two (2) types of
authorities conferred upon a corporate officer or agent in dealing with third persons. Actual
authority can either be express or implied. Express actual authority refers to the power delegated

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to the agent by the corporation, while an agent’s implied authority can be measured by his or
her prior acts which have been ratified by the corporation or whose benefits have been accepted
by the corporation. Calubad vs. Ricarcen Development Corporation, 838 SCRA 303, G.R. No.
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202364 August 30, 2017
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The basis of agency is representation and the same may be constituted expressly or impliedly.
In an implied agency, the principal can be bound by the acts of the implied agent. The same is
true with an oral agency.
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The basis of agency is representation and the same may be constituted expressly or impliedly. In
an implied agency, the principal can be bound by the acts of the implied agent. The same is true
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with an oral agency. Acting for and in petitioner’s behalf by virtue of the implied or oral agency,
Ong was thus able to sell the vehicle to Chua, but he failed to remit the proceeds thereof to
petitioner; his guarantee checks bounced as well. This entitled petitioner to sue for estafa
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through abuse of confidence. This is exactly what petitioner did: on May 18, 2011, he filed a
complaint for estafa and carnapping against Ong before the Quezon City Prosecutor’s Office.
Since Ong was able to sell the subject vehicle to Chua, petitioner thus ceased to be the owner
thereof. Nor is he entitled to the possession of the vehicle; together with his ownership,
petitioner lost his right of possession over the vehicle. His argument that respondent is a buyer
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in bad faith, when the latter nonetheless proceeded with the purchase and registration of the
vehicle on March 7, 2011, despite having been apprised of petitioner’s earlier November, 2010
“Failed to Return Vehicle” report filed with the PNP-HPG, is unavailing. Petitioner had no right to
file said report, as he was no longer the owner of the vehicle at the time; indeed, his right of
action is only against Ong, for collection of the proceeds of the sale. Siy vs. Tomlin, 824 SCRA
106, G.R. No. 205998 April 24, 2017

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 2024 BAR REVIEW CIVIL LAW
Handout No. 24
AGENCY

Article 1317 of the Civil Code provides that no person could contract in the name of another
without being authorized by the latter, or unless he had by law a right to represent him; the
contract entered into in the name of another by one who has no authority or legal
representation, or who has acted beyond his powers, is 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.

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But the conveyance by Julian through the Deed had full force and effect with respect to his share
of 1/22 of the entire property consisting of 546 square meters by virtue of its being a voluntary

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disposition of property on his part. Mactan Cebu International Airport Authority (MCIAA) vs.
Heirs of Gavina Ijordan, 778 SCRA 250, G.R. No. 173140 January 11, 2016

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Agency can be express or implied from the acts of the principal, from his silence or lack of action,
or his failure to repudiate the agency knowing that another person is acting on his behalf
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without authority.

A contract of agency may be inferred from all the dealings between Oliver and Castro. Agency
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can be express or implied from the acts of the principal, from his silence or lack of action, or his
failure to repudiate the agency knowing that another person is acting on his behalf without
authority. The question of whether an agency has been created is ordinarily a question which
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may be established in the same way as any other fact, either by direct or circumstantial evidence.
The question is ultimately one of intention. Oliver vs. Philippine Savings Bank, 788 SCRA 189,
G.R. No. 214567 April 4, 2016
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Agency is not presumed. Proving its existence, nature, and extent is incumbent upon the person
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alleging it.

In Bordador vs. Luz, this Court stated that “a person dealing with an agent is put upon inquiry
and must discover upon [their] peril the authority of the agent.” They must demand a written
authority from the principal, lest it would be grossly and inexcusably negligent for such third party
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to enter into a contract with such agent. Thus, a third party must determine the nature and extent
of authority of a purported agent to bind a principal. Failure to do so constitutes negligence.
Accordingly, they cannot enforce the contract against the ostensible principal. Navotas Industrial
Corporation vs. Alberto C. Guanzon, G.R. No. 230931, November 15, 2021; Jusayan vs. Sombilla,
751 Phil. 109 (2015); Bordador vs. Luz, 347 Phil. 654 (1997)

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 2024 BAR REVIEW CIVIL LAW
Handout No. 24
AGENCY

Promoter’s contracts or pre-incorporation contracts are governed by the law on agency.

Under corporate law, contracts entered, prior corporate existence, by its representatives “have
binding effects depending on the prevailing circumstances.” Among which is “where a contract
is entered into with the parties knowing fully well that a corporation does not yet legally exist,”
particularly a corporation yet to be registered or still in the process of registration. These
contracts are entered into in the name of the intended corporation by the “promoters” or
organizers of the corporation to establish the corporate business enterprise. Contracts of this

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nature are known as promoter’s contracts or pre-incorporation contracts which are governed by
the Law on Agency. Applying the pertinent provisions of agency in the Civil Code of the
Philippines, Article 1897 of the law explicitly provides that “an agent who acts as such is not

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personally liable to the party with whom he contracts, unless he expressly binds himself or
exceeds the limits of his authority without giving such party sufficient notice of his powers.”
Eliseo N. Hao vs. Emerlinda S. Galang, G.R. No. 247472, October 6, 2021

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The principle of ratification is essential in making every pre-incorporation contract valid and
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binding against the newly created corporation, since the third-party knowingly entered into
the contract at the time the corporate party did not yet exist to so authorize a representative.
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The contract of lease between the parties is clearly a pre-incorporation contract, wherein the
“representative of a corporation in the process of incorporation binds oneself to ensure that the
corporation, once formed, will ratify the contract entered in its name. The representative
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becomes personally liable for such contract in the event that the corporation does not so ratify
it once it comes into existence.” Article 1898 and Article 1901 of the Civil Code of the Philippines
demonstrates the effects of the principal’s ratification or non-ratification of the acts of the agent.
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Relatedly, the “principle of ratification is essential in making every pre-incorporation contract

valid and binding against the newly created corporation, since the third-party knowingly entered
into the contract at the time the corporate party did not yet exist to so authorize a
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representative.” Eliseo N. Hao vs. Emerlinda S. Galang, G.R. No. 247472, October 6, 2021

When the sale of a piece of land or any interest thereon is through an agent, the authority of
the latter shall be in writing; otherwise, the sale shall be void.
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The significance of requiring the authority of an agent to be put into writing was amplified in
Dizon vs. Court of Appeals, 396 SCRA 151 (2003): When the sale of a piece of land or any interest
thereon is through an agent, the authority of the latter shall be in writing; otherwise, the sale
shall be void. Thus the authority of an agent to execute a contract for the sale of real estate must
be conferred in writing and must give him specific authority, either to conduct the general
business of the principal or to execute a binding contract containing terms and conditions which
are in the contract he did execute. A special power of attorney is necessary to enter into any

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 2024 BAR REVIEW CIVIL LAW
Handout No. 24
AGENCY

contract by which the ownership of an immovable is transmitted or acquired either gratuitously

or for a valuable consideration. The express mandate required by law to enable an appointee of
an agency (couched) in general terms to sell must be one that expressly mentions a sale or that
includes a sale as a necessary ingredient of the act mentioned. For the principal to confer the
right upon an agent to sell real estate, a power of attorney must so express the powers of the
agent in clear and unmistakable language. When there is any reasonable doubt that the language
so used conveys such power, no such construction shall be given the document. Mactan-Cebu
International Airport Authority vs. Unchuan, 791 SCRA 581, G.R. No. 182537 June 1, 2016

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Article 1878 of the Civil Code requires a Special Power of Attorney (SPA) in cases where real

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rights over immovable property are created or conveyed.

Article 1878 of the Civil Code requires an SPA in cases where real rights over immovable property

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are created or conveyed. Here, the SPAs specifically authorized Roberto to “offer as collateral”
to SMC the subject properties, to wit: To offer as collateral, security or property bond with [SMC]
a parcel of land located at Las Piñas City containing an area of ___ square meters and all
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improvements thereon and covered by TCT No. ____. HEREBY GIVING AND GRANTING unto
my/our said Attorney-in-Fact full power and authority whatsoever requisite necessary to be done
in and about the premises as fully to all intents and purposes as I/WE might or could lawfully do
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if personally present and acting; and HEREBY RATIFYING AND CONFIRMING all that my/our
Attorney-in-Fact shall lawfully do or cause to be done under and by virtue of these presents. San
Miguel Corporation vs. Vda. de Trinidad, 945 SCRA 282 , G.R. No. 237506 July 28, 2020
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Whether the party to the sale of a real property is a natural or a juridical person, as long as it
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is entered into by someone other than its registered owner, the written authority of the party’s
representative is an explicit requirement to the validity of the sale itself.
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It should be further borne in mind that when the sale of a piece of land, or any interest therein,
is made through an agent (such as Jimmy in this case), the grant of authority must be in writing,
otherwise, the sale itself is void. The grant of power to the agent must also be expressly stated
in clear and unmistakable language; otherwise, only acts of administration are deemed
conferred. As previously mentioned, a corporation grants authority to its representative through
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its board of directors, which issues a board resolution relative to the appointment of an agent.
The corporate secretary then certifies this board resolution under oath, pursuant to Article
1358(1) of the Civil Code. Accordingly, whether the party to the sale of a real property is a natural
or a juridical person, as long as it is entered into by someone other than its registered owner, the
written authority of the party’s representative is an explicit requirement to the validity of the
sale itself. While the Register of Deeds is not required to inquire into the intrinsic validity of the
transaction and should, as a matter of course, record the instrument presented for registration,
this ministerial duty is subject to the condition that all the requisites for registration are present.

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 2024 BAR REVIEW CIVIL LAW
Handout No. 24
AGENCY

In the absence of a prescribed requirement, the Register of Deeds acts in excess of their authority
should they proceed to register the instrument. Lim vs. People, 862 SCRA 405, G.R. No. 226590
April 23, 2018

When the sale of a piece of land or any interest thereon is through an agent, the authority of
the latter shall be in writing; otherwise, the sale shall be void.

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The significance of requiring the authority of an agent to be put into writing was amplified in
Dizon v. Court of Appeals, 396 SCRA 151 (2003): When the sale of a piece of land or any interest
thereon is through an agent, the authority of the latter shall be in writing; otherwise, the sale

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shall be void. Thus the authority of an agent to execute a contract for the sale of real estate must
be conferred in writing and must give him specific authority, either to conduct the general
business of the principal or to execute a binding contract containing terms and conditions which

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are in the contract he did execute. A special power of attorney is necessary to enter into any
contract by which the ownership of an immovable is transmitted or acquired either gratuitously
or for a valuable consideration. The express mandate required by law to enable an appointee of
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an agency (couched) in general terms to sell must be one that expressly mentions a sale or that
includes a sale as a necessary ingredient of the act mentioned. For the principal to confer the
right upon an agent to sell real estate, a power of attorney must so express the powers of the
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agent in clear and unmistakable language. When there is any reasonable doubt that the language
so used conveys such power, no such construction shall be given the document. Mactan-Cebu
International Airport Authority vs. Unchuan, 791 SCRA 581, G.R. No. 182537 June 1, 2016
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Laches will not set in against a void transaction where the agent did not have a special power
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of attorney (SPA) to dispose of the lots co-owned by the other registered owners.

The rule is that a void contract produces no effect either against or in favor of anyone and cannot
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be ratified. Similarly, laches will not set in against a void transaction, as in this case, where the
agent did not have a special power of attorney to dispose of the lots co-owned by the other
registered owners. In fact, Article 1410 of the Civil Code specifically provides that an action to
declare the inexistence of a void contract does not prescribe. The transaction entered into by
Atanacio and CAA, however, was not entirely void because the lack of consent by the other co-
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owners in the sale was with respect to their shares only. Article 493 of the New Civil Code
expressly provides: Art. 493. Each co-owner shall have the full ownership of his part and the fruits
and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when personal rights are involved. But the
effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the
portion which may be allotted to him in the division upon the termination of the co-ownership.
Mactan-Cebu International Airport Authority vs. Unchuan, 791 SCRA 581, G.R. No. 182537 June
1, 2016

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 2024 BAR REVIEW CIVIL LAW
Handout No. 24
AGENCY

An agent must possess a special power of attorney (SPA) if he intends to borrow money in his
principal’s behalf, to bind him as a guarantor or surety, or to create or convey real rights over
immovable property, including real estate mortgages.

In general, an agency may be express or implied. However, an agent must possess a special power
of attorney if he intends to borrow money in his principal’s behalf, to bind him as a guarantor or
surety, or to create or convey real rights over immovable property, including real estate
mortgages. While the special power of attorney may be either oral or written, the authority given

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must be express. In other words, there must be “a clear mandate from the principal specifically
authorizing the performance of the act,” not merely overt acts from which an agency may be
inferred. Consequently, the agent’s “authority must be duly established by competent and

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convincing evidence other than the self serving assertion of the party claiming that such authority
was verbally given.” Philippine International Trading Corporation vs. Threshold Pacific
Corporation, 881 SCRA 609, G.R. No. 209119 October 3, 2018

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For the purpose of borrowing money, the agent’s authority must be direct, categorical, and
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cannot be lightly implied.

Verily, respondents TPC and Cuales also presented documentary evidence, i.e., ASPAI’s
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postdated checks and real estate mortgages executed to secure the loan, reimbursements made
by PITC to TPC for storage and delivery expenses incurred by the latter, LandBank Letter of Credit
issued directly in the name of ASPAI’s supplier, ASPAI’s certification acknowledging its receipt of
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the loan proceeds, receipts of fertilizer purchases submitted by ASPAI to PITC, PITC demand
letters directly sent to ASPAI, criminal complaint for the violation of Batas Pambansa Blg. 22 filed
by PITC against ASPAI to show that ASPAI is the real client and TPC is merely its agent. However,
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none of these demonstrate an express and direct order from ASPAI authorizing respondents TPC
and Cuales to enter into the loan. For the purpose of borrowing money, the agent’s authority
must be direct, categorical, and cannot be lightly implied. Philippine International Trading
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Corporation vs. Threshold Pacific Corporation, 881 SCRA 609, G.R. No. 209119 October 3, 2018

For the principle of apparent authority to apply, the petitioner was burdened to prove the
following: (a) the acts of the respondent justifying belief in the agency by the petitioner; (b)
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knowledge thereof by the respondent which is sought to be held; and (c) reliance thereon by
the petitioner consistent with ordinary care and prudence.

Assuming that Roberto exceeded the limits of his authority under the SPA and such unauthorized
acts were not ratified by Gemma and Trinidad, et al., the latter are still bound by the mortgages
entered by Roberto under the doctrine of apparent authority. As explained in Woodchild
Holdings, Inc. v. Roxas Electric and Construction Co., Inc., 436 SCRA 235 (2004): It bears stressing
that apparent authority is based on estoppel and can arise from two instances: first, the principal

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may knowingly permit the agent to so hold himself out as having such authority, and in this way,
the principal becomes estopped to claim that the agent does not have such authority; second,
the principal may so clothe the agent with the indicia of authority as to lead a reasonably prudent
person to believe that he actually has such authority. There can be no apparent authority of an
agent without acts or conduct on the part of the principal and such acts or conduct of the
principal must have been known and relied upon in good faith and as a result of the exercise of
reasonable prudence by a third person as claimant and such must have produced a change of
position to its detriment. The apparent power of an agent is to be determined by the acts of the

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principal and not by the acts of the agent. For the principle of apparent authority to apply, the
petitioner was burdened to prove the following: (a) the acts of the respondent justifying belief in
the agency by the petitioner; (b) knowledge thereof by the respondent which is sought to be

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held; and (c) reliance thereon by the petitioner consistent with ordinary care and prudence. San
Miguel Corporation vs. Vda. de Trinidad, 945 SCRA 282 , G.R. No. 237506 July 28, 2020

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Under the doctrine of apparent authority, acts and contracts of the agent, as are within the
apparent scope of the authority conferred on him, although no actual authority to do such acts
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or to make such contracts has been conferred, bind the principal.

As mentioned above, the records of the case show no evidence that EGI authorized Santos to file
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a Complaint and enter into a Compromise Agreement on its behalf. Neither was there any
showing that EGI’s By-Laws authorize its President to do such acts. EGI’s grant of authority to
Santos, however, falls under the doctrine of apparent authority. Under this doctrine, acts and
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contracts of the agent, as are within the apparent scope of the authority conferred on him,
although no actual authority to do such acts or to make such contracts has been conferred, bind
the principal. Furthermore, the principal’s liability is limited only to third persons who have been
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led reasonably to believe by the conduct of the principal that such actual authority exists,
although none was actually given. Apparent authority is determined only by the acts of the
principal and not by the acts of the agent. Engineering Geoscience, Inc. vs. Philippine Savings
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Bank, 890 SCRA 199, G.R. No. 187262 January 10, 2019

Although the general rule is that “no person, not even its officers, can validly bind a
corporation” without the authority of the corporation’s board of directors, the Supreme Court
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(SC) has recognized instances where third persons’ actions bound a corporation under the
doctrine of apparent authority or ostensible agency.

“A contract is void if one of the essential requisites of contracts under Article 1318 of the New
Civil Code is lacking.” Consent, being one of these requisites, is vital to the existence of a contract
“and where it is wanting, the contract is nonexistent.” For juridical entities, consent is given
through its board of directors. As this Court held in First Philippine Holdings Corporation v. Trans
Middle East (Phils.) Equities, Inc., 607 SCRA 605 (2009), a juridical entity, like EMRASON, “cannot

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Handout No. 24
AGENCY

act except through its board of directors as a collective body, which is vested with the power and
responsibility to decide whether the corporation should enter in a contract that will bind the
corporation, subject to the articles incorporation, bylaws, or relevant provisions of law.”
Although the general rule is that “no person, not even its officers, can validly bind a corporation”
without the authority of the corporation’s board of directors, this Court has recognized instances
where third persons’ actions bound a corporation under the doctrine of apparent authority or
ostensible agency. Ayala Land, Inc. vs. ASB Realty Corporation, 881 SCRA 56, G.R. No. 210043

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September 26, 2018

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View that the Civil Code provides that “[i]f the agent contracts in the name of the principal,
exceeding the scope of his [or her] authority, and the principal does not ratify the contract, it
shall be void if the party with whom the agent contracted is aware of the limits of the powers

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granted by the principal[.]”

Even the Civil Code provides that “[i]f the agent contracts in the name of the principal, exceeding
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the scope of his [or her] authority, and the principal does not ratify the contract, it shall be void
if the party with whom the agent contracted is aware of the limits of the powers granted by the
principal[.]” There is no showing that a Commission on Elections resolution explicitly authorizing
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respondent to enter the Memorandum of Agreement was attached to the Agreement as to

assure the parties of respondent’s authority to sign on behalf of the Commission on Elections.
There is also no showing that the Commission on Elections has resolved to approve or ratify the
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Memorandum of Agreement respondent signed. Rappler, Inc. vs. Bautista, 788 SCRA 442, G.R.
No. 222702 April 5, 2016
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The doctrine of apparent authority provides that a corporation will be estopped from denying
the agent’s authority if it knowingly permits one (1) of its officers or any other agent to act
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within the scope of an apparent authority, and it holds him out to the public as possessing the
power to do those acts.

The doctrine of apparent authority provides that a corporation will be estopped from denying
the agent’s authority if it knowingly permits one of its officers or any other agent to act within
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the scope of an apparent authority, and it holds him out to the public as possessing the power to
do those acts. The existence of apparent authority may be ascertained through (1) the general
manner in which the corporation holds out an officer or agent as having the power to act or, in
other words, the apparent authority to act in general, with which it clothes him; or (2) the
acquiescence in his acts of a particular nature, with actual or constructive knowledge thereof,
whether within or beyond the scope of his ordinary powers. Georg vs. Holy Trinity College, Inc.,
797 SCRA 550, G.R. No. 190408 July 20, 2016

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OBLIGATIONS OF AGENT AND PRINCIPAL

Though he may perform acts in a manner more advantageous to the principal than that
specified by him, in no case shall the agent carry out the agency if its execution would
manifestly result or damage to the principal.

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There is no dearth of statutory provisions in the New Civil Code that aim to preserve the fiduciary
character of the relationship between principal and agent. Of the established rules under the

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code, one cannot be more basic than the obligation of the agent to carry out the purpose of the
agency within the bounds of his authority. Though he may perform acts in a manner more
advantageous to the principal than that specified by him, in no case shall the agent carry out the

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agency if its execution would manifestly result or damage to the principal. Virata vs. Ng Wee,
830 SCRA 271, G.R. No. 220926, G.R. No. 221058, G.R. No. 221109, G.R. No. 221135, G.R. No.
221218 July 5, 2017
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In many cases as well, busy vehicle owners selling their vehicles actually leave them, together
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with all the documents of title, spare keys, and deeds of sale signed in blank, with secondhand
car traders they know and trust, in order for the latter to display these vehicles for actual
viewing and inspection by prospective buyers at their lots, warehouses, garages, or
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showrooms, and to enable the traders to facilitate sales on-the-spot, as-is-where-is, without
having to inconvenience the owners with random viewings and inspections of their vehicles.
For this kind of arrangement, an agency relationship is created between the vehicle owners, as
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principals, and the car traders, as agents.

In many cases as well, busy vehicle owners selling their vehicles actually leave them, together
2

with all the documents of title, spare keys, and deeds of sale signed in blank, with secondhand
car traders they know and trust, in order for the latter to display these vehicles for actual viewing
and inspection by prospective buyers at their lots, warehouses, garages, or showrooms, and to
enable the traders to facilitate sales on-the-spot, as-is-where-is, without having to inconvenience
the owners with random viewings and inspections of their vehicles. For this kind of arrangement,
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an agency relationship is created between the vehicle owners, as principals, and the car traders,
as agents. The situation is akin to an owner of jewelry who sells the same through an agent, who
receives the jewelry in trust and offers it for sale to his/her regular clients; if a sale is made, the
agent takes payment under the obligation to remit the same to the jewelry owner, minus the
agreed commission or other compensation. Siy vs. Tomlin, 824 SCRA 106, G.R. No. 205998 April
24, 2017

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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 nonperformance, the principal
may suffer.”

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 nonperformance, the principal may

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suffer.” International Exchange Bank (now Union Bank of the Philippines) vs. Briones, 822 SCRA
103, G.R. No. 205657 March 29, 2017

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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 nonperformance of its obligation

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as the agent, and because it prioritized its interests over that of its principal.

Having been negligent in its duties as the duly constituted agent, petitioner must be held liable
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for the damages suffered by the Spouses Briones because of nonperformance 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
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(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
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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 it negligence and
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underscores its bad faith. Thus, it will be inequitable now to compel the Spouses Briones to pay
the full amount of the lost property. International Exchange Bank (now Union Bank of the
Philippines) vs. Briones, 822 SCRA 103, G.R. No. 205657 March 29, 2017
2

When there is a close, proximate and causal connection between the agent’s efforts and the
sale of the property, the agents are entitled to their commission.
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The respondents’ actions indeed constituted the procuring cause of the sale. When there is a
close, proximate and causal connection between the agent’s efforts and the sale of the property,
the agents are entitled to their commission. On the issue of whether the respondents are entitled
to the overprice commission or to the 5% finders’ fee only, the Court finds that the CA correctly
upheld the award of P2.8 million as overprice commission in favor of the respondents. Ticong vs.
Malim, 819 SCRA 116, G.R. No. 220785, G.R. No. 222887 March 1, 2017

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As long as the agent acts within the scope of the authority given by his principal, the actions of
the former shall bind the latter.

Accordingly, the laws on agency apply to their relationship. Article 1881 of the New Civil Code
provides that the agent must act within the scope of his authority. He may do such acts as may
be conducive to the accomplishment of the purpose of the agency. Thus, as long as the agent
acts within the scope of the authority given by his principal, the actions of the former shall bind
the latter. Oliver vs. Philippine Savings Bank, 788 SCRA 189, G.R. No. 214567 April 4, 2016

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Under the law of agency, an agent is not personally liable for the obligations of the principal

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unless he performs acts outside the scope of his authority or he expressly binds himself to be
personally liable.

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Under the law of agency, an agent is not personally liable for the obligations of the principal
unless he performs acts outside the scope of his authority or he expressly binds himself to be
personally liable. Otherwise, the principal is solely liable. Here, there was no showing that SRMO
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bound itself personally for Gerardo’s obligations. SRMO also acted within the bounds of the
authority issued by Gerardo, as the transferee pendente lite of the widow’s interest, to receive
the payment. Siguion Reyna Montecillo and Ongsiako Law Offices vs. Chionlo-Sia, 783 SCRA 56,
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G.R. No. 181186 February 3, 2016

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Under Article 1881 of the Civil Code, an agent is mandated to act within the scope of his
authority.
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Incidentally, the Court agrees with the Lopez heirs’ contention that the SPA in favor of Rivera was
insufficient to cloth her with authority to file the petition for the ex parte issuance of a writ of
possession in the instant case. Under Article 1881 of the Civil Code, an agent is mandated to act
2

within the scope of his authority. The scope of an agent’s authority, in turn, is what appears in
the written terms of the power of attorney granted upon him. Heirs of Eugenio Lopez, Sr. vs.
Querubin, 753 SCRA 371, G.R. No. 164092 March 18, 2015
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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 nonperformance, the principal
may suffer.”

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 nonperformance, the principal may

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suffer.” International Exchange Bank (now Union Bank of the Philippines) vs. Briones, 822 SCRA
103, G.R. No. 205657 March 29, 2017

One person may appoint a great many agents not only as of course where their duties relate to
different subjects, but also frequently where, though severally appointed and authorized, their

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powers and duties may relate to the same subject.

The agency provisions of our Civil Code recognize such a situation but limit the regulation thereof

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to the responsibility of the co-agents as against other parties. Nevertheless, our Civil Code
operates under the presumption that obligations are joint in nature unless solidarity is stipulated.
This presumption extends to co-agents under Article 1894 of the Civil Code with respect to their

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responsibility. Conversely, such presumption of jointness must likewise extend to the principal’s
obligation to compensate the co-agents, unless otherwise stipulated or proven. Here, the
presumption of joint agency is bolstered by the aforecited evidence showing that Atienza and
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Quijada worked together on the Surigao del Sur deals as co-agents. Acting separately but in
concert, Atienza and Quijada represented TKC in the negotiations, coordinated with the
concerned LGU officials, and handled the processing of the procurement documents. Since there
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is no indication from the record of any agreement, stipulation, or policy governing the sharing of
commission among TKC’s agents, the 3% commission on the aforementioned deals must be
shared equally between Quijada and Atienza, still following the principles of the law on agency.
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Edwin Alacon Atienza vs. TKC Heavy Industries Corporation, G.R. No. 217782, June 23, 2021
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Determining the nature and scope of authority of a purported agent who collects payment on
behalf of a principal is important as the payment of an obligation must be “made to the person
in whose favor the obligation has been constituted, or [their] successor in interest, or any
2

person authorized to receive it.”

Payment made to a third person will extinguish an obligation only insofar as it redounded to the
benefit of the creditor, or when payment was made in good faith to said third person, who must
be in possession of the credit. In the case of juridical entities xxx, the appointment of authorized
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representatives made by a corporation’s board of directors is typically embodied in a board

resolution or a secretary’s certificate to enter into specified acts or transactions on behalf of the
corporation. Absent any board resolution or secretary’s certificate designating said
representative to act on behalf of the corporation, any act performed purportedly on behalf of
said corporation will be deemed unenforceable as against the corporation. Navotas Industrial
Corporation vs. Alberto C. Guanzon, G.R. No. 230931, November 15, 2021

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A power of attorney must be strictly construed and pursued. The instrument will be held to
grant only those powers which are specified therein, and the agent may neither go beyond nor
deviate from the power of attorney.

Angeles vs. Philippine National Railways, 500 SCRA 444 (2006), dictates that “[a] power of
attorney must be strictly construed and pursued. The instrument will be held to grant only those
powers which are specified therein, and the agent may neither go beyond nor deviate from the
power of attorney.” Thus, the varying descriptions of the properties mentioned in the SPA and

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that of the subject properties seriously put into question the authority of Rivera to file the
petition for the ex parte issuance of a writ of possession over the subject properties. More
importantly, the fact that Evelyn Sandoval — the principal who executed the SPA in favor of

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Rivera — categorically manifested that she did not authorize any person to file the said petition
should have raised doubts as to the authority of Rivera to file the same. All the same, the Court
has already previously settled the impropriety of the issuance of the writ of possession in this

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case. Heirs of Eugenio Lopez, Sr. vs. Querubin, 753 SCRA 371, G.R. No. 164092 March 18, 2015
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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 nonperformance of its obligation
as the agent, and because it prioritized its interests over that of its principal.
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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
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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
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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 it negligence and underscores its bad faith. Thus, it will be inequitable now to compel
2

the Spouses Briones to pay the full amount of the lost property. International Exchange Bank
(now Union Bank of the Philippines) vs. Briones, 822 SCRA 103, G.R. No. 205657 March 29, 2017

Sales agents, by the very nature of their functions, are both employees and agents of their
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employers.

Our application of the law on agency to the claims of an employee in the context of a labor
proceeding is grounded in the particular facts of this case, specifically, in the nature of Atienza’s
employment as a sales agent. It is clear from the record that TKC sales agents, Atienza included,
conduct sales activities, promote TKC’s products to prospective clients, communicate prospective
and closed sales to the head office, and assist LGUs with the processing of government
procurement documents in connection with such sales. TKC sales agents discharge these

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functions in representation of, and with the consent of, TKC. Undoubtedly, there exists a
principal-agent relationship between TKC and its sales agents. Sales agents, by the very nature of
their functions, are both employees and agents of their employers. Atienza fits this definition of
a traveling salesman; as such, the law on agency governs his right to commissions, in the absence
of contractual stipulations on record. It must be remembered that the principles of civil law
remain applicable to the employer-employee relationship, although such contract be primarily
regulated by the Labor Code and its allied laws and regulations, in view of the vital role that labor
plays in society, as recognized in our Constitution. Edwin Alacon Atienza vs. TKC Heavy Industries

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Corporation, G.R. No. 217782, June 23, 2021

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As a general rule, an agent is entitled to a commission only upon the successful conclusion of a
sale.

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However, in certain cases where the factual circumstances are contested, as in the case at bar,
the determination of an agent’s right to commissions depends on a number of considerations,
such as: 1) the extent of completion of the undertaking, which may be full, partial, or non-
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existent; 2) the value of the agent’s efforts to the principal; 3) the termination of the agency
before full completion of the undertaking; and 4) the nature and circumstances of such
termination. Edwin Alacon Atienza vs. TKC Heavy Industries Corporation, G.R. No. 217782, June
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23, 2021
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Agents may still be entitled to commissions for transactions consummated within a reasonable
time after the expiration or termination of their authority if it can be shown that the agent’s
efforts were “somehow instrumental” to the consummation thereof.
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As regards the Caloocan deal, records show that TKC made deliveries of heavy equipment to the
Caloocan LGU on March 5, 7, and 11, 2013, or a mere one week after Atienza ceased becoming
2

an agent of the company. Under our law on agency, agents may still be entitled to commissions
for transactions consummated within a reasonable time after the expiration or termination of
their authority if it can be shown that the agent’s efforts were “somehow instrumental” to the
consummation thereof. In view of the evidence on record, We find it most just and appropriate
to award P100,000.00 in equity to Atienza for his efforts in securing the Caloocan transaction, in
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line with the foregoing “equitable commission doctrine” enunciated by this Court in Prats vs.
Court of Appeals and Manotok Brothers, Inc. vs. Court of Appeals. While we sustain respondents’
contention that Atienza was not the efficient procuring cause of the transaction, his efforts in
securing the documentation and approvals necessary for the consummation thereof entitle him
to an equitable remuneration therefor. Edwin Alacon Atienza vs. TKC Heavy Industries
Corporation, G.R. No. 217782, June 23, 2021; Prats vs. Court of Appeals, 171 Phil. 322, 347
(1978); Sanchez vs. Medicard Philippines, Inc., 504 Phil. 332, 336-337 (2005); Manotok Brothers,
Inc., vs. Court of Appeals, 293 Phil. 230, 236 (1993)

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The law creates a presumption that an agent has the power to appoint a substitute. The
consequence of the presumption is that, upon valid appointment of a substitute by the agent,
there ipso jure arises an agency relationship between the principal and the substitute, i.e., the
substitute becomes the agent of the principal.

The law creates a presumption that an agent has the power to appoint a substitute. The
consequence of the presumption is that, upon valid appointment of a substitute by the agent,
there ipso jure arises an agency relationship between the principal and the substitute, i.e., the

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substitute becomes the agent of the principal. As a result, the principal is bound by the acts of
the substitute as if these acts had been performed by the principal’s appointed agent.
Concomitantly, the substitute assumes an agent’s obligations to act within the scope of authority,

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to act in accordance with the principal’s instructions, and to carry out the agency, among others.
In order to make the presumption inoperative and relieve himself from its effects, it is incumbent
upon the principal to prohibit the agent from appointing a substitute. Villaluz vs. Land Bank of

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the Philippines, 814 SCRA 466, G.R. No. 192602 January 18, 2017
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The law creates a presumption that an agent has the power to appoint a substitute.

The consequence of the presumption is that, upon valid appointment of a substitute by the agent,
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there ipso jure arises an agency relationship between the principal and the substitute, i.e., the
substitute becomes the agent of the principal. As a result, the principal is bound by the acts of
the substitute as if these acts had been performed by the principal’s appointed agent.
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Concomitantly, the substitute assumes an agent’s obligations to act within the scope of authority,
to act in accordance with the principal’s instructions, and to carry out the agency, among others.
In order to make the presumption inoperative and relieve himself from its effects, it is incumbent
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upon the principal to prohibit the agent from appointing a substitute. Villaluz vs. Land Bank of
the Philippines, 814 SCRA 466, G.R. No. 192602 January 18, 2017
2

EXTINGUISHMENT

The general rule is that the death of the principal or, by analogy, the agent extinguishes the
contract of agency, unless any of the circumstances provided for under Article 1930 or Article
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1931 obtains; in which case, notwithstanding the death of either principal or agent, the
contract of agency continues to exist.

One of the modes of extinguishing a contract of agency is by the death of either the principal or
the agent. In Rallos v. Felix Go Chan & Sons Realty Corporation, 81 SCRA 251 (1978), the Court
declared that because death of the principal extinguished the agency, it should follow a fortiori
that any act of the agent after the death of his principal should be held void ab initio unless the
act fell under the exceptions established under Article 1930 and Article 1931 of the Civil Code.

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The exceptions should be strictly construed. In other words, the general rule is that the death of
the principal or, by analogy, the agent extinguishes the contract of agency, unless any of the
circumstances provided for under Article 1930 or Article 1931 obtains; in which case,
notwithstanding the death of either principal or agent, the contract of agency continues to exist.
Lopez vs. Court of Appeals, 876 SCRA 1, G.R. No. 163959 August 1, 2018

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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

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in order to deal with a third person in a way that excludes the agent.

Revocation as a form of extinguishing an agency under Article 1924 of the Civil Code only applies

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in cases of incompatibility, such as when the principal disregards or bypassess 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
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petitioner about the loss. The Spuses Briones continued paying the monthly installment for the
next three (3) months following the vehicle’s loss to show their good faith. International
Exchange Bank (now Union Bank of the Philippines) vs. Briones, 822 SCRA 103, G.R. No. 205657
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March 29, 2017

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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
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negligence. This is not the implied termination or revocation of an agency provided for under
Article 1924 of the Civil Code.
2

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
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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. International Exchange
Bank (now Union Bank of the Philippines) vs. Briones, 822 SCRA 103, G.R. No. 205657 March
29, 2017

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While a contract of agency is generally revocable at will as it is primarily based on trust and
confidence, Article 1927 of the Civil Code provides the instances when an agency becomes
irrevocable.

While a contract of agency is generally revocable at will as it is primarily based on trust and
confidence, Article 1927 of the Civil Code provides the instances when an agency becomes

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irrevocable: Article 1927. An agency cannot be revoked if a bilateral contract depends upon it, or
if it is the means of fulfilling an obligation already contracted, or if a partner is appointed manager
of a partnership in the contract of partnership and his removal from the management is

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unjustifiable. A bilateral contract that depends upon the agency is considered an agency coupled
with an interest, making it an exception to the general rule of revocability at will. Lim v. Saban,
447 SCRA 232 (2004), emphasizes that when an agency is established for both the principal and

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the agent, an agency coupled with an interest is created and the principal cannot revoke the
agency at will. International Exchange Bank (now Union Bank of the Philippines) vs. Briones,
822 SCRA 103, G.R. No. 205657 March 29, 2017
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Under the doctrine of apparent authority, acts and contracts of the agent within the apparent
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scope of the authority conferred on him, although no actual authority to do such acts or has
been beforehand withdrawn, revoked or terminated, bind the principal.
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Basic is the rule that the revocation of an agency becomes operative, as to the agent, from the
time it is made known to him. Third parties dealing bona fide with one who has been accredited
to them as an agent, however, are not affected by the revocation of the agency, unless notified
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of such revocation. This refers to the doctrine of apparent authority. Under the said doctrine,
acts and contracts of the agent within the apparent scope of the authority conferred on him,
although no actual authority to do such acts or has been beforehand withdrawn, revoked or
2

terminated, bind the principal. Thus, as to a third person, “apparent authority, when present,
trumps restrictions that the principal has privately imposed on the agent. The relevant
appearance is that the principal has conferred authority on an agent. An actor may continue to
possess apparent authority although the principal has terminated the actor’s actual authority or
the agency relationship between them. This is so because a third party may reasonably believe
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that the actor continues to act as an agent and within the scope of actual authority on the basis
of manifestations previously made by the principal. Such a manifestation, once made, remains
operative until the third party has notice of circumstances that make it unreasonable to believe
that the actor continues to have actual authority.” Hence, apparent authority may survive the
termination of actual authority or of an agency relationship. Bitte vs. Jonas, 777 SCRA 489, G.R.
No. 212256 December 9, 2015

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Under Article 1924 of the New Civil Code, “an agency is revoked if the principal directly manages
the business entrusted to the agent, dealing directly with third persons.”

Logic dictates that when a principal disregards or bypasses the agent and directly deals with such
person in an incompatible or exclusionary manner, said third person is deemed to have
knowledge of the revocation of the agency. They are expected to know circumstances that should
have put them on guard as to the continuing authority of that agent. The mere fact of the
principal dealing directly with the third person, after the latter had dealt with an agent, should

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be enough to excite the third person’s inquiring mind on the continuation of his authority. Bitte
vs. Jonas, 777 SCRA 489, G.R. No. 212256 December 9, 2015

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While a contract of agency is generally revocable at will as it is primarily based on trust and
confidence, Article 1927 of the Civil Code provides the instances when an agency becomes

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irrevocable.

Article 1927. An agency cannot be revoked if a bilateral contract depends upon it, or if it is the
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means of fulfilling an obligation already contracted, or if a partner is appointed manager of a
partnership in the contract of partnership and his removal from the management is unjustifiable.
A bilateral contract that depends upon the agency is considered an agency coupled with an
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interest, making it an exception to the general rule of revocability at will. Lim vs. Saban, 447 SCRA
232 (2004), emphasizes that when an agency is established for both the principal and the agent,
an agency coupled with an interest is created and the principal cannot revoke the agency at will.
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International Exchange Bank (now Union Bank of the Philippines) vs. Briones, 822 SCRA 103,
G.R. No. 205657 March 29, 2017
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A contract of agency is generally revocable because 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
2

to act depends on the will and license of the principal he or she 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, e.g., if a bilateral contract depends upon
the agency, or if it is the means of fulfilling an obligation already contracted. The reason for its
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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. Hence, the law provides that in such cases, the agency cannot be revoked at the sole
will of the principal.

In this case, We agree with the finding of the CA that the agency granted by Quinto to Padilla is
coupled with interest because it is the means of fulfilling an obligation already contracted which
is the MOA between Padilla and Quinto dated October 15, 2004. In the said MOA, it was

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specifically stated that Padilla had introduced “very substantial improvements” to the hotel
complex during his lease xxx. Pursuant to the MOA, Padilla and Quinto agreed to lease the hotel
complex to Cecilia, who in turn, paid a security deposit of P500,000.00, took over the possession
and operations of the property and paid the monthly rentals thereafter. However, a year after
its turnover to Cecilia, the hotel complex was totally damaged and the substantial improvements
introduced by Padilla therein were either stolen or completely destroyed. Thus, Quinto executed
the August 28, 2007 SPA authorizing Padilla to perform the following acts on his behalf: XXX. In

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accordance with this authority and to protect his and Quintos’ interests over the subject property
pursuant to the October 15, 2004 MOA, Padilla filed the instant complaint for damages against
Cecilia. Indubitably, the lease agreement over the hotel complex is the subject matter of the

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agency, and it is clear from the records that Padilla has a material interest in the subject matter
as he has introduced substantial improvements therein. In view of their respective interests,
Quinto being the owner and Padilla being the author of the improvements found in the hotel

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complex, both agreed to lease the property and to share in the earnings from the lease contract
entered into with Cecilia over the subject property. The August 28, 2007 SPA, therefore, is the
means of fulfilling an obligation already contracted, which is the October 15, 2004 MOA in this
jr 47
case. Cecilia Yulo Locsin substituted by Mr. Leandro Y. Locsin vs. Puerto Princesa Resort Hotel,
Inc., G.R. No. 233678, July 27, 2022, J. Hernando
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