Escueta vs. Lim
CA
G.R No. 137162 Jan 24, 2007
First Division
Facts:
Rufino Lim, herein respondent, averred that she had bought the
hereditary properties of the Petitioners Rubio and heirs of Baloloy.
On April 10, 1990 Petitioners executed a Contract of Sale and
received from Respondent Lim a down payment of 102,169.86 and
450,000 respectively and the balance will be paid after the titles are
transferred into Lim’s name.
Rubio and the heirs of Baloloy refused to deliver the title to Lim
despite her offer of the payment of the balance. Despite the
existence of a Contract of Sale between Lim and Rubio and the heirs
of Baloloy, Corazon Escueta having knowledge thereof executed a
simulated sale involving the lots. As for the Baloloys, they argued
that they already withdrawn their offer to sell for the reason that
respondent failed to pay the balance on time hence the Contract of
Sale has no more force and effect. As to Rubio, it alleged that Lim
has no cause of action since, Rubio appointed her daughter Patricia
Llamas to be his attorney-in-fact, and not in favor of Victoria Laygo
Lim who represented Rubio in the sale between the Respondent
Rufina Lim.
The RTC declared the Petitioners in default. CA affirmed RTC
decision with amendments. Hence, this petition.
Issue: Whether or not the Contract of Sale between Rufina Lim and
the Petitioners Rubio and Baloloys is valid.
Held:
Yes, the Contract of Sale is valid.
Ruling: The Court held that the Contract of Sale between the
petitioner and respondent is valid and binding. Rubio argued that
Victoria has no authority to represent him in the Sale of the disputed
properties since Rubio appointed her daughter as his attorney-in-
fact and not Victoria. Art. 1892 provides:
Article 1892 of the Civil Code provides:
Art. 1892. The agent may appoint a substitute if the principal has not
prohibited him from doing so; but he shall be responsible for the
acts of the substitute:
(1) When he was not given the power to appoint one
In the case above, Rubio made his daughter Patricia to be her
Attorney-in –fact, and according to the above article, Patricia is not
prohibited to appoint a substitute as a representative of Rubio.
Patricia, acting on the authority given to her, appointed Victoria as
her substitute hence the transaction between Victoria and
Respondent is valid. Art. 1317 further provides:
Art. 1317. x x x
A contract entered into in the name of another by one who has no
authority or legal representation, or who has acted beyond his
powers, shall be unenforceable, unless it is ratified, expressly or
impliedly, by the person on whose behalf it has been executed,
before it is revoked by the other contracting party.
The acceptance of Rubio of the downpayment and encashment of
the said checks serves as the ratification of Rubio of the Sale of the
Properties with the respondent Rufina Lim.
Cervantes v.
GR No. 125138
March 2, 1999
Facts:
Cervantes was issued a round ticket for Manila-Honolulu-Los
Angeles-Honolulu-Manila, which ticket expressly provided an expiry
date of March 27, 1990. He was issued the said ticket following a
compromises agreement between the two parties from previous
lawsuits. On March 23, four days before its expiration, he used the
ticket and went to Los Angeles. He booked a return ticket for the
April 2 flight which was confirmed by PAL personnel. On the day of
his supposed return, he was not allowed to board because it was
already expired.
Issue:
Whether or not the PAL agents (personnel), upon confirmation of
Cervantes’ return ticket, extended the validity of the ticket.
Held:
No, PAL agents’ confirmation did not extend the validity of the
ticket. They did not have authority.
Ratio:
Since the PAL agents are not privy to the said agreement and
petitioner knew that a written request to the legal counsel of PAL
was necessary, he cannot use what the PAL agents did to his
advantage. The said agents acted without authority when they
confirmed the flights of the petitioner. If the said third person is
aware of such limits of authority, he is to blame.
Rural Bank of Bombon v CA
G.R. No. 95703 | August 3, 1992
Quick Summary:
Ederlinda Gallardo transacted with Rufino Aquino, contracting him
to be her agent and providing him with a Special Power of Attorney
authorizing him to mortgage her property in her behalf for the
purpose of securing loans from banks. She provided him with the
TCT to the property as well. Rufino Aquino secured a loan from Rural
Bank of Bombon for the amount of PhP350,000.00 as principal and
chargeable with a 14% interest per annum.
In the contract of mortgage, he represented himself to be the
attorney-in-fact of Gallardo, but proceeded to sign his name as
mortgagor. He even got his wife to sign the documents as wife of
mortgagor. Gallardo, upon knowing of the transaction, went to court
to secure the annulment of such contract since she was allegedly
surprised to find out that her property was already mortgaged and
correspondence regarding the contract of mortgage were not being
sent to her, and instead sent to the address of Aquino, who has
since disappeared from Bulacan and now resides in Camarines Sur.
Further, the mortgage was secured to pay off personal loans of
Aquino and to establish his personal fishpond business. RTC issued a
TRO restraining Rural Bank of Bombon to foreclose the mortgage. In
his Answer, Aquino alleged that Gallardo owed him money and it
was already the responsibility of Aquino to take care of payments
due. RTC ruled in favor of Aquino and Bank of Bombon. CA reversed
the ruling of the RTC and held that the Dealof Real Estate Mortgage
was not valid. It is not binding on the principal Gallardo since it was
executed not in her name as principal but in the personal capacity of
the Aquino spouses.
Issue: WON the Deed of Real Estate Mortgage executed by Rufino S.
Aquino as attorney-in-fact of Ederlinda Gallardo in favor of the Rural
Bank of Bombon is valid.
Held:
No.
Aquino signed the Deed of Real Estate Mortgage in his name alone
as mortgagor, without any indication that he was signing for and in
behalf of the property owner, Ederlinda Gallardo. He bound himself
alone in his personal capacity as a debtor of the petitioner Bank and
not as the agent or attorney-in-fact of Gallardo. Ratio: It is a general
rule in the law of agency that, in order to bind the principal by a
mortgage on real property executed by an agent, it must upon its
face purport to be made, signed and sealed in the name of the
principal, otherwise, it will bind the agent only. It is not enough
merely that the agent was in fact authorized to make the mortgage,
if he has not acted in the name ofthe principal. Neither is it
ordinarily sufficient that in the mortgage the agent describes himself
as acting by virtueof a power of attorney, if in fact the agent has
acted in his own name and has set his own hand and seal to the
mortgage.
This is especially true where the agent himself is a party to the
instrument. However clearly the body of the mortgage may show
and intend that it shall be the act of the principal, yet, unless in fact
it is executed by the agent for and on behalf of his principal and as
the act and deed of the principal, it is not valid as to the principal.
(Philippine Sugar Estates Development Co. vs. Poizat)Bank cannot
rely on Article 1883 to bind the principal Gallardo. It is not applicable
to the case at bar. Article 1883 states “in such case the agent is the
one directly bound in favor of the person with whom he has
transacted, as if the transaction was his own, except when the
contract involves things belonging to the principal.” There is no
principle of law by which a person can become liable on a real
mortgage which she never executed either in person or by attorney
in fact. Here, Aquino acted purportedly as an agent of Gallardo, but
actually acted in his personal capacity. Involved herein are
properties titled in the name of respondent Gallardo against which
the Bank proposes to foreclose the mortgage constituted by an
agent (Aquino) acting in his personal capacity.
Filipinas Life Assurance Co. v Pedroso
Gr No. 159489 February 4, 2008
Facts:
Teresita O. Pedroso is a policyholder of a 20-year endowment life
insurance issued by petitioner Filipinas Life Assurance Company
(Filipinas Life). Pedroso claims Renato Valle was her insurance agent
since 1972 and Valle collected her monthly premiums. Valle told her
that the Filipinas Life Escolta Office was holding a promotional
investment program for policyholders. She called the Escolta office
and talked to Francisco Alcantara, the administrative assistant, who
referred her to the branch manager, Angel Apetrior.
Pedroso inquired about the promotional investment and Apetrior
confirmed that there was such a promotion. She was even told she
could push through with the check she issued. From the records, the
check, with the endorsement of Alcantara at the back, was
deposited in the account of Filipinas Life with the Commercial Bank
and Trust Company (CBTC), Escolta Branch. However, when Pedroso
tried to withdraw her investment, Valle did not want to return some
P17,000 worth of it.
Issue: WON Filipinas Life is jointly and severally liable with Apetrior
and Alcantara on the claim of
Pedroso and Palacio or WON its agent Renato Valle is solely liable to
Pedroso and Palacio
Ruling:
Filipinas Life cannot profess ignorance of Valles acts. Even if Valles
representations were beyond his authority as a debit/ insurance
agent, Filipinas Life thru Alcantara and Apetrior expressly and
knowingly ratified Valles acts. It cannot even be denied that Filipinas
Life benefited from the investments deposited by Valle in the
account of Filipinas Life. In our considered view, Filipinas Life had
clothed Valle with apparent authority; hence, it is now estopped to
deny said authority.
Innocent third persons should not be prejudiced if the principal
failed to adopt the needed measures to prevent misrepresentation,
much more so if the principal ratified his agents acts beyond the
latter’s authority.
CONSTANTE AMOR DE CASTRO and CORAZON AMOR DE CASTRO,
petitioners, vs. COURT OF
APPEALS and FRANCISCO ARTIGO, respondents.
G.R. No. 115838
July 18, 2002
Facts:
Appellants5 were co-owners of four (4) lots located at EDSA corner
New York and Denver Streets in Cubao, Quezon City. In a letter
dated January 24, 1984 appellee6 was authorized by appellants to
act as real estate broker in the sale of these properties for the
amount ofP23,000,000.00, five percent (5%) of which will be given
to the agent as commission. It was appellee who first found Times
Transit Corporation, represented by its president Mr. Rondaris, as
prospective buyer which desired to buy two (2) lots only, specifically
lots 14 and 15. Eventually, sometime in May of 1985, the sale of lots
14 and 15
was consummated. Appellee received from appellants P48,893.76 as
commission.
It was then that the rift between the contending parties soon
emerged. Appellee apparently felt short changed because according
to him, his total commission should be P352,500.00 which is five
percent (5%) of the agreed price of P7,050,000.00 paid by Times
Transit Corporation to appellants for the two (2) lots, and that it was
he who introduced the buyer to appellants and unceasingly
facilitated the negotiation which ultimately led to the
consummation of the sale. Hence, he sued below to collect the
balance of P303,606.24 after having received P48,893.76 in advance.
Issue:
(1) whether the complaint merits dismissal for failure to implead
other co-owners as indispensable parties
(2)whether Artigo's claim has been extinguished by full payment,
waiver or abandonment
Held: (1) no, (2) no
Ratio: Re first issue:
There is no dispute that Constante appointed Artigo in a
handwritten note dated January 24, 1984 to sell the properties of
the De Castros for P23 million at a 5 percent commission. The
authority was on a first come, first serve basis. Constante signed the
note as owner and as representative of the other co-owners. Under
this note, a contract of agency was clearly constituted between
Constante and Artigo.
Whether Constante appointed Artigo as agent, in Constante's
individual or representative capacity, or both, the De Castros cannot
seek the dismissal of the case for failure to implead the other co-
owners as indispensable parties. The De Castros admit that the
other co-owners are solidarily liable under the contract of agency,10
citing Article 1915 of the Civil Code, which reads:
Art. 1915. If two or more persons have appointed an agent for a
common transaction or undertaking, they shall be solidarily liable to
the agent for all the consequences of the agency.
When the law expressly provides for solidarity of the obligation, as
in the liability of co-principals in a contract of agency, each obligor
may be compelled to pay the entire obligation.12 The agent may
recover the whole compensation from any one of the co-principals,
as in this case.
Indeed, Article 1216 of the Civil Code provides that a creditor may
sue any of the solidary debtors. This article reads:
Art. 1216. The creditor may proceed against any one of the solidary
debtors or some or all of them simultaneously. The demand made
against one of them shall not be an obstacle to those which may
subsequently be directed against the others, so long as the debt has
not been fully collected.
Solidarity does not make a solidary obligor an indispensable party in
a suit filed by the creditor.
Re second issue: A contract of agency which is not contrary to law,
public order, public policy, morals or good custom is a valid contract,
and constitutes the law between the parties.14 The contract of
agency entered into by Constante with Artigo is the law between
them and both are bound to comply with its terms and conditions in
good faith. The mere fact that "other agents" intervened in the
consummation of the sale and were paid their respective
commissions cannot vary the terms of the contract of agency
granting Artigo a 5 percent commission based on the selling price.
These "other agents" turned out to be employees of Times Transit,
the buyer Artigo introduced to the De Castros. In any event, we find
that the 5 percent real estate broker's commission is reasonable and
within the standard practice in the real estate industry for
transactions of this nature. Artigo's acceptance of partial payment of
his commission neither amounts to a waiver of the balance nor puts
him in estoppel. In this case, it is evident that Artigo merely received
the partial payment without waiving the balance. Thus, there is no
estoppel to speak of.
Mariano Diolosa & Alegria Villanueva-Diolosa v. CA and Quirino
Baterna (as owner and proprietor of Quin Baterna Realty) (1984)
Relova, J.
Facts:
Baterna is a licensed real estate broker. The spouses Biolosa owned
the Villa Alegre subdivision. June 20, 1968, they entered into an
agreement: Baterna would be their exclusive sales agent to sell the
lots of the subdivision “until all the property is fully disposed.”
Sept 27, 1986 (about 3 mos later) the spouses terminated the
services of Baterna as because the remaining unsold lots were
reserved for their 6 grandkids. (there were 27 lots which remained
unsold) Now, Baterna is claiming that under the terms of their
contract, he had unrevocable authority to sell the lots until all were
disposed. The rescission of the contract contravenes their
agreement. He also claims to be entitled to a commission on the lots
unsold because of the rescission.
The spouses argue that they are within their legal right to terminate
the agency because they needed the undisposed lots for the use of
their family. They also say that Baterna has no legal right to a
commission to unsold lots.
CFI dismissed. CA says that notwithstanding NCC 1920 (that the
principal may revoke the agency at will) spouses could not terminate
the agency agreement without paying damages. o
The agency agreement expressly stipulated “until all the property as
is fully disposed" o The testimony of a certain Roberto Malundo
that Baterna agreed to the intention of Mrs. Diolosa to reserve some
lots cannot prevail over the clear terms of the agreement. o
Wanting to reserve the lots for the grandkids is not a legal reason to
rescind the agency agreement. (even if each kid would be given one
lot each, there would still be 21 lots available and the spouses have
other lands that can be reserved for the kids)
Issue/Held: Can the spouses terminate the agency without paying
damages to Baterna, the real estate broker? NO. They have to pay
damages. Ratio: Under the contract, the spouses allowed the real
estate broker to sell, cede, etc. until all lots are fully disposed. The
authority to sell is not extinguished until all lots are disposed.
When they revoked the contract, they became liable to the real
estate broker for damages for breach of contract. Since the
agency agreement is a valid contract, it may only be rescinded on
grounds specified in NCC 1381-82.
ART. 1381. The following contracts are rescissible:
(1) Those which are entered in to by guardians whenever the wards
whom they represent suffer lesion by more than one-fourth of the
value of the things which are the object thereof;
(2) Those agreed upon in representation of absentees, if the latter
suffer the lesion stated in the preceding number;
(3) Those undertaken in fraud of creditors when the latter cannot in
any other name collect the claims due them;
(4) Those which refer to things under litigation if they have been
entered into by the defendant without the knowledge and approval
of the litigants or of competent judicial authority;
(5) All other contracts specially declared by law to be subject to
rescission.
ART. 1382. Payments made in a state of insolvency for obligations to
whose fulfillment the debtor could not be compelled at the time
they were effected, are also rescissible. In this case, not one of
the grounds are present. Petition denied.
G.R. No. L-41420 July 10, 1992
CMS LOGGING, INC., petitioner, 
 agency, and the case at bar is not one falling under the exception
vs.
 mentioned, which is to evade the payment of the agent's
THE COURT OF APPEALS and D.R. AGUINALDO CORPORATION,
respondents.
NOCON, J.:
Facts:
Petitioner CMS is a forest concessionaire engaged in the logging
business, while private respondent DRACOR is engaged in the
business of exporting and selling logs and lumber. On August 28,
1957, CMS and DRACOR entered into a contract of agency 1
whereby the former appointed the latter as its exclusive export and
sales agent for all logs that the former may produce, for a period of
five (5) years. By virtue of the aforesaid agreement, CMS was able to
sell through DRACOR a total of 77,264,672 board feet of logs in
Japan, from September 20, 1957 to April 4, 1962.
About six months prior to the expiration of the agreement, while on
a trip to Tokyo, Japan, CMS's president, Atty. Carlos Moran Sison,
and general manager and legal counsel, Atty. Teodoro R.
Dominguez, discovered that DRACOR had used Shinko Trading Co.,
Ltd. (Shinko for brevity) as agent, representative or liaison officer in
selling CMS's logs in Japan for which Shinko earned a commission of
U.S. $1.00 per 1,000 board feet from the buyer of the logs. Under
this arrangement, Shinko was able to collect a total of U.S.
$77,264.67.
After this discovery, CMS sold and shipped logs valued at U.S.
$739,321.13 or P2,883,351.90, 4 directly to several firms in Japan
without the aid or intervention of DRACOR.
CMS sued DRACOR for the commission received by Shinko and for
moral and exemplary damages, while DRACOR counterclaimed for
its commission, amounting to P144,167.59, from the sales made by
CMS of logs to Japanese firms.
Issue:
Whether or not DRACOR was entitled to its commission from the
sales made directly by CMS to Japanese firms.
Held: No.
Ratio: The principal may revoke a contract of agency at will, and
such revocation may be express, or implied, and may be availed of
even if the period fixed in the contract of agency as not yet expired.
As the principal has this absolute right to revoke the agency, the
agent cannot object thereto; neither may he claim damages arising
from such revocation, unless it is shown that such was done in order
to evade the payment of agent's commission. In the case at bar,
CMS appointed DRACOR as its agent for the sale of its logs to
Japanese firms. Yet, during the existence of the contract of agency,
DRACOR admitted that CMS sold its logs directly to several Japanese
firms. This act constituted an implied revocation of the contract of
agency under Article 1924 of the Civil Code, which provides:
Art. 1924 The agency is revoked if the principal directly manages the
business entrusted to the agent, dealing directly with third persons.
Since the contract of agency was revoked by CMS when it sold its
logs to Japanese firms without the intervention of DRACOR, the
latter is no longer entitled to its commission from the proceeds of
such sale and is not entitled to retain whatever moneys it may have
received as its commission for said transactions. Neither would
DRACOR be entitled to collect damages from CMS, since damages
are generally not awarded to the agent for the revocation of the
commission.
Valenzuela v Court of Appeals
G.R. No. 83122 October 19, 1990
J. Gutierrez Jr.
Facts:
Valenzuela, a General Agent of respondent Philippine American
General Insurance Company, Inc (Philmagen), was authorized to
solicit and sell all kinds of non-life insurance. He had a 32.5%
commission rate. From 1973 to 1975, Valenzuela solicited marine
insurance from Delta Motors, Inc. from which he was entitled to a
commission of 32%.
However, Valenzuela did not receive his full commission. Philamgen
wanted to cut Valenzuela’s commission by 50% but he declined.
When Philamgen offered again, Valenzuela firmly reiterated his
objection. Afterwards, Philamgen took drastic action against
Valenzuela. They reversed the commission due him, threatened the
cancellation of policies issued by his agency, and started to leak out
news that Valenzuela has a substantial debt with Philamgen. His
agency contract was terminated.
The petitioners sought relief by filing the complaint against the
private respondents. The trial court found that the principal cause of
the termination as agent was his refusal to share his Delta
commission.
The court considered these acts as harassment and ordered the
company to pay for the resulting damage in the value of the
commission. They also ordered the company to pay moral damages.
The company appealed. The CA ordered Valenzuela to pay the entire
amount of the commission.
Hence, this appeal by Valenzuela.
Issue:
WON the agency contract is coupled with interest on the part of
agent Valenzuela.
Ratio:
In any event the principal's power to revoke an agency at will is so
pervasive, that the Supreme Court has consistently held that
termination may be effected even if the principal acts in bad faith,
subject only to the principal's liability for damages.
The Supreme Court accorded great weight on the trial court’s factual
findings and found the cause of the conflict to be Valenzuela’s
refusal to share the commission. Philamgen told the petitioners of
its desire to share the Delta Commission with them. It stated that,
should Delta back out from the agreement, the petitioners would be
charged interests through a reduced commission after full payment
by Delta.
Philamgen proposed reducing the petitioners' commissions by half
of the original thus giving them an agent's commission of 16.25%.
The company insisted on the reduction scheme. Also, the company
pressured the agents to share the income with the threat to
terminate the agency. The petitioners were also told that the Delta
commissions would not be credited to their account. This continued
until the agency was terminated.
Records also show that the agency is one "coupled with an interest,"
and, therefore, should not be freely revocable at the unilateral will
of the company.
The records sustain the finding that the private respondent started
to covet a share of the insurance business that Valenzuela had built
up, developed and nurtured for years. The company appropriated
the entire insurance business of Valenzuela.
Worse, despite the termination of the agency, Philamgen continued
to hold Valenzuela jointly and severally liable with the insured for
unpaid premiums.
Under these circumstances, it is clear that Valenzuela had an
interest in the continuation of the agency when it was
unceremoniously terminated not only because of the commissions
he procured, but also Philamgen’s stipulation liability against him for
unpaid premiums. The respondents cannot state that the agency
relationship between Valenzuela and Philamgen is not coupled with
interest.
There is an exception to the principle that an agency is revocable at
will and that is when the agency has been given not only for the
interest of the principal but also for the mutual interest of the
principal and the agent. The principal may not defeat the agent's
right to indemnification by a termination of the contract of agency.
Also, if a principal violates a contractual or quasi-contractual duty
which he owes his agent, the agent may as a rule bring an
appropriate action for the breach of that duty. Hence, if a principal
acts in bad faith and with abuse of right in terminating the agency,
then he is liable in damages.
DE LA PENA V HIDALGO
FACTS:
De la Pena y de Ramon and De Ramon, in her own behalf and as the
legal guardian of her son Roberto De la Pena, filed in the CFI a
written complaint against Hidalgos
De La Pena y de Ramon, as the judicial administrator of the estate of
the deceased De la Pena y Gomiz, with the consent of the court filed
a second amended complaint prosecuting his action solely against
Frederico Hidalgo
CFI ruled in favor of plainiff-administrator for the sum of P13, 606.19
and legal interest from the date of the filing of the complaint and
the costs of the trial.
De la Pena y Ramon filed a third amended complaint with the
permission of the court alleging, among other things, as a first cause
of action, when Frederico Hidalgo had possession of and
administered the following properties to wit, 1 house and lot; at
Calle San Luis; another house and lot at Calle Cortada; another
house and lot at Calle San Luis, and a fenced lot on the same street,
all of the district of Ermita, and another house and lot at Calle
Looban de Paco, belonging to his principal, De la Pena y Gomiz,
according to the power of attorey executed in his favor
Hidalgo, as such agent, collected the rents and income from said
properties, amounting to P50, 244, which sum, collected in partial
amounts and on different dates, he should have deposited, in
accordance with the verbal agreement between the deceased and
himself in the general treasury of the Spanish Government at an
interest of 5% per annum, which interest on accrual was likewise to
be deposited in order that it also might bear interest; that Hidalgo
did not remit or pay to Gomiz, during his lifetime, nor to any
representative of the said Gomiz, the sum aforestated nor any part
thereof with the sole exception of P1,289.03, nor has he deposited
the unpaid balance of said sum in the treasury, according to
agreement, wherefore he has become liable to his principal and to
the administrator for the said sum, together with its interest
amounting to P72,548.24
The court ruled in favor of De la Pena and said that Hidalgo, as
administrator of the estate of deceased Gomiz, actually owed De la
Pena
ISSUE: W/N Hidalgo is considered an agent of Gomiz and as such
must reimburse present administrator, De la Pena
RULING: No
Gomiz, before embarking for Spain, executed before a notary a
power of attorney in favor of Hidalgo as his agent and that he
should represent him and administer various properties he owned
and possessed in Manila.
After Hidalgo occupied the position of agent and administrator of De
la Pena y Gomiz’s property for several years, the former wrote to the
latter requesting him to designate a person who might substitute
him in his said position in the event of his being obliged to absent
himself from these Islannds
From the procedure followed by the agent, Hidalgo, it is logically
inferred that he had definitely renounced his agency and that the
agency was duly terminated according to the provisions of art 1782
Although the word “Renounce” was not employed in connection
with the agency executed in his favor, yet when the agent informs
his principal that for reasons of health and by medical advice he is
about to depart from the place where he is exercising his trust and
where the property subject to his administration is situated,
abandons the property, turns it over to a third party, and transmits
to his principal a general statement which summarizes and
embraces all the balances of his accounts since he began to exercise
his agency to the date when he ceased to hold his trust, it then
reasonable and just to conclude that the said agent expressly and
definitely renounced his agency.
Rallos v. Felix Go Chan & Realty Corp.
FACTS:
An SPA was executed by sisters Concepcion and Gerundia in favo of
their brother Simeon for the sale of a parcel of land co-owned by the
two. Months after Conception died, Simeon sold the undivided
shares of his sisters to herein respondent Felix Go Chan & Realty
Corp. Petitioner Ramon Rallos, administrator of he late Concepcion's
estate, prayed that the sale of the undivided share of the deceased
be invalidated and a new certificate be issued in the name of
respondent corporation and Concepion's intestate estate, plus
damages. CFI ruled in favor of petitioner and granted the payers but
CA reversed the decision. Respondent's MR was further denied.
ISSUE:
Whete the sale entered into by an agent is valid alhough executed
after death of the principal.
HELD:
No, the sale is void because Simeon's authority as an agent of
Concepcion was extinguished upon her death. Article 1317 provides
that no one may contract inthe name of another without being
authorized or unless he has, by law, a right to represent him. Article
1919 urthers hat the death of the princpal terminates the agency.
The case at bar is also not among the exceptions whereby an agent's
acts bind the principal even after the latter's death because of
Simeon's knowledge of Concepion's death is material. CA's decision
is reversed, CFI decision affimed. The sale was null and void.
TERRADO V CA (ART. 1919)
(2) NO. Essentially, the contract of management and administration
between the Municipality and Lacuesta is one of agency whereby a
person binds himself to render some service or to do something in
representation or on behalf of another, with the consent or
authority of the latter. Lacuesta bound himself as Manager-
Administrator of the Bayambang Fishing and Hunting Park and
Municipal Watershed to render service or perform duties and
responsibilities in representation or on behalf of the Municipality of
Bayambang, with the consent or authority of the latter. Under Art.
1919 of the Civil Code, agency is extinguished by the death of the
agent. His rights and obligations arising from the contract are not
transmittable to his heirs or predecessors-in-interest

FACTS: On January 21, 1973, the Philippine Legislature ceded a

certain portion of Bayambang Province of Pangasinan (which was
once public land) to the municipality of the Bayambang to be used
or disposed of in accordance with the general municipal law relative
to the letting of fisheries in municipal waters. On 1974, the
municipality of Bayambang enacted Ordinance No. 8, establishing
the Bayambang Fishery and Hunting Park and Municipal Water Shed.
Also in the said ordinance, the municipality appointed and
constituted private respondent Lacuesta as Manager-Administrator
of the watershed for a period of 25 years, renewable for another 25
years.

This is under the condition that said respondent shall pay the
municipality the sum equivalent to 10% of the annual gross income
that may be derived from the forest products, wild game and fish.
Such ordinance was approved by the Provincial Board of Pangasinan
but was disapproved by the Secretary of Agriculture and Natural
Resources as it “grants fishery privileges to respondent Lacuesta
without the benefit of competitive public hearing in contravention
to law.” The municipality then informed Lacuesta of the disapproval
of the ordinance and directed him to refrain and desist from acting
as Administrator-Manager. However, Lacuesta refused and insisted
on retaining possession of the fisheries. Despite such refusal, the
municipality of Bayambang passed another resolution resolving to
advertise for public bidding the said fishery area.

Among the winning bidders are herein petitioners. There was a long
line of petitions/motions filed in the RTC, CA, and SC filed by both
parties. What is important is that while the case was pending in the
CFI of Pangasinan, Lacuesta died. The judge of said court (Judge
Villalon, also a respondent) sided with Lacuesta.

As such, despite the fact that Lacuesta died, she still ordered the
restoration of the possession of all fisheries and areas covered by
the contract to Lacuesta and his party.

ISSUES:
(1) Whether or not the Management Administration contract
between the municipality and Lacuesta was valid

(2) Whether or not the Management-Administration contract still

stands even if Lacuesta already died

HELD:
(1) NO. The Management-Administration contract entered into by
Lacuesta and the municipalty was void as it lacked a vital procedural
aspect (public bidding) necessary for the validity of the contract.
Moreover, the Supreme Court held that the municipality had no
power to grant exclusive privileges of fishing for more than 5 years.