case no.
7 On June 19, 1968, defendant Doronila wrote a letter to the SSS Administrator, renewing
G.R. No. L-39822
ANTONIO E. PRATS, doing business under the name of Philippine Real Estate
Exchange, petitioner,
vs.
HON. COURT OF APPEALS, ALFONSO DORONILA and PHILIPPINE NATIONAL
BANK, respondents.
January 31, 1978
Facts:
Alfonso Doronila (Doronila) is the registered owner of a parcel of land in Montalban, Rizal.
He tried to sell the said property and designated several agents to sell the same. Moreover,
he offered the said property to the Social Security System (SSS), but failed to consummate
any sale.
On February 14, 1968, Doronila gave Antonio Prats (Prats), doing business under the
name of “Philippine Real Estate Exchange” (PREE), the exclusion option and authority to
sell the same. Doronila and Prats agreed that the basic price shall be 3.00 per square meter
(sq.m.). From such sale, Prats is entitled to 10% commission. The said Agreement is good
for a period of 60 days from the date of conformity. However, if negotiations have been
started with a buyer, said period is automatically extended until said negotiations is
terminated, but not more than fifteen days. Provided, however, that a written offer by the
buyer must be made.
Doronila then requested the withdrawal of his papers from the SSS. SSS then requested a
meeting with Doronila; which the latter declined and instead referred the matter to PREE,
as the one given the exclusive authority to negotiate its sale.
On April 18, 1968, defendant DORONILA extended the plaintiff’s exclusive option and
authority to expire May 18, 1968.
On May 6,1968, plaintiff made a formal written offer to the Social Security System to sell
the 300 hectares land of defendant DORONILA at the price of P6.00 per square meter,
On May 18, 1968, after plaintiff exclusive option and authority had been extended, plaintiff
wrote to Doronila, informing the latter that SSS is acquiring the subject property and
informed Doronila that pursuant to their agreement, PREE has fifteen days more to finish
the negotiations.
On May 30, 1968, Prats wrote a letter to Doronila informing the latter that SSS agreed to
purchase the said property. On June 6, 1968, in reply, Doronila informed Prats that he did
not receive any written offer from SSS or any other buyer to purchase the property.
Consequently, the option and authority became null and void.
his offer to sell his 300 hectare land to the SSS at P4.00 per square meter.
Doronila executed a Deed of Absolute Sale. He then received the full purchase price of
9,750,000.00.
Prats then demanded the payment of his professional services as real estate broker, which
Dornila failed to pay.
The Regional Trial Court ruled in favor of Prats. CA reversed the said decision.
Issue:
Whether Prats is the efficient procuring cause in bringing about the sale
Ruling:
No.
From the stipulation of facts and the evidence of record, it is clear that the offer of
defendant Doronila to sell the 300 hectares of land in question to the Social Security
System was formally accepted by the System only on June 20, 1968 after the exclusive
authority, in favor of the plaintiff, petitioner herein, had expired.
The Court has noted on the other hand that Doronila finally sold the property to the Social
Security System at P3.25 per square meter which was the very same price counter-offered
by the Social Security System and accepted by him in July, 1967 when he alone was dealing
exclusively with the said buyer long before Prats came into the picture but that on the
other hand Prats' efforts somehow were instrumental in bringing them together again and
finally consummating the transaction at the same price of P3.25 square meter, although
such finalization was after the expiration of Prats' extended exclusive authority. Still such
price was higher than that stipulated in the exclusive authority granted by Doronila to
Prats.
Under the circumstances, the Court grants in equity the sum of One Hundred Thousand
Pesos (P100,000.00) by way of compensation for his efforts and assistance in the
transaction, which however was finalized and consummated after the expiration of his
exclusive authority and sets aside the P10,000.00 — attorneys' fees award adjudged
against him by respondent court.
case no. 9
ELEANOR ERICA STRONG AND RICHARD P. STRONG
vs
FRANCISCO GUTIERREZ REPIDE
6 Phil 680 May 3. 1909
FACTS:
Strong owned stock in the Philippine Sugar Estates Development Company, Limited
Repide was a director of the company and owned about three-quarters of the company’s
stock. He was also the company’s administrator general and thus had exclusive control of
the company’s management. The company owned profitable land in the Caribbean. The
Philippine government made an offer to purchase this land. Repide handled the
company’s negotiations with the government.
While the offer from the government was being considered, Repide hired a third party
broker to buy Strong’s stock in the company. This third party broker hired another third
party to communicate with Strong. Neither Repide nor the first broker he hired disclosed
the pending land sale. The broker communicating with Strong did not know that Repide
was the actual purchaser of Strong’s stock. The sale of the land to the government resulted
in the company’s stock increasing in value tenfold.
An action was commenced by Eleanor Erica Strong and Richard P. Strong her husband,
against the defendant It was brought by the plaintiff Mrs. Strong, as the owner of 800
shares of the capital stock of the Philippine Sugar Estates Development Company, Limited,
to recover such shares from defendant, on the ground that the shares had been sold and
delivered by plaintiff's agent to the agent of defendant without authority from plaintiff;
and also on the ground that defendant fraudulently concealed from plaintiff's agent, one F.
Stuart Jones, facts affecting the value of the stock so sold and delivered. The stock was of
the par value of $100 per share, Mexican currency.
The plaintiff never had any negotiations for the sale of the stock herself and was ignorant
that it was sold until some time after the sale, the negotiations for which took place
between an agent of the plaintiff and an agent of defendant, the name of the defendant
being undisclosed.
Repide put in issue the lack of authority of the agent of the plaintiff, denied all fraud, and
alleged that the purchase of the stock from plaintiff's agent was made by one Albert
Kauffman, who afterwards sold and conveyed the same to the defendant, and that the
defendant, prior to the commencement of the suit, and prior to any demand made upon
him by the plaintiff in error herein, had sold, transferred, and delivered the stock to Luis
Gutierrez, a citizen and resident of Spain.
The court directed that the plaintiff recover from the defendant the sum found to be due
by the court, and that the judgment might be satisfied by the delivery to the plaintiff, Mrs.
Strong, of her 800 shares of stock within the time mentioned in the decree.
A motion was made by defendant for a new trial, which was overruled. The same was duly
argued in the Philippine Supreme Court which ruled that the agent of the plaintiff had no
power to sell or deliver her stock.
The defendant then made a motion for a new trial on the ground of newly- discovered
evidence, which consisted of a power of attorney from Mrs. Strong to Mr. F. Stuart Jones
and Mr. Robert H. Wood, which authorized both, or either of them, to sell or otherwise
dispose of the property of the plaintiff as they or he might choose, to administer, manage,
and control all the property and revenues of the grantor of what ever nature and condition.
After opposition this motion was granted and leave given to the parties to submit new
evidence as to the nature of the authority delegated by the plaintiff in error to her agent
Jones. From that decree of reversal and dismissal the plaintiffs seek brought the case for
review.
ISSUE: Whether or not there is a valid sale of the shares of stocks owned by Mrs.
Strong, the principal through the agent, Jones.
RULING:
Yes. The SC ruled that upon that piece of evidence the court held that the authority of the
agent Jones was sufficient, and that the paper became absolutely decisive of the issues in
the case, and the judgment of the court of first instance reversed, and the action dismissed.
The power of attorney, under the newly discovered evidence empowered either Jones or
Wood to sell the general stocks of the plaintiff. A construction that would restrict the
words disposing of the same to the revenues, fruits, and products rather than the property
itself is inconsistent with the nature of such revenues, with the right of hypothecation of
property expressly granted and with the general scope of the power, as well as with its
interpretation by the simultaneous and subsequent acts of the parties.
It was clearly under this authority that the proceeds of the sale of other stocks made by
either one of these attorneys were deposited and reinvested in their joint names, and they
were justified in the construction of this instrument that induced them to adopt this course
of business. It is also clear that the direction of the plaintiff to Jones, in the conversation
on the Luneta, not to part with this stock until he got its face value, related to his action
under this particular instrument and amounted to an express recognition of its character
as a preexisting grant of a power of sale.
This document is also important as a test of the accuracy and credibility of several of the
witnesses and of their good faith in endeavoring to explain away upon other hypotheses
the facts that grew naturally out of its existence and its terms.
The subject of the sale of the friar lands was frequently mooted and its probabilities
publicly discussed in a general way. Such discussion was founded upon rumors and gossip
as to the condition of the negotiations. The public press referred to it not infrequently, but
the actual state of the negotiations, the actual probabilities of the sale being consummated,
and the particular position of power and influence which the defendant occupied in such
negotiations, prior to the time of the purchase of plaintiff's stock, were not accurately
known by plaintiff's agent or by anyone else outside those interested in the matter as
negotiators.
case no. 12
NATIONAL POWER CORPORATION, Plaintiff-Appellant, v. NATIONAL
MERCHANDISING CORPORATION and DOMESTIC INSURANCE COMPANY OF THE
PHILIPPINES
Facts:
This case is about the recovery of liquidated damages from a seller’s agent that
allegedly exceeded its authority in negotiating the sale.
The National Power Corporation and National Merchandising Corporation
(NAMERCO), as the representative of the International Commodities Corporation, a New
York based firm, executed in Manila a contract for the of four thousand long tons of crude
sulfur for its Maria Cristina Fertilizer Plant in Iligan. A performance bond in the sum was
executed by the Domestic Insurance Company in favor of the NPC to guarantee the seller’s
obligations.
It was stipulated in the contract of sale that the seller would deliver the sulfur at
Iligan City within sixty days from notice of the establishment in its favor of a letter of credit
and that failure would subject the seller and its surety to the payment of liquidated
damages. The New York supplier was not able to deliver the sulfur due to its inability to
secure shipping space. As a result, NPC demanded liquidated damages from the New York
firm, NAMERCO and its surety.
On its answer, NAMERCO contends that the delivery of the sulfur was
conditioned on the availability of a vessel to carry the shipment and that it acted within
the scope of its authority as agent in signing the contract of sale.
Issue:
Whether or not NAMERCO exceeded its authority.
Ruling:
NAMERCO exceeded its authority. Upon examination of the documentary
evidence presented, the contention of NAMERCO shall fail as the invitation to bid issued
by the NPC provides that non-availability of a steamer to transport the sulfur is not a
ground for non-payment of the liquidated damages.
NAMERCO’s bid or offer is even more explicit. It provides that it was "responsible
for the availability of bottom or vessel" and that it "guarantees the availability of bottom
or vessel to ship the quantity of sulfur within the time specified in this bid"
While it is true that the New York corporation in its cable to NAMERCO stated
that the sale was subject to availability of a steamer, NAMERCO did not disclose that cable
to the NPC and, contrary to its principal’s instruction, it agreed that non-availability of a
steamer was not a justification for nonpayment of the liquidated damages.
Therefore, NAMERCO acted beyond the bounds of its authority as it violated its
principal’s cabled instructions (1) that the delivery of the sulfur should be "C & F Manila",
not "C & F Iligan City" ; (2) that the sale be subject to the availability of a steamer and (3)
that the seller should be allowed to withdraw right away the full amount of the letter of
credit and not merely eighty percent thereof.
Under Article 1897 of the Civil Code, the agent who exceeds the limits of his
authority without giving the party with whom he contracts sufficient notice of his powers
is personally liable to such party. Before the contract of sale was signed, NAMERCO was
already aware that its principal was having difficulties in booking shipping space. In a
cable sent one day before the contract of sale was signed, the New York supplier advised
NAMERCO that the latter should not sign the contract unless it wished to assume sole
responsibility for the shipment. When NAMERCO entered into the contract, the New York
corporation informed the former that since it acted contrary to the latter’s cabled
instructions, the New York Corporation disclaimed responsibility for the contract and that
the responsibility for the sale rested on NAMERCO.
The defendants also contend that the trial court erred in holding as enforceable
the stipulation for liquidated damages despite its finding that the contract was executed
by the agent in excess of its authority and is, therefore, allegedly unenforceable. In support
of that contention, the defendants cite article 1403 of the Civil Code which provides that a
contract entered into in the name of another person by one who has acted beyond his
powers is unenforceable.
This contention however is untenable because article 1403 refers to the
unenforceability of the contract against the principal. In the instant case, the contract
containing the stipulation for liquidated damages is not being enforced against it principal
but against the agent and its surety. It is being enforced against the agent because article
1807 implies that the agent who acts in excess of his authority is personally liable to the
party with whom he contracted.
NAMERCO never disclosed to the NPC the cabled or written instructions of its
principal. For that reason and because NAMERCO exceeded the limits of its authority, it
virtually acted in its own name and not as agent and it is, therefore, bound by the contract
of sale which, however, is not enforceable against its principal.
case no. 15
GUTIERREZ HERMANOS, plaintiff-appellant,
vs.
ORIA HERMANOS & CO., defendant-appellant.
G.R. No. L-8346 March 30, 1915
FACTS:
Counsel for the mercantile firm of Gutierrez Hermanos filed a complaint against the
commercial concern of Oria Hermanos & Co., alleging there have existed commercial
relations between them which gave rise to the opening of a mutual current account, at 8
percent interest, under the name of Oria Hermanos & Co., on the books of the plaintiff
Gutierrez Hermanos.
Plaintiff notified defendant that the current account existing between them would be
closed at the end of thirty days counting from that date, at the expiration of which period
defendant should pay any debit balance that might be owing.The defendant firm,
notwithstanding the said demands, refused to pay the principal and interest owing on the
said account.
Defendant alleged that, by virtue of a commission contract, Oria Hermanos & Co. had
forwarded piculs of copra, bales of hemp and piculs of loose hemp to Gutierrez Hermanos
for sale on commission. That by reason of said sale, Gutierrez Hermanos collected large
sums for commission and brokerage and had turned in for the goods sold amounts less
than what they were actually worth in Manila. Defendant had recently received
information that these lots of hemp and copra were purchased by the firm of Gutierrez
Hermanos for itself, notwithstanding that the latter had stated to its principals, Oria
Hermanos & & Co., that they had been sold to third persons.
Defendant also alleged that, by virtue of the said commission contract, Gutierrez
Hermanos sacks of rice were allegedly to have been purchased from third persons,
wherefore Oria Hermanos & Co. paid a certain stipulated percentage as commission or
brokerage for the sales but the rice so forwarded had not been purchased from third
persons, but belonged to Gutierrez Hermanos who sold it directly to defendant, collecting
from the latter excessive prices, advance payments, commission and interest, all to the
fraud and injury of the defendant firm. Various quantities of salt, petroleum, tobacco,
groceries and beverages for the purchase thereof, Gutierrez Hermanos had also collected
a commission.
ISSUE:
Whether or not Oria is liable to Gutierrez for unsettled amount.
HELD:
Yes except those overpriced transactions which were attended with deceit, fraud, or error
gravely prejudicial to the party who gave said approval.
Oria Hermanos & Co., upon its accepting and approving the accounts which were
presented to it by Gutierrez Hermanos, as transcripts or copies from the latter's books, did
not have an opportunity to make the required verification of the entries of rice contained
in the said accounts or of the invoices of this article in all their details, and whenever it has
discovered that Gutierrez Hermanos, as commission agent, has made overcharged or
placed extra prices in addition to the 2 per cent commission, it has a right to demand
reimbursement of the excess in price which it had erroneously paid as principal. As
regards the petroleum, it is undeniable that the invoices were in higher prices than it
actually cost. Moreover, Oria Hermanos & Co. is entitled to the discount obtained by the
commission house from the commercial firm which sold the petroleum.
When an agent in executing the orders and commissions of his principal carries out the
instructions he has received from his principal, and does not appear to have exceeded his
authority or to have acted with negligence, deceit, or fraud, he cannot be held responsible
for the failure of his principal to accomplish the object of the agency.
After an account has been submitted by the party obligated to render it and it has been
approved by the one whom it affects, it cannot be again revised at the latter's request.
Unless it be demonstrated that in the approval thereof intervened deceit, fraud, or error
gravely prejudicial to the party who gave said approval.
"If commission agents be obliged to render to their principals itemized accounts,
supported by vouchers, of the sums they collect as commission and of the transactions
effected by them in relation with their principals, as often as the latter may desire, in cases
where there arises some trouble, some difference of opinion or a conflict of interests, or
where the commission agents close the account, as occurs in the case at bar because the
principals did not pay what they were owing or because, instead of the debt being
diminished, it was increased, the commission contract would become an inexhaustible and
never ending source of litigation and of claims without number, a formidable arm for
spiteful principals against which it would be insufficient to oppose an arsenal of vouchers
such as might be treasured by the most prescient commission agent, because there could
be avoided neither the brother resulting from their necessary examination, nor the heavy
expenses and loss of time that are the inevitable accompaniment of this class of work."