NATURE, FORM AND KINDS OF AGENCY Art. 1868.

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. (17 !a" Art. 186!. Agency may be e#press, or implied from the acts of the principal, from his silence or lac$ of action, or his failure to repudiate the agency, $nowing that another person is acting on his behalf without authority. Agency may be oral, unless the law re%uires a specific form. (171 a" Art. 187 . Acceptance by the agent may also be e#press, or implied from his acts which carry out the agency, or from his silence or inaction according to the circumstances. (n" Art. 1871. Between persons who are present, the acceptance of the agency may also be implied if the principal delivers his power of attorney to the agent and the latter receives it without any ob&ection. (n" Art. 187'. Between persons who are absent, the acceptance of the agency cannot be implied from the silence of the agent, e#cept( (1" )hen the principal transmits his power of attorney to the agent, who receives it without any ob&ection* ('" )hen the principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is habitually engaged as an agent, and he did not reply to the letter or telegram. Art. 187+. ,f a person specially informs another or states by public advertisement that he has given a power of attorney to a third person, the latter thereby becomes a duly authori-ed agent, in the former case with respect to the person who received the special information, and in the latter case with regard to any person. .he power shall continue to be in full force until the notice is rescinded in the same manner in which it was given. Art. 187/. )hen a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing* otherwise, the sale shall be void. Art. 1870. Agency is presumed to be for a compensation, unless there is proof to the contrary. (n" Art. 1876. An agency is either general or special. .he former comprises all the business of the principal. .he latter, one or more specific transactions. (171'" Art. 1877. An agency couched in general terms comprises only acts of administration, even if the principal should state that he withholds no power or that the agent may e#ecute such acts as he may consider appropriate, or even though the agency should authori-e a general and unlimited management. (n" Art. 1878. 1pecial powers of attorney are necessary in the following cases( (1" .o ma$e such payments as are not usually considered as acts of administration* ('" .o effect novations which put an end to obligations already in e#istence at the time the agency was constituted*

(+" .o compromise, to submit %uestions to arbitration, to renounce the right to appeal from a &udgment, to waive ob&ections to the venue of an action or to abandon a prescription already ac%uired* (/" .o waive any obligation gratuitously* (0" .o enter into any contract by which the ownership of an immovable is transmitted or ac%uired either gratuitously or for a valuable consideration* (6" .o ma$e gifts, e#cept customary ones for charity or those made to employees in the business managed by the agent* (7" .o loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration* (8" .o lease any real property to another person for more than one year* (!" .o bind the principal to render some service without compensation* (1 " .o bind the principal in a contract of partnership* (11" .o obligate the principal as a guarantor or surety* (1'" .o create or convey real rights over immovable property* (1+" .o accept or repudiate an inheritance* (1/" .o ratify or recogni-e obligations contracted before the agency* (10" Any other act of strict dominion. (n" Art. 187!. A special power to sell e#cludes the power to mortgage* and a special power to mortgage does not include the power to sell. (n" Art. 188 . A special power to compromise does not authori-e submission to arbitration. (171+a" Art. 1881. .he agent must act within the scope of his authority. 2e may do such acts as may be conducive to the accomplishment of the purpose of the agency. (171/a" Art. 188'. .he limits of the agent3s authority shall not be considered e#ceeded should it have been performed in a manner more advantageous to the principal than that specified by him. (1710" Art. 188+. ,f an agent acts in his own name, the principal has no right of action against the persons with whom the agent has contracted* neither have such persons against the principal. ,n such case the agent is the one directly bound in favor of the person with whom he has contracted, as if the transaction were his own, e#cept when the contract involves things belonging to the principal. .he provisions of this article shall be understood to be without pre&udice to the actions between the principal and agent. SPOUSES YU ENG CHO & FRANCISCO TAO YU v. PAN AMERICAN WORLD AIRWAYS, INC. (GR 12356 , M!"#$ 2%, 2 & 4A5.1( 6laintiff 7u 8ng 5ho is the owner of 7oung 2ardware 5o. and Achilles 9ar$eting. ,n connection with :this; business, he travels from time to time to 9alaysia, .aipei and 2ong$ong. <n =uly 1 , 1!76, plaintiffs bought plane tic$ets (8#hs. A > B" from defendant 5laudia .agunicar who represented herself to be an agent of defendant .ourist )orld

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1ervices, ,nc. (.)1,". .he destination:s; are 2ong$ong, .o$yo, 1an 4rancisco, C.1.A., for the amount of 6'0, . per computation of said defendant 5laudia .agunicar (8#hs. 5 > 5D1". .he purpose of this trip is to go to 4airfield, Bew =ersey, C.1.A. to buy to two ('" lines of infrared heating system processing te#tured plastic article A few days before the scheduled flight of plaintiffs, their son, Adrian 7u, called the 6an Am office to verify the status of the flight. According to said Adrian 7u, personnel of defendant 6an Am told him over the phone that plaintiffs3 boo$ing:s; are confirmed. <n =uly '+, 1!78, plaintiffs left for 2ong$ong and stayed there for five (0" days. .hey left 2ong$ong for .o$yo on =uly '8, 1!78. Cpon their arrival in .o$yo, they called up 6anDAm office for reconfirmation of their flight to 1an 4rancisco. 1aid office, however, informed them that their names are not in the manifest. 1ince plaintiffs were supposed to leave on the '!th of =uly, 1!78, and could not remain in =apan for more than 7' hours, they were constrained to agree to accept airline tic$ets for .aipei instead, per advise of =AE officials. .his is the only option left to them because Borthwest Airlines was then on stri$e, hence, there was no chance for the plaintiffs to obtain airline seats to the Cnited 1tates within 7' hours. 6laintiffs paid for these tic$ets. Cpon reaching .aipei, there were no flight:s; available for plaintiffs, thus, they were forced to return bac$ to 9anila on August +, 1!78, instead of proceeding to the Cnited 1tates. :=apan; Air Eines (=AE" refunded the plaintiffs the difference of the price for .o$yoD.aipei :and; .o$yoD1an 4rancisco (8#hs. , > =" in the total amount of 6',6 '. . ,n view of their failure to reach 4airfield, Bew =ersey, Fadiant 2eat 8nterprises, ,nc. cancelled 7u 8ng 5ho3s option to buy the two lines of infraDred heating system (8#h. G". .he agreement was for him to inspect the e%uipment and ma$e final arrangement:s; with the said company not later than August 7, 1!78. 4rom this business transaction, plaintiff 7u 8ng 5ho e#pected to reali-e a profit of 6+ , . to 6/ , . . ?efendant .agunicar claims that on =uly 1+, 1!78, a few days before the scheduled flight, plaintiff 7u 8ng 5ho personally went to her office, pressing her about their flight. 1he called up defendant =ulieta 5anilao, and the latter told her Ho sige 5laudia, confirm na.H 1he even noted this in her inde# card (8#h. E", that it was =ulieta who confirmed the boo$ing (8#h. ED1". ,t was then that she allegedly attached the confirmation stic$ers (8#hs. ', 'DB .)1," to the tic$ets. .hese stic$ers came from .)1,. ?efendant .agunicar alleges that it was only in the first wee$ of August, 1!78 that she learned from Adrian 7u, son of plaintiffs, that the latter were not able to ta$e the flight from .o$yo to 1an 4rancisco, C.1.A. After a few days, said Adrian 7u came over with a gentleman and a lady, who turned out to be a lawyer and his secretary. ?efendant .agunicar claims that plaintiffs were as$ing for her help so that they could file an action against 6anDAm. Because of plaintiffs3 promise she will not be involved, she agreed to sign the affidavit prepared by the lawyer. A complaint for damages was filed by petitioners against private respondents 6an American )orld Airways, ,nc. (6an Am", .ourist )orld 1ervices, ,nc. (.)1,", =ulieta 5anilao (5anilao", and 5laudia .agunicar (.agunicar" for e#penses allegedly incurred such as costs of tic$ets and hotel accommodations when petitioners were compelled to stay in 2ong$ong and then in .o$yo by reason of the nonD confirmation of their boo$ing with 6anDAm. ,n a ?ecision dated Bovember 1/, 1!!1, the Fegional .rial 5ourt of 9anila, Branch +, held the defendants &ointly and severally liable, e#cept defendant =ulieta 5anilao

<nly respondents 6an Am and .agunicar appealed to the 5ourt of Appeals. <n 11 August 1!!0, the appellate court rendered &udgment modifying the amount of damages awarded, holding private respondent .agunicar solely liable therefor, and absolving respondents 6an Am and .)1, from any and all liability. ,11C8( )hether here is no agency relationship among 6ABD A9, .)1, and .agunicar are contrary to the &udicial admissions of 6ABDA9, .)1, and .agunicar and li$ewise contrary to the findings of fact of the trial court. 28E?( By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. % .he elements of agency are( (1" consent, e#press or implied, of the parties to establish the relationship* ('" the ob&ect is the e#ecution of a &uridical act in relation to a third person* (+" the agent acts as a representative and not for himself* (/" the agent acts within the scope of his authority. ' ,t is a settled rule that persons dealing with an assumed agent are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and e#tent of authority, and in case either is controverted, the burden of proof is upon them to establish it. ,n the case at bar, petitioners rely on the affidavit of respondent .agunicar where she stated that she is an authori-ed agent of .)1,. .his affidavit, however, has wea$ probative value in light of respondent .agunicar3s testimony in court to the contrary. Affidavits, being ta$en ex parte, are almost always incomplete and often inaccurate, sometimes from partial suggestion, or for want of suggestion and in%uiries. .heir infirmity as a species of evidence is a matter of &udicial e#perience and are thus considered inferior to the testimony given in court. 1 4urther, affidavits are not complete reproductions of what the declarant has in mind because they are generally prepared by the administering officer and the affiant simply signs them after the same have been read to her. 11 Fespondent .agunicar testified that her affidavit was prepared and typewritten by the secretary of petitioners3 lawyer, Atty. Acebedo, who both came with Adrian 7u, son of petitioners, when the latter went to see her at her office. .his was confirmed by Adrian 7u who testified that Atty. Acebedo brought his notarial seal and notari-ed the affidavit of the same day. 12 .he circumstances under which said affidavit was prepared put in doubt petitioners3 claim that it was e#ecuted voluntarily by respondent .agunicar. ,t appears that the affidavit was prepared and was based on the answers which respondent .agunicar gave to the %uestions propounded to her by Atty. Acebedo. 13 .hey never told her that the affidavit would be used in a case to be filed against her. 1( .hey even assured her that she would not be included as defendant if she agreed to e#ecute the affidavit. 15 Fespondent .agunicar was prevailed upon by petitioners3 son and their lawyer to sign the affidavit despite her ob&ection to the statement therein that she was an agent of .)1,. .hey assured her that Hit is immaterialH 16 and that Hif we file a suit against you we cannot get anything from you.H 1% .his purported admission of respondent .agunicar cannot be used by petitioners to prove their agency relationship. At any rate, even if such affidavit is to be given any probative value, the e#istence of the agency relationship cannot be established on its sole basis. .he declarations of the agent alone are generally insufficient to establish the fact or e#tent of his authority. 1' ,n addition, as between the negative allegation of respondents 5anilao and .agunicar

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that neither is an agent nor principal of the other, and the affirmative allegation of petitioners that an agency relationship e#ists, it is the latter who have the burden of evidence to prove their allegation, 1) failing in which, their claim must necessarily fail. )e stress that respondent .agunicar categorically denied in open court that she is a duly authori-ed agent of .)1,, and declared that she is an independent travel agent. 2 )e have consistently ruled that in case of conflict between statements in the affidavit and testimonial declarations, the latter command greater weight. 21 As further proofs of agency, petitioners call our attention to .)1,3s 8#hibits H7H, H7DAH, and H8H which show that .agunicar and .)1, received sales commissions from 6an Am. 8#hibit H7H 22 is the .ic$et 1ales Feport submitted by .)1, to 6an Am reflecting the commissions received by .)1, as an agent of 6an Am. 8#hibit H7DAH 23 is a listing of the routes ta$en by passengers who were audited to .)1,3s sales report. 8#hibit H8H 2( is a receipt issued by .)1, covering the payment made by .agunicar for the tic$ets she bought from .)1,. .hese documents cannot &ustify the decision that .agunicar was paid a commission either by .)1, or 6an Am. <n the contrary, .agunicar testified that when she pays .)1,, she already deducts in advance her commission and merely gives the net amount to .)1,. 25 4rom all sides of the legal prism, the transaction is simply a contract of sale wherein .agunicar buys airline tic$ets from .)1, and then sells it at a premium to her clients. )28F84<F8, the decision appealed from is hereby A44,F98?. 5ost against petitioners. 1< <F?8F8?. CONSTANTE AMOR DE CASTRO v. CA (GR 115'3', *+,- ' 2 2& 4A5.1( Appellants0 were coDowners of four (/" lots located at 8?1A corner Bew 7or$ and ?enver 1treets in 5ubao, Iue-on 5ity. ,n a letter dated =anuary '/, 1!8/ (8#hibit HAD1, p. 1//, Fecords", appellee6 was authori-ed by appellants to act as real estate bro$er in the sale of these properties for the amount of 6'+, , . , five percent (0J" of which will be given to the agent as commission. ,t was appellee who first found .imes .ransit 5orporation, represented by its president 9r. Fondaris, as prospective buyer which desired to buy two ('" lots only, specifically lots 1/ and 10. 8ventually, sometime in 9ay of 1!80, the sale of lots 1/ and 10 was consummated. Appellee received from appellants 6/8,8!+.76 as commission. ,t was then that the rift between the contending parties soon emerged. Appellee apparently felt short changed because according to him, his total commission should be 6+0',0 . which is five percent (0J" of the agreed price of 67, 0 , . paid by .imes .ransit 5orporation to appellants for the two ('" lots, and that it was he who introduced the buyer to appellants and unceasingly facilitated the negotiation which ultimately led to the consummation of the sale. 2ence, he sued below to collect the balance of 6+ +,6 6.'/ after having received 6/8,8!+.76 in advance. <n the other hand, appellants completely traverse appellee3s claims and essentially argue that appellee is selfishly as$ing for more than what he truly deserved as commission to the pre&udice of other agents who were more instrumental in the consummation of the sale. Although appellants readily concede that it was appellee who first introduced .imes .ransit 5orp. to them, appellee was not designated by them as their e#clusive real estate agent but that in fact there were more or less eighteen (18" others whose collective efforts in the long run dwarfed those of appellee3s, considering that the first negotiation for the sale where appellee too$ active participation failed and it was

these other agents who successfully bro$ered in the second negotiation. But despite this and out of appellants3 Hpure liberality, beneficence and magnanimityH, appellee nevertheless was given the largest cut in the commission (6/8,8!+.76", although on the principle of quantum meruit he would have certainly been entitled to less. 1o appellee should not have been heard to complain of getting only a pittance when he actually got the lion3s share of the commission and worse, he should not have been allowed to get the entire commission. 4urthermore, the purchase price for the two lots was only 6+.6 million as appearing in the deed of sale and not 67. 0 million as alleged by appellee. .hus, even assuming that appellee is entitled to the entire commission, he would only be getting 0J of the 6+.6 million, or 618 , . .H 6rivate respondent 4rancisco Artigo (HArtigoH for brevity" sued petitioners 5onstante A. ?e 5astro (H5onstanteH for brevity" and 5ora-on A. ?e 5astro (H5ora-onH for brevity" to collect the unpaid balance of his bro$er3s commission from the ?e 5astros. .he .rial 5ourt finds defendants 5onstante and 5ora-on Amor de 5astro &ointly and solidarily liable to plaintiff. .he 5ourt of Appeals affirmed in toto the decision of the F.5. 2ence, this petition. ,11C8( )hether the complaint merits dismissal for failure to implead other coDowners as indispensable parties 28E?( .he ?e 5astros argue that Artigo3s complaint should have been dismissed for failure to implead all the coDowners of the two lots. .he ?e 5astros claim that Artigo always $new that the two lots were coDowned by 5onstante and 5ora-on with their other siblings =ose and 5armela whom 5onstante merely represented. .he ?e 5astros contend that failure to implead such indispensable parties is fatal to the complaint since Artigo, as agent of all the four coDowners, would be paid with funds coDowned by the four coDowners. .he ?e 5astros3 contentions are devoid of legal basis. An indispensable party is one whose interest will be affected by the court3s action in the litigation, and without whom no final determination of the case can be had.7 .he &oinder of indispensable parties is mandatory and courts cannot proceed without their presence.8 )henever it appears to the court in the course of a proceeding that an indispensable party has not been &oined, it is the duty of the court to stop the trial and order the inclusion of such party.! 2owever, the rule on mandatory &oinder of indispensable parties is not applicable to the instant case. .here is no dispute that 5onstante appointed Artigo in a handwritten note dated =anuary '/, 1!8/ to sell the properties of the ?e 5astros for 6'+ million at a 0 percent commission. .he authority was on a first come, first serve basis. 5onstante signed the note as owner and as representative of the other coDowners. Cnder this note, a contract of agency was clearly constituted between 5onstante and Artigo. )hether 5onstante appointed Artigo as agent, in 5onstante3s individual or representative capacity, or both, the ?e 5astros cannot see$ the dismissal of the case for failure to implead the other coDowners as indispensable parties. The De Castros admit that the other co-owners are solidarily liable under the contract of agency,1 citing Article 1!10 of the 5ivil 5ode, which reads( Art. 1!10. ,f two or more persons have appointed an agent for a common transaction or underta$ing, they

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shall be solidarily liable to the agent for all the conse%uences of the agency. .he solidary liability of the four coDowners, however, militates against the ?e 5astros3 theory that the other coDowners should be impleaded as indispensable parties. )hen the law e#pressly provides for solidarity of the obligation, as in the liability of coDprincipals in a contract of agency, each obligor may be compelled to pay the entire obligation.1' .he agent may recover the whole compensation from any one of the coDprincipals, as in this case. ,ndeed, Article 1'16 of the 5ivil 5ode provides that a creditor may sue any of the solidary debtors. .his article reads( Art. 1'16. .he creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. .he demand made against one of them shall not be an obstacle to those which may subse%uently be directed against the others, so long as the debt has not been fully collected. .hus, the 5ourt has ruled in Operators Incorporated vs. American Biscuit Co., Inc. that H# # # solidarity does not make a solidary obligor an indispensable party in a suit filed by the creditor. Article 1'16 of the 5ivil 5ode says that the creditor Kmay proceed against anyone of the solidary debtors or some or all of them simultaneously3.H (8mphasis supplied"

28E?(

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.A FINANCE CORPORATION v. CA GR )(566, *+,- 1))2 4A5.1( <n ?ecember 17, 1!8 , Fenato @aytano, doing business under the name @ebbs ,nternational, applied for and was granted a loan with respondent .raders Foyal Ban$ in the amount of 66 , . . As security for the payment of said loan, the @aytano spouses e#ecuted a deed of suretyship whereby they agreed to pay &ointly and severally to respondent ban$ the amount of the loan including interests, penalty and other ban$ charges. ,n a letter dated ?ecember 0, 1!8 addressed to respondent ban$, 6hilip )ong as credit administrator of BA 4inance 5orporation for and in behalf of the latter, undertoo$ to guarantee the loan of the @aytano spouses. 6artial payments were made on the loan leaving an unpaid balance in the amount of 680,8 7.'0. 1ince the @aytano spouses refused to pay their obligation, respondent ban$ filed with the trial court complaint for sum of money against the @aytano spouses and petitioner corporation as alternative defendant. .he @aytano spouses did not present evidence for their defense. 6etitioner corporation, on the other hand, raised the defense of lac$ of authority of its credit administrator to bind the corporation. <n ?ecember 1', 1!88, the trial court rendered a decision in favor of plaintiff and against defendantsL@aytano spouses, ordering the latter to &ointly and severally pay the plaintiff. Bot satisfied with the decision, respondent ban$ appealed with the 5ourt of Appeals. <n 9arch 1+, 1!! , respondent appellate court rendered &udgment modifying the decision of the trial court. 2ence, this petition. ,11C8( )hether the letter of guaranty is ultra vires and thus invalid andLor unenforceable.

,t is a settled rule that persons dealing with an assumed agent, whether the assumed agency be a general or special one are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and e#tent of authority, and in case either is controverted, the burden of proof is upon them to establish it (2arry Geeler v. Fodrigue-, / 6hil. 1!". 2ence, the burden is on respondent ban$ to satisfactorily prove that the credit administrator with whom they transacted acted within the authority given to him by his principal, petitioner corporation. .he only evidence presented by respondent ban$ was the testimony of 6hilip )ong, credit administrator, who testified that he had authority to issue guarantees as can be deduced from the wording of the memorandum given to him by petitioner corporation on his lending authority. .he said memorandum which allegedly authori-ed )ong not only to approve and grant loans but also to enter into contracts of guaranty in behalf of the corporation. Although )ong was clearly authori-ed to approve loans even up to 6+0 , . without any security re%uirement, which is far above the amount sub&ect of the guaranty in the amount of 66 , . , nothing in the said memorandum e#pressly vests on the credit administrator power to issue guarantees. )e cannot agree with respondent3s contention that the phrase Hcontingent commitmentH set forth in the memorandum means guarantees. ,t has been held that a power of attorney or authority of an agent should not be inferred from the use of vague or general words. @uaranty is not presumed, it must be e#pressed and cannot be e#tended beyond its specified limits (?irector v. 1ing =uco, 0+ 6hil. ' 0". ,n one case, where it appears that a wife gave her husband power of attorney to loan money, this 5ourt ruled that such fact did not authori-e him to ma$e her liable as a surety for the payment of the debt of a third person (Ban$ of 6hilippine ,slands v. 5oster, /7 6hil. 0!/". .he sole allegation of the credit administrator in the absence of any other proof that he is authori-ed to bind petitioner in a contract of guaranty with third persons should not be given weight. .he representation of one who acts as agent cannot by itself serve as proof of his authority to act as agent or of the e#tent of his authority as agent (Melasco v. Ea Crbana, 08 6hil. 681". )ong3s testimony that he had entered into similar transactions of guaranty in the past for and in behalf of the petitioner, lac$s credence due to his failure to show documents or records of the alleged past transactions. .he actuation of )ong in claiming and testifying that he has the authority is understandable. 2e would naturally ta$e steps to save himself from personal liability for damages to respondent ban$ considering that he had e#ceeded his authority. .he rule is clear that an agent who e#ceeds his authority is personally liable for damages (Bational 6ower 5orporation v. Bational 9erchandising 5orporation, Bos. ED ++81! and ED++8!7, <ctober '+, 1!8', 117 15FA 78!". Anent the conclusion of respondent appellate court that petitioner is estopped from alleging lac$ of authority due to its failure to cancel or disallow the guaranty, )e find that the said conclusion has no basis in fact. Fespondent ban$ had not shown any evidence aside from the testimony of the credit administrator that the disputed transaction of guaranty was in fact entered into the official records or files of petitioner corporation, which will show notice or $nowledge on the latter3s part and its conse%uent ratification of the said transaction. ,n the absence of clear proof, it would be unfair to hold petitioner corporation guilty of estoppel in allowing its credit administrator to act as though the latter had power to guarantee.

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A55<F?,B@E7, the petition is @FAB.8? and the assailed decision of the respondent appellate court dated 9arch 1+, 1!! is hereby F8M8F18? and 18. A1,?8 and another one is rendered dismissing the complaint for sum of money against BA 4inance 5orporation. 1< <F?8F8?. /UIROGA v PARSONS HARDWARE CO 3' P$0, 4A5.1( <n =anuary '/, 1!11, in this city of manila, a contract was entered into by and between the plaintiff, as party of the first part, and =. 6arsons (to whose rights and obligations the present defendant later subrogated itself", as party of the second part. <f the three causes of action alleged by the plaintiff in his complaint, only two of them constitute the sub&ect matter of this appeal and both substantially amount to the averment that the defendant violated the following obligations( not to sell the beds at higher prices than those of the invoices* to have an open establishment in ,loilo* itself to conduct the agency* to $eep the beds on public e#hibition, and to pay for the advertisement e#penses for the same* and to order the beds by the do-en and in no other manner. As may be seen, with the e#ception of the obligation on the part of the defendant to order the beds by the do-en and in no other manner, none of the obligations imputed to the defendant in the two causes of action are e#pressly set forth in the contract. But the plaintiff alleged that the defendant was his agent for the sale of his beds in ,loilo, and that said obligations are implied in a contract of commercial agency. ,11C8( whether the defendant, by reason of the contract hereinbefore transcribed, was a purchaser or an agent of the plaintiff for the sale of his beds.. 28E?( ,n order to classify a contract, due regard must be given to its essential clauses. ,n the contract in %uestion, what was essential, as constituting its cause and sub&ect matter, is that the plaintiff was to furnish the defendant with the beds which the latter might order, at the price stipulated, and that the defendant was to pay the price in the manner stipulated. .he price agreed upon was the one determined by the plaintiff for the sale of these beds in 9anila, with a discount of from ' to '0 per cent, according to their class. 6ayment was to be made at the end of si#ty days, or before, at the plaintiff3s re%uest, or in cash, if the defendant so preferred, and in these last two cases an additional discount was to be allowed for prompt payment. .hese are precisely the essential features of a contract of purchase and sale. .here was the obligation on the part of the plaintiff to supply the beds, and, on the part of the defendant, to pay their price. .hese features e#clude the legal conception of an agency or order to sell whereby the mandatory or agent received the thing to sell it, and does not pay its price, but delivers to the principal the price he obtains from the sale of the thing to a third person, and if he does not succeed in selling it, he returns it. By virtue of the contract between the plaintiff and the defendant, the latter, on receiving the beds, was necessarily obliged to pay their price within the term fi#ed, without any other consideration and regardless as to whether he had or had not sold the beds. ,t would be enough to hold, as we do, that the contract by and between the defendant and the plaintiff is one of purchase and sale, in order to show that it was not one made on the basis of a commission on sales, as the plaintiff claims it was, for these contracts are incompatible with each other. But, besides, e#amining the clauses of this

contract, none of them is found that substantially supports the plaintiff3s contention. Bot a single one of these clauses necessarily conveys the idea of an agency. .he words commission on sales used in clause (A" of article 1 mean nothing else, as stated in the contract itself, than a mere discount on the invoice price. .he word agency, also used in articles ' and +, only e#presses that the defendant was the only one that could sell the plaintiff3s beds in the Misayan ,slands. )ith regard to the remaining clauses, the least that can be said is that they are not incompatible with the contract of purchase and sale. .he plaintiff calls attention to the testimony of 8rnesto Midal, a former viceDpresident of the defendant corporation and who established and managed the latter3s business in ,loilo. ,t appears that this witness, prior to the time of his testimony, had serious trouble with the defendant, had maintained a civil suit against it, and had even accused one of its partners, @uillermo 6arsons, of falsification. 2e testified that it was he who drafted the contract 8#hibit A, and, when %uestioned as to what was his purpose in contracting with the plaintiff, replied that it was to be an agent for his beds and to collect a commission on sales. 2owever, according to the defendant3s evidence, it was 9ariano Eope- 1antos, a director of the corporation, who prepared 8#hibit A. But, even supposing that 8rnesto Midal has stated the truth, his statement as to what was his idea in contracting with the plaintiff is of no importance, inasmuch as the agreements contained in 8#hibit A which he claims to have drafted, constitute, as we have said, a contract of purchase and sale, and not one of commercial agency. .his only means that 8rnesto Midal was mista$en in his classification of the contract. But it must be understood that a contract is what the law defines it to be, and not what it is called by the contracting parties. .he plaintiff also endeavored to prove that the defendant had returned beds that it could not sell* that, without previous notice, it forwarded to the defendant the beds that it wanted* and that the defendant received its commission for the beds sold by the plaintiff directly to persons in ,loilo. But all this, at the most only shows that, on the part of both of them, there was mutual tolerance in the performance of the contract in disregard of its terms* and it gives no right to have the contract considered, not as the parties stipulated it, but as they performed it. <nly the acts of the contracting parties, subse%uent to, and in connection with, the e#ecution of the contract, must be considered for the purpose of interpreting the contract, when such interpretation is necessary, but not when, as in the instant case, its essential agreements are clearly set forth and plainly show that the contract belongs to a certain $ind and not to another. 4urthermore, the return made was of certain brass beds, and was not effected in e#change for the price paid for them, but was for other beds of another $ind* and for the letter 8#hibit ED1, re%uested the plaintiff3s prior consent with respect to said beds, which shows that it was not considered that the defendant had a right, by virtue of the contract, to ma$e this return. As regards the shipment of beds without previous notice, it is insinuated in the record that these brass beds were precisely the ones so shipped, and that, for this very reason, the plaintiff agreed to their return. And with respect to the soDcalled commissions, we have said that they merely constituted a discount on the invoice price, and the reason for applying this benefit to the beds sold directly by the plaintiff to persons in ,loilo was because, as the defendant obligated itself in the contract to incur the e#penses of advertisement of the plaintiff3s beds, such sales were to be considered as a result of that advertisement.

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,n respect to the defendant3s obligation to order by the do-en, the only one e#pressly imposed by the contract, the effect of its breach would only entitle the plaintiff to disregard the orders which the defendant might place under other conditions* but if the plaintiff consents to fill them, he waives his right and cannot complain for having acted thus at his own free will. 4or the foregoing reasons, we are of opinion that the contract by and between the plaintiff and the defendant was one of purchase and sale, and that the obligations the breach of which is alleged as a cause of action are not imposed upon the defendant, either by agreement or by law. .he &udgment appealed from is affirmed, with costs against the appellant. 1o ordered. AL.ALADE*O v PHILIPPINE REFINING CO (5 P$0, 556 4A5.1( ,t appears that Albalade&o y 5ia. is a limited partnership, organi-ed in conformity with the laws of these ,slands, and having its principal place of business at Eegaspi, in the 6rovince of Albay* and during the transactions which gave origin to this litigation said firm was engaged in the buying and selling of the products of the country, especially copra, and in the conduct of a general mercantile business in Eegaspi and in other places where it maintained agencies, or subDagencies, for the prosecution of its commercial enterprises. .he Misayan Fefining 5o. is a corporation organi-ed under the laws of the 6hilippine ,slands* and prior to =uly !, 1!' , it was engaged in operating its e#tensive plant at <pon, 5ebu, for the manufacture of coconut oil. <n August '8, 1!18, the plaintiff made a contract with the Misayan Fefining 5o. 6ursuant to this agreement the plaintiff, during the year therein contemplated, bought copra e#tensively for the Misayan Fefining 5o. At the end of said year both parties found themselves satisfied with the e#isting arrangement, and they therefore continued by tacit consent to govern their future relations by the same agreement. ,n this situation affairs remained until =uly !, 1!' , when the Misayan Fefining 5o. closed down its factory at <pon and withdrew from the copra mar$et. )hen the contract above referred to was originally made, Albalade&o y 5ia. apparently had only one commercial establishment, i.e., that at Eegaspi* but the large re%uirements of the Misayan Fefining 5o. for copra appeared so far to &ustify the e#tension of the plaintiff3s business that during the course of the ne#t two or three years it established some twenty agencies, or subagencies, in various ports and places of the 6rovince of Albay and neighboring provinces. After the Misayan Fefining 5o. had ceased to buy copra, as above stated, of which fact the plaintiff was duly notified, the supplies of copra already purchased by the plaintiff were gradually shipped out and accepted by the Misayan Fefining 5o., and in the course of the ne#t eight or ten months the accounts between the two parties were li%uidated. .he last account rendered by the Misayan Fefining 5o. to the plaintiff was for the month of April, 1!'1, and it showed a balance of 6'88 in favor of the defendant. Cnder date of =une '0, 1!'1, the plaintiff company addressed a letter from Eegaspi to the 6hilippine Fefining 5o. (which had now succeeded to the rights and liabilities of the Misayan Fefining 5o.", e#pressing its approval of said account. ,n this letter no dissatisfaction was e#pressed by the plaintiff as to the state of affairs between the parties* but about si# wee$s thereafter the present action was begun.

.his action was instituted in the 5ourt of 4irst ,nstance of the 6rovince of Albay by Albalade&o y 5ia., 1. en 5., to recover a sum of money from the 6hilippine Fefining 5o., as successor to the Misayan Fefining 5o., two causes of action being stated in the complaint. Cpon hearing the cause the trial &udge absolved the defendant from the first cause of action but gave &udgment for the plaintiff to recover the sum of 6/!,6'6.68, with costs, upon the second cause of action. 4rom this &udgment the plaintiff appealed with respect to the action ta$en upon the first cause of action, and the defendant appealed with respect to the action ta$en upon the second cause of action. ,t results that, by the appeal of the two parties, the decision of the lower court is here under review as regards the action ta$en upon both grounds of action set forth in the complaint. ,11C8( )hether he defendant liable for the e#penses incurred by the plaintiff in $eeping its organi-ation intact during the period now under consideration. 28E?( )e note that in his letter of =uly 1 , 1!' , 9r. ?ay suggested that if the various purchasing agents of the Misayan Fefining 5o. would $eep their organi-ation intact, the company would endeavor to see that they should not lose by the transaction in the long run. .hese words afford no sufficient basis for the conclusion, which the trial &udge deduced therefrom, that the defendant is bound to compensate the plaintiff for the e#penses incurred in maintaining its organi-ation. .he correspondence sufficiently shows on its face that there was no intention on the part of the company to lay a basis for contractual liability of any sort* and the plaintiff must have understood the letters in that light. .he parties could undoubtedly have contracted about it, but there was clearly no intention to enter into contractual relation* and the law will not raise a contract by implication against the intention of the parties. .he inducement held forth was that, when purchasing should be resumed, the plaintiff would be compensated by the profits then to be earned for any e#pense that would be incurred in $eeping its organi-ation intact. ,t is needless to say that there is no proof showing that the officials of the defendant acted in bad faith in holding out this hope. ,n the appellant3s brief the contention is advanced that the contract between the plaintiff and the Misayan Fefining 5o. created the relation of principal and agent between the parties, and the reliance is placed upon article 17'! of the 5ivil 5ode which re%uires the principal to indemnify the agent for damages incurred in carrying out the agency. Attentive perusal of the contract is, however, convincing to the effect that the relation between the parties was not that of principal and agent in so far as relates to the purchase of copra by the plaintiff. ,t is true that the Misayan Fefining 5o. made the plaintiff one of its instruments for the collection of copra* but it is clear that in ma$ing its purchases from the producers the plaintiff was buying upon its own account and that when it turned over the copra to the Misayan Fefining 5o., pursuant to that agreement, a second sale was effected. ,n paragraph three of the contract it is declared that during the continuance of this contract the Misayan Fefining 5o. would not appoint any other agent for the purchase of copra in Eegaspi* and this gives rise indirectly to the inference that the plaintiff was considered its buying agent. But the use of this term in one clause of the contract cannot dominate the real nature of the agreement as revealed in other clauses, no less than in the caption of the agreement itself. ,n some of the trade letters also the various instrumentalities used by the Misayan Fefining 5o. for

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the collection of copra are spo$en of as agents. But this designation was evidently used for convenience* and it is very clear that in its activities as a buyer the plaintiff was acting upon its own account and not as agents, in the legal sense, of the Misayan Fefining 5o. .he title to all of the copra purchased by the plaintiff undoubtedly remained in it until it was delivered by way of subse%uent sale to said company. 4or the reasons stated we are of the opinion that no liability on the part of the defendant is shown upon the plaintiff3s second cause of action, and the &udgment of the trial court on this part of the case is erroneous. .he appealed &udgment will therefore be affirmed in so far as it absolves the defendant from the first cause of action and will be reversed in so far as it gives &udgment against the defendant upon the second cause of action* and the defendant will be completely absolved from the complaint. 1o ordered, without e#press findings as to costs of either instance. CARAM v. LAURETA 1 3 SCRA % 4A5.1( .his is a petition for certiorari to review the decision of the 5ourt of Appeals promulgated on =anuary '!, 1!68 in 5AD@. F. B<. +07'1DF entitled H5laro E. Eaureta, plaintiffD appellee versus 9arcos 9ata, 5odidi 9ata and 4ermin 5aram, =r., defendantsD appellants* .ampino (9ansaca", et al. ,ntervenorsDappellants,H affirming the decision of the 5ourt of 4irst ,nstance of ?avao in 5ivil 5ase Bo. + 8+. <n =une '0, 1!0!, 5laro E. Eaureta filed in the 5ourt of 4irst ,nstance of ?avao an action for nullity, recovery of ownership andLor reconveyance with damages and attorney3s fees against 9arcos 9ata, 5odidi 9ata, 4ermin N. 5aram, =r. and the Fegister of ?eeds of ?avao 5ity. <n =une 1 , 1!/0, 9arcos 9ata conveyed a large tract of agricultural land covered by <riginal 5ertificate of .itle Bo. + 1! in favor of 5laro Eaureta, plaintiff, the respondent herein. .he deed of absolute sale in favor of the plaintiff was not registered because it was not ac$nowledged before a notary public or any other authori-ed officer. At the time the sale was e#ecuted, there was no authori-ed officer before whom the sale could be ac$nowledged inasmuch as the civil government in .agum, ?avao was not as yet organi-ed. 2owever, the defendant 9arcos 9ata delivered to Eaureta the peaceful and lawful possession of the premises of the land together with the pertinent papers thereof such as the <wner3s ?uplicate <riginal 5ertificate of .itle Bo. + 1!, s$etch plan, ta# declaration, ta# receipts and other papers related thereto. 1ince =une 1 , 1!/0, the plaintiff Eaureta had been and is stin in continuous, adverse and notorious occupation of said land, without being molested, disturbed or stopped by any of the defendants or their representatives. ,n fact, Eaureta had been paying realty ta#es due thereon and had introduced improvements worth not less than 6' , . at the time of the filing of the complaint. <n 9ay 0, 1!/7, the same land covered by <riginal 5ertificate of .itle Bo. + 1! was sold by 9arcos 9ata to defendant 4ermin N. 5aram, =r., petitioner herein. .he deed of sale in favor of 5aram was ac$nowledged before Atty. Abelardo Aportadera. <n 9ay '', 1!/7, 9arcos 9ata, through Attys. Abelardo Aportadera and @umercindo Arcilla, filed with the 5ourt of 4irst ,nstance of ?avao a petition for the issuance of a new <wner3s ?uplicate of <riginal 5ertificate of .itle Bo. + 1!, alleging as ground therefor the loss of said title in the evacuation place of defendant 9arcos 9ata in 9agugpo, .agum, ?avao. <n =une 0, 1!/7, the 5ourt of 4irst ,nstance of ?avao issued an order directing the Fegister of ?eeds of ?avao to issue a new <wner3s ?uplicate

5ertificate of .itle Bo. + 1! in favor of 9arcos 9ata and declaring the lost title as null and void. <n ?ecember !, 1!/7, the second sale between 9arcos 9ata and 4ermin 5aram, =r. was registered with the Fegister of ?eeds. <n the same date, .ransfer 5ertificate of .itle Bo. 1/ was issued in favor of 4ermin 5aram =r. <n August '!, 1!0!, the defendants 9arcos 9ata and 5odidi 9ata filed their answer with counterclaim admitting the e#istence of a private absolute deed of sale of his only property in favor of 5laro E. Eaureta but alleging that he signed the same as he was sub&ected to duress, threat and intimidation for the plaintiff was the commanding officer of the 1 th division C14,6 operating in the unoccupied areas of Borthern ?avao with its head%uarters at 6ro&ect Bo. 7 (Gm. 6 , ?avao Agusan 2ighways", in the 9unicipality of .agum, 6rovince of ?avao* that Eaureta3s words and re%uests were laws* that although the defendant 9ata did not li$e to sell his property or sign the document without even understanding the same, he was ordered to accept 660 . 9indanao 8mergency notes* and that due to his fear of harm or danger that will happen to him or to his family, if he refused he had no other alternative but to sign the document. .he defendants 9arcos 9ata and 5odidi 9ata also admit the e#istence of a record in the Fegistry of ?eeds regarding a document allegedly signed by him in favor of his coDdefendant 4ermin 5aram, =r. but denies that he ever signed the document for he $new before hand that he had signed a deed of sale in favor of the plaintiff and that the plaintiff was in possession of the certificate of title* that if ever his thumb mar$ appeared in the document purportedly alienating the property to 4ermin 5aram, did his consent was obtained through fraud and misrepresentation for the defendant 9ata is illiterate and ignorant and did not $now what he was signing* and that he did not receive a consideration for the said sale. .he defendant 4ermin 5aram =r. filed his answer on <ctober '+, 1!0! alleging that he has no $nowledge or information about the previous encumbrances, transactions, and alienations in favor of plaintiff until the filing of the complaints. .he trial court rendered a decision declaring that the deed of sale, 8#hibit A, e#ecuted by 9arcos 9ata in favor of 5laro E. Eaureta stands and prevails over the deed of sale, in favor of 4ermin 5aram, =r. .he defendants appealed from the &udgment to the 5ourt of Appeals which promulgated its decision affirming the &udgment of the trial court. ,11C8( )hether there is a valid sale of the property was made through his representatives, 6edro ,respe and Atty. Abelardo Aportadera. 28E?( .he contention of the petitioner has no merit. .he facts of record show that 9ata, the vendor, and 5aram, the second vendee had never met. ?uring the trial, 9arcos 9ata testified that he $nows Atty. Aportadera but did not $now 5aram. .hus, the sale of the property could have only been through 5aram3s representatives, ,respe and Aportadera. .he petitioner, in his answer, admitted that Atty. Aportadera acted as his notary public and attorneyDinDfact at the same time in the purchase of the property. .he petitioner contends that he cannot be considered to have acted in bad faith because there is no direct proof showing that ,respe and Aportadera, his alleged agents, had $nowledge of the first sale to Eaureta. .his contention is also without merit.

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8ven if ,respe and Aportadera did not have actual $nowledge of the first sale, still their actions have not satisfied the re%uirement of good faith. Bad faith is not based solely on the fact that a vendee had $nowledge of the defect or lac$ of title of his vendor. ,n the instant case, ,respe and Aportadera had $nowledge of circumstances which ought to have put them an in%uiry. Both of them $new that 9ata3s certificate of title together with other papers pertaining to the land was ta$en by soldiers under the command of 5ol. 5laro E. Eaureta. 16 Added to this is the fact that at the time of the second sale Eaureta was already in possession of the land. ,respe and Aportadera should have investigated the nature of Eaureta3s possession. ,f they failed to e#ercise the ordinary care e#pected of a buyer of real estate they must suffer the conse%uences. .he rule of caveat emptor re%uires the purchaser to be aware of the supposed title of the vendor and one who buys without chec$ing the vendor3s title ta$es all the ris$s and losses conse%uent to such failure. .he principle that a person dealing with the owner of the registered land is not bound to go behind the certificate and in%uire into transactions the e#istence of which is not there intimated should not apply in this case. ,t was of common $nowledge that at the time the soldiers of Eaureta too$ the documents from 9ata, the civil government of .agum was not yet established and that there were no officials to ratify contracts of sale and ma$e them registerable. <bviously, Aportadera and ,respe $new that even if 9ata previously had sold t he ?isputed such sale could not have been registered. .here is no doubt then that ,respe and Aportadera, acting as agents of 5aram, purchased the property of 9ata in bad faith. Applying the principle of agency, 5aram as principal, should also be deemed to have acted in bad faith. 1ince 5aram was a registrant in bad faith, the situation is as if there was no registration at all. .he %uestion to be determined now is, who was first in possession in good faithO A possessor in good faith is one who is not aware that there e#ists in his title or mode of ac%uisition any flaw which invalidates it. Eaureta was first in possession of the property. 2e is also a possessor in good faith. ,t is true that 9ata had alleged that the deed of sale in favor of Eaureta was procured by force. 21 1uch defect, however, was cured when, after the lapse of four years from the time the intimidation ceased, 9arcos 9ata lost both his rights to file an action for annulment or to set up nullity of the contract as a defense in an action to enforce the same. Anent the fourth error assigned, the petitioner contends that the second deed of sale, 8#hibit H4H, is a voidable contract. Being a voidable contract, the action for annulment of the same on the ground of fraud must be brought within four (/" years from the discovery of the fraud. ,n the case at bar, Eaureta is deemed to have discovered that the land in %uestion has been sold to 5aram to his pre&udice on ?ecember !, 1!/7, when the ?eed of 1ale, 8#hibit H4H was recorded and entered in the <riginal 5ertificate of .itle by the Fegister of ?eeds and a new 5ertificate of .itle Bo. 1/ was issued in the name of 5aram. .herefore, when the present case was filed on =une '!, 1!0!, plaintiff3s cause of action had long prescribed. .he petitioner3s conclusion that the second deed of sale, H8#hibit 4H, is a voidable contract is not correct. , n order that fraud can be a ground for the annulment of a contract, it must be employed prior to or simultaneous to the, consent or creation of the contract. .he fraud or dolo causante must be that which determines or is the essential cause of the contract. Dolo causante as a ground for the annulment of contract is specifically described in Article 1++8 of the Bew 5ivil 5ode of the 6hilippines as Hinsidious words or

machinations of one of the contracting partiesH which induced the other to enter into a contract, and Hwithout them, he would not have agreed toH. .he second deed of sale in favor of 5aram is not a voidable contract. Bo evidence whatsoever was shown that through insidious words or machinations, the representatives of 5aram, ,respe and Aportadera had induced 9ata to enter into the contract. 1ince the second deed of sale is not a voidable contract, Article 1+!1, 5ivil 5ode of the 6hilippines which provides that the action for annulment shall be brought within four (/" years from the time of the discovery of fraud does not apply. 9oreover, Eaureta has been in continuous possession of the land since he bought it in =une 1!/0. A more important reason why Eaureta3s action could not have prescribed is that the second contract of sale, having been registered in bad faith, is null and void. Article 1/1 of the 5ivil 5ode of the 6hilippines provides that any action or defense for the declaration of the ine#istence of a contract does not prescribe. ,n a 9emorandum of Authorities submitted to this 5ourt on 9arch 1+, 1!78, the petitioner insists that the action of Eaureta against 5aram has prescribed because the second contract of sale is not void under Article 1/ ! 23 of the 5ivil 5ode of the 6hilippines which enumerates the $inds of contracts which are considered void. 9oreover, Article 10// of the Bew 5ivil 5ode of the 6hilippines does not declare void a second sale of immovable registered in bad faith. .he fact that the second contract is not considered void under Article 1/ ! and that Article 10// does not declare void a deed of sale registered in bad faith does not mean that said contract is not void. Article 10// specifically provides who shall be the owner in case of a double sale of an immovable property. .o give full effect to this provision, the status of the two contracts must be declared valid so that one vendee may contract must be declared void to cut off all rights which may arise from said contract. <therwise, Article 10// win be meaningless. .he first sale in favor of Eaureta prevails over the sale in favor of 5aram. )28F84<F8, the petition is hereby denied and the decision of the 5ourt of Appeals sought to be reviewed is affirmed, without pronouncement as to costs. 1< <F?8F8?. FIEGE & .ROWN v SMITH, .ELL & COMPANY, LTD. (3 P$0, 113 4A5.1( .he defendant, 1mith, Bell > 5o. Etd., is a corporation organi-ed under the laws of the 6hilippine ,slands with its principal office in the city of 9anila. ,n 1!18, the defendant 5owper was in the employ of the defendant corporation, which among other things, was engaged in the sale of machinery and e%uipment for the use of manufacturers of coconut oil. As the result of negotiations with the company, on 9ay 6, 1!18, 5owper wrote a letter. .his letter referred to what is $nown in the evidence as the 2arden contract. Eater, both plaintiffs here became associated with 5owper in finding purchasers and in the sale of such machinery for the defendant corporation. <utside of the above letter, there is no written contract as to what the plaintiffs should receive or the defendant should pay them for their services, and there is but little, if any, oral evidence of any contract between 4iege, Brown, and 5owper, as one party, and the defendant corporation, as the other. As a result of their services, a number of purchasers were found for the machinery with whom the defendant

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corporation entered into written contracts for its sale and delivery, and undertoo$ in good faith to carry out the terms and provisions of the different contracts with the respective purchasers. .he plaintiffs 4iege and Brown now claim that the signing of the respective purchasers made and constituted a complete sale of the machinery, and that their compensation should be based upon the gross amount of the contracts, which should be construed as completed sales. ,n other words, which when the contracts were signed, their services were complete and their commissions were earned. 5laiming that the defendant company has breached its contract, and refused to account or settle with the plaintiffs for their services, they commenced this action, to recover from the defendant corporation, and because 5owper refused to &oin the plaintifs, he was made a defendant in the action. Among other things, the complaint alleges that, under the terms and conditions of the contract, the plaintiffs and their associate 5owper were to see$ buyers for the machinery which were acceptable to the defendant company, and that the prices were to be fi#ed by the plaintiffs, as bro$ers, but which should, in no case, be less than 61 , for each e#peller, and that the date of delivery should not be specific but only appro#imate. .hat the plaintiffs secured order for machinery and e%uipment and which were delivered to, and accepted by , the defendant company, as follows( (2ere follows a list of the contracts, dates, with whom made, and amounts aggregating to 6+1+, ." ,t is then alleged that, for the purpose of carrying out the respective contracts, the defendant imported all of the specified machinery, but that it has failed and refused and still refuses to ma$e any settlement with the plaintiffs or to render any accounting of the cost of the machinery, or to ma$e any payment, either in full or on account, of the services rendered. .hat the plaintiffs have no way to determine the amount of the compensation which they should receive, and that it can only ascertained by means of an accounting, which the defendant company should ma$e. .hat they are entitled to recover appro#imately 6+0, , and they pray that the defendant company be re%uired within a reasonable time to furnish the plaintiffs a full and complete accounting, and to pay them the amount found to be due for the service rendered, upon which they should have interest from the time the machinery was imported, and for such other and further relief as may be &ust and e%uitable. 4or answer, the defendant admits that at the times alleged the plaintiffs were associated, as partners, under the firm name of the 6hilippine @eneral 5ommercial 5ompany* that it is a corporation as alleged* and that in the year, 1!18, it engaged the plaintiffs to act as bro$ers for the sale of machinery and e%uipmetn, and they delivered purchasers3 contracts to the defendant company, which it accepted, amounting to 6+1+, as alleged in paragraph 6 of the complaint. .he defendant =.5. 5owper was formerly a partner of the plaintiffs, and withdrew from the partnership won August 8, 1!18, and that he had an interest in the amount which the plaintiffs should recover, but refused to &oin with them, and denies all other material allegations of the complaint, and, as a further and separate defense, alleges that the plaintiffs and defendant 5owper secured orders for machinery and e%uipment, for which the company, Hagreed to pay plaintiffs and the defendant =.5. 5owper, in e%ual shares, oneDhalf of the net profits derived by said defendant, 1mith, Bell > 5o., Etd., from said orders.H ,t is then alleged that outside of 6', paid by the ,nsular 5oconut <il, 5o., on its order of August '', 1!18, no other payment s have been made on the respective contracts by any of the other purchaser, which were secured by the

plaintiffs. .hat until such payments have been made, the defendant company cannot ascertain the net profits, but that it has not received any profits whatever from any of the other orders, and that, as soon as full payment of any order is made by the purchaser, the company will render an accounting to plaintiffs, and pay them any amount found due. Cpon such issues, the case was tried, and a &udgment was rendered for plaintiffs for 66,011.17, without interest or costs, from which they appealed, claiming that the court erred in failing to find that the plaintifs were entitled to commissions on two different contracts* that the court erred in failing to find that the plaintiffs were entitled to commissions on two different contracts* that the court erred in holding that plaintiffs3 recovery should be based upon the defendant company reali-ing a profit on the respective contracts* and in rendering &udgement without interest or costs. ,11C8( )hether the one half agreed upon by the party should be oneDhalf of the difference between the cost of the machinery laid down at 9anila and the price specified in the contracts with the respective purchasers or HoneDhalf of the net profits.H 28E?( Although the oral evidence pro and con is more or less conflicting, the trial court found that the letter of 9ay 6, 1!18, above %uoted, was basis of the contract under which the services were rendered, and that the plaintiffs were only entitled to recover oneDhalf of the net profits that the company made out of its contracts with the purchasers, and limited the amount of plaintiffs3 recovery to the oneDhalf of the net profits, which the company had actually received and collected under the contracts ,or 66,011.17. April 10, 1!18, 4iege, Brown and 5owper formed a partnership $nown as the 6hilippine @eneral 5ommercial 5ompany to do a general bro$erage business. ,t is admitted that on 9ay 6, 1!18, 5owper wrote the letter above %uoted, and that the different members of the firm and the defendant company $new that the letter was written and received. August 10, 1!18, the respective members of the firm signed a writing, which, among, other things, recites( ,t is further agreed that whatever commissions may be due or become due to the members of the copartnership on order for machinery or merchandise shall be paid by 1mith, Bell > 5o. pro rata among the three partners, etc.Hand that on the same date the three members of the firm addressed the following letter to the defendant company( .he undersigned hereby re%uest that all commissions that may accrue on orders for machinery or merchandise accepted or pending acceptance in which we, or any of us, may be interested, be paid as same fall due to the undersigned individually in pro rata shares of oneD third of such commissions . . . . H .he contract with 2arden was dated 9ay 16* with Micente 1otelo two contracts were dated August 16, and two August ' * one with A. 5hicote was August 11* and the other August 1!, and the one with the ,nsular 5oconut <il 5o., August '', all in the year, 1!18. )hen you consider the dates of the respective contracts, the recital in the agreement between the members of the firm, and the letter to the firm of August 10, become important. .he firm agreement recites Hthat whatever commissions may be due or become due,H and the letter recites H that all commission that may accrue on orders

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for machinery or merchandise accepted or pending acceptance.H .he e#pellers were not to be sold for less than 61 , . As we construe the contract, the plaintiffs and 5owper during his partnership, as one party, and the defendant company, as the other party, were to divide e%ually the profits of each contract, and until such time as the company made a profit on a given contract, plaintiffs3 commission was not earned as to that contract. .here was no profit through the mere signing of the contract by the purchaser and its acceptance by the company. .here would not be any profit until the purchaser paid all the money and complied with his contract. Cntil such time as the company reali-ed a profit on the contracts, there was nothing to share or divide. .he authorities cited by the attorneys for the appellants are good law, but, under the facts in this case, they are not in point. 6laintiffs commission was to paid out of, and is limited to, net profits, and e#cept as to the amount found by the trial court, there is no evidence of net profit on any of the contracts. Bo tender was made before <ctober 10, 1!1!, the date of filing the complaint, and none is alleged in the answer. 1eptember 8, 1!' , through its attorneys, the defendant wrote a letter to plaintiffs3 attorneys, in which they say they are willing to pay as commissions on contracts for the sale of a machinery the sum of 66,011.17, Hin full settlement of all claims which they have upon our clients on that behalf as of this date,H and we Hhereby tender you the sum of 66,011.17 in full settlement of all claims due by our clients as of this date.H As applied to the e#isting facts, it might be %uestioned as to whether this was a good tender of the 66,011.17. But, assuming that it was valid for that amount, it was made nearly one year after the action was commenced and more than one year after the defendant had collected the money upon the contracts, and it does not include interest on the money collected or the accrued costs. .he evidence shows, and the company in effect admits, that from and out of moneys which it had previously collected on the contracts, the plaintiffs were entitled to have and received 66,011.17. Cnder the contract between the plaintiffs and the company, this money should have been paid to the plaintiffs when it was collected. .he lower court found that the plaintiffs were not entitled to interest and costs. .hat was error. ,n so far as it found that the plaintiffs were entitled to &udgment for 66,011.17, the &udgment of the lower court is affirmed. ,n all other respects, it is reversed, and a &udgement will be entered here in favor of the plaintiffs for 66,011.17, with interest from the 10th of <ctober,1!1!, at the rate of si# per cent per annum, together with costs in favor of the plaintiffs in both this and the lower court. .his &udgment to be without pre&udice to plaintiffs3 right to recover any other profits which may have accrued or which may hereafter accrue upon any of the remaining contracts. 1o ordered. LIM TEK GOAN v A1ORES %6 P$0, 363 FACTS2 .he accused was arraigned on August 7, 1!0' and the case set for hearing on 1eptember 1!, 1!0'. <n the latter date, after the first witness for the prosecution has testified, counsel for private prosecution moved for the postponement of the trial on the ground that their ne#t witness was sic$ and unable to come to court. .his motion was granted and the trial was postponed to <ctober 17, 1!0', this time to be held at 5alamba, Eaguna. )hen this

date came, the private prosecution, through counsel, presented an urgent motion for continuance of the trial, which was granted with the conformity of the defense, the court setting it on Bovember 1+, 1!0'. <n said date, Bovember 1+, counsel for private prosecution, instead of going to trial, again filed a motion for postponement, this time see$ing to transfer the case to the 1an 6ablo branch alleging as reasons that his witnesses were all residents of 1an 6ablo 5ity and it would be to their convenience, as well as of the defendants, who were li$ewise residing in the same place, that the trial be continued there. .his motion was ob&ected to not only by the defense but also by 4iscal ?avid 5arreon who argued that he saw no reason for the transfer in view of the fact that the case had already been partially tried at the 5alamba branch. ,n the course of the argument that ensued, counsel for the accused intervened and &oined 4iscal ?avid 5arreon in his opposition to the transfer ma$ing the observation in passing that since the private prosecutor was acting under the direction and control of the fiscal and the latter had registered his ob&ection, he found no reason for him to insist on his petition more so when his appearance in this case was not as a matter of right but merely by tolerance on the part of the court. .his observation came as a surprise to the counsel for private prosecution who then and there as$ed the court for a ruling as to whether his appearance in the case was a matter of right or a matter of tolerance as insinuated, intimating that if this should be resolved against him he would bring the matter to the 1upreme 5ourt for a definite ruling. 4orthwith, the court ruled that in cases of this nature which do not involve any civil liability the appearance of a private prosecutor cannot be considered as a matter of right and if allowed it would only be upon tolerance of the court and of the parties. .his conclusion notwithstanding, the court noted that counsel for the private prosecution cannot claim any pre&udice on his part for he could continue appearing as such by tolerance of the court until after the final termination of the case. Bot satisfied with this ruling, counsel interposed the present petition for certiorari. ,11C8( )hether in the prosecution of a criminal case commenced either by complaint or by information an offended party may intervene, personally or by attorney, as a matter of right as claimed by petitioner, or upon mere tolerance, as ruled by respondent &udge. 28E?( .he law on this point is clear. 1ection /, Fule 1 6, provides that Hall criminal actions either commenced by complaint or by information shall be prosecuted under the direction and control of the fiscalH3 and, as a corollary, it is also provided that Hunless the offended party has waived the civil action or e#pressly reserved the right to institute it after the termination of the criminal case, . . . he may intervene, personally or by attorney, in the prosecution of the offense.H (1ection 10, Fule 1 6." 4rom these provisions we can clearly infer that while criminal actions as a rule are prosecuted under the direction and control of the fiscal, however, an offended party may intervene in the proceeding, personally or by attorney, specially in cases of offenses which cannot be prosecuted e#cept at the instance of the offended party. (6eople vs. ?i-on, // 6hil., '67* 2errero vs. ?ia-, 70 6hil., /8!." .he only e#ception to this rule is when the offended party waives his right to civil action or e#pressly reserves his right to institute it after the termination of the case, in which case he loses his right to intervene upon the theory that he is deemed to have lost his interest in its prosecution.(6eople vs.

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Mele-, 77 6hil., 1 '6, // <ff. @a-., :6;, 1811* 6eople vs. 5apistrano, ! 6hil., 8'+." And in any event, whether an offended party intervenes in the prosecution of a criminal action, his intervention must always be sub&ect to the direction and control of the prosecuting official (Idem.". 5onsidering the foregoing observations, it is apparent that the ruling of respondent &udge that in cases li$e the one under consideration which do not involve any civil liability an offended party can only appear upon tolerance on the part of the court is not well ta$en it being contrary to the law and precedents obtaining in this &urisdiction. ,n this respect, the law ma$es no distinction between cases that are public in nature and those that can only be prosecuted at the instance of the offended party. ,n either case the law gives to the offended party the right to intervene, personally or by counsel, and he is deprived of such right only when he waives the civil action or reserves his right to institute one. 1uch is not the situation in the present case. .he case at bar involves a public crime and the private prosecution has asserted its right to intervene in the proceedings. .he respondent &udge, therefore, erred in considering the appearance of counsel merely as a matter of tolerance. )e believe, however, that the incident at bar is not of such a character as to give rise to a petition for certiorari for it does not involve grave abuse of discretion. )hile the ruling of the &udge is erroneous, he has however caused no pre&udice to counsel since he has e#pressly manifested in his order that he could continue representing the interest of his client. .he action of the &udge may at most be considered an error of &udgment which can be remedied by appeal. )e find therefore no reason for granting the relief now urged by counsel in his petition for certiorari. )herefore, the petition is denied, without pronouncement as to costs. O.LIGATIONS OF AGENT A"3. 1''(. .he agent is bound by his acceptance to carry out the agency, and is liable for the damages which, through his nonDperformance, the principal may suffer. 2e must also finish the business already begun on the death of the principal, should delay entail any danger. (1718" A"3. 1''5. ,n case a person declines an agency, he is bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner until the latter should appoint an agent or ta$e charge of the goods. (n" A"3. 1''6. 1hould there be a stipulation that the agent shall advance the necessary funds, he shall be bound to do so e#cept when the principal is insolvent. (n" A"3. 1''%. ,n the e#ecution of the agency, the agent shall act in accordance with the instructions of the principal. ,n default thereof, he shall do all that a good father of a family would do, as re%uired by the nature of the business. A"3. 1'''. An agent shall not carry out an agency if its e#ecution would manifestly result in loss or damage to the principal. (n" A"3. 1''). .he agent shall be liable for damages if, there being a conflict between his interests and those of the principal, he should prefer his own. (n" A"3. 1') . ,f the agent has been empowered to borrow money, he may himself be the lender at the current rate of interest. ,f he has been authori-ed to lend money at interest, he cannot borrow it without the consent of the principal. (n" A"3. 1')1. 8very agent is bound to render an account of his transactions and to deliver to the principal whatever he may

have received by virtue of the agency, even though it may not be owing to the principal. 8very stipulation e#empting the agent from the obligation to render an account shall be void. (17' a" A"3. 1')2. .he 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" )hen he was not given the power to appoint one* ('" )hen he was given such power, but without designating the person, and the person appointed was notoriously incompetent or insolvent. All acts of the substitute appointed against the prohibition of the principal shall be void. (17'1" A"3. 1')3. ,n the cases mentioned in Bos. 1 and ' of the preceding article, the principal may furthermore bring an action against the substitute with respect to the obligations which the latter has contracted under the substitution. (17''a" A"3. 1')(. .he responsibility of two or more agents, even though they have been appointed simultaneously, is not solidary, if solidarity has not been e#pressly stipulated. (17'+" A"3. 1')5. ,f solidarity has been agreed upon, each of the agents is responsible for the nonDfulfillment of agency, and for the fault or negligence of his fellows agents, e#cept in the latter case when the fellow agents acted beyond the scope of their authority. (n" A"3. 1')6. .he agent owes interest on the sums he has applied to his own use from the day on which he did so, and on those which he still owes after the e#tinguishment of the agency. (17'/a" A"3. 1')%. .he agent who acts as such is not personally liable to the party with whom he contracts, unless he e#pressly binds himself or e#ceeds the limits of his authority without giving such party sufficient notice of his powers. (17'0" A"3. 1')'. ,f the agent contracts in the name of the principal, e#ceeding the scope of his 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. ,n this case, however, the agent is liable if he undertoo$ to secure the principal3s ratification. (n" A"3. 1')). ,f a duly authori-ed agent acts in accordance with the orders of the principal, the latter cannot set up the ignorance of the agent as to circumstances whereof he himself was, or ought to have been, aware. (n" A"3. 1) . 1o far as third persons are concerned, an act is deemed to have been performed within the scope of the agent3s authority, if such act is within the terms of the power of attorney, as written, even if the agent has in fact e#ceeded the limits of his authority according to an understanding between the principal and the agent. (n" A"3. 1) 1. A third person cannot set up the fact that the agent has e#ceeded his powers, if the principal has ratified, or has signified his willingness to ratify the agent3s acts. (n" A"3. 1) 2. A third person with whom the agent wishes to contract on behalf of the principal may re%uire the presentation of the power of attorney, or the instructions as regards the agency. 6rivate or secret orders and instructions of the principal do not pre&udice third persons who have relied upon the power of attorney or instructions shown them. (n" A"3. 1) 3. .he commission agent shall be responsible for the goods received by him in the terms and conditions and as described in the consignment, unless upon receiving them he

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should ma$e a written statement of the damage and deterioration suffered by the same. (n" A"3. 1) (. .he commission agent who handles goods of the same $ind and mar$, which belong to different owners, shall distinguish them by countermar$s, and designate the merchandise respectively belonging to each principal. (n" A"3. 1) 5. .he commission agent cannot, without the e#press or implied consent of the principal, sell on credit. 1hould he do so, the principal may demand from him payment in cash, but the commission agent shall be entitled to any interest or benefit, which may result from such sale. (n" A"3. 1) 6. 1hould the commission agent, with authority of the principal, sell on credit, he shall so inform the principal, with a statement of the names of the buyers. 1hould he fail to do so, the sale shall be deemed to have been made for cash insofar as the principal is concerned. (n" A"3. 1) %. 1hould the commission agent receive on a sale, in addition to the ordinary commission, another called a guarantee commission, he shall bear the ris$ of collection and shall pay the principal the proceeds of the sale on the same terms agreed upon with the purchaser. (n" A"3. 1) '. .he commission agent who does not collect the credits of his principal at the time when they become due and demandable shall be liable for damages, unless he proves that he e#ercised due diligence for that purpose. (n" A"3. 1) ). .he agent is responsible not only for fraud, but also for negligence, which shall be &udged with more or less rigor by the courts, according to whether the agency was or was not for a compensation. (17'6" DOMINGO v. DOMINGO (2 SCRA 131 4A5.1( ,n a document, Micente 9. ?omingo granted @regorio ?omingo, a real estate bro$er, the e#clusive agency to sell his lot Bo. 88+ of 6iedad 8state with an area of about 88,/77 s%uare meters at the rate of 6'. per s%uare meter (or for 6176,!0/. " with a commission of 0J on the total price, if the property is sold by Micente or by anyone else during the + Dday duration of the agency or if the property is sold by Micente within three months from the termination of the agency to apurchaser to whom it was submitted by @regorio during the continuance of the agency with notice to Micente. .he said agency contract was in triplicate, one copy was given to Micente, while the original and another copy were retained by @regorio. <n =une +, 1!06, @regorio authori-ed the intervenor .eofilo 6. 6urisima to loo$ for a buyer, promising him oneDhalf of the 0J commission. .hereafter, .eofilo 6urisima introduced <scar de Eeon to @regorio as a prospective buyer. After several conferences between @regorio and <scar de Eeon, the latter raised his offer to 61 !, . on =une ' , 1!06 , to which Micente agreed by signing. Cpon demand of Micente, <scar de Eeon issued to him a chec$ in the amount of 61, . as earnest money, after which Micente advanced to @regorio the sum of 6+ . . <scar de Eeon confirmed his former offer to pay for the property at 61.' per s%uare meter in another letter. 1ubse%uently, Micente as$ed for an additional amount of 61, . as earnest money, which <scar de Eeon promised to deliver to him. 6ursuant to his promise to @regorio, <scar gave him as a gift or propina the sum of <ne .housand 6esos (61, . " for succeeding in persuading Micente to sell his lot at 61.' per s%uare meter or a total in round figure of <ne 2undred Bine .housand 6esos (61 !, . ". .his gift of <ne .housand 6esos (61, . " was not disclosed by @regorio to Micente. Beither did <scar pay Micente the additional amount

of <ne .housand 6esos (61, . " by way of earnest money. ,n the deed of sale was not e#ecuted on August 1, 1!06 as stipulated in 8#hibit H5H nor on August 10, 1!06 as e#tended by Micente, <scar told @regorio that he did not receive his money from his brother in the Cnited 1tates, for which reason he was giving up the negotiation including the amount of <ne .housand 6esos (61, . " given as earnest money to Micente and the <ne .housand 6esos (61, . " given to @regorio as propina or gift. )hen <scar did not see him after several wee$s, @regorio sensed something fishy. 1o, he went to Micente and read a portion of 8#hibit HAH mar$ed habit HAD1H to the effect that Micente was still committed to pay him 0J commission, if the sale is consummated within three months after the e#piration of the + Dday period of the e#clusive agency in his favor from the e#ecution of the agency contract on =une ', 1!06 to a purchaser brought by @regorio to Micente during the said + D day period. Micente grabbed the original of 8#hibit HAH and tore it to pieces. @regorio held his peace, not wanting to antagoni-e Micente further, because he had still duplicate of 8#hibit HAH. 4rom his meeting with Micente, @regorio proceeded to the office of the Fegister of ?eeds of Iue-on 5ity, where he discovered 8#hibit H@3 deed of sale e#ecuted on 1eptember 17, 1!06 by Amparo ?ia-, wife of <scar de Eeon, over their house and lot Bo. / ?enver 1treet, 5ubao, Iue-on 5ity, in favor Micente as down payment by <scar de Eeon on the purchase price of Micente3s lot Bo. 88+ of 6iedad 8state. Cpon thus learning that Micente sold his property to the same buyer, <scar de Eeon and his wife, he demanded in writting payment of his commission on the sale price of <ne 2undred Bine .housand 6esos (61 !, . ", 8#hibit H2H. 2e also conferred with <scar de Eeon, who told him that Micente went to him and as$ed him to eliminate @regorio in the transaction and that he would sell his property to him for <ne 2undred 4our .housand 6esos (61 /, . ,n Micente3s reply to @regorio3s letter, 8#hibit H2H, Micente stated that @regorio is not entitled to the 0J commission because he sold the property not to @regorio3s buyer, <scar de Eeon, but to another buyer, Amparo ?ia-, wife of <scar de Eeon. .he 5ourt of Appeals found from the evidence that 8#hibit HAH, the e#clusive agency contract, is genuine* that Amparo ?ia-, the vendee, being the wife of <scar de Eeon the sale by Micente of his property is practically a sale to <scar de Eeon since husband and wife have common or identical interests* that @regorio and intervenor .eofilo 6urisima were the efficient cause in the consummation of the sale in favor of the spouses <scar de Eeon and Amparo ?ia-* that <scar de Eeon paid @regorio the sum of <ne .housand 6esos (61, . " as HpropinaH or gift and not as additional earnest money to be given to the plaintiff, because 8#hibit H66H, Micente3s letter addressed to <scar de Eeon with respect to the additional earnest money, does not appear to have been answered by <scar de Eeon and therefore there is no writing or document supporting <scar de Eeon3s testimony that he paid an additional earnest money of <ne .housand 6esos (61, . " to @regorio for delivery to Micente, unli$e the first amount of <ne .housand 6esos (61, . " paid by <scar de Eeon to Micente as earnest money, evidenced by the letter 8#hibit H/H* and that Micente did not even mention such additional earnest money in his two replies 8#hibits H,H and H=H to @regorio3s letter of demand of the 0J commission. ,11C8( (1" whether the failure on the part of @regorio to disclose to Micente the payment to him by <scar de Eeon of the amount of <ne .housand 6esos (61, . " as gift or HpropinaH for having persuaded Micente to reduce the purchase price from 6'. to 61.' per s%uare meter, so constitutes fraud as to cause a forfeiture of his commission on the sale price.

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28E?( ,n the case at bar, defendantDappellee @regorio ?omingo as the bro$er, received a gift or propina in the amount of <ne .housand 6esos (61, . " from the prospective buyer <scar de Eeon, without the $nowledge and consent of his principal, herein petitionerDappellant Micente ?omingo. 2is acceptance of said substantial monetary gift corrupted his duty to serve the interests only of his principal and undermined his loyalty to his principal, who gave him partial advance of .hree 2undred 6esos (6+ . " on his commission. As a conse%uence, instead of e#erting his best to persuade his prospective buyer to purchase the property on the most advantageous terms desired by his principal, the bro$er, herein defendantDappellee @regorio ?omingo, succeeded in persuading his principal to accept the counterD offer of the prospective buyer to purchase the property at 61.' per s%uare meter or <ne 2undred Bine .housand 6esos (61 !, . " in round figure for the lot of 88,/77 s%uare meters, which is very much lower the the price of 6'. per s%uare meter or <ne 2undred 1eventyD1i# .housand Bine 2undred 4iftyD4our 6esos (6176,!0/. " for said lot originally offered by his principal. .he duty embodied in Article 18!1 of the Bew 5ivil 5ode will not apply if the agent or bro$er acted only as a middleman with the tas$ of merely bringing together the vendor and vendee, who themselves thereafter will negotiate on the terms and conditions of the transaction. Beither would the rule apply if the agent or bro$er had informed the principal of the gift or bonus or profit he received from the purchaser and his principal did not ob&ect therto. 11 2erein defendantD appellee @regorio ?omingo was not merely a middleman of the petitionerDappellant Micente ?omingo and the buyer <scar de Eeon. 2e was the bro$er and agent of said petitionerDappellant only. And therein petitionerDappellant was not aware of the gift of <ne .housand 6esos (61, . " received by @regorio ?omingo from the prospective buyer* much less did he consent to his agent3s accepting such a gift. .he fact that the buyer appearing in the deed of sale is Amparo ?ia-, the wife of <scar de Eeon, does not materially alter the situation* because the transaction, to be valid, must necessarily be with the consent of the husband <scar de Eeon, who is the administrator of their con&ugal assets including their house and lot at Bo. / ?enver 1treet, 5ubao, Iue-on 5ity, which were given as part of and constituted the down payment on, the purchase price of herein petitionerDappellant3s lot Bo. 88+ of 6iedad 8state. 2ence, both in law and in fact, it was still <scar de Eeon who was the buyer. As a necessary conse%uence of such breach of trust, defendantDappellee @regorio ?omingo must forfeit his right to the commission and must return the part of the commission he received from his principal. .eofilo 6urisima, the subDagent of @regorio ?omingo, can only recover from @regorio ?omingo his oneDhalf share of whatever amounts @regorio ?omingo received by virtue of the transaction as his subDagency contract was with @regorio ?omingo alone and not with Micente ?omingo, who was not even aware of such subDagency. 1ince @regorio ?omingo received from Micente ?omingo and <scar de Eeon respectively the amounts of .hree 2undred 6esos (6+ . " and <ne .housand 6esos (61, . " or a total of <ne .housand .hree 2undred 6esos (61,+ . ", oneDhalf of the same, which is 1i# 2undred 4ifty 6esos (660 . ", should be paid by @regorio ?omingo to .eofilo 6urisima. Because @regorio ?omingo3s clearly unfounded complaint caused Micente ?omingo mental anguish and serious an#iety as well as wounded feelings, petitionerD appellant Micente ?omingo should be awarded moral

damages in the reasonable amount of <ne .housand 6esos (61, . " attorney3s fees in the reasonable amount of <ne .housand 6esos (61, . ", considering that this case has been pending for the last fifteen (10" years from its filing on <ctober +, 1!06. )28F84<F8, the &udgment is hereby rendered, reversing the decision of the 5ourt of Appeals and directing defendantD appellee @regorio ?omingo( (1" to pay to the heirs of Micente ?omingo the sum of <ne .housand 6esos (61, . " as moral damages and <ne .housand 6esos (61, . " as attorney3s fees* ('" to pay .eofilo 6urisima the sum of 1i# 2undred 4ifty 6esos (660 . "* and (+" to pay the costs. DUHART FRERES Y CIE v MACIAS 5( P$0, 613 4A5.1( .he change made in the names of the plaintiffs by the amended complaint filed on <ctober 1/, 1!'7, substituting for the partnership H?uhart 4reres > 5ie.,H the names of 6edro ?uhart and 8ugenio ?uhart, who according to said amended complaint are the sole collective partners, and the managing partners according to the evidence, does not constitute a substantial alternation of the party plaintiff, and does not effect the validity and legal force of the attachment of the defendants3 property, issued in favor of said H?uhart 4reres > 5ie.,H upon a prior complaint, which writ still subsist as well in favor of the original plaintiff H?uhart 4reres > 5ie.,H as for the same entity in the persons of its own sole collective partners, the plaintiffs 6edro ?uhart and 8ugenio ?uhart. )henever it happens, as in the instant case, that there is no real change of the party plaintiff, the writ of attachment issued in favor of said plaintiff as an entry, remains unchanged and in favor of said plaintiff as and there is no necessity for issuing another in favor of such as may later appear in the cause as plaintiff, so long as they are to all intents and purposes the same party plaintiff or its successorsDinDinterest. .he alternation thus introduced into the complaint does not amount to a real change in the party plaintiff. 4urthermore, this %uestion has already been decided by this court against the defendants herein in the certiorari proceedings instituted by them on =anuary, 1!'8, @.F. Bo. '88!0. .he appellants contend that as the plaintiffs subscribed the contract 8#hibit A on behalf of the partnership H?uhart 4reres > 5ie,H they cannot now sue in their town behalf, and in the instant action must be instituted by the partnership. ,t was so done in the beginning, but said defendant having demurred, and the court sustained their demurrer, the complaint had to bee amended, naming the collective partners as plaintiffs in favor of the original plaintiff, the partnership H?uhart 4reres > 5ie., ,t is to be noted that the present plaintiffs, in e#ecuting and signing the contract 8#hibit A, did so, according to its own terms, as partners of the firm Duhart !reres " Cie. doing business in the aforementioned city. At any rate, the defendant, 8rnesto 9acias, who, in 8#hibit A contracted with the plaintiffs, cannot now gainsay their right to bring this suit as partners of said firm. As to the defendant H8 9acias 5ommission ,mpe# 5o., Etd.,H the parties entered into an agreement in contract 8#hibit A (5lause M" as an agency under said commercial name, and it appears from paragraph ' of the fifth special defense of the defendants that said defendant is an agency created and organi-ed in the 6hilippines by virtue of said contract 8#hibit A. .he defendants come under the doctrine laid down by this court in 1trachan > 9ac9urray vs. 8maldi ('' 6hil., '!0". ,11C8(

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)hether the document 8#hibit A was a contract of agency and in ordering its rescission, and in not declaring that said document was a partnership contract of &oint account. 28E?( .here is no merit in the assertion that the contract evidence by instruments 8#hibit A, is a &ointDaccount partnership contract. )e are not concerned with an accidental association confined to definite transaction, being thus free from any solemnity in its formation (art. '/ , 5ode of 5ommerce* 9erchantile Eaw, 5arreras, p. + , +d edition", nor did they in the contract agree upon any capital, or that 8rnesto 9acias subscribed or would contribute a part of said capital (art. '+!, 5ode of 5ommerce". <n the contrary, it is the opening of an Hagency,H a word and an idea, repeated and e#plained throughout the instrument as signifying, a commercial agency. And notwithstanding the wise sphere of action granted to said agency, the parties does not render it any the less an agency, which, however, agreed upon a limit, until further stipulation, as may be seen in clause M,,, of the contract, namely, commissions, which are one of the $inds of a commercial agency, specifically so called in article '// of the 5ode of 5ommerce. )e see no sufficient reason for holding that the plaintiffs violated the contract, and therefore, we find no error in the &udgment appealed from ordering the dismissal of the defendants3 counterclaim. ,t appears of record that the defendant 8rnesto 9acias violated clauses M,,,, P,, P,,, and P,,, of the contract, for it has been established that if he did open a ban$ing credit for fifty per cent centum of the value of his orders, which were not paid, neither paid for the credit, nor sent a monthly statement, nor $ept accounts, nor forwarded to the plaintiffs a balance and semestral inventory. All of which gives the plaintiffs a right to rescind the contract as agreed upon in clause P,P thereof. As to the amount awarded to the plaintiffs, we find no reason in these proceedings to depart lower court3s findings in this matter. )ith regard to the order that defendant 9acias render a detailed account to the plaintiffs of the business of said agency, as prayed for in the complaint, we deem it &ustified. ,t is simply the conse%uence of the recession of the contract of agency, also decreed by the court below. 8very agent must give an account of his operations, a general principle e#pressly laid down in article 17' of the 5ivil 5ode. ,t is no obstacle to this order to render accounts that a sum of money has been ad&udged to the plaintiffs, or that the defendants3 counterclaim has been dismissed. Both the claim of said sum of the counterclaim are %uestioned raised and submitted by the parties to the court, which, in view of the evidence, had no decide and did in fact decide, and it has not been shown that they represent all the transactions between the parties or all the operations of the agency. .he appeal being without merit, we affirm the &udgment appealed from, with cost against the defendants. 1o ordered. MUNICIPAL COUNCIL OF ILOILO v E4ANGELISTA 55 P$0, 2) 4A5.1( <n 9arch ' , 1!'/, the 5ourt of 4irst ,nstance of ,loilo rendered &udgment in civil case Bo. +01/ thereof, wherein the appellant herein, .an <ng 1-e Mda. de .an .oco was the plaintiff, and the municipality of ,loilo the defendant, and the former sought to recover of the latter the value of a strip of land belonging to said plaintiff ta$en by the defendant to widen a public street* the &udgment entitled the plaintiff to recover 6/',!66./ , representing the value of said

strip of land, from the defendant (8#hibit A". <n appeal to this court (@. F. Bo .''617" 1 the &udgment was affirmed on Bovember '8, 1!'/ (8#hibit B". After the case was remanded to the court of origin, and the &udgment rendered therein had become final and e#ecutory, Attorney =ose 8vangelista, in his own behalf and as counsel for the administratri# of =ose 9a .Arroyo3s intestate estate, filed a claim in the same case for professional services rendered by him, which the court, acting with the consent of the appellant widow, fi#ed at 10 per cent of the amount of the &udgment. At the hearing on said claim, the claimants appeared, as did also the 6hilippine Bational Ban$, which prayed that the amount of the &udgment be turned over to it because the land ta$en over had been mortgaged to it. Antero 1oriano also appeared claiming the amount of the &udgment as it had been assigned to him, and by him, in turn, assigned to 9auricio 5ru- > 5o., ,nc. After hearing all the adverse claims on the amount of the &udgment the court ordered that the attorney3s lien in the amount of 10 per cent of the &udgment, be recorded in favor of Attorney =ose 8vangelista, in his own behalf and as counsel for the administratri# of the deceased =ose 9a .Arroyo, and directed the municipality of ,loilo to file an action of interpleading against the adverse claimants, the 6hilippine Bational Ban$, Antero 1oriano, 9auricio 5ru- > 5o., =ose 8vangelista and =ose Arroyo, as was done, the case being filed in the 5ourt of 4irst ,nstance of ,loilo as civil case Bo. 77 '. After due hearing, the court rendered the decision %uoted from at the beginning. <n 9arch '!, 1!'8, the municipal treasurer of ,loilo, with the approval of the auditor of the provincial treasurer of ,loilo and of the 8#ecutive Bureau, paid the late Antero 1oriano the amount of 66, in part payment of the &udgment mentioned above, assigned to him by .an Boon .iong, acting as attorneyDinDfact of the appellant herein, .an <ng 1-e Mda. de .an .oco. <n ?ecember 18, 1!'8, the municipal treasurer of ,loilo deposited with the cler$ of the 5ourt of 4irst ,nstance of ,loilo the amount of 66, on account of the &udgment rendered in said civil case Bo. +01/. ,n pursuance of the resolution of the court below ordering that the attorney3s lien in the amount of 10 per cent of the &udgment be recorded in favor of Attorney =ose 8vangelista, in his own behalf and as counsel for the late =ose 9a. Arroyo, the said cler$ of court delivered on the same date to said Attorney =ose 8vangelista the said amount of 66, . At the hearing of the instant case, the codefendants of Attorney =ose 8vangelista agreed not to discuss the payment made to the latter by the cler$ of the 5ourt of 4irst ,nstance of ,loilo of the amount of 66, mentioned above in consideration of said lawyer3s waiver of the remainder of the 10 per cent of said &udgment amounting to 6///.6!. )ith these two payments of 66, each ma$ing a total of 61', , the &udgment for 6/',!66.// against the municipality of ,loilo was reduced to 6+ ,!66./ , which was ad&udicated by said court to 9auricio 5ru- > 5o. .his appeal, then, is confined to the claim of 9auricio 5ru- > 5o. as alleged assignee of the rights of the late Attorney Antero 1oriano by virtue of the said &udgment in payment of professional services rendered by him to the said widow and her coheirs. ,11C8( )hether the assignment made by .an Boon .iong as attorneyDinDfact of the appellant .an <ng 1-e Miuda de .an .oco, to Attorney Antero 1oriano, of all the credits, rights and

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interests belonging to said appellant .an <ng 1-e Miuda de .an .oco entitled Miuda de .an .oco vs. .he 9unicipal 5ouncil of ,loilo, ad&udicating to said widow the amount of 6/',!66./ , plus the costs of court, against said municipal council of ,loilo, in consideration of the professional services rendered by said attorney to said widow of .an .oco and her coheirs. 28E?( A glance at these receipts shows that those amounts were received by Attorney Antero 1oriano for the firm of 1oriano > Arroyo, which is borne out by the stamp on said receipts reading, HBefete 1oriano > Arroyo,H and the manner in which said attorney receipted for them, H1oriano > Arroyo, by A. 1oriano.H .herefore, the appellant3s contention that the amounts of 6' and 60 evidence by said receipts should be considered as payments made to Attorney Antero 1oriano for professional services rendered by him personally to the interests of the widow of .an .oco, is untenable. Besides, if at the time of the assignments to the late Antero 1oriano his professional services to the appellant widow of .an .oco had already been paid for, no reason can be given why it was necessary to write him money in payment of professional services on 9arch 1/, 1!'8 (8#hibit 0D@ .an .oco" and ?ecember 10, of the same year (8#hibit 0D 2 .an .oco" after the deed of assignment, (8#hibit 'D5ru-" dated 1eptember '7, 1!'7, had been e#ecuted. ,n view of the fact that the amounts involved in the cases prosecuted by Attorney Antero 1oriano as counsel for .an .oco3s widow, some of which cases have been appealed to this court, run into the hundreds of thousands of pesos, and considering that said attorney had won several of those cases for his clients, the sum of 61 , to date paid to him for professional services is wholly inade%uate, and shows, even if indirectly, that the assignments of the appellant3s rights and interests made to the late Antero 1oriano and determined in the &udgment aforementioned, was made in consideration of the professional services rendered by the latter to the aforesaid widow and her coheirs. .he defendantDappellant also contends that the deed of assignment 8#hibit 'D5ru- was drawn up in contravention of the prohibition contained in article 1/0!, ,t does not appear that the Attorney Antero 1oriano was counsel for the herein appellant in civil case Bo. +01/ of the 5ourt of 4irst ,nstance of ,loilo, which she instituted against the municipality of ,loilo, ,loilo, for the recovery of the value of a strip of land e#propriated by said municipality for the widening of a certain public street. .he only lawyers who appear to have represented her in that case were Arroyo and 8vangelista, who filed a claim for their professional fees .)hen the appellant3s credit, right, and interests in that case were assigned by her attorneyDinDfact .an Boon .iong, to Attorney Antero 1oriano in payment of professional services rendered by the latter to the appellant and her coheirs in connection with other cases, that particular case had been decided, and the only thing left to do was to collect the &udgment. .here was no relation of attorney and client, then, between Antero 1oriano and the appellant, in the case where that &udgment was rendered* and therefore the assignment of her credit, right and interests to said lawyer did not violate the prohibition cited above. As to whether .an Boon .iong as attorneyDinDfact of the appellant, was empowered by his principal to ma$e as assignment of credits, rights and interests, in payment of debts for professional services rendered by lawyers, in paragraph M, of the power of attorney, 8#hibit 0D5ru-, .an Boon .iong is authori-ed to employ and contract for the services of lawyers upon such conditions as he may deem

convenient, to ta$e charge of any actions necessary or e#pedient for the interests of his principal, and to defend suits brought against her. .his power necessarily implies the authority to pay for the professional services thus engaged. ,n the present case, the assignment made by .an Boon .iong, as AttorneyDinDfact for the appellant, in favor of Attorney Antero 1oriano for professional services rendered in other cases in the interests of the appellant and her coheirs, was that credit which she had against the municipality of ,loilo, and such assignment was e%uivalent to the payment of the amount of said credit to Antero 1oriano for professional services. )ith regard to the failure of the other attorneyDinDfact of the appellant, .an 9ontano, authori-ed by 8#hibit 1 Q .an .oco, to consent to the deed of assignment, the latter being also authori-ed to pay, in the name and behalf of the principal, all her debts and the liens and encumbrances her property, the very fact that different letters of attorney were given to each of these two representatives shows that it was not the principal3s intention that they should act &ointly in order to ma$e their acts valid. 4urthermore, the appellant was aware of that assignment and she not only did not repudiate it, but she continued employing Attorney Antero 1oriano to represent her in court. 4or the foregoing considerations, the court is of opinion and so holds( (1" .hat an agent of attorneyDin Dfact empowered to pay the debts of the principal, and to employ lawyers to defend the latter3s interests, is impliedly empowered to pay the lawyer3s fees for services rendered in the interests of said principal, and may satisfy them by an assignment of a &udgment rendered in favor of said principal* ('" that when a person appoints two attorneysDinDfact independently, the consent of the one will not be re%uired to validate the acts of the other unless that appears positively to have been the principal3s attention* and (+" that the assignment of the amount of a &udgment made by a person to his attorney, who has not ta$en any part in the case wherein said &udgment was rendered, made in payment of professional services in other cases, does not contravene the prohibition of article 1/0!, case 0, of the 5ivil 5ode. By virtue whereof, and finding no error in the &udgment appealed from, the same is affirmed in its entirety, with costs against the appellant. 1o ordered. E. MACIAS & CO v WARNER, .ARNES & CO. (3 P$0, 155 4A5.1( .he plaintiff is a corporation duly registered and domiciled in 9anila. .he defendant is a corporation duly licensed to do business in the 6hilippine ,slands, and is the resident agent of insurance companies H.he 5hina 4ire ,nsurance 5ompany, Eimited, of 2ong$ong,H H.he 7angD.s-e ,nsurance Association Eimited, of 1hanghai,H and H.he 1tate Assurance 5ompany, Eimited, of Eiverpool. .he plaintiff is an importer of te#tures and commercial articles for wholesale. ,n the ordinary course of business, it applied for, and obtained, the following policies against loss by fire( 6olicy Bo. /1/+, of 61', , recites that 9rs. Fosario Mi-carra, having paid to the 5hina 4ire ,nsurance 5ompany, Eimited, 61 ' for insuring against or damage by fire certain merchandise the description of which follows, Hthe company agrees with the insured that, if the property above described, or any party thereof, shall be destroyed or damaged by fire between 1eptember 16, 1!18, and 1eptember 16, 1!1!,H etc., H.he company will, out of its capital, stoc$ and funds, pay or ma$e good all such loss or damage, not e#ceedingH the amount of the policy. .his policy was later duly assigned to the plaintiff. 6olicy Bo. /+8', for 610, , was issued by the same company to, and in the name of, plaintiff.

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6olicy Bo. +'6, for 61 , , was issued to, and in the name of policy Bo. +'6, for 61 , , was issued to, and in the name of the plaintiff by .he 7angD.s-e ,nsurance Association, Eimited, and recites that the premium of 61'0 was paid by the plaintiff to the association, and that, in the event of loss by fire between certain dates, Hthe funds and property of the said association shall be sub&ect and liable to pay, reinstate, or ma$e good to the said assured, their heirs, e#ecutors, or administrators, such loss or damage as shall be occasioned by fire to the property aboveDmentioned and hereby insured,H not e#ceeding the amount of the policy. 6olicy Bo. 7!6111, for 68, , was issued by .he 1tates Assurance 5ompany, Eimited, to the plaintiff for a premium of 61 , which was paid to the Assurance 5ompany through the defendant, its authori-ed agent, and recites that Hthe company agrees with the insured that in the event of loss by fire between certain dates, the company will, out of its capital, stoc$ and funds, pay the amount of such loss or damage,H not e#ceeding the amount of the policy, and it is attested by the defendant, through its H5ashier and Accountant and 9anager, Agents, 1tate Assurance 5o., Etd.,H authori-ed agents of the Assurance 5ompany. 6olicy Bo. /1/+ is attested Hon behalf of .he 5hina 4ire ,nsurance 5ompany, Eimited,H by the cashier and accountant and manager of the defendant, as agents of .he 5hina 4ire ,nsurance 5ompany, Eimited. .he same is true as to policy no. /+8'. 6olicy Bo. +'6 recites the payment of a premium of 61'0 by the plaintiff to .he 7angD.s-e ,nsurance Association, Eimited, and that, in the event of loss, Hthe funds and property of the said association shall be sub&ect and liable to pay, reinstate, or ma$e good to the said assured, their heirs, e#ecutors, or administrators, such loss or damage as shall be occasioned by fire or lightning to the propertyH insured, not e#ceeding the amount of the policy, and it is attested by the defendant, through its cashier and accountant and manager, as agents of the association Hunder the authority of a 6ower of Attorney from .he 7angD.s-e ,nsurance Association, Eimited,H Hto sign, for and on behalf of the said Association, etc.H 9arch '0, 1!1!, and while the policies were in force, a loss occurred in which the insured property was more or less damaged by fire and the use of water resulting from the fire. .he plaintiff made a claim for damages under its policies, but could not agree as to the amount of loss sustained. ,t sold the insured property in its then damaged condition, and brought this action against )arner, Barnes > 5o., in its capacity as agents, to recover the difference between the amount of the policies and the amount reali-ed from the sale of the property, and in the first cause of action, it prayed for &udgment for 6'+, 0'.!!, and in the second cause of action 6!,807.10. .he numbers and amounts of the policies and the names of the insurance companies are set forth and alleged in the complaint. After trial the court found that there was due the plaintiff from the three insurance companies p18,/!+.'! with interest thereon at the rate of 6 per cent per annum, from the date of the commencement of the action, and costs ,11C8( )hether the resident agent in 9anila of the companies, and was authori-ed to solicit and do business for them as such agent* that each company is a foreign corporation. 28E?(

.his is not a case of an undisclosed agent or an undisclosed principal. ,t is a case of a disclosed agent and a disclosed principal. .he policies on their face shows that the defendant was the agent of the respective companies, and that it was acting as such agent in dealing with the plaintiff. .hat in the issuance and delivery of the policies, the defendant was doing business in the name of, acting for, and representing, the respective insurance companies. .he different policies e#pressly recite that, in the event of a loss, the respective companies agree to compensate the plaintiff for the amount of the loss. the defendant company did not insure the property of the plaintiff, or in any manner agree to pay the plaintiff the amount of any loss. .here is no contract of any $ind. either oral or written, between the plaintiff and )arner, Barnes > 5o. 6laintiff3s contracts are with the insurance companies, and are in writing, and the premiums were paid to the insurance companies, and are in writing, and the premiums were paid to the insurance companies and the policies were issued by, and in the name of, the insurance companies, and on the face of the policy itself, the plaintiff $new that the defendant was acting as agent for, and was representing, the respective insurance companies in the issuance and deliver of the policies. .he defendant company did not contract or agree to do anything or to pay the plaintiff any money at any time or on any condition, either as agent or principal. .here is a very important distinction between the power and duties of a resident insurance agent of a foreign company and that of an e#ecutor, administrator, or receiver. An insurance agent as such is not responsible for, and does not have, any control over the corpus or estate of the corporate property, as does an e#ecutor, administrator, or receiver. 1ub&ect only to the order of the court, such officers are legal custodians and have actual possession of the corporate property. ,t is under their control and within their &urisdiction. As stated by counsel for )arner, Barnes > 5o., an attorney of record for an insurance company has greater power and authority to act for, and bind, the company than does a soliciting agent of an insurance company. 7et, no attorney would contend that a personal action would lie against local attorneys who represent a foreign corporation to recover on a contract made by the corporation. <n the same principles by which plaintiff see$s to recover from the defendant, an action could be maintained against the cashier of any ban$ on every foreign draft which he signed for, and on behalf of, the ban$. 8very cause of action ex contractu must be founded upon a contract, oral or written, either e#press or implied. )arner, Barnes > 5o., as principal or agent, did not ma$e any contract, either or written, with the plaintiff. .he contracts were made between the respective insurance companies and the insured, and were made by the insurance companies, through )arner, Barnes > 5o., as their agent. As in the case of a ban$ draft, it is not the cashier of the ban$ who ma$es the contract to pay the money evidenced by the draft, it is the ban$, acting through its cashier, that ma$es the contract. 1o, in the instant case, it was the insurance companies, acting through )arner, Barnes > 5o., as their agent, that made the written contracts wit the insured. .he trial court attached much importance to the fact that in the further and separate answer, an admission was made Hthat defendant was at all times ready and will not to pay, on behalf of the insurance companies by whom each was proportionately liable, the actual damageH sustained by the plaintiff covered by the policies upon the terms and conditions therein stated.

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)hen analy-ed, that is nothing more than a statement that the companies were ready and willing to prorate the amount when the losses were legally ascertained. Again, there is not claim or pretense that )arner, Barnes > 5o. had any authority to act for, and represent the insurance companies in the pending action, or to appear for them or ma$e any admission which would bind them. As a local agent, it could not do that without e#press authority. .hat power could only e#ercised by an e#ecutive officer of the company, or a person who was duly authori-ed to act for, and represent, the company in legal proceedings, and there is no claim or pretense, either e#press or implied, that the defendant has any such authority. 6laintiff3s cause of action, if any, is direct against the insurance companies that issued the policies and agreed to pay the losses. .he only defendant in the instant case is H)arner, Barnes > 5o., in its capacity as agents of(H the insurance companies. )arner, Barnes > 5o. did not ma$e any contract with the plaintiff, and are not liable to the plaintiff on any contract, either as principal or agent. 4or such reason, plaintiff is not entitled to recover its losses from )arner, Barnes > 5o., either as principal or agent. .here is no breach of any contract with the plaintiff by )arners, Barnes > 5o., either as agent or principal, for the simple reason that )arner, Barnes > 5o., as agent or principal, never made any contract, oral or written, with the plaintiff. .his defense was promptly raised before the ta$ing of the testimony, and again renewed on the motion to set aside the &udgment. 6laintiff3s own evidence shows that any cause of action it may have is against the insurance companies which issued the policies. .he complaint is dismissed, and the &udgment of the lower court is reversed, and one will be entered here in favor of )arner, Barnes > 5o., Etd., against the plaintiff, for costs in both this and the lower court. 1o ordered. CADWALLADER v SMITH, .ELL & COMPANY % P$0, (61 4A5.1( ,n this action the plaintiff, as assignee of the 6acific 8#port Eumber 5ompany, sues for R+,/86, Cnited 1tates currency, the differences between the amount turned over to the company on account of a cargo of cedar piles consigned to the defendants as its agents and afterwards bought by them, and the amount actually received by them on the subse%uent sale thereof. .he defendant were allowed by the court below a counterclaim of R6,!!+.8 , Cnited 1tates currency, from which was deducted R', 6+.16 for the plaintiffs claim, leaving a balance in favor of the defendants of R/,!+ .6/, for the e%uipment of which, to wit, !,861.'8 pesos, &udgment was entered. .he defendants have not appealed. .he plaintiff too$ several e#ceptions, but on the argument its counsel stated that its contention was confined to the allowance by the trial court of the commissions of the defendant on selling the piling. ,n 9ay 1! ', the 6acific 8#port Eumber 5ompany of 6ortland shipped upon the steamer #uito five hundred and eightyDone (081" piles to the defendant, 2enry ). 6eabody > 5ompany, at 9anila, on the sale of which before storage the consignees were to receive a commission of one half of whatever sum was obtained over R10 for each pile and 0 per cent of the price of the piles sold after storage. After the arrival of the steamer on August ', 6eabody and 5ompany wrote the agent of the 6acific 5ompany at 1hanghai that for lac$ of a demand the piles would have to be sold at considerably less than R10 apiece* whereupon the company3s agent directed them to ma$e the best possible offer for the piles, in response to which on August 0 they telegraphed him

an offer of R1' apiece. ,t was accepted by him on August 6, in conse%uence of which the defendant paid the 6acific 5ompany R6,!7'. ,t afterwards appeared that on =uly ! 6eabody > 5ompany had entered into negotiations with the ,nsular 6urchasing Agent for the sale for the piles at R' a piece, resulting of August / in the sale to the @overnment of two hundred and thirteen ('1+" piles at R1! each. 9ore of them were afterwards sold to the @overnment at the same figure and the remainder to other parties at carrying prices, the whole reali-ing to the defendants R1 ,/1.66, amounting to R+,//0.66 above the amount paid by the defendant to the plaintiff therefor. .hus it is clear that at the time when the agents were buying from their principal these piles at R1' apiece on the strength of their representation that no better price was obtainable, they had already sold a substantial part of them at R1!. ,n these transactions the defendant, 1mith, Bell > 5ompany, were associated with the defendants, 2enry ). 6eabody > 5ompany, who conducted the negotiations, and are conse%uently accountable with them. ,t is plaint that in concealing from their principal the negotiations with the @overnment, resulting in a sale of the piles at 1! a piece and in misrepresenting the condition of the mar$et, the agents committed a breach of duty from which they should benefit. .he contract of sale to themselves thereby induced was founded on their fraud and was sub&ect to annulment by the aggrieved party. (5ivil 5ode, articles 1'60 and 1'6!." Cpon annulment the parties should be restored to their original position by mutual restitution. (Article 1+ + and 1+ 6." .herefore the defendants are not entitled to retain their commission reali-ed upon the piles included under the contract so annulled. ,n respect of the '1+ piles, which at the time of the ma$ing of this contract on August 0 they had already sold under the original agency, their commission should be allowed. .he court below found the net amount due from the defendants to the plaintiff for the #uito piles, after deducting the e#pense of landing the same and R0/+.1 commission, was R1,76 .88, on which it allowed interest at the rate of 6 per cent from 9arch 1, 1! +. .his amount should be increased by the addition thereto of the amount of the commission disallowed, to wit, R++1.17 giving R', !'. 0. ,nterest computed on this sum to the date of the entry of &udgment below amounts to R+0!.77, which added to the principal sum ma$es R','/1.8', the amount of plaintiff3s claim, which is to be deducted from defendants3 counterclaim of R6,!!+.8 , leaving a balance of R/,0/1.!8, e%uivalent to !, 8+.!6 pesos, the amount for which &udgment below should have been entered in favor of the defendants. Eet the &udgment of the 5ourt of 4irst ,nstance be modified accordingly, without costs to either party. After e#piration of twenty days let &udgment be entered in accordance herewith and ten days thereafter the record remanded to the court below for proper action. 1o ordered.

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NATIONAL .ANK v. .AGAMASPAD G.R. N5. L63( % *+78 2), 1)51 4A5.1( .he plaintiff 6hilippine Bational Ban$, initiated this suit in the 5ourt of 4irst ,nstance of 5otabato for the purpose of collecting from the defendants Bernardo Bagamaspad and Bienvenido 9. 4errer who, in the years 1!/6 and 1!/7, were its Agent and Assistant Agent, respectively, in its 5otabato Agency, the sum of 67 /,! +.18, said to have been disbursed and released by them as special crop loans,

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without authority and in a careless manner to manifestly insolvent, un%ualified or fictitious borrowers, all contrary to the rules and regulations of the plaintiff Ban$. .he theory on which the Ban$3s claim and complaint are based is that the two defendants Bagamaspad and 4errer acting as Agent and Assistant Agent of the 5otabato Agency, in granting new crop loans after Bovember 1+, 1!/6, violated the instructions of the Ban$, and that furthermore, in granting said crop loans, they acted negligently and did not e#ercise the care and precaution re%uired of them in order to prevent the release of crop loans to persons who were neither %ualified borrowers nor entitled to the assistance being rendered by the @overnment and the Ban$, all contrary to the rules and regulations issued by the Ban$. ,n the course of the trial, upon petition of plaintiff3s counsel, the amount of the claim was reduced to 66!!,8 +.07, due to payments made by some of the borrowers. <n 9arch +1, 1!/!, the trial court rendered &udgment in favor of the plaintiff, ordering both defendants to pay &ointly and severally to it the sum of 66!!,8 +.07, representing the uncollected balance of the special crop loans improperly released by said defendants, with legal interest thereon from the date of the filing of the complaint, plus costs. .he two defendants appealed from that decision. .he appeal was first ta$en to the 5ourt of Appeals but in view of the amount involved it was certified to this .ribunal by the said 5ourt of Appeals. ,11C8( )hether the appellants, as agents were e#tremely la#, negligent and careless in granting new special crop loans. 28E?( .he lower court as may be seen, severely critci-ed and condemned the acts of la#ity, negligence and carelessness of the appellants. But the severity of this criticism and condemnation would appear to be amply warranted by the evidence. <ut of the numerous acts of la#ity, negligence and carelessness established by the record, a few cases may be cited. .he evidence shows that in violation of these instructions and regulations, the defendants released large loans aggregating 6+/8,768.'' to about 1 + borrowers who were neither landowners or tenants but only public land sales applicants that is to say, persons who have merely filed applications to buy public lands. Appellants in their overDenthusiasm and seemingly inordinate desire to grant as many loans as possible and in amounts disproportionate to the needs of the borrowers, admitted and passed upon more loan applications than they could properly handle. 4rom =uly, 1!/6 to 9arch, 1!/7 the total amount of about eight and half (81L'" million pesos was released in the form of special crop loans to about 0,1 0 borrowers and this, in a relatively sparsely populated province li$e 5otabato. Also, contrary to the Ban$3s rules and regulations regarding the granting of special crops loans, the defendants allowed intermediaries to intervene in the granting of special crop loans. .he trial court based the civil liability of the appellants herein on the provisions of Arts. 1718 and 171! of the 5ivil 5ode, defining and enumerating the duties and obligations of an agent and his liability for failure to comply with such duties, and Art. '0! of the 5ode of 5ommerce which provides that an agent must observe the provisions of law and regulations with respect to business transactions entrusted to him otherwise he shall be responsible for the conse%uences resulting from their breach or omissions* and

also Art. 1! ' of the 5ivil 5ode which provides for the liability of one for his tortious act, that is to say, any act or omission which causes damage to another by his fault or negligence. Appellants while agreeing with the meaning and scope of the legal provisions cited, nevertheless insist that those provisions are not applicable to them inasmuch as they are not guilty of any violation of instructions or regulations of the plaintiff Ban$* and that neither are they guilty of negligence of carelessness as found by the trial court. A careful study and consideration of the record, however, convinces us and we agree with the trial court that the defendantsDappellants have not only violated instructions of the plaintiff Ban$, including things which said Ban$ wanted done or not done, all of which were fully understood by them, but they (appellants" also violated standing regulations regarding the granting of loans* and, what is more, thru their carelessness, la#ity and negligence, they allowed loans to be granted to persons who were not entitled to receive loans. ,n view of all the foregoing, and finding no reversible error in the decision appealed from, the same is hereby affirmed with costs against the appellants. 1o ordered. GON1ALE1 v. E.*. HA.ERER G.R. N5. L6226 ( F89"+!"- 3, 1)25 4A5.1( .his action is brought to recover the sum of 6+/,'6 alleged to be due the plaintiffs from the defendant upon a written agreement for the sale of a tract of land situated in the 6rovince of Bueva 8ci&a. .he plaintiffs also as$ for damages in the sum of 61 , for the alleged failure of the defendant to comply with his part of the agreement. .he defendant in his answer admits that of the purchase price stated in the agreement a balance of 6+1, remains unpaid, but by way of special defense, crossDcomplaint and counterDclaim alleges that at the time of entering into the contract the plaintiffs through false representations lead him to believe that they were in possession of the land and that the title to the greater portion thereof was not in dispute* that on see$ing to obtain possession he found that practically the entire area of the land was occupied by adverse claimants and the title thereto disputed* that he conse%uently has been unable to obtain possession of the land* and that the plaintiffs have made no efforts to prosecute the proceedings for the registration of the land. 2e therefore as$s that the contract be rescinded* that the plaintiffs be ordered to return to him the 6+ , already paid by him to them and to pay 6'0, as damages for breach of the contract. .he court below dismissed the plaintiffs3 complaint, declared the contract rescinded and void and gave the defendant &udgment upon his counterclaim for the sum of 6+ , , with interest from the date upon which the &udgment becomes final. .he case is now before this court upon appeal by the plaintiffs from that &udgment. ,11C8( )hether @on-ale- cannot be charged with the misrepresentations of @ome28E?( As to the contention that the plaintiff @on-alecannot be charged with the misrepresentations of @ome-, 03 0: :+;;0#0873 35 :!- 3$!3 3$8 ,!338" 07 78<530!307< ;5" 3$8 :!,8 5; 3$8 ,!7= !#38= !: 3$8 !<873 !7= "8>"8:873!30v8 5; 3$8 53$8" >,!0730;;, $0: ?0;8@ $!v07< !##8>38= 3$8 9878;03 5; 3$8 "8>"8:873!3057: 5; $8" !<873 :$8 #!7753, 5; #5+":8, 8:#!>8 ,0!90,03- ;5" 3$8A. (2as$ell vs. 1tarbird, 10' 9ass., 117* '+ A.1.F., 8 !." .he contention of the appellants that the symbolic delivery effected by the e#ecution and delivery of the

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?,@81. A18

agreement was a sufficient delivery of the possession of the land, is also without merit. .he possession referred to in the contract is evidently physical* if it were otherwise it would not have been necessary to mention it in the contract. ($ee 5ru-ado vs. Bustos and 8scaler, +/ 6hil., 17." .he &udgment appealed from is in accordance with the law, is fully sustained by the evidence, and is therefore affirmed, with the costs against the appellants. 1o ordered. COMMERCIAL .ANK v REPU.LIC ARMORED CAR G.R. N5:. L61'223 !7= L61'22( S8>38A98" 3 , 1)63 4A5.1( ?efendantDappellant ?amaso 6ere- has presented a motion for new trial on the ground of newly discovered evidence. ,t is claimed that movant was not aware of the nature of the power of attorney that Famon Facelis used, purportedly signed by him, to secure the loans for the Fepublic Armored 5ar 1ervice 5orporation and the Fepublic 5redit 5orporation. ,n the motion it is claimed that a photostatic copy of the power of attorney used by Famon Facelis was presented at the trial. .his photostatic copy or a copy thereof has not been submitted to us, for this reason )e cannot rule upon his claim and contention that Famon Facelis had no authority to bind the movant as surety for the loans obtained from the appellee 5ommercial Ban$ > .rust 5ompany. Bot having before Cs the supposed photostatic copy of the power of attorney used to secure the loans, there is no reason for Cs to rule, in accordance with his contention, that Facelis e#ceeded his authority in securing the loans sub&ect of the present actions. .he motion for reconsideration, however, presents a copy of a power of attorney purportedly e#ecuted by movant on <ctober '', 1!0'. ,t is not e#pressly mentioned that this is the precise power of attorney that Famon Facelis Ctili-ed to secure the loans the collection of which is sought in these cases. But assuming, for the sa$e of argument, that the said power of attorney incorporated in the motion for reconsideration was the one used to obtain the loans. )e find that the movant3s contention has no merit. ,n accordance with the document, Facelis was authori-ed to negotiate for a loan or various loans .. with other being institution, financing corporation, insurance companies or investment corporations, in such sum or sums, aforesaid AttorneyDinDfact 9r. Famon Facelis, may deem proper and convenient to my interests, ... and to e#ecute any and all documents he deems re%uisite and necessary in order to obtain such loans, always having in mind best interest* ... ,11C8( )hether the general power of attorney is sufficient for Atty. Facelis to obtain a loan 28E?( 15 holds that this general power attorney to secure loans from any ban$ing institute was sufficient authority for Famon Facelis to obtain the credits sub&ect of the present suits. ,t will be noted furthermore that Facelis, as agent ?amaso 6ere-, e#ecuted the documents evidencing the loans signing the same H?amaso 6ere- by Famon Facelis,H and in the said contracts ?amaso 6ere- agreed %ointly and severally to be responsible for the loans. As the document as signed ma$es 6ere- &ointly and severally responsible, there is no merit in the contention that 6ere- was only being held liable as a guarantor. 4urthermore, the promissory notes evidencing the loan are attached to the complaint in @.F. Bos. ED18' and ED

18''/. ,f the movant 6ere- claims that Faceli had no authority to e#ecute the said promissory notes, the authenticity of said documents should have been specifically denied under oath in defendant3s answers in the lower court. .his was done* conse%uently 6ere- could not and may not now claim that his agent did not have authority to e#ecute the loan agreements. 9otion for new trial is denied. HERMOSA, v EPIFANIO M. LONGARA G.R. N5. L6526% O#3598" 2%, 1)53 4A5.1(

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.his is an appeal by way of certiorari against a decision of the 5ourt of Appeals, fourth division, approving certain claims presented by 8pifanio 9. Eongara against the testate estate of 4ernando 2ermosa, 1r. .he claims are of three $inds, namely, 6',+/1./1 representing credit advances made to the intestate from 1!+' to 1!//, 61',!'/.1' made to his son 4rancisco 2ermosa, and 6+,77' made to his grandson, 4ernando 2ermosa, =r. from 1!/0 to 1!/7, after the death of the intestate, which occurred in ?ecember, 1!//. .he claimant presented evidence and the 5ourt of Appeals found, in accordance therewith, that the intestate had as$ed for the said credit advances for himself and for the members of his family Hon condition that their payment should be made by 4ernando 2ermosa, 1r. as soon as he receive funds derived from the sale of his property in 1pain.H 5laimant had testified without opposition that the credit advances were to be Hpayable as soon as 4ernando 2ermosa, 1r.3s property in 1pain was sold and he receive money derived from the sale.H .he 5ourt of Appeals held that payment of the advances did not become due until the administratri# received the sum of 6' , from the buyer of the property. Cpon authori-ation of the probate court in <ctober, 1!/7, and the same was paid for subse%uently. .he 5laim was filed on <ctober ', 1!/8. ,11C8( )hether the obligation contracted by the intestate was sub&ect to a condition e#clusively dependent upon the will of the debtor (a condicion potestativa" and therefore null and void )hether the sale was not effected in the lifetime of the debtor (the intestate", but after his death and by his administrator, the very wife of the claimant 28E?( ,n accordance with article 1110 of the old 5ivil 5ode. .he case of Osme&a vs. 'ama, (1/ 6hil. !!" is cited to support appellants contention. ,n this case, this court seems to have filed that a promise to pay an indebtedness Hif a house of strong materials is soldH is an obligation the performance of which depended on the will of the debtor. )e have e#amined this case and we find that the supposed ruling was merely an assumption and the same was not the actual ruling of the case. A careful consideration of the condition upon which payment of the sums advanced was made to depend, Has soon as he (intestate" receive funds derived from the sale of his property in 1pain,H discloses the fact that the condition in %uestion does not depend e#clusively upon the will of the debtor, but also upon other circumstances beyond his power or control. ,f the condition were Hif he decides to sell his house.H or Hif he li$es to pay the sums advanced,H or any other condition of similar import implying that upon him (the debtor" alone payment would depend, the condition would be protestativa, dependent e#clusively upon his will or discretion. ,n the form that the condition was found by the 5ourt of Appeals however the condition implies that the intestate had already

?,@81. A1!

decided to sell his house, or at least that he had made his creditors believe that he had done so, and that all that we needed to ma$e his obligation (to pay his indebtedness" demandable is that the sale be consummated and the price thereof remitted to the islands. Bote that if the intestate would prevent or would have prevented the consummation of the sale voluntarily, the condition would be or would have been deemed or considered complied with (article 111!, old 5ivil 5ode"..he will to sell on the part of the intestate was, therefore, present in fact, or presumed legally to e#ist, although the price and other conditions thereof were still within his discretion and final approval. But in addition of the sale to him (the intestateDvendor", there were still other conditions that had no concur to effect the sale, mainly that of the presence of a buyer, ready, able and willing to purchase the property under the conditions demanded by the intestate. )ithout such a buyer the sale could not be carried out or the proceeds thereof sent to the islands. ,t is evident, therefore sent to the islands. ,t is evident, therefore, that the condition of the obligation was not a purely protestative one, depending e#clusively upon the will of the intestate, but a mi#ed one, depending partly upon the will of intestate and partly upon chance, i.e., the presence of a buyer of the property for the price and under the conditions desired by the intestate. .he obligation is clearly governed by the second sentence of article 1110 of the old 5ivil 5ode (8 9anresa, 1'6". .he condition is, besides, a suspensive condition, upon the happening of which the obligation to pay is made dependent. And upon the happening of the condition, the debt became immediately due and demandable. <ne other point needs to be considered, and this is the fact that the sale was not effected in the lifetime of the debtor (the intestate", but after his death and by his administrator, the very wife of the claimant. <n this last circumstance we must bear in mind that the 5ourt of Appeals found no evidence to show that the claim was the product of a collusion or connivance between the administratri# and the claimant. .hat there was really a promise made by the intestate to pay for the credit advances maybe implied from the fact that the receipts thereof had been preserved. 2ad the advances been made without intention of demanding their payment later, said receipts would not have been preserved. Fegularity of the advances and the close relationship between the intestate and the claimant also support this conclusion. As to the fact that the suspensive condition too$ place after the death of the debtor, and that advances were made more than ten years before the sale, we supported in our conclusion that the same is immaterial by 1ancheFoman, who says, among other things, as to conditional obligations. As the obligation retroacts to the date when the contract was entered into, all amounts advanced from the time of the agreement became due, upon the happening of the suspensive condition. As the obligation to pay became due and demandable only when the house was sold and the proceeds received in the islands, the action to recover the same only accrued, within the meaning of the statute of limitations, on date the money became available here hence the action to recover the advances has not yet prescribed. .he above considerations dispose of the most important %uestions raised on this appeal. ,t is also contended that the third group of claims, i.e., credits furnished the intestate3s grandson after his (intestate3s" death in 1!//, should have been allowed. )e find merit in this contention. 8ven if authori-ation to furnish necessaries to his grandson may have been given, this authori-ation could not be made to e#tend after his death, for two obvious reasons. 4irst because

the obligation to furnish support is personal and is e#tinguished upon the death of the person obliged to give support(article 10 , old 5ivil 5ode", and second because upon the death of a principal (the intestate in this case", his agent3s authority or authori-ation is deemed terminated (article 17+', old 5ivil 5ode". .hat part of the decision allowing this group of claims, amounting to 6+,77' should be reversed. <ne last contention of the appellant is that the claims are barred by the statute of nonDclaims. ,t does not appear from the record that this %uestion was ever raised in any of the courts below. )e are, therefore, without authority under our rules to consider this issue at this stage of the proceedings. .he &udgment appealed from is hereby affirmed in so far as it approves the claims of appellee in the amounts of 6',+/1 and 61',!/'.1', and reversed as to that of 6+,77'. )ithout costs.

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RALLOS v. FELIB GO CHAN G.R. N5. L62(332 *!7+!"- 31, 1)%' 4A5.1( .his is a case of an attorneyDinDfact, 1imeon Fallos, who after of his death of his principal, 5oncepcion Fallos, sold the latter3s undivided share in a parcel of land pursuant to a power of attorney which the principal had e#ecuted in favor. .he administrator of the estate of the went to court to have the sale declared uneanforceable and to recover the disposed share. .he trial court granted the relief prayed for, but upon appeal the 5ourt of Appeals uphold the validity of the sale and the complaint. 2ence, this 6etition for Feview on certiorari. 5oncepcion and @erundia both surnamed Fallos were sisters and registered coDowners of a parcel of land $nown as Eot Bo. 0!8+ of the 5adastral 1urvey of 5ebu covered by .ransfer 5ertificate of .itle Bo. 11116 of the Fegistry of 5ebu. <n April '1, 1!0/, the sisters e#ecuted a special power of attorney in favor of their brother, 1imeon Fallos, authori-ing him to sell for and in their behalf lot 0!8+. <n 9arch +, 1!00, 5oncepcion Fallos died. <n 1eptember 1', 1!00, 1imeon Fallos sold the undivided shares of his sisters 5oncepcion and @erundia in lot 0!8+ to 4eli# @o 5han > 1ons Fealty 5orporation for the sum of 61 ,686.! . .he deed of sale was registered in the Fegistry of ?eeds of 5ebu, .5. Bo. 11118 was cancelled, and a new transfer certificate of .itle Bo. 1'!8! was issued in the named of the vendee. <n 9ay 18, 1!06 Famon Fallos as administrator of the ,ntestate 8state of 5oncepcion Fallos filed a complaint doc$eted as 5ivil 5ase Bo. FD/0+ of the 5ourt of 4irst ,nstance of 5ebu, praying (1" that the sale of the undivided share of the deceased 5oncepcion Fallos in lot 0!8+ be d unenforceable, and said share be reconveyed to her estate* ('" that the 5ertificate of 3title issued in the name of 4eli# @o 5han > 1ons Fealty 5orporation be cancelled and another title be issued in the names of the corporation and the H,ntestate estate of 5oncepcion FallosH in e%ual undivided and (+" that plaintiff be indemnified by way of attorney3s fees and payment of costs of suit. Bamed party defendants were 4eli# @o 5han > 1ons Fealty 5orporation, 1imeon Fallos, and the Fegister of ?eeds of 5ebu, but subse%uently, the latter was dropped from the complaint. .he complaint was amended twice* defendant 5orporation3s Answer contained a crossclaim against its coDdefendant, 1imon Fallos while the latter filed thirdDparty complaint against his sister, @erundia Fallos )hile the case was pending in the trial court, both 1imon and his sister @erundia died and they were substituted by the respective administrators of their estates.

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,11C81( )hat is the legal effect of an act performed by an agent after the death of his principalO Applied more particularly to the instant case, )e have the %uery. is the sale of the undivided share of 5oncepcion Fallos in lot 0!8+ valid although it was e#ecuted by the agent after the death of his principalO )hat is the law in this &urisdiction as to the effect of the death of the principal on the authority of the agent to act for and in behalf of the latterO ,s the fact of $nowledge of the death of the principal a material factor in determining the legal effect of an act performed after such deathO 28E?( By reason of the very nature of the relationship between 6rincipal and agent, agency is e#tinguished by the death of the principal or the agent. .his is the law in this &urisdiction. (anresa commenting on Art. 17 ! of the 1panish 5ivil 5ode e#plains that the rationale for the law is found in the %uridical basis of agency which is representation .hem being an in. integration of the personality of the principal integration that of the agent it is not possible for the representation to continue to e#ist once the death of either is establish. )othier agrees with 9anresa that by reason of the nature of agency, death is a necessary cause for its e#tinction. *aurent says that the &uridical tie between the principal and the agent is severed ipso &ure upon the death of either without necessity for the heirs of the fact to notify the agent of the fact of death of the former. .he same rule prevails at common law the death of the principal effects instantaneous and absolute revocation of the authority of the agent unless the 6ower be coupled with an interest. .his is the prevalent rule in American =urisprudence where it is wellDsettled that a power without an interest confer. red upon an agent is dissolved by the principal3s death, and any attempted e#ecution of the power afterward is not binding on the heirs or representatives of the deceased. ,n the instant case, it cannot be %uestioned that the agent, 1imeon Fallos, $new of the death of his principal at the time he sold the latter3s share in Eot Bo. 0!8+ to respondent corporation. .he $nowledge of the death is clearly to be inferred from the pleadings filed by 1imon Fallos before the trial court. 12 .hat 1imeon Fallos $new of the death of his sister 5oncepcion is also a finding of fact of the court a %uo 13 and of respondent appellate court when the latter stated that 1imon Fallos 3must have $nown of the death of his sister, and yet he proceeded with the sale of the lot in the name of both his sisters 5oncepcion and @erundia Fallos without informing appellant (the realty corporation" of the death of the former. <n the basis of the established $nowledge of 1imon Fallos concerning the death of his principal 5oncepcion Fallos, Article +,-+ of the Civil Code is inapplicable. .he law e#pressly re%uires for its application lac$ of $nowledge on the part of the agent of the death of his principal* it is not enough that the third person acted in good faith. .hus in Buason > Feyes v. 6anuyas, the 5ourt applying Article 17+8 of the old 5ivil rode now Art. 1!+1 of the new 5ivil 5ode sustained the validity , of a sale made after the death of the principal because it .as not sho.n that the agent /ne. of his principal0s demise. )hatever conflict of legal opinion was generated by Cassiday v. (c1en2ie in American &urisprudence, no such conflict e#ists in our own for the simple reason that our statute, the 5ivil 5ode, e#pressly provides for two e#ceptions to the general rule that death of the principal revo$es ipso

&ure the agency, to wit( (1" that the agency is coupled with an interest (Art 1!+ ", and ('" that the act of the agent was e#ecuted without $nowledge of the death of the principal and the third person who contracted with the agent acted also in good faith (Art. 1!+1". 8#ception Bo. ' is the doctrine followed in 5assiday, and again )e stress the indispensable re%uirement that the agent acted without $nowledge or notice of the death of the principal ,n the case before Cs the agent Famon Fallos e#ecuted the sale notwithstanding notice of the death of his principal Accordingly, the agent3s act is unenforceable against the estate of his principal. ,B M,8) <4 AEE .28 4<F8@<,B@, )e set aside the ecision of respondent appellate court, and )e affirm en toto the &udgment rendered by then 2on. Amador 8. @ome- of the 5ourt of 4irst ,nstance of 5ebu, %uoted in pages ' and + of this <pinion, with costs against respondent realty corporation at all instances. DE LA PECA v HIDALGO G.R. N5. L66626 O#3598" 6, 1)11 FACTS2 .his decision concerns the appeals entered under respective bills of e#ception by counsel for =ose de la 6eSa y de Famon, the administrator of the estate of the deceased =ose de la 6eSa y @omi-, from the order of the 18th of the same month, directing that the amount deposited as bond, by counsel for the intervening attorneys, 5hicote > 9iranda, 4rederic$ @. )aite, and 5. ). <3Brien, from the said order of <ctober 18, in so far as it declares that the counterclaim by the said 2idalgo against de la 6eSa was presented in his capacity as administrator of the aforementioned estate and that the intervener3s lien could not avail to prevent the setD off decreed in the said first order appealed from. After a regular trial in the 5ourt of 4irst ,nstance of this city of the case of =ose de la 6eSa y de Famon, as administrator of the estate of his deceased father, 3ose de la )e&a y 4omi2, vs. !ederico 5idalgo, for the payment of a sum of money, the record of the proceedings was forwarded to this court on appeal. By the decision rendered 2idalgo to pay to =ose de la 6eSa y de Famon, as administrator, the sum of 66,77/.0 with legal interest from 9ay '+, 1! 6, and, li$ewise, sentenced the said =ose de la 6eSa y de Famon to pay to 4ederico 2idalgo, as a counterclaim, the sum of 6!, , with legal interest thereon from 9ay '1, 1! 7, the date of the counterclaim* and affirmed the &udgment appealed from in so far as it was in agreement with the said decision, and reversed it in so far as it was not in accordance therewith. .hat decision became final. .he record of proceedings having been remanded for e#ecution to the 5ourt of 4irst ,nstance whence it originated, the &udge, by order of <ctober 1/, 1!1 , decreed that both amounts for which the defendant 2idalgo and the administrator 6eSa were mutually liable in concurrent sums, should offDset each other, and that, conse%uently, the plaintiff, 6eSa y de Famon, in conformity with the final decision of this court, was liable for the payment of the difference between such amounts, or 6','7/.!+, together with the interests at 6 per cent from the said date. At this stage of the proceedings for the e#ecution of the &udgment that had become final, the attorneys for the said plaintiff, 9essrs. 5hicote > 9iranda, 4rederic$ @arfield )aite, and 5. ). <3Brien represented by 5. A. ?e)itt, as$ed that they be permitted to intervene in the proceedings, as they held a lien upon the amount awarded in the said decision of this court, rendered in favor of the plaintiff and against the defendant, and alleged that the lien which they held was upon the &udgment entered in favor of the plaintiff in his capacity as administrator, against the defendant* that

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the defendant was entitled to the &udgment awarded him by virtue of his counterclaim, yet, in consideration of the fact that their lien affected the &udgment of the lower court, which was in no wise reversed, the said lien was valid with respect to any &udgment that the plaintiff had obtained against the defendant, notwithstanding such counterclaim. ,n spite of the defendant3s opposition, the court, ruling on this incidental %uestion raised, issued the aforecited order of <ctober 18, 1!1 . ,11C8( )hether the counterclaim by the said 2idalgo against de la 6eSa was presented in his capacity as administrator of the aforementioned estate and that the intervener3s lien could not avail to prevent the setDoff decreed in the said first order appealed from. 28E?( ,t is evident, by a simple perusal of the finding of facts an of the grounds of law of the final decision rendered in that action, that the same was instituted by =ose de la 6eSa y de Famon, not by himself and in his own representation, but in his capacity as administrator of the estate of his deceased father, =ose de la 6eSa y @omi-, demanding payment of certain amounts which, according to his third mended complaint, the defendant 4ederico 2idalgo owed the latter* and it is none the less evident that the counterclaim presented by the defendant 4ederico 2idalgo had for its sole ob&ect the collection of a certain sum which was owing to him by the deceased testator, =ose de la 6eSa y @omi-, and that the plaintiff, =ose de la 6eSa y de Famon, per se and personally, had nothing to do with this debt of the estate, which concerned him only as such administrator. ,f in any place or in any line of said decision mention was made of the name of the plaintiff 6eSa y de Famon without the title of his office as administrator of the estate, it probably was because the complaint was filed and the action was brought by him in his capacity of administrator, and the counterclaim, also, was directed him as such administrator* and if in any paragraph the said title of his office was omitted in designating him, such omission can not serve as a ground for concluding that the counterclaim allowed and the sentence imposed in the said decision were against =ose de la 6eSa y de Famon as a private individual and not as the administrator of the aforementioned estate* and the sentence contained in the decision referred to can in no wise be understood to have been made against =ose de la 6eSa y de Famon personally, but in his capacity of administrator of the estate, which alone was liable for the debt owing to the defendant* if mention was therein made of the plaintiff by name, it is because he was the representative of the debtor estate. ,n the aforementioned decision of this court, by which the complaint and the counterclaim presented by the parties to the said suit were disposed of, the amount which the defendant 2idalgo should pay to the administrator of the estate of the deceased 6eSa y @omi- and the sum which the said administrator, designated by his name of =ose de la 6eSa y de Famon, should, by virtue of the counterclaim, pay to the defendant, 4ederico 2idalgo, alone were specified* the resultant difference, after the setDoff should have been made, was not stated, as it was considered that this merely arithmetical operation would necessarily be performed in the course of the e#ecution proceedings by the &udge of the 5ourt of 4irst ,nstance charged with carrying out the final decision rendered in the case. .his, in fact, he did do in his order of <ctober 1/, by directing that the plaintiff should pay the said sum, that it, the difference which was found to e#ist, after ma$ing the setDoff between the respective amounts the

litigating parties were sentenced to pay. .he failure to state in the said decision that both debts were set off against each other up to a concurrent sum, can not avail as a ground for alleging that the attorneys of the administrator 6eSa y de Famon have ac%uired a lien on the amount which 2idalgo should pay to the administrator 6eSa y de Famon in preference to the creditor of the amount that is the sub&ect of the counterclaim. ,f it &ust be that the estate of the deceased 6eSa y @omi- should collect the amount owing it by 2idalgo, as determined by final decision, it is e%ually &ust that 2idalgo should have the same right to collect the sum which the said estate owes him, according to the same decision* therefore, in order to comply with such decision, determining the two liabilities directly opposed to each other, it conse%uently and logically follows that a setDoff of both credits, up to a concurrent amount, must be affected* and if the lien or the right to collect professional fees on the part of the attorneys were superior to the right of the creditor of the estate, the result would be that the e#ecutory decision would not be complied with* there would then be no setDoff and the defendant would be compelled to pay to the said administrator his debt to the estate, through the aforementioned lien of the intervening attorneys, but could not collect, nor apply to the payment of the credit owing him by the same estate, the amount of his debt to the latter* this would be illegal and opposed to the most rudimentary principles of &ustice and, furthermore, would be an absurdity and contrary to common sense .he &udgment appealed from having been reversed with respect to that portion thereof relative to the liability as$ed by the administrator of the estate to be laid against 4ederico 2idalgo, the sole &udgment to be e#ecuted is that contained in the decision rendered in second instance and in this decision, as has been shown* and the result, in short, has been in no wise favorable to the plaintiff because, instead of being able to collect the amount of his credit owing by 2idalgo to the estate, he still finds himself obliged to pay the defendant the difference resulting from the setDoff to which the counterclaim, made by the latter for a greater sum, gave rise* and therefore, the right claimed by the appellant attorneys to collect their fees out of the amount awarded to the said administrator, is in all respects unsustainable, inasmuch as, in conse%uence of the counterclaim, there was a setDoff against that amount and the plaintiff has nothing to collect, but, on the contrary, is still liable for the difference which was found to e#ist after the reciprocal debts of both parties had been set off against each other. .he right of attorneys for the administrator 6eSa y de Famon, to collect fees for professional service, under section +7 of the 5ode of 5ivil 6rocedure, is restricted to the personal founds of their client, to amounts awarded to the latter by final decision, but does not comprise sums of money which, according to the same decision, must be applied to be made in such decision by virtue of a prior counterclaim.+a.phil.net )e $now of no legal provision which grants to the attorneys for the losing party in a suit, or who has not obtained a &udgment authori-ing him to collect money from the adverse party, the privilege of collecting their professional fees with preference over, and better right then, the said adverse party, the legitimate creditor of the said attorneys3 client. .he suit was prosecuted for the collection of amounts which both parties reciprocally were owing each other, and a decision was rendered deciding the complaint and the counterclaim and determining the sums which the litigating parties must mutually pay* therefore, the final &udgment must be e#ecuted, as provided by the trial &udge, pursuant to its terms, and no impediment to such e#ecution can be had

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in the improper contention made by the appellant attorneys, who can invo$e no law or &ust reason which authori-es them to collect their professional fees out of the bond given by 2idalgo, once the same was not deposited as security for the payment of the said fees. 4or the foregoing reasons, whereby the errors attributed by the appellant attorneys to the trial &udge have been duly refuted, it is our opinion and we hold that we should and hereby do affirm the order of <ctober 1/, 1!1 , and also the order of the 18th of the same month, with the e#ception of the final provision of this last order, of <ctober 18, which we reversed and direct tat return be made to 4ederico 2idalgo of the sum of 68,0 retained by the cler$ of the court below as a result of the motion of intervention herein concerned. Bo special finding is made as to the costs. 1o ordered.

VALERA v. VELASCO
4A5.1( By virtue of the powers of attorney, the defendant was appointed attorneyDinDfact of the said plaintiff with authority to manage his property in the 6hilippines, consisting of the usufruct of a real property located of 8chague 1treet, 5ity of 9anila. .he defendant accepted both powers of attorney, managed plaintiff3s property, reported his operations, and rendered accounts of his administration* and on 9arch +1, 1!'+ presented e#hibit 4 to plaintiff, which is the final account of his administration for said month, wherein it appears that there is a balance of 6+, 08.++ in favor of the plaintiff. .he li%uidation of accounts revealed that the plaintiff owed the defendant 61,1 , and as misunderstanding arose between them, the defendant brought suit against the plaintiff, civil case Bo. '+//7 of this court. =udgment was rendered in his favor on 9arch '8, 1!'+, and after the writ of e#ecution was issued, the sheriff levied upon the plaintiff3s right of usufruct, sold it at public auction and ad&udicated it to the defendant in payment of all of his claim. 1ubse%uently, on 9ay 11, 1!'+, the plaintiff sold his right of redemption to one 8duardo 2ernande-, for the sum of 6' (8#hibit A". <n 1eptember /, 1!'+, this purchaser conveyed the same right of redemption, for the sum of 6' , to the plaintiff himself, 4ederico Malera (8#hibit 5". After the plaintiff had recovered his right of redemption, one 1alvador Malle&o, who had an e#ecution upon a &udgment against the plaintiff rendered in a civil case against the latter, levied upon said right of redemption, which was sold by the sheriff at public auction to 1alvador Malle&o for 6'0 and was definitely ad&udicated to him. Eater, he transferred said right of redemption to the defendant Melasco. .his is how the title to the right of usufruct to the aforementioned property later came to vest the said defendant. ,11C8( )hether one of the ways of terminating an agency is by the e#press or tacit renunciation of the agent* )hether 9iguel Melasco was, and at present is, an authori-ed representative of the plaintiff 4ederico Malera 28E?( .he misunderstanding between the plaintiff and the defendant over the payment of the balance of 61, due the latter, as a result of the li%uidation of the accounts between them arising from the collections by virtue of the former3s usufructuary right, who was the principal, made by

the latter as his agent, and the fact that the said defendant brought suit against the said principal on 9arch '8, 1!'8 for the payment of said balance, more than prove the breach of the &uridical relation between them* for, although the agent has not e#pressly told his principal that he renounced the agency, yet neither dignity nor decorum permits the latter to continue representing a person who has adopted such an antagonistic attitude towards him. )hen the agent filed a complaint against his principal for recovery of a sum of money arising from the li%uidation of the accounts between them in connection with the agency, 4ederico Malera could not have understood otherwise than that 9iguel Melasco renounced the agency* because his act was more e#pressive than words and could not have caused any doubt. (' 5. =., 0/+." ,n order to terminate their relations by virtue of the agency the defendant, as agent, rendered his final account on 9arch +1, 1!'+ to the plaintiff, as principal. Briefly, then, the fact that an agent institutes an action against his principal for the recovery of the balance in his favor resulting from the li%uidation of the accounts between them arising from the agency, and renders and final account of his operations, is e%uivalent to an e#press renunciation of the agency, and terminates the &uridical relation between them. ,f, as we have found, the defendantDappellee 9iguel Melasco, in adopting a hostile attitude towards his principal, suing him for the collection of the balance in his favor, resulting from the li%uidation of the agency accounts, ceased ipso facto to be the agent of the plaintiffDappellant, said agent3s purchase of the aforesaid principal3s right of usufruct at public auction held by virtue of an e#ecution issued upon the &udgment rendered in favor of the former and against the latter, is valid and legal, and the lower court did not commit the fourth and fifth assignments of error attributed to it by the plaintiffD appellant. ,n regard to the third assignment of error, it is deemed unnecessary to discuss the validity of the sale made by 4ederico Malera to 8duardo 2ernande- of his right of redemption in the sale of his usufructuary right made by the sheriff by virtue of the e#ecution of the &udgment in favor of 9iguel Melasco and against the said 4ederico Malera* and the same thing is true as to the validity of the resale of the same right of redemption made by 8duardo 2ernande- to 4ederico Malera* inasmuch as 9iguel Melasco3s purchase at public auction held by virtue of an e#ecution of 4ederico Malera3s usufructuary right is valid and legal, and as neither the latter nor 8duardo 2ernande- e#ercised his right of redemption within the legal period, the purchaser3s title became absolute. 9oreover, the defendantDappellee, 9iguel Melasco, having ac%uired 4ederico Malera3s right of redemption from 1alvador Malle&o, who had ac%uired it at public auction by virtue of a writ of e#ecution issued upon the &udgment obtained by the said Malle&o against the said Malera, the latter lost all right to said usufruct. And even supposing that 8duardo 2ernande- had been tric$ed by 9iguel Melasco into selling 4ederico Malera3s right of repurchase to the latter so that 1alvador Malle&o might levy an e#ecution on it, and even supposing that said resale was null for lac$ of consideration, yet, inasmuch as 8duardo 2ernande- did not present a third party claim when the right was levied upon for the e#ecution of the &udgment obtained by Malle&o against 4ederico Mallera, nor did he file a complaint to recover said right before the period of redemption e#pired, said 8duardo 2ernande-, and much less 4ederico Malera, cannot now contest the validity of said resale, for the reason that the oneDyear period of redemption has already elapsed.

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Beither did the trial court err in not ordering 9iguel Melasco to render a li%uidation of accounts from 9arch +1, 1!'+, inasmuch as he had ac%uired the rights of the plaintiff by purchase at the e#ecution sale, and as purchaser, he was entitled to receive the rents from the date of the sale until the date of the repurchase, considering them as part of the redemption price* but not having e#ercised the right repurchase during the legal period, and the title of the repurchaser having become absolute, the latter did not have to account for said rents. 1ummari-ing, the conclusion is reached that the disagreements between an agent and his principal with respect to the agency, and the filing of a civil action by the former against the latter for the collection of the balance in favor of the agent, resulting from a li%uidation of the agency accounts, are facts showing a rupture of relations, and the complaint is e%uivalent to an e#press renunciation of the agency, and is more e#pressive than if the agent had merely said, H, renounce the agency.H By virtue of the foregoing, and finding no error in the &udgment appealed from, the same is hereby affirmed in all its parts, with costs against the appellant. 1o ordered. PASNO v. FORTUNATA RA4INA G.R. N5. L6315'1 F89"+!"- 3, 1)3 4A5.12 @abina Eabitoria during her lifetime mortgaged three parcels of land to the 6hilippine Bational Ban$ to secure an indebtedness of 61,6 . ,t was stipulated in the mortgage, among other things, that the mortgagee Hmay remove, sell or dispose of the mortgaged property or any buildings, improvements or other property in, on or attached to it and belonging to the mortgagor in accordance with the provisions of Act Bo. +1+0 or ta$e other legal action that it may deem necessary.H .he mortgagor died, and a petition was presented in court for the probate of her last will and testament. ?uring the pendency of these proceedings, a special administrator was appointed by the lower court who too$ possession of the estate of the deceased, including the three parcels of land mortgaged to the 6hilippine Bational Ban$. .he estate having failed to comply with the conditions of the mortgage, the 6hilippine Bational Ban$, pursuant to the stipulations contained in the same, as$ed the sheriff of .ayabas to proceed with the sale of the parcels of land. )hen the attorney for the special administrator received notice of the proposed action, he filed a motion in court in which an order was as$ed re%uiring the sheriff to vacate the attachment over the mortgaged properties and to abstain from selling the same. .he lower court granted the petition in an order of 4ebruary 1/, 1!'!, and later denied a motion for reconsideration presented on behalf of the 6hilippine Bational Ban$. .he mortgage ma$es special reference to Act Bo. +1+0. .hat Act is one to regulate the sale of property under special powers inserted in or anne#ed to realDestate mortgages. ,t fails to ma$e provision regarding the sale of mortgaged property which is in custodia legis. Cnder these circumstances, it would be logical to suppose that the general provisions of 6hilippine law would govern this latter contingency. ,t is a familiar rule that statutes in pari materia are to be read together. .he legislative body which enacted Act Bo. +1+0 must be presumed to have been ac%uainted with the provisions of such a well $nown law as the 5ode of 5ivil 6rocedure and to have passed Act Bo. +1+0 with reference thereto. ,11C8(

)hether the right of sale of the mortgaged property can survive and can be enforced under special power while the mortgaged property is in custodia legis 28E?( .he power of sale given in a mortgage is a power coupled with an interest which survives the death of the grantor. <ne case, that of 5arter vs. 1locomb (:18!8;, 1'' B. 5., /70", has gone so far as to hold that a sale after the death of the mortgagor is valid without notice to the heirs of the mortgagor. 2owever that may be, conceding that the power of sale is not revo$ed by the death of the mortgagor, nevertheless in view of the silence of Act Bo. +1+0 and in view of what is found in section 7 8 of the 5ode of 5ivil 6rocedure, it would be preferable to reach the conclusion that the mortgagee with a power of sale should be made to foreclose the mortgage in conformity with the procedure pointed out in section 7 8 of the 5ode of 5ivil 6rocedure. .hat would safeguard the interests of the estate by putting the estate on notice while it would not &eopardi-e any rights of the mortgagee. .he only result is to suspend temporarily the power to sell so as not to interfere with the orderly administration of the estate of a decedent. A contrary holding would be inconsistent with the portion of our law governing the settlement of estates of deceased persons. ,t results that the trial &udge committed no error in sustaining the petition of the administrator of the estate of the deceased @abina Eabitoria and in denying the motion of the 6hilippine Bational Ban$. Agreeable to the foregoing pronouncements, the &udgment and orders appealed from will be affirmed, with oneDhalf of the costs of this instance against the oppositors and appellants 4ortunata Favina and 6onciano Favina, and the other half of the costs of this instance against the 6hilippine Bational Ban$.

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