70. G.R. No. L-2411, Thomas v. Pineda, 89 Phil.

312
Characters:
1. David Thomas plaintiff-appellant; claims to be the sole owner of the business Silver
Dollar Caf
2. Hermogenes Pineda defendant-appellant; manager/trustee of the business claiming to be
the rightful owner of the business.
3. Tuason, J ponente
Facts:
Plaintiff bought a bar and restaurant business in 1931 from one Dell Clark.
Defendant was employed as a bartender and in the course of the business latter became a
cashier and manager with a salary of P250.
War broke-out in 1941. To prevent the business and its property from falling into enemy
hands, the plaintiff being a citizen of the United States made a fictitious sale thereof to the
defendant; and to clothe the sale with a semblance of reality.
A public document was executed between the plaintiff and defendant stating the fact that
the sale between them was fictitious and that the defendant shall return the business to
plaintiff after liberation.
On February 3, 1945, the building was destroyed by fire but the defendant had been able
to remove some of its furniture, the cash register, the piano, the safe, and a considerable
quantity of stocks to a place of safety. According to the defendant, all of these goods were
accounted for and turned over to the plaintiff after the City of Manila had been retaken by
the American Forces.
During the post-liberation period, plaintiff brought a certified public accountant to the
establishment in for the purpose of examining the books of the business and the
defendant threatened the plaintiff and his companion with a gun if they persisted in their
purpose.
As a result of that incident, the plaintiff forthwith filed the present action, and set up a
separate business under the same trade-name, Silver Dollar Caf.
Issue: Whether or not the defendant has the duty to render an accounting of the business.
Ruling: The conclusion thus seems clear that the defendant owes the plaintiff an accounting of
his management of the plaintiff's business during the occupation. The exact legal character of
the defendant's relation to the plaintiff matters not a bit. It was enough to show, and it had been
shown, that he had been entrusted with the possession and management of the plaintiff's
business and property for the owner's benefit and had not made an accounting. As legal
proposition and in good conscience, the defendants registration of the trade name Silver Dollar
Cafe must be deemed to have been affected for the benefit of its owner of whom he was a mere
trustee or employee.
Doctrine: The relations of an agent to his principal are fiduciary and it is an elementary and
very old rule that in regard to property forming the subject matter of the agency, he is estopped
from acquiring or asserting a title adverse to that of principal. His position is analogous to that of
a trustee and he cannot consistently, with the principles of good faith, be allowed to create in
himself an interest in opposition to that of his principal or cestui que trust. A receiver, trustee,
attorney, agent or any other person occupying fiduciary relations respecting property or persons
utterly disabled from acquiring for his own benefit the property committed to his custody for
management.

76 - Nielson & Co. Inc. vs Lepanto Consolidated Mining Co.

Charaters:
1. Nielson & Co., Inc plaintiff appellant; operator and manager of mining properties of
Lepanto by virtue of a management contract.
2. Lepanto Consolidated Mining Company defendant appellee; owner of the mining
properties
3. Zaldivar, J ponente
Facts:
It appears that the suit involves an operating agreement executed before World War II
between the plaintiff and the defendant whereby the former operated and managed the
mining properties owned by the latter for a management fee of P2,500.00 a month and a
10% participation in the net profits resulting from the operation of the mining properties.
Said agreement was entered into in 1937 for a period of 5 years and was extended for
another 5 years or until 1947.
War broke-out in February 1942. The mill, power plant, supplies on hand, equipment,
concentrates on hand and mines, were destroyed upon orders of the United States Army,
to prevent their utilization by the invading Japanese Army. The Japanese forces thereafter
occupied the mining properties, operated the mines during the continuance of the war,
and who were ousted from the mining properties only in August of 1945.
LEPANTO took possession thereof and embarked in rebuilding and reconstructing the
mines and mill. The reconstruction lasted until 1948 and resumed operation under the
exclusive management of LEPANTO.
Shortly after the mines were liberated from the Japanese invaders in 1945, a disagreement
arose between NIELSON and LEPANTO over the status of the operating contract in
question which as renewed expired in 1947. Under the terms thereof, the management
contract shall remain in suspense in case fortuitous event or force majeure, such as war or
civil commotion, adversely affects the work of mining and milling.
NIELSON held the view that, on account of the war, the contract was suspended during the
war; hence the life of the contract should be considered extended for such time of the
period of suspension. On the other hand, LEPANTO contended that the contract should
expire in 1947 as originally agreed upon because the period of suspension accorded by
virtue of the war did not operate to extend further the life of the contract.
Issue: Whether or not the management contract is suspended thus extending the
period of the contract entitling Nielson for the fees as stipulated in the contract.
Ruling: A careful scrutiny of the clause above-quoted will at once reveal that in order that the
management contract may be deemed suspended two events must take place which must be
brought in a satisfactory manner to the attention of defendant within a reasonable time, to wit:
(1) the event constituting the force majeure must be reasonably beyond the control of Nielson,
and (2) it must adversely affect the work of mining and milling the company is called upon to
undertake. As long as these two condition exist the agreement is deem suspended.
It is then undeniable that beginning February, 1942 the operation of the Lepanto mines
stopped or became suspended as a result of the destruction of the mill, power plant and other
important equipment necessary for such operation in view of a cause which was clearly beyond
the control of Nielson and that as a consequence such destruction adversely affected the work of

mining and milling which the latter was called upon to undertake under the management
contract. Consequently, by virtue of the very terms of said contract the same may be deemed
suspended from February, 1942 and as of that month the contract still had 60 months to go.
It is, therefore, clear from the foregoing that the Lepanto mines were liberated on August
1, 1945, but because of the period of rehabilitation and reconstruction that had to be made as a
result of the destruction of the mill, power plant and other necessary equipment for its operation
it cannot be said that the suspension of the contract ended on that date. Hence, the contract
must still be deemed suspended during the succeeding years of reconstruction and
rehabilitation, and this period can only be said to have ended on June 26, 1948 when, as reported
by the defendant, the company officially resumed the mining operations of the Lepanto.
Let us now come to the management fees claimed by Nielson for the period of extension.
In this respect, it has been shown that the management contract was extended from June 27,
1948 to June 26, 1953, or for a period of sixty (60) months. During this period Nielson had a right
to continue in the management of the mining properties of Lepanto and Lepanto was under
obligation to let Nielson do it and to pay the corresponding management fees. Appellant Nielson
insisted in performing its part of the contract but Lepanto prevented it from doing so. Hence, by
virtue of Article 1186 of the Civil Code, there was a constructive fulfillment on the part of Nielson
of its obligation to manage said mining properties in accordance with the contract and Lepanto
had the reciprocal obligation to pay the corresponding management fees and other benefits that
would have accrued to Nielson if Lepanto allowed it (Nielson) to continue in the management of
the mines during the extended period of five (5) years.
82. Conde vs CA, G.R. No. L-40242 December 15, 1982
Characters:
1. Dominga Conde petitioner; vendor-a-retro of a parcel of land she with her brothers
inherited.
2. Pio Altera and Casimira Pasagui spouses; vendees-a-retro; effected the pacto de retro
sale to with petitioner thru his son-i-law then later, resold the land to herein respondents
3. Ramon and Catalina Conde respondent spouses; claiming to be the rightful owner of the
land by virtue of the second sale executed by them with Altera (no relationship with
petitioner was established)
4. PACIENTE CORDERO son-in-law of Pio Altera who represented Pio Altera to effect the
redemption of Dominga Conde as eveidenced by a public instrument signed by Cordero in
behalf of Altera
5. Melencio-Herrera, J ponente
Facts:
On 7 April 1938. Margarita Conde, Bernardo Conde and the petitioner Dominga Conde, as
heirs of Santiago Conde, sold with right of repurchase, within ten (10) years from said
date, a parcel of agricultural land to Sps. Altera.
On 28 November 1945, private respondent Paciente Cordero, son-in-law of the Alteras,
signed a document in the Visayan dialect effecting the repurchase of Dominga Conde of
the subject parcel of land.
To be noted is the fact that neither of the vendees-a-retro, Pio Altera nor Casimira Pasagui,
was a signatory to the deed. Petitioner maintains that because Pio Altera was very ill at
the time, Paciente Cordero executed the deed of resale for and on behalf of his father-inlaw.
On 30 June 1965 Pio Altera sold the disputed lot to the spouses Ramon Conde and Catalina
T. Conde, who are also private respondents herein.
Contending that she had validly repurchased the lot in question in 1945, petitioner filed,
on 16 January 1969, in the Court of First Instance of Leyte.
Private respondents, for their part, adduced evidence that Paciente Cordero signed the
document of repurchase merely to show that he had no objection to the repurchase; and

that he did not receive the amount of P165.00 from petitioner inasmuch as he had no
authority from his parents-in-law who were the vendees-a-retro.
After trial, the lower Court rendered its Decision dismissing the Complaint and the
counterclaim and ordering petitioner to vacate and deliver the property to Sps. Conde.
CA upheld the decision of the CFI.

Issue: Whether or not the signing of Cordero in behalf of his father-in-law binding to
the latter.
Ruling: Of significance, however, is the fact that from the execution of the repurchase
document in 1945, possession, which heretofore had been with the Alteras, has been in the
hands of petitioner as stipulated therein. Land taxes have also been paid for by petitioner yearly
from 1947 to 1969 inclusive (Exhibits "D" to "D-15"; and "E"). If, as opined by both the Court a
quo and the Appellate Court, petitioner had done nothing to formalize her repurchase, by the
same token, neither have the vendees-a-retro done anything to clear their title of the
encumbrance therein regarding petitioner's right to repurchase. No new agreement was entered
into by the parties as stipulated in the deed of pacto de retro, if the vendors a retro failed to
exercise their right of redemption after ten years. If, as alleged, petitioner exerted no effort to
procure the signature of Pio Altera after he had recovered from his illness, neither did the Alteras
repudiate the deed that their son-in-law had signed. Thus, an implied agency must be held to
have been created from their silence or lack of action, or their failure to repudiate the agency.