Orient air service vs ca

Whether or not the CA erred in affirming the decision of the trial court.

It is believed, however, that respondent appellate court erred in affirming the rest of the decision of the trial
court.1wphi1 We refer particularly to the lower court's decision ordering American Air to "reinstate defendant as its
general sales agent for passenger transportation in the Philippines in accordance with said GSA Agreement."

By affirming this ruling of the trial court, respondent appellate court, in effect, compels American Air to extend its
personality to Orient Air. Such would be violative of the principles and essence of agency, defined by law as a contract
whereby "a person binds himself to render some service or to do something in representation or on behalf of another,
WITH THE CONSENT OR AUTHORITY OF THE LATTER . 17 (emphasis supplied) In an agent-principal relationship, the
personality of the principal is extended through the facility of the agent. In so doing, the agent, by legal fiction, becomes
the principal, authorized to perform all acts which the latter would have him do. Such a relationship can only be
effected with the consent of the principal, which must not, in any way, be compelled by law or by any court. The
Agreement itself between the parties states that "either party may terminate the Agreement without cause by giving the
other 30 days' notice by letter, telegram or cable." (emphasis supplied) We, therefore, set aside the portion of the ruling
of the respondent appellate court reinstating Orient Air as general sales agent of American Air.

G.R. No. 145817 October 19, 2011

URBAN BANK, INC, Petitioner,

vs.
MAGDALENO M. PEA, Respondent.

FACTS:

Pea, a lawyer, was formerly a stockholder, director and corporate secretary of Isabel Sugar Company, Inc. (ISCI).
ISCI owned a parcel of land. ISCI leased the land. Without its consent and in violation of the lease contract, the
lessee subleased the land to several tenants, who in turn put up nightclubs inside the compound. Before the
expiration of the lease contract, ISCI informed the lessee and his tenants that the lease would no longer be renewed
because the land will be sold.

ISCI and Urban Bank executed a Contract to Sell, and they agreed that the final installment released by the bank
upon ISCIs delivery of full and actual possession of the land, free from any tenants.

ISCI then instructed Pea, to act as its agent and handle the eviction of the tenants. The lessee left, but the
unauthorized sub-tenants refused to leave. Pea had the gates of the property closed and he also posted security
guardsservices for which he advanced payments. Despite the closure of the gates and the posting of the guards,
the sub-tenants would force open the gates, and proceed to carry on with their businesses.

Pea then filed a complaint with the RTC, which issued a TRO. At the time the complaint was filed, a new title to the
had already been issued in the name of Urban Bank.

When information reached the judge that the had already been transferred by ISCI to Urban Bank, the trial court
recalled the TRO and issued a break-open order for the property. Pea immediately contacted ISCIs presidentand
told him that because of the break-open order of the RTC, he (Pea) would be recalling the security guards he had
posted to secure the property. The President asked him to suspend the withdrawal of the posted guards, so that
ISCI could get in touch first with Urban Bank.

Pea also called Urban Banks President. The President allegedly assured him that the bank was going to retain his
services, and that the he should not give up possession of the subject land.
Thereafter, Pea, in representation of Urban Bank, filed a separate complaint with the RTC-Makati City, to enjoin
the tenants from entering the Pasay property. Acting on Urban Banks preliminary prayer, the RTC-Makati City
issued a TRO.

While the 2nd complaint was pending, Pea made efforts to settle the issue of possession of the with the sub-
tenants. During the negotiations, he was exposed to several civil and crimal cases and received several threats
against his life. The sub-tenants eventually agreed to stay off the property for a total consideration of PhP1.5M.
Pea advanced the payment for the full and final settlement of their claims against Urban Bank. Pea formally
informed Urban Bank that it could already take possession of the Pasay property. There was however no mention
of the compensation due and owed to him for the services he had rendered. The bank subsequently took actual
possession of the property and installed its own guards at the premises.

Pea thereafter made several attempts to contact Urban Bank, but the bank officers would not take any of his calls.
Pea formally demanded from Urban Bank the payment of the 10% compensation and attorneys fees allegedly
promised to him during his telephone conversation with Urban Banks President for securing and maintaining
peaceful possession of the property.

Urban Bank and individual bank officers and directors argued that it was ISCI, the original owners of the Pasay
property, that had engaged the services of Pea in securing the premises; and, consequently, they could not be held
liable for the expenses Pea had incurred.

ISSUE: W/N Pena is entitled to payment for the services he rendered as agent of Urban Bank.

HELD: Yes.

RATIO:

Pea should be paid for services rendered under the agency relationship that existed between him and Urban Bank
based on the civil law principle against unjust enrichment, and not on the basis of the purported oral contract.
Whether or not an agency has been created is determined by the fact that one is representing and acting for
another. The law makes no presumption of agency; proving its existence, nature and extent is incumbent
upon the person alleging it.

(NOTE: This case is also under I.3.c of our outline so Im including this): Agency is presumed to be for
compensation. Unless the contrary intent is shown, a person who acts as an agent does so with the expectation of
payment according to the agreement and to the services rendered or results effected.

In this case theres no evidence that Urban Bank agreed to pay Pea a specific amount or percentage of amount for
his services, so the court applies the principle against unjust enrichment and on the basis of quantum meruit. The
agency of Pea comprised of services ordinarily performed by a lawyer who is tasked with the job of ensuring
clean possession by the owner of a property. The court measured the amount Pena is entitled to for the services he
rendered (as opposed to the 10% compensation demanded by Pena).

Loadmaster vs glodel

At this juncture, the Court clarifies that there exists no principal-agent relationship between Glodel and Loadmasters, as
erroneously found by the CA. Article 1868 of the Civil Code provides: 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. The elements of a contract of agency are: (1) consent, express or implied, of the parties to establish the
relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a
representative and not for himself; (4) the agent acts within the scope of his authority.
Accordingly, there can be no contract of agency between the parties. Loadmasters never
represented Glodel. Neither was it ever authorized to make such representation. It is a settled
rule that the basis for agency is representation, that is, the agent acts for and on behalf of the
principal on matters within the scope of his authority and said acts have the same legal effect
as if they were personally executed by the principal. On the part of the principal, there must
be an actual intention to appoint or an intention naturally inferable from his words or
actions, while on the part of the agent, there must be an intention to accept the appointment
and LOADMASTERS CUSTOMS SERVICES, INC., Petitioner vs. GLODEL BROKERAGE CORPORATION and R&B INSURANCE
CORPORATION, Respondents

Facts: On August 28, 2001, R&B Insurance issued an insurance policy in favor of Columbia to insure the shipment of 132 bundles of electric copper
cathodes against All Risks. The cargoes were shipped on board the vessel Richard Rey from Isabela, Leyte, to Pier 10, North Harbor, Manila. They
arrived on the same date.

Columbia engaged the services of Glodel for the release and withdrawal of the cargoes from the pier and the subsequent delivery to its
warehouses/plants. Glodel, in turn, engaged the services of Loadmasters for the use of its delivery trucks to transport the cargoes to Columbias
warehouses/plants in Bulacan and Valenzuela City.

The goods were loaded on board twelve (12) trucks owned by Loadmasters, driven by its employed drivers and accompanied by its employed truck
helpers. Six (6) truckloads of copper cathodes were to be delivered to Balagtas, Bulacan, while the other six (6) truckloads were destined for Lawang
Bato, Valenzuela City.

Of the six (6) trucks en route to Balagtas, Bulacan, however, only five (5) reached the destination. One (1) truck, loaded with 11 bundles or 232 pieces
of copper cathodes, failed to deliver its cargo. This missing truck was evetually recovered but without the copper cathodes

This prompted Columbia to file with R&B Insurance a claim for insurance indemnity in the amount of P1,903,335.39. Columbia paid P1,896,789.62.

R&B Insurance, thereafter, filed a complaint for damages against both Loadmasters and Glodel before the Regional Trial Court. It sought reimbursement
of the amount it had paid to Columbia for the loss of the subject cargo. It claimed that it had been subrogated to the right of the consignee to recover
from the party/parties who may be held legally liable for the loss.

Loadmasters argues that it cannot be considered an agent of Glodel because it never represented the latter in its dealings with
the consignee.

Glodel argues that its relationship with Loadmasters is that of Charter wherein the transporter (Loadmasters) is only hired for
the specific job of delivering the merchandise. Thus, the diligence required in this case is merely ordinary diligence or that of a good
father of the family, not the extraordinary diligence required of common carriers.

R&B Insurance argues, finally, that as to the relationship between Loadmasters and Glodel, it contends that a contract of
agency existed between the two corporations

Issue: WON Loadmaster was an agent of Glodel

Held: No, it was not.

Article 1868 of the Civil Code provides: 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.

The elements of a contract of agency are: (1) consent, express or implied, of the parties to establish the relationship; (2) the object is the execution of a
juridical act in relation to a third person; (3) the agent acts as a representative and not for himself; (4) the agent acts within the scope of his authority.

In the case at bar, it is clear that there was no contract of agency between the parties. Loadmasters never represented Glodel. Neither was it ever
authorized to make such representation.

It is a settled rule that the basis for agency is representation, that is, the agent acts for and on behalf of the principal on matters within the
scope of his authority and said acts have the same legal effect as if they were personally executed by the principal. On the part of the
principal, there must be an actual intention to appoint or an intention naturally inferable from his words or actions, while on the part
of the agent, there must be an intention to accept the appointment and act on it. Such mutual intent is not obtaining in this case.
RALLOS v FELIX GO CHAN & REALTY COPR., Munoz-Palma

Plaintiff: Ramon Rallos

Defendant: Felix Go Chan & Sons Realty Corporation
Facts: Concepcion and Gerundia Rallos were sisters and registered co-owners of the parcel of land in issue. They
executed a special power of attorney in favor of their brother, Simeon Rallos, authorizing him to sell such land for and in
their behalf. After Concepcion died, Simeon Rallos sold the undivided shares of his sisters Concepcion and Gerundia to
Felix Go Chan & Sons Realty Corporation for the sum of P10,686.90. New TCTs were issued to the latter.
Petitioner Ramon Rallos, administrator of the Intestate Estate of Concepcion filed a complaint praying (1) that the sale of
the undivided share of the deceased Concepcion Rallos in lot 5983 be unenforceable, and said share be reconveyed to
her estate; (2) that the Certificate of 'title issued in the name of Felix Go Chan & Sons Realty Corporation be cancelled
and another title be issued in the names of the corporation and the "Intestate estate of Concepcion Rallos" in equal
undivided and (3) that plaintiff be indemnified by way of attorney's fees and payment of costs of suit.

Issues: Whether or not the sale fell within the exception to the general rule that death extinguishes the authority of the
agent

Held/Ratio: Yes the sale is void. The court held that no one may contract in the name of another without being
authorized by the latter, or unless he has by law a right to represent him (Art. 1317 of the Civil Code). Simons authority
as agent was extinguished upon Concolacions death. The sale did not fall under the exceptions to the general rule that
death ipso jure extinguishes the authority of the agent. Art. 1930 inapplicable since SPA in favor of Simon Rallos was not
coupled with interest and Art. 1931 inapplicable because Rallos knew of principal Concepcions death. For Art 1931 to
apply, both requirements must be present

Laws on agency, the terms of which are clear and unmistakable leaving no room for an interpretation contrary to its
tenor, should apply, the law provides that death of the principal ipso jure extinguishes the authority of the agent to sell
rendering the sale to a third person in good faith unenforceable unless at the agent had no knowledge of the principals
death at that time (exception under Art. 1931)

Dispositive: CA Decision reversed, CFI decision affirmed. Sale was null and void.

(Court discussed relevant principles first)

Relationship of Agency (concept arising from principles under Art 1317 and 1403)- one party, caged the principal
(mandante), authorizes another, called the agent (mandatario), to act for and in his behalf in transactions with third
persons.
-derivative in nature, power emanating from principal
-agents acts are acts of the principal

Essential Elements:
(1) there is consent, express or implied of the parties to establish the relationship;
(2) the object is the execution of a juridical act in relation to a third person;
(3) the agents acts as a representative and not for himself, and
(4) the agent acts within the scope of his authority.

Extinguishment
o Generally: among others, By the death, civil interdiction, insanity or insolvency of the principal or of the
agent
- death of the principal effects instantaneous and absolute revocation of the authority of the
agent
o Exceptions:
(Art. 1930) if it has been constituted in the common interest of the latter and of the agent, or in
the interest of a third person who has accepted the stipulation in his favor.
(Art. 1931) agent acted without knowledge of the pricipals death and that the third person
was in good faith (both these reqs should be present)
 Victoria Milling Co., Inc. v. CA and Consolidated Sugar Corporation
G.R. No. 117356 June 19, 2000
Quisumbing, J.

FACTS:
St. Therese Merchandising regularly bought sugar from Victorias Milling Co., Inc. In the course of their dealings,
Victorias Milling issued several Shipping List/Delivery Receipts (SLDRs) to St. Therese Merchandising as proof of
purchases. Among these was SLDR No. 1214M which covers 25,000 bags of sugar. Each bag contained 50 kilograms
and priced at P638.00 per bag. The transaction it covered was a direct sale.
On October 25, 1989, St. Therese Merchandising sold to Consolidated Sugar Corp. its rights in SLDR No. 1214M for
P14,750,000.00. Consolidated Sugar Corp. issued checks in payment. That same day, Consolidated Sugar Corp. wrote
Victorias Milling that it had been authorized by St. Therese Merchandising to withdraw the sugar covered by SLDR
No. 1214M.
Consolidated Sugar Corp. surrendered SLDR No. 1214M to Victorias Millings NAWACO warehouse and was allowed
to withdraw sugar. However, after 2,000 bags had been released, Victorias Milling refused to allow further
withdrawals of sugar against SLDR No. 1214M because, according to it, St. Therese Merchandising had already
withdrawn all the sugar covered by the cleared checks.

ISSUE: WON the contract was one of agency or sale

HELD: Sale.
Victorias Milling heavily relies upon St. Therese Merchandisings letter of authority allowing Consolidated Sugar Corp.
to withdraw sugar against SLDR No. 1214M to show that the latter was St. Therese Merchandisings agent. The pertinent
portion of said letter reads: This is to authorize Consolidated Sugar Corporation or its representative to withdraw for
and in our behalf (stress supplied) the refined sugar covered by Shipping List/Delivery Receipt = Refined Sugar (SDR)
No. 1214 dated October 16, 1989 in the total quantity of 25, 000 bags.
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.
The basis of agency is representation. On the part of the principal, there must be an actual intention to appoint or an
intention naturally inferable from his words or actions; and on the part of the agent, there must be an intention to
accept the appointment and act on it, and in the absence of such intent, there is generally no agency. One factor which
most clearly distinguishes agency from other legal concepts is control; one person - the agent - agrees to act under
the control or direction of another - the principal.
Victorias Milling failed to sufficiently establish the existence of an agency relation between Consolidated Sugar Corp.
and St. Therese Merchandising. The fact alone that it (St. Therese Merchandising) had authorized withdrawal of sugar
by Consolidated Sugar Corp. for and in our (St. Therese Merchandisings) behalf should not be eyed as pointing to
the existence of an agency relation. Further, Consolidated Sugar Corp. has shown that the 25,000 bags of sugar covered
by the SLDR No. 1214M were sold and transferred by St. Therese Merchandising to it. A conclusion that there was a
valid sale and transfer to Consolidated Sugar Corp. may, therefore, be made thus capacitating Consolidated Sugar Corp.
to sue in its own name, without need of joining its imputed principal St. Therese Merchandising as co-plaintiff.
Consolidated Sugar Corp. was a buyer of the SLDFR form, and not an agent of STM. Consolidated Sugar Corp. was not
subject to St. Therese Merchandisings control. That no agency was meant to be established by the Consolidated Sugar
Corp. and STM is clearly shown by Consolidated Sugar Corp.s communication to petitioner that SLDR No. 1214M
had been sold and endorsed to it.27 The use of the words sold and endorsed means that St. Therese Merchandising
and Consolidated Sugar Corp. intended a contract of sale, and not an agency.
Eurotech Industrial Technologies, Inc. v. Edwin Cuizon and Erwin Cuizon
G.R. No. 167552 April 23, 2007
Chico-Nazario, J.

FACTS: Eurotech is engaged in the business of importation and distribution of various

European industrial equipment. It has as one of its customers Impact Systems Sales
which is a sole proprietorship owned by Erwin Cuizon.
Eurotech sold to Impact Systems various products allegedly amounting to
P91,338.00. Cuizons sought to buy from Eurotech 1 unit of sludge pump valued at
P250,000.00 with Cuizons making a down payment of P50,000.00. When the sludge
pump arrived from the United Kingdom, Eurotech refused to deliver the same to Cuizons
without their having fully settled their indebtedness to Eurotech. Thus, Edwin Cuizon and
Alberto de Jesus, general manager of Eurotech, executed a Deed of Assignment of
receivables in favor of Eurotech.
Cuizons, despite the existence of the Deed of Assignment, proceeded to collect
from Toledo Power Company the amount of P365,135.29. Eurotech made several
demands upon Cuizons to pay their obligations. As a result, Cuizons were able to make
partial payments to Eurotech. Cuizons total obligations stood at P295,000.00 excluding
interests and attorneys fees.
Edwin Cuizon alleged that he is not a real party in interest in this case. According
to him, he was acting as mere agent of his principal, which was the Impact Systems, in
his transaction with Eurotech and the latter was very much aware of this fact.
The RTC dropped Edwin Cuizon as party defendant in the case. The Court of
Appeals, affirmed the trial courts decision. Hence, the appeal.

ISSUE: Whether or not Edwin exceeded his authority when he signed the Deed of
Assignment thereby binding himself personally to pay the obligations to Eurotech

HELD: No. Edwin did not exced his authority when he signed the Deed of Assignment.
As stated in Art. 1897, The agent who acts as such is not personally liable to the party
with whom he contracts, unless he expressly binds himself or exceeds the limits of his
authority without giving such party sufficient notice of his powers. An agent, who acts as
such, is not personally liable to the party with whom he contracts. There are 2 instances
when an agent becomes personally liable to a third person. The first is when he expressly
binds himself to the obligation and the second is when he exceeds his authority. In the
last instance, the agent can be held liable if he does not give the third party sufficient
notice of his powers. In this case, Edwin does not fall within any of the exceptions
contained in Art. 1897. Edwin Cuizon acted well-within his authority when he signed the
Deed of Assignment. Eurotech refused to deliver the 1 unit of sludge pump unless it
received, in full, the payment for Impact Systems indebtedness. Impact Systems
desperately needed the sludge pump for its business since after it paid the amount of
P50,000.00 as downpayment it still persisted in negotiating with Eurotech which
culminated in the execution of the Deed of Assignment of its receivables from Toledo
Power Company. The significant amount of time spent on the negotiation for the sale of
the sludge pump underscores Impact Systems perseverance to get hold of the said
equipment. Edwins participation in the Deed of Assignment was reasonably necessary
or was required in order for him to protect the business of his principal. Therefore, Edwin
Cuizon acted within the scope of his authority and is not personally liable for the
obligations to Eurotech.