Equitable PCI v Ku

March 26, 2001

EQUITABLE PCI BANK, formerly EQUITABLE BANKING CORPORATION
vs.
ROSITA KU
KAPUNAN, J.
SUMMARY: Litigation ensued between Rosita Ku and Equitable. When CA ruled in favor of Rosita, Equitable filed a motion for an
extension of 30 days to file its petition for review as it allegedly received the CA decision on April 25, 2000. However, Rosita argues that
the petition is defective because Bank actually received CA decision on April 24, 2000 when Joel Rosales, an employee of Banks law
firm received it from the Post office and thus Equitable should have filed motion for extension on May 9, 2000 not May 10. Equitable
replied that Joel is not an agent of the bank as expressly mentioned in his affidavit. HELD: Bank filed petition beyond reglementary
period. There was perfection of the agency as Joel Rosales averred in his affidavit that on occasions when I receive mail matters for
said law office, it is only to help them receive their letters promptly, implying that counsel had allowed the practice of Rosales receiving
mail in behalf of the former. There is no showing that counsel had objected to this practice or took steps to put a stop to it. However, in
the interest of justice, the petition was still given due course.

ISSUES:
1) Whether Joel Rosales can be considered the agent of Banks counsel and thus service to him was considered service to Bank?
(YES) [Whether the act of the law firm in allowing its employee to occasionally receive its mail can be construed to mean an agency
relationship? YES]

RATIO:
1) Joel Rosales is an agent of Banks counsel.
Although the Affidavit of Joel Rosales states that he is not the constituted agent of Curato-Divina-Mabilog-Nedo-Magturo-
Pagaduan Law Office, an agency may be express but it may also be implied from the acts of the principal, from his silence, or lack
of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. (Art. 1869)
Likewise, acceptance by the agent may also be express, although it may also be implied from his acts which carry out the agency,
or from his silence or inaction according to the circumstances (Art. 1870).
CASE AT BAR: Joel Rosales averred that on occasions when I receive mail matters for said law office, it is only to help them
receive their letters promptly, implying that counsel had allowed the practice of Rosales receiving mail in behalf of the
former. There is no showing that counsel had objected to this practice or took steps to put a stop to it.

Rallos v. Yangco, 20 Phil 269

MORELAND, J.:

FACTS:

Yangco sent Rallos a letter inviting the latter to be the consignor in buying and selling leaf
tobacco and other native products. Terms and conditions were also contained in the letter.

Accepting the invitation, Rallos proceeded to do a considerable business with Yangco

through the said Collantes, as his factor, sending to him as agent for Yangco a good deal of
produce to be sold on commission.

Rallos sent to the said Collantes, as agent for Yangco, 218 bundles of tobacco in the leaf
to be sold on commission, as had been other produce previously.

The said Collantes received said tobacco and sold it for the sum of P1,744. The charges
for such sale were P206.96, leaving in the hands of said Collantes the sum of 1,537.08
belonging to Rallos. This sum was, apparently, converted to his own use by said agent.

It appears, however, that prior to the sending of said tobacco Yangco had severed his
relations with Collantes and that the latter was no longer acting as his factor. This fact was not
known to Rallos; and it is conceded in the case that no notice of any kind was given by Yangco
of the termination of the relations between Yangco and his agent, Collantes.

Yangco thus refused to pay the said sum upon demand of Rallos, placing such refusal
upon the ground that at the time the said tobacco was received and sold by Collantes, he was
acting personally and not as agent of Yangco.
ISSUE:

Whether or not Yangco as principal is liable brought by the sale of the produce

RULING:

Yes. Yangco, as principal is liable. Having advertised the fact that Collantes was his agent
and having given special notice to Rallos of that fact, and having given them a special invitation
to deal with such agent, it was the duty of Yangco on the termination of the relationship of the
principal and agent to give due and timely notice thereof to Rallos. Failing to do so, he is
responsible to them for whatever goods may have been in good faith and without negligence
sent to the agent without knowledge, actual or constructive, of the termination of such
relationship.

Sally Yoshizaki, Petitioner, vs. Joy Training Center of Aurora, Inc., Respondents
G.R. No. 174978; July 31, 2013

Facts: Richard and Linda Johnson were members of Joy Trainings Board of Trustees who sold the real properties, a
wrangler jeep, and other personal properties in favor of the spouses Sally and Yoshio Yoshizaki. Joy Training filed an
action for cancellation of sales alleging that the spouses Johnson is without the requisite authority from the Board of
Directors. The RTC ruled in favor of the spouses Yoshizaki. It found that Joy Training owned the real properties and it
authorized he spouses Johnson to sell the real properties. It recognized that there were only five actual members of the
board of trustees; consequently, a majority of the board of trustees validly authorized the sale. It also ruled that the sale of
personal properties was valid because they were registered in the spouses Johnsons name. The CA upheld the RTCs
jurisdiction over the case but reversed its ruling with respect to the sale of real properties. It also ruled that the resolution
is void because it was not approved by a majority of the board of trustees.

Issue: Was there a contract of agency to sell the real properties between Joy Training and the spouses Johnson?

Ruling: The SC ruled that there was no contract of agency between Joy Training and the spouses Johnson to sell the
parcel of land with its improvements. Art. 1868 of the Civil Code defines a contract of agency 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. It may be express, or implied from the acts of the principal, from his silence or lack of
action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. In
this case, the presented evidence did not convince the SC of the existence of the contract of agency to sell the real
properties. The certification is a mere general power of attorney which comprises all of Joy training. Art. 1877 of CC
clearly states that 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 execute such acts as he may authorize as general and unlimited
management.
 Reman Recio, Petitioner, vs.
Heirs and the Spouses Aguedo and Maria Altamirano, Respondents.
G.R. No. 182349; July 24, 2013

Facts: Nena Recio, mother of Reman Recio leased from the Altamiranos a parcel of land with improvements. The
Altamiranos inherited the subject land from their deceased parents, the spouses Aguedo Altamirano and Maria Vaduvia.
The sale of the land to Nena Recio did not materialize. The Altamiranos consolidated the two parcels of land covered by
the TCT and subdivided into 3 parcels of lands. Reman and his family remained in the peaceful possession of Lot 3. He
renewed Nenas option to buy the subject property. They conducted negotiations with Alejandro who introduced himself
as representing the other heirs. After which, the Altamiranos through Alejandro entered into an oral contract of sale with
the petitioner and made partial payments which Alejandro received. Then, the petitioner offered to pay the remaining
balance, but Alejandro kept on avoiding the petitioner. Recio filed a case and while its pending, it was discovered that the
property was sold to respondents Spouses Lajarca.

The RTC ruled that the Absolute Sale between Altamiranos and the Lajarcas was Null and Void, but the Court of
Appeals modified that the sale between Alejandro and Recio is valid only with respect to the aliquot share of Alejandro.
CA held that Alejandros sale of Not. No. 3 did not bind his co-owners because a sale of real property by one purporting
to be an agent of the owner without any written authority from the latter is null and void. An SPA from co-owners
pursuant to Art 1878 of the NCC is necessary.

Issue: Can the contract of sale between Alejandro (representing the share of his co-owners) and Recio be held valid
pursuant to Apparent Authority of an Agent based on Estoppel?

Ruling: No. Woodchild Holdings, Inc. vs. Roxas Electric and Construction Company, Inc.stressed that apparent authority based
on estoppel can rise from the principal who knowingly permit the agent with indicia of authority that would lead a
reasonable prudent person to believe that he actually has such authority. Apparent authority of an agent arises only from
acts or conducts on the part of the principal and such act or conduct of the principal must have been known and relied
upon in good faith and as a result of the exercise of a reasonable prudence by a third person as claimant and such must
have produced a change of position to its detriment. In this case, there was no evidence on record of specific acts which
the Altamiranos made before the sale to the petitioner, indicating that they fully knew of the representation of Alejandro.
All that the petitioner relied upon were acts that happened after the sale to him. Absent the consent of Alejandros co-
owners, the Court held that the sale between the other Altamarinos and the petitioner was null and void.

Woodchild Holdings v. Roxas Electric

G.R. No. 140667, August 12, 2004
Corporation Law Case Digest by John Paul C. Ladiao (15 March 2016)
(Topic: Doctrine of Piercing the Veil of Corporate Fiction)

FACTS:

The respondent Roxas Electric and Construction Company, Inc. (RECCI), formerly the Roxas Electric and
Construction Company, was the owner of two parcels of land. A portion of one Lot which abutted the other Lot
was a dirt road accessing to the Sumulong Highway, Antipolo, Rizal.

At a special meeting on May 17, 1991, the respondent's Board of Directors approved a resolution authorizing
the corporation, through its president, Roberto B. Roxas, to sell the Lots, at a price and under such terms and
conditions which he deemed most reasonable and advantageous to the corporation; and to execute, sign and
deliver the pertinent sales documents and receive the proceeds of the sale for and on behalf of the company.

Petitioner Woodchild Holdings, Inc. (WHI) wanted to buy the Lot on which it planned to construct its warehouse
building, and a portion of the adjoining lot, so that its 45-foot container van would be able to readily enter or
leave the property.

On September 5, 1991, a Deed of Absolute Sale in favor of WHI was issued, under which the Lot was sold for
P5,000,000, receipt of which was acknowledged by Roxas under the following terms and conditions:

The Vendor agree (sic), as it hereby agrees and binds itself to give Vendee the beneficial use of and a right of
way from Sumulong Highway to the property herein conveyed consists of 25 square meters wide to be used as
the latter's egress from and ingress to and an additional 25 square meters in the corner of Lot No. 491-A-3-B-
1, as turning and/or maneuvering area for Vendee's vehicles.
The Vendor agrees that in the event that the right of way is insufficient for the Vendee's use (ex entry of a 45-
foot container) the Vendor agrees to sell additional square meters from its current adjacent property to allow
the Vendee full access and full use of the property.

the respondent posits that Roxas was not so authorized under the May 17, 1991 Resolution of its Board of
Directors to impose a burden or to grant a right of way in favor of the petitioner on Lot No. 491-A-3-B-1, much
less convey a portion thereof to the petitioner. Hence, the respondent was not bound by such provisions
contained in the deed of absolute sale.
ISSUE:

Whether or not the respondent is bound by the provisions in the deed of absolute sale granting to the petitioner
beneficial use and a right of way over a portion of Lot accessing to the Sumulong Highway and granting the
option to the petitioner to buy a portion thereof, and, if so, whether such agreement is enforceable against the
respondent?

HELD:

No.

Generally, the acts of the corporate officers within the scope of their authority are binding on the corporation.
However, under Article 1910 of the New Civil Code, acts done by such officers beyond the scope of their
authority cannot bind the corporation unless it has ratified such acts expressly or tacitly, or is estopped from
denying them.

Thus, contracts entered into by corporate officers beyond the scope of authority are unenforceable against the
corporation unless ratified by the corporation.

Evidently, Roxas was not specifically authorized under the said resolution to grant a right of way in favor of the
petitioner on a portion of Lot No. 491-A-3-B-1 or to agree to sell to the petitioner a portion thereof. The
authority of Roxas, under the resolution, to sell Lot No. 491-A-3-B-2 covered by TCT No. 78086 did not include
the authority to sell a portion of the adjacent lot, Lot No. 491-A-3-B-1, or to create or convey real rights thereon.
Neither may such authority be implied from the authority granted to Roxas to sell Lot No. 491-A-3-B-2 to the
petitioner "on such terms and conditions which he deems most reasonable and advantageous."

The general rule is that the power of attorney must be pursued within legal strictures, and the agent can neither
go beyond it; nor beside it. The act done must be legally identical with that authorized to be done.30 In sum,
then, the consent of the respondent to the assailed provisions in the deed of absolute sale was not obtained;
hence, the assailed provisions are not binding on it.

There can be no apparent authority of an agent without acts or conduct on the part of the principal and such
acts or conduct of the principal must have been known and relied upon in good faith and as a result of the
exercise of reasonable prudence by a third person as claimant and such must have produced a change of
position to its detriment.

The apparent power of an agent is to be determined by the acts of the principal and not by the acts of the
agent.

Case Name:

Country Bankers Insurance v. Keppel Cebu ShipyardPetitioner:

Country Bankers Insurance Corporation
Respondent:
Keppel Cebu Shipyard, Unimarine Shipping Lines, Inc., Paul Rodriguez
SCRA:
673 SCRA 427
G.R. No:
166044
Date:
June 18, 2012
FACTS:
Unimarine Shipping Lines, Inc. (Unimarine) is a corporation engaged in the shipping
industry. Unimarine contracted theservices of Keppel Cebu Shipyard for dry-docking and
ship repair works on its vessel, the MV Pacific Fortune.Cebu Shipyard issued a bill
to Unimarine in consideration for its services. They negotiated to a reduction to P3.85M
and
terms of this agreement were embodied in Cebu Shipyards letter to the President/GM of
Unimarine.
In compliance withthe agreement, Unimarine secured from Country Bankers
Insurance Corp. (CBIC)
, through its agent, Bethoven Quinain
(Quinain), a Surety Bond of P3M. The expiration of the Surety Bond was extended
through an Endorsement attached tothe Surety Bond.Cebu Shipyard sent
Unimarine letters, demandi
ng it to settle its account. Due to Unimarines nonpayment, Cebu Shipyard
asked the surety CBIC to fulfill their obligations as sureties. However, CBIC alleged that
the Surety Bond was issued by itsagent, Quinain, in excess of his authority.
ISSUE:
W/N the provisions of Article 1911 of the Civil Code is applicable in the present case to
hold petitioner liable for the actsdone by its agent in excess of authority. YES
HELD:
CBIC is liable for the surety bond. CBIC could not be allowed to disclaim liabil
ity because Quinains actions were within the
terms of the special power of attorney given to him. Our law mandates an agent to act
within the scope of his authority.
The scope of an agents authority is what appears in the written terms of the power of at
torney granted upon him.
Under Articles 1898 and 1910, an agents act, even if done beyond the scope of his authority,
may bind the principal if he
ratifies them, whether expressly or tacitly. It must be stressed though that only the
principal, and not the agent, can ratifythe unauthorized acts, which the principal must
have knowledge of.
Neither Unimarine nor Cebu Shipyard was able to repudiate CBICs testimony that it was
unaware of the existence of
Surety Bond and Endorsement. There were no allegations either that CBIC should have
been put on alert with regard to
Quinains business transactions done on its behalf. It is clear, and undisputed therefore,
that there can be no ratification
inthis case, whether express or implied.Article 1911, on the other hand, is based on the
principle of estoppel, which is necessary for the protection of third persons.It states that
the principal is solidarily liable with the agent even when the latter has exceeded his
authority, if the principalallowed him to act as though he had full powers. However, for
an agency by estoppel to exist, the following must beestablished:1.

The principal manifested a representation of the agents authority or knowingly allowed the
agent to assume suchauthority
2.

The third person, in good faith, relied upon such representation3.

Relying upon such representation, such third person has changed his position to his
detriment.An agency by estoppel, which is similar to the doctrine of apparent authority,
requires proof of reliance upon therepresentations, and that, in turn, needs proof that
the representations predated the action taken in reliance.
This Court cannot agree with the Court of Appeals pronouncement of negligence on CBICs part.
CBIC not only clearly
stated the limits of its ag
ents powers in their contracts, it even stamped its surety bonds with the restrictions, in order
to
alert the concerned parties. Moreover, its company procedures, such as reporting
requirements, show that it has designeda system to monitor the insurance
contracts issued by its agents. CBIC cannot be faulted for Quinains deliberate failure to
notify it of his transactions with Unimarine. In fact, CBIC did not even receive the
premiums paid by Unimarine to Quinain.
DISPOSITION:
WHEREFORE, this petition is hereby GRANTED and the complaint against CBIC is
DISMISSED for lack of merit.
B. H. MACKE ET AL V JOSE CAMPS

FACTS:

* B. H. Macke and W.H. Chandler, partners doing business under thee firm name of Macke, Chandler And
Company, allege that during the months of February and March 1905, they sold to Jose Camps and delivered at his
place of business, known as the :Washington Caf, various bills of goods amounting to P351.50; that Camps has only
paid on account of said goods the sum of P174; that there is still due them on account of said goods the sum of P177.50

* Plaintiffs made demand for the payment from defendant and that the latter failed and refused to pay the said
balance or any part of it

* Macke, one of the plaintiffs, testified that on the order of one Ricardo Flores, who represented himself to be
the agent of Jose Camps, he shipped the said goods to the defendant at the Washington Caf; that Flores (agent) later
acknowledged the receipt of the said goods and made various payments thereon amounting in all to P174; that believes
that Flores is still the agent of Camps; and that when he went to the Washington Caf for the purpose of collecting his
bill he found Flores, in the absence of Camps, apparently in charge of the business and claiming to be the business
manager of Camps, said business being that of a hotel with a bar and restaurant annexed.

* A written contract was introduced as evidence, from which it appears that one Galmes, the former of
Washington Caf subrented the building wherein the business was conducted, to Camps for 1 year for the purpose of
carrying on that business, Camps obligating himself not to sublet or subrent the building or the business without the
consent of the said Galmes. *This contract was signed by Camps and the name of Ricardo Flores as a witness and
attached thereon is an inventory of the furniture and fittings which also is signed by Camps with the word sublessee
below the name, and at the foot of this inventory the word received followed by the name Ricardo Flores with the
words managing agent immediately following his name.

ISSUE: W/N Ricardol Flores was the agent of Camps

Ruling: Yes

Evidence is sufficient to sustain a finding that Flores is the agent of Camps in the management of the bar of the
Washington Caf with authority to bind Camps, his principal, for the payment of the goods

The contract sufficiently establishes the fact that Camps was the owner of the business and of the bar, and the
title of managing agent attached to the signature of Flores which appears on that contract, together with the fact that
at the time the purchases were made, Flores was apparently in charge of the business performing the duties usually
intrusted to a managing agent leave little room for doubt that he was there as the authorized agent of Camps.

Agency by Estoppel --- One who clothes another with apparent authority as his agent, and holds him out to the
public as such, can not be permitted to deny the authority of such person to act as his agent, to the prejudice of
innocent third persons dealing with such person in good faith and in the honest belief that he is what he appears to be.

Estopple---- Whenever a party has, by his own declaration, act or omission, intentionally and deliberately led
another to believe a particular thing true, and to act upon such belief, he can not, in any litigation arising out of such
declaration, act, or omission be permitted to falsify; and unless the contrary appears, the authority of the agent must be
presumed to include all the necessary and usual means of carrying his agency into effect.

Naguiat vs CA and Queao

GR No. 118375, 03 October 2003
412 SCRA 591

FACTS
Queao applied with Naguiat a loan for P200,000, which the latter granted. Naguiat
indorsed to Queao Associated bank Check No. 090990 for the amount of P95,000 and
issued also her own Filmanbank Check to the order of Queao for the amount of
P95,000. The proceeds of these checks were to constitute the loan granted by Naguiat to
Queao. To secure the loan, Queao executed a Deed of Real Estate Mortgage in favor
of Naguiat, and surrendered the owners duplicates of titles of the mortgaged properties.
The deed was notarized and Queao issued to Naguiat a promissory note for the amount
of P200,000. Queao also issued a post-dated check amounting to P200,000 payable to
the order of Naguait. The check was dishonoured for insufficiency of funds. Demand was
sent to Queao. Shortly, Queao, and one Ruby Reubenfeldt met with Naguiat. Queao
told Naguiat that she did not receive the loan proceeds, adding that the checks were
retained by Reubenfeldt, who purportedly was Naguiats agent.

Naguiat applied for extrajudicial foreclosure of the mortgage. RTC declared the Deed as
null and void and ordered Naguiat to return to Queao the owners duplicates of titles of
the mortgaged lots.

ISSUE
Whether or not the issuance of check resulted in the perfection of the loan contract.

HELD
The Court held in the negative. No evidence was submitted by Naguiat that the checks
she issued or endorsed were actually encashed or deposited. The mere issuance of the
checks did not result in the perfection of the contract of loan. The Civil Code provides
that the delivery of bills of exchange and mercantile documents such as checks shall
produce the effect of payment only when they have been cashed. It is only after the
checks have been produced the effect of payment that the contract of loan may have
been perfected.

Article 1934 of the Civil Code provides: An accepted promise to deliver something by
way of commodatum or simple loan is binding upon the parties, but the commodatum or
simple loan itsel shall not be perfected until the delivery of the object of the contract. A
loan contract is a real contract, not consensual, and as such, is perfected only upon the
delivery of the objects of the contract.

YUN KWAN BYUNG vs. PHILIPPINE AMUSEMENT AND GAMING

CORPORATION
G.R. No. 163553 December 11, 2009

FACTS
PAGCOR launched its Foreign Highroller Marketing Program. The Program aims to invite patrons from foreign countries to
play at the dollar pit of designated PAGCOR-operated casinos under specified terms and conditions and in accordance with industry
practice. Petitioner, a Korean national, alleges that he came to the Philippines four times to play for high stakes at the Casino Filipino;
that in the course of the games, he was able to accumulate gambling chips worth US$2.1 million. Petitioner contends that when he
presented the gambling chips for encashment with PAGCORs employees or agents, PAGCOR refused to redeem them.

PAGCOR claims that petitioner, who was brought into the Philippines by ABS Corporation, is a junket player who played in
the dollar pit exclusively leased by ABS Corporation for its junket players. PAGCOR alleges that it provided ABS Corporation with
distinct junket chips. ABS Corporation distributed these chips to its junket players. At the end of each playing period, the junket
players would surrender the chips to ABS Corporation. Only ABS Corporation would make an accounting of these chips to
PAGCORs casino treasury.

ISSUE
Whether the CA erred in holding that PAGCOR is not liable to petitioner, disregarding the doctrine of implied agency, or
agency by estoppels

RULING
Petitioner alleges that there is an implied agency. Alternatively, petitioner claims that even assuming that no actual agency
existed between PAGCOR and ABS Corporation, there is still an agency by estoppel based on the acts and conduct of PAGCOR
showing apparent authority in favor of ABS Corporation. Petitioners argument is clearly misplaced. 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. Absent such mutual intent, there is generally no agency.

There is no implied agency in this case because PAGCOR did not hold out to the public as the principal of ABS Corporation.
PAGCORs actions did not mislead the public into believing that an agency can be implied from the arrangement with the junket
operators, nor did it hold out ABS Corporation with any apparent authority to represent it in any capacity. The Junket Agreement was
merely a contract of lease of facilities and services.