#1

V-GENT, INC., Petitioner, vs. MORNING STAR TRAVEL and TOURS, INC., Respondent. G.R. No. 186305,
SECOND DIVISION, July 22, 2015, BRION, J. An agent may sue or be sued solely in its own name and
without joining the principal when the following elements concur: (1) the agent acted in his own name
during the transaction; (2) the agent acted for the benefit of an undisclosed principal; and (3) the
transaction did not involve the property of the principal. When these elements are present, the agent
becomes bound as if the transaction were its own.

FACTS

The petitioner V-Gent, Inc. (V-Gent) bought twenty-six (26)2 two-way plane tickets (Manila-
EuropeManila) from the respondent Morning Star Travel and Tours, Inc. (Morning Star).

On June 24, 1998 and September 28, 1998, V-Gent returned a total of fifteen (15) unused tickets worth
$8,747.50 to the defendant. Of the 15, Morning Star refunded only six (6) tickets worth $3,445.62.
Morning Star refused to refund the remaining nine (9) unused tickets despite repeated demands. On
December 15, 2000, petitioner V-Gent filed a money claim against Morning Star for payment of the
unrefunded $5,301.88 plus attorney's fees. Morning Star countered that V-Gent was not entitled to a
refund because the tickets were bought on the airline company's "buy one, take one" promo. It alleged
that there were only fourteen (14) unused tickets and only seven (7) of these were refundable;
considering that it had already refunded six (6) tickets (which is more or less 50o/o of 14), then there
was nothing else to refund. Morning Star also questioned V-Gent's personality to file the suit. It asserted
that the passengers, in whose names the tickets were issued, are the real parties-in-interest.

ISSUE

Whether VGENT, the agent, has legal standing to file the complaint

RULING

No. Every action must be prosecuted or defended in the name of the real party-in-interest - the party
who stands to be benefited or injured by the judgment in the suit.8 In suits where an agent represents a
party, the principal is the real party-in-interest; an agent cannot file a suit in his own name on behalf of
the principal. Rule 3, Section 3 of the Rules of Court provides the exception when an agent may sue or
be sued without joining the principal. Section 3. Representatives as parties. - Where the action is
allowed to be prosecuted and defended by a representative or someone acting in a fiduciary capacity,
the beneficiary shall be included in the title of the case and shall be deemed to be the real party-in-
interest. A representative may be a trustee of an express trust, a guardian, an executor or administrator,
or a party authorized by law or these Rules. An agent acting in his own name and for the benefit of an
undisclosed principal may sue or be sued without joining the principal except when the contract involves
things belonging to the principal. (Emphasis supplied.) Thus an agent may sue or be sued solely in its
own name and without joining the principal when the following elements concur: (1) the agent acted in
his own name during the transaction; (2) the agent acted for the benefit of an undisclosed principal; and
(3) the transaction did not involve the property of the principal. When these elements are present, the
agent becomes bound as if the transaction were its own. This rule is consistent with Article 1883 of the
Civil Code which says: Art. 1883. If 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. In 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, except when the contract involves things belonging to
the principal. The provisions of this article shall be understood to be without prejudice to the actions
between the principal and agent. In the present case, only the · first element is present; the purchase
order and the receipt were in the name of V-Gent. However, the remaining elements are absent
because: (1) V-Gent disclosed the names of the passengers to Morning Star - in fact the tickets were in
their names; and (2) the transaction was paid using the passengers' money. Therefore, Rule 3, Section 3
of the Rules of Court cannot apply. To define the actual factual situation, V-Gent, the agent, is suing to
recover the money of its principals - the passengers - who are the real parties-in-interest because they
stand to be injured or benefited in case Morning Star refuses or agrees to grant the refund because the
money belongs to them. From this perspective, V-Gent evidently does not have a legal standing to file
the complaint. Finally, V-Gent argues that by making a partial refund, Morning Star was already
estopped from refusing to make a full refund on the ground that V-Gent is not the real party-in-interest
to demand reimbursement. We find no merit in this argument. The power to collect and receive
payments on behalf of the principal is an ordinary act of administration covered by the general powers
of an agent. On the other hand, the filing of suits is an act of strict dominion.
#2

SPOUSES ROLANDO AND HERMINIA SALVADOR, Petitioners, v. SPOUSES ROGELIO AND ELIZABETH
RABAJA AND ROSARIO GONZALES, Respondents. G.R. No. 199990, SECOND DIVISION, February 04, 2015,
MENDOZA, J. Persons dealing with an agent must ascertain not only the fact of agency, but also the
nature and extent of the agent’s authority. A third person with whom the agent wishes to contract on
behalf of the principal may require the presentation of the power of attorney, or the instructions as
regards the agency. The basis for agency is representation and a person dealing with an agent is put
upon inquiry and must discover on his own peril the authority of the agent. In this case, Spouses Rabaja
did not recklessly enter into a contract to sell with Gonzales. They required her presentation of the
power of attorney before they transacted with her principal. And when Gonzales presented the SPA to
Spouses Rabaja, the latter had no reason not to rely on it.

FACTS:

Sometime in July 1998, Spouses Rabaja learned that Spouses Salvador were looking for a buyer of the
subject property. Petitioner Herminia Salvador (Herminia) personally introduced Gonzales to them as
the administrator of the said property. Spouses Salvador even handed to Gonzales the owner’s duplicate
certificate of title over the subject property. On July, 3, 1998, Spouses Rabaja made an initial payment of
P48,000.00 to Gonzales in the presence of Herminia. Gonzales then presented the Special Power of
Attorney3 (SPA), executed by Rolando Salvador (Rolando) and dated July 24, 1998. On the same day, the
parties executed the Contract to Sell4 which stipulated that for a consideration of P5,000,000.00,
Spouses Salvador sold, transferred and conveyed in favor of Spouses Rabaja the subject property.
Spouses Rabaja made several payments totalling P950,000.00, which were received by Gonzales
pursuant to the SPA provided earlier as evidenced by the check vouchers signed by Gonzales and the
improvised receipts signed by Herminia. Sometime in June 1999, however, Spouses Salvador complained
to Spouses Rabaja that they did not receive any payment from Gonzales. This prompted Spouses Rabaja
to suspend further payment of the purchase price; and as a consequence, they received a notice to
vacate the subject property from Spouses Salvador for non-payment of rentals. Thereafter, Spouses
Salvador instituted an action for ejectment against Spouses Rabaja. In turn, Spouses Rabaja filed an
action for rescission of contract against Spouses Salvador and Gonzales, the subject matter of the
present petition.

ISSUE

Whether Gonzales, as agent of Spouses Salvador, could validly receive the payments of Spouses Rabaja

RULING

Yes. The Court agrees with the courts below in finding that the contract entered into by the parties was
essentially a contract of sale which could be validly rescinded. Spouses Salvador insist that they did not
receive the payments made by Spouses Rabaja from Gonzales which totalled P950,000.00 and that
Gonzales was not their duly authorized agent. These contentions, however, must fail in light of the
applicable provisions of the New Civil Code which state: Art. 1900. So far as third persons are concerned,
an act is deemed to have been performed within the scope of the agent's authority, if such act is within
the terms of the power of attorney, as written, even if the agent has in fact exceeded the limits of his
authority according to an understanding between the principal and the agent. x x x x Art. 1902. A third
person with whom the agent wishes to contract on behalf of the principal may require the presentation
of the power of attorney, or the instructions as regards the agency. Private or secret orders and
instructions of the principal do not prejudice third persons who have relied upon the power of attorney
or instructions shown them. x x x x Art. 1910. The principal must comply with all the obligations which
the agent may have contracted within the scope of his authority.

Persons dealing with an agent must ascertain not only the fact of agency, but also the nature and extent
of the agent’s authority. A third person with whom the agent wishes to contract on behalf of the
principal may require the presentation of the power of attorney, or the instructions as regards the
agency. The basis for agency is representation and a person dealing with an agent is put upon inquiry
and must discover on his own peril the authority of the agent. In this case, Spouses Rabaja did not
recklessly enter into a contract to sell with Gonzales. They required her presentation of the power of
attorney before they transacted with her principal. And when Gonzales presented the SPA to Spouses
Rabaja, the latter had no reason not to rely on it. Perhaps the most significant point which defeats the
petition would be the fact that it was Herminia herself who personally introduced Gonzalez to Spouses
Rabaja as the administrator of the subject property. By their own ostensible acts, Spouses Salvador
made third persons believe that Gonzales was duly authorized to administer, negotiate and sell the
subject property. This fact was even affirmed by Spouses Salvador themselves in their petition where
they stated that they had authorized Gonzales to look for a buyer of their property.40 It is already too
late in the day for Spouses Salvador to retract the representation to unjustifiably escape their principal
obligation. As correctly held by the CA and the RTC, considering that there was a valid SPA, then Spouses
Rabaja properly made payments to Gonzales, as agent of Spouses Salvador; and it was as if they paid to
Spouses Salvador. It is of no moment, insofar as Spouses Rabaja are concerned, whether or not the
payments were actually remitted to Spouses Salvador. Any internal matter, arrangement, grievance or
strife between the principal and the agent is theirs alone and should not affect third persons. If Spouses
Salvador did not receive the payments or they wish to specifically revoke the SPA, then their recourse is
to institute a separate action against Gonzales. Such action, however, is not any more covered by the
present proceeding.
#3

INTERNATIONAL EXCHANGE BANK NOW UNION BANK OF THE PHILIPPINES vs SPOUSES JEROME AND
QUINNIE BRIONES, AND JOHN DOE G.R. No. 205657, March 29, 2017, Leonen,J. Upon accepting an
agency, the agent becomes bound to carry out the agency and shall be held liable for the damages,
which the principal may incur due to the agent's non-performance

FACTS:

Spouses Briones took out a loan of P3.7M from iBank (now Union Bank) to purchase a BMW Z4
Roadster. They executed a promissory note that required them to take out an insurance policy on the
car and to give iBank, as attomey-infact, irrevocable authority to file an insurance claim in case of loss or
damage to the vehicle. The BMW was carnapped so the spouses declared the loss to iBank, which
instructed them to continue paying the next three monthly installments "as a sign of good faith,” a
directive they complied with. After they finished paying the 3 installments, iBank demanded full
payment of the lost vehicle. The spouses submitted a notice of claim with their insurance company
which was denied due to a delay in the reporting of the lost vehicle. iBank filed a complaint for replevin
or sum of money against the spouses alleging default in paying the monthly amortizations of the
mortgaged vehicle

ISSUE: W/N Spouses Briones are liable to iBank for the monthly amortizations of the BMW.

RULING:

NO. Under the promissory note, Spouses Briones appointed iBank as their attorney-in-fact (agent),
authorizing it to file a claim with the insurance company if the mortgaged vehicle was lost or damaged.
iBank was also authorized to collect the insurance proceeds as the beneficiary of the insurance policy. As
the agent, petitioner was mandated to look after the interests of the Spouses Briones by collecting the
insurance proceeds. However, instead of going after the insurance proceeds, as expected of it as the
agent, petitioner opted to claim the full amount from the Spouses Briones, disregarding the established
principal-agency relationship, and putting its own interests before those of its principal. The insurance
policy was valid when the vehicle was lost, and that the insurance claim was only denied because of the
belated filing. Having been negligent in its duties as the duly constituted agent, petitioner must be held
liable for the denial of the insurance claim suffered by the Spouses Briones because of non-performance
of its obligation as the agent, and because it prioritized its interests over that of its principal. Petitioner's
bad faith was evident when it advised the Spouses Briones to continue paying three (3) monthly
installments after the loss, purportedly to show their good faith. If petitioner was indeed acting in good
faith, it could have timely informed the Spouses Briones that it was terminating the agency and its right
to file an insurance claim, and could have advised them to facilitate the insurance proceeds themselves.
This would have allowed the spouses to collect from their insurer and pay the amortizations on the
BMW. Petitioner's failure to do so only compounds its negligence and underscores its bad faith. Thus, it
will be inequitable now to compel the Spouses Briones to pay the full amount of the lost property.
#4

ANICETO G. SALUDO v. PHILIPPINE NATIONAL BANK, GR No. 193138, 2018-08-20

Facts:
a partnership for the practice of law, constituted in accordance with the Civil Code
provisions on partnership, acquires juridical personality by operation of law. Having a
juridical personality distinct and separate from its partners, such partnership is the real
party-in-interest in a suit brought in connection with a contract entered into in its name and
by a person authorized to act on its behalf.
Saludo) filed this petition for review on certiorari
CA affirmed with modification the January 11, 2007 Omnibus Order[4] issued by Branch 58
of the Regional Trial Court (RTC) of Makati City... ruled that respondent Philippine National
Bank's (PNB) counterclaims against Saludo and the Saludo Agpalo Fernandez and Aquino
Law Office (SAFA Law Office) should be reinstated in its answer.
SAFA Law Office entered into a Contract of Lease[5] with PNB, whereby the latter agreed to
lease 632 square meters of the second floor of the PNB Financial Center Building in
Quezon City for a period of three years and for a monthly rental fee of P189,600.00.
rental fee is subject to a yearly escalation rate of 10%.
occupied the leased premises and paid advance rental fees and security deposit in the total
amount of P1,137,600.00.
According to PNB, SAFA Law Office continued to occupy the leased premises until
February 2005, but discontinued paying its monthly rental obligations after December 2002.
PNB sent a demand letter... to pay its outstanding unpaid rents in the amount of
P4,648,086.34. PNB sent another letter[11] demanding the payment of unpaid rents in the
amount of P5,856,803.53 which was received by SAFA Law Office on November 10, 2003.
SAFA Law Office expressed its intention to negotiate. It claimed that it was enticed by the
former management of PNB into renting the leased premises by promising to: (1) give it a
special rate due to the large area of the place; (2) endorse PNB's cases to the firm with
rents to be paid out of attorney's fees; and (3) retain the firm as one of PNB's external
counsels. When new management took over, it allegedly agreed to uphold this agreement
to facilitate rental payments. However, not a single case of significance was referred to the
firm. SAFA Law Office then asked PNB to review and discuss its billings, evaluate the
improvements in the area and agree on a compensatory sum to be applied to the unpaid
rents, make good its commitment to endorse or refer cases to SAFA Law Office under the
intended terms and conditions, and book the rental payments due as receivables payable
every time attorney's fees are due from the bank on the cases it referred.
% discount on its unpaid rents, noting that while it was waiting for case referrals, it had paid
a total amount of P13,457,622.56 from January 1999 to December 2002, which included the
accelerated rates of 10% per annum beginning August 1999 until July 2003.
February 2005, SAFA Law Office vacated the leased premises.
proposing a settlement by providing a range of suggested computations... with deductions
for the value of improvements it introduced in the premises, professional fees due from
Macroasia Corporation, and the 50% discount allegedly promised by Dr. Lucio Tan.
PNB, however, declined the settlement proposal in a letter
Saludo, in his capacity as managing partner of SAFA Law Office, filed an amended
complaint[17] for accounting and/or recomputation of unpaid rentals and damages against
PNB
PNB filed a motion to include an indispensable party as plaintiff,[18] praying that Saludo be
ordered to amend anew his complaint to include SAFA Law Office as principal plaintiff. PNB
argued that the lessee in the Contract of Lease is not Saludo but SAFA Law Office, and that
Saludo merely signed the Contract of Lease as the managing partner of the law firm. Thus,
SAFA Law Office must be joined as a plaintiff in the complaint
PNB argued that as a matter of right and equity, it can claim that amount from SAFA Law
Office in solidum with Saludo.
Saludo filed his motion to dismiss counterclaims,[23] mainly arguing that SAFA Law Office
is neither a legal entity nor party litigant. As it is only a relationship or association of lawyers
in the practice of law and a single proprietorship which may only be sued through its owner
or proprietor, no valid counterclaims may be asserted against it.
Court DENIES the motion of PNB to include the SAFA Law Offices. Plaintiff has shown by
documents attached to his pleadings that indeed SAFA Law Offices is a mere single
proprietorship and not a commercial and business partnership. More importantly, plaintiff
has admitted and shown sole responsibility in the affairs entered into by the SAFA Law
Office. PNB has even admitted that the SAFA Law Office, being a partnership in the
practice of law, is a non-legal entity. Being a non-legal entity, it cannot be a proper party,
and therefore, it cannot sue or be sued.
CA held that Saludo is estopped from claiming that SAFA Law Office is his single
proprietorship. Under the doctrine of estoppel, an admission or representation is rendered
conclusive upon the person making it, and cannot be denied or disproved as against the
person relying thereon. Here, SAFA Law Office was the one that entered into the lease
contract and not Saludo. In fact, the latter signed the contract as the firm's managing
partner. The alleged Memorandum of Understanding[33] (MOU) executed by the partners of
SAFA Law Office, .which states, among others, that Saludo alone would be liable for the
firm's losses and liabilities, and the letter of Saludo to PNB confirming that SAFA Law Office
is his single proprietorship did not convert the firm to a single proprietorship. Moreover,
SAFA Law Office sent a letter to PNB regarding its unpaid rentals which Saludo signed as a
managing partner. The firm is also registered as a partnership with the Securities and
Exchange Commission
On the question of whether SAFA Law Office is an indispensable party, the CA held that it is
not. As a partnership, it may sue or be sued in its name or by its duly authorized
representative. Saludo, as managing partner, may execute all acts of administration,
including the right to sue. Furthermore, the CA found that SAFA Law Office is not a legal
entity. A partnership for the practice of law is not a legal entity but a mere relationship or
association for a particular purpose. Thus, SAFA Law Office cannot file an action in court.
the CA ruled that PNB's counterclaims against SAFA Law Office should not be dismissed.
While SAFA Law Office is not a legal entity, it can still be sued under Section 15,[36] Rule 3
of the Rules of Court considering that it entered into the Contract of Lease with PNB.
CA further ruled that while it is true that SAFA Law Office's liability is not in solidum with
Saludo as PNB asserts, it does not necessarily follow that both of them cannot be made
parties to PNB's counterclaims.
the presence ofSAFA Law Office is required for the granting of complete relief in the
determination of PNB's counterclaim.
The court must, therefore, order it to be brought in as defendant since jurisdiction over it can
be obtained
Saludo raises the following issues
Issues:
CA erred in including SAFA Law Office as defendant to PNB's counterclaim despite its
holding that SAFA Law Office is neither an indispensable party nor a legal entity;
Ruling:
petition is bereft of merit.
SAFA Law Office is a juridical entity and the real party-in-interest in the suit filed with the
RTC by Saludo against PNB. Hence, it should be joined as plaintiff in that case.
SAFA Law Office is a partnership and not a single proprietorship.
Two or more persons may also form a partnership for the exercise of a profession. Under
Article 1771, a partnership may be constituted in any form, except where immovable
property or real rights are contributed thereto, in which case a public instrument shall be
necessary. Article 1784, on the other hand, provides that a partnership begins from the
moment of the execution of the contract, unless it is otherwise stipulated.
SAFA Law Office was constituted as a partnership at the time its partners signed the
Articles of Partnership[45] wherein they bound themselves to establish a partnership for the
practice of law, contribute capital and industry for the purpose, and receive compensation
and benefits in the course of its operation.
subsequent registration of the Articles of Partnership with the SEC, on the other hand, was
made in compliance with Article 1772 of the Civil Code, since the initial capital of the
partnership was P500,000.00.
Saludo asserts that SAFA Law Office is a sole proprietorship on the basis of the MOU
executed by the partners of the firm
The foregoing evinces the parties' intention to entirely shift any liability that may be incurred
by SAFA Law Office in the course of its operation to Saludo, who shall also receive all the
remaining assets of the firm upon its dissolution. This MOU, however, does not serve to
convert SAFA Law Office into a sole proprietorship. As discussed, SAFA Law Office was
manifestly established as a partnership based on the Articles of Partnership. The MOU,
from its tenor, reinforces this fact. It did not change the nature of the organization of SAFA
Law Office but only excused the industrial partners from liability.
The MOU is an agreement forged under the foregoing provision. Consequently, the sole
liability being undertaken by Saludo serves to bind only the parties to the MOU, but never
third persons like PNB.
Having settled that SAFA Law Office is a partnership, we hold that it acquired juridical
personality by operation of law. The perfection and validity of a contract of partnership
brings about the creation of a juridical person separate and distinct from the individuals
comprising the partnership.
subsequent communications between the parties have always been made for or on behalf
ofPNB and SAFA Law Office, respectively.
Saludo's claims that SAFA Law Office is his sole proprietorship and not a legal entity fail in
light of the clear provisions of the law on partnership. To reiterate, SAFA Law Office was
created as a partnership, and as such, acquired juridical personality by operation of law.
Hence, its rights and obligations, as well as those of its partners, are determined by law and
not by what the partners purport them to be.
We hold, however, that our reference to this US case is an obiter dictum which cannot serve
as a binding precedent.
our law on partnership does not exclude partnerships for the practice of law from its
coverage. Article 1767 of the Civil Code provides that "[t]wo or more persons may also form
a partnership for the exercise of a profession." Article 1783, on the other hand, states that
"[a] particular partnership has for its object determinate things, their use or fruits, or a
specific undertaking, or the exercise of a profession or vocation." Since the law uses the
word "profession" in the general sense, and does not distinguish which professional
partnerships are covered by its provisions and which are not, then no valid distinction may
be made.
we stress that unlike Philippine law, American law does not treat of partnerships as forming
a separate juridical personality for all purposes.
Our jurisprudence has long recognized that American common law does not treat of
partnerships as a separate juridical entity unlike Philippine law.
It being a basic tenet of the Spanish and Philippine law that the partnership has a juridical
personality of its own, distinct and separate from that of its partners (unlike American and
English law that does not recognize such separate juridical personality), the bypassing of
the existence of the limited partnership as a taxpayer can only be done by ignoring or
disregarding clear statutory mandates and basic principles of our law.
Having settled that SAFA Law Office is a juridical person, we hold that it is also the real
party-in-interest in the case filed by Saludo against PNB.
under Article 1816 of the Civil Code, the partners' obligation with respect to the partnership
liabilities is subsidiary in nature. It is merely secondary and only arises if the one primarily
liable fails to sufficiently satisfy the obligation. Resort to the properties of a partner may be
made only after efforts in exhausting partnership assets have failed or if such partnership
assets are insufficient to cover the entire obligation.[76] Consequently, considering that
SAFA Law Office is primarily liable under the contract of lease, it is the real party-in-interest
that should be joined as plaintiff in the RTC case.
no showing that SAFA Law Office, as a separate juridical entity, is being used for
fraudulent, unfair, or illegal purposes. Hence, its partners cannot be held primarily liable for
the obligations of the partnership. As it was SAFA Law Office that entered into a contract of
lease with respondent PNB, it should also be impleaded in any litigation concerning that
contract.
#5
#6
SPS. RAINIER JOSE M. YULO AND JULIET L. YULO v. BANK OF PHILIPPINE ISLANDS,
GR No. 217044, 2019-01-16
Facts:
the Bank of the Philippine Islands issued Rainier a pre-approved credit card. His wife, Juliet,
was also given a credit card as an extension of his account. Rainier and Juliet (the Yulo
Spouses) used their respective credit cards by regularly charging goods and services on
them.[5]
The Yulo Spouses regularly settled their accounts with the Bank of the Philippine Islands at
first, but started to be delinquent with their payments by July 2008. Their outstanding
balance ballooned to P264,773.56 by November 29, 2008.[6]On November 11, 2008, the
Bank of the Philippine Islands sent Spouses Yulo a Demand Letter[7] for the immediate
payment of their outstanding balance of P253,017.62.
November 11, 2008, the Bank of the Philippine Islands sent Spouses Yulo a Demand
Letter[7] for the immediate payment of their outstanding balance of P253,017.62.
February 23, 2009, the Bank of the Philippine Islands filed a Complaint[9] before the
Metropolitan Trial Court of Makati City for sum of money against the Yulo Spouses. This
was initially raffled to the Metropolitan Trial Court Branch 67, Makati City, and was docketed
as Civil Case No. 97470.In their Answer,[10] the Yulo Spouses admitted that they used the
credit cards issued by the Bank of the Philippine Islands but claimed that their total liability
was only P20,000.00. They also alleged that the Bank of the Philippine Islands did not fully
disclose to them the Terms and Conditions on their use of the issued credit cards.[11]
Metropolitan Trial Court, in its Decision,[15] ruled in favor of the Bank of the Philippine
Islands and ordered the Spouses Yulo to pay the bank the sum of P229,378.68.
Issues:
sole issue for this Court's resolution is whether or not petitioners Rainier Jose M. Yulo and
Juliet L. Yulo are bound by the Terms and Conditions on their use of credit cards issued by
responden
Ruling:
When a credit card provider issues a credit card to a pre-approved or pre-screened client,
the usual screening processes "such as the filing of an application form and submission of
other relevant documents prior to the issuance of a credit card, are dispensed with and the
credit card is issued outright."[41] As the recipient of an unsolicited credit card, the pre-
screened client can then choose to either accept or reject it.
When a credit card provider issues a credit card to a pre-approved or pre-screened client,
the usual screening processes "such as the filing of an application form and submission of
other relevant documents prior to the issuance of a credit card, are dispensed with and the
credit card is issued outright."[41] As the recipient of an unsolicited credit card, the pre-
screened client can then choose to either accept or reject it.[42]
As a pre-screened client, petitioner Rainier did not submit or sign any application form as a
condition for the issuance of a credit card in his account. Unlike a credit card issued through
an application form, with the applicant explicitly consenting to the Terms and Conditions on
credit accommodation use, a pre-screened credit card holder's consent is not immediately
apparent.Thus, respondent, as the credit card provider, had the burden of proving its
allegation that petitioner Rainier consented to the Terms and Conditions surrounding the
use of the credit card issued to him.[45]While the Delivery Receipt[46] showed that Baitan
received the credit card packet for petitioner Rainier, it failed to indicate Baitan's relationship
with him. Respondent also failed to substantiate its claim that petitioner Rainier authorized
Baitan to act on his behalf and receive his pre-approved credit card. The only evidence
presented was the check mark in the box beside "Authorized Representative" in the
Delivery Receipt. This self-serving evidence is obviously insufficient to sustain respondent's
claim.
A contract of agency is created when a person acts for or on behalf of a principal, with the
latter's consent or authority.[47] Unless required by law, an agency does not require a
particular form, and may be express or implied from the acts or silence of the principal
Out of the above given principles, sprung the creation an acceptance of the relationship of
agency whereby one party, called the principal (mandante), authorizes another, called the
agent (mandatario), to act for find (sic) in his behalf in transactions with third persons. The
essential elements of agency are: (1) there is consent, express or implied, of the patties to
establish the relationship; (2) the object is the execution of a juridical act in relation to a third
person; (3) the agents (sic) acts as a representative and not for himself; and (4) the agent
acts within the scope of his authority.
Respondent fell short in establishing an agency relationship between petitioner Rainier and
Baitan, as the evidence presented did not support its claim that petitioner Rainier authorized
Baitan to act on his behalf. Without proof that petitioner Rainier read and agreed to the
Terms and Conditions of his pre-approved credit card, petitioners cannot be bound by it.
Petitioners do not deny receiving and using the credit cards issued to them. They do,
however, insist that respondent failed to establish their liability because the Statements of
Account submitted into evidence "merely reflect [their] alleged incurred transactions[,]"[51]
but are not the source of their obligation or liability.Petitioners are mistaken.When
petitioners accepted respondent's credit card by using it to purchase goods and services, a
contractual relationship was created between them, "governed by the Terms and Conditions
found in the card membership agreement. Such terms and conditions constitute the law
between the parties."[52]Under Payment of Charges in the Terms and Conditions,
petitioners would be furnished monthly Statements of Account and would have a 20-day
period from the statement date to settle their outstanding balance, or the minimum required
payment.[53] However, with respondent's failure to prove petitioner Rainier's conformity and
acceptance of the Terms and Conditions, petitioners cannot be bound by its
provisions.Nonetheless, petitioner Rainier admitted to receiving the Statements of Account
from respondent, and was aware of the interest rate charges imposed by respondent.[54] In
his testimony, he even categorically admitted that he was not disputing the transactions and
purchases he made before his default in payment and his account's freezing:
This case thus falls squarely within Alcaraz v. Court of Appeals[56] and Ledda v. Bank of
the Philippine Islands,[57] where the credit card provider also failed to prove the pre-
screened client's consent to the credit card's terms and conditions. Alcaraz ruled that when
the credit card provider failed to prove its client's consent, even if the latter did not deny
availing of the credit card by charging purchases on it, the credit card client may only be
charged with legal interest:... records reveal that as of the July 9, 2008 Statement of
Account, petitioners had an outstanding balance of P229,378.68.
The Metropolitan Trial Court ruling was affirmed by both the Regional Trial Court and the
Cour
However, since petitioner Rainier did not consent to the Terms and Conditions governing
his credit card, there is a need to modify the outstanding balance by removing the interests,
penalties, and other charges imposed before and on the July 9, 2008 Statement of Account
Thus, the finance charges, penalties, and interests amounting to P9,321.17 should be
deducted from the outstanding balance of P229,378.68, leaving a new outstanding balance
of P220,057.51. This outstanding balance shall then be subjected to 12% legal interest from
November 11, 2008,[74] the date of respondent's first extrajudicial demand[75] until June
30, 2013, and six percent (6%) legal interest from July 1, 2013 until fully paid.
WHEREFORE, premises considered, the Petition for Review on Certiorari is PARTIALLY
GRANTED
#7
MA. LORENA TICONG v. MANUEL A. MALIM, GR No. 220785, 2017-03-01
Facts:
Ticongs were the registered owners of several parcels of land located in Digos, Davao del
Sur
Malim, presenting himself as the authorized representative of the Ticongs, sent a letter of
"formal intent to sell" to Jainus C. Perez (Perez), the real estate field supervisor of the
Church of Jesus Christ of Latter-Day Saints (Buyer), offering to sell the subject properties
for P2,000.00 per square meter; and that below Malim's signature were inscribed the words,
"NOTED/CONFORMED" with the signature of Lorenzo Ticong above "Lorenzo Ticong, Lot
Owner
Memorandum of Agreement (MOA) authorizing them to "look, negotiate, and sell to any
prospective buyer" for their properties on a commission basis; that they were also
authorized by the Ticongs to charge an "overprice" on top of the P900.00 per square meter
price; that the subject properties were eventually sold at P1,460.00 per square meter or for
the total amount of P7,300,000.00; that the sale was made possible due to their efforts
which should entitle them to an overprice commission of P2,800,000.00 based on the
P560.00 per square meter overprice; and that the Ticongs, however, paid them only
P50,000.00 and refused to pay the remaining balance despite demands
Ticongs, on the other hand, stressed that Malim, et al. were not entitled to the overprice
commission; that the MOA was crafted and solely prepared by Malim, et al. and that they
signed the same without comprehending the salient aspects thereof... sale of their
properties prospered through their own active, direct and personal efforts and was
eventually attained when they sued the Buyer
Malim, et al. were not even licensed realty brokers and considering the questionable and
anomalous nature of the MOA, the provision therein with respect to the overprice
commission and 5% finders' fee were not valid, binding and enforceable against them
RTC rendered a decision upholding the validity of the MOA
CA denied the appeal.
Issues:
whether respondents Malim, et al. were entitled to the payment of their brokers' overprice
commission for being the procuring cause of the sale
Ruling:
Court sees no cogent reason to grant the consolidated petitions... respondents were the
procuring cause of the sale. At the very least, the respondents were able to bring together
the Ticongs and the Buyer to negotiate and lay the groundwork for a sale transaction.
"procuring cause," in describing a broker's activity, refers to a cause originating a series of
events which, without break in their continuity, results in the accomplishment of the prime
objective of employing the broker - to produce a purchaser ready, willing and able to buy
real estate on the owner's terms.[18] To be regarded as the procuring cause of a sale, a
broker's efforts must have been the foundation of the negotiations which subsequently
resulted in a sale.[19] "The broker must be the efficient agent or the procuring cause of the
sale. The means employed by him and his efforts must result in the sale. He must find the
purchaser, and the sale must proceed from his efforts acting as broker."... respondents
were instrumental in the sale of the properties of the Ticongs. Without their intervention, no
sale would have been consummated. They were the ones who set the sale of the said lots
in motion. If not for the respondents, the Buyer would not have known about the lots being
sold by the Ticongs.
Malim, with the conformity of Lorenzo Ticong, sent a formal letter of intent informing the
representative of the Buyer regarding the availability for sale of the Ticongs' properties
Ticongs expressly recognized the respondents as their sole agents and middlemen with
respect to the sale transaction and that the latter were in constant communication with the
Buyer and the Ticongs... respondents were the agents who negotiated the sale of the
subject lots
When there is a close, proximate and causal connection between the agent's efforts and the
sale of the property, the agents are entitled to their commission
SECOND PARTY is authorized to make an OVERPRICE at top of the P900.00/sq. meter as
our net asking price; that the FIRST PARTY, hereby Authorize the SECOND PARTY to
look, negotiate, and sell to any prospective buyer/buyers to the above lots... respondents
sold the property to a third party, the Buyer, for a higher price. The respondents were, thus,
entitled to the overprice amount as commission. Given the sale of the subject lots at
P1,460.00 per square meter, the over price was P560.00 per square meter or a total of
P2,800,000.00
#8
MANUEL JUSAYAN v. JORGE SOMBILLA, GR No. 163928, 2015-01-21
Facts:
Wilson) owned four parcels of land situated in New Lucena, Iloilo. On June 20, 1970, Wilson
entered into an agreement with respondent Jorge Sombilla (Jorge),[3] wherein Wilson
designated Jorge as his agent to supervise the tilling and farming... of his riceland in crop
year 1970-1971
Wilson sold the four parcels of land to Timoteo Jusayan (Timoteo).[4] Jorge and Timoteo
verbally agreed that Jorge would retain possession of the parcels of... land and would
deliver 110 cavans of palay annually to Timoteo without need for accounting of the
cultivation expenses provided that Jorge would pay the irrigation fees. From 1971 to 1983,
Timoteo and Jorge followed the arrangement
Timoteo sent several letters to Jorge terminating his administration and demanding the
return of the possession of the parcels of land
Due to the failure of Jorge to render accounting and to return the possession of the parcels
of land despite demands, Timoteo filed on June 30, 1986 a complaint for recovery of
possession and accounting against Jorge
Jorge asserted that he enjoyed security of tenure as the agricultural lessee of Timoteo; and
that he could not be dispossessed of his landholding without valid cause.
RTC upheld the contractual relationship of agency
CA reversed the RTC and dismissed the case, declaring that the contractual relationship
between the parties was one of agricultural tenancy
Issues:
Whether or not the relationship between the petitioners and respondent is that of agency or
agricultural leasehold
Ruling:
petition for review lacks merit.
In agency, the agent binds himself to render some service or to do something in
representation or on behalf of the principal, with the consent or authority of the latter.[10]
The basis of the civil law relationship of agency is representation,... Whether or not an
agency has been created is determined by the fact that one is representing and acting for
another.[13] The law does not presume agency; hence, proving its... existence, nature and
extent is incumbent upon the person alleging it.[14]... to prove the tenancy relationship,
Jorge presented handwritten receipts[15] indicating that the sacks of palay delivered to and
received by one Corazon Jusayan represented payment of rental. In this regard, rental was
the legal term for... the consideration of the lease... receipts substantially proved that the
contractual relationship between Jorge and Timoteo was a lease.
this Court differentiated between a leasehold tenancy and a civil law lease in the following
manner, namely: (1) the subject matter of a leasehold tenancy is limited to agricultural land,
but that of a civil law lease... may be rural or urban property; (2) as to attention and
cultivation, the law requires the leasehold tenant to personally attend to and cultivate the
agricultural land; the civil law lessee need not personally cultivate or work the thing leased;
(3) as to purpose, the landholding... in leasehold tenancy is devoted to agriculture; in civil
law lease, the purpose may be for any other lawful pursuits; and(4) as to the law that
governs, the civil law lease is governed by the Civil Code, but the leasehold tenancy is
governed by special laws.
Court GRANTS the petition for review on certiorari by PARTIALLY AFFIRMING the decision
of the Court of Appeals to the extent that it upheld the tenancy relationship of the parties;
DISMISSES the complaint for recovery of possession and... accounting
#9
JOSEFINA P. REALUBIT v. PROSENCIO D. JASO, GR No. 178782, 2011-09-21
Facts:
petitioner Josefina Realubit (Josefina) entered into a Joint Venture Agreement with Francis
Eric Amaury Biondo (Biondo), a French national, for the operation of an ice manufacturing
business.  With Josefina as the industrial partner and Biondo as... the capitalist partner, the
parties agreed that they would each receive 40% of the net profit, with the remaining 20% to
be used for the payment of the ice making machine which was purchased for the business.
Biondo subsequently executed a Deed of Assignment dated 27 June 1997, transferring all
his rights and interests in the business in favor of respondent Eden Jaso (Eden), the wife of
respondent Prosencio Jaso.
demanding an accounting and inventory thereof as well as... the remittance of their portion
of its profits.
the Spouses Jaso commenced the instant suit with the filing of their 3 August 1998
Complaint against Josefina, her husband, Ike Realubit (Ike), and their alleged dummies, for
specific performance, accounting,... examination, audit and inventory of assets and
properties, dissolution of the joint venture, appointment of a receiver and damages.
Spouses Realubit had no gainful occupation or business prior to their joint venture with
Biondo;... the Spouses Realubit have fraudulently concealed... the funds and assets thereof
thru their relatives, associates or dummies.
Claiming that they have been engaged in the tube ice trading business under a single
proprietorship even before... their dealings with Biondo,... could not have executed the
Deed of Assignment which bears a signature markedly different from that which he affixed
on their Joint
Venture Agreement; that they refused the Spouses Jaso's demand in view of the dubious
circumstances surrounding their acquisition of Biondo's share in the business... that said
business had already... stopped operations on 13 January 1996 when its plant shut down
after its power supply was disconnected by MERALCO for non-payment of utility bills...
defendants are ordered to submit to plaintiffs a complete accounting and inventory of the
assets and liabilities of the joint venture from its inception to the pres
On appeal before the CA, the foregoing decision was set aside
Issues:
WHETHER OR NOT THERE WAS A VALID ASSIGNMENT OF RIGHTS TO THE JOINT
VENTURE.
WHETHER THE COURT MAY ORDER PETITIONER [JOSEFINA REALUBIT] AS
PARTNER IN THE JOINT VENTURE TO RENDER [A]N ACCOUNTING TO ONE WHO IS
NOT A PARTNER IN SAID JOINT VENTURE.
WHETHER PRIVATE RESPONDENTS [SPOUSES JASO] HAVE ANY RIGHT IN THE
JOINT VENTURE AND IN
Ruling:
the Deed of Assignment Biondo executed in favor of Eden not only enjoys a presumption of
regularity[17] but is also considered prima facie evidence of the facts therein stated.
In view of the Spouses Realubit's failure to... discharge this onus, we find that both the RTC
and the CA correctly upheld the authenticity and validity of said Deed of Assignment upon
the combined strength of the above-discussed disputable presumptions and the testimonies
elicited from Eden[20]... and Notary Public Rolando Diaz.
forgery is never presumed and must... likewise be proved by clear and convincing evidence
by the party alleging the same.
a joint venture is likened to a particular partnership or one which "has for its object
determinate things, their use or fruits, or a specific undertaking, or the exercise of a
profession or... vocation."[27]   The rule is settled that joint ventures are governed by the
law on partnerships... it is evident that "(t)he transfer by a partner of his partnership interest
does not make the assignee of such interest a partner of the firm, nor entitle the assignee to
interfere in the management of the partnership business or to receive anything... except the
assignee's profits.  The assignment does not purport to transfer an interest in the
partnership, but only a future contingent right to a portion of the ultimate residue as the
assignor may become entitled to receive by virtue of his proportionate interest in the...
capital."
Spouses Jaso are entitled to Biondo's share in the profits,... despite Juanita's lack of
consent to the assignment of said Frenchman's interest in the joint venture.
petition is DENIED for lack of merit
Principles:
Art. 1813.  A conveyance by a partner of his whole interest in the partnership does not itself
dissolve the partnership, or, as against the ot
# 10
BANK OF PHILIPPINE ISLANDS v. YOLANDA LAINGO, GR No. 205206, 2016-03-16
Facts:
On 20 July 1999, Rheozel Laingo (Rheozel), the son of respondent Yolanda Laingo
(Laingo), opened a "Platinum 2-in-1 Savings and Insurance" account with petitioner Bank of
the Philippine Islands (BPI) in its Claveria, Davao City branch. The Platinum 2-in-1 Savings
and Insurance account is a savings account where depositors are automatically covered by
an insurance policy against disability or death issued by petitioner FGU Insurance
Corporation (FGU Insurance), now known as BPI/MS Insurance Corporation. BPI issued
Passbook No. 50298 to Rheozel corresponding to Savings Account No. 2233-0251-11. A
Personal Accident Insurance Coverage Certificate No. 043549 was also issued by FGU
Insurance in the name of Rheozel with Laingo as his named beneficiary.
On 25 September 2000, Rheozel died due to a vehicular accident as evidenced by a
Certificate of Death issued by the Office of the Civil Registrar General of Tagum City, Davao
del Norte. Since Rheozel came from a reputable and affluent family, the Daily Mirror
headlined the story in its newspaper on 26 September 2000.
On 27 September 2000, Laingo instructed the family's personal secretary, Alice Torbanos
(Alice) to go to BPI, Claveria, Davao City branch and inquire about the savings account of
Rheozel. Laingo wanted to use the money in the savings account for Rheozel's burial and
funeral expenses.
Alice went to BPI and talked to Jaime Ibe Rodriguez, BPI's Branch Manager regarding
Laingo's request. Due to Laingo's credit standing and relationship with BPI, BPI
accommodated Laingo who was allowed to withdraw P995,000 from the account of
Rheozel. A certain Ms. Laura Cabico, an employee of BPI, went to Rheozel's wake at the
Cosmopolitan Funeral Parlor to verify some information from Alice and brought with her a
number of documents for Laingo to sign for the withdrawal of the P995,000.
More than two years later or on 21 January 2003, Rheozel's sister, Rhealyn Laingo-
Concepcion, while arranging Rheozel's personal things in his room at their residence in
Ecoland, Davao City, found the Personal Accident Insurance Coverage Certificate No.
043549 issued by FGU Insurance. Rhealyn immediately conveyed the information to
Laingo.
Laingo sent two letters dated 11 September 2003 and 7 November 2003 to BPI and FGU
Insurance requesting them to process her claim as beneficiary of Rheozel's insurance
policy.
FGU Insurance sent a reply-letter to Laingo denying her claim. FGU Insurance stated that
Laingo should have filed the claim within three calendar months from the death of Rheozel
as required under Paragraph 15 of the Personal Accident Certificate of Insurance which
states:15. Written notice of claim shall be given to and filed at FGU Insurance Corporation
within three calendar months of death or disability.
the trial court decided the case in favor of respondents.
Court of Appeals reversed the ruling of the trial court.
Issues:
The main issue for our resolution is whether or not Laingo, as named beneficiary who had
no knowledge of the existence of the insurance contract, is bound by the three calendar
month deadline for filing a written notice of claim upon the death of the insured.
Ruling:
Petitioners contend that the words or language used in the insurance contract, particularly
under paragraph 15, is clear and plain or readily understandable by any reader which
leaves no room for construction. Petitioners also maintain that ignorance about the
insurance policy does not exempt respondent from abiding by the deadline and petitioners
cannot be faulted for respondent's failure to comply.
BPI offered a deposit savings account with life and disability insurance coverage to its
customers called the Platinum 2-in-1 Savings and Insurance account. This was a marketing
strategy promoted by BPI in order to entice customers to invest their money with the added
benefit of an insurance policy. Rheozel was one of those who availed of this account, which
not only included banking convenience but also the promise of compensation for loss or
injury, to secure his family's future.
As the main proponent of the 2-in-1 deposit account, BPI tied up with its affiliate, FGU
Insurance, as its partner. Any customer interested to open a deposit account under this 2-
in-1 product, after submitting all the required documents to BPI and obtaining BPI's
approval, will automatically be given insurance coverage. Thus, BPI acted as agent of FGU
Insurance with respect to the insurance feature of its own marketed product.
BPI, as agent of FGU Insurance, had the primary responsibility to ensure that the 2-in-1
account be reasonably carried out with full disclosure to the parties concerned, particularly
the beneficiaries. Thus, it was incumbent upon BPI to give proper notice of the existence of
the insurance coverage and the stipulation in the insurance contract for filing a claim to
Laingo, as Rheozel's beneficiary, upon the latter's death.
The provision is clear that an agent is bound to carry out the agency. The relationship
existing between principal and agent is a fiduciary one, demanding conditions of trust and
confidence. It is the duty of the agent to act in good faith for the advancement of the
interests of the principal. In this case, BPI had the obligation to carry out the agency by
informing the beneficiary, who appeared before BPI to withdraw funds of the insured who
was BPI's depositor, not only of the existence of the insurance contract but also the
accompanying terms and conditions of the insurance policy in order for the beneficiary to be
able to properly and timely claim the benefit.
Upon Rheozel's death, which was properly communicated to BPI by his mother Laingo, BPI,
in turn, should have fulfilled its duty, as agent of FGU Insurance, of advising Laingo that
there was an added benefit of insurance coverage in Rheozel's savings account.
There is a rationale in the contract of agency, which flows from the "doctrine of
representation," that notice to the agent is notice to the principal,[11] Here, BPI had been
informed of Rheozel's death by the latter's family. Since BPI is the agent of FGU Insurance,
then such notice of death to BPI is considered as notice to FGU Insurance as well. FGU
Insurance cannot now justify the denial of a beneficiary's insurance claim for being filed out
of time when notice of death had been communicated to its agent within a few days after
the death of the depositor-insured. In short, there was timely notice of Rheozel's death
given to FGU Insurance within three months from Rheozel's death as required by the
insurance company.
The records show that BPI had ample opportunity to inform Laingo, whether verbally or in
writing, regarding the existence of the insurance policy attached to the deposit account.
Since BPI, as agent of FGU Insurance, fell short in notifying Laingo of the existence of the
insurance policy, Laingo had no means to ascertain that she was entitled to the insurance
claim. It would be unfair for Laingo to shoulder the burden of loss when BPI was remiss in
its duty to properly notify her that she was a beneficiary.
Thus, as correctly decided by the appellate court, BPI and FGU Insurance shall bear the
loss and must compensate Laingo for the actual damages suffered by her family plus
attorney's fees. Likewise, FGU Insurance has the obligation to pay the insurance proceeds
of Rheozel's personal accident insurance coverage to Laingo, as Rheozel's named
beneficiary.
11.

Calubad v. Ricarcen Development Corporation

G.R. No. 202364, 30 August 2017

FACTS:

Ricarcen was a family corporation. Marilyn R. Soliman (Marilyn) was its president from 2001 to
August 2003. The other members of the board of directors during that time were Marilyn’s mother,
Erlinda Villanueva, her brother, her aunt, and her sisters.

Marilyn, acting on Ricarcen’s behalf as its president, took out a loans from Calubad. This loan was
secured by a real estate mortgage.

To prove her authority to execute the three (3) mortgage contracts in Ricarcen’s behalf, Marilyn
presented Calubad with a Board Resolution dated October 15, 2001.

Ricarcen, after firing Marilyn filed its Complaint for Annulment of Real Estate Mortgage and
Extrajudicial Foreclosure of Mortgage and Sale with Damages against Marilyn, Calubad, and
employees of the Registry of Deeds of Quezon City and of the Regional Trial Court of Quezon City.

Ricarcen claimed that it never authorized its former president Marilyn to obtain loans from Calubad
or use the Quezon City property as collateral for the loans. Calubad, on the other hand, asserted
that he exercised the necessary diligence required under the circumstances by requiring Marilyn to
submit the necessary documents to prove her authority from Ricarcen. Calubad likewise argued that
even if Ricarcen did not authorize Marilyn, it was already estopped from denying her authority since
the loan proceeds had been released and Ricarcen had benefited from them.

ISSUE:

Whether Marilyn, as President, has authority to enter into contracts for and in Ricarcen’s behalf.

RULING:

Yes. As the former president of Ricarcen, it was within Marilyn’s scope of authority to act for and
enter into contracts in Ricarcen’s behalf. Her broad authority from Ricarcen can be seen with how
the corporate secretary entrusted her with blank yet signed sheets of paper to be used at her
discretion.She also had possession of the owner’s duplicate copy of the land title covering the
property mortgaged to Calubad, further proving her authority from Ricarcen.

The doctrine of apparent authority provides that even if no actual authority has been conferred on an
agent, his or her acts, as long as they are within his or her apparent scope of authority, bind the
principal. However, the principal’s liability is limited to third persons who are reasonably led to
believe that the agent was authorized to act for the principal due to the principal’s conduct.

Hence, Calubad could not be faulted for continuing to transact with Marilyn, even agreeing to give
out additional loans, because Ricarcen clearly clothed her with apparent authority. Likewise, it
reasonably appeared that Ricarcen’s officers knew of the mortgage contracts entered into by Marilyn
in Ricarcen’s behalf as proven by the issued Banco De Oro checks as payments for the monthly
interest and the principal loan.

Ricarcen claimed that it never granted Marilyn authority to transact with Calubad or use the Quezon
City property as collateral for the loans, but its actuations say otherwise.

It appears as if Ricarcen and its officers gravely erred in putting too much trust in Marilyn. However,
Calubad, as an innocent third party dealing in good faith with Marilyn, should not be made to suffer
because of Ricarcen’s negligence in conducting its own business affairs.
12.

SIGUION REYNA MONTECILLO v. NORMA CHIONLO-SIA, GR No. 181186, 2016-02-03

Facts:
Siguion Reyna Montecillo & Ongsiako Law Offices (SRMO) acted as counsel for Remedios
N. Rodriguez (Remedios) when she commenced an action for the intestate settlement of
the estate of her deceased husband
During the pendency of the intestate proceedings, Remedios asked for the payment of
widow's allowance. This, however, was denied by the RTC
CA) promulgated a decision reversing the RTC's Order and granted Remedios a monthly
widow's allowance of P3,000.00... while the case was pending before the CA, Remedios
executed a Deed of Sale of Inheritance... wherein she agreed to sell all her rights, interests
and participation in the estate of Susano J. Rodriguez to a certain Remigio M. Gerardo
(Gerardo) in consideration of P200,000.00
As a condition subsequent to the sale, Remedios, on March 1, 1988, executed a special
power of attorney[5] (SPA) authorizing Gerardo to, among others, "receive from any person,
entity, government agency or instrumentality, or from any court, any... property, real or
personal, cash, checks or other commercial documents which may be due to me or payable
to me by virtue of any contract, inheritance or any other legal means," and to "receive said
property... in his own name and for his own account and to deposit the same at... his sole
discretion for his own account, and dispose of [the] same without any limitation.
Gerardo later on executed a document titled as "Substitution of Attorney-in-Fact,"[7] where
he designated SRMO as substitute attorney... pursuant to the power of substitution granted
to him in the earlier SPA. Gerardo subsequently executed his own SPA authorizing SRMO
"[t]o appear... and represent [Gerardo] in any and all proceedings and incidents in the
aforementioned case.
After the CA's decision regarding the widow's allowance became final and executory,
SRMO, on April 24, 1991, accordingly filed a motion with the RTC for the payment of the
allowance then amounting to a total of P315,000.00.[9] A few months after, the Estate... of
Deceased Susano J. Rodriguez (Estate) remitted to SRMO three (3) checks totaling this
amount
Remedios questioned the RTC's Order approving the partition and denied the execution of
the Deed of Sale in favor of Gerardo. She also demanded that SRMO return the amount it
received... however, Remedios filed a Notice of Withdrawal of the same motion
RTC... motu proprio directed SRMO to reimburse the Estate the amount of P315,000.00
representing the widow's allowance it received
SRMO moved to be excused from reimbursing the Estate. According to SRMO, when it
sought the payment of the widow's allowance, it was merely seeking the enforcement of a
judgment credit in favor of... its client, Remedios, who had, in turn, sold her interests to
Gerardo, also represented by SRMO
Issues:
SRMO is now before this Court contending that while it was not a party in the intestate
proceedings, it is nevertheless an "aggrieved party" which can file a petition for certiorari. It
claims that the RTC's order of reimbursement violated SRMO's right to due process.
SRMO further argues that the RTC erred in ordering it to reimburse the widow's allowance
since SRMO received said allowance only in favor of Gerardo as buyer of Remedios'
interests pursuant to the Deed of Sale.
Ruling:
The general rule, therefore, is that a person not a party to the proceedings in the trial court
cannot maintain an action for certiorari in the CA or the Supreme Court to have the order or
decision of the trial court reviewed... facts show that SRMO became involved in its own
capacity only when the RTC ordered it to return the money that it received on behalf of its
client. The order of reimbursement was directed to SRMO in its personal capacity—not in its
capacity as counsel for... either Remedios or Gerardo.
We find this directive unusual because the order for reimbursement would typically have
been addressed to the parties of the case; the counsel's role and duty would be to ensure
that his client complies with the court's order. The underlying premise... of the RTC's order
of reimbursement is that, logically, SRMO kept or appropriated the money. But the premise
itself is untenable because SRMO never claimed the amount for its own account. In fact, it
is uncontroverted that SRMO only facilitated the transfer of the amount to
Gerardo.
If the RTC was convinced that the Estate had a right to reimbursement, it should have
ordered the party who ultimately benefited from any unwarranted payment—not his lawyer
—to return the money.
petition is GRANTED
Principles:
Under the law of agency, an agent is not personally liable for the obligations of the principal
unless he performs acts outside the scope of his authority or he expressly binds himself to
be personally liable.[32] Otherwise, the principal is solely liable.
Here, there was no showing that SRMO bound itself personally for Gerardo's obligations.
SRMO also acted within the bounds of the authority issued by Gerardo, as the transferee
pendente lite of the widow's interest, to receive the payment.[33]
13. REPUBLIC V. BANEZ; G.R. NO. 169442; OCTOBER 14, 2015

Facts:
In 1976, Antonio V. Bañez, Luisita Bañez Valera, and Nena Bañez Hojilla (collectively,
respondents) offered for sale a parcel of land
Pursuant to the offer... to sell on 7 December 1981, respondents executed a Letter
Agreement irrevocably giving CRC the option to purchase the subject property, which CRC
accepted... co-owners shall take all necessary steps to cause the CRC Portion to be
brought under the operation of Republic Act No. 496, as amended, and to cause the
issuance in their name of the corresponding original certificate of title
An absolute deed of sale containing the above provisions and standard warranties on
conveyances of real property shall be executed by the co-owners in favor of CRC or its
assignee/... rovided, that payment shall be made by CRC only upon presentation by the co-
owners to CRC of certificate/s and/or clearances, with corresponding receipts,... issued by
the appropriate government office/s or agency/ies to the effect that capital gains tax, real
estate taxes on the Property and local transfer tax and other taxes, fees or charges due on
the transaction and/or on the Property have been paid.
Respondents asked for several cash advances which reached the total amount of, more or
less, Two Hundred Seventeen Thousand Pesos (P217,000.00), to be deducted from the
purchase price of Four Hundred Thousand Pesos (P400,000.00... ake all steps necessary
to cause a portion of the lot covered by Tax Declaration No. 40185 in the name of Urbano
Bañe
To do all acts and things and to execute all papers and documents of whatever nature or
kind required for the accomplishments of the aforesaid purpos
HEREBY GRANTING AND GIVING unto our said attorney full power and authority
whatsoever requisite or necessary or proper to be done in or about the premises as fully to
all intents and purposes as we might or could lawfully do if personally present
However, CRC stopped its operation. T... he Development Bank of the Philippines and
National Development Company took over CRC's operation and turned over CRC's equity
to Asset Privatization Trust (APT),... The APT's function is to take title to and possession of,
provisionally manage and dispose of nonperforming assets of government financial
institutions... hus, the original party, CRC, is now represented by the Republic of the
Philippines through the PMO (hereinafter referred to... as petitioner), the successor of the
defunct APT.
respondents declared afterwards the subject property as Urbano Bañez property, rented out
to third parties the staff houses petitioner constructed, and ordered its guards to prohibit the
petitioner from entering the compoun... ojilla filed a Motion to Dismiss on the grounds that
he was not a real party-in-interest and that the action was barred by the Statute of
Limitation... hich Motion the RTC granted in an Order dated 16 August 2000 based on
Article 1144(1) of the Civil Code,... which bars actions filed beyond ten (10) years upon the
execution of the written contract.
he defendants were given [enough] time from December 7, 1981 to comply with their
obligation, hence, after a reasonable period of time, the plaintiff should have demanded
compliance of defendants' undertaking
Within that 18-year period, there was no act on the... part of petitioner, whether judicial or
extrajudicial, to interrupt prescription.
hile petitioner paid cash advances to respondents for the processing of the registration of
the title, "which totaled to more or less P217,000.0... petitioner] has not demanded
compliance by [respondents] of their... obligation, that is, the execution of the absolute deed
of sale and the delivery of the Original Certificate of Titl... n appeal, petitioner argued that
the RTC erred when it dismissed the complai
Court of Appeals affirmed the ruling of the RTC... the Court of Appeals found that the
extrajudicial demand to respondents did not... serve to toll the running of the prescriptive
period
While petitioner sent demand letters dated 29 May 1991 and 24 October 1991, these...
demand letters were not considered as demand letters because the letters simply called the
attention of Hojilla to return the properties and unlock the gates
With regard to the issue of running of prescriptive period against the State, the Court of
Appeals opined that because the subject property is a patrimonial property of the State
when APT became the controlling stockholder of CRC, prescription may run against the
State
Issues:
whether or not the complaint for specific performance was filed beyond the prescriptive
period.
Ruling:
petitioner argues that although there is a 10-year limitation within which to file a case based
on a written contrac... etitioner referred to the letter sent by Hojilla to the former dated 15
August 1984
In the letter dated 15 August 1984, respondents affirmed their undertaking that they will...
claim full payment of the property upon presentation of a clean title and the execution of the
Absolute Deed of Sale
"[t]he Bañez heirs will only claim for the full payment of the property upon presentation of a
clean title and execution of a Deed of Sale signed by... the heirs... ased on Hojilla's
representation as stated in the letter dated 15 August 1984, petitioner argues that Hojilla is
estopped by his own acts and for misleading petitioner because "respondents not only
failed to comply with their commitment to deliver a certificate of title but... where [sic] they
also [misled] petitioner into believing that they were working on the title of subject property...
petitioner further added that because there was no period fixed for the fulfillment or
performance of the obligation to deliver the title, the least the court should have done was to
fix the period pursuant to Article 1197 of the Civil Code.
guments of respondents, which are aligned with the reasons of the lower courts, rely on
Article 1144 of the Civil Code, which provides that actions upon a written contract must be
brought within ten (10) years from execution. Becau
We rule in favor of the petitioner.
In Hojilla's letter to petitioner dated 15 August 1984, Hojilla updated petitioner of the status
of the subject property's title, in this wise:
There is no other logical conclusion but that the 15 August 1984 letter is an
acknowledgment of respondents' commitment under the Contract
The letter served to update petitioner of the status of the subject property's title, an
obligation agreed upon by the parties in the
Contract.
Principles:
written acknowledgment of debt or obligation effectively interrupts the running of the
prescriptive period and sets the same running anew
When respondents went abroad pending the performance of their obligations in the
Contract, they authorized Hojilla to register the subject property— a single obligation in the
whole range of obligations in the Contract
The SPA appeared to have left no representative to fulfill... respondents' obligations in the
Contract on their behalf except for Hojilla's authority to register the subject property.
[t]he Bañez heirs will only... claim for the full payment of the property upon presentation of a
clean title and execution of a Deed of Sale signed by the heirs."[23]
If Hojilla knew that he had no authority to execute the Contract and receive the letters on
behalf of respondents, he should have opposed petitioner's demand letter
However, having received the several demand letters from petitioner, Hojilla continuously
represented himself as... the duly authorized agent of respondents, authorized not only to
administer and/or manage the subject property, but also authorized to register the subject
property and represent the respondents with regard to the latter's obligations in the
Contract. Hojilla also assured... petitioner that petitioner's obligation to pay will arise only
upon presentation of the title.
In an agency by estoppel or apparent authority, "[t]he principal is bound by the acts of his
agent with the apparent authority which he knowingly permits the agent to assume, or which
he holds the agent out to the public as possessing... respondents' acquiescence of Hojilla's
acts was made when they failed to repudiate the latter's acts. They knowingly permitted
Hojilla to represent them and petitioners were clearly misled into believing Hojilla's authority.
Thus, the respondents are now estopped from... repudiating Hojilla's authority, and Hojilla's
actions are binding upon the respondents
Respondents cannot benefit from their own inaction and failure to comply with their
obligations in the Contract and let the petitioner suffer from respondents' own... default.
14

G.R. No. 202088 MANUEL L. BAUTISTA,

SPOUSES ANGEL SAHAGUN and
CARMELITA BAUTISTA, and ANIANO L.
BAUTISTAvs MARGARITO L. BAUTISTA
 

Facts: The Bautista siblings – Margarito, Manuel L. Bautista,

Carmelita Bautista Sahagun (Carmelita), Aniano L. Bautista
(Aniano), Florencia Bautista de Villa (Florencia), and Ester
Bautista Cabrera (Ester) – established a lending business through
a common fund from the proceeds of the sale of a parcel of
coconut land they inherited from their mother Consorcia Lantin
Bautista.

Amelia V. Mendoza obtained a loans from Florencia, and secured

the same with a real estate mortgage over a parcel of land she
owned. SubsequentlyAmelia and Florencia executed another
Kasulatan ng Pagdaragdag ng Sanla. Florencia, thereafter,
received the owner’s duplicate copy of TCT No. T-2371, which she,
in turn, entrusted to Carmelita when she went overseas.

On November 28, 2002, Amelia allegedly sold the subject property

to Margarito through a Kasulatan ng Bilihang Tuluyan. On the same
date, Florencia filed a Petition for the Issuance of a Second
Owner’s Duplicate of TCT No. T-2371 before the RTC of San Pablo
City. She alleged that she was the mortgagee of the subject
property, and that she could not locate, despite diligent search,
the owner’s duplicate title in her possession, which she
misplaced sometime in September 2002. Florencia also executed a
Special Power of Attorney in favor of Margarito to represent her
in the proceedings.

Petitioners tried to oppose the issuance, but on January 30,

2003, the RTC granted the petition and TCT No. T-59882 was later
issued in the name of Margarito.

Petitioners averred that Margarito and the others refused to heed

their oral and written demands for the partition of the
properties they co-owned, which included the Sta. Monica
property. For his part, Margarito asseverated that he exclusively
owns the property in controversy since he used his personal funds
in purchasing the land. On February 16, 2009, the RTC ruled in
favor of the petitioners and declared, among other things, that
the Sta. Monica property was commonly owned by the siblings.
Aggrieved, Margarito elevated the case before the CA. In a
Decision dated March 6, 2012, the CA reversed and set aside the
decision of the RTC.

The CA concluded that petitioners failed to establish that they

are -owners of the Sta. Monica property. It held that the TCT
under Margarito’s name was an indefeasible and incontrovertible
title to the property and has more probative weight than the
blank Kasulatan adduced by the petitioners. Consequently,
petitioners’ action for partition and accounting cannot be acted
upon because they failed to prove that they are co-owners of the
Sta. Monica property.

Issue: Whether or not Implied Trust resulted from the act of

petitioners when he conveyed the subject land by his Transfer
Certificate of Title.

Rulings: Yes. Their transaction resulted into an Implied Trust.

Despite all these, Margarito failed to prove that Amelia conveyed
the Sta. Monica property exclusively in his name. It is also
quite intriguing why he did not even bother to present the
testimony of Amelia or of Florencia, who could have enlightened
the court about their transactions. In addition, We find it
incredible that a property, which secured a loan roughly over a
million pesos, would be sold for considerably less than that
amount or for only ₱550,000.00.

As for the TCT No. T-59882 in the name of Margarito, like in the
case at bar, although a certificate of title is the best proof of
ownership of a piece of land, the mere issuance of the same in
the name of any person does not foreclose the possibility that
the real property may be under co-ownership with persons not
named in the certificate or that the registrant may only be a
trustee or that other parties may have acquired interest
subsequent to the issuance of the certificate of title. The
principle that a trustee who puts a certificate of registration
in his name cannot repudiate the trust by relying on the
registration is one of the well-known limitations upon a title.

There is an implied trust when a property is sold and the legal

estate is granted to one party but the price is paid by another
for the purpose of having the beneficial interest of the
property. This is sometimes referred to as a purchase money
resulting trust, the elements of which are: (a) an actual payment
of money, property or services, or an equivalent, constituting
valuable consideration; and (b) such consideration must be
furnished by the alleged beneficiary of a resulting trust.

A trust, which derives its strength from the confidence one

reposes on another especially between families, does not lose
that character simply because of what appears in a legal
document. From the foregoing, this Court finds that an implied
resulting trust existed among the parties. The pieces of evidence
presented demonstrate their intention to acquire the Sta. Monica
property in the course of their business, just like the other
properties that were also the subjects of the partition case and
the compromise agreement they entered into. Although the Sta.
Monica property was titled under the name of Margarito, the
surrounding circumstances as to its acquisition speak of the
intent that the equitable or beneficial ownership of the property
should belong to the Bautista siblings.

Inevitably, the RTC’s Order of partition of the Sta. Monica

property was erroneously set aside by the CA and this Court is
convinced that petitioners satisfactorily established that they
are co-owners of the property and are entitled to the reliefs
prayed for.

Advertisements
15.
SPOUSES MAY S. VILLALUZ and JOHNNY VILLALUZ, JR.,v.LAND BANK OF THE
PHILIPPINES and the REGISTER OF DEEDS FOR DAVAO CITY G.R. No. 192602, January
18, 2017, Third Division, JARDELEZA, J. An agent appointed in a Power of Attorney with
authority to sign documents relating to a mortgage, may appoint a substitute if the principal has
not prohibited him from doing so. A bank can thus validly transact with a substitute agent as long
as the Power of Attorney does not prohibit the appointment of a substitute. A real estate
mortgage can be validly executed before the loan is released, provided that the loan is actually
released thereafter. An assignment of inventory (given in addition to a real estate mortgage) is
not a substitute for payment of sums of money. As such, it does not serve to extinguish the loan
and the accessory real estate mortgage.

FACTS: In 1996, the Spouses May and Johnny Villauz (“Spouses”) executed an SPA in favor of
May Villauz’s mother. Paula Agbisit, which authorized the latter to “sign in our behalf all
documents relating the sale, mortgage, or other disposition’ of a property owned by the Spouses
located in Davao City. The property was to be used as collateral for a loan to expand Paula
Agbisit’s backyard cut flower business.
On June 19, 1996, Paula Agbisit executed her own SPA appointing (as her substitute agent)
Milflores Cooperative (of which she was the Chairperson) as attorney-in-fact in obtaining a loan
from and executing a real estate mortgage in favor of the Land Bank of the Philippines. Milflores
Cooperative also executed a Deed of Assignment of Produce/ Inventory as additional collateral
for the loan. Land Bank of the Philippines approved a P3 million loan in favor of Milflores
Cooperative and on June 25, 1996 made a partial release of P995, 500. On the same day, Paula
Agbisit borrowed the amount of P604, 750 from Milflores Cooperative. The trial court dismissed
the complaint and which dismissal was affirmed by the Court of Appeals. Hence, this petition to
the Supreme Court.

ISSUES: 1. Whether Paula Agbisit could further delegate her authority as attorney-in-fact for the
Spouses Villaluz? If not, was the mortgage in favor of Land Bank executed by Milflores
Cooperative void. 2. Whether the real estate mortgage can be deemed void since there was no
loan yet when the mortgage was executed. 3. Whether the SPA issued by the Spouses in favor of
Paula Agbisit was extinguished when Milflores Cooperative assigned its produce and inventory
to Land Bank as additional collateral.
RULING: 1. YES. The delegation of authority made by Paula Agbisit to Milflores Cooperative is
valid. Articles 1892 and 1893 of the Civil Code provide the rules regarding the appointment of a
substitute by an agent. The law created a presumption that an agent has the power to appoint a
substitute. The consequence of the presumption is that, upon valid appointment of a substitute by
the agent, there ipso facto arises an agency relationship between the principal and the substitute,
i.e. the substitute becomes the agent of the principal. As a result, the principal is bound by the
acts of the substitute as if these acts had been done by the principal’s appointed agent. In this
case, the SPA executed by the Spouses in favor of Paula Agbisit contains no restrictive language
indicative of an intention to prohibit Paula Agbisit from appointing a substitute agent. Thus,
Paula Agbisit’s appointment of Milflores as substitute agent was valid and consequently, the real
estate mortgage is considered validly executed. 2. The Spouses floated a new theory that the
mortgage was void because the loan was not yet in existence when the mortgage was executed
on June 21, 1996 as the loan was released only on June 25, 1996. The Supreme Court ruled that
although the validity of the real estate mortgage is dependent upon the validity of the loan, what
is essential is that the loan contract intended to be secured is actually
perfected (although the proceeds are not yet released) prior to the execution of the mortgage
contract. In loan transactions, it is customary for the lender to require the borrower to execute the
security contracts prior to the initial loan drawdown. This is understandable since a prudent bank
would not want to release its funds without the security arrangements in place. On the other
hand, the borrower would not be prejudiced by mere execution of the security contract because
unless the proceeds are delivered, the obligations under the security contracts will not arise. In
other words, the security contract, in this case, the real estate mortgage, is conditioned upon the
release of the loan amount. This suspensive condition was satisfied when Land Bank released the
first tranche of the ₱3,000,000 loan to Milflores Cooperative, which consequently gave rise to
the Spouses’ obligations under the real estate mortgage. The Spouses’ theory that the additional
security by Milflores Cooperative of its produce/ inventory extinguished the loan and
consequently the agency contract, was likewise found to be unacceptable. The assignment was
for the express purpose of “securing the payment of the line/ loan, interest, and charges thereon.”
Nowhere in the deed can it be reasonably deduced that the collaterals assigned by Milflores
Cooperative were intended to substitute the payment of the sum of money under the loan. It was
merely an accessory contract to secure the principal loan obligation. The Spouses understandably
feel shorthanded because their property was foreclosed by reason of another person’s inability to
pay. However, they were not coerced to grant an SPA in favor of Paula Agbisit. Nor were they
prohibited from prescribing conditions on how such power may be exercised. Absent such
express limitations, the law recognized Land Bank’s right to rely on the terms of the power of
attorney as written