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Philpotts vs. Philippine Manufacturing Co.

and Berry

W.G. Philpotts (Petitioner) , a stockholder in Philippine Manufacturing Company sought to compel respondents to permit plaintiff, a person or by some authorized agent or attorney to inspect and examine the records of the business transacted by said company since January 1, 1918.

Respondent corporation or any of its officials has refused to allow the petitioner himself to examine anything relating to the affairs of the company, and the petitioner prays for an order commanding respondents to place records of all business transactions of the company, during a specific period, at the disposal of the plaintiff or his duly authorized agent or attorney. Petitioner desires to exercise said right through agent or attorney.

Petition is filed originally in the Supreme Court under authority of Section 515 of Code of Civil Procedure, which gives SC concurrent jurisdiction with then Court of First Instance in cases where any corporation or person unlawfully excludes the plaintiff from use and enjoyment and some right he is entitled.

ISSUE: Whether the right which the law concedes to a stockholder to inspect the records can be exercised by a proper agent or attorney of the stockholder as well as by stockholder in person


Yes. Right of inspection of records can be exercised by proper agent or attorney of the stockholder as well as by stockholder in person.

The right of inspection / examination into corporate affairs given to a stockholder in section 51 of the Corporation Law which states: The records of all business transactions of the corporation and the minutes of any meeting shall be open to the inspection of any director, member, or stockholder of the corporation at reasonable hour can be exercised either by himself or by any duly authorized representative or attorney in fact, and either with or without the attendance of the stockholder. This is in conformity with the general rule that what a man may do in person he may do through another.


FACTS: Petitioners Bordador spouses were engaged in the business of purchase and sale of jewelry, while respondent Brigida Luz was their regular customer. Respondent Narciso Deganos, Luz's brother, received several pieces of jewelry from the Bordadors amounting to P382,816.00, which items were indicated in 17 receipts covering the same--11 of the receipts stated that they were received by Deganos for a certain Evelyn Aquino, while the remaining 6 indicated that they were received by Deganos for Luz. Deganos was supposed to sell the items at a profit and remit the proceeds and return the unsold items to the Bordadors. Deganos remitted only P53,207.00. He neither paid the balance of the sales proceeds, nor did he return any unsold item to the Bordadors, which led them to file an action for recovery of a sum of money and damages against Deganos and Luz with the RTC. The Bordadors claimed that Deganos acted as the agent of Luz when he received the items of jewelry, and because he failed to pay for the same, Luz, as principal, became solidarily liable with him. Deganos asserted that it was he alone who was involved in the transaction with the Bordadors; that he neither acted as agent for nor was he authorized to act as an agent by Luz, notwithstanding the fact that 6 of the receipts indicated that the items were received by him for Luz. He added that he never delivered any of the items to Luz. Luz corroborated the claims of Deganos. The RTC found that only Deganos was liable to the Bordados. It further found that it was petitioner Lydia Bordador who indicated in the receipts that the items were received by Deganos for Evelyn Aquino and for Luz. It said that it was "persuaded that Brigida D. Luz was behind Deganos," but because there was no memorandum to this effect, the agreement between the parties was unenforceable under the Statute of Frauds. Absent the required memorandum or any written document connecting Luz with the subject receipts or authorizing Deganos to act on her behalf, the alleged agreement between the Bordadors and Luz was unenforceable. The Bordadors elevated the case to the CA which affirmed said judgment, hence the instant petition.

ISSUE: Whether Luz is liable to the Bordadors for the latter's claim for money and damages

despite the fact that Luz did not sign any of the subject receipts or authorized Deganos to receive the items of jewelry on her behalf

HELD: No, Luz is not liable to the Bordadors.

RATIO: THE BASIS FOR AGENCY IS REPRESENTATION. The basis for agency is representation. Here, there is no showing that Luz consented to the acts of Deganos or authorized him to act on her behalf, much less with respect to the particular transactions involved. The Bordadors' attempt to foist liability on Luz through the supposed agency relation with Deganos is groundless and ill-advised. A PERSON DEALING WITH AN AGENT IS PUT UPON INQUIRY AND MUST DISCOVER UPON HIS PERIL THE AUTHORITY OF THE AGENT. Besides, it was grossly and inexcusably negligent of the Bordadors to entrust to Deganos, not once or twice but on at least 6 occasions as evidenced by 6 receipts, several pieces of jewelry of substantial value without requiring a written authorization from his alleged principal. A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent.

GUARDEX ENTERPRISES V. NLRC Facts: A claim for alleged unpaid commissions of an agent is what is basically involved in the action at bar. The two parties in this case are: Marcelina A. Escandor (engaged in the manufacture and sale of fire-fighting equipment and the building or fabrication of fire trucks under Guardex Enterprises) and Jumbee Orbeta (a freelance salesman). It appears that Orbeta somehow learned that Escandor had offered to fabricate a fire truck for Rubberworld (Phil) Inc. He wrote to Escandor inquiring about the amount of commission for the sale of a fire truck. Escandor wrote back on the same day to advise that it was P15,000 per unit. Four days later, Orbeta offered to follow up Escandors pending proposal to sell a fire truck to Rubberworld, and asked for P250 as representation expenses. Escandor agreed and gave him the money. When no word was received by Escandor from Orbeta after 3 days, she herself inquired in writing from Rubberworld about her offer of sale of a fire truck. After 7 months, Escandor finally concluded a contract with Rubberworld for the latters purchase of a fire truck. At this point, Orbeta suddenly reappeared and asked for his commission for the sale of the fire truck to Rubberworld. Escandor refused, saying that he had nothing to do with the offer, negotiation and consummation of the sale. Issue: Whether or not Orbeta (acting as an agent) is entitled to commission as regards the sale of a fire truck to Rubberworld? Held: No. He is not entitled to any commission. Ratio: Even finding that under these circumstances, an agency had indeed been constituted will not save the day for Orbeta, because nothing in the record tends to prove that he succeeded in carrying out its terms or ever as much as attempted to do so. The evidence in fact clearly indicates otherwise. The terms of Escandors letter assuming that it was indeed an authority to sell, as Orbeta insists are to the effect that entitlement to the P15,000 commission is contingent on the purchase by a customer of a fire truck, the implicit condition being that the agent would earn the commission if he was instrumental in bringing the sale about. Orbeta certainly had nothing to do with the sale of the fire truck, and is not therefore entitled to any commission at all.

Furthermore, even if Orbeta is considered to have been Escandors agent for the time he was supposed to follow up the offer to sell, such agency would have been deemed revoked upon the resumption of direct negotiations between Escandor and Rubberworld, Orbeta having in the meantime abandoned all efforts (if indeed any were exerted) to secure the deal in Escandors behalf.