No. L-20567. July 30, 1965.
contract refers to that moment in the
PHILIPPINE NATIONAL BANK,
petitioner, vs. MANILA SURETY &
FIDELITY CO., INC. and THE COURT
OF APPEALS (Second Division),
respondents.
Agency; Duty of agent to act with the
care of a good father of a family.—An
agent is required to act with the care
of a good father of a family and
becomes liable for the damages
which the principal may suffer
through his non-performance.
Same; Same; Bank liable for neglect
in collecting sums due its debtor.—A
bank is answerable for negligence in
failing to collect the sums due its
debtor from the latter’s own debtor,
contrary to said bank’s duty as
holder of an exclusive and
irrevocable power of attorney to
make such collections.
Suretyship; Surety released when
assigned funds permitted by creditor
to be exhausted without notifying
former.—By allowing the assigned
funds to be exhausted without
notifying the surety, the creditor
deprives the surety of any possibility
of recoursing against that security,
and therefore the surety is released.
Philippine National Bank vs. Manila
Surety & Fidelity Co., Inc., 14 SCRA
776, No. L-20567 July 30, 1965
G.R. No. 170530. July 5, 2010.*
SARGASSO CONSTRUCTION & and Phrases; A government or public
DEVELOPMENT
CORPORATION/PICK & SHOVEL,
INC./ATLANTIC ERECTORS, INC.
(JOINT VENTURE), petitioner, vs.
PHILIPPINE PORTS AUTHORITY,
respondent.
Contracts; Elements; Stages; The
birth or the perfection of the
life of a contract when there is finally
a concurrence of the wills of the
contracting parties with respect to
the object and the cause of the
contract.—Every contract has the
following essential elements: (i)
consent, (ii) object certain and (iii)
cause. Consent has been defined as
the concurrence of the wills of the
contracting parties with respect to
the object and cause which shall
constitute the contract. In general,
contracts undergo three distinct
stages, to wit: negotiation, perfection
or birth, and consummation.
Negotiation begins from the time the
prospective contracting parties
manifest their interest in the
contract and ends at the moment of
their agreement. Perfection or birth
of the contract takes place when the
parties agree upon the essential
elements of the contract, i.e.,
consent, object and price.
Consummation occurs when the
parties fulfill or perform the terms
agreed upon in the contract,
culminating in the extinguishment
thereof. The birth or the perfection
of the contract, which is the crux of
the present controversy, refers to
that moment in the life of a contract
when there is finally a concurrence
of the wills of the contracting parties
with respect to the object and the
cause of the contract.
Same; Government Contracts; Words
contract has been defined as a
contract entered into by state
officers acting on behalf of the state,
and in which the entire people of the
state are directly interested.—A
government or public contract has
been defined as a contract entered
into by state officers acting on behalf
of the state, and in which the entire
people of the state are directly
interested. It relates wholly to
matter of public concern, and affects
private rights only so far as the
statute confers such rights when its
provisions are carried out by the
officer to whom it is confided to
perform. A government contract is
essentially similar to a private
contract contemplated under the
Civil Code. The legal requisites of
consent of the contracting parties, an
object certain which is the subject
matter, and cause or consideration
of the obligation must likewise
concur. Otherwise, there is no
government contract to speak of.
Same; Same; While contracts to
which the government is a party are
generally subject to the same laws
and regulations which govern the
validity and sufficiency of contracts
between private individuals, a
government contract, however, is
perfected only upon approval by a
competent authority, where such
approval is required.—Contracts to
which the government is a party are
generally subject to the same laws
and regulations which govern the
validity and sufficiency of contracts
between private individuals. A
government contract, however, is
perfected only upon approval by a
competent authority, where such
approval is required. The
contracting officer functions as agent
of the Philippine government for the
purpose of making the contract.
There arises then, in that regard, a
principal-agent relationship
between the Government, on one
hand, and the contracting official, on
the other. The latter though, in
contemplation of law, possesses only
actual agency authority. This is to
say that his contracting power exists,
where it exists at all, only because
and by virtue of a law, or by
authority of law, creating and
conferring it. And it is well settled
that he may make only such
contracts as he is so authorized to
make. Flowing from these basic
guiding principles is another stating
that the government is bound only to
the extent of the power it has
actually given its officers-agents. It
goes without saying then that,
conformably to a fundamental
principle in agency, the acts of such
agents in entering into agreements
or contracts beyond the scope of
their actual authority do not bind or
obligate the Government. The
moment this happens, the principal-
agent relationship between the
Government and the contracting
officer ceases to exist. (emphasis
supplied) It was stressed that … the
contracting official who gives his
consent as to the subject matter and
the consideration ought to be
empowered legally to bind the
Government and that his actuations
in a particular contractual
undertaking on behalf of the
government come within the ambit
of his authority. On top of that, the
approval of the contract by a higher
authority is usually required by law
or administrative regulation as a
requisite for its perfection.
Same; Same; The authority of
government officials to represent
the government in any contract must
proceed from an express provision
of law or valid delegation of
authority—without such actual
authority being possessed by
Philippine Ports Authority’s (PPA’s)
general manager, there could be no
real consent, much less a perfected
contract, to speak of.—P.D. 857
likewise states that one of the
corporate powers of respondent’s
Board of Directors is to “reclaim…
any part of the lands vested in the
Authority.” It also “exercise[s] all the
powers of a corporation under the
Corporation Law.” On the other
hand, the law merely vests the
general manager the “general
power… to sign contracts” and “to
perform such other duties as the
Board may assign…” Therefore,
unless respondent’s Board validly
authorizes its general manager, the
latter cannot bind respondent PPA
to a contract. The Court completely
agrees with the CA that the
petitioner failed to present
competent evidence to prove that
the respondent’s general manager
possessed such actual authority
delegated either by the Board of
Directors, or by statutory provision.
The authority of government
officials to represent the
government in any contract must
proceed from an express provision
of law or valid delegation of
authority. Without such actual
authority being possessed by PPA’s
general manager, there could be no
real consent, much less a perfected
contract, to speak of.
Same; Same; Applicable laws form
part of, and are read into, the
contract without need for any
express reference thereto, and, more
so, to a purported government
contract, which is imbued with
public interest.—It is of no moment
if the phrase “approval of higher
authority” appears nowhere in the
Notice of Award. It neither justifies
petitioner’s presumption that the
required approval “had already been
granted” nor supports its conclusion
that no other condition (than the
completion of fendering of Pier 2 as
stated in the Notice of Award) ought
to be complied with to create a
perfected contract. Applicable laws
form part of, and are read into, the
contract without need for any
express reference thereto; more so,
to a purported government contract,
which is imbued with public interest.
Same; Same; Doctrine of Apparent
Authority; Words and Phrases; The
doctrine of apparent authority, in
the realm of government contracts,
has been restated to mean that the
government is not bound by
unauthorized acts of its agents, even
though within the apparent scope of
their authority; Apparent authority,
or what is sometimes referred to as
the “holding out” theory, or doctrine
of ostensible agency, imposes
liability, not as the result of the
reality of a contractual relationship,
but rather because of the actions of a
principal or an employer in
somehow misleading the public into
believing that the relationship or the
authority exists.—Petitioner’s
invocation of the doctrine of
apparent authority is misplaced.
This doctrine, in the realm of
government contracts, has been
restated to mean that the
government is NOT bound by
unauthorized acts of its agents, even
though within the apparent scope of
their authority. Under the law on
agency, however, “apparent
authority” is defined as the power to
affect the legal relations of another
person by transactions with third
persons arising from the other’s
manifestations to such third person
such that the liability of the principal
for the acts and contracts of his
agent extends to those which are
within the apparent scope of the
authority conferred on him, although
no actual authority to do such acts or
to make such contracts has been
conferred. Apparent authority, or
what is sometimes referred to as the
“holding out” theory, or doctrine of
ostensible agency, imposes liability,
not as the result of the reality of a
contractual relationship, but rather
because of the actions of a principal
or an employer in somehow
misleading the public into believing
that the relationship or the authority
exists. The existence of apparent
authority may be ascertained
through (1) the general manner in
which the corporation holds out an
officer or agent as having the power
to act or, in other words, the
apparent authority to act in general,
with which it clothes him; or (2) the
acquiescence in his acts of a
particular nature, with actual or
constructive knowledge thereof,
whether within or beyond the scope
his ordinary powers. It requires
presentation of evidence of similar
act(s) executed either in its favor or
in favor of other parties.
Same; Same; Same; Apparent
authority is determined only by the
acts of the principal and not by the
acts of the agent—the principal is
not responsible where the agent’s
own conduct and statements have
created the apparent authority.—
Easily discernible from the foregoing
is that apparent authority is
determined only by the acts of the
principal and not by the acts of the
agent. The principal is, therefore, not
responsible where the agent’s own
conduct and statements have
created the apparent authority. In
this case, not a single act of
respondent, acting through its Board
of Directors, was cited as having
clothed its general manager with
apparent authority to execute the
contract with it.
Evidence; As a rule, conclusions and
findings of fact arrived at by the trial
court are entitled to great weight on
appeal and should not be disturbed
unless for strong and cogent
reasons.—To rule on the first issue,
there is a need to quote the findings
below. As a rule, conclusions and
findings of fact arrived at by the trial
court are entitled to great weight on
appeal and should not be disturbed
unless for strong and cogent
reasons.
Agency; Common Carriers; Air
Transportation; Where a passenger
was fully aware of the need to send a
letter to a particular office of an
airline for the extension of the
period of validity of his ticket, he
cannot subsequently use what was
done by airline agents, who acted
without authority, in confirming his
flights.—From the aforestated facts,
it can be gleaned that the petitioner
was fully aware that there was a
need to send a letter to the legal
counsel of PAL for the extension of
the period of validity of his ticket.
Since the PAL agents are not privy to
the said Agreement and petitioner
knew that a written request to the
legal counsel of PAL was necessary,
he cannot use what the PAL agents
did to his advantage. The said
agents, according to the Court of
Appeals, acted without authority
when they confirmed the flights of
the petitioner.
Same; Same; Same; The acts of an
agent beyond the scope of his
authority do not bind the principal,
unless the latter ratifies the same
expressly or impliedly.—Under
Article 1898 of the New Civil Code,
the acts of an agent beyond the
scope of his authority do not bind
the principal, unless the latter
ratifies the same expressly or
impliedly. Furthermore, when the
third person (herein petitioner)
knows that the agent was acting
beyond his power or authority, the
principal cannot be held liable for
the acts of the agent. If the said third
person is aware of such limits of
authority, he is to blame, and is not
entitled to recover damages from the
agent, unless the latter undertook to
secure the principal’s ratification.
Same; Same; Same; The admission
by a passenger that he had to submit
a letter to the airline’s legal counsel
requesting for an extension of the
validity of his tickets is tantamount
to knowledge on his part that mere
employees of the airline had no
authority to extend the validity of his
tickets.—The admission by
Cervantes that he was told by PAL’s
legal counsel that he had to submit a
letter requesting for an extension of
the validity of subject tickets was
tantamount to knowledge on his
part that the PAL employees had no
authority to extend the validity of
subject tickets and only PAL’s legal
counsel was authorized to do so.
Same; Same; Actions; Pleadings and
Practice; The failure of a defendant
to raise the defense of lack of
authority of its agents in its answer
or in a motion to dismiss is cured
where the said issue was litigated
upon.—However, notwithstanding
PAL’s failure to raise the defense of
lack of authority of the said PAL
agents in its answer or in a motion to
dismiss, the omission was cured
since the said issue was litigated
upon, as shown by the testimony of
the petitioner in the course of trial.
Same; Same; Damages; In awarding
moral damages for breach of
contract of carriage, the breach must
be wanton and deliberately injurious
or the one responsible acted
fraudulently or with malice or bad
faith.—In awarding moral damages
for breach of contract of carriage, the
breach must be wanton and
deliberately injurious or the one
responsible acted fraudulently or
with malice or bad faith. Petitioner
knew there was a strong possibility
that he could not use the subject
ticket, so much so that he bought a
back-up ticket to ensure his
departure. Should there be a finding
of bad faith, we are of the opinion
that it should be on the petitioner.
What the employees of PAL did was
one of simple negligence. No injury
resulted on the part of petitioner
because he had a back-up ticket
should PAL refuse to accommodate
him with the use of subject ticket.
Same; Same; Same; To warrant the
award of exemplary dam-ages, the
wrongful act must be accompanied
by bad faith, and the guilty party
acted in a wanton, fraudulent,
reckless or malevolent manner.—
Neither can the claim for exemplary
damages be upheld. Such kind of
damages is imposed by way of
example or correction for the public
good, and the existence of bad faith
is established. The wrongful act
must be accompanied by bad faith,
and an award of damages would be
allowed only if the guilty party acted
in a wanton, fraudulent, reckless or
malevolent manner. Here, there is no
showing that PAL acted in such a
manner. An award for attorney’s fees
is also improper.
[No. 39037. October 30, 1933]
THE PHILIPPINE NATIONAL BANK,
plaintiff and appellee, vs. PAZ
AGUDELO Y GONZAGA ET AL.,
defendants. PAZ AGUDELO Y
GONZAGA, appellant.
PRINCIPAL AND AGENT; PERSONAL
LIABILITY OF AGENT.—When an
agent negotiates a loan in his own
name and executes a promissory
note under his personal signature
without express authority from his
principal, giving as security therefor
real estate belonging to the latter,
also in his own name and not in the
name and in representation of said
principal, the obligation so
contracted by him is personal and is
not binding upon the af oresaid
principal.
HARTFORD BEAUMONT, assignee of
W. Borck, plaintiff and appellee, vs.
MAURO PRIETO, BENITO LEGARDA,
JR., and BENITO VALDES as
administrator of the estate of Benito
Legarda, deceased, and BENITO
VALDES, defendants and appellants.
(See U. S. Supreme Court decision in
this same case, p. 985, post.)
1.PRINCIPAL AND AGENT;
LIABILITIES TO THIRD PERSONS.—
Although, according to article 1717
of the Civil Code, when the agent acts
in his own name he is not personally
liable to the .person with Beaumont
vs. Prieto., 41 Phil. 670, No. 8988
March 30, 1916
Nos. L-25836-37. January 31, 1981.*
THE PHILIPPINE BANK OF
COMMERCE, plaintiff-appellee, vs.
JOSE M. ARUEGO, defendant-
appellant.
Remedial Law; Civil Procedure;
Defaults; Requirements for setting
aside an order of default.—It has
been held that to entitle a party to
relief from a judgment taken against
him through his mistake,
inadvertence, surprise or excusable
neglect, he must show to the court
that he has a meritorious defense. In
other words, in order to set aside the
order of default, the defendant must
not only show that his failure to
answer was due to fraud, accident,
mistake or excusable negligence but
also that he has a meritorious
defense.
Same; Same; Pleadings; Failure of
defendant to file an answer on the
last day for pleading, excusable;
Reason.—The failure then of the
defendant to file his answer on the
last day for pleading is excusable.
The order setting aside the dismissal
of the complaint was received at
5:00 o’clock in the afternoon. It was
therefore impossible for him to have
filed his answer on that same day
because the courts then held office
only up to 5:00 o’clock in the
afternoon. Moreover, the defendant
immediately filed his answer on the
following day.
Same; Appeals; New Trial; New trial
not to be granted if it will serve no
purpose, and defense is
ineffective.—It is evident then that
the defendant’s appeal can not
prosper. To grant the defendant’s
prayer will result in a new trial
which will serve no purpose and will
just waste the time of the courts as
well as of the parties because the
defense is nil or ineffective.
Mercantile Law; Negotiable
Instruments; Bills of Exchange; A
party who signs a bill of exchange as
an agent, but failed to disclose his
principal becomes personally liable
for the drafts he accepted.—An
inspection of the drafts accepted by
the defendant shows that nowhere
has he disclosed that he was signing
as a representative of the Philippine
Education Foundation Company. He
merely signed as follows. “JOSE
ARUEGO (Acceptor) (SGD) JOSE
ARUEGO.” For failure to disclose his
principal, Aruego is personally liable
for the drafts he accepted.
Same; Same; Same; Accommodation
party; Liability of an accommodation
party.—In lending his name to be
accommodated party, the
accommodation party is in effect a
surety for the latter. He lends his
name to enable the accommodated
party to obtain credit or to raise
money. He receives no part of the
consideration for the instrument but
assumes liability to the other parties
thereto because he wants to
accommodate another.
Same; Same; Same; Liability of an
acceptor or drawee is primary; A
party, a lawyer, who intends to be
secondarily liable should not have
signed as an acceptor or drawee.—In
the instant case, the defendant
signed as a drawee/acceptor. Under
the Negotiable Instruments Law, a
drawee is primarily liable. Thus, if
the defendant who is a lawyer, really
intended to be secondarily liable
only, he should not have signed as an
acceptor/drawee. In doing so, he
became primarily and personally
liable for the drafts.
Same; Same; Same; A commercial
paper which conforms under the
definition of a bill of exchange is a
bill of exchange; Acceptance; Nature
of acceptance is important only in
the determination of liability of the
parties, hut not to determine
whether a commercial paper is a bill
of exchange or not.—Under the
Negotiable Instruments Law, a bill of
exchange is an unconditional order
in writing addressed by one person
to another, signed by the person
giving it, requiring the person to
whom it is addressed to pay on
demand or at a fixed or
determinable future time a sum
certain in money to order or to
bearer. As long as a commercial
paper conforms with the definition
of a bill of exchange, that paper is
considered a bill of exchange. The
nature of acceptance is important
only in the determination of the kind
of liabilities of the parties involved,
but not in the determination of
whether a commercial paper is a bill
of exchange or not.
G.R. No. 75640. April 5, 1990.*
NATIONAL FOOD AUTHORITY,
(NFA), petitioner, vs.
INTERMEDIATE APPELLATE
COURT, SUPERIOR (SG) SHIPPING
CORPORATION, respondents.
Civil Law; Agency; Agent’s apparent
representation yields to the
principal’s true representation and
the contract is considered as entered
into between the principal and third
person.—Consequently when things
belonging to the principal (in this
case, Superior Shipping Corporation)
are dealt with, the agent is bound to
the principal although he does not
assume the character of such agent
and appears acting in his own name.
In other words, the agent’s apparent
representation yields to the
principal’s true representation and
that, in reality and in effect, the
contract must be considered as
entered into between the principal
and the third person (Sy Juco and
Viardo v. Sy Juco, 40 Phil. 634).
Corollarily, if the principal can be
obliged to perform his duties under
the contract, then it can also demand
the enforcement of its rights arising
from the contract.
G.R. No. 95703. August 3, 1992.*
RURAL BANK OF BOMBON
(CAMARINES SUR), INC., petitioner,
vs. HON. COURT OF APPEALS,
EDERLINDA M. GALLARDO, DANIEL
MANZO and RUFINO S. AQUINO,
respondents.
Agency; Banks; Mortgages; Agent
who signs a Deed of Mortgage in his
name alone does not validly bind
owner of mortgaged estate.—In view
of this rule, Aquino’s act of signing
the Deed of Real Estate Mortgage in
his name alone as mortgagor,
without any indication that he was
signing for and in behalf of the
property owner, Ederlinda Gallardo,
bound himself alone in his personal
capacity as a debtor of the petitioner
Bank and not as the agent or
attorney-in-fact of Gallardo.
Same; Same; Same; Same.—The
above provision of the Civil Code
relied upon by the petitioner Bank, is
not applicable to the case at bar.
Herein respondent Aquino acted
purportedly as an agent of Gallardo,
but actually acted in his personal
capacity. Involved herein are
properties titled in the name of
respondent Gallardo against which
the Bank proposes to foreclose the
mortgage constituted by an agent
(Aquino) acting in his personal
capacity. Under these circumstances,
we hold, as we did in Philippine
Sugar Estates Development Co. vs.
Poizat, supra, that Gallardo’s
property is not liable on the real
estate mortgage.
G.R. No. 121824. January 29, 1998.*
BRITISH AIRWAYS, petitioner, vs.
COURT OF APPEALS, GOP MAHTANI,
and PHILIPPINE AIRLINES,
respondents.
Common Carriers; Air
Transportation; The nature of an
airline’s contract of carriage
partakes of two types, namely: a
contract to deliver a cargo or
mechandise to its destination and a
contract to transport passengers to
their destination.—Before we
resolve the issues raised by BA, it is
needful to state that the nature of an
airline’s contract of carriage
partakes of two types, namely: a
contract to deliver a cargo or
merchandise to its destination and a
contract to transport passengers to
their destination. A business
intended to serve the travelling
public primarily, it is imbued with
public interest, hence, the law
governing common carriers imposes
an exacting standard. Neglect or
malfeasance by the carrier’s
employees could predictably furnish
bases for an action for damages.
Same; Same; In determining the
amount of compensatory damages in
breach of contract involving
misplaced luggage, it is vital that the
claimant satisfactorily prove during
the trial the existence of the factual
basis of the damages and its causal
connection to defendant’s acts.—In
the instant case, it is apparent that
the contract of carriage was between
Mahtani and BA. Moreover, it is
indubitable that his luggage never
arrived in Bombay on time.
Therefore, as in a number of cases
we have assessed the airlines’
culpability in the form of damages
for breach of contract involving
misplaced luggage. In determining
the amount of compensatory
damages in this kind of cases, it is
vital that the claimant satisfactorily
prove during the trial the existence
of the factual basis of the damages
and its causal connection to
defendant’s acts.
Same; Same; Warsaw Convention; In
a contract of air carriage, a
declaration by the passenger of a
higher value is needed to recover a
greater amount.—Admittedly, in a
contract of air carriage a declaration
by the passenger of a higher value is
needed to recover a greater amount.
Article 22(1) of the Warsaw
Convention, provides as follows: “x x
x x x x x x x (2) In the transportation
of checked baggage and goods, the
liability of the carrier shall be limited
to a sum of 250 francs per kilogram,
unless the consignor has made, at
the time the packages was handed
over to the carrier, a special
declaration of the value at delivery
and has paid a supplementary sum if
the case so requires. In that case the
carrier will be liable to pay a sum
not exceeding the declared sum,
unless he proves that the sum is
greater than the actual value to the
consignor at delivery.”
Same; Same; Tariffs; An air carrier is
not liable for the loss of baggage in
an amount in excess of the limits
specified in the tariff which was filed
with the proper authorities, such
tariff being binding on the passenger
regardless of the passenger’s lack of
knowledge thereof or assent
thereto.—American jurisprudence
provides that an air carrier is not
liable for the loss of baggage in an
amount in excess of the limits
specified in the tariff which was filed
with the proper authorities, such
tariff being binding on the passenger
regardless of the passenger’s lack of
knowledge thereof or assent thereto.
This doctrine is recognized in this
jurisdiction.
Same; Same; Pleadings and Practice;
Waivers; Benefits of limited liability
are subject to waiver such as when
the air carrier failed to raise timely
objections during the trial when
questions and answers regarding the
actual claims and damages sustained
by the passenger were asked.—
Notwithstanding the foregoing, we
have, nevertheless, ruled against
blind reliance on adhesion contracts
where the facts and circumstances
justify that they should be
disregarded. In addition, we have
held that benefits of limited liability
are subject to waiver such as when
the air carrier failed to raise timely
objections during the trial when
questions and answers regarding the
actual claims and damages sustained
by the passenger were asked. Given
the foregoing postulates, the
inescapable conclusion is that BA
had waived the defense of limited
liability when it allowed Mahtani to
testify as to the actual damages he
incurred due to the misplacement of
his luggage, without any objection.
Same; Same; Same; Same; Evidence;
Objection to evidence deemed
inadmissible for any reason must be
made at the earliest opportunity, lest
silence when there is opportunity to
speak may operate as a waiver of
objections.—Indeed, it is a well-
settled doctrine that where the
proponent offers evidence deemed
by counsel of the adverse party to be
inadmissible for any reason, the
latter has the right to object.
However, such right is a mere
privilege which can be waived.
Necessarily, the objection must be
made at the earliest opportunity, lest
silence when there is opportunity to
speak may operate as a waiver of
objections. BA has precisely failed in
this regard.
Same; Same; Evidence; Factual
findings of the trial court, as
affirmed by the Court of Appeals, are
entitled to great respect.—Needless
to say, factual findings of the trial
court, as affirmed by the Court of
Appeals, are entitled to great
respect. Since the actual value of the
luggage involved appreciation of
evidence, a task within the
competence of the Court of Appeals,
its ruling regarding the amount is
assuredly a question of fact, thus, a
finding not reviewable by this Court.
Actions; Pleadings and Practice;
Third-Party Complaints; Words and
Phrases; The third-party complaint
is a procedural device whereby a
‘third party’ who is neither a party
nor privy to the act or deed
complained of by the plaintiff, may
be brought into the case with leave
of court, by the defendant, who acts
as third-party plaintiff to enforce
against such third-party defendant a
right for contribution, indemnity,
subrogation or any other relief, in
respect of the plaintiff’s claim.—In
Firestone Tire and Rubber Company
of the Philippines v. Tempengko, we
expounded on the nature of a third-
party complaint thus: “The third-
party complaint is, therefore, a
procedural device whereby a ‘third-
party’ who is neither a party nor
privy to the act or deed complained
of by the plaintiff, may be brought
into the case with leave of court, by
the defendant, who acts as third-
party plaintiff to enforce against
such third-party defendant a right
for contribution, indemnity,
subrogation or any other relief, in
respect of the plaintiff’s claim. The
third-party complaint is actually
independent of and separate and
distinct from the plaintiff’s
complaint. Were it not for this
provision of the Rules of Court, it
would have to be filed independently
and separately from the original
complaint by the defendant against
the third-party. But the Rules permit
defendant to bring in a third-party
defendant or so to speak, to litigate
his separate cause of action in
respect of plaintiff’s claim against a
third-party in the original and
principal case with the object of
avoiding circuitry of action and
unnecessary proliferation of law
suits and of disposing expeditiously
in one litigation the entire subject
matter arising from one particular
set of facts.”
Air Transportation; Agency;
Damages; An agent is also
responsible for any negligence in the
performance of its function and is
liable for damages which the
principal may suffer by reason of its
negligent act.—Parenthetically, the
Court of Appeals should have been
cognizant of the well-settled rule
that an agent is also responsible for
any negligence in the performance of
its function and is liable for damages
which the principal may suffer by
reason of its negligent act. Hence, the
Court of Appeals erred when it
opined that BA, being the principal,
had no cause of action against PAL,
its agent or subcontractor.
Same; Same; Same; International Air
Transport Association (IATA);
Member airlines of the IATA are
regarded as agents of each other in
the issuance of the tickets and other
matters pertaining to their
relationship.—Also, it is worth
mentioning that both BA and PAL
are members of the International Air
Transport Association (IATA),
wherein member airlines are
regarded as agents of each other in
the issuance of the tickets and other
matters pertaining to their
relationship. Therefore, in the
instant case, the contractual
relationship between BA and PAL is
one of agency, the former being the
principal, since it was the one which
issued the confirmed ticket, and the
latter the agent.
Actions; Pleadings and Practice;
Third-Party Complaints; The
purpose of a third-party complaint is
precisely to avoid delay and circuity
of action and to enable the
controversy to be disposed of in one
suit.—Accordingly, to deny BA the
procedural remedy of filing a third-
party complaint against PAL for the
purpose of ultimately determining
who was primarily at fault as
between them, is without legal basis.
After all, such proceeding is in
accord with the doctrine against
multiplicity of cases which would
entail receiving the same or similar
evidence for both cases and
enforcing separate judgments
therefor. It must be borne in mind
that the purpose of a third-party
complaint is precisely to avoid delay
and circuity of action and to enable
the controversy to be disposed of in
one suit. It is but logical, fair and
equitable to allow BA to sue PAL for
indemnification, if it is proven that
the latter’s negligence was the
proximate cause of Mahtani’s
unfortunate experience, instead of
totally absolving PAL from any
liability.
G.R. No. 82040, August 27, 1991.*
BA FINANCE CORPORATION,
petitioner, vs. HON. COURT OF
APPEALS, Hon. Presiding Judge of
Regional Trial Court of Manila,
Branch 43, MANUEL CUADY and
LILIA CUADY, respondents.
Civil Law; Subrogation; B.A. Finance
Corporation was deemed subrogated
to the rights and obligations of
Supercars, Inc. when the latter
assigned the promissory note
together with the chattel mortgage
constituted on the motor vehicle in
question in favor of the former.—
B.A. Finance Corporation was
deemed subrogated to the rights and
obligations of Supercars, Inc. when
the latter assigned the promissory
note, together with the chattel
mortgage constituted on the motor
vehicle in question, in favor of the
former. Consequently, B.A. Finance
Corporation is bound by the terms
and conditions of the chattel
mortgage executed between the
Cuadys and Supercars, Inc. Under
the deed of chattel mortgage, B.A.
Finance Corporation was constituted
attorneyin-fact with full power and
authority to file, follow-up,
prosecute, compromise or settle
insurance claims; to sign, execute
and deliver the corresponding
papers, receipts and documents to
the Insurance Company as may be
necessary to prove the claim, and to
collect from the latter the proceeds
of insurance to the extent of its
interests, in the event that the
mortgaged car suffers any loss or
damage.
Same; Same; Agency; In granting B.A
Finance Corporation the
aforementioned powers and
prerogatives, the Cuady spouses
created in the former’s favor an
agency.—In granting B.A. Finance
Corporation the aforementioned
powers and prerogatives, the Cuady
spouses created in the former’s favor
an agency. Thus, under Article 1884
of the Civil Code of the Philippines,
B.A. Finance Corporation is bound by
its acceptance to carry out the
agency, and is liable for damages
which, through its non-performance,
the Cuadys, the principal in the case
at bar, may suffer.
Civil Procedure; Evidence; Judgment
of the Court of Appeals is conclusive
as to the facts and may not
ordinarily be reviewed by the
Supreme Court.—Moreover, B.A.
Finance Corporation would have this
Court review and reverse the factual
findings of the respondent appellate
court. This, of course, the Court
cannot and will not generally do. It is
axiomatic that the judgment of the
Court of Appeals is conclusive as to
the facts and may not ordinarily be
reviewed by the Supreme Court. The
doctrine is, to be sure, subject to
certain specific exceptions none of
which, however, obtains in the
instant case.
Same; Appeals; Issues not raised
and/or ventilated in the trial court,
let alone in the Court of Appeals,
cannot be raised for the first time on
appeal.—Finally, B.A. Finance
Corporation contends that
respondent trial court committed
grave abuses of discretion in two
instances: First, when it denied the
petitioner’s motion for
reconsideration praying that the
counsel be allowed to cross-examine
the affiant, and; second, when it
seriously considered the evidence
adduced ex-parte by the Cuadys, and
heavily relied thereon, when in truth
and in fact, the same was not
formally admitted as part of the
evidence for the private respondents
(Memorandum for the Petitioner, p.
10). This Court does not have to
unduly dwell on this issue which
was only raised by B.A. Finance
Corporation for the first time on
appeal. A review of the records of
the case shows that B.A. Finance
Corporation failed to directly raise
or ventilate in the trial court nor in
the respondent appellate court the
validity of the evidence adduced
exparte by private respondents. It
was only when the petitioner filed
the instant petition with this Court
that it later raised the
aforementioned issue. As ruled by
this Court in a long line of cases,
issues not raised and/or ventilated
in the trial court, let alone in the
Court of Appeals, cannot be raised
for the first time on appeal as it
would be offensive to the basic rules
of fair play, justice and due process.
[No. 8346. March 30, 1915.]
GUTIERREZ HERMANOS, plaintiff
and appellant, vs. ORIA HERMANOS
& Co., defendant and appellant.
1.ACCOUNTS; SET-OFF AND
COUNTERCLAIM.—If a creditor is
under obligation to render an
account of the result of certain
commercial operations carried on
between him and his debtor, even
though the latter may
unquestionably appear to owe him a
certain sum, it is impossible to
determine whether said plaintiff
creditor is or is not entitled to collect
the whole amount claimed in the
complaint until it is demonstrated by
the account rendered at the request
of said debtor whether or not his
creditor owes him anything which,
although it may not entirely offset
the sum claimed by the creditor, may
at least reduce his indebtedness by
that amount.
2.ID.; RECONSIDERATION OF
APPROVAL.—After an account has
been submitted by the party
obligated to render it and it has been
approved by the one whom it affects,
it cannot be again revised at the
latter's request. unless it be
demonstrated that in the approval
thereof intervened deceit, fraud, or
error gravely prejudicial to the party
who gave said approval.
3.PRINCIPAL AND AGENT;
RESPONSIBILITY OF AGENT FOR
ACTS OF PRINCIPAL.—When an
agent in executing the orders and
commissions of his principal carries
out the instructions he has received
from his principal, and does not
appear to have exceeded his
authority or to have acted with
negligence, deceit, or fraud, he
cannot be held responsible for the
failure of his principal to accomplish
the object of the agency.
4.CONTRACTS; EFFECT OF FAILURE
OF PERFORMANCE.—When one
party to a mutual obligation fails
duly to carry out his agreement, he
thereby releases the other, who does
not thus become delinquent.
Delinquency commences when one
of the contracting parties fulfills his
obligation and becomes invested
with power to terminate the
contract because of failure on the
other's part to carry out the
agreement.
5.INTEREST; STIPULATION AS TO
TIME OF PAYMENT.—In the absence
of a written contract regarding the
date when mutual interest, verbally
stipulated at the rate of 8 per cent a
year, should be paid, the approval
given by one of the interested
parties to seventeen accounts
submitted semiannually by the other
for a period of more than nine years,
during which the interest was paid
semiannually, gives rise to the
presumption that the interested
parties had verbally contracted to
that effect, especially when this
verbal contract is sustained and
continually corroborated without
protest or objection on the part of
the one who now claims that such
payment ought to be made annually
instead of semiannually; and the
assent and acquiescence given
seventeen times cannot later be
changed in order to set aside said
semiannual payments, repeatedly
made in accord with the other party,
once the accumulation of interest on
the principal has been authorized by
article 317 of the Code of Commerce.
G.R. No. 114311. November 29, 1996
COSMIC LUMBER CORPORATION,
petitioner, vs. COURT OF APPEALS
and ISIDRO PEREZ, respondents.
Agency; Special Powers of Attorney;
Compromise Agreements; Sales; Pre-
Trial; Ejectment; A special power of
attorney for an agent to institute any
action in court to eject all persons in
the principal's lots so that the
principal could take material
possession thereof, and for this
purpose, to appear at the pre-trial
and enter into any stipulation of
facts and/or compromise agreement
but only insofar as this is protective
of the rights and interests of the
principal in the property, does not
grant any power to the agent to sell
the subject property nor a portion
thereof.—We agree with petitioner.
The authority granted Villamil-
Estrada under the special power of
attorney was explicit and
exclusionary: for her to institute any
action in court to eject all persons
found on Lots Nos. 9127 and 443 so
that petitioner could Cosmic Lumber
take material possession thereof,
and for this purpose, to appear at the
pre-trial and enter into any
stipulation of facts and/or
compromise agreement but only
insofar as this was protective of the
rights and interests of petitioner in
the property. Nowhere in this
authorization was Villamil-Estrada
granted expressly or impliedly any
power to sell the subject property
nor a portion thereof. Neither can a
conferment of the power to sell be
validly inferred from the specific
authority "to enter into a an appointee of an agency (couched)
compromise agreement" because of
the explicit limitation fixed by the
grantor that the compromise
entered into shall only be "so far as it
shall protect the rights and interest
of the corporation in the
aforementioned lots" In the context
of the specific investiture of powers
to Villamil-Estrada, alienation by
sale of an immovable certainly
cannot be deemed protective of the
right of petitioner to physically
possess the same, more so when the
land was being sold for a price of
P80.00 per square meter, very much
less than its assessed value of
P250.00 per square meter, and
considering further that petitioner
never received the proceeds of the
sale.
Same; Same; Same; Same; The
express mandate required by law to
enable an appointee of an agency
(couched) in general terms to sell
must be one that expressly mentions
a sale or that includes a sale as a
necessary ingredient of the action
mentioned.—When the sale of a
piece of land or any interest thereon
is through an agent, the authority of
the latter shall be in writing;
otherwise, the sale shall be void.
Thus the authority of an agent to
execute a contract for the sale of real
estate must be conferred in writing
and must give him specific authority,
either to conduct the general
business of the principal or to
execute a binding contract
containing terms and conditions
which are in the contract he did
execute. A special power of attorney
is necessary to enter into any
contract by which the ownership of
an immovable is transmitted or
acquired either gratuitously or for a
valuable consideration. The express
mandate required by law to enable
in general terms to sell must be one
that expressly mentions a sale or
that includes a sale as a necessary
ingredient of the act mentioned. For
the principal to confer the right upon
an agent to sell real estate, a power
of attorney must so express the
powers of the agent in clear and
unmistakable language. When there
is any reasonable doubt that the
language so used conveys such
power, no such construction shall be
given the document.
170
170
SUPREME COURT REPORTS
ANNOTATED
Cosmic Lumber Corporation vs.
Court of Appeals
Same; Same; Same; Courts;
Jurisdiction; The nullity of the
settlement between an agent and a
third person impairs the jurisdiction
of the trial court to render its
decision based on the compromise
agreement.—It is therefore clear
that by selling to respondent Perez a
portion of petitioner's land through
a compromise agreement, Villamil-
Estrada acted without or in obvious
authority. The sale ipso jure is
consequently void. So is the
compromise agreement. This being
the case, the judgment based
thereon is necessarily void.
Antipodal to the opinion expressed
by respondent court in resolving
petitioner's motion for
reconsideration, the nullity of the
settlement between Villamil-Estrada
and Perez impaired the jurisdiction
of the trial court to render its
decision based on the compromise
agreement.
Actions; Courts; Judgments;
Annulment of Judgments; Pleadings
and Practice; A party may now
petition the Court of Appeals to
annul and set aside judgments of
Regional Trial Courts.—Under
authority of Sec. 9, par. (2), of B.P.
Blg. 129, a party may now petition
the Court of Appeals to annul and set
aside judgments of Regional Trial
Courts. "Thus, the Intermediate
Appellant Court (now Court of
Appeals) shall exercise wi wi wi wi
(2) Exclusive original jurisdiction
over action for annulment of
judgments of the Regional Trial
Courts wi wi wi x" However, certain
requisites must first be established
before a final and executory
judgment can be the subject of an
action for annulment. It must either
be void for want of jurisdiction or for
lack of due process of law, or it has
been obtained by fraud.
Conformably with law and the
above-cited authorities, the petition
to annul the decision of the trial
court in Civil Case No, D-7750 before
the Court of Appeals was proper.
Emanating as it did from a void
compromise agreement, the trial
court had no jurisdiction to render a
judgment based thereon.
Same; Same; Same; Same; Fraud;
Words and Phrases; Fraud may
assume different shapes and be
committed in as many different
ways, and here lies the danger of
attempting to define fraud, for man
in his ingenuity and fertile
imagination will always contrive
new schemes to fool the unwary.—
For sure, the Court of Appeals
restricted the concept of fraudulent
acts within too narrow limits. Fraud
may assume different shapes and be
committed in as many different ways
and here lies the danger of
attempting to define fraud. For man
in his ingenuity and fertile
imagination will always contrive
new schemes to fool the unwary.
171
VOL. 265, NOVEMBER 29, 1996
171
Cosmic Lumber Corporation vs.
Court of Appeals
Same; Same; Same; Same; Same;
Same; Extrinsic fraud refers to any
fraudulent act of the prevailing party
in the litigation which is committed
outside of the trial of the case,
whereby the defeated party has been
prevented from exhibiting fully his
side of the case by fraud or
deception practiced on him by his
opponent.—There is extrinsic fraud
within the meaning of Sec. 9, par. (2),
of B.P. Blg. 129, where it is one the
effect of which prevents a party from
hearing a trial, or real contest, or
from presenting all of his case to the
court, or where it operates upon
matters, not pertaining to the
judgment itself, but to the manner in
which it was procured so that there
is not a fair submission of the
controversy. In other words,
extrinsic fraud refers to any
fraudulent act of the prevailing party
in the litigation which is committed
outside of the trial of the case,
whereby the defeated party has been
prevented from exhibiting fully his
side of the case by fraud or
deception practiced on him by his
opponent. Fraud is extrinsic where
the unsuccessful party has been
prevented from exhibiting fully his
case, by fraud or deception practiced
on him by his opponent, as by
keeping him away from court, a false
promise of a compromise; or where
the defendant never had knowledge
of the suit, being kept in ignorance
by the acts of the plaintiff; or where
an attorney fraudulently or without
authority connives at his defeat;
these and similar cases which show
that there has never been a real
contest in the trial or hearing of the
case are reasons for which a new
suit may be sustained to set aside
and annul the former judgment and
open the case for a new and fair
hearing.
Agency; Fraud; Equity; When an
agent is engaged in the perpetration
of a fraud upon his principal for his
own extrinsic benefit, he is not really
acting for the principal but is really
acting for himself, entirely outside
the scope of his agency—the basic
tenets of agency rest on the highest
considerations of justice, equity and
fair play, and an agent will not be
permitted to pervert his authority to
his own personal advantage.—It
may be argued that petitioner knew
of the compromise agreement since
the principal is chargeable with and
bound by the knowledge of or notice
to his agent received while the agent
was acting as such. But the general
rule is intended to protect those who
exercise good faith and not as a
shield for unfair dealing. Hence there
is a well-established exception to the
general rule as where the conduct
and dealings of the agent are such as
to raise a clear presumption that he
will not communicate to the
principal the facts in controversy.
The logical reason for this exception
is that where the agent is
committing a fraud, it would be
contrary to common sense to
presume or to expect that he would
communicate the facts to the
principal. Verily, when an agent is
engaged in the perpetration of a
fraud upon his principal for his own
exclusive benefit, he is not really
acting for the principal but is really
acting for himself, entirely outside
the scope of his agency. Indeed, the
basic tenets of agency rest on the
highest considerations of justice,
equity and fair play, and an agent
will not be permitted to pervert his
authority to his own personal
advantage, and his act in secret
hostility to the interests of his
principal trascends the power
afforded him.
[No. 21237. March 22, 1924]
JAMES D. BARTON, plaintiff and
appellee, vs. LEYTE ASPHALT &
MINERAL OIL Co., LTD., defendant
and appellant.
1.PRINCIPAL AND AGENT;
AUTHORITY OF SELLING AGENT;
SALES TO SUBAGENT.—An agent
who is clothed with authority to sell
a given commodity cannot bind the
principal by selling to himself, either
directly or indirectly. It results that
the principal is not obligated to fill
orders taken by the agent from his
own subagent, unless the principal
ratifies such sale with full knowledge
of the facts.
2.EVIDENCE; PRIVILEGE OF
ATTORNEY AND CLIENT; LOSS OF
PRIVILEGE.—The privilege which
protects communications between
attorney and client does not extend
to a copy of a letter written by the
client to his attorney which comes to
the hands of the adverse party.
Where the authenticity of such a
document is admitted, the court will
take no notice of the manner in
which it was obtained.
[No. L-2886. August 22, 1952]
GREGORIO ARANETA, INC., plaintiff
and appellant, vs. PAZ TUASON DE
PATERNO and JOSE VIDAL,
defendants and appellants.
1.CONTRACTS; SALE; MORTGAGE.—
The proviso in a contract of sale of
real estate that 10 per cent of the
purchase price should be paid only
after the mortgage on the property
should have been cancelled, is not
onerous or unusual. It was not
onerous or unusual for the vendee to
withhold a relatively small portion
of the purchase price before all the
impediments to the final
consummation of the sale had been
removed.
2.ID.; DECEIT IN ITS EXECUTION.—A
vendor could not be considered to
have been deceived into signing a
deed of sale of real estate, where the
circumstances show (1) that she is
intelligent and well educated and
had been managing her affairs; (2)
that she had an able attorney who
was assisting her in a lawsuit; and
(3) that she has a son who is a
leading citizen and a business man
and knew the English language very
well if she did not. If she signed the
deed of sale without being apprised
of its import, it can hardly be
conceived that she did not have her
attorney or her son, who took active
part in the negotiations, read it to
her afterwards.
3.CORPORATIONS; CORPORATE
ENTITY.—The fiction of corporate
entity of a corporation, which has
long been organized and has
engaged in real estate business, will
not be disregarded apart from the
members of the corporation, where
the corporate entity was not used to
circumvent the law or perpetrate
deception and the disregard of the
technicality would pave the way for
the evasion of a legitimate and
binding commitment. "The courts
will not ignore the corporate entity
in order to further the perpetration
of a fraud." (18 C. J. S., 381.)
4.PRINCIPAL AND AGENT; AGENT,
DEFINED; CIVIL CODE, ARTICLE
1459.—An agent, in the sense used
in article 1459 of the Civil Code, is
one who accepts another's
representation to perform in his
name certain acts of more or less
transcendancy. (10 Manresa, 46th
ed., 100.)
5.ID.; ID.; ID.—The ban of paragraph
2 of article 1459 connotes the idea of
trust and confidence; and so, where
the relationship does not involve
considerations of good faith and
integrity, the prohibition should not,
and does not apply. To come under
the prohibition, the agent must be in
a fiduciary relation with his
principal.
6.ID.; ID.; ID.—A person who acts as
a go-between or middleman
between the vendor and the vendee,
bringing them together to make the
contract themselves, without any
power or discretion whatsoever
which he could abuse to his
advantage and to the owner's
prejudice, is not an agent within the
meaning of article 1459 of the Civil
Code.
7.ATTORNEY AND CLIENT; CIVIL
CODE, ARTICLE 1459.—Attorneys
are only prohibited f rom buying
their client's property 'which is the
subject of litigation (Art. 1459, No. 5,
Spanish Civil Code). Where the
questioned sale of the property of
the client was effected before the
subject thereof became involved in
the present action, the prohibition
does not lie.
8.BANKS AND BANKING;
CERTIFICATION OF CHECK;
DEPOSIT DURING JAPANESE
OCCUPATION NULLITY OF, UNDER
EXECUTIVE ORDER No. 49.—Under
banking laws and practice, by the
certification "the funds represented
by the check were transferred from
the credit of the maker to that of the
payee or holder, and, for all intents
and purposes, the latter became the
depositor of the drawee bank with
rights and duties of one in such
relation"; the transfer of the
corresponding funds from the credit
of the depositor to that of the payee
had to be coextensive with the life of
the checks, which in this case was 90
days. If the checks were not
presented for payment within that
period, they became invalid and the
funds were automatically restored to
the credit of the drawer though not
as a current deposit but as special
deposit. Where the checks were
never collected and the account
against which they were drawn was
not used or claimed, and since that
account "was opened during the
Japanese occupation and in Japanese
currency," the checks "became
obsolete -as the account subject
thereto is considered null and void
in accordance with Executive Order
No. 49 of the President of the
Philippines."
9.OBLIGATIONS AND CONTRACTS;
PAYMENT BY CHECK, WHICH WERE
LOST OR DESTROYED.—The
stipulation that the seller "shall not
hold the vendee responsible for any
loss of these checks," which were to
be void if not presented for payment
at the Bank within 90 days from date
of acceptance," was unconscionable,
void and unenforceable in so far as
the said stipulation would stretch
the vendor's liability for those
checks beyond 90 days. It was not in
accord with law, equity or good
conscience to hold a party
responsible for something he or she
had no access to and could not make
use of but which was under the
absolute control and disposition of
the other party.
10.SALE; LOSS OF THE FUNDS
REPRESENTED BY CHECKS IN
PAYMENT; TIME FOR PAYMENT.—
In adjudging the vendee to be the
party to shoulder the loss of the
amount of the check issued in
payment of the obligation, and
ordering the vendee to pay the
amount to the vendor, the judgment
was not intended to be in the nature
of an extension of time of payment.
11.CONTRACTS AND OBLIGATIONS;
RESCISSION; CASUAL BREACH OF
CONTRACT.—"The general rule is
that recission will not be permitted
for a slight or casual breach of the
contract, but only for such breaches
as are so substantial and
fundamental as to defeat the object
of the parties." (Song Fo & Co. vs.
HawaiianPhilippine Co., 47 Phil.,
821, 827.)
12.ID.; INTEREST, SUSPENSION OF
THE RUNNING OF, ALTHOUGH
DEBT HAS NOT BEEN PAID.—The
matter of the suspension of the
running of interest on the loan is
governed by principles which regard
reality rather than technicality,
substance rather than form. Good
faith of the offeror or ability to make
good the offer should in simple
justice excuse the debtor from
paying interest after the offer was
rejected. A debtor cannot be
considered delinquent who offered
checks backed by sufficient deposit
or ready to pay cash if the creditor
chose that means of payment.
Technical defects of the offer cannot
be adduced to destroy its effects
when the objection to accept the
payment was based on entirely
different grounds. Thus, although
the defective consignation made by
the debtor did not discharge the
mortgage debt, the running of
interest on the loan is suspended by
the offer and tender of payment.
13.ID. ; DEBT MORATORIUM.—The
mortgagor is not entitled to
suspension of payment under the
debt moratorium law or orders
because the bulk of the debt was a
pre-war obligation and the
moratorium order as to such
obligation has been repealed except
where the debtor has suffered war
damage and has filed claim for it.
Moreover, the debtor herself caused
her creditor to be brought into this
case which resulted in the filing of
the cross-claim to foreclose the
mortgage.
No. L-30573. October 29, 1971.
VICENTE M. DOMINGO,represented
by his heirs, ANTONINA RAYMUNDO
VDA. DE DOMINGO, RICARDO,
CESAR, AMELIA, VICENTE JR.,
SALVADOR, IRENE and JOSELITO, all
surnamed DOMINGO, petitioners-
appellants, vs. GREGORIO M.
DOMINGO,respondent-appellee,
TEOFILO P. PURISIMA, intervenor-
respondent.
Agency; Obligations of an agent.—–
Articles 1891 and 1909 of the Civil
Code demand the utmost good faith,
fidelity, honesty, candor and fairness
on the part of the agent to his
principal. The agent has an absolute
obligation to make a full disclosure
or complete account to his principal
of all his transactions and other
material facts relevant to the agency,
so much so that the law as amended
does not countenance any
stipulation exempting the agent
from such an obligation and
considers such an exemption as void.
Same; Failure of agent to make full
disclosure makes him guilty of
breach of his loyalty to the
principal.—–An agent who takes a
secret profit in the nature of a bonus,
gratuity or personal benefit from the
vendee, without revealing the same
to bis principal is guilty of a breach
of his loyalty to the latter and forfeits
his right to collect the commission
that may be due him, even if the
principal does not suffer any injury
by reason of such breach of fidelity,
or that he obtained better results or
that the agency is a gratuitous one,
or that usage or custom allows it;
because the rule is to prevent the
possibility of any wrong, not to
remedy or repair an actual damage.
Same; Duty of fidelity when not
applicable.—–The duty embodied in
Article 1891 of the Civil Code does
not apply if the agent or broker
acted only as a middleman with the
task of merely bringing together the
vendor and vendee, who themselves
thereafter will negotiate on the
terms and conditions of the
transaction.
G.R. No. 141485. June 30, 2005.*
PABLITO MURAO and NELIO
HUERTAZUELA, petitioners, vs.
PEOPLE OF THE PHILIPPINES,
respondent.
Civil Law; Agency; Private
complainant’s right to a commission
does not make him a joint owner of
the money paid to LMICE by the City
Government of Puerto Princesa but
merely establishes the relation of
agent and principal.—His right to a
commission does not make private
complainant Federico a joint owner
of the money paid to LMICE by the
City Government of Puerto Princesa,
but merely establishes the relation
of agent and principal. It is
unequivocal that an agency existed
between LMICE and private
complainant Federico. Article 1868
of the Civil Code defines agency as a
special contract whereby “a person
binds himself to render some service
or to do something in representation
or on behalf of another, with the
consent or authority of the latter.”
Although private complainant
Federico never had the opportunity
to operate as a dealer for LMICE
under the terms of the Dealership
Agreement, he was allowed to act as
a sales agent for LMICE. He can
negotiate for and on behalf of LMICE
for the refill and delivery of fire
extinguishers, which he, in fact, did
on two occasions—with Landbank
and with the City Government of
Puerto Princesa.
_______________
Same; Same; All profits made and
any advantage gained by an agent in
the execution of his agency should
belong to the principal.—All profits
made and any advantage gained by
an agent in the execution of his
agency should belong to the
principal. In the instant case,
whether the transactions negotiated
by the sales agent were for the sale
of brand new fire extinguishers or
for the refill of empty tanks,
evidently, the business belonged to
LMICE. Consequently, payments
made by clients for the fire
extinguishers pertained to LMICE.
When petitioner Huertazuela, as the
Branch Manager of LMICE in Puerto
Princesa City, with the permission of
petitioner Murao, the sole proprietor
of LMICE, personally picked up
Check No. 611437 from the City
Government of Puerto Princesa, and
deposited the same under the
Current Account of LMICE with
PCIBank, he was merely collecting
what rightfully belonged to LMICE.
Indeed, Check No. 611437 named
LMICE as the lone payee.
Same; Same; Criminal Law; Estafa; A
fiduciary relationship between the
complainant and the accused is an
essential element of estafa by
misappropriation or conversion
without which the accused could not
have committed estafa.—Since
LMICE is the lawful owner of the
entire proceeds of the check
payment from the City Government
of Puerto Princesa, then the
petitioners who collected the
payment on behalf of LMICE did not
receive the same or any part thereof
in trust, or on commission, or for
administration, or under any other
obligation involving the duty to
make delivery of, or to return, the
same to private complainant
Federico, thus, the RTC correctly
found that no fiduciary relationship
existed between petitioners and
private complainant Federico. A
fiduciary relationship between the
complainant and the accused is an
essential element of estafa by
misappropriation or conversion,
without which the accused could not
have committed estafa. Murao vs.
People, 462 SCRA 366, G.R. No.
141485 June 30, 2005
G.R. No. 192085. February 22,
2012.*
CARIDAD SEGARRA SAZON,
petitioner, vs. LETECIA VASQUEZ-
MENANCIO, represented by
attorney-in-fact EDGAR S. SEGARRA,
respondent.
Remedial Law; Civil Procedure;
Appeals; When a case is appealed,
the appellate court has the power to
review the case in its entirety.—In
Heirs of Carlos Alcaraz v. Republic of
the Philippines, 464 SCRA 280
(2005), we reiterated the cardinal
rule that when a case is appealed,
the appellate court has the power to
review the case in its entirety, to wit:
In any event, when petitioners
interposed an appeal to the Court of
Appeals, the appealed case was
thereby thrown wide open for
review by that court, which is thus
necessarily empowered to come out
with a judgment as it thinks would
be a just determination of the
controversy. Given this power, the
appellate court has the authority to
either affirm, reverse or modify the
appealed decision of the trial court.
To withhold from the appellate court
its power to render an entirely new
decision would violate its power of
review and would, in effect, render it
incapable of correcting patent errors
committed by the lower courts.
Thus, we agree with respondent that
the CA was free to affirm, reverse, or
modify either the Decision or the
Order of the RTC.
Same; Same; Same; Factual findings
of the trial court are accorded high
respect and are generally not
disturbed by appellate courts, unless
found to be clearly arbitrary or
baseless.—Factual findings of the
trial court are accorded high respect
and are generally not disturbed by
appellate courts, unless found to be
clearly arbitrary or baseless. This
Court does not review the factual
findings of an appellate court, unless
these findings are “mistaken, absurd,
speculative, conjectural, conflicting,
tainted with grave abuse of
discretion, or contrary to the
findings culled by the trial court of
origin.”
Civil Law; Human Relations;
Quantum Meruit; Unjust
Enrichment; The doctrine of
quantum meruit (as much as one
deserves) prevents undue
enrichment based on the equitable
postulate that it is unjust for a
person to retain benefit without
paying for it.—The doctrine of
quantum meruit (as much as one
deserves) prevents undue
enrichment based on the equitable
postulate that it is unjust for a
person to retain benefit without
paying for it. Being an equitable
principle, it should only be applied if
no express contract was entered
into, and no specific statutory
provision is applicable. Although
petitioner was given the authority to
set the amount of her salary, she
failed to do so. Thus, she should at
least be given what she merits for
her services. We find no reason to
reverse the finding of both the RTC
and the CA that P1,000 per month
for 15 years is a just, reasonable, and
fair compensation to petitioner for
administering respondent’s
properties. The lower court is
ordered to add this amount to the
deductibles that petitioner is able to
prove or, if the deductibles exceed
the monetary value of the income
generated by the properties, to add
this amount to whatever respondent
ends up owing petitioner.
[No. 42958. October 21, 1936]
C. N. HODGES, plaintiff and
appellant, vs. CARLOTA SALAS and
PAZ SALAS, defendants and
appellees.
1.EVIDENCE; PROBATORY VALUE
OF SECONDARY EVIDENCE
ADMITTED WITHOUT
OBJECTION.—It is universally
accepted that when secondary or
incompetent evidence is presented
and accepted without any objection
on the part of the other party, the
latter is bound thereby and the court
is obliged to grant it the probatory
value it deserves. (City of Manila vs.
Cabangis, 10 Phil., 151; Bersabal vs.
Bernal, 13 Phil., 463; Kuenzle &
Streiff vs. Jiongco, 22 Phil., 110; U. S.
vs. Choa Tong, 22 Phil., 562; U. S. vs.
Ong Shiu, 28 Phil., 242; De Leon vs.
Director of Prisons, 31 Phil., 60; U. S.
vs. Hernandez, 31 Phil., 342; 23 C. J.,
39, section 1783, and the cases
therein cited; 10 R. C. L., 1008,
paragraph 197, and the cases therein
cited.)
2.MORTGAGES; LOANS; CHARGING
COMPOUND INTEREST;
APPLICATION OF THE SAME.—The
fact of charging illegal interest,
although it exceeds the maximum
limit of interest that may be charged,
does not make the loan or the
mortgage usurious because the
transactions took place subsequent
to the execution of said contracts
and the latter do not appear to be
void ab initio (66 C. J., pages 243,
244, section 194). Said interest
should be applied first (to the
payment of the stipulated and
unpaid interest and, later, to that of
the capital. (Aguilar vs. Rubiato and
Gonzalez Vila, 40 Phil., 570; Go
Chioco vs. Martinez, 45 Phil., 256;
Gui Jong & Co. vs. Rivera and Avellar,
3.ID.; ID.; CHARGING INTEREST IN
ADVANCE.—Section 5 of Act No.
2655, as amended by section 3 of Act
No. 3291, expressly permits a
creditor to charge in advance
interest corresponding to not more
than one year, whatever the
duration of the loan. What is
prohibited is the charging in advance
of interest for more than one year.
Section 6 reiterates said rule in
exempting a creditor found guilty of
usury from the obligation to return
the interest and commissions
collected by him in advance,
provided said interest and
commissions are not for a period of
more than one year and the rate of
interest does not exceed the
maximum limit fixed by law.
4.USURY, ACTION FOR;
PRESCRIPTION; REQUISITES FOR
PRESCRIPTION TO CONSTITUTE
VALID DEFENSE.—In order that
prescription may constitute a valid
defense and it may be considered on
appeal, it must be specifically
pleaded in the answer and proven
with the same degree of certainty
with which an essential allegation in
a civil action is established.
Otherwise it will not be taken into
consideration, much less if it is
alleged for the first time on appeal.
5.AGENCY; POWERS or THE AGENT;
LIMITATIONS.—The pertinent
clauses of the power of attorney
from which may be determined the
intention of the principals in
authorizing their agent to obtain a
loan, securing it with their real
property, were quoted at, the
beginning of the decision. The terms
thereof are limited; the agent was
thereby authorized only to borrow
any amount of money which he
deemed necessary. There is nothing,
however, to indicate that the
defendants had likewise authorized
him to convert the money obtained
by him to his personal use. With
respect to a power of attorney of
special character, it cannot be
interpreted as also authorizing the
agent to use the money as he
pleased, particularly when it does
not appear that such was the
intention of the principals, and in
applying part of the funds to pay his
personal obligations, he exceeded
his authority (art. 1714, Civil Code;
Bank of the Philippine Islands vs. De
Coster, 47 Phil., 594 and 49 Phil.,
574). In cases like the present one, it
should be understood that the agent
was obliged to turn over the money
to the principals or, at least, place it
at their disposal.
G.R. No. 130423. November 18,
2002.*
VIRGIE SERONA, petitioner, vs. HON.
COURT OF APPEALS and THE
PEOPLE OF THE PHILIPPINES,
respondents.
Criminal Law; Estafa Through
Misappropriation or Conversion
(Art. 315, par. 1[b] of the Revised
Penal Code); Elements.—The
elements of estafa through
misappropriation or conversion as
defined in Article 315, par. 1(b) of
the Revised Penal Code are: (1) that
the money, good or other personal
property is received by the offender
in trust, or on commission, or for
administration, or under any other
obligation involving the duty to
make delivery of, or to return, the
same; (2) that there be
misappropriation or conversion of
such money or property by the
offender or denial on his part of such
receipt; (3) that such
misappropriation or conversion or
denial is to the prejudice of another;
and (4) that there is a demand made
by the offended party on the
offender. While the first, third and
fourth elements are concededly
present, we find the second element
of misappropriation or conversion to
be lacking in the case at bar.
Same; Same; Sales; Agency; An agent
does not ipso facto commit the crime
of estafa through conversion or
misappropriation by delivering
jewelry she received to be sold on
commission basis to a sub-agent—
the law on agency in our jurisdiction
allows the appointment by an agent
of a substitute or sub-agent in the
absence of an express agreement to
the contrary between the agent and
the principal.—Petitioner did not
ipso facto commit the crime of estafa
through conversion or
misappropriation by delivering the
jewelry to a sub-agent for sale on
commission basis. We are unable to
agree with the lower courts’
conclusion that this fact alone is
sufficient ground for holding that
petitioner disposed of the jewelry
“as if it were hers, thereby
committing conversion and a clear
breach of trust.” It must be pointed
out that the law on agency in our
jurisdiction allows the appointment
by an agent of a substitute or sub-
agent in the absence of an express
agreement to the contrary between
the agent and the principal. In the
case at bar, the appointment of
Labrador as petitioner’s sub-agent
was not expressly prohibited by
Quilatan, as the acknowledgment
receipt, Exhibit “B”, does not contain
any such limitation. Neither does it
appear that petitioner was verbally
forbidden by Quilatan from passing
on the jewelry to another person
before the acknowledgment receipt
was executed or at any other time.
Thus, it cannot be said that
petitioner’s act of entrusting the
jewelry to Labrador is characterized
by abuse of confidence because such
an act was not proscribed and is, in
fact, legally sanctioned.
Same; Same; Same; Same; Words
and Phrases; The essence of estafa
under Art. 315, par. 1(b) is the
appropriation or conversion of
money or property received to the
prejudice of the owner; The words
“convert” and “misappropriated”
connote an act of using or disposing
of another’s property as if it were
one’s own, or of devoting it to a
purpose or use different from that
agreed upon.—The essence of estafa
under Article 315, par. 1(b) is the
appropriation or conversion of
money or property received to the
prejudice of the owner. The words
“convert” and “misappropriated”
connote an act of using or disposing
of another’s property as if it were
one’s own, or of devoting it to a
purpose or use different from that
agreed upon. To misappropriate for
one’s own use includes not only
conversion to one’s personal
advantage, but also every attempt to
dispose of the property of another
without right.
Same; Same; Same; Same; It is
consistent with usual practice for the
seller of jewelry entrusted to be sold
on commission basis to necessarily
part with the valuables in order to
find a buyer and allow inspection of
the items for sale.—It cannot be said
that petitioner misappropriated the
jewelry or delivered them to
Labrador “without right.” Aside from
the fact that no condition or
limitation was imposed on the mode
or manner by which petitioner was
to effect the sale, it is also consistent
with usual practice for the seller to
necessarily part with the valuables
in order to find a buyer and allow
inspection of the items for sale.
Same; Same; Same; Same; The rule is
that where an accused is acquitted of
estafa may nevertheless be held
civilly liable where the facts
established by the evidence so
warrant; An agent who is not
prohibited from appointing a sub-
agent but does so without express
authority is responsible for the acts
of the sub-agent.—Petitioner is not
entirely free from any liability
towards Quilatan. The rule is that an
accused acquitted of estafa may
nevertheless be held civilly liable
where the facts established by the
evidence so warrant. Then too, an
agent who is not prohibited from
appointing a sub-agent but does so
without express authority is
responsible for the acts of the sub-
agent. Considering that the civil
action for the recovery of civil
liability arising from the offense is
deemed instituted with the criminal
action, petitioner is liable to pay
complainant Quilatan the value of
the unpaid pieces of jewelry.
G.R. No. 137162. January 24, 2007.*
CORAZON L. ESCUETA, assisted by
her husband EDGAR ESCUETA,
IGNACIO E. RUBIO, THE HEIRS OF
LUZ R. BALOLOY, namely,
ALEJANDRINO R. BALOLOY and
BAYANI R. BALOLOY, petitioners, vs.
RUFINA LIM, respondent.
Pleadings and Practice; Admissions;
The factual admission in the
pleadings on record dispenses with
the need to present evidence to
prove the admitted fact, and all
proofs submitted by the party
making such admission “contrary
thereto or inconsistent therewith
should be ignored whether objection
is interposed by a party or not.”—An
admission, verbal or written, made
by a party in the course of the
proceedings in the same case, does
not require proof.” The “factual
admission in the pleadings on record
[dispenses] with the need x x x to
present evidence to prove the
admitted fact.” It cannot, therefore,
“be controverted by the party
making such admission, and [is]
conclusive” as to them. All proofs
submitted by them “contrary thereto
or inconsistent therewith should be
ignored whether objection is
interposed by a party or not.”
Besides, there is no showing that a
palpable mistake has been
committed in their admission or that
no admission has been made by
them.
Annulment of Judgments; The 60-
day period for filing a petition for
annulment of judgment is reckoned
from the time the party acquired
knowledge of the order, judgment or
proceedings and not from the date
he actually read the same.—Section
3 of Rule 38 of the Rules of Court
states: SEC. 3. Time for filing
petition; contents and verification.—
A petition provided for in either of
the preceding sections of this Rule
must be verified, filed within sixty
(60) days after the petitioner learns
of the judgment, final order, or other
proceeding to be set aside, and not
more than six (6) months after such
judgment or final order was entered,
or such proceeding was taken; and
must be accompanied with affidavits
showing the fraud, accident, mistake,
or excusable negligence relied upon,
and the facts constituting the
petitioner’s good and substantial
cause of action or defense, as the
case may be. There is no reason for
the Baloloys to ignore the effects of
the above-cited rule. “The 60-day
period is reckoned from the time the
party acquired knowledge of the
order, judgment or proceedings and
not from the date he actually read
the same.”
Agency; The agent may appoint a
substitute if the principal has not
prohibited him from doing so.—
Article 1892 of the Civil Code
provides: Art. 1892. The agent may
appoint a substitute if the principal
has not prohibited him from doing
so; but he shall be responsible for
the acts of the substitute: (1) When
he was not given the power to
appoint one x x x. Applying the
above-quoted provision to the
special power of attorney executed
by Ignacio Rubio in favor of his
daughter Patricia Llamas, it is clear
that she is not prohibited from
appointing a substitute. By
authorizing Virginia Lim to sell the
subject properties, Patricia merely
acted within the limits of the
authority given by her father, but
she will have to be “responsible for
the acts of the sub-agent,” among
which is precisely the sale of the
subject properties in favor of
respondent.
Same; Sales; A contract executed by
an agent without authority to sell is
not void but simply unenforceable.—
Even assuming that Virginia Lim has
no authority to sell the subject
properties, the contract she executed
in favor of respondent is not void,
but simply unenforceable, under the
second paragraph of Article 1317 of
the Civil Code which reads: Art.
1317. x x x A contract entered into in
the name of another by one who has
no authority or legal representation,
or who has acted beyond his powers,
shall be unenforceable, unless it is
ratified, expressly or impliedly, by
the person on whose behalf it has
been executed, before it is revoked
by the other contracting party.
Same; Same; The acceptance and
encashment by the owner of a check
representing the purchase price of
his property sold through his agent
constitute ratification of the contract
of sale and produce the effects of an
express power of agency.—Ignacio
Rubio merely denies the contract of
sale. He claims, without
substantiation, that what he received
was a loan, not the down payment
for the sale of the subject properties.
His acceptance and encashment of
the check, however, constitute
ratification of the contract of sale
and “produce the effects of an
express power of agency.” “[H]is
action necessarily implies that he
waived his right of action to avoid
the contract, and, consequently, it
also implies the tacit, if not express,
confirmation of the said sale
effected” by Virginia Lim in favor of
respondent.
Same; Same; Estoppel; The doctrine
of estoppel is not only that which
prohibits a party from assuming
inconsistent positions, based on the
principle of election, but that which
precludes him from repudiating an
obligation voluntarily assumed after
having accepted benefits
therefrom.—Similarly, the Baloloys
have ratified the contract of sale
when they accepted and enjoyed its
benefits. “The doctrine of estoppel
applicable to petitioners here is not
only that which prohibits a party
from assuming inconsistent
positions, based on the principle of
election, but that which precludes
him from repudiating an obligation
voluntarily assumed after having
accepted benefits therefrom. To
countenance such repudiation would
be contrary to equity, and would put
a premium on fraud or
misrepresentation.”
Same; Same; Double Sales; A second
buyer of the property who may have
had actual or constructive
knowledge of a defect in the seller’s
title, or at least was charged with the
obligation to discover such defect,
cannot be a registrant in good
faith.—Applying Article 1544 of the
Civil Code, a second buyer of the
property who may have had actual
or constructive knowledge of such
defect in the seller’s title, or at least
was charged with the obligation to
discover such defect, cannot be a
registrant in good faith. Such second
buyer cannot defeat the first buyer’s
title. In case a title is issued to the
second buyer, the first buyer may
seek reconveyance of the property
subject of the sale. Even the
argument that a purchaser need not
inquire beyond what appears in a
Torrens title does not hold water. A
perusal of the certificates of title
alone will reveal that the subject
properties are registered in
common, not in the individual names
of the heirs.
Same; Same; Earnest Money; Earnest
money constitutes an advance
payment to be deducted from the
total price.—Earnest money has
been given by respondent. “[I]t shall
be considered as part of the price
and as proof of the perfection of the
contract. It constitutes an advance
payment to “be deducted from the
total price.”
Same; Same; In a contract of sale, the
vendor loses ownership over the
property and cannot recover it until
and unless the contract is resolved
or rescinded.—Ignacio Rubio could
no longer sell the subject properties
to Corazon Escueta, after having sold
them to respondent. “[I]n a contract
of sale, the vendor loses ownership
over the property and cannot
recover it until and unless the
contract is resolved or rescinded x x
x.” The records do not show that
Ignacio Rubio asked for a rescission
of the contract. What he adduced
was a belated revocation of the
special power of attorney he
executed in favor of Patricia Llamas.
“In the sale of immovable property,
even though it may have been
stipulated that upon failure to pay
the price at the time agreed upon the
rescission of the contract shall of
right take place, the vendee may pay,
even after the expiration of the
period, as long as no demand for
rescission of the contract has been
made upon him either judicially or
by a notarial act.”
G.R. No. 136433. December 6, 2006.*
ANTONIO B. BALTAZAR, petitioner,
vs. HONORABLE OMBUDSMAN,
EULOGIO M. MARIANO, JOSE D.
JIMENEZ, JR., TORIBIO E. ILAO, JR.
and ERNESTO R. SALENGA,
respondents.
Locus Standi; Parties; Words and
Phrases; Civil Procedure; Locus
standi is defined as “a right of
appearance in a court of justice on a
given question”—in private suits,
standing is governed by the “real-
parties-in interest” rule found in
Section 2, Rule 3 of the 1997 Rules of
Civil Procedure which provides that
“every action must be prosecuted or
defended in the name of real party in
interest.”—Locus standi is defined as
“a right of appearance in a court of
justice x x x on a given question.” In
private suits, standing is governed
by the “real-parties-in interest” rule
found in Section 2, Rule 3 of the
1997 Rules of Civil Procedure which
provides that “every action must be
prosecuted or defended in the name
of the real party in interest.”
Accordingly, the “real-party-in
interest” is “the party who stands to
be benefited or injured by the
judgment in the suit or the party
entitled to the avails of the suit.”
Succinctly put, the plaintiffs’
standing is based on their own right
to the relief sought.
Ombudsman; The Office of the
Ombudsman is mandated to
“investigate and prosecute on its
own or on complaint by any person,
any act or omission of any public
officer or employee, office or agency,
when such act or omission appears
to be illegal, unjust, improper or
inefficient—the Ombudsman can act
on anonymous complaints and motu
proprio inquire into alleged
improper official acts or omissions
from whatever source, e.g., a
newspaper. Thus, any complaint
may be entertained by the
Ombudsman for the latter to initiate
an inquiry and investigation for
alleged irregularities.—The Office of
the Ombudsman is mandated to
“investigate and prosecute on its
own or on complaint by any person,
any act or omission of any public
officer or employee, office or agency,
when such act or omission appears
to be illegal, unjust, improper or
inefficient (emphasis supplied).” The
Ombudsman can act on anonymous
complaints and motu proprio
inquire into alleged improper official
acts or omissions from whatever
source, e.g., a newspaper. Thus, any
complainant may be entertained by
the Ombudsman for the latter to
initiate an inquiry and investigation
for alleged irregularities.
Litigations; The Rules allow a non-
lawyer to conduct litigation in
person and appear for oneself only
when he is a party to a legal
controversy.—Filing the petition in
person before this Court is another
matter. The Rules allow a non-
lawyer to conduct litigation in
person and appear for oneself only
when he is a party to a legal
controversy. Section 34 of Rule 138
pertinently provides, thus: SEC. 34.
By whom litigation conducted.—In
the court of a justice of the peace a
party may conduct his litigation in
person, with the aid of an agent or
friend appointed by him for that
purpose, or with the aid of an
attorney. In any other court, a party
may conduct his litigation personally
or by aid of an attorney, and his
appearance must be either personal
or by a duly authorized member of
the bar (emphases supplied).
Legal Maxims; Words and Phrases;
Agency; The legal maxim potestas
delegata non delegare potest; a
power once delegated cannot be re-
delegated, while applied primarily in
political law to the exercise of
legislative power, is a principle of
agency—for another, a redelegation
of the agency would be detrimental
to the principal as the second agent
has no privity of contract with the
former.—The legal maxim potestas
delegata non delegare potest; a
power once delegated cannot be re-
delegated, while applied primarily in
political law to the exercise of
legislative power, is a principle of
agency. For another, a re-delegation
of the agency would be detrimental
to the principal as the second agent
has no privity of contract with the
former.
Due Process; Preliminary
Investigation; Courts are given wide
latitude to accord the accused ample
opportunity to present
controverting evidence even before
trial as demanded by due process.
Thus, we held in Villaflor v. Vivar,
349 SCRA 194 (2001), that “[a]
component part of due process in
criminal justice, preliminary
investigation is a statutory and
substantive right accorded to the
accused before trial—to deny their
claim to a preliminary investigation
would be to deprive them of the full
measure of their right to due
process.—Courts are given wide
latitude to accord the accused ample
opportunity to present
controverting evidence even before
trial as demanded by due process.
Thus, we held in Villaflor v. Vivar,
349 SCRA 194 (2001), that “[a]
component part of due process in
criminal justice, preliminary
investigation is a statutory and
substantive right accorded to the
accused before trial. To deny their
claim to a preliminary investigation
would be to deprive them of the full
measure of their right to due
process.”
Jurisdictions; Actions; It is settled
rule that jurisdiction over the
subject matter is determined by the
allegations of the complaint—the
nature of an action is determined by
the material averments in the
complaint and the character of the
relief sought, not by the de-fenses
asserted in the answer or motion to
dismiss.—It is a settled rule that
jurisdiction over the subject matter
is determined by the allegations of
the complaint. The nature of an
action is determined by the material
averments in the complaint and the
character of the relief sought, not by that he was anthorized to execute
the defenses asserted in the answer contracts of this kind, and it not
or motion to dismiss. appearing from the record what
Probable Cause; Ombudsman; The limitations, if any, were placed
function of determining the upon his powers to act for his
existence of probable cause is principal.
proper for the Ombudsman in this
case and we will not tread on the
[No. 10099. January 27,
realm of this executive function to
examine and assess evidence 1916.]
supplied by the parties, which is TEOFILA DEL ROSARIO
supposed to be exercised at the start DE COSTA and BERNARDINO
of criminal proceedings.—The COSTA, plaintiffs and appellants,
function of determining the vs. LA BADENIA, a corporation,
existence of probable cause is defendant and appellee.
proper for the Ombudsman in this
case and we will not tread on the PRINCIPAL AND AGENT;
realm of this executive function to LIABILITY OF PRINCIPAL.—
examine and assess evidence The principal is liable upon
supplied by the parties, which is subagency contracts entered into
supposed to be exercised at the start by a general agent in the name of
of criminal proceedings. In Perez v. the principal, when it appears
Hagonoy Rural Bank, Inc., 327 SCRA
that the general agent was
588 (2000), as cited in Longos Rural
clothed with such broad powers
Waterworks and Sanitation
Association, Inc. v. Hon. Desierto, as to justify the inference that he
385 SCRA 392 (2002), we had was anthorized to execute
occasion to rule that we cannot pass contracts of this kind, and it not
upon the sufficiency or insufficiency appearing from the record what
of evidence to determine the limitations, if any, were placed
existence of probable cause. upon his powers to act for his
principal. Del Rosario and Costa
[No. 10099. January 27, 1916.] vs. La Badenia., 33 Phil. 316, No.
TEOFILA DEL ROSARIO DE 10099 January 27, 1916
COSTA and BERNARDINO
COSTA, plaintiffs and
appellants, vs. LA BADENIA, a
corporation, defendant and
appellee.
PRINCIPAL AND
AGENT; LIABILITY OF
PRINCIPAL.—The principal is
liable upon subagency contracts
entered into by a general agent in
the name of the principal, when it
appears that the general agent
was clothed with such broad
powers as to justify the inference