Barreto v Santa Marina
G.R. No. 8169
December 29, 1913
PRINCIPAL AND AGENT; REVOCATION OF AGENT'S
AUTHORITY. —
(Art. 1733, Civil Code; art. 279, Code of Commerce.)
2. ID.; ID.; RIGHT OF PRINCIPAL TO DISMISS
AGENT. — Even though a period is stipulated during which
the agent or employee is to hold his position in the service
of the owner or head of a mercantile establishment, yet the
latter may, for any of the special reasons specified in article
300 of the Code of Commerce, dismiss such agent or
employee even before the termination of the period.
DECISION
TORRES, J p:
Facts:
Plaintiff’s side:
On January 5, 1911, counsel for the plaintiff Antonio M.a
Barretto filed suit against Jose Santa Marina, alleging that
the defendant for payment of compensation of services
rendered subsequent to December 31, 1909.
On January 8, 1910, and for a long time prior thereto, the
plaintiff had held the position of agent of the defendant in
the Philippine Islands for the management of the said
business in the name and for the account of the said
defendant; that the plaintiff's services were rendered in
pursuance of a contract whereby the defendant obligated
himself in writing to hire the said services for so long a time
as the plaintiff should not show discouragement and to
compensate such services at the rate of P37,000 Philippine
currency per annum; The defendant, without reason,
justification, or pretext and in violation of the contract before
mentioned, summarily and arbitrarily dispensed with the
plaintiff's services and removed him from the management
of the business, since which date the defendant had
refused to pay him the compensation, or any part thereof,
due him and payable in full for services rendered
subsequent to December 31, 1909; and that, as a second
cause of action based upon the facts aforestated, the
plaintiff had suffered losses and damages in the sum of
P100,000 Philippine currency. Said counsel therefore
prayed that judgment be rendered against the defendant by
sentencing him to pay to the plaintiff P137,000 Philippine
currency, and the interest thereon at the legal rate, in
addition to the payment of the costs, together with such
other equitable remedies as the law allows.
Defendant’s side:
Plaintiff had no contract whatever with the defendant in
which any period of time was stipulated during which the
former was to render his services as manager of the La
Insular factory;
That the defendant revoked for just cause the power
conferred upon the plaintiff; that subsequent to the
revocation of such power, and on the occasion of the
plaintiff's having sold all his rights and interests in the
business of the La Insular factory to the defendant, in
consideration of the sum received by him, the plaintiff
renounced all action, intervention and claim that he might
have against the defendant relative to the business
aforementioned, whereby all the questions that might have
arisen between hem were settled.
The most important fact in this case, which stands out
prominently from the evidence regarded as a whole, is that
of the plaintiff Barretto's renunciation or resignation of the
position he held as agent and manager of the said factory,
which was freely and voluntarily made by him on the
occasion of the insolvency and disappearance of the
Chinaman Uy Yan, who had bought from the factory
products aggregating in value the considerable sum of
P97,000 and, without paying this large debt, disappeared
and has not been seen since.
Honorable S. del Rosario, judge, sentenced the defendant
to pay to the plaintiff the salary to which he was entitled for
the first eight days of January, 1910, also that for the
following month, at the rate of P3,083.33 per month, without
special finding as to costs, and dismissed the second cause
of action contained in the complaint presented in that case.
Demand is made in this suit for the payment of the
considerable sum of P137,000, together with the legal
interest thereon. Two amounts make up this sum: One of
P37,000, as salary for the year 1910, claimed to be due for
services rendered by the plaintiff as agent and manager of
the tobacco factory known as La Insular; and the other of
P100,000 as an indemnity for losses and damages, on
account of the plaintiff's removal without just cause from his
position as agent and manager of said factory, effected
arbitrarily and in violation of the contract of hire of services
between the parties, the plaintiff claiming to be still entitled
to hold the position from which he was dismissed.
The record does not show that Santa Marina, his principal,
required him to resign his position as manager, but that
Barretto himself voluntarily stated by letter to his principal
that, for the reasons therein mentioned, he resigned and
placed at the latter's disposal the position of agent and
manager of the La Insular factory; and if the principal, Santa
Marina, deemed it suitable to relieve the agent, for having
been negligent and overstepping his authority in the
discharge of his office, and furthermore because of his
having expressly resigned his position, and placed it at the
disposal of the chief owner of the business, it cannot be
explained how such person can be entitled to demand an
indemnity for losses and damages, from his principal, who
merely exercised his lawful right of relieving the plaintiff
from the position which he had voluntarily given up.
So, the agent and manager Barretto was not really
dismissed or removed by the defendant Santa Marina. What
did occur was that, in view of the resignation tendered by
the plaintiff for the reasons which he himself conscientiously
deemed to warrant his surrender of the position he was
holding in the La Insular factory, the principal owner of this
establishment, the defendant Santa Marina, had to look for
and appoint another agent and manager to relieve and
substitute him in the said employment — a lawful act
performed by the principal owner of the factory and one
which cannot serve as a ground upon which to demand
from the latter an indemnity for losses and damages,
inasmuch as, in view of the facts that occurred and were
acknowledged and confessed by Barretto in is letters,
Exhibits 3 and 6, the plaintiff could not expect, nor ought to
have expected, that the defendant should have insisted on
the unsuccessful agent's continuance in his position, or that
he should not have accepted the resignation tendered by
the plaintiff in his first letter.
By the mere fact that the defendant remained silent and
designated another person, Mr. J. McGavin, to discharge in
the plaintiff's stead the powers and duties of agent and
manager of the said factory, Barretto should have
understood that his resignation had been accepted and that
if its acceptance was not communicated to him immediately
it was owing to the circumstance that the principal owner of
the factory did not then have, nor until several months
afterwards, any other person whom he could appoint and
place in his stead, for, as soon as the defendant Santa
Marina could appoint the said McGavin, he revoked the
power he had conferred upon the plaintiff and
communicated this fact to the latter, by means of the letter,
Exhibit D, which was presented to him by the bearer
thereof, McGavin himself, the new manager and agent
appointed.
Issue and Held:
1) Whether any period or term for the duration of the
position of agent and manager was fixed in the
verbal contract made between the deceased
Joaquin Santa Marina
No. The defendant acknowledged the said verbal contract
and also its ratification by him after his brother's death; but
he denied any stipulation therein that Barretto should hold
his office for any specific period of time fixed by and
between the contacting parties, for the deceased Joaquin
Santa Marina, in conferring power upon the plaintiff, did not
do so for any specific time, nor did he set any period within
which he should hold his office of agent and manager of the
La Insular factory; neither did he fix the date for the
termination of such services, in the instrument of power of
attorney executed by the defendant Santa Marina before a
notary on the 25th of September, 1908.
From the context of the instrument just mentioned it cannot
be concluded that any time whatever was fixed during
which the plaintiff should hold his position of agent.
The defendant, in executing that instrument, whereby the
agreement made between his brother Joaquin and Barretto
was ratified, did no more than accord to the plaintiff the
same confidence that the defendant's predecessor in
interest had in him; and so long as this merely subjective
condition of trust lodged in the agent existed, the time
during which the latter might hold his office could be
considered indefinite or undetermined, but as soon as that
indispensable condition of a power of attorney
disappeared and the conduct of the agent ceased to
inspire confidence, the principal had a right to revoke
the power he had conferred upon his agent, especially
when the latter, for good reasons, gave up the office he
was holding.
The time during which the agent may hold his position
is indefinite or undetermined, when no period has been
fixed in his commission and so long as the confidence
reposed in him by the principal exists; but as soon as
this confidence disappears the principal has a right to
revoke the power he conferred upon the agent,
especially when the latter has resigned his position for
good reasons.
2) Whether or not Santa Marina can validly revoke
contract of agency, even before expiration of period
if any was fixed.
Yes. The contract of agency can subsist only so long as the
principal has confidence in his agent, because, from the
moment such confidence disappears and although there be
a fixed period for the exercise of the office of agent, a
circumstance that does not appear in the present case, the
principal has a perfect right to revoke the power that he had
conferred upon the agent owing to the confidence he had in
him and which for sound reasons had ceased to exist.The
record does not show it to have been duly proved,
notwithstanding the plaintiff's allegation, that a period was
fixed for holding his agency or office of agent and manager
of the La Insular factory.
Article 1733 of the Civil Code, applicable to the case at bar,
according to the provisions of article 2 of the Code of
Commerce, prescribes: "The principal may, at his will,
revoke the power and compel the agent to return the
instrument containing the same in which the authority
was given."
Article 279 of the Code of Commerce provides: "The
principal may revoke the commission intrusted to an
agent at any stage of the transaction, advising him
thereof, but always being liable for the result of the
transactions which took place before the latter was
informed of the revocation."
It is not incumbent upon the courts to fix the period during
which contracts for services shall last. Their duration is
understood to be implicitly fixed, in default of express
stipulation, by the period for the payment of the salary of the
employee. Even though the annual salary fixed for the year
are collected and paid in monthly installments as they fall
due, and so the plaintiff collected and was paid his
remuneration; therefore, on the latter's discontinuance in his
office as agent, he would at most be entitled to the salary
for one month and some odd days, allowed in the judgment
of the lower court.
Article 302 of the Code of Commerce reads thus:
"In cases in which no special time is fixed in the contracts of
service, any one of the parties thereto may dissolve it,
advising the other party thereof one month in advance.
"The factor or shop clerk shall be entitled, in such case, to
the salary due for the month."
From the mere fact that the principal no longer had
confidence in the agent, he is entitled to withdraw it and
to revoke the power he conferred upon the latter, even
before the expiration of the period of the period of the
engagement or of the agreement made between them;
but, in the present case, once it has been shown that,
between the deceased Joaquin Santa Marina and the
latter's heir, now the defendant, on the one hand, and the
plaintiff Barretto, on the other, no period whatever was
stipulated during which the last-named should hold the
office of agent manager of the said factory, it is
unquestionable that the defendant, even without good
reasons, could lawfully revoke the power conferred
upon the plaintiff and appoint in his place Mr. McGavin,
and thereby contracted no liability whatever other than
the obligation to pay the plaintiff the salary pertaining
to one month and some odd days, as held in the
judgment below.
Barretto himself acknowledged in his aforesaid letter,
Exhibit 3, that he had exceeded his authority and acted
negligently in selling on credit to the said Chinaman a large
quantity of the products of the factory under the plaintiff's
management, reaching the considerable value of P97,000;
whereby he confessed one of the causes which led to his
removal, the revocation of the power conferred upon him
and the appointment of a new agent in his place.
The defendant, Jose Santa Marina, in his letter of
December 2, 1909, whereby he communicated to the
plaintiff the revocation of the power he had conferred upon
him and the appointment of another new agent, Mr.
McGavin, stated among other things that the loan
contracted by the agent Barretto, without the approval of the
principal, caused a great panic among the stockholders of
the factory and that the defendant hoped to allay it by the
new measure that he expected to adopt. This, then, was still
another reason that induced the principal to withdraw the
confidence placed in the plaintiff and to revoke the power
he had conferred upon him. Therefore, even omitting
consideration of the resignation before mentioned, we find
duly warranted the reasons which impelled the defendant to
revoke the said power and relieve the plaintiff from the
position of agent and manager of the La Insular factory.
In revoking the authority conferred upon the plaintiff, acted
within his unquestionable powers and did not thereby
violate any statute whatever that may have limited them;
consequently, he could not have caused the plaintiff any
harm or detriment to his right and interests, for not only had
Santa Marina a justifiable reason to proceed as he did, but
also no period whatever had been stipulated during which
the plaintiff should be entitled to hold his position; and
furthermore, because, in relieving the latter and
appointing another person in his place, the defendant
acted in accordance with the renunciation and
resignation which the plaintiff had tendered. If the
plaintiff is entitled to any indemnity in accordance with law,
such was awarded to him in the judgment of the lower court
by granting him the right to collect salary for one month and
some odd days.
Coleongco v. Clarapols| G.R. No. L-18616 (1964)|
Reyes, J.B.L., J.
Facts:
Since 1951, Eduardo L. Claparols, operated a factory
for the manufacture of nails in Talisay, Occidental
Negros, the "Claparols Steel & Nail Plant". The raw
material, nail wire, was imported from foreign
sources, specially from Belgium; and he had a
regular dollar allocation therefor, granted by the
Import Control Commission and the Central Bank.
The marketing of the nails was handled by the
"ABCD Commercial" of Bacolod, which was owned
by a chinaman named Kho To.
Losses compelled Claparols in 1953 to look for
someone to finance his imports of nail wire. At first,
Kho To agreed to do the financing, but on April 25,
1953, the Chinaman introduced his compadre,
appellant Vicente Coleongco, to the appellee,
recommending said appellant to be the financier in
the stead of Kho To. Claparols agreed, and on April
25 of that year a contract (Exhibit B) was perfected
between them whereby Coleongco undertook to
finance and put up the funds required for the
importation of the nail wire, which Claparols bound
himself to convert into nails at his plant. It was
agreed that Coleongco would have the exclusive
distribution of the product, and the "absolute care in
the marketing of these nails and the promotion of
sales all over the Philippines", except the Davao
Agency; that Coleongco would "share the control of
all the cash" from sales or deposited in banks; that
he would have a representative in-the management;
that all contracts and transactions should be jointly
approved by both parties; that proper books would
be kept and annual accounts rendered; and that
profits and losses would be shared "on a 50-50
basis". The contract was renewed from year to year
until 1958, and Coleongco's share subsequently
increased by 5% of the net profit of the factory. On
April 27, 1953, Claparols executed in favor of
Coleongco, at the latter's behest, a special power of
attorney (Exhibit C) to open and negotiate letters of
credit, to sign contracts, bills of lading, invoices, and
papers covering transactions; to represent appellee
and the nail factory; and to accept payments and
cash advances from dealers and distributors.
Thereafter, Coleongco also became the assistant
manager of the factory, and took over its business
transactions, while Claparols devoted most of his
time to the nail manufacture processes.
Around mid-November 1956, Claparols learned from
the PNB that Coleongco wrote the bank trying to
discredit him, causing the bank to issue an alias writ
of execution. Behind Claparol's back, Colengco
wrote the bank alleging that Claparol was not
serious in meeting his financial obligations by selling
the machines. Claparols was able to settle the
matter with the bank but because of this, he
revoked the SPA and informed Coleongco of the
same thru registered mail. He also hired an
autditing firm C. Miller & Company, auditors, to go
over the books and records of the business with a
view to adjusting the accounts of the associates.
This is after learning the Coleongco asked the
superintendent Agsam to pour acid on the
machinery to paralyze the factory. Coleongco also
wrote Kho To to cut his monthly advances from
P2000 to P1000 to take advantage of the financial
difficulties of Claparols and so that later, they may
own the factory. This was carried on by Kho To in a
letter advising that he can only draw P1000. The
auditors found that Coleongco owed the Claparols
Nail Factory the amount of P81,387.37, as of June
30, 1957. Coleongco was also dismissed as the
assistant manager.
Coleongco denies the allegations and claims that
the revocation of the SPA was illegal and that he is
entitled to the share of the profits as well as moral
damages. Claparols counterclaimed.
Issue:
Can Claparols validly revoke the Special Power of
Attorney even if it is coupled with interest on the
part of the agent?
Held:
YES. It is first contended by the appellant Coleongco
that the power of attorney was made to protect his
interest under the financing agreement and was one
coupled with an interest that the appellee Claparols
had no legal power to revoke. This point cannot be
sustained. It must not be forgotten that a power of
attorney can be made irrevocable by contract only
in the sense that the principal may not recall it at his
pleasure; but coupled with interest or not, the
authority certainly can be revoked for a just cause,
such as when the attorney-in-fact betrays the
interest of the principal, as happened in this case. It
is not open to serious doubt that the irrevocability of
the power of attorney may not be used to shield the
perpetration of acts in bad faith, breach of
confidence, or betrayal of trust, by the agent, for
that would amount to holding that a power, coupled
with an interest authorizes the agent to commit
frauds against the principal.
Our new Civil Code, in Article 1172, expressly
provides the contrary in prescribing that
responsibility arising from fraud is demandable in all
obligations, and that any waiver of action for future
fraud is void. It is also on this principle that the Civil
Code, in its Article 1800, declares that the powers of
a partner, appointed as manager, in the articles of
copartnership are irrevocable without just or lawful
cause; and an agent with power coupled with an
interest cannot stand on better ground than such a
partner in so far as irrevocability of the power is
concerned.
The action of plaintiff -appellant for damages and
lost profits due to the discontinuance of the
financing agreement, Exhibit "B", may not prosper,
because the record shows that the appellant
likewise breached his part of the contract. It will be
recalled that under paragraph 2 of the contract,
Exhibit "B", it was stipulated:
"That the Party of the Second Part (Coleongeo) has
agreed to finance and put up all the necessary
money which may be needed to pay for the
importation of the raw material needed by such nail
factory and allocated by the ICC from time to time
either in cash or with whatever suitable means
which the Party of the Second Part may be able to
make by suitable arrangements with any well known
banking institution recognized by the Central Bank
of the Philippines."
Instead of putting up all the necessary money
needed to finance the imports of raw material,
Coleangco merely advanced 25% in cash on account
of the price and had the balance covered by surety
agreements executed by Claparols and others as
solidary (joint and several) guarantors. Claparols
was made to shoulder 3/4, of the payment for the
imports, contrary to the financing agreement.
Paragraph 11 of the latter expressly denied
Coleongco any power or authority to bind Claparols
without previous consultation and authority. When
the balances for the cost of the importations
became due, Coleongco in some instances, paid it
with the dealers' advances to the nail factory
against future sales without the knowledge of
Claparols. Under paragraphs 8 and 11 of the
financing agreement, Coleongeo was to give
preference to the operating expenses before sharing
profits, so that until the operating costs were
provided for, Coleongco had no right to apply the
factory's income to pay his own obligations.
For 1957 to 1958 Claparols financed the imports of
nail wire without the help of appellant, and in view
of the latter's infringement of his obligations, his
acts of disloyalty previously discussed, and his
diversions of factory funds (he even bought two
motor vehicles with them), the court finds no
justification for his insistence in sharing in the
factory's profit for these years, nor for the
restoration of the revoked power of attorney.
The accountant's reports and testimony prove that
as of June 30, 1957, Coleongco owed to Claparols
the sum of P83,466.34 that after some adjustment
was reduced to P81,387.37, practically accepted
even by appellant's auditor.
The basic rule of contracts requires parties to act
loyally toward each other, in the pursuit of the
common end, and appellant clearly violated the rule
of good faith prescribed by Art. 1315 of the New
Civil Code.
The lower court also allowed Claparols P50,000 for
damages, material, moral and exemplary, caused by
the appellant Coleongco's acts in maliciously
undermining appellee's credit that led the Philippine
National Bank to secure a writ of execution against
Claparols. Undeniably, the attempts of Colleongco to
discredit and "squeeze" Claparols out of his own
factory and business could not but cause the latter
mental anguish and serious anxiety, as found by the
court below, for which he is entitled to
compensation; and the malevolence that lay behind
appellee's actions justified also the imposition of
exemplary or deterrent damages (Civ. Code, Art.
2232). While the award could have been made
larger without violating the canons of justice, the
discretion in fixing such damages primarily lay in the
trial court, and we feel that the same should be
respected.
Judgment affirmed.
NEW MANILA LUMBER COMPANY, plaintiff-
appellant, vs. REPUBLIC OF THE
PHILIPPINES, defendant-appellee| G.R. No. L-
14248 April 28, 1960 | GUTIERREZ DAVID, J. - Kat
Facts:
New Manila filed a complaint against the Republic
for the recovery of a sum of money and alleges that:
- the Republic, thru the Director of Schools,
entered into a contract with Alfonso Mendoza to
build 2 school houses, where the lumber
materials in said construction were supplied by
New Manila;
- prior to the payment by Republic of any
amount due the contractor, the latter executed
powers of attorney in favor of New Manila
"constituting it as his sole, true and lawful
attorney-in-fact with specific and exclusive
authority to collect and receive from the
Republic any and all amounts due or may be due
to said contractor Mendoza from the Republic in
connection with the construction of the aforesaid
school buildings, as may be necessary to pay
materials supplied by New Manila";
- that originals of the powers of attorney were
received by Republic (thru the Director of Public
Schools) who promised to pay New Manila, but it
paid the contractor on different occasions
without first making payment to New Manila.
- that Republic be ordered to pay New Manila
P18,327.15 as the unpaid balance of the cost of
lumber supplied with legal interest from the due
date, attorney's fees and costs.
The Republic, through the Sol-Gen, moved to
dismiss on ff. grounds: (1) it does not allege a
sufficient cause of action, (2) New Manila has no
right to institute the action under Act No. 3688, and
(3) the court is without jurisdiction to entertain the
same against the Republic.
TC: in favor of the Republic holding that "there is no
juridical tie between plaintiff-supplier and
defendant-owner and dismissed the complaint.
Hence, this appeal.
Issue: WON New Manila can collect from the
Republic the amount due to it based on the power of
attorney executed in its favor by contractor
Mendoza
Held: NO.
Section 1 of Public Act No. 3688, entitled "An Act for
the protection of persons furnishing material and
labor for the construction of public works", reads in
part as follows:
SECTION 1. Any person. . .entering into a formal
contract with the Government of the Philippine
Islands for the construction of any public building. . .
shall be required, before commencing such work, to
execute the usual penal bond, with good and
sufficient sureties; and any. . .corporation who has
furnished labor or materials . . .and payment for
which has not been made, shall have the right to
intervene and be made a party to any action
instituted by the Government . . .on the bond of the
contractor, and to have their rights and claims
adjudicated in such action and judgment rendered
thereon, subject, however, to the priority of the claim
and judgment of the Government . . . If the full
amount of the liability of the surety on said bond is
insufficient to pay the full amount of said claims and
demands, then, after paying the full amount due the
Government, the remainder shall be distributed pro
rata among said intervenors. If no suit should be
brought by the Government . . . within six months
from the completion and final settlement of said
contract, or if the Government expressly waives its
right to institute action on the penal bond, then the
person or persons supplying the contractor with
labor and materials shall, upon application therefor,
and furnishing affidavit to the department under the
direction of which said work has been prosecuted,
that labor or materials for the prosecution of such
work have been supplied by him or them, and
payment for which has not been made, be furnished
with a certified copy of said contract and bond, upon
which he or they shall have a right of action, and
shall be, and are hereby, authorized to bring suit in
the name of the Government . . . in the CFI in the
district in which said contract was to be performed
and executed. . .against said contractor and his
sureties. . .
The Republic has already instituted a suit against
the contractor Mendoza for the forfeiture of the
latter's bond posted to secure the faithful
performance of stipulations in the construction
contract with regards to one of the 2 school
buildings. The contractor Mendoza has a similar
bond with respect to the other school building.
Pursuant to Act 3688, plaintiff's legal remedy is,
not to bring suit against the Government, there
being no privity of contract between them, but to
intervene in the civil case above-mentioned as
an unpaid supplier of materials to the
contractor, or file an action in the name of the
Republic against said contractor on the
latter's other bond.
New Manila argues that an implied contract
between it and the Republic arose, when the latter,
thru the Director of Public Schools, on being
furnished copies of the powers of attorney executed
by the contractor, promised to make payment to
New Manila for the materials supplied for the
construction of the school buildings.
The Republic was not a party to the execution
of the powers of attorney. Besides, the Director
of Public Schools had no authority to bind the
Republic on the payment. While he was the
official who entered into contract with the contractor
for the construction of the school buildings, payment
of the contract price was not within his exclusive
control but subject to approval under existing laws
not only by the Department Head (Sec. 568, Rev.
Adm, Code), but also by the Auditor General.
At any rate, the powers of attorney made New
Manila the contractor's agent in the collection of
whatever amounts may be due the contractor from
the Republic. And since after the execution of
the powers of attorney, the contractor
(principal) demanded and collected from the
Republic the money the collection of which he
entrusted to New Manila, the agency
apparently has already been revoked. (Articles
1920 and 1924, NCC)
New Manila argued that the powers of attorney in its
favor are irrevocable and are coupled with interest.
Even supposing that they are, still their alleged
irrevocability cannot affect the Republic who is not a
party thereto. They are obligatory only on the
principal who executed the agency.
Plaintiff also cites Article 1729 of NCC:
Those who put their labor upon or furnish
materials for a piece of work undertaken by the
contractor have an action against the owner up
to the amount owing from the latter to the
contractor at the time the claim is made.
This article, however, "is subject to the provisions of
special law," which, here, is Act No. 3688.
New Manila’s action being a claim for sum of money
arising from an alleged implied contract between it
and the Republic should have been lodged with the
Auditor General as the state cannot be sued without
its consent. Affirmed.
DY BUNCIO & COMPANY, INC., plaintiff-appelle,
vs. ONG GUAN CAN, ET AL., defendants. JUAN
TONG and PUA GIOK ENG, appellants. - Chachu
FACTS
• This is a suit over a rice mill and camarin
situated at Dao, Province of Capiz. Plaintiff
claims that the property belongs to its judgment
debtor, Ong Guan Can, while defendants Juan
Tong and Pua Giok Eng claim as owner and
lessee of the owner by virtue of a deed dated
July 31, 1931, by Ong Guan Can, Jr.
• After trial the CFI of Capiz held that the deed
was invalid and that the property was subject to
the execution which has been levied on said
properties by the judgment creditor of the
owner. Defendants Juan Tong and Pua Giok bring
this appeal and insist that the deed of the 31st
of July, 1931, is valid.
• The first recital of the deed is that Ong Guan
Can, Jr., as agent of Ong Guan Can, the
proprietor of the commercial firm of Ong Guan
Can & Sons, sells the rice-mill and camarin for
P13,000 and gives as his authority the power of
attorney dated the 23d of May, 1928, a copy of
this public instrument being attached to the
deed and recorded with the deed in the office of
the register of deeds of Capiz.
• The receipt of the money acknowledged in the
deed was to the agent, and the deed was signed
by the agent in his own name and without any
words indicating that he was signing it for the
principal.
ISSUE 1. WON the power of attorney gives the
agent the power to alienate the property- NO
• The power of attorney is not a general power of
attorney but a limited one and does not give the
express power to alienate the properties in
question. (Article 1713 of the Civil Code.)
• Appellants claim that this defect is cured by
Exhibit 1, which purports to be a general power
of attorney given to the same agent in 1920.
ISSUE 2. WON this purported 2nd power of attorney
cured the defect in the first- NO
• Article 1732 of the Civil Code is silent over
the partial termination of an agency. The
making and accepting of a new power of
attorney, whether it enlarges or decreases the
power of the agent under a prior power of
attorney, must be held to supplant and
 revoke the latter when the two are
inconsistent. If the new appointment with
limited powers does not revoke the general
power of attorney, the execution of the second
power of attorney would be a mere futile
gesture.
• The title of Ong Guan Can not having been
divested by the so-called deed of July 31, 1931,
his properties are subject to attachment and
execution.
The judgment appealed from is therefore
affirmed.
JUAN GARCIA Y PALICIO, plaintiff and appellee,
vs. JOSEFA DE MANZANO, as administratrix of
the estate of her husband Narciso Lopez
Manzano, defendant and appellant.|February 4,
1919|MOIR, J.: - Hazel
1. Narciso Lopez Manzano1 gave a general
power-of-attorney to his son, Angel L.
Manzano on the 9th of February, 1910, and
on the 25th of March a second general
power-of-attorney to his wife, Josefa Samson.
2. Narciso L. Manzano had had various
commercial dealings with the plaintiff Garcia
in this case and renewed these dealings
before leaving for Spain.
3. Manzano was the owner of a half interest in a
small steamer, the San Nicolas, the other
half being owned by Ocejo, Perez & Co., with
whom there was a partnership agreement to
run the steamer for a few years.
4. When this period expired Ocejo, Perez & Co.,
refused to continue the contract and
demanded that Manzano buy or sell. As he
did not want to sell at the price offered and
could not buy, plaintiff Juan Garcia bought
the half interest held by Ocejo, Perez & Co.,
on the 15th of October, 1910.
5. Angel L. Manzano, acting under his power-of-
attorney, sold in July, 1911, the other half of
the boat to the plaintiff, but as Garcia is a
Spaniard and could not register the boat in
his name at the Custom House, the boat was
registered in the name of Agustin Garcia, a
son of the plaintiff, who at that time, was a
minor about twenty years old. Agustin Garcia
shortly thereafter died, leaving his parents as
his heirs at law, and as such heir, plaintiff's
wife was made a party.
1
was a merchant in Atimonan, Tayabas, who went to Spain in
May, 1910, and died there the 8th of September, 1913
6. Angel L. Manzano, by virtue of the power-of-
attorney from his father, Narciso L. Manzano,
executed a contract, Exhibit A, by which
Juan Garcia agreed to extend a credit to
Narciso L. Manzano in the sum of P12,000,
and this credit was used by Manzano.
7. To secure it, a mortgage was given in the
same document on three parcels of land in
Atimonan, with their improvements. The
registration of this mortgage was refused by
the registrar.
8. Upon death of Narciso, Josefa Samson y San
Pedro, was named as administratrix of the
property and no claims having been
presented against the estate to the
commissioners
9. CFI ordered the partition of the partition of
the property amongst the heirs of Narciso.
10. Plaintiff Garcia filed his action in the Court of
First Instance of Tayabas to foreclose the so-
called mortgage in Exhibit A.
11. Defendants, "Josefa de Manzano y otros,"
filed an answer on September 4, 1915,
stating they knew such a mortgage
document set up in the complaint existed,
but as they were not certain that Exhibit A
was an exact copy, they denied the
document; they denied its efficacy and legal
effect; they denied the jurisdiction of the
court to hear and decide the case, and
alleged that the action had prescribed.
CFI: The trial court held there was no legal
mortgage and gave judgment in favour of
plaintiff Garcia against Josefa Samson only.
ISSUE #1: WON the power-of-attorney to the wife
revoked the one to the son, in accordance with
article 17352 of the Civil Code.
HELD: NO. There is no proof in the record that the
first agent, the son, knew of the power-of-attorney
to his mother.
It was necessary under the law for the defendants,
in order to establish their counterclaim, to prove
that the son had notice of the second power-of-
attorney. They have not done so, and it must be
considered that Angel L. Manzano was acting under
a valid power-of-attorney from his father which had
not been legally revoked on the date of the sale of
the half interest in the steamer to the plaintiff's son,
2
"The appointment of a new agent for the same business
produces a revocation of the previous agency from the day on
which notice was given to the former agent, excepting the
provisions of the next preceding article."
which half interest was legally inherited by the
plaintiffs.
ISSUE#2: WON the power-of-attorney authorized the
sale of the boat by Angel L. Manzano.
HELD: YES. The power-of-attorney authorizes the
sale of real property, the buying of real property and
mortgaging the same, the borrowing of money and
in fact is general and complete.
The power does not expressly state that the agent
may sell the boat, but a power so full and complete
and authorizing the sale of real property, must
necessarily carry with it the right to sell a half
interest in a small boat. The record further shows
the sale was necessary in order to get money or a
credit without which it would be impossible to
continue the business which was being conducted in
the name of Narciso L. Manzano, and for his benefit.
We consider that the authorization is so complete
that it carries with it full authority to sell the one-half
interest in the boat which was then owned by
Narciso L. Manzano.
DISPOSITIVE: That part of the judgment ordering the
defendant Josefa Samson de Manzano to pay the
plaintiff 11,12,752.85 is revoked, and the judgment
in so far as it dismisses the counterclaim of the
defendants is affirmed, without any declaration of
costs. So ordered.
TORRES, J., with whom concurs ARAULLO, J.,
dissenting in part:
- the defendant Josefa Samson, widow of the
late Narciso Lopez Manzano, should be obliged
to pay one-half of the sum stated in her letter of
September 10, 1913, with interest at the rate of
6 per cent per annum from January 10, 1917, the
date on which the amended complaint was filed.
- It is contended that the conjugal partnership
property is directly liable for the payment of the
debts of such partnership and that in order to
determine what this property is, in case of the
death of one of the spouses, it is indispensable
that a liquidation be made of the property that
may have been left by the deceased husband or
wife, for the purpose of classifying and
separating in the estate the private property of
each spouse and such property as partakes of
the nature of community property.
- The record shows that, not only was the
liquidation made, but also that the partition of
the estate left by Narciso Lopez Manzano at his
death, had already been effected, so that it
appears duly determined what property as
community property would have pertained to the
widow, Josefa Samson; and, as it is a proven
fact, and one not discussed, that, on the death of
the husband Manzano, the dissolved conjugal
partnership was in debt to the plaintiff in the
sum of P12,752.85. Under this premise it is
unquestionable that the widow Samson, the
surviving member of that partnership, should be
obliged to pay one-half of this sum, that is
P6,376.425, for it would not be right for her to
enrich herself by keeping possession of this
amount, to the prejudice of the plaintiff creditor.
Rallos v Yangco|G.R. No. 6906|September 27,
1911 - Naty
Quick Summary:
Yangco opened a steamship office and proceeded to
do business with Rallos in the buying and selling of
tobacco. In his invitation letter, he indicated that
Collantes was his agent, equipped with a public
power of attorney, and authorized to perform in his
name and on his behalf all acts necessary for
carrying out his plans. Plaintiffs, as according to
their practice, sent 218 bundles of tobacco in the
leaf to be sold on commission. They were unable to
collect the sum of PhP1,537.08 for this shipment as
amount was apparently converted to agent’s own
use. The court held that Yangco is liable since he
failed to send actual or constructive, of the
termination of such relationship. Unknown to the
defendant, Yangco had already severed his
business relationship with Collantes. Rallos cannot
be prejudiced (Art. 1921).
Facts:
Collantes is an agent of Yangco, the owner of the
steamship company and doing business with the
defendant. Yangco had previously introduced
Collantes through a letter to them as his agent,
equipped with a public power of attorney, and
authorized to act in his name and on his behalf.
On February 1909, plaintiffs sent to the said
Collantes, as agent for the defendant, 218 bundles
of tobacco in the leaf to be sold on commission, as
had been other produce previously. The said
Collantes received said tobacco and sold it for the
sum of P1,744. The charges for such sale were
P206.96. leaving in the hands of said Collantes the
sum of P1,537.08 belonging to the plaintiffs. This
sum was, apparently, converted to his own use by
said agent.
However, prior to the sending of said tobacco, the
defendant had severed his relations with Collantes
and that the latter was no longer acting as his
factor. This fact was not known to the plaintiffs; and
it is conceded in the case that no notice of any kind
was given by the defendant to the plaintiffs of the
termination of the relations between the defendant
and his agent. The defendant refused to pay the
said sum upon demand of the plaintiffs, placing such
refusal upon the ground that at the time the said
tobacco was received and sold by Collantes he was
acting personally and not as agent of the defendant.
This action was brought to recover said sum.
Issue:
Whether or not the plaintiffs, acting in good faith
and without knowledge, having sent produce to sell
on commission to the former agent of the
defendant, can recover from the defendant.
Held:
Yes, the defendant is liable. Having advertised the
fact that Collantes was his agent and having given
them a special invitation to deal with such agent, it
was the duty of the defendant on the termination of
the relationship of principal and agent to give due
and timely notice thereof to the plaintiffs. Failing to
do so, he is responsible to them for whatever goods
may have been in good faith and without negligence
sent to the agent without knowledge, actual or
constructive, of the termination of such relationship.
CMS Logging v. CA| 211 SCRA 375 (1992)|
Nocon, J.- Elaine
Facts:
CMS Logging is a forest concessionaire engaged in
logging business while DRACOR is engaged in
exporting and selling logs and lumber. On Aug. 28,
1957, the parties entered into a contract of agency
whereby CMS appointed DRACOR as its sales agent
for all logs that it may produce, for a period of 5
years.
By virtue of the agreement, CMS was able to sell
through DRACOR a total of 77,264,672 board feet of
logs in Japan from April 20, 1957 to April 4, 1962.
About 6 months before the expiration of the
contract, the CMS president Atty. Carlos Moran Sison
and general manager and legal counsel Atty.
Teodoro R. Dominguez discovered that DRACOR had
used Shinko Trading as agent in selling the logs in
Japan for which Shinko earned a commission of US
$1 per 1000 board feet for a total of US$77,264.67.
CMS claimed that this commission to Shinko was in
violation of the agreement and is entitled to this
amount as DRACOR had already been paid the 5%
commission under the agreement. After this
discovery, CMS shipped logs directly to several firms
in Japan without aid or intervention of DRACOR for a
total of US$739,321.13 or P2,883,351.90. CMS sued
DRACOR for the commission received by Shinko
while DRACOR filed a counterclaim for its own
commission from the CMS' direct sale to Japanese
firms.
The trial court dismissed the complaint while the CA
affirmed.
Issues:
a.Whether or not CMS is entitled to the commission
received by Shinko;
b.Whether or not the contract of agency was
revoked by CMS?
c.Is DRACOR still entitled to commission?
Held:
a.NO. There is no evidence to establish that Shinko
did receive the amount of US$77,264.67 as
commission arising from the sale of CMS' logs to
Japan. It was not established by the testimonies and
letters of the witnesses including Atty. Dominguez
since the same were mere hearsays. The letters
presented also cannot be considered as admissions
since it did not categorically declare that Shinko in
fact receive the commissions. Even if it was shown
that Shinko received the commissions in question,
CMS is not entitled thereto since these were
apparently paid by the buyers to Shinko for
arranging the sale.
b.YES. The principal may revoke a contract of
agency at will, and it may be express or implied, and
may be availed of even if the period fixed in the
contract of agency has not yet expired. As the
principal has this absolute right to revoke the
agency, the agent cannot object thereto; neither
may he claim damages arising from such
revocation, unless it is shown that such was done in
order to evade the payment of agent's commission.
In this case, DRACOR admitted that CMS sold its logs
directly to the Japanese firms during the existence
of the contract of agency. This constitutes implied
revocation under Art. 1924 which provides that:
"The agency is revoked if the principal directly
manages the business entrusted to the agent,
dealing directly with third persons."
c.NO. Since the contract of agency was revoked by
CMS when it sold its logs to Japanese firms without
the intervention of DRACOR, the latter is no longer
entitled to its commission from the proceeds of such
sale and is not entitled to retain whatever money it
may have received as its commission for said
transactions. Neither could it collect damages from
CMS since damages are not generally awarded to
the agent for revocation of the agency and the case
does not fall under the exception , which is to evade
the payment of the agent's commission. Judgment
MODIFIED.
JOSE DE LA PEA Y DE RAMON, plaintiff-
appellant, vs.
FEDERICO HIDALGO, defendant-appellant.| G.R.
No. L-5486, 1910| TORRES, J.:| Kat
In the original decision of TC, it ruled in favor of the
plaintiff-administrator Jose De La Pea y De Ramon
for P13,606.19 and legal interest from the date of
the filing of the complaint and the costs of the trial.
Both Jose De La Pea y De Ramon and Federico
Hidalgo appealed and the latter presented a written
motion for new hearing, alleging the discovery of
new evidence favorable to him which would
necessarily influence the decision which was
granted.
Jose dela Peña y de Ramon, and Vicenta de Ramon,
in her own behalf and as the legal guardian of her
son Roberto de la Peña, filed in the CFI of Manila the
original and first complaint drawn against Federico,
Antonio, and Francisco Hidalgo, who had
successively administered the property3 of Jose de la
Peña y Gomiz, now deceased; but later the action
was directed only against Federico; the
administration of the property, from the time its
owner left these Islands and returned to Spain,
lasted from November 18, 1887, to January 7, 1904;
and third, the administration by Federico4, Antonio5,
and Francisco Hidalgo6 should be divided in their
respective periods.
Before Peña y Gomiz embarked for Spain, on
November 12, 1887, he executed before a notary a
power of attorney in favor of Federico Hidalgo,
Antonio L. Rocha, Francisco Roxas and Isidro Llado,
so that, as his agents, they might represent him and
administer, in the order in which they were
appointed, various properties he owned and
possessed in Manila. Federico Hidalgo took charge
of the administration of the properties on November
18, 1887.
After Federico had occupied the position of agent
and administrator for several years, he wrote to his
principal requesting him to designate a person who
might substitute him in his position in the event of
his being obliged to absent himself from these
Islands, as one of those appointed in the said power
of attorney had died and the others did not wish to
take charge of the administration of their principal's
property. Hidalgo, stated that, Peña y Gomiz, did not
answer his letters, to approve or object to the
former's accounts, and did not appoint or designate
another person who might substitute Federico in his
administration of his constituent's property.
3
(1) house and lot at No. 48 Calle San Luis; (1) house and lot at
No. 6 Calle Cortada; (1) house and lot at 56 Calle San Luis, and
(1) fenced lot on the same street, all of the district of Ermita,
and (1) house and lot at No. 81 Calle Looban de Paco
4
From November 18, 1887, to December 31, 1893, the property
of the absent Jose de la Peña y Gomiz was administered by his
agent, Federico Hidalgo, under power of attorney
5 rendered the accounts pertaining to the years 1892-
From January 1, 1894, to September, 1902, Antonio Hidalgo
administered the said property
6
From October, 1902, to January 7, 1904, Francisco Hidalgo was
its administrator.
For reasons of health and by order of his physician,
Federico was obliged, on March 22, 1894, to embark
for Spain, and, on preparing for his departure, he
rendered the accounts of his administration
corresponding to the last quarters, up to December
31, 1893, not as yet transmitted, and forwarded
them to his constituent with a general statement of
all the partial balances, which amounted to
P6,774.50, by letter dated March 22, 1894,
addressed to his principal, Peña y Gomiz. In this
letter Federico informed the latter of the writer's
intended departure for Spain and of his having
provisionally turned over the administration of the
property to his cousin, Antonio Hidalgo, upon whom
the writer had conferred a general power of
attorney, but asking, in case that this was not
sufficient, that Peña send to Antonio Hidalgo a new
power of attorney.
Four causes of action of plaintiff as to Federico’s
liability:
1. P72,548.24 and interest thereon which covers the
collected rents and income from the properties (from
November 12, 1887 to January 7, 1904, when Federico
Hidalgo had possession of and administered the
properties) constitutive of P50,244 collected in partial
amounts which Federico failed to deposit as per verbal
agreement b/w Federico and his principal in the general
treasury of the Spanish Government at 5% interest per
annum, with the exception of P1,289.03
2. P6,751.60 (inclusive of interest where the original
amount P6,360 was deposited by Gonzalo Tuason in the
general treasury of the Spanish Government, to the
credit of Peña y Gomiz, at 5% interest per annum, and on
December 20, 1888, Federico, as agent, withdrew said
amount with its interest and disposed of it for his own use
and benefit, notwithstanding the demands made upon
him) plus interest thereon
3. P4,402.76 with 5% interest p.a., compounded yearly, to
the time of filing of complaint and w/ 6% interest from
then which was based on the P6K (3K each) remitted
from Singapore by Peña y Gomiz, on his voyage to Spain,
to Fr. Ramon Caviedas, a Franciscan friar residing in this
city, with the request to deliver the same to Federico,
who, on receiving this money, appropriated it to his own
use and benefit, and only remitted to Peña y Gomiz in
Spain, by drafts of, P737.24 and P860, without having
returned or paid the balance of the sum, notwithstanding
demands upon him so to do
4. P2K he (on his arrival from Spain and w/o having any
knowledge or information of the true condition of affairs
relative to the property of Peña y Gomiz and its
administration) paid to Federico at the latter’s request,
derived from the property of the deceased, which
Federico has not returned despite demands upon him.
Federico Hidalgo alleged:
1. That prior to March 22 (when Federico left for Spain
for treatment), Federico came, rendered accounts to his
principal, and on the date when he embarked for Spain
1893, which were those that yet remained to be
forwarded, and transmitted to him a general statement of
accounts from November 18, 1887, to December 31,
1893, with a balance of P6,774.50 in favor of Peña y
 Gomiz, which remained in the control of the acting
administrator, Antonio Hidalgo; when Federico left these
Islands, he has not again intervened nor taken any part
directly or indirectly in the administration of the property
of Peña y Gomiz, the latter's administrator by express
authorization having been Antonio Hidalgo, who later
delegated his powers to Francisco Hidalgo; that from
1887 to December 31, 1893, which accounts the plaintiff
approved without any protest whatever and received to
his entire satisfaction the balance due and the vouchers
and documents and documents relating to the property
of the deceased Peña y Gomiz and issued to Federico the
proper acquaintance therefor.
2. that Jose de la Peña y Gomiz, on several occasions
ordered Federico Hidalgo through Fr. Caviedas, to collect
the interest from the principal amount from the caja
general de depositos (General Deposit Bank) with the
corresponding deposit receipt and the draft on London for
their transmittal to Peña y Gomiz: all of which was
performed by Federico from the Chartered Bank of India,
Australia and China and delivered the draft, together with
the receipt from the General Deposit Bank, to Fr.
Caviedas, and to again deposit the P5,500, in the Bank in
Peña y Gomiz's own name, then Fr. Caviedas delivered to
Federico, by order of Peña y Gomiz, the deposit receipt
for P5,500 with the request that he withdraw from the
General Deposit Bank the capital and accrued interest,
which amounted altogether to P5,775, and that he deliver
this amount to Father Caviedas, which he did, in order
that it might be remitted to Peña y Gomiz.
3. The defendant denied each of the allegations
contained in the 3rd and 4th causes of action, and avers
that they are all false and calumnious.
As a counterclaim, Federico alleges that Peña y Gomiz owed
him P4K with 6%interest p.a., and P3,600, and on the
plaintiff's being presented with the receipt subscribed by his
father, Peña y Gomiz, evidencing his debt, plaintiff freely and
voluntarily offered to exchange for the said receipt another
document executed by him, and transcribed in the complaint
and that plaintiff has not paid him the said sum, with the
exception of P2K.
TC: Federico Hidalgo owed plaintiff P37,084.93; plaintiff
was not entitled to recover any sum from Federico for
the second, third, and fourth causes of action; plaintiff
owed Federico P10,155, which Federico was entitled to
deduct from the sum he owed plaintiff. Judgment was
against Federico to pay P26,629.93, with 6% interest p.a.
from May 23, 1906, and the costs.
Plaintiff prayed for the execution of the judgment,
but Federico solicited a suspension of the issuance
of the writ of execution until his motion for appeal is
approved, which was granted upon the defendants
giving a bond for P34K.
Issue: WON Federico is liable to the plaintiff-
administrator of the estate for the amounts covering
his administration, that of Antonio, and that of
Francisco
Held: NO. Federico Hidalgo is only liable for the
results and consequences of his administration
during the period when the said property was in his
charge, and therefore his liability cannot extend
beyond the period of his management.
On renunciation of agency by Federico Hidalgo
From the procedure followed by Federico
Hidalgo, it is logically inferred that he had
definitely renounced his agency was duly
terminated, according to the provisions of article
1732 of CC, because, although in the said letter of
March 22, 1894, the word "renounce" was not
employed in connection with the agency or power of
attorney executed in his favor, yet when the agent
informs his principal that for reasons of health
and by medical advice he is about to depart
from the place where he is exercising his trust
and where the property subject to his
administration is situated, abandons the
property, turns it over a third party, without
stating when he may return to take charge of
the administration, renders accounts of its
revenues up to a certain date, December 31,
1893, and transmits to his principal a general
statement which summarizes and embraces all
the balances of his accounts since he began to
exercise his agency to the date when he
ceased to hold his trust, and asks that a power
of attorney in due form in due form be
executed and transmitted to another person
who substituted him and took charge of the
administration of the principal's property, it is
then reasonable and just to conclude that the
said agent expressly and definitely renounced
his agency.
This renouncement was confirmed by the
subsequent procedure, as well as of the agent as of
the principal, until the latter died, on August 2,
1902, since the principal Peña did not
disapprove the designation of Antonio
Hidalgo, nor did he appoint another, nor send
a new power of attorney to the same, as he was
requested to by the previous administrator who
abandoned his charge; and the trial record certainly
contains no proof that Federico, since he left these
Islands until his return, took any part whatever,
directly or even indirectly, in the said administration
of the principal's property, while Antonio Hidalgo
was the only person who was in charge of the
aforementioned administration of De la Peña y
Gomiz's property and the one who was to represent
the latter in his business affairs, with his tacit
consent. Antonio Hidalgo acted in the matter of
the administration of the property of Jose de
la Peña y Gomiz by virtue of an implied agency
derived from the latter, in accordance with article
1710 of CC.
On receipt of letters by Pena y Gomiz written by
Federico
The statements of Federico regarding the letters he
sent to his principal of his designation of Antonio as
administrator since he will leave for Spain for health
reasons were proven by letters, but denied by
plaintiff, but on the introduction of a copy thereof by
Federico at the trial, it was admitted without
objection by the plaintiff; this letter of the 22d of
March, 1894 shows conclusively that it was received
by the deceased, and the letter of transmittal of the
22nd of March, 1894, one of the several letters
written by Hidalgo, which Fr. Gomiz, affirms that he
saw among the papers of the deceased Peña, the
dates were from 1890-1894; From all of which it is
deduced that Peña y Gomiz was informed of the
departure of his agent from these Islands for
reasons of health and because of the physician's
advice, of the latter's having turned over the
administration of the property to Antonio Hidalgo,
and of his agent's the defendant's petition that he
send a new power of attorney to the substitute.
On implied agency of Antonio Hidalgo
The proof of the tacit consent of the principal, Jose
de la Peña y Gomiz consists in that Peña, knowing
that on account of the departure of Federico from
the Philippines, requested him to send a new power
of attorney in favor of the said Antonio,
nevertheless, Peña y Gomiz saw fit not to execute
nor transmit any power of attorney whatever to the
new administrator of his property and remained
silent for nearly 9 years; in permitting Antonio
Hidalgo to administer his property in this city
during such 8 years, it is inferred, from the
procedure and silence of the owner thereof,
that he consented to have Antonio Hidalgo
administer his property, and in fact created in
his favor an implied agency, as the true and
legitimate administrator.
On lack of authority to substitute the power of
agency
The designation of Antonio Hidalgo was not
made as a result of substitution of the power
of attorney executed by Peña in favor of the
defendant, but in order that the principal's
property should not be abandoned.
As to Antonio Hidalgo’s liability
Federico Hidalgo could not and can not be
responsible for the administration of the property
which was administered by Antonio during 8 years
and some months because of the sole fact of his
having turned over to the latter the administration
of the said property on his departure for Spain. The
care of the property and interests of another does
not require sacrifice on the part of the agent of his
own life and interests. Federico was obliged to
deliver the said property belonging to Peña y Gomiz
to Antonio for good and valid reasons, and reasons,
and in proceeding in the manner he complied with
the duty required of him by law and justice and
acted as a diligent agent.
As to liability of Federico for Francisco’s
administration
If Federico is not responsible for the results of the
administration by Antonio, neither is he responsible
for that performed by Francisco, as the latter was
not even chosen by Federico, who, on October 1,
1902, when Francisco took charge of Peñas'
property that had been turned over to him by
Antonio, was in Spain and had no knowledge of nor
intervention in such delivery; wherefore Federico
can in no manner be obliged to pay to the plaintiff
any sum that may be found owing by Francisco.
Francisco Hidalgo rendered accounts to the plaintiff
of the administration of the property in question
during the third period (for 1 year, 3 months) and
that he delivered to the plaintiff the balance of
P1,280.03, for which the latter issued to Francisco
the document written in his own handwriting and
the signature which, affixed by himself, he admitted
in his testimony was authentic—plaintiff was not
entitled to recover any sum whatever for the rents
pertaining to the administration by Francisco.
As to last partial accounts made by Federico
Peña y Gomiz remained silent and offered no
objection to the said accounts and did not manifest
his disapproval of the same nor of the general
statement; and when his son, the plaintiff, came to
this city in company with Federico from Spain and
arrived in Manila, the former, for the purpose of
taking charge of the estate left by his father, and
after the plaintiff had examined the accounts kept
by Federico, he approved them and therefore issued
in favor of Federico the in which Peña y de Ramon
acknowledged having received from his deceased
father's old agent the accounts, balances, and
vouchers to his entire satisfaction, and gave an
acquittance in full settlement of the administration
that had been commended to the defendant
Hidalgo. This document contains no proof of any
kind of Federico Hidalgo's having obtained it by
coercion, intimidation, deceit, or fraud; neither is its
shown to have been duly impugned as false,
criminally or civilly.
With respect to the responsibility contracted by the
defendant,
It is not enough that the agent should have
satisfactorily rendered the accounts pertaining to his
trust, but it is also indispensable that it be proved
that he had paid to his principal, or to the owner of
the property administered, the balance resulting
from his accounts. This balance amounts to
P6,774.50. It was the imperative duty of Federico to
transmit this to his principal, Peña y Gomiz, as the
final balance of the accounts of his administration
and failure so to do and delivery of the same to his
successor, Antonio, he acted improperly, and must
pay the same to the plaintiff.
As to the 2nd cause of action of plaintiff
The 2 amounts of P3K each, expressed in two
deposit receipts received from De la Peña y
Gomiz by Fr. Caviedas and later delivered to
Francisco Hidalgo for the successive
operations of remittance and redeposit in the
bank before mentioned, are the same and only
ones that were on deposit in the said bank in
the name of their owner, Peña y Gomiz. Hence,
plaintiff was not entitled to recover any sum for the
second and third causes of action, notwithstanding
that plaintiff withdrew the third cause of action.
Liability of Pena y Gomiz to Federico Hidalgo
Peña y Gomiz owed, during his lifetime, to Federico
Hidalgo, P7,600, P4K of which were to bear 6%
interest p.a., and the remainder w/o any interest,
and that, notwithstanding the lapse of the period of
3 years, from November, 1887, within which he
bound himself to repay the amount borrowed, and in
spite of his creditor's demand of payment, made by
registered letter, the debt was not paid up to the
time of the debtor's death. But, to deduct the P2K
which Federico received from the plaintiff on
account of the credit.
As to interest
It was not expressly stipulated that either the balance of
the last account rendered by the Federico in 1893, or the
sum which the plaintiff bound himself to pay to Federico,
in the instrument of 1904, should bear interest; nor is
there proof that a demand was made, on the part of the
respective creditors, until the date of complaint, on the
part of the plaintiff, and that of the counterclaim, on the
part of Federico.
FEDERICO VALERA, Plaintiff-Appellant , vs.
MIGUEL VELASCO, Defendant-Appellee. - Chachu
FACTSs
• By virtue of the powers of attorney, Exhibits X
and Z, executed by the plaintiff on April 11,
1919, and on August 8, 1922, the defendant was
appointed attorney-in-fact of the said plaintiff
with authority to manage his property in the
Philippines, consisting of the usufruct of a real
property located of Echague Street, City of
Manila.
• The defendant accepted both powers of
attorney, managed plaintiff's property, reported
his operations, and rendered accounts of his
administration; and on March 31, 1923
presented exhibit F to plaintiff, which is the final
account of his administration for said month,
wherein it appears that there is a balance of
P3,058.33 in favor of the plaintiff.
• The liquidation of accounts revealed that the
plaintiff owed the defendant P1,100, and as
misunderstanding arose between them, the
defendant brought suit against the plaintiff and
udgment was rendered in his favor and after the
writ of execution was issued, the sheriff levied
upon the plaintiff's right of usufruct, sold it at
public auction and adjudicated it to the
defendant in payment of all of his claim. virtual
law library
• Subsequently, the plaintiff sold his right of
redemption to one Eduardo Hernandez, for the
sum of P200. This purchaser conveyed the same
right of redemption, for the sum of P200, to the
plaintiff himself, Federico Valera. virtual law
library
• After the plaintiff had recovered his right of
redemption, one Salvador Vallejo, who had an
execution upon a judgment against the plaintiff
rendered in a civil case against the latter, levied
upon said right of redemption, which was sold by
the sheriff at public auction to Salvador Vallejo
for P250 and was definitely adjudicated to him.
Later, he transferred said right of redemption to
the defendant Velasco.
• This is how the title to the right of usufruct to the
aforementioned property later came to vest the
said defendant.
ISSUE 1. WON one of the ways of terminating an
agency is by the express or tacit renunciation of the
agent and WON the institution of a civil action and
the execution of the judgment obtained by the
agent against his principal is but renunciation of the
powers conferred on the agent- YES
• Article 1732 of the Civil Code reads as follows:
Art. 1732. Agency is terminated:
1. By revocation;
2. By the withdrawal of the agent;
3. By the death, interdiction, bankruptcy, or
insolvency of the principal or of the agent.
• And article 1736 of the same Code provides that:
Art. 1736. An agent may withdraw from the agency
by giving notice to the principal. Should the latter
suffer any damage through the withdrawal, the
agent must indemnify him therefore, unless the
agent's reason for his withdrawal should be the
impossibility of continuing to act as such without
serious detriment to himself.
• The misunderstanding between the plaintiff and
the defendant over the payment of the balance
of P1,000 due the latter, as a result of the
liquidation of the accounts between them arising
from the collections by virtue of the former's
usufructuary right, who was the principal, made
by the latter as his agent, and the fact that the
said defendant brought suit against the said
principal for the payment of said balance, more
than prove the breach of the juridical relation
between them; for, although the agent has not
expressly told his principal that he renounced
the agency, yet neither dignity nor decorum
permits the latter to continue representing a
person who has adopted such an antagonistic
attitude towards him.
• When the agent filed a complaint against
his principal for recovery of a sum of
money arising from the liquidation of the
accounts between them in connection with
the agency, Federico Valera could not have
understood otherwise than that Miguel
Velasco renounced the agency; because his
act was more expressive than words and could
not have caused any doubt. In order to
terminate their relations by virtue of the agency
the defendant, as agent, rendered his final
account on March 31, 1923 to the plaintiff, as
principal. law library
• Briefly, then, the fact that an agent
institutes an action against his principal for
the recovery of the balance in his favor
resulting from the liquidation of the
accounts between them arising from the
agency, and renders and final account of
his operations, is equivalent to an express
renunciation of the agency, and terminates
the juridical relation between them.
• If, as we have found, the defendant-appellee
Miguel Velasco, in adopting a hostile attitude
towards his principal, suing him for the collection
of the balance in his favor, resulting from the
liquidation of the agency accounts, ceased ipso
facto to be the agent of the plaintiff-appellant,
said agent's purchase of the aforesaid principal's
right of usufruct at public auction held by virtue
of an execution issued upon the judgment
rendered in favor of the former and against the
latter, is valid and legal, and the lower court did
not commit the fourth and fifth assignments of
error attributed to it by the plaintiff-appellant.ch
ISSUE 2: WON the sale to Hernandez by Valero is
valid- NO
• It is deemed unnecessary to discuss the
validity of the sale made by Federico Valera to
Eduardo Hernandez of his right of redemption in
the sale of his usufructuary right made by the
sheriff by virtue of the execution of the judgment
in favor of Miguel Velasco and against the said
Federico Valera; and the same thing is true as to
the validity of the resale of the same right of
redemption made by Eduardo Hernandez to
Federico Valera; inasmuch as Miguel
Velasco's purchase at public auction held
by virtue of an execution of Federico
Valera's usufructuary right is valid and
legal, and as neither the latter nor Eduardo
Hernandez exercised his right of
redemption within the legal period, the
purchaser's title became absolute.
• Moreover, the defendant-appellee, Miguel
Velasco, having acquired Federico Valera's
right of redemption from Salvador Vallejo,
who had acquired it at public auction by
virtue of a writ of execution issued upon
the judgment obtained by the said Vallejo
against the said Valera, the latter lost all
right to said usufruct. law library
• And even supposing that Eduardo Hernandez
had been tricked by Miguel Velasco into selling
Federico Valera's right of repurchase to the
latter so that Salvador Vallejo might levy an
execution on it, and even supposing that said
resale was null for lack of consideration, yet,
inasmuch as Eduardo Hernandez did not present
a third party claim when the right was levied
upon for the execution of the judgment obtained
by Vallejo against Federico Vallera, nor did he
file a complaint to recover said right before the
period of redemption expired, said Eduardo
Hernandez, and much less Federico Valera,
cannot now contest the validity of said resale,
for the reason that the one-year period of
redemption has already elapsed.
ISSUE 3: WON Miguel Velasco has to render a
liquidation of accounts from March 31, 1923- NO
• inasmuch as Velasco had acquired the rights of
the plaintiff by purchase at the execution sale,
and as purchaser, he was entitled to receive the
rents from the date of the sale until the date of
the repurchase, considering them as part of the
redemption price; but not having exercised the
right repurchase during the legal period, and the
title of the repurchaser having become absolute,
the latter did not have to account for said rents.
CONSOLACION L. RAMOS, administratrix-
appellant, vs. BENIGNO A. CAOIBES, attorney-in-
fact-appellee.|G.R. No. L-5142| February 26, 1954|
JUGO, J.: - Hazel
Principal: Concepcion Ramos
ATTY-in fact: Benigno A. Caoibes

QUICK SUMMARY:
Concepcion Ramos executed 2 documents. The first
is a power of attorney appointing Caoibes to collect
from Phil. War damage Commission any claim
regarding property lost during the last war. The 2nd
document is an affidavit stating that any claim
made- half to be given to her sister and the other to
Caoibes. Before Ramos died, she filed a claim with
the Commission. This was encashed by Caoibes
after death of Ramos thru the power of atty.
Administratrix Consolacion Ramos discovered the
collection made by Caoibes. She filed a motion with
the court asking that Caoibes be ordered to deposit
the sum of P501.62 with the clerk of court. Caoibes
was willing to deliver P250. This was refused by
administratrix. TC ruled in favour of Caoibes. SC
reversed. Held: When Caoibes made use of the
power of attorney, his principal, Concepcion
was already dead
1. Concepcion Ramos Dipusoy executed before a
notary public two documents which have been
marked as Annex "A" and Annex "B.
2. ANNEX A- a power of attorney- constituting and
appointing Mr. Benigno A. Caoibes.. ”to collect
any amount due me(Ramos) from the Philippine
War Damage Commission, regarding my claim
filed for my properties that were lost during the
last war in Balayan, Batangas, to cash checks,
warrants and to sign receipts, vouchers,
documents which shall be necessary to the said
purpose.”
3. ANNEX B- an affidavit stating that “at in case
payment of any amount or amounts collected
from the Philippine War Damage Commission, my
nephew and at the same time attorney-in-fact,
shall give my sister Teopista Vda. de Basa one-
half , of the corresponding amount and the other
half shall be given to my nephew and niece Mr.
and Mrs. Benigno A. Caoibes”
4. Concepcion Ramos died on August 19, 1948,
leaving a will dated January 7, 1927 admitted to
probate on October 4, 1948, in which she ordered
that the credits due to her be distributed among
the children of the deceased Antonino Ramos,
namely, Consolacion, Ramon, Socorro and Cirila
5. One year before she died, Concepcion Ramos
filed with the War Damage Commission a claim.
6. The Commission issued a check, in the amount of
P501.62, payable to the deceased Concepcion
Ramos. This check was returned to the
Commission and substituted by the latter on
November 10, 1948, for the same amount, but
payable to Benigno A. Caoibes, who had
presented to said entity Annexes "A" and "B, in
order to exchange the first check which he
cashed for himself.
7. Annexes "A" and "B" were presented to the
Commission by Caoibes after the death of
Concepcion.
8. The administratrix, Consolacion L. Ramos, the
appellant herein, discovered the collection made
by Caoibes when she saw the note "previous
payment" which appeared in the account sent to
her by the Commission on October 13, 1950.
9. She filed a motion with the court asking that
Caoibes be ordered to deposit the sum of P501.62
with the clerk of court.
10. Caoibes contended that, by virtue of Annex
"A", and Annex "B", he had the right to retain, for
himself, half of the sum of P501.62. He was
however willing to deliver to the clerk the sum of
P250.81
11. TC: ordered Caoibes to deposit P250.81 at
the disposal of the administratrix and the other
parties in this intestate proceedings
ISSUE: WON atty-in-fact Caoibes is obliged to
deliver the full amount of the check P501.62.
HELD. YES
RATIO
- Annex A is only a power of attorney. Caoibes, as
agent, had the obligation to deliver the amount
collected by virtue of said power to his principal,
Concepcion, or, after her death, to the
administratrix of her estate, Consolacion.
- There is absolutely no cession of rights made in
favor of Caoibes in Annex "A", and under Article
1711 of the old Civil Code (which was in force at
the time of the transaction), the contract of
agency is presumed to be gratuitous, unless the
agent is a professional agent. There is no proof
that Caoibes was such.
- Furthermore, according to Article 1732 of
said Code, an agency is terminated, among
other causes, by the death of the principal
or of the agent. When Caoibes made use of
the power of attorney, his principal,
Concepcion was already dead.
- Coming now to Annex "B", the alleged document
of donation, it should be noted that it is not a
donation of real but of personal property and is
governed by article 632 of the old Civil Code.
- The alleged donation was made in writing but it
has not been accepted in the same form, and
consequently, has no validity. It cannot be
considered a donation upon valuable
consideration, for no services nor any valuable
consideration had passed from the donees to the
donor.
- The mere fact that Caoibes collected the claim
from the War Damage Commission is not such a
service as to require compensation. Caoibes did
not even prepare the claim.
- The court below in its order of June 15, 1951, said
that it "having had the opportunity to personally
 confer with the parties and Attorney Caoibes
being agreeable to turn over the amount of
P250.81 to the Clerk of this Court in final
settlement of this matter - it is ordered that the
said Atty. Caoibes deposit the amount of P250.81
with the Clerk of this Court, the said amount to be
at the disposal of the administratrix and the other
parties in these intestate proceedings. With this
order, the matter before the administratrix never
consented to the reduction of the claim.
Dispositive: reversed and Benigno A. Caoibes is
ordered to deposit with the Clerk of Court of
Batangas the sum of P501.62 to be at the disposal
of the administratrix in her capacity as such, without
pronouncement as to costs. So
ordered.chanroblesvirtualawlibrary chanrobles
virtual law library
Herrera v Luy Kim Guan
G.R. No. L-17043
January 31, 1961
Quick Summary:
Plaintiff is the legitimate daughter of the Luis
Herrera, previous owner of three lots with
improvements. Prior to leaving for China, Luis
Herrera executed in 1931 a deed of General Power
of Attorney which authorized and empowered the
defendant Kim Guan, among others to administer
and sell these properties. Sale of the lots were
effected in 1931, 1937 and 1939. As admitted by
both parties (plaintiffs and defendants), Luis Herrera
is now deceased, but as to the specific and precise
date of his death the evidence of both parties failed
to show. Plaintiff posits that all the transactions
mentioned in the preceding quoted portion of the
decision were fraudulent and were executed after
the death of Luis Herrera and, consequently, when
the power of attorney was no longer operative. The
court held the sale valid as plaintiff was unable to
satisfy the court in proving that Herrera died in
1936. The notice letter from “Candi” did not even
name Luis Herrera and was properly rejected by the
court. There was also positive testimony from Chung
Lian that he saw Luis Herrera alive when he visited
him in 1940. Even ranting arguendo that Luis
Herrera did die in 1936, plaintiffs presented no
proof and there is no indication in the record, that
the agent Luy Kim Guan was aware of the death of
his prince at the time he sold the property. The
death of the principal does not render the act of an
agent unenforceable, where the latter had no
knowledge of such extinguishment the agency.
Facts:
The Plaintiff Natividad Herrera is the legitimate
daughter of Luis Herrera, now deceased and who
died in China sometime after he went to that
country in the last part of 1931 or early part of
1932. The said Luis Herrera in his lifetime was the
owner of three (3) parcels of land and their
improvements, known as Lots 1740, 4465 and 4467.
Before leaving for China, however, Luis Herrera
executed on December 1, 1931, a deed of General
Power of Attorney, Exhibit 'B', which authorized and
empowered the defendant Kim Guan, among others
to administer and sell the properties of said Luis
Herrera.
These lots were later sold by the defendant Luy Kim
in his capacity as attorney-in-fact of the deceased
Luis Herrera to Luy Chay on September 11, 1939.
Transfer Certificate of Title was issued to Luy Chay
by virtue of deed of sale. On August 28, 1941, to
secure a loan of P2,00 a deed of mortgage to the
Zamboanga Mutual Building and Association was
executed by Luy Chay. On January 31, 1947, the
said Luy Chay executed a deed of sale in favor of
Lino Bangayan.
One half (½) participation in the two lots, was sold
to Nicomedes Salaza and to the defendant Luy Kim
Guan. On August 4, 1937, the defendant Luy Kim
Guan and Nicomedes Salazar executed a deed of
mortgage in favor of Bank of the Philippine Islands
to secure a loan of P3,500.00. On August 17, 1937,
the defendant Luy Kim Guan and Nicomedes Salazar
sold Lot 4465 to Carlos Eijansantos . Nicomedes
Salazar sold his one half (½) interest on Lot 4467 to
the defendant Lino Bangayan for P3,000.00 on
February 22, 1949 and the corresponding Transfer
Certificate of Titlewas issued to Lino Bangayan and
to Luy Kim Guan, both becoming co-owners in equal
shares.
As admitted by both parties (plaintiffs and
defendants), Luis Herrera is now deceased, but as to
the specific and precise date of his death the
evidence of both parties failed to show. It is the
contention of plaintiff-appellant that all the
transactions mentioned in the preceding quoted
portion of the decision were fraudulent and were
executed after the death of Luis Herrera and,
consequently, when the power of attorney was no
longer operative.
Issue:
Were the sale transactions null and void and of no
effect because they were executed by the attorney-
in-fact after the death of his Principal? Did Kim Guan
cease being the agent of Luis Herrera upon his
death?
Held:
Coming now to the contention that these
transactions are null and void and of no effect
because they were executed by the attorney-in-fact
after the death of his Principal, suffice it to say that
as found by the lower court, the date of death of
Luis Herrera has not been satisfactorily proven. The
only evidence presented by the Plaintiff-appellant in
this respect is a supposed letter received from a
certain "Candi", dated at Amoy in November, 1936,
purporting to give information that Luis Herrera
(without mentioning his name) had died in August of
that year. This piece of evidence was properly
rejected by the lower court for lack of identification.
On the other hand, we have the testimony of the
witness Chung Lian to the effect that when he was
in Amoy the year 1940, Luis Herrera visited him and
had a conversation with him, showing that the latter
was still alive at the time. Since the documents had
been executed the attorney-in-fact one in 1937 and
the other in 1939, it is evident, if we are to believe
this testimony, that the documents were executed
during the lifetime of the principal.
Even granting arguendo that Luis Herrera did die in
1936, plaintiffs presented no proof and there is no
indication in the record, that the agent Luy Kim
Guan was aware of the death of his prince at the
time he sold the property. The death of the principal
does not render the act of an agent unenforceable,
where the latter had no knowledge of such
extinguishment the agency.
Del Rosario vs. Abad G.R. No. L-10881 Padilla, J.-
Elaine
Summary:
Within the prohibitive period of five years, the
homesteader mortgaged the improvements of the
homestead in favor of defendant. At the same time,
he executed an "irrevocable special power of
attorney coupled with interest" in favor of the
mortgagee authorizhig him to sell the land. After the
lapse of the prohibitive period, the mortgagor died
leaving the mortgage debt unpaid. Thereafter,
acting on the power of attorney, the mortgagee sold
the land. Held: The power of attorney executed by
the homesteader in favor of defendant did not
create an agency with interest nor did it clothe the
agency with irrevocable character. A mere
statement in the power of attorney that it is coupled
with interest is not enough. In what does such
interest consist must be stated in the power of
attorney. The mortgage has nothing to do with the
power of attorney and may be foreclosed by the
mortgagee upon failure of the mortgagor to comply
with his obligation. As the agency was not coupled
with an interest, it was terminated upon the death of
the principal, and the agent could no longer validly
convey the land. Hence, the sale was null and void.
Facts:
On 12 December 1936, the Secretary of Agriculture
and Commerce, by authority of the President of the
Commonwealth of the Philippines, issued under the
provisions of the Public Land Act (Act, No. 2874)
homestead patent No. 40596 to Tiburcio del Rosario,
with an area of 9 hectares 43 aces and 14 centares
in Nueva Ecija. On 24 February 1937, Tiburcio del
Rosario obtained a loan from Primitivo Abad in the
sum of P2,000 with interest at the rate of 12% per
annum, payable on 31 December 1941. As security
for the payment thereof he mortgaged the
improvements of the parcel of land in favor of the
creditor. On the same day, 24 February, the
mortgagor executed an 'irrevocable special power of
attorney coupled with interest" in favor of the
mortgagee, authorizing him, among others, to sell
and convey the parcel of land. Thereafter the
mortgagor and his family moved to Santiago,
Isabela, and there established a new residence.
Sometime in December 1945 the mortgagor died
leaving the mortgage debt unpaid. On 9 June 1947,
Primitivo Abad, acting as attorney-in-fact of Tiburcio
del Rosario, sold the parcel of land to his son
Teodorico Abad for and in consideration of the token
sum of P1.00 and the payment by the vendee of the
mortgage debt of Tiburcio del Rosario to Primitivo
Abad. The vendee took possession of the parcel of
land.
The plaintiffs are the children and heirs of the late
Tiburcio del Rosario, sought to recover possession
and ownership of the parcel of land, damages,
attorney's fees and costs. The defendants answered
the complaint and prayed for the dismissal thereof,
damages, attorney's fees and costs.
Issue:
Can the attorney-in-fact validly sell the property
even after the death of the principal?
Held:
NO. The encumbrance or alienation of lands
acquired by free patent or homestead in violation of
this section is null and void. Section 116 of the
Public Land Act (Act No. 2874), under which the
homestead was granted to the appellees' father,
provides:
"Lands acquired under the free patent or homestead
provisions shall not be subject to encumbrance or
alienation from the date of the approval of the
application and for a term of five years from and
after the date of the issuance of the patent or grant,
nor shall they become liable to the satisfaction of
any debt contracted prior to the expiration of said
period; but the improvements or crops on the land
may be mortgaged or pledged to qualified persons,
associations, or corporations."
The power of attorney executed by Tiburcio del
Rosario in favor of Primitivo Abad does not create an
agency coupled with an interest nor does it clothe
the agency with an irrevocable character. A mere
statement in the power of attorney that it is coupled
with an interest is not enough. The fact that Tiburcio
del Rosario, the principal, had mortgaged the
improvements of the parcel of land to Primitivo
Abad, the agent, is not such an interest as could
render irrevocable the power of attorney executed
by the principal in favor of the agent. In fact no
mention of it is made in the power of attorney. The
mortgage on the improvements of the parcel of land
has nothing to do with the power of attorney and
may be foreclosed by the mortgagee upon failure of
the mortgagor to comply with his obligation. As the
agency was not coupled with an interest, it was
terminated upon the death of Tiburcio del Rosario,
the principal, sometime in December 1945, and
Primitivo Abad, the agent, could no longer validly
convey the parcel of land to Teodorico Abad on 9
June 1947.
The sale, therefore, to the latter was null and void.
But granting that the irrevocable power of attorney
was lawful and valid it would subject the parcel of
land to all encumbranceas it was in violation of the
law that prohibits the alienation or encumbrance of
lands acquired by homstead from the date of the
approval of the application and for a term of five
years from and after the issuance of the patent or
grant.
As the sale to Teodorico Abad is null and void, the
appellees cannot be compelled to reimburse
Teodorico Abad for what he had paid to Primitivo
Abad. The former's right of action is against the
latter, without prejudice to the right of Primitivo
Abad to foreclose the mortgage on the
improvements of the parcel of land if the mortgage
debt is not paid by the appellees, as heirs and
successors-in-interest of the mortgagor.
The judgment appealed from is affirmed, with costs
against the appellants.
Estate of the deceased Gabina Labitoria. ENRIQUE
M. PASNO, petitioner-appellee, vs. FORTUNATA
RAVINA and PONCIANA RAVINA, oppositors-
appellants. PNB, appellant.MALCOLM, J.: - Kat
There are two appeals in this case. One appeal has
been taken by Ravina to the legalization of the will
of Gabina Labitoria, and concerns the validity of that
will. The other appeal has been taken by PNB and
concerns the survivability of the right of sale of the
mortgaged property under special power while the
mortgaged property is in custodia legis. We will deal
with these appeals separately.
I. PASNO vs. RAVINA. Validity of Gabina Labitoria's
will.
As the stenographic notes have not been written up
and elevated to this court, any discussion of the
evidence is rendered impossible.
Issue: WON the admitted fact that the will was
executed on July 27, 1928, although stating that it
was executed on February 6, 1926, invalidates the
will.
Held: NO. As said by the TC judge, the reason for
the error was on account of the will being in great
part a reproduction of another will of February 6,
1926, and inadvertently retaining this date.
Section 618, as amended, of the Code of Civil
Procedure prescribes the requisites necessary to the
execution of a valid will. The law does not require
that the will shall be dated. Accordingly, a will
without a date is valid. So likewise an
erroneous date will not defeat a will.
TC was right in admitting the will of Labitoria to
probate.
II. PASNO vs. PNB. Right of the mortgagee PNB to
foreclose the mortgage in its favor executed by
Gabina Labitoria during her lifetime now that the
mortgaged property is in the hands of an
administrator.
Facts:
Gabina Labitoria during her lifetime mortgaged 3
parcels of land to the PNB to secure an indebtedness
of P1,600. It was stipulated in the mortgage that the
mortgagee "may remove, sell or dispose of the
mortgaged property or any buildings,
improvements or other property in, on or
attached to it and belonging to the mortgagor
in accordance with the provisions of Act No.
3135 or take other legal action that it may
deem necessary." The mortgagor died, and a
petition was presented in court for the probate of
her last will and testament. During the pendency of
these proceedings, a special administrator was
appointed by the TC who took possession of the
estate of the deceased, including the 3 parcels of
land mortgaged to the PNB. The estate having failed
to comply with the conditions of the mortgage, the
PNB asked the sheriff of Tayabas to proceed with
the sale of the parcels of land. When the attorney
for the special administrator received notice of the
proposed action, he filed a motion in court in which
an order was asked requiring the sheriff to vacate
the attachment over the mortgaged properties and
to abstain from selling the same which the TC
granted.
Issue: WON the Power of sale in deed of mortgage
can be enforced extrajudicially when the mortgagor
died prior to the enforcement of the same
Held: NO.
The mortgage makes special reference to Act No.
3135, which regulates the sale of property under
special powers inserted in or annexed to real-estate
mortgages. It fails to make provision regarding
the sale of mortgaged property which is
in custodia legis. Under these circumstances, it
would be logical to suppose that the general
provisions of Philippine law would govern this latter
contingency. Statutes in pari materia are to be read
together. The legislative body which enacted Act No.
3135 must be presumed to have been acquainted
with the provisions of such a well known law as the
Code of Civil Procedure and to have passed Act No.
3135 with reference thereto.
PNB practically concedes that the law applicable to
the case is section 708 of the Code of Civil
Procedure. The cited section reads:
"A creditor holding a claim against the deceased,
secured by mortgage or other collateral security,
may abandon the security and prosecute his claim
before the committee, and share in the general
distribution of the assets of the estate; or he may
foreclose his mortgage or realize upon his
security, by ordinary action in court, making
the executor or administrator a party
defendant; and if there is a judgment for a
deficiency, after the sale of the mortgaged
premises, or the property pledged, in the
foreclosure or other proceeding to realize upon the
security, he may prove his deficiency
judgment before the committee against the
estate of the deceased; or he may rely upon
his mortgage or other security alone, and
foreclose the same at any time, within the
period of the statute of limitations, and in
that event he shall not be admitted as a
creditor, and shall receive no share in the
distribution of the other assets of the estate;
but nothing herein contained shall prohibit the
executor or administrator from redeeming the
property mortgaged or pledged, by paying the debt
for which it is held as security, under the direction
of the court, if the court shall adjudge it to be for
the best interest of the estate that such
redemption shall be made."
The law provides two remedies. The creditor here is
not taking advantage of the first remedy for the
mortgage security has not been abandoned. Rather
is the second remedy invoked but until now
unsuccessfully since the mortgagee has not begun
an ordinary action in court to foreclose the
mortgage making the special administrator a party
defendant.
The power of sale given in a mortgage is a
power coupled with an interest which survives
the death of the grantor. In Carter vs. Slocomb, it
was held that a sale after the death of the
mortgagor is valid without notice to the heirs of the
mortgagor. However that may be, conceding that
the power of sale is not revoked by the death of the
mortgagor, nevertheless in view of the silence of Act
No. 3135 and in view of what is found in section 708
of the Code of Civil Procedure, it would be
preferable to reach the conclusion that the
mortgagee with a power of sale should be made to
foreclose the mortgage in conformity with the
procedure pointed out in section 708 of the Code of
Civil Procedure. That would safeguard the interests
of the estate by putting the estate on notice while it
would not jeopardize any rights of the mortgagee.
The only result is to suspend temporarily the
power to sell so as not to interfere with the
orderly administration of the estate of a
decedent.
Affirmed.
Separate Opinions| STREET, VILLAMOR, and
OSTRAND, JJ., concurring and dissenting:
It is our opinion that, under such a power of sale in
deed of mortgage, the sale may be proceeded with
under the provisions of Act No. 3135, which is
expressly referred to in the mortgage now under
consideration.
Section 708 of the Code of Civil Procedure, if
attentively examined, it will be seen that the
bringing of an action to foreclose is necessary only
when the mortgagee wishes to obtain a judgment
over for the deficiency remaining unpaid after
foreclosure is effected.
Part of section 708:
Or he may rely upon his mortgage or other security
alone, and foreclose the same at any time, within the
period of the statute of limitations, and in that event
he shall not be admitted as a creditor, and shall
receive no share in the distribution of the other
assets of the estate.
The alternative here contemplated is a
foreclosure under power of sale contained in
the mortgage. It must be so, since there are no
other modes of foreclosure known to the law than by
ordinary action and foreclosure under power of sale
in deed of mortgage, and the procedure by action is
covered in that part of section 708 which
immediately precedes the words which we have
quoted above. It will be noted that the result of
adopting the last mode of foreclosure is that
the creditor waives his right to recover any
deficiency from the estate.
The policy of the court in requiring foreclosure
by action in case of the death of a mortgagor,
where a power of sale is inserted in the
mortgage, will prove highly prejudicial to the
estates of deceased mortgagors. The creditor
can recover, for attorney's fees and expenses,
whatever the court will allow as reasonable,
within the stipulated limit. On the other hand, if an
extrajudicial foreclosure is effected under the
power of sale, the expenses of foreclosure are
limited to the cost of advertising and other
actual expenses of the sale, not including the
attorney's fee.

If foreclosure is effected extrajudicially under the

power, in conformity with the provisions of Act No.
3135, mortgagor has a full year, from the date of
the sale, within which to redeem the property. On
the other hand, the provisions of the Code of Civil
Procedure on foreclosure of mortgages by action
allows no fixed period for redemption after sale;
although, in the closing words of section 708 of the
Code of Civil Procedure the court is authorized to
permit the administrator to redeem mortgaged
property, this refers to redemption to be effected
before the foreclosure becomes final. The decision
in this case will impose a burden upon the estates of
deceased persons who have mortgaged real
property for the security of debts, without any
compensatory advantage.