Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 76590 February 26, 1990
HEIRS OF MRI !E " CRU# $ GUTIERRE#, petitioners,
vs.
COURT OF PPE"S a%& HEIRS OF MRI !E " CRU# $ GUE'RR,
respondents.

PRS, J.:
his is a petition for revie! on certiorari of the "une #$, #%&' decision ( of
the then Inter(ediate )ppellate Court in )C*+.R. CV No. ,-$&- reversin. the
appealed decision of the Re.ional rial Court of )n.eles Cit/, and the
Nove(ber #0, #%&' resolution of the sa(e court den/in. the (otion for
reconsideration.
1erein petitioners are the heirs 2children3 of the late Maria de la Cru4 /
+utierre4, (arried to Mateo del Rosario 5ansan., !hile herein private
respondents are the heirs of Maria de la Cru4 / +uevarra, (arried to Cali6to
Di(alanta, and 7er(in de la Cru4. he controvers/ involves a #,%&, s8uare
(eters portion of 5ot #9&&.
7ro( #%0# until her death in #%-#, Maria de la Cru4 / +utierre4 resided in the
8uestioned lot in the concept of an o!ner. She declared the lot for ta6
purposes in her na(e. 5ater, she entrusted the ad(inistration of the said lot
to her niece Maria de la Cru4 / +uevarra. :hen cadastral proceedin.s !ere
held in Porac, in Cadastral Case No. #&, on March #$, #%0', Maria de la Cru4
/ +utierre4 ;led an ans!er to the 8uestioned lot. In the said ;led ans!er,
over the hand!ritten na(e <Maria de la Cru4 / +utierre4< is a thu(b(ar=
presu(abl/ a>6ed b/ her, E6hibit <0*C<? that in para.raph $, a person
na(ed therein as 7er(in de la Cru4 / +utierre4 is stated to have an interest
or participation on the said lot. 1o!ever, in the space provided in para.raph
& to be ;lled up !ith the personal circu(stances of clai(ant Maria de la Cru4
/ +utierre4, !hat appears therein is the na(e Maria de la Cru4, (arried to
Cali6to Di(alanta, instead of Maria de la Cru4 / +utierre4, E6hibit <0*)<? and
in the space provided in para.raph %, intended for the personal
circu(stances of other person or persons !ho (a/ have an interest on the
said lot, the na(e 7er(in de la Cru4, sin.le, appears, E6hibit <0*@<.
)ccordin.l/, the trial court rendered a decision adAudicatin. 5ot No. #9&& in
favor of Maria de la Cru4, 0' /ears old, (arried to Cali6to Di(alanta and
7er(in de la Cru4, Sin.le. 7inall/, Ori.inal Certi;cate of itle No. #''&9 of the
Re.ister of Deeds of Pa(pan.a !as issued in their na(es.
Petitioners, clai(in. to have learned of the sa(e onl/ on "ul/ #, #%$9, on
October #, #%$9 2alle.edl/ barel/ three (onths after discover/ of the
re.istration, and t!o /ears after the death of Maria de la Cru4 / +uevarra
!ho, before she died in #%$9, revealed to petitioners Daniel 5ansan. and
Isidro 5ansan. that the lot of their (other Maria de la Cru4 / +utierre4 had
been included in her title3, ;led !ith the then Court of 7irst Instance of
Pa(pan.a, @ranch IV, presided over b/ 1on. Cesar V. )leAandria, a co(plaint
for reconve/ance, doc=eted therein as Civil Case No. 0#9&. he sa(e !as
a(ended on "une #', #%$-.
he (ain thrust of the co(plaint is that the clai(ant of 5ot #9&& in Cadastral
Case No. #& !as Maria de la Cru4 / +utierre4 and not Maria de la Cru4 /
+uevarra !ho b/ not usin. her (aternal surna(e <+uevarra< succeeded in
re.isterin. 5ot #9&& in her na(e and that of her brother 7er(in de la Cru4.
Bnder the circu(stances, it is clai(ed that Maria de la Cru4 (arried to
Cali6to Di(alanta and 7er(in de la Cru4 hold the propert/ in trust for the
petitioners.
In their ans!er 2Rollo, pp. '0*'-3, private respondents clai(ed that the land
in 8uesti n is their e6clusive propert/, havin. inherited the sa(e fro( their 
parents and the OC No. #''&9 !as issued in their na(es. Moreover, the/
asserted that petitioners have lost their cause of action b/ prescription.
Durin. the pre*trial, the parties stipulated the follo!in. factsC
#. hat 5ot No. #9&& is the lot in 8uestion as stated in
Para.raph D of the Co(plaint?
0. hat on March #$, #%0', Maria de la Cru4 /
+utierre4 ;led her )ns!er over the cadastral lot in
8uestion?
D. hat Maria de la Cru4 / +utierre4 a>6ed her
thu(b(ar= in the )ns!er dated March #$, #%0'?
9. hat b/ virtue of the )ns!er over Cadastral lot in
8uestion ;led b/ Maria de la Cru4 / +utierre4 on
March #$, #%0', OC No. #''&9 !as issued coverin.
the lot in 8uestion?
-. hat the (aternal surna(e of Maria de la Cru4 and
7er(in de la Cru4 is +uevarra and not +utierre4? and
'. hat Maria de la Cru4 / +uevarra and 7er(in de la
Cru4 / +uevarra did not ;le their ans!er over the lot
in 8uestion. 2p. D, Inter(ediate )ppellate Court
Decision? p. 9', Rollo3
he issues stated are as follo!sC
#. :hether or not the hand!ritin.s in the )ns!er of
Maria de la Cru4 / +utierre4 !ere her hand!ritin.s?
0. :hether or not the heirs of Maria de la Cru4 /
+utierre4 are pa/in. the land ta6es of the lot in
8uestion proportionatel/ to their respective shares?
D. :hether or not 5ot #9&&, the lot in 8uestion, is
declared in the na(e of Maria de la Cru4 / +utierre4?
9. :hether or not durin. the lifeti(e of Maria de la
Cru4 / +utierre4 up to the ti(e of her death, she !as
in actual possession of the lot in 8uestion? and
-. If there !as fraud in securin. OC No. #''&9 in
the na(e of Maria de la Cru4, (arried to Cali6to
Di(alanta, and 7er(in de la Cru4, sin.le. 2pp. D*9,
Inter(ediate )ppellate Court Decision? pp. 9'9$,
Rollo3
)fter trial, the trial court, in a decision dated Nove(ber #$, #%&D 2ibid., pp.
D9*903, ruled in favor of the petitioners. he decretal portion of the said
decision, readsC
:1ERE7ORE, Aud.(ent is hereb/ rendered in favor of the
plaintiEs?
2a3 orderin. the above*na(ed defendants to
reconve/ to the plaintiEs a portion of #,%&, s8uare
(eters of 5ot No. #9&& covered b/ Ori.inal
Certi;cate of itle No. #''&9 of the Re.ister of Deeds
of Pa(pan.a, b/ e6ecutin. a deed of reconve/ance
and re.isterin. the sa(e !ith the said O>ce at their
o!n e6pense?
2b3 orderin. the parties to cause the surve/ and
division of 5ot No. #&99 into t!o e8ual parts in order
that t!o separate titles, one for the plaintiEs and the
other for the defendants can be issued b/ the
Re.ister of Deeds of Pa(pan.a in their favor and
one*half of the e6penses therefore to be shouldered
b/ the plaintiEs, and the other half b/ the defendant?
2c3 orderin. that the land to be adAudicated to the
plaintiEs should include the portion !here the
e6istin. house of the late Maria de la Cru4 /
+utierre4 is situated?
2d3 orderin. the plaintiEs and the defendants to pa/
the correspondin. estate and inheritance ta6es if the
parcels of land inherited b/ the( are subAect to the
pa/(ent of the sa(e?
2e3 orderin. the defendants to pa/ the costs of suit.
On appeal, considerin. the action as based on an i(plied trust, the then
Inter(ediate )ppellate Court in its decision pro(ul.ated on "une #$, #%&'
2Ibid., pp. 99*-D3 reversed the decision of the trial court. he dispositive
portion readsC
:1ERE7ORE, the Court is constrained to REVERSE the decision
appealed fro(. ) ne! one is hereb/ entered dis(issin. the
co(plaint.
) Motion for Reconsideration !as ;led, but the sa(e !as denied in a
resolution dated Nove(ber #0, #%&' 2Ibid., p. ''3. 1ence, the instant
petition.
Petitioners raised three 2D3 reasons !arrantin. revie!, to !itC
I
RESPONDEN COBR ERRED :1EN I RB5ED 1) 1E )CION
7OR RECONVEF)NCE 7I5ED @F 1EREIN PEIIONERS :I1 1E
5O:ER COBR 1)D )5RE)DF PRESCRI@ED?
II
RESPONDEN COBR ERRED IN RB5IN+ 1) PEIIONERS :ERE
+BI5F O7 5)C1ES? and
III
RESPONDEN COBR ERRED IN RB5IN+ 1) 1ERE :)S NO
EVIDENCE O7 7R)BD COMMIED @F 1E PREDECESSOR*IN*
INERES O7 PRIV)E RESPONDENS IN SECBRIN+ I5E O 1E
5O IN GBESION.
2pp. #D, 0, and 00, Petition for Revie! pp. 0#, 0&, and D, Rollo3
he instant petition is i(pressed !ith (erit.
he (ain issue in this case is !hether or not petitionersH action for
reconve/ance has alread/ prescribed.
he ans!er is in the ne.ative.
)s aptl/ ar.ued b/ petitioners, the Court of )ppeals erred !hen it ruled that
their action has alread/ prescribed? obviousl/ on the !ron. pre(ise that the
action is one based on i(plied or constructive trust. )s (aintained b/
petitioners, their action is one based on e6press trust and not on i(plied or
constructive trust. PetitionersH predecessor*in*interest, Maria de la Cru4 /
+utierre4, !as an unlettered !o(an, a fact borne out b/ her a>6in. her
thu(b(ar= in her ans!er in Cadastral Case No. #&, E6hibit <0*C<. @ecause of
her (ental !ea=ness, in a prepared docu(ent for her, E6hibit <@*D<, she
consented and authori4ed her niece Maria de la Cru4 / +uevarra to
ad(inister the lot in 8uestion. Such fact is corroborated b/ the testi(on/ of
Daniel 5ansa/, the son of Maria de la Cru4 / +utierre4 that Maria de la Cru4 /
+uevarra !as the one entrusted !ith the pa/in. of land ta6es.
Private respondents ar.ue that said E6hibit <@*D< is a portion of the ta6
declaration 2E6hibit <@<3 !hich !as prepared b/ the O>ce of the Municipal
)ssessorIreasurer !here the lot in 8uestion is located, and clearl/ not the
!ritten instru(ent constitutin. an e6press trust re8uired under )rticle #99D
of the Civil Code. his ar.u(ent of private respondents, is untenable. It has
been held that under the la! on rusts, it is not necessar/ that the docu(ent
e6pressl/ state and provide for the e6press trust, for it (a/ even be created
orall/, no particular !ords are re8uired for its creation 2)rticle #999, Civil
Code3. )n e6press trust is created b/ the direct and positive acts of the
parties, b/ so(e !ritin. or deed or !ill or b/ !ords evidencin. an intention
to create a trust 2Sotto v. eves, &' SCR) #-9 J#%$&K3. No particular !ords
are re8uired for the creation of an e6press trust, it bein. su>cient that a
trust is clearl/ intended 2Vda. de Mapa v. Court of )ppeals, #-9 SCR) 0%9
J#%&$K3. 1ence, petitionerHs action, bein. one based on e6press trust, has not
/et prescribed. @e it noted that )rticle #99D of the Civil Code !hich states
<No e6press trusts concernin. an i((ovable or an/ interest therein (a/ be
proved b/ parol evidence,< refers (erel/ to enforceabilit/, not validit/ of a
contract bet!een the parties. Other!ise stated, for purposes of validit/
bet!een the parties, an e6press trust concernin. an i((ovable does not
have to be in !ritin.. hus, )rticle #99D (a/ be said to be an e6tension of
the Statute of 7rauds. he action to co(pel the trustee to conve/ the
propert/ re.istered in his na(e for the bene;t of the cestui for trust does not
prescribe. If at all, it is onl/ !hen the trustee repudiates the trust that the
period of prescription (a/ run 2Enri8ue4 v. Court of )ppeals, #,9 SCR) '-'
J#%&#K3.
PREMISES CONSIDERED, the "une #$, #%&' decision of the Inter(ediate
)ppellate Court is hereb/ REVERSED and the Nove(ber #$, #%&D decision of
the trial court is hereb/ REINS)ED, e6cpt as to the latter courtHs ;ndin.
that this case deals !ith an i(plied trust.
SO ORDERED.
Melencio-Herrera (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SPECI)5 7IRS DIVISION
G.R. No. 1225)) *a%uary 2+, 200,
REGIN P. !I#ON, MPRO !. -RTO"OME, FI!E"IN !. -"#,
ESTER -! !I#ON a%& *OSEPH NTHON$ !I#ON, R$MUN! .
!I#ON, GERR! . !I#ON a%& *OSE . !I#ON, *R., petitioners,
vs.
COURT OF PPE"S a%& O'ER"N! E.PRESS "INES, INC.,
respondents.
6*********************************************************6
G.R. No. 12)7)1 *a%uary 2+, 200,
REGIN P. !I#ON, MPRO !. -RTO"OME, FI!E"IN !. -"#,
ESTER -! !I#ON a%& *OSEPH NTHON$ !I#ON, R$MUN! .
!I#ON, GERR! . !I#ON a%& *OSE . !I#ON, *R., petitioners,
vs.
COURT OF PPE"S HON. M.IMINO C. SUNCION a%& O'ER"N!
E.PRESS "INES, INC., respondents.
R E S O " U T I O N
$NRES/SNTIGO, J.0
On "anuar/ 0&, #%%%, this Court rendered Aud.(ent in these consolidated
cases as follo!sC
1HEREFORE, in vie! of the fore.oin., both petitions are GRNTE!.
he decision dated March 0%, #%%9 and the resolution dated October
#%, #%%- in C)*+.R. CV Nos. 0-#-D*-9, as !ell as the decision dated
Dece(ber ##, #%%- and the resolution dated )pril 0D, #%%$ in C)*+.R.
SP No. DD##D of the Court of )ppeals are hereb/ RE'ERSE! a%& SET
SI!E.
5et the records of this case be re(anded to the trial court for
i((ediate e6ecution of the Aud.(ent dated Nove(ber 00, #%&0 in
Civil Case No. VIII*0%#-- of the then Cit/ Court 2no! Metropolitan rial
Court3 of Gue4on Cit/, @ranch III as a>r(ed in the decision dated
Septe(ber 0', #%&9 of the then Inter(ediate )ppellate Court 2no!
Court of )ppeals3 and in the resolution dated "une #%, #%&- of this
Court.
1o!ever, petitioners are ordered to REFUN! to private respondent the
a(ount of PD,,,,,,.,, !hich the/ received throu.h )lice ). Di4on on
"une 0,, #%$-.
SO OR!ERE!.
Private respondent ;led a Motion for Reconsideration, Second Motion for
Reconsideration, and Motion to Suspend Procedural Rules in the 1i.her
Interest of Substantial "ustice, all of !hich have been denied b/ this Court.
his not!ithstandin., the cases !ere set for oral ar.u(ent on March 0#,
0,,#, on the follo!in. issuesC
#. :1E1ER 1ERE )RE CIRCBMS)NCES 1) :OB5D "BSI7F
SBSPENSION O7 1E RB5ES O7 COBR?
0. :1E1ER 1E SBM O7 PD,,,,,,.,, RECEIVED @F )5ICE DILON
7ROM PRIV)E RESPONDEN :)S INENDED )S P)RI)5 P)FMEN O7
1E PBRC1)SE PRICE O7 1E PROPERF, OR )S P)FMEN O7 @)CM
REN)5S ON 1E PROPERF?
D. :1E1ER )5ICE DILON :)S )B1ORILED O RECEIVE 1E SBM O7
PD,,,,,,.,, ON @E1)57 O7 PEIIONERS?
9. 2)3 I7 SO, :1E1ER PEIIONERS )RE ESOPPED 7ROM
GBESIONIN+ 1E @E5)ED ENERCISE @F PRIV)E RESPONDEN O7
IS OPION O @BF :1EN 1EF )CCEPED 1E S)ID P)RI)5
P)FMEN?
2@3 I7 SO, :1E1ER )5ICE DILON C)N V)5ID5F @IND PEIIONERS IN
1E )@SENCE O7 ) :RIEN PO:ER O7 )ORNEF?
-. 2)3 :1E1ER 1ERE :)S ) PER7ECED CONR)C O7 S)5E
@E:EEN 1E P)RIES?
2@3 :1E1ER 1ERE :)S ) CONR)C O7 S)5E ) 5E)S :I1
RESPEC O 1E S1)RES O7 7IDE5) )ND )5ICE DILON? )ND
'. :1E1ER PRIV)E RESPONDENHS )CION 7OR SPECI7IC
PER7ORM)NCE 1)S PRESCRI@ED.
In order to resolve the ;rst issue, it is necessar/ to pass upon the other
8uestions !hich relate to the (erits of the case. It is onl/ !here there e6ist
stron. co(pellin. reasons, such as servin. the ends of Austice and
preventin. a (iscarria.e thereof, that this Court can suspend the rules.
#
)fter revie!in. the records, !e ;nd that, despite all of private respondentHs
protestations, there is absolutel/ no !ritten proof of )lice Di4onHs authorit/ to
bind petitioners. 7irst of all, she !as not even a co*o!ner of the propert/.
Neither !as she e(po!ered b/ the co*o!ners to act on their behalf.
he acceptance of the a(ount of PD,,,,,,.,,, purportedl/ as partial
pa/(ent of the purchase price of the land, !as an act inte.ral to the sale of
the land. )s a (atter of fact, private respondent invo=es such receipt of
pa/(ent as .ivin. rise to a perfected contract of sale. In this connection,
)rticle #&$9 of the Civil Code is e6plicit thatC <:hen a sale of a piece of land
or an/ interest therein is throu.h an a.ent, the authorit/ of the latter shall be
in !ritin.? other!ise, the sale shall be void.<
:hen the sale of a piece of land or an/ interest thereon is throu.h an
a.ent, the authorit/ of the latter shall be in !ritin.? other!ise, the sale
shall be void. hus the authorit/ of an a.ent to e6ecute a contract for
the sale of real estate (ust be conferred in !ritin. and (ust .ive hi(
speci;c authorit/, either to conduct the .eneral business of the
principal or to e6ecute a bindin. contract containin. ter(s and
conditions !hich are in the contract he did e6ecute. ) special po!er of
attorne/ is necessar/ to enter into an/ contract b/ !hich the
o!nership of an i((ovable is trans(itted or ac8uired either
.ratuitousl/ or for a valuable consideration. he e6press (andate
re8uired b/ la! to enable an appointee of an a.enc/ 2couched3 in
.eneral ter(s to sell (ust be one that e6pressl/ (entions a sale or
that includes a sale as a necessar/ in.redient of the act (entioned. 7or
the principal to confer the ri.ht upon an a.ent to sell real estate, a
po!er of attorne/ (ust so e6press the po!ers of the a.ent in clear and
un(ista=able lan.ua.e. :hen there is an/ reasonable doubt that the
lan.ua.e so used conve/s such po!er, no such construction shall be
.iven the docu(ent.
0
It necessaril/ follo!s, therefore, that petitioners cannot be dee(ed to have
received partial pa/(ent of the supposed purchase price for the land
throu.h )lice Di4on. It cannot even be said that )lice Di4onHs acceptance of
the (one/ bound at least the share of 7idela Di4on, in the absence of a
!ritten po!er of attorne/ fro( the latter. It should be borne in (ind that the
Receipt dated "une 0,, #%$-, !hile (ade out in the na(e of 7idela Di4on,
!as si.ned b/ )lice Di4on alone.
Moreover, there could not have been a perfected contract of sale. )s !e held
in our Decision dated "anuar/ 0&, #%%%, the i(plied rene!al of the contract
of lease bet!een the parties aEected onl/ those ter(s and conditions !hich
are .er(ane to the lesseeHs ri.ht of continued enAo/(ent of the propert/.
he option to purchase aEorded private respondent e6pired after the one*
/ear period .ranted in the contract. Other!ise stated, the i(plied rene!al of
the lease did not include the option to purchase. :e see no reason to disturb
our rulin. on this point, i!C
In this case, there !as a contract of lease for one 2#3 /ear !ith option
to purchase. he contract of lease e6pired !ithout the private
respondent, as lessee, purchasin. the propert/ but re(ained in
possession thereof. 1ence, there !as an i(plicit rene!al of the
contract of lease on a (onthl/ basis. he other ter(s of the ori.inal
contract of lease !hich are revived in the i(plied ne! lease under
)rticle #'$, of the Ne! Civil Code are onl/ those ter(s !hich are
.er(ane to the lesseeHs ri.ht of continued enAo/(ent of the propert/
leased. herefore, an i(plied ne! lease does not ipso facto carr/ !ith
it an/ i(plied revival of private respondentHs option to purchase 2as
lessee thereof3 the leased pre(ises. he provision entitlin. the lessee
the option to purchase the leased pre(ises is not dee(ed incorporated
in the i(pliedl/ rene!ed contract because it is alien to the possession
of the lessee. Private respondentHs ri.ht to e6ercise the option to
purchase e6pired !ith the ter(ination of the ori.inal contract of lease
for one /ear. he rationale of this Court is thatC
<his is a reasonable construction of the provision, !hich is
based on the presu(ption that !hen the lessor allo!s the lessee
to continue enAo/in. possession of the propert/ for ;fteen da/s
after the e6piration of the contract he is !illin. that such
enAo/(ent shall be for the entire period correspondin. to the
rent !hich is custo(aril/ paid O in this case up to the end of the
(onth because the rent !as paid (onthl/. Necessaril/, if the
presu(ed !ill of the parties refers to the enAo/(ent of
possession the presu(ption covers the other ter(s of the
contract related to such possession, such as the a(ount of
rental, the date !hen it (ust be paid, the care of the propert/,
the responsibilit/ for repairs, etc. @ut no such presu(ption (a/
be indul.ed in !ith respect to special a.ree(ents !hich b/
nature are forei.n to the ri.ht of occupanc/ or enAo/(ent
inherent in a contract of lease.<
D
here bein. no (erit in the ar.u(ents advanced b/ private respondent,
there is no need to suspend the Rules of Court and to ad(it the (otion for
reconsideration. :hile it is !ithin the po!er of the Court to suspend its o!n
rules, or to e6cept a particular case fro( its operation, !henever the interest
of Austice re8uire it, ho!ever, the (ovant (ust sho! stron. co(pellin.
reasons such as servin. the ends of Austice and preventin. a .rave
(iscarria.e thereof,
9
none of !hich obtains in this case.
5iti.ation (ust end so(eti(e and so(e!here. )n eEective and e>cient
ad(inistration of Austice re8uires that, once a Aud.(ent has beco(e ;nal,
the !innin. part/ be not, throu.h a (ere subterfu.e, deprived of the fruits
of the verdict. Courts (ust, therefore, .uard a.ainst an/ sche(e calculated
to brin. about that result. Constituted as the/ are to put an end to
controversies, courts should fro!n upon an/ atte(pt to prolon. the(.
-
CCOR!ING"$, the Motion to Suspend Procedural Rules in the 1i.her
Interest of Substantial "ustice ;led b/ private respondent is DENIED :I1
7IN)5IF. No further pleadin.s !ill be entertained in these cases.
SO OR!ERE!.
"aide, Jr., C .J ., see separate opinion.
Puno, J., concur.
P234e5 M3%3%6 Cor7ora83o% 9:. CIR ;G.R. No. 1)+1+7 <7r34 16, 200+=>
Post under case di.ests, Civil 5a! at uesda/, 7ebruar/ 0#, 0,#0 Posted b/
Schi4ophrenic Mind
Fa?8:0 Petitioner Phile6 entered into an a.ree(ent !ith @a.uio +old Minin.
Corporation for the for(er to (ana.e the latterPs (inin. clai( =no! as the
Sto. Mine. he partiesP a.ree(ent !as deno(inated as QPo!er of )ttorne/R.
he (ine suEered continuin. losses over the /ears, !hich resulted in
petitionersP !ithdra!al as (ana.er of the (ine. he parties e6ecuted a
QCo(pro(ise Dation in Pa/(entR, !herein the debt of @a.uio a(ounted to
Php. ##0,#D',,,,.,,. Petitioner deducted said a(ount fro( its .ross inco(e
in its annual ta6 inco(e return as Qloss on the settle(ent of receivables fro(
@a.uio +old a.ainst reserves and allo!ancesR. @IR disallo!ed the a(ount as
deduction for bad debt. Petitioner clai(s that it entered a contract of a.enc/
evidenced b/ the Qpo!er of attorne/R e6ecuted b/ the( and the advances
(ade b/ petitioners is in the nature of a loan and thus can be deducted fro(
its .ross inco(e. Court of a6 )ppeals 2C)3 reAected the clai( and held that
it is a partnership rather than an a.enc/. C) a>r(ed C)
I::ue0 :hether or not it is an a.enc/.
He4&0 No. he lo!er courts correctl/ held that the QPo!er of )ttorne/R 2P)3 is
the instru(ent (aterial that is (aterial in deter(inin. the true nature of the
business relationship bet!een petitioner and @a.uio. )n e6a(ination of the
said P) reveals that a partnership or Aoint venture !as indeed intended b/
the parties. :hile a corporation li=e the petitioner cannot .enerall/ enter into
a contract of partnership unless authori4ed b/ la! or its charter, it has been
held that it (a/ enter into a Aoint venture, !hich is a=in to a particular
partnership. he P) indicates that the parties had intended to create a P)
and establish a co((on fund for the purpose. he/ also had a Aoint interest
in the pro;ts of the business as sho!n b/ the -,*-, sharin. of inco(e of the
(ine.
Moreover, in an a.enc/ coupled !ith interest, it is the a.enc/ that cannot be
revo=ed or !ithdra!n b/ the principal due to an interest of a third part/ that
depends upon it or the (utual interest of both principal and a.ent. In this
case the non*revocation or non*!ithdra!al under the P) applies to the
advances (ade b/ the petitioner !ho is the a.ent and not the principal
under the contract. hus, it cannot be inferred fro( the stipulation that it is
an a.enc/.
F34373%a: "3@e ::ura%?e Co. <%oA ya4a "3@e ::ura%?e, I%?.= 9.
C4eBe%8e Pe&ro:a, Tere:38aPe&ro:a a%& *e%%3@er Pa4a?3o
+.R. No. #-%9&%, 7ebruar/ ,9, 0,,&Guisu(bin., ".
FCTS0

eresita Pedroso is a polic/holder of a 0,*/ear endo!(ent life

insurance issued b/ 7ilipinas 5ife)ssurance Co. Pedroso clai(s Renato
Valle !as her insurance a.ent since #%$0 and Valle collectedher (onthl/
pre(iu(s. In the ;rst !ee= of "anuar/ #%$$, Valle told her that the 7ilipinas
5ife EscoltaO>ce !as holdin. a pro(otional invest(ent pro.ra( for
polic/holders. It !as oEerin. &S prepaidinterest a (onth for certain a(ounts
deposited on a (onthl/ basis. Enticed, she initiall/ investedand issued a
post*dated chec= for P#,,,,,. In return, Valle issued Pedroso his personal
chec= forP&,, for the &S prepaid interest and a 7ilipinas 5ife ).ent receipt.

Pedroso called the Escolta o>ce and tal=ed to 7rancisco )lcantara, the
ad(inistrative assistant, !horeferred her to the branch (ana.er, )n.el
)petrior. Pedroso in8uired about the pro(otional invest(ent and
)petrior con;r(ed that there !as such a pro(otion. She !as even told she
couldpush throu.h !ith the chec= she issued. 7ro( the records, the
chec=, !ith the endorse(ent of )lcantara at the bac=, !as deposited in
the account of 7ilipinas 5ife !ith the Co((ercial @an= and rust Co(pan/,
Escolta @ranch.

Rel/in. on the representations (ade b/ 7ilipinas 5ifePs dul/ authori4ed

representatives )petrior and)lcantara, as !ell as havin. =no!n a.ent Valle
for 8uite so(e ti(e, Pedroso !aited for the (aturit/of her initial
invest(ent. ) (onth after, her invest(ent of P#,,,,, !as returned
to her after she(ade a !ritten re8uest for its refund. o collect the
a(ount, Pedroso personall/ !ent to the Escoltabranch !here )lcantara .ave
her the P#,,,,, in cash. )fter a second invest(ent, she (ade $ to &(ore
invest(ents in var/in. a(ounts, totalin. PD$,,,, but at a lo!er rate of -S
prepaid interest a(onth. Bpon (aturit/ of PedrosoPs subse8uent
invest(ents, Valle !ould ta=e bac= fro( Pedroso thecorrespondin. a.entPs
receipt he issued to the latter.

Pedroso told respondent "ennifer Palacio, also a 7ilipinas 5ife

insurance polic/holder, about theinvest(ent plan. Palacio (ade a
total invest(ent of P9%,--, but at onl/ -S prepaid
interest.1o!ever, !hen Pedroso tried to !ithdra! her invest(ent, Valle did
not !ant to return so(e P#$,,,,!orth of it. Palacio also tried to !ithdra!
hers, but 7ilipinas 5ife, despite de(ands, refused to returnher (one/.
ISSUE0
:ON 7ilipinas 5ife is Aointl/ and severall/ liable !ith )petrior and )lcantara
on the clai( of Pedroso and Palacio or :ON its a.ent Renato Valle is solel/
liable to Pedroso and Palacio
HE"!0

Pedroso and Palacio had invested P9$,,,, and P9%,--,, respectivel/. hese
!ere received b/ Valleand re(itted to 7ilipinas 5ife, usin. 7ilipinas 5ifePs
o>cial receipts. VallePs authorit/ to solicit andrecei ve i nvest (ent s !as
al so est abl i shed b/ t he par t i es. :hen Pedroso and Pal aci o
sou.ht con;r(ation, )lcantara, holdin. a supervisor/ position, and )petrior, the branch
(ana.er, con;r(edthat Valle had authorit/. :hile it is true that a person
dealin. !ith an a.ent is put upon in8uir/ and(ust discover at his o!n peril
the a.entPs authorit/, in this case, Pedroso and Palacio did e6ercisedue
dili.ence in re(ovin. all doubts and in con;r(in. the validit/ of the
representations (ade b/Valle.

7ilipinas 5ife, as the principal, is liable for obli.ations contracted b/ its a.ent Valle. @/ the
contract of a.enc/, a person binds hi(self to render so(e service or to do
so(ethin. in representation or onbehalf of another, !ith the consent or
authorit/ of the latter. he .eneral rule is that the principal isresponsible
for the acts of its a.ent done !ithin the scope of its authorit/, and
should bear theda(a.e caused t o t hi rd per sons. :hen t he
a.ent e6ceeds hi s aut hor i t /, t he a.ent beco(es personall/ liable
for the da(a.e. @ut even !hen the a.ent e6ceeds his authorit/, the
principal is stillsolidaril/ liable to.ether !ith the a.ent if the principal allo!ed
the a.ent to act as thou.h the a.enthad full po!ers. he acts of an a.ent
be/ond the scope of his authorit/ do not bind the principal,unless the principal
rati;es the(, e6pressl/ or i(pliedl/.

Ra83C?a83o%
T adoption or con;r(ation b/ one person of an act perfor(ed on his behalf
b/ another!ithout authorit/

Even if VallePs representations !ere be/ond his authorit/ as a

debitIinsurance a.ent, 7ilipinas 5ifethru )lcantara and )petrior e6pressl/ and
=no!in.l/ rati;ed VallePs acts. 7ilipinas 5ife bene;ted fro(the invest(ents deposited b/
Valle in the account of 7ilipinas 5ife.
Ge%e93e9e "3B 9. F4ore%?3o Saba%
+.R. No. #'D$0, Dece(ber #', 0,,9 in.a, ".
FCTS0

Eduardo FbaUe4, o!ner of a #,,,,*s8uare (eter lot in Cebu Cit/,

entered into an ).ree(ent and)ut hor i t / t o Ne.ot i at e and Sel l
!i t h 7l orenci o Saban. Bnder t he ).enc/ ).ree(ent ,
FbaUe4authori4ed Saban to loo= for a bu/er of the lot for P0,,,,,,.,, and
to (ar= up the sellin. price toinclude the a(ounts needed for pa/(ent of
ta6es, transfer of title and other e6penses incident tothe sale, as !ell as
SabanPs co((ission for the sale.

hrou.h SabanPs eEorts, FbaUe4 and his !ife !ere able to sell the
lot to +enevieve 5i( and thespouses @enAa(in and 5ourdes 5i(. he
price of the lot as indicated in the Deed of )bsolute Sale isP0,,,,,,.,,. he
vendees a.reed to purchase the lot at the price of P',,,,,,.,,, inclusive of
ta6esand other incidental e6penses of the sale. )fter the sale, 5i(
re(itted to Saban the a(ounts of P##D, 0-$. ,, f or pa/(ent of
t a6es due on t he t r ansact i on as !el l as P-,, ,,,. ,, as
bro=er P s co((ission.

Saban recei ved chec=s i n pa/(ent of hi s co((i ssi on but al l

of t he( !ere di shonored uponpresent(ent. hus, he ;led a
co(plaint for collection of su( of (one/ and da(a.es a.ainst FbaUe4and
5i(. Saban alle.ed that FbaUe4 told 5i( that he 2Saban3 !as not entitled to
an/ co((ission forthe sale since he concealed the actual sellin. price of the
lot fro( FbaUe4 and because he !as not alicensed real estate bro=er.
ISSUES0
2#3 :ON Saban is entitled to receive his co((ission fro( the sale? 203 if in
the a>r(ative,:ON it is 5i( !ho is liable to pa/ Saban his sales co((ission
HE"!0
2#3 Fes.

he a.enc/ !as not revo=ed since FbaUe4 re8uested that 5i( (a=e
stop pa/(ent orders for thechec=s pa/able to Saban onl/ after the
consu((ation of the sale. )t that ti(e, Saban had alread/perfor(ed his
obli.ation as FbaUe4Ps a.ent !hen, throu.h his 2SabanPs3 eEorts, FbaUe4
e6ecuted theDeed of )bsolute Sale of the lot !ith 5i( and the Spouses 5i(.

o deprive Saban of his co((ission subse8uent to the sale !hich

!as consu((ated throu.h hiseEorts !ould be a breach of his contract of
a.enc/ !ith FbaUe4 !hich e6pressl/ states that Saban!ould be entitled to
an/ e6cess in the purchase price after deductin. the P0,,,,,,.,, due to
FbaUe4and the transfer ta6es and other incidental e6penses of the sale.

SabanPs a.enc/ !as not one coupled !ith an interest. an a.enc/ is dee(ed
as one coupled !ith aninterest !here it is established for the (utual
bene;t of the principal and of the a.ent, or for theinterest of the
principal and of third persons, and it cannot be revo=ed b/ the principal so
lon. as theinterest of the a.ent or of a third person subsists. In an a.enc/
coupled !ith an interest, the a.entPsinterest (ust be in the subAect
(atter of the po!er conferred and not (erel/ an interest in
thee6ercise of the po!er because it entitles hi( to co(pensation. :hen an
a.entPs interest is con;nedto earnin. his a.reed co(pensation, the a.enc/
is not one coupled !ith an interest, since an a.entPsi nt erest i n
obt ai ni n. hi s co(pensat i on as such a.ent i s an ordi nar /
i nci dent of t he a.enc/relationship. 2See )rt. #%0$3
HE"!0
203 Fes. It is Aust and proper for 5i( to pa/ Saban the balance of P0,,,,,,.,,.
7urther(ore,since FbaUe4 received a total of P0D,,,,,.,, fro( 5i(, or an
e6cess of PD,,,,,.,, fro( his as=in.price of P0,,,,,,.,,, Saban (a/ clai(
such e6cess fro( FbaUe4Ps estate, if that re(ed/ is stillavailable, in vie! of
the trial courtPs dis(issal of SabanPs co(plaint as a.ainst FbaUe4, !ith
SabanPse6press consent, due to the latterPs de(ise !hen the case !as still
pendin..
ORIENT IR SER'ICES
vs.
C
7)CSC
V
)(erican )irlines and Orient )ir Services and 1otel Representatives entered
into a +eneral Sales ).enc/ ).ree(ent !hereb/ )(ericanauthori4ed the
latter to act as its e6clusive .eneral sales a.ent !ithin the Philippines for the
sale of air passen.er transportation 2servicesCsolicit and pro(ote passen.er
tra>c, servicin. and supervisin. a.ents etc.3
o
It !as stipulated that neither Orient nor its sub*a.ents perfor( services for
an/ other air carrier si(ilar to those to be perfor(edhereunder for )(erican
!ithout the prior !ritten consent of )(erican
o
Re(ittances* tic=et stoc= or e6chan.e orders 5ESS co((issions
o
)(erican !ill pa/ Orient sales a.enc/ co((ission and an overridin.
co((ission T DS of the tariE fares and char.es for allsales of transportation
over )(ericanPs service b/ Orient or its sub*a.ents
o
In case of default 2re(ittance3 )(erican (a/ ter(inate the a.ree(ent?
other!ise either part/ (a/ ter(inate !ithout cause b/.ivin. D, da/sP notice
V
)(erican alle.ed that Orient failed to pro(ptl/ re(it the net proceeds of
sales T ter(inated the ).ree(ent T ;led suit for accountin. !ith preli(inar/
attach(ent or .arnish(ent, (andator/ inAunction and restrainin. order
V
Orient denied alle.ations contendin. that after the application to the
co((ission due it , plaintiE in fact still o!ed Orient a balance inunpaid
overridin. co((issions
V
CC in favor of Orient T ter(ination !as ille.al and i(proper* ORDERED
P5)INI77 O REINS)E DE7END)N )S IS+ENER)5 S)5ES )+EN
V
C)C a>r(ed C !ith so(e (odi;cations !ith respect to the (onetar/
a!ards
V
)MERIC)N clai(s overridin. co((ission should be based onl/ on tic=eted
sales*to be entitled to the DS overridin. co((ission, the sale(ust be (ade
b/ Orient )ir and the sale (ust be done !ith the use of )(ericanPs tic=et
stoc=s
V
ORIENC contractual stipulation of DS overridin. co((ission covers the total
revenue of )(erican not (erel/ fro( the tic=eted sales,invo=in. its
desi.nation as the ENC5BSIVE +eneral sales a.ent of a(ericanISSBEC e6tent
of Orient )irPs ri.ht to the DS overridin. co((ission1E5DC basis should be
O)5 REVENBE 2in favor of Orient3
V
0 co((issions? a3 sales a.enc/ co((ission? b3 overridin. co((ission of DS
of tariE fares and char.es for all sales of passen.er transpoover )(erican air
services. he latter t/pe of co((issions !ould accrue for sales of )(erican
(ade not on its tic=et stoc= but on thetic=et stoc= of other air carriers sold
b/ such carriers or other authori4ed tic=etin. facilities or travel a.ents. o
rule other!ise !ould erasean/ distinction bet!een the 0 t/pes of
co((issions
V
)(erican air !as the part/ responsible for the preparation of the a.ree(ent
2contract of adhesion3
V
Since the )(erican !as still obli.ated to Orient for the said co((ission,
Orient !as Austi;ed in refusin. to re(it the su(s de(anded. heter(ination
!as therefore :I1OB cause and basis
V
2)+ENCF P)R3 T )ppellate court erred in orderin. )(erican air to reinstate
the defendant as its .eneral sales a.ent
o
Co(pellin. )(erican to e6tend its personalit/ to Orient !ould be violative of
the principles and essence of )+ENCF
o
)+ENCF* contract !hereb/ <a person binds hi(self to render so(e service or
to do so(ethin. in representation or on behalf of another, :I1 1E
CONSEN OR )B1ORIF O7 1E 5)ER
o
In an a.ent*principal relationship, the personalit/ of the principal is e6tended
throu.h the facilit/ of the a.ent
o
he a.ent, b/ le.al ;ction, beco(es the principal, authori4ed to perfor( all
acts !hich the latter !ould have hi( do. Such arelationship can onl/ be
eEected !ith the consent of the principal, !hich (ust not, in an/ !a/, be
co(pelled b/ la! or b/ an/
CMS "o663%6 9 C
Petitioner CMS is a forest concessionaire en.a.ed in the lo..in.business,
!hile private respondent DR)COR is en.a.ed in thebusiness of e6portin.
and sellin. lo.s and lu(ber. On )u.ust 0&,#%-$, CMS and DR)COR entered
into a contract ofa.enc/ # !hereb/ the for(er appointed the latter as
itse6clusive e6port and sales a.ent for all lo.s that the for(er (a/produce,
for a period of ;ve 2-3 /ears.)bout si6 (onths prior to the e6piration of the
a.ree(ent, !hileon a trip to o=/o, "apan, CMSHs president and .eneral
(ana.er and le.al counsel, discovered that DR)COR had used Shin=oradin.
Co., 5td. 2Shin=o for brevit/3 as a.ent, representative or liaison o>cer in
sellin. CMSHs lo.s in "apan for !hich Shin=oearned a co((ission of B.S.
W#.,, per #,,,, board feet fro( thebu/er of the lo.s. Bnder this
arran.e(ent, Shin=o !as able tocollect a total of B.S. W$$,0'9.'$.CMS
clai(ed that this co((ission paid to Shin=o !as in violationof the a.ree(ent
and that it 2CMS3 is entitled to this a(ount aspart of the proceeds of the sale
of the lo.s. CMS contendedthat since DR)COR had been paid the -S
co((ission under thea.ree(ent, it is no lon.er entitled to the additional
co((issionpaid to Shin=o as this tanta(ount to DR)COR receivin.
doubleco(pensation for the services it rendered.)fter this discover/, CMS
sold and shipped lo.s valued at B.S.W$D%,D0#.#D or P0,&&D,D-#.%,, 9 directl/
to several ;r(s in "apan!ithout the aid or intervention of DR)COR.CMS sued
DR)COR for the co((ission received b/ Shin=o andfor (oral and e6e(plar/
da(a.es, !hile DR)CORcounterclai(ed for its co((ission, a(ountin. to
P#99,#'$.-%,fro( the sales (ade b/ CMS of lo.s to "apanese ;r(s. In
itsrepl/, CMS averred as a defense to the counterclai( thatDR)COR had
retained the su( of P#,#,#'$.-% as part of itsco((ission for the sales (ade
b/ CMS. hus, as its counterclai(

to DR)CORHs counterclai(, CMS de(anded DR)COR return thea(ount it
unla!full/ retained. DR)COR later ;led an a(endedcounterclai(, alle.in.
that the balance of its co((ission on thesales (ade b/ CMS !as
P90,'D,.&0, thus i(pliedl/ ad(ittin. thatit retained the a(ount alle.ed b/
CMS.RCC dis(issed the co(plaint. o evidence !as presented tosho! that
Shin=o received the co((ission of B.S. W$$,0'9.'$arisin. fro( the sale of
CMSHs lo.s in "apan, thou.h the trial courtstated that <Shin=o !as able to
collect the total a(ount ofW$$,0'9.'$ BS Dollars.C)C )>r(ed RC
decision.SCC )>r(ed. 1o!ever, Court ;nds (erit in CMSHs contention
thatthe appellate court erred in holdin. that DR)COR !as entitledto its
co((ission fro( the sales (ade b/ CMS to "apanese ;r(s.#.

he principal (a/ revo=e a contract of a.enc/ at !ill,and such revocation
(a/ be e6press, or i(plied, and(a/ be availed of even if the period ;6ed in
thecontract of a.enc/ as not /et e6pired. )s the principalhas this absolute
ri.ht to revo=e the a.enc/, the a.entcan not obAect thereto? neither (a/ he
clai( da(a.esarisin. fro( such revocation, unless it is sho!n that such!as
done in order to evade the pa/(ent of a.entHsco((ission.0.

Since the contract of a.enc/ !as revo=ed b/ CMS!hen it sold its lo.s to
"apanese ;r(s !ithout theintervention of DR)COR, the latter is no lon.er
entitledto its co((ission fro( the proceeds of such sale and isnot entitled to
retain !hatever (one/s it (a/ havereceived as its co((ission for said
transactions. Neither !ould DR)COR be entitled to collect da(a.es
fro(CMS, since da(a.es are .enerall/ not a!arded to thea.ent for the
revocation of the a.enc/, and the caseat bar is not one fallin. under the
e6ception(entioned, !hich is to evade
the pa/(ent of the a.entHs co((ission.