AUSTRIA vs CA

this amount, PNB was able to regularly collect a

total of

FACTS:
Guillermo Austria gave Maria G. Abad a pendant
with diamonds to be sold on a commission basis or
to return on demand. However, on her way
home, 2 men snatched her pursue which contained
the jewelry and cash. In short, Abad failed to return
the jewelry upon demand. A case was filed for the
recovery or for damages. In defense, the alleged
robbery extinguished the obligation.

P106,382.01. However,
reasons, PNB

due

to

unexplained

was not able to collect until the investigators found

out
that more money were payable to ATACO from
BPW. The
latter allowed another creditor to collect funds due
to

ISSUE:
Whether or not Abad is liable?

ATACO under the same purchase order, to a total

of

HELD:
P311,230.41.
YES. The Court cited Article 1174 of the Civil Code
is not applicable, in the case the agreement
provided that except in cases expressly specified
by the law or when it is otherwise declared by
stipulation or when the nature of the obligation
requires the assumption of risk, no person shall be
responsible for those events which could not be
foreseen or which though foreseen were
inevitable. It is a recognized jurisdiction that to
constitute a caso fortuito that would exempt a
person from responsibility. It is necessary that the
event must be independent of the human will or the
obligors will.

An agent is required to act with the care of a

good father of a family and becomes liable for
the damages, which the principal may suffer
through his non-performance.
A bank is answerable for negligence in failing to
collect the sums due its debtor from the latters
own debtor, contrary to said banks duty as

PNB v MANILA Surety

holder of an exclusive and irrevocable power of

FACTS: Adams & Taguba Corporation (ATACO)

constituted
PNB as its assignee and attorney-in-fact to receive
and

attorney to make such collections.

The general rule under A1883 is that an agent who
acts in his own name is a bar against the right of

collect from the Bureau of Public Works the

amount to

action of the principal against the person to whom

pay for the asphalt delivered to it under a trust

receipt

the agent has contracted with. In this case, the

agent

guaranteed by Manila Surety.

is the one primarily bound.

ATACO delivered
P431,466.52. Of

to

BPW

asphalt

worth

Exception: When the contract invloves things

belonging to the principal.

recover the balance of P158,563.18, plus interests

and

suffer through its non-performance. PNBs power

to collect was expressly made irrevocable so that
BPW could very well refuse to make payments to
ATACO itself, and reject any demands by the
surety.

damages.

Domingo vs Domingo

CA ruled that PNB was negligent in having

stopped

Quick Summary:

Thus, PNB sued both ATACO and Manila Surety

to

collecting from BPW before ATACOs debt is fully

collected, thereby allowing funds to be taken by
other
creditors to the prejudice of the surety.
PNB asserts that the power of attorney executed
in it is
favor from ATACO was merely an additional
security; that
it was the duty of the surety to see to it that the
obligor
fulfills his obligation; and that PNB has no
obligation to
the surety to collect any sum from ATACO.
ISSUE: W/N PNB is negligent as an agent-creditor
of

Facts: Gregorio Domingo, Vicente Domingos

broker and agent, received P1,000 from Oscar de
Leon as gift or propina. Oscar gave him said
amount after Gregorio succeeded in persuading
Vicente to accept his offer to buy the lot for P1.20
instead of P2.
Held: An agent who takes a secret profit in the
nature of a bonus, gratuity or personal benefit from
the vendee, without revealing the same to his
principal, the vendor, is guilty of a breach of his
loyalty to the principal and forfeits his right to
collect the commission from his principal, even if
the principal does not suffer any injury by reason of
such breach of fidelity, or that he obtained better
results or that the agency is a gratuitous one, or
that usage or custom allows it. The fact that the
principal may have been benefited by the valuable
services of the said agent does not exculpate the
agent who has only himself to blame for such a
result by reason of his treachery or perfidy. As a
necessary consequence of such breach of trust,
Gregorio Domingo must forfeit his right to the
commission and must return the part of the
commission he received from his principal.

Severino vs Severino
ATACO in collecting sums due to it
HELD: YES. The CA did not hold PNB responsible
for its
negligence in failing to collect from ATACO for its
debt to
PNB, but for ITS NEGLECT IN COLLECTING
SUMS DUE TO
ATACO FROM BPW. An agent is required to act
with the
care and diligence of a good father of a family and
becomes liable for the damages, which the
principal may

FACTS: Plaintiff Fabiola Severino, the daughter

and sole heir of Melecio Severino, is praying for the
court to compel defendant Guillermo Severino,
Melecios brother to convey the four parcels of land
in question to her favor.
Melecio Severino died in 1915. Some 428 hectares
of land were recorded in the Mortgage Law
Register in his name. During his lifetime, the land
was worked by the defendant, Guillermo as
administrator for and on behalf of Melecio.
In 1916, cadastral proceedings were instituted for
the registration of land titles. The land was
described as separate lots. Roque Hofilena, as
lawyer for Guillermo, filed answers in behalf of the
latter, claiming the lot in question as the property of
his client. No opposition was presented and the

court therefore decreed the title in Guillermos

favor. It should be noted that during the cadastral
proceeding, plaintiff Fabiola was only a minor and
that Guillermo did not appear personally in the
proceedings and the only testimony in support of
his claim was that of Hofilenas sworn statement
that the former inherited the land from his father
and that he has possessed the land for 30 years.

effect such retransfer or, in default thereof, to pay

ISSUE: W/N defendant Guillermo is an agent of

Melecio

deceased. In his testimonies in a similar case

involving

and was guilty of fraud in procuring title to the

lands in

the same land, he testified that he was the

administrator

question thereby compelling him to convey the

lands in

of the land and that he had always known the land

as

favor of Fabiola as the sole heir.

property of Melecio.

HELD: Conveyance of the land to Fabiola is

proper. Guillermo alleges that one year having
passed since the entry of the final decree
adjudicating the land to his name, said decree
cannot now be opened. The SC said that this is
not an action to set aside the decree under the
Land Registration Act but is an action in personam
against an agent to compel him to return, or

The relations of an agent to his principal are

fiduciary

retransfer, to the heirs or the estate of its principal,

the

estopped from acquiring or asserting title adverse

to that

property commited to his custody as such agent, to

of the principal.

Agent has the obligation to deliver to his

The principals right of action to compel a

principal all funds collected on his account.

reconveyance is not extinguished through the

registration

damages.
It cannot be disputed that Guillermo came into the
possession if the property as only the agent of the

and it is an elementary and very old rule that in

regard
to property forming the subject matter of agency,
he is

The relations of an agent and his principal are

of the land in favor of the agent. Though such
fiduciary and in regard to his property forming
the subject-matter of the agency, he is estopped
from acquiring or asserting a title adverse to
that of the principal. AGENCY | ATTY. OBIETA |
2D 2012

registration may not be reopened, there appears

no
reason why the agent should not be compelled,
through a
suit in equity, to make such reparation as may lie
within

IMPERIAL | DE LUZURIAGA | HIPOLITO 7

execute the necessary documents of conveyance
to

his power for the breach of trust committed by him,

and

as long as the land stands registered in his name

such

interest or benefit, which may result from such

sale

reparation may take the form of a conveyance or

transfer

Municipal Council vs Evangelista

of title to the cestui que trust, i.e. the principal.

FACTS:

Green Valley vs IAC

On March 20, 1924, the Court of First

Instance of Iloilo rendered judgment in Civil
Case No. 3514 thereof, wherein the appellant,
herein Tan Ong Sze Vda. de Tan Toco was
the plaintiff and the Municipality of Iloilo the
defendant and the former sought to recover of
the plaintiff value of a strip of land belonging
to said plaintiff taken by the defendant to
widen a public street; the judgment entitled
the plaintiff to recover Php 42,966.40
representing the value of said strip of land
from the defendant. On appeal to the
judgment was affirmed on November 28,
1924. After the case was remanded to the
court of origin and the judgment rendered
therein had become final and executory.
Attorney Jose Evangelista in his own behalf
and as counsel for the administratix of Jose
Ma. Arroyos intestate estate filed a claim in
the said case for professional
services rendered by him, which the court
acting with the consent of the appellant
widow, fixed at 15% of the amount of the
judgment.

FACTS:
Squibb and Green Valley agreed on
November 3, 1969 that Green Valley would be
the distributor of the former. Squib delivered
the goods to Green Valley upon collection it
failed to pay. Squibb filed a suit to collect.
Green Valley alleged that the contract
enforced with Squibb was a mere agency to
sell and the goods received were in
consignment with the obligation to turn over
the proceeds, less its commission or to return
the goods if not sold. On the other hand,
Squibb claimed that the contract was that of a
sale and that Green Valley was obligated to
pay for the goods within the 60day creditperiod. Green Valley was able to sell
the goods but failed to collect from the
purchasers. Both the trial and the appellate
court upheld the claim of Squibb.
ISSUE:
Whether or not the contract was of sale or
agency?
HELD:
The Supreme Court did not recognize if the
contract was that of sale or agency. But it
stated that whether viewed as a contact of
sale or agency, the liability of Green Valley is
indubitable adopting Green Valleys theory
that the contract is an agency to sell, it is
liable because it sold on creditwithout
authority from its principal. The Court quoted
Article 1905 of the Civil Code, The
commission agent can not, without the
express or implied consent of the principal,
sell on credit. Should he do so, the principal
may demand from him payment in cash, but
the commission agent shall be entitled to any

At the hearing on said claim, the claimants

appearead as did also for the Philippine
National Bankwhich prayed that the amount of
the judgment be turned over to it because the
land taken over had been mortgaged to it.
Antero Soriano also appeared claiming the
amount of the judgment as it had been
assigned to him and by him in turn, assigned
to Mauricio Cruz & Co., Inc. After hearing, all
the adverse claims on the amount of the
judgment, the court ordered that the
attorneys lien in the amount of 15% of the
judgment be recorded in favor of Attorney
Evangelista in his own behalf and counsel for
the administratix of the deceased Jose Ma.
Arroyo and directed the Municipality of Iloilo to
file an action of interpleading against the
adverse claimants: the PNB, Antero Soriano,
Mauricio Cruz & Co., Jose Evangelista and
Jose Arroyo, as was done the case being filed

in the CFI of Iloilo as civil case no. 7702. On

March 29, 1928 with the approval of the
auditor of the provincial treasurer of Iloilo and
with the Executive Bureau paid the late Antero
Soriano the amount of Php 6,000.00 in part
payment of the judgment mentioned above
assigned to him by Tan Boon Tiong acting as
attorney-in-fact of the appellant herein, Tan
Ong Sze Vda. de Tan Toco. On December 18,
1928, the municipal treasurer of Iloilo
deposited with the clerk of the Court of First
Instance of Iloilo the amount of Php 6,000.00
on account of the judgment rendered in said
civil case no. 3514. In pursuance of the
resolution of the court below ordering that the
attorneys lien in the amount of 15% of the
judgment be recorded in favor of Attorney
Jose Evangelista.In his own behalf and as a
counsel for the late Jose Ma. Arroyo, the said
clerk of court delivered on the same date to
said Attorney Evangelista the said amount of
Php 6,000.00.
At the hearing of the instant case, the codefendants of Evangelista agreed not to
discuss the payment made to the latter by the
clerk of CFI of Iloilo of the amount Php
6,000.00 mentioned above in consideration of
said lawyers waiver of the remainder of the
15% of said judgment amounting to Php
44.69. With these 2 payments of Php 6,000.00
each making a total of Php 12,000.00 , the
judgment for Php 42,966.44 against the
Municipality of Iloilo was reduced to Php
30,966.40 which was adjudicated by said
court to Maurice Cruz & Co. This appeal, then
is confined to the claim of Mauricio Cruz & Co.
as alleged assignee of the rights of the late
Soriano by virtue of the said judgment in
payment of professional services rendered by
him to the said widow and her co-heirs.
ISSUE:
Whether or not the assignment made by Tan
Boon Tiong as attorney-in-fact of the appellant
Tan Ong Sze Vda. de Tan Toco to Attorney
Antero Soriano, of all the credits, rights and
interests belonging to said appellant entitled
Vda. de Tan Toco v.s. the Municipal of Iloilo
adjudicating to said widow the amount of Php
42,966.40 plus the costs of court against said
municipal council in consideration of

the professional services rendered by said

attorney to said widow and her co-heirs valid?
HELD:
YES. As to whether Tan Boon Tiong as
attorney-in-fact of the appellant was
empowered by his principal to make as
assignment of credits, rights and interests, in
payment of debts for professional
services rendered by lawyers.Tan Boon Tiong
is authorized to employ and contract for the
services of lawyers upon such conditions as
he may deem convenient. This power
necessarily implies the authoirty to pay
the professional services they engaged. In the
present case, for the appellant in favor of Atty.
Soriano for professional services rendered in
other cases in the interests of the appellant
and her co-heirs was that credit which had
against the Municipality and such assignment
was equivalent to the payment of amount of
said credit to Antero Soriano for professional
services.