1.
BORDADOR V LUZ It was grossly and inexcusably negligent of petitioner to entrust to Deganos, not once or twice but on at
FACTS:
Petitioners were engaged in the business of purchase and sale of jewelry and respondent Brigida Luz,
also known as Aida Luz, was their regular customer.
On several occasions, respondent Deganos, brother of Luz, received several pieces of gold and jewelry
from petitioners amounting to P382, 816. These items and their prices were indicated in seventeen
receipts covering the same. 11 of the receipts stated that they were received for a certain Aquino, a niece
of Deganos, and the remaining 6 receipts indicated that they were received for Luz.
Deganos was supposed to sell the items at a profit and thereafter remit the proceeds and return the
unsold items to Bordador. Deganos remitted only the sum of P53, 207. He neither paid the balance of
the sales proceeds, nor did he return any unsold item to petitioners.
The total of his unpaid account to Bordador, including interest, reached the sum of P725, 463.98.
Petitioners eventually filed a complaint in the barangay court against Deganos to recover said amount.
In the barangay proceedings, Luz, who was not impleaded in the caes, appeared as a witness for
Deganos and ultimately, she and her husband, together with Deganos signed a compromise agreement
with petitioners.
In that compromise agreement, Deganos obligated himself to pay petitioners, on installment basis , the
balance of his account plus interest thereon. However, he failed to comply with his aforestated
undertakings.
Petitioners instituted a complaint for recovery of sum of money and damages, with an application for
preliminary attachment against Deganos and Luz.
Deganos and Luz was also charged with estafa
During the trial of the civil cae, petitioners claimed that Deganos acted as agent of Luz when received
the subject items of jewelry, and because he failed to pay for the same, Luz, as principal, and her spouse
are solidarily liable with him
Trial court ruled that only Deganos was liable to Bordador for the amount and damages claimed. It held
that while Luz did have transactions with petitioners in the past, the items involved were already paid for
and all that Luz owed Bordador was the sum or P21, 483 representing interest on the principal account
which she had previously paid for.
CA affirmed TCs decision
ISSUE:
W/N Luz are liable to petitioners for the latters claim for money and damages in the sum of P725,463.98,
plus interests and attorneys fees, despite the fact that the evidence does not show that they signed any
of the subject receipts or authorized Deganos to receive the items of jewelry on their behalf
RULING: No
Evidence does not support the theory of Bordador that Deganos was an agent of Luz and that the latter
should consequently be held solidarily liable with Deganos in his obligation to petitioners.
The basis for agency is representation. Here, there is no showing that Luz consented to the acts of
Deganos or authorized him to act on her behalf, much less with respect to the particular transactions
involved.
least six occasions as evidenced by 6 receipts, several pieces of jewelry of substantial value without
requiring a written authorization from his alleged principal.
A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the
agent.
Records show that neither an express nor an implied agency was proven to have existed between
Deganos and Luz. Evidently, Bordador who were negligent in their transactions with Deganos cannot
seek relief from the effects of their negligence by conjuring a supposed agency relation between the two
respondents where no evidence supports such claim.
2. Equitable PCI v Ku
March 26, 2001
EQUITABLE PCI BANK, formerly EQUITABLE BANKING CORPORATION
vs.
ROSITA KU
KAPUNAN, J.
SUMMARY: Litigation ensued between Rosita Ku and Equitable. When CA ruled in favor of Rosita,
Equitable filed a motion for an extension of 30 days to file its petition for review as it allegedly received
the CA decision on April 25, 2000. However, Rosita argues that the petition is defective because Bank
actually received CA decision on April 24, 2000 when Joel Rosales, an employee of Banks law firm
received it from the Post office and thus Equitable should have filed motion for extension on May 9, 2000
not May 10. Equitable replied that Joel is not an agent of the bank as expressly mentioned in his affidavit.
HELD: Bank filed petition beyond reglementary period. There was perfection of the agency as Joel
Rosales averred in his affidavit that on occasions when I receive mail matters for said law office, it is
only to help them receive their letters promptly, implying that counsel had allowed the practice of Rosales
receiving mail in behalf of the former. There is no showing that counsel had objected to this practice or
took steps to put a stop to it. However, in the interest of justice, the petition was still given due course.
DOCTRINE:
PERFECTION FROM SIDE OF PRINCIPAL: An agency may be express but it may also be implied
from the acts of the principal, from his silence, or lack of action, or his failure to repudiate the agency,
knowing that another person is acting on his behalf without authority.
PERFECTION FROM SIDE OF AGENT: Likewise, acceptance by the agent may also be express,
although it may also be implied from his acts which carry out the agency, or from his silence or
inaction according to the circumstances (Art. 1870).
FACTS:
Noddy Dairy Products Inc. incurred a loan from Equitable Banking Corporation (now Equitable PCI
Bank)
As security, Rosita Ku, treasurer of Noddy, Inc., and Ku GiokHeng, VP/GM of Noddy Inc. and
Rositas father, mortgaged a residential house and lot located in La Vista, QC which is registered in
Rositas name
When Noddy, Inc. failed to pay the loan, Equitable foreclosed the property extrajudicially and was
issued a certificate of sale after winning in the foreclosure sale. Rosita failed to redeem the property
so the Register of Deeds canceled the TCT in her name and a new one was issued in Equitables
name.
May 10, 89: Equitable instituted an action for ejectment before MeTC QC against Rositas father Ku
GiokHeng.
o It allowed Ku GiokHeng to remain in the property on the condition that the latter pay
rent. However, Ku GiokHengs failed to pay rent thus this action.
Ku GiokHeng denied that there was any lease agreement over the property.
MeTC (Dec. 8, 94): In favor of Equitable and ordered Ku Giok Heng to vacate the premises.
o No right for his continued possession of or stay as title had been duly transferred to
Equitable. Buyer in foreclosure sale becomes the absolute owner of the property
purchased if it is not redeemed during the period of 1 year after the registration of the sale
Ku GiokHeng did not appeal the decision of the MeTC.
 Dec. 20, 94: Instead, he and Rosita Ku, filed an action before RTC QC to nullify the decision of the
MeTC.
RTC (Sept. 13, 99): No merit; Dismissed complaint and ordered the execution of the MeTC decision.
Rosita filed in CA a special civil action for certiorari assailing the decision of the RTC as she was
not made a party to the ejectment suit and was, therefore, deprived of due process.
CA (Mar. 31, 2000): Agreed with Rosita. Enjoined the eviction of Rosita from the premises.
May 10, 2000: Equitable filed in SC a motion for an extension of 30 days from May 10, 2000 or
until June 9, 2000 to file its petition for review of the CA decision as the Bank has received the CA
decision on April 25, 2000.
o April 25, 2000 Received CA Decision (15 days reglementary period to file petition for
review OR file motion for extension)
o May 10,2000 Filed motion for extension for 30 days
o June 9, 2000 w/n 30 days
SC: Granted the motion for a 30-day extension counted from the expiration of the reglementary
period and conditioned upon the timeliness of the filing of the motion for extension.
June 13, 2000: Equitable Bank filed its petition, contending that there was no need to name Rosita
Ku as a party in the action for ejectment since she was not a resident of the premises nor was she
in possession of the property.
o FOOTNOTE: The last day to file the petition was on June 9, 2000 but because of the
Courts 99th Anniversary Celebration, business transactions were suspended on said date
per Memorandum Circular No. 03-2000.
Rosita argues that the petition is defective because of non-compliance with reglementary period.
o Bank received CA decision not on April 25, 2000 but on April 24, 2000
o April 24, 2000 - copy was duly delivered to and received by Joel Rosales (Authorized
Representative) as evidenced by a Certification issued by the Manila Central Post
Office
o May 10, 2000 When Equitable filed its motion for extension to file petition for review, it
was 1 day beyond the reglementary period for filing the petition for review OR motion to
extend w/c must be filed on May 9, 2000 - 15 days from the receipt of CA decision
Banks Reply: Reiterates its honest representation of having received a copy of CA decision on
April 25, 2000. Receipt on April 24, 2000 by Joel Rosales, who was not an agent of its counsels
law office cannot be considered receipt of the CA Decision by the Bank (or its counsel).
Rosales Affidavit
o Employee of Unique Industrial & Allied Services, Inc. and assigned with the Equitable PCI
Bank, Mail and Courier Department w/ official duty and responsibility to receive and pick-
up from the Manila Central Post Office the various mails, letters, correspondence, and
other mail matters intended for the banks various departments and offices at Equitable
Bank Building
o I am not the constituted agent of Curato-Divina-Mabilog-Nedo-Magturo-Pagaduan
Law Office for purposes of receiving their incoming mail matters; neither am I any
such agent of the various other tenants of the said Building. On occasions when I
receive mail matters for said law office, it is only to help them receive their letters
promptly.
o April 24, 2000: Received CA Decision together with other mail matters, and brought them
to the Mail and Courier Department;
o April 25, 2000: After sorting out mail matters, erroneously recorded them on page 422 of
logbook as having been received on April 25, 2000
o April 27, 2000: Decision was sent by the Mail and Courier Department to said Law Office
whose receiving clerk opened the letter and stamped on the Notice of Judgment their
actual date of receipt: April 27, 2000
o May 8, 2000: Atty. Roland A. Niedo of said law office inquired as to actual date of receipt
of letter, and informed him that based on logbook, it was received on April 25, 2000.
o Error was caused by an honest mistake.
Bank also argues such receipt did not constitute notice to its counsel, as required by Sec. 2 and 10,
Rule 13 of ROC. CA decision actually received on April 27, 2000.
o SEC. 2. Filing and service defined. Filing is the act of presenting the pleading or other
paper of the clerk of court. Service is the act of providing a party with a copy of the pleading
or paper concerned. If any party has appeared by counsel, service upon him shall be
made upon his counsel or one of them, unless service upon the party himself is ordered
by the court. Where one counsel appears for several parties, he shall only be entitled to
one copy of any paper served upon him by the opposite side.
o PLDT vs. NLRC: It was only when the Legal Services Division actually received a copy
of the decision that a proper and valid service may be deemed to have been made.
o Actual receipt by its counsel was actually on April 27, 2000, not April 25, 2000. The
motion for extension to file the petition for review was even filed 2 days before the lapse
of the 15-day reglementary period
Assuming the motion for extension was indeed one day late, Bank urges SC to suspend its rules
and admit the petition in the interest of justice.
ISSUES:
1) Whether Joel Rosales can be considered the agent of Banks counsel and thus service to him was
considered service to Bank? (YES) [Whether the act of the law firm in allowing its employee to
occasionally receive its mail can be construed to mean an agency relationship? YES]
2) Whether, in the interest of justice, the rules on reglementary periods can be suspended in this case?
(YES)
3) Whether a person can be evicted by virtue of a decision rendered in an ejectment case where she was
not joined as a party? (YES)
RATIO:
1) Joel Rosales is an agent of Banks counsel.
Although the Affidavit of Joel Rosales states that he is not the constituted agent of Curato-Divina-
Mabilog-Nedo-Magturo-Pagaduan Law Office, an agency may be express but it may also be
implied from the acts of the principal, from his silence, or lack of action, or his failure to repudiate
the agency, knowing that another person is acting on his behalf without authority. (Art. 1869)
Likewise, acceptance by the agent may also be express, although it may also be implied from his
acts which carry out the agency, or from his silence or inaction according to the circumstances (Art.
1870).
CASE AT BAR: Joel Rosales averred that on occasions when I receive mail matters for said law
office, it is only to help them receive their letters promptly, implying that counsel had allowed the
practice of Rosales receiving mail in behalf of the former. There is no showing that counsel
had objected to this practice or took steps to put a stop to it.
2) Court gives due course to petition in spite of noncompliance with periods in light of the merits of the
petition.
The perfection of an appeal within the period fixed by the rules is mandatory and
jurisdictional. But, it is always in the power of this Court to suspend its own rules, or to except a
particular case from its operation, whenever the purposes of justice require it. Strong compelling
reasons such as serving the ends of justice and preventing a grave miscarriage thereof warrant
the suspension of the rules.
The Court proceeded to enumerate cases where the rules on reglementary periods were
suspended (6 days; 13 days; 1 day; 7 days; 2 days; tardy appeal).
3) Even if Rosita were a resident of the property, she is nevertheless bound by the judgment of the MeTC
in the action for ejectment despite her being a non-party thereto as the daughter of Ku GiokHeng, the
defendant in the action for ejectment.
Generally, no man shall be affected by any proceeding to which he is a stranger, and strangers to
a case are not bound by judgment rendered by the court. (Matuguina vs. CA) Nevertheless, a
judgment in an ejectment suit is binding not only upon the defendants in the suit but also against
those not made parties thereto, if they are:
o a) trespassers, squatters or agents of the defendant fraudulently occupying the property
to frustrate the judgment;
o b) guests or other occupants of the premises with the permission of the defendant;
o c) transferees pendente lite;
o d) sub-lessees;
o e) co-lessees; or
 o f) members of the family, relatives and other privies of the defendant. (Oro Cam
Enterprises, Inc. vs. CA)
DISPOSITIVE: Petition GIVEN DUE COURSE and GRANTED. CA decision REVERSED.
3. YUN KWAN BYUNG vs. PHILIPPINE AMUSEMENT AND GAMING CORPORATION
G.R. No. 163553 December 11, 2009
FACTS
PAGCOR launched its Foreign Highroller Marketing Program. The Program aims to invite patrons from
foreign countries to play at the dollar pit of designated PAGCOR-operated casinos under specified terms
and conditions and in accordance with industry practice. Petitioner, a Korean national, alleges that he
came to the Philippines four times to play for high stakes at the Casino Filipino; that in the course of the
games, he was able to accumulate gambling chips worth US$2.1 million. Petitioner contends that when
he presented the gambling chips for encashment with PAGCORs employees or agents, PAGCOR
refused to redeem them.
PAGCOR claims that petitioner, who was brought into the Philippines by ABS Corporation, is a junket
player who played in the dollar pit exclusively leased by ABS Corporation for its junket players. PAGCOR
alleges that it provided ABS Corporation with distinct junket chips. ABS Corporation distributed these
chips to its junket players. At the end of each playing period, the junket players would surrender the chips
to ABS Corporation. Only ABS Corporation would make an accounting of these chips to PAGCORs
casino treasury.
ISSUE
Whether the CA erred in holding that PAGCOR is not liable to petitioner, disregarding the doctrine of
implied agency, or agency by estoppels
RULING
Petitioner alleges that there is an implied agency. Alternatively, petitioner claims that even assuming that
no actual agency existed between PAGCOR and ABS Corporation, there is still an agency by estoppel
based on the acts and conduct of PAGCOR showing apparent authority in favor of ABS Corporation.
Petitioners argument is clearly misplaced. The basis for agency is representation, that is, the agent acts
for and on behalf of the principal on matters within the scope of his authority and said acts have the same
legal effect as if they were personally executed by the principal. On the part of the principal, there must
be an actual intention to appoint or an intention naturally inferable from his words or actions, while on the
part of the agent, there must be an intention to accept the appointment and act on it. Absent such mutual
intent, there is generally no agency.
There is no implied agency in this case because PAGCOR did not hold out to the public as the principal
of ABS Corporation. PAGCORs actions did not mislead the public into believing that an agency can be
implied from the arrangement with the junket operators, nor did it hold out ABS Corporation with any
apparent authority to represent it in any capacity. The Junket Agreement was merely a contract of lease
of facilities and services.
4. GERMANN & CO V DONALDSON
FACTS: This is an incident of want of personality of the plaintiffs attorney. The action is to recover money
said to be due for freight under charter party. It was brought by virtue of general power of suits, executed
in Manila by Fernando Kammerzell, and purports to be a substitution in favor of several attorneys of
power given to Kammerzell in an instrument executed in Berlin by Max Leonard Tornow, the sole owner
of the business carried on in Berlin and Manila under the name Germann & Co.
ISSUE: Does the authority include the power to file actions in court for the purpose of recovering a sum
of money?
HELD
Yes, the authority includes the power to file suits to recover sums of money due to the business concern,
for it cannot be supposed in the absence of very clear language to that effect, that it was the intention of
the principal to withhold from the agent essential to efficient management of the business entrusted to
his control.
RULING: Held that a power of attorney executed in Germany, should be tested as to its formal validity by
the laws of that country and not by the provisions of the CC.
The right to commence action for collection of debts owing to principal is not an incident of strict
ownership, which must be conferred upon express terms. (Germann & Co vs. Donaldson, G.R. No. L-
439, November 11, 1901)
The power to legally compel the payment of debts owing to the principal is an express grant of the right
to bring suit for the collection of such debts. (Germann & Co vs. Donaldson, G.R. No. L-439, November
11, 1901)
DISPO: Affirmed
5. Diego Linan vs Marcos Puno (G.R. No. L-9608)
Facts:
Linan an owner of a parcel of land executed a document stating the power, duties and obligations of
Puno:
I, Diego Lian, of age, married, a resident of Daet, Province of Ambos Camarines, Philippine Islands, and
at the present time temporarily residing in this city of Tarlac, capital of the Province of Tarlac, P.I., set
forth that I hereby confer sufficient power, such as the law requires, upon Mr. Marcos P. Puno, likewise
a resident of this city of Tarlac, capital of the Province of Tarlac, in order that in my name and
representation he may administer the interest I possess within this municipality of Tarlac, purchase, sell,
collect and pay, as well as sue and be sued before any authority, appear before the courts of justice and
administrative officers in any proceeding or business concerning the good administration and
advancement of my said interests, and may, in necessary cases, appoint attorneys at law or attorneys in
fact to represent him.
June 1911 Puno sold and delivered the said parcel of land to the other defendants for a sum of 800pesos
Plaintiff alleges that the document did not confer upon Puno the power to sell the land and prayed that
the sale be set aside, the land be returned to him together with damages.
Puno contend s that the sale was valid and prayed that he be relieved from any liability.
Issue:
Whether the sale of Puno acting as an agent of Linan was a valid sale ?
Ruling:
RTC: Favored plaintiff Linan That the document
(1) did not give Puno authority to sell the land;
(2) that the sale was illegal and void;
(3) That defendants should return to the land to the plaintiff; and
(4) That the defendants should pay to the plaintiff the sum of P1,000 as damages, P400 of which the
defendant Puno should alone be responsible for, and to pay the costs
SC
Favored defendant puno : to quote;
The SC examined the power conferred upon the defendant Puno (Exhibit A) and ascertain, if possible,
what was the real intent of the plaintiff. The lower court held that the "only power conferred was the power
to administer." Reading the contract we find it says that the plaintiff "I confer ... power ... that ... he may
administer ... purchase, sell, collect and pay ... in any proceeding or business concerning the good
administration and advancement of my said interests." The words "administer, purchase, sell," etc., seem
to be used coordinately. Each has equal force with the other. There seems to be no good reason for
saying that Puno had authority to administer and not to sell when "to sell" was as advantageous to the
plaintiff in the administration of his affairs as "to administer." To hold that the power was "to administer"
only when the power "to sell" was equally conferred would be to give to special words of the contract a
special and limited meaning to the exclusion of other general words of equal import.
The record contains no allegation on proof that Puno acted in bad faith or fraudulently in selling the land.
It will be presumed that he acted in good faith and in accordance with his power as he understood it. That
his interpretation of his power, as gathered from the contract
the other defendants acted in good faith, we are of the opinion that the contract, liberally construed, as
we think it should be, justifies the interpretation given it by Puno. In reaching this conclusion, we have
taken into account the fact that the plaintiff delayed his action to annul said sale from the month of June,
1911, until the 15th of February, 1913. Neither have we overlooked the fact in the brief of the appellants
that the plaintiff has not returned, nor offered to return, nor indicated a willingness to return, the purchase
price In view of all the foregoing, we are of the opinion that the lower court committed the error complained
of in the second assignment, and, without discussing the other assignments of error, we are of the
opinion, and so hold, that the judgment of the lower court should be and is hereby revoked and that the
appellants should be relieved from all liability under the complaint.
6. ROBINSON, FLEMING & CO VS CRUZ & TAN CHONG SAY
FACTS:
* Plaintiff is a partnership organized and existing under the laws of Great Britain, with a resident
attorney-in-fact in the Phil. Islands
* The defendant is a domestic partnership doing business in the city of Manila, and it is alleged
that it is represented in London, England, by a duly appointed agent and attorney-in-fact.
* Plaintiff claims that under a written contract executed about April 1921, it bought from Cruz & Tan 500
bales of Manila hemp grade J at 40 pounds less 1%, equivalent, in Philippine pesos to P364.66, per ton
of 20 cwt. Net landed weight.
* Pursuant to the contract, Cruz & Tan shipped in 2 parcels from Manila to London, for delivery to
Robinson, the 500 bales of Manila hemp grade JDC/J, freight and f.p.a. insurance for the account of
Cruz, which hemp upon being weighed in London, and deducting the tare, as provided for in the contract,
amounted to 1182 cwt-2 qtrs10 pounds equivalent to 59.13 tons of 20 cwt. Net weight, and after deducting
freight, commission, and insurance, as the contract provides, it had an invoice value of 1872 pounds
equivalent to P17,241.48, Phil currency
* That at the time of the shipment, Cruz drew upon Robinson for P18,417.27, which draft the latter paid
by means of a letter of credit, thus leaving a balance due and owing the plaintiff of P1,175.59
* when the hemp arrived in London, it was not in merchantable condition, and was not so when it was
shipped from Manila
* After the shipment, Cruz did not, without undue delay, provide plaintiff with Government graders
certificates for the hemp, and by reason thereof, plaintiff was obliged to lighter and store 250 bales of it
pending the arrival of the Government graders certificates at a cost of P135.87
* By reason of such acts, Cruz became indebted to plaintiff in the sum of P14,461.20, no part of which
has been paid, except the sum of 11,687.87 which was the net value of 450 bales of Manila hemp grade
J shipped by Cruz to plaintiff leaving a balance then due and owing from defendant to plaintiff, on its first
cause of action, of P2,539.09 for which demand has been made and payment refused.
ISSUE: W/N the trial court erred in ruling that Messrs. H.E. Marchant and Francis Adams had been
agents of the defendant in London for the purpose of selling and disposing of its hemp, the nature,
character, and scope of such agency not appearing to have been limited
RULING: NO
This action is founded upon an alleged written contract which the plaintiff claims was executed
by and between it and the defendant, acting by and through its authorized agent, H. Merchant, now
deceased, who was then in London and who was at that time the London agent of the defendant in the
selling of its hemp
In the very nature of things, an agent cannot sell hemp in a foreign country (London) without
making some kind of a contract, and if he had power to sell, it would carry with it the authority to make
and enter into the usual and customary contract for its slae
SC: Marchant was the London agent of Cruz & Tan, and in the ordinary course of business,
executed the contract for and on behalf of the defendant, as its agent, and as its act and deed, and for
such reason, the defendant is bound by the contract.
The defendant undertook to carry out and perform the terms and provisions of the contract,
and by and under its terms, to ship and deliver the hemp, drew the draft, and took and accepted the
money for its payment
SC: Contract is valid and binding upon the defendant, and that Marchant, as the agent of the
defendant, not only had the authority to make and enter into it for and on behalf of the defendant, but as
a matter of fact the contract was legally ratified and approved by the subsequent acts and conduct of the
defendant.
The contract was executed in the ordinary course of business and Marchant was acting within
the scope of his authority as agent of Cruz and Tan.
7. PURITA PAHUD VS. CA
[ G.R. NO. 160346, AUGUST 25, 2009 ]
FACTS:
Spouses Pedro San Agustin and Agatona Genil were able to acquire a 246-square meter parcel of land
situated in Barangay Anos, Los Baos, Laguna and covered by Original Certificate of Title . Agatona
Genil and Pedro San Agustin died ,( both died intestate) survived by their eight (8) children:
respondents, Eufemia, Raul, Ferdinand, Zenaida, Milagros, Minerva, Isabelita and Virgilio.
Eufemia, Ferdinand and Raul executed a Deed of Absolute Sale of Undivided Shares conveying in favor
of petitioners (the Pahuds, for brevity) their respective shares . Eufemia also signed the deed on behalf
of her four (4) other co-heirs, namely: Isabelita on the basis of a special power of attorney , and also for
Milagros, Minerva, and Zenaida but without their apparent written authority. The deed of sale was also
not notarized.
The Pahuds paid the accounts into the Los Baos Rural Bank where the subject property was
mortgaged. The bank issued a release of mortgage and turned over the owner's copy of the OCT to the
Pahuds, the Pahuds made more payments to Eufemia and her siblings. When Eufemia and her co-heirs
drafted an extra-judicial settlement of estate to facilitate the transfer of the title to the Pahuds, Virgilio
refused to sign it.
Virgilio's co-heirs filed a complaint for judicial partition of the subject property before the RTC of
Calamba, Laguna.In the course of the proceedings for judicial partition, a Compromise Agreement was
signed with seven (7) of the co-heirs agreeing to sell their undivided shares to Virgilio .. The compromise
agreement was, however, not approved by the trial court because Atty. Dimetrio Hilbero, lawyer for
Eufemia and her six (6) co-heirs, refused to sign the agreement because he knew of the previous sale
made to the Pahuds.
Eufemia acknowledged having received the payments from Virgilio. Virgilio then sold the entire property
to spouses Isagani Belarmino and Leticia Ocampo (Belarminos) . The Belarminos immediately
constructed a building on the subject property.
Alarmed and bewildered by the ongoing construction on the lot they purchased, the Pahuds immediately
confronted Eufemia who confirmed to them that Virgilio had sold the property to the Belarminos.Then the
Pahuds filed a complaint in intervention in the pending case for judicial partition.
Issue:
1. Whether or not the sale of the subject property by Eufemia and her co-heirs to the Pahuds is valid
and enforceable.
2. Whether or not the sale by co-heirs to Virgilio is void.
3. Whether or not the sale of Virgilio to Belarminos is valid.
Ruling:
1. The transaction needs for qualification:
First: the sale made by Eufemia, Isabelita and her two brothers to the Pahuds should be valid
only with respect to the 4/8 portion of the subject property. Second; the sale with respect to the 3/8
portion, representing the shares of Zenaida, Milagros, and Minerva, is void because Eufemia could not
dispose of the interest of her co-heirs in the said lot absent any written authority from the latter, as
explicitly required by law. It is true also there is no special power, they can file an annulment of the sale,
but the true facts of which the seven admitted that they sold their shares to pahuds, they cannot assail
the validity of the transaction. Instead, they just remain silent , because by allowing them to do so would
be tantamount to giving premium to their three (3) sisters dishonest and fraudulent deed. Thus their
silence of the issue bars from a making for a contrary claim and they are stopped from impugning the
validity of the sale.
While the sale with respect to the 3/8 portion is void by express provision of law and not susceptible to
ratification. The validity of the said transaction cannot be corrected on the basis of common law principle
of estoppel.
The law provides:
When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall
be in writing; otherwise, the sale shall be void.
a special power of attorney is necessary for an agent to enter into a contract by which the ownership of
an immovable property is transmitted or acquired, either gratuitously or for a valuable consideration.
The authority of an agent to execute a contract of sale of real estate must be conferred in writing and
must give him specific authority, either to conduct the general business of the principal or to execute a
binding contract containing terms and conditions which are in the contract he did execute. A special
power of attorney is necessary to enter into any contract by which the ownership of an immovable is
transmitted or acquired either gratuitously or for a valuable consideration. The express mandate required
by law to enable an appointee of an agency in general terms to sell must be one that expressly mentions
a sale or that includes a sale as a necessary ingredient of the act mentioned. For the principal to confer
the right upon an agent to sell real estate, a power of attorney must so express the powers of the agent
in clear and unmistakable language. When there is any reasonable doubt that the language so used
conveys such power, no such construction shall be given the document.
In the absence of a written authority to sell a piece of land is, ipso jure, void, precisely to protect the
interest of an unsuspecting owner from being prejudiced by the unwarranted act of another.
2. the subsequent sale made by the seven co-heirs to Virgilio was void because they no longer had
any interest over the subject property which they could alienate at the time of the second transaction.
Nemo dat quod non habet. Virgilio, however, could still alienate his 1/8 undivided share to the
Belarminos.
3. The sale to Bilarminos is not valid, they did not purchased the property from Virgilio in good faith.
the Belarminos were fully aware that the property was registered not in the name of the immediate
transferor, Virgilio, but remained in the name of the mother title. This fact alone is sufficient impetus to
make further inquiry and, thus, negate their claim that they are purchasers for value in good faith.
They knew that the property was still subject of partition proceedings before the trial court, and that the
compromise agreement signed by the heirs was not approved by the RTC following the opposition of the
counsel for Eufemia and her six other co-heirs.
As a general rule, a purchaser of a real property is not required to make any further inquiry beyond what
the certificate of title indicates on its face. But the rule excludes those who purchase with knowledge of
the defect in the title of the vendor or of facts sufficient to induce a reasonable and prudent person to
inquire into the status of the property. Such purchaser cannot close his eyes to facts which should put a
reasonable man on guard, and later claim that he acted in good faith on the belief that there was no
defect in the title of the vendor. His mere refusal to believe that such defect exists, or his obvious neglect
by closing his eyes to the possibility of the existence of a defect in the vendor's title, will not make him an
innocent purchaser for value, if afterwards it turns out that the title was, in fact, defective. In such a case,
he is deemed to have bought the property at his own risk, and any injury or prejudice occasioned by such
transaction must be borne by him.
The Belarminos, being transferees pendente lite, are deemed buyers in mala fide, and they stand exactly
in the shoes of the transferor and are bound by any judgment or decree which may be rendered for or
against the transferor. Furthermore, had they verified the status of the property by asking the neighboring
residents, they would have been able to talk to the Pahuds who occupy an adjoining business
establishment and would have known that a portion of the property had already been sold.
The supreme court reversed and set aside the ruling of the CA and reinstated of the RTC with
modification.
8. COSMIC LUMBER CORPORATION vs. COURT OF APPEALS and ISIDRO PEREZ,
G.R. No. 114311. November 29, 1996 BELLOSILLO, J.
FACTS: Cosmic Corporation, through its General Manager executed a Special Power of Attorney
appointing Paz G. Villamil-Estrada as attorney-in-fact to initiate, institute and file any court action for the
ejectment of third persons and/or squatters of the entire lot 9127 and 443 for the said squatters to remove
their houses and vacate the premises in order that the corporation may take material possession of the
entire lot. Villamil-Estrada then instituted an action for the ejectment of private respondent Isidro Perez
and recover the possession of a portion of lot 443 before the RTC.
Subsequently, Estrada entered into a Compromise Agreement with Perez, the terms and
conditions such as: In order for Perez to buy the said lot he is presently occupying, he has to pay to
plaintiff through Estada the sum of P26,640 computed at P80/square meter and that Cosmic Lumber
recognizes ownership and possession of Perez by virtue of this compromise agreement over said portion
of 333 sqm of lot 443 and whatever expenses of subdivision, registration and other incidental expenses
shall be shouldered by Perez.
Although the agreement was approved by the trial court and the decision became final and executory it
was not executed within the 5 year period from date of its finality allegedly due to the failure of Cosmic
Lumber to produce the owner's duplicate copy of Title No. 37649 needed to segregate from Lot No. 443
which is the portion sold by Villamil-Estrada, to private respondent under the compromise agreement.
Upon learning of the fraudulent transaction, petitioner sought annulment of the decision of the trial court
before respondsent Court of Appeals on the ground that the compromise agreement was void.
ISSUE: Whether there the acts of Paz Estrada are binding to Cosmic Lumber
RULING: No. The authority granted Villamil-Estrada under the special power of attorney was explicit and
exclusionary: for her to institute any action in court to eject all persons found on lots number 9127 and
443 so that Cosmic Lumber could take material possession thereof and for this purpose, to appear at the
pre-trial and enter into any stipulation of facts and/or compromise agreement but only insofar as this was
protective of the rights and interests of Cosmic Lumber in the property.
Nowhere in this authorization was Villamil-Estrada granted expressly or impliedly any power to
sell the subject property nor a portion thereof. Neither can a conferment of the power to sell be validly
inferred from the specific authority to enter into a compromise agreement because of the explicit
limitation fixed by the grantor that the compromise entered into shall only be so far as it shall protect the
rights and interest of the corporation in the aforementioned lots.
In the context of special investiture of powers to Villamil-Estrada, alienation by sale of an
immovable certainly cannot be deemed protective of the right of Cosmic Lumber to physically possess
the same, more so when the land was being sold for a price of P80/sqm , very much less than its assessed
value of P250/sqm and considering further that plaintiff never received the proceeds of the sale.
When the sale of a piece of land or any interest thereon is through an agent, the authority of
the latter shall be in writing; otherwise, the sale should be void. Thus, the authority of an agent to execute
a contract for the sale of real estate must be conferred in writing and must give him specific authority,
either to conduct the general business of the principal or to execute a binding contract containing terms
and conditions which are in the contract he did execute.
For the principal to confer the right upon an agent to sell real estate, a power of attorney must
so express the powers of the agent in clear and unmistakable language. It is therefore clear that by selling
to Perez a portion of Cosmic Lumbers land through a compromise agreement, Villamil-Estrada acted
without or in obvious authority. The sale ipso jure is consequently void and so is the compromise
agreement. This being the case, the judgment based thereon is necessarily void.
When an agent is engaged in the perpetration of a fraud upon his principal for his own exclusive
benefit, he is not really acting for the principal but is really acting for himself, entirely outside the scope of
his agency.

9. HODGES VS SALAS

10. BRITISH AIRWAYS VS CA

FACTS:
On April 16, 1989, Mahtani decided to visit his relatives in Bombay, India. He asked Mr. Gumar to prepare
his travel plans.

Mr. Gumar purchased a ticket from British Airways (BA).

Since BA had no direct flights from Manila to Bombay, Mahtani had to take a flight to Hongkong via PAL,
and upon arrival in Hongkong he had to take a connecting flight to Bombay on board BA.
Before departure, Mahtani checked in at PAL counter his two pieces of luggage containing his clothings
and personal effects, confident that upon reaching Hongkong, the same would be transferred to the BA
flight bound for Bombay.

when Mahtani arrived in Bombay he discovered that his luggage was missing and that upon inquiry from
the BA representatives, he was told that the same might have been diverted to London.
After waiting for 1 week, BA finally advised him to file a claim by accomplishing the "Property Irregularity
Report.

In the Philippines, on June 11, 1990 Mahtani filed his complaint for damages and attorney's fees5 against
BA and Mr. Gumar before the RTC.L alleging that the reason for the non-transfer of the luggage was due
to the latter's late arrival in Hongkong, thus leaving hardly any time for the proper transfer of Mahtani's
luggage to the BA aircraft bound for Bombay.

The RTC rendered its decision in favor of Mahtani.

BA is ordered to pay Mahtani P7,000 for the value of the 2 suitcases
$400 for the value of the contents of the luggage
P50,000 for moral and exemplary damages and 20% for attorneys fees and cost of the action.
This decision was affirmed by CA.

ISSUE: WON the award of the damages was without basis since Mahtani failed to declare a higher
valuation w/ respect to his luggage.
RULING: The SC ruled in the negative.
the nature of an airline's contract of carriage partakes of two types, namely: a contract to deliver a cargo
or merchandise to its destination and a contract to transport passengers to their destination. A business
intended to serve the traveling public primarily, it is imbued with public interest, hence, the law governing
common carriers imposes an exacting standard. 14 Neglect or malfeasance by the carrier's employees
could predictably furnish bases for an action for damages.

Admittedly, in a contract of air carriage a declaration by the passenger of a higher value is needed to
recover a greater amount. Article 22(1) of the Warsaw Convention

However, , we have held that benefits of limited liability are subject to waiver such as when the air carrier
failed to raise timely objections during the trial when questions and answers regarding the actual claims
and damages sustained by the passenger were asked.

Given the foregoing postulates, the inescapable conclusion is that BA had waived the defense of limited
liability when it allowed Mahtani to testify as to the actual damages he incurred due to the misplacement
of his luggage, without any objection.

Indeed, it is a well-settled doctrine that where the proponent offers evidence deemed by counsel of the
adverse party to be inadmissible for any reason, the latter has the right to object. However, such right is
a mere privilege which can be waived. Necessarily, the objection must be made at the earliest opportunity,
lest silence when there is opportunity to speak may operate as a waiver of objections. 25 BA has precisely
failed in this regard.

To compound matters for BA, its counsel failed, not only to interpose a timely objection, but even
conducted his own cross-examination as well.