Valenzuela vs Ca

Valenzuela v CA G.R. No. 83122 October 19, 1990

J. Gutierrez Jr.

Facts:
Petitioner Valenzuela, a General Agent respondent Philamgen, was
authorized to solicit and sell all kinds of non-life insurance. He
had a 32.5% commission rate. From 1973 to 1975, Valenzuela solicited
marine insurance from Delta Motors, Inc. in the amount of P4.4
Million from which he was entitled to a commission of 32%. However,
Valenzuela did not receive his full commission which amounted to P1.6
Million from the P4.4 Million. Premium payments amounting to
P1,946,886.00 were paid directly to Philamgen. Valenzuelas
commission amounted to P632,737.00.
Philamgen wanted to cut Valenzuelas commission to 50% of the
amount. He declined.
When Philamgen offered again, Valenzuela firmly reiterated his
objection.
Philamgen took drastic action against Valenzuela. They: reversed the
commission due him, threatened the cancellation of policies issued by
his agency, and started to leak out news that Valenzuela has a
substantial debt with Philamgen. His agency contract was terminated.
The petitioners sought relief by filing the complaint against the
private respondents. The trial court found that the principal cause
of the termination as agent was his refusal to share his Delta
commission.
The court considered these acts as harassment and ordered the company
to pay for the resulting damage in the value of the commission. They
also ordered the company to pay 350,000 in moral damages.
The company appealed. The CA ordered Valenzuela to pay the entire
amount of the commission. Hence, this appeal by Valenzuela.

Issue:
1. WON the agency contract is coupled with interest on the part of
agent Valenzuela.
2. Whether or not Philamgen can be held liable for damages due to the
termination of the General Agency Agreement it entered into with the
petitioners.
3. WON Valenzuela should pay the premiums he collected.

Held: Yes. Yes. Petition granted

Ratio:
1. In any event the principal's power to revoke an agency at will is
so pervasive, that the Supreme Court has consistently held that
termination may be effected even if the principal acts in bad faith,
subject only to the principal's liability for damages.
The Supreme Court accorded great weight on the trial courts factual
findings and found the cause of the conflict to be Valenzuelas
refusal to share the commission. Philamgen told the petitioners of
its desire to share the Delta Commission with them. It stated that
should Delta back out from the agreement, the petitioners would be
charged interests through a reduced commission after full payment by
Delta.
Philamgen proposed reducing the petitioners' commissions by 50% thus
giving them an agent's commission of 16.25%. The company insisted on
the reduction scheme. The company pressured the agents to share the
income with the threat to terminate the agency. The petitioners were
also told that the Delta commissions would not be credited to their
account. This continued until the agency was terminated.
Records also show that the agency is one "coupled with an interest,"
and, therefore, should not be freely revocable at the unilateral will
of the company.
The records sustain the finding that the private respondent started
to covet a share of the insurance business that Valenzuela had built
up, developed and nurtured. The company appropriated the entire
insurance business of Valenzuela. Worse, despite the termination of
the agency, Philamgen continued to hold Valenzuela jointly and
severally liable with the insured for unpaid premiums.
Under these circumstances, it is clear that Valenzuela had an
interest in the continuation of the agency when it was
unceremoniously terminated not only because of the commissions he
procured, but also Philamgens stipulation liability against him for
unpaid premiums. The respondents cannot state that the agency
relationship between Valenzuela and Philamgen is not coupled with
interest.
There is an exception to the principle that an agency is revocable at
will and that is when the agency has been given not only for the
interest of the principal but also for the mutual interest of the
principal and the agent. The principal may not defeat the agent's
right to indemnification by a termination of the contract of agency.
Also, if a principal violates a contractual or quasi-contractual duty
which he owes his agent, the agent may as a rule bring an appropriate
action for the breach of that duty.
2. Hence, if a principal acts in bad faith and with abuse of right in
terminating the agency, then he is liable in damages. The Civil Code
says that "every person must in the exercise of his rights and in the
performance of his duties act with justice, give every one his due,
and observe honesty and good faith: (Art. 19, Civil Code), and every
person who, contrary to law, wilfully or negligently causes damages
to another, shall indemnify the latter for the same (Art. 20, Civil
Code).
3. As to the issue of whether or not the petitioners are liable to
Philamgen for the unpaid and uncollected premiums which the appellate
court ordered Valenzuela to pay, the respondent court erred in
holding Valenzuela liable.
Under Section 77 of the Insurance Code, the remedy for the non-
payment of premiums is to put an end to and render the insurance
policy not binding.
Philippine Phoenix- non-payment of premium does not merely suspend
but puts an end to an insurance contract since the time of the
payment is peculiarly of the essence of the contract.
Section 776 of the insurance Code says that no contract of insurance
by an insurance company is valid and binding unless and until the
premium has been paid, notwithstanding any agreement to the contrary
Since the premiums have not been paid, the policies issued have
lapsed. The insurance coverage did not go into effect or did not
continue and the obligation of Philamgen as insurer ceased. Philam
cant demand from or sue Valenzuela for the unpaid premiums.
The court held that the CAs giving credence to an audit that showed
Valenzuela owing Philamgen P1,528,698.40 was unwarranted. Valenzuela
had no unpaid account with Philamgen. But, facts show that the
beginning balance of Valenzuela's account with Philamgen amounted to
P744,159.80. 4 statements of account were sent to the agent.
It was only after the filing of the complaint that a radically
different statement of accounts surfaced in court. Certainly,
Philamgen's own statements made by its own accountants over a long
period of time and covering examinations made on four different
occasions must prevail over unconfirmed and unaudited statements made
to support a position made in the course of defending against a
lawsuit.
The records of Philamgen itself are the best refutation against
figures made as an afterthought in the course of litigation.
Moreover, Valenzuela asked for a meeting where the figures would be
reconciled. Philamgen refused to meet with him and, instead,
terminated the agency agreement.
After off-setting the amount, Valenzuela had overpaid Philamgen the
amount of P530,040.37 as of November 30, 1978. Philamgen cannot later
be heard to complain that it committed a mistake in its computation.
The alleged error may be given credence if committed only once. But
as earlier stated, the reconciliation of accounts was arrived at four
(4) times on different occasions where Philamgen was duly represented
by its account executives. On the basis of these admissions and
representations, Philamgen cannot later on assume a different posture
and claim that it was mistaken in its representation with respect to
the correct beginning balance as of July 1977 amounting to
P744,159.80. The audit report commissioned by Philamgen is unreliable
since its results are admittedly based on an unconfirmed and
unaudited beginning balance of P1,758,185.43.
Philamgen has been appropriating for itself all these years the gross
billings and income that it took away from the petitioners. A
principal can be held liable for damages in cases of unjust
termination of agency. This Court ruled that where no time for the
continuance of the contract is fixed by its terms, either party is at
liberty to terminate it at will, subject only to the ordinary
requirements of good faith. The right of the principal to terminate
his authority is absolute and unrestricted, except only that he may
not do so in bad faith.
The circumstances of the case, however, require that the contractual
relationship between the parties shall be terminated upon the
satisfaction of the judgment. No more claims arising from or as a
result of the agency shall be entertained by the courts after that
date.

Heirs of yap vs ca 312 scra 603

Heirs of Lorenzo Yap v. CA Digest

Heirs of Lorenzo Yap v. Court of Appeals

G.R. No.. 133047 August 17, 1999

Facts:
1. Petitioners as heirs of Lorenzo Yap filed an action against Ramon
Yap and co-respondent for the reconveyance of land, with buildings
and improvement on it. They alleged that the said property was held
in trust by Ramon and that it was their father Lorenzo who purchased
the said land and constructed the apartment building on it. However,
alleging that since at that time, Lorenzo was still a Chinese
citizen, hence prohibited from owning land, he caused it to be
registered in the name of respondent Ramon.

2. The said property was sold by Ramon to his co-respondent which

caused the petitioners to file this action.

3. The lower court ruled in favor of the respondents or the ownership

of Ramon. This was affirmed by the Court of Appeals. Hence this
petition.

Issue: Whether or not a trust was constituted between Lorenzo

and Ramon

RULING: No, and even it there was an implied trust, it could not have
been valid as it was in contravention of applicable laws. There is a
basic distinction between implied and express trusts. Express trusts
cannot be proved by parole evidence. Even then, in order to establish
the existence of an implied trust in real property by parole
evidence, the prove should be as fully convincing as the facts as if
the acts giving rise to the trust obligation are proven by an
authentic document. The petitioners' evidence was insufficient to
prove clearly that a trust was constituted between their father and
Ramon.

Saltiga de Romero v CA 319 scra 180

Saltiga v. Romero Digest

Saltiga v. Romero
G.R. No. 109307 November 25, 1999
Ponente: Gonzaga-Reyes, J.:

Trusts

Facts:
1. The petitioners filed an action against Lutero Romero and DBP
(bank) for the reconveyance of a parcel of land alleging that the
said property was conveyed to Romero by their father by virtue of a
trust.

2. In 1939, Eugenio (father)of petitioners obtained the rights and

interest to the then public land from the Jaug spouses but since he
had already applied for a homestead previously, he could no longer
apply for this said land. As a result he caused the application to be
under the name of his eldest son Eustaquio. When the father died, the
said land was portioned to the children who subsequently possessed
each share.

3. Romero alleged that he was subsequently forced to sign three

affidavits which purportedly sold the shares to his other siblings.
He repudiated the said affidavits which made his sisters file estafa
charges against him.

Issue:Whether or not a trust was created between their father

and Romero for the benefit of the heirs of the former

RULING: No, and even if there was it would be void for being contrary
to law. Eugenio Romero was never the owner of the subject land
because all he obtained from the Jaug spouses were the rights and
interests to the land. He could not have owned it as his application
for homestead patent was disapproved.

More importantly, there was no evidence of the supposed trust. A

trust is a legal relationship between a person having an equitable
ownership in property and another owning a legal title to such
property. The equitable ownership of the former entitles him to
perform certain duties and powers by the latter. Trust relations can
therefore be express or implied. Express being those created by
direct and positive acts of the parties, by a writing or a deed, or
will or by words that evidence an intention to create a trust.
Implied trusts refer to those that are deducible from the nature of
the transaction as matters of intent or which are superinduced on the
transaction by operation of law as a matter of equity, independently
of the particular intention of the parties. Implied trust can either
be resulting or constructive trusts, both coming by operation of
law.
resulting trusts arise from the equitable doctrine that valuable
consideration and not legal title determines the equitable title or
interest are presumed always to have been contemplated by the
parties. While cosntructive trusts are created by construction of
equity to satisfy the demands of justice and prevent enrichment.