The only issue in Eurotech Industrial Technologies, Inc. v. Crizon, et al., G.R. No.

167552, April
23, 2007 is whether, sales manager of a sale proprietorship acting within the scope of his authority
is liable with the principal in case the latter breaches his obligation to another.

In ruling that he is not, the SC

Held: No. An agent who acts as such, is not personally liable to the party with whom he contracts.
(Art. 1897, NCC). As manager, his position is unique in that it presupposes the grant of broad
powers within which to conduct the business of the principal.

Well-settled is the rule that:

The powers of an agent are particularly broad in the case of one acting as
a general agent or manager; such a position presupposes a degree of confidence
reposed and investiture with liberal powers for the exercise of judgment and
discretion in transactions and concerns which are incidental or appurtenant to the
business entrusted to his care and management. In the absence of an agreement
to the contrary, a managing agent may enter into any contracts that he deems
reasonably necessary or requisite for the protection of the interests of his principal
entrusted to his management. x x x.. (3 Am Jur. 2d, No. 91, p. 602).

The agent acted within the scope of his authority. Had he not done so, the business of the
principal would have been adversely affected and he would have violated his fiduciary relation
with his principal.

The first part of 1897declares that the principal is liable in cases when the agent acted
within the bounds of his authority. Under this, the agent is completely absolved of any liability.
The second part of the said provision presents the situations when the agent himself becomes
liable to a third party when he expressly binds himself or he exceeds the limits of his authority
without giving notice of his powers to the third person. However, it must be pointed out that in
case of excess of authority by the agent, like what petitioner claims exists here, the law does not
say that a third person can recover from both the principal and the agent.

Nature of agency.

In a contract of agency, a person binds himself to render some service or to do something

in representation or on behalf of another with the latters consent. The underlying principle of the
contract of agency is to accomplish results by using the services of others to do a great variety
of things like selling, buying, manufacturing, and transporting. Its purpose is to extend the
personality of the principal or the party for whom another acts and from whom he or she derives
the authority to act. It is said that the basis of 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. By this legal fiction, the
actual or real absence of the principal is converted into his legal or juridical presence qui facit
alium facit per se.

Elements of a contract of agency.

The elements of the contract of agency are: (1) consent, express or implied, of the parties
to establish the relationship; (2) the object is the execution of a juridical act in relation to a third
person; (3) the agent acts as a representative and not for himself; and (4) the agent acts within
the scope of his authority. (Yu Eng Cho v. Pan American World Airways, Inc., 385 Phil. 453
(2000)).

FACTS:

Eurotech is engaged in the business of importation and distribution of various European

industrialequipment. It has as one of its customers Impact Systems Sales which is a sole
proprietorship ownedby Erwin Cuizon.

Eurotech
sold to Impact Systems various products allegedly amounting to P91,338.00. Cuizo
nssought to buy from Eurotech 1 unit of sludge pump valued at P250,000.00 with Cuizons
making adown payment of P50,000.00. When the sludge pump arrived from the
United Kingdom, Eurotechrefused to deliver the same to Cuizons
without their having fully settled their indebtedness toEurotech. Thus, Edwin Cuizon
and Alberto de Jesus, general manager of Eurotech, executed a Deedof Assignment of receivables
in favor of Eurotech.

Cuizons, despite the existence of the Deed of Assignment, proceeded to collect from Toledo
PowerCompany the amount of P365,135.29. Eurotech made several demands upon Cuizons to
pay theirobligations. As a result, Cuizons were able to make partial payments to
Eurotech. Cuizons totalobligations stood at P295,000.00 excluding interests and attorneys fees.

Edwin Cuizon alleged that he is not a real party in interest in this case. According to him, he
wasacting as mere agent of his principal, which was the Impact Systems, in his transaction with
Eurotechand the latter was very much aware of this fact.
ISSUE:
WON Edwin exceeded his authority when he signed the Deed of Assignment thereby
bindinghimself personally to pay the obligations to Eurotech
HELD:
No.

Edwin insists that he was a mere agent of Impact Systems which is owned by Erwin
and that hisstatus as such is known even to Eurotech as it is alleged in the Complaint that he is being sued in
hiscapacity as the sales manager of the said business venture. Likewise, Edwin points to the
Deed of Assignment which clearly states that he was acting as a representative of Impact
Systems in saidtransaction.
Art. 1897. The agent who acts as such is not personally liable to the party with whom he
contracts,unless he expressly binds himself or exceeds the limits of his authority without giving
such partysufficient notice of his powers.

In a
contract of agency
, a person binds himself to render some service or to do something
inrepresentation or on behalf of another with the latters consent. Its purpose is
to extend thepersonality of the principal or the party for whom another acts and from whom he
or she derives theauthority to act. The basis of agency is representation, that is, the agent
acts for and on behalf of theprincipal 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.

elements of the contract of agency: (1) consent, express or implied, of the parties to establish
therelationship; (2) the object is the execution of a juridical act in relation to a third
person; (3) thea g e n t a c t s a s a r e p r e s e n t a t i v e a n d n o t f o r h i m s e l f ; ( 4 ) t h e
a g e n t a c t s w i t h i n t h e s c o p e o f h i s authority

An agent, who acts as such, is not personally liable to the party with whom he contracts. There
are 2instances when an agent becomes personally liable to a third person. The first is when he
expresslybinds himself to the obligation and the second is when he exceeds his authority. In the
last instance,the agent can be held liable if he does not give the third party sufficient notice of
his powers. Edwindoes not fall within any of the exceptions contained in Art. 1897.

In the absence of an agreement to the contrary, a managing agent may enter into any contracts
thathe deems reasonably necessary or requisite for the protection of the
interests of his principalentrusted to his management.

Edwin Cuizon acted well-within his authority when he signed the Deed of
Assignment. Eurotechrefused to deliver the 1 unit of sludge pump unless it
received, in full, the payment for ImpactSystems indebtedness. Impact Systems
desperately needed the sludge pump for its business since

Plaintiff: Ramon Rallos

Defendant: Felix Go Chan & Sons Realty Corporation

Facts: Concepcion and Gerundia Rallos were sisters and registered co-owners of a parcel of land
known as Lot No. 5983 of the Cadastral Survey of Cebu covered by Transfer Certificate of Title
No. 11116 of the Registry of Cebu.They executed a special power of attorney in favor of their
brother, Simeon Rallos, authorizing him to sell such land for and in their behalf. After Concepcion
died, Simeon Rallos sold the undivided shares of his sisters Concepcion and Gerundia to Felix
Go Chan & Sons Realty Corporation for the sum of P10,686.90. New TCTs were issued to the
latter. Petitioner Ramon Rallos, administrator of the Intestate Estate of Concepcion filed a
complaint praying (1) that the sale of the undivided share of the deceased Concepcion Rallos in
lot 5983 be unenforceable, and said share be reconveyed to her estate; (2) that the Certificate of
title issued in the name of Felix Go Chan & Sons Realty Corporation be cancelled and another
title be issuedin the names of the corporation and the Intestate estate of Concepcion Rallos in
equal undivided and (3) that plaintiff be indemnified by way of attorneys fees and payment of
costs of suit.

Issues:

1) WON sale was valid although it was executed after the death of the principal, Concepcion.

2) WON sale fell within the exception to the general rule that death extinguishes the authority of
the

agent

3) WON agents knowledge of the principals death is a material factor.

4) WON petitioner must suffer the consequence of failing to annotate a notice of death in the title

(thus there was good faith on the part of the Respondent vendee)

5) WON good faith on the part of the respondent in this case should be treated parallel to that of
an

CFI: Sale of land was null and void insofar as the one-half pro-indiviso share of Concepcion Rallos
Ordered the issuance of new TCTs to respondent corporation and the estate of Concepcion in
theproportion of share each pro-indiviso and the payment of attorneys fees and cost of litigation
Respondent filed cross claim against Simon Rallos(*Simon and Gerundia died during pendency
of case) juan T. Borromeo, administrator of the Estate of Simeon Rallos was ordered to pay
defendant the price of the share of the land (P5,343.45) plus attorneys fees [Borromeo filed a
third party complaint against Josefina Rallos, special administratrix of the Estate
of Gerundia] Dismissed without prejudice to filing either a complaint against the regular
administrator of the Estate of Gerundia Rallos or a claim in the Intestate-Estate of Cerundia
Rallos, covering the same subject-matter

CA: CFI Decision reversed, upheld the sale of Concepcions share.MR: denied.innocent
purchaser for a value of a land.

Jocelyn B. Doles vs. Ma. Aura Tina AngelesG.R. No. 149353. June 26, 2006.

Facts:
Petitioner executed a Deed of Absolute Sale ceding a parcel of land in favor of respondent to satisfy thealleged
indebtedness of the former in the amount of P405,430.00. Since the said land was mortgaged tothe National
Home Mortgage Finance Corporation, they further agreed that respondent assume theremaining balance of the
loan. Learning that the petitioner still has arrearages, respondent demanded thatthe arrearages be paid first.
Petitioner did not heed, thus a case was filed by the respondent.In answer, the petitioner alleged that sale was
void for lack of consideration and that she was not indebtedto the respondent as she only referred her friends to
respondent whom she knew to be engaged in the business of lending money in exchange for personal
checks through her capitalist Arsenio Pua. Further petitioner contended that since the
respondent is also an agent, she does not have the capacity to sue her.It is an admitted fact by both
petitioner and defendant, based on their testimonies, that respondent knewthat the money will be used by
the friends of the petitioner; that the respondent was merely representingArsenio Pua; and that
before the supposed friends of the petitioner defaulted in payment, each issued their personal checks in the
name of Arsenio Pua for the payment of their debt.
Issue/s:
Whether or not petitioner and respondent were acting on their personal capacity or as mere agents.
Ruling:
The question whether an agency has been created is ordinarily a question which may be established in thesame
was as any other fact, either by direct or circumstantial evidence. Agency may be implied from thewords and
conduct of the parties and the circumstances of the particular case. Though the fact or extent ofauthority of the
agents may not, as a general rule, be established from the declarations of the agents alone,if one frofessed to
act as agent for another, she may be stopped to deny her agency both as against theasserted
principal and the third persons interested in the transaction in which he or she is engaged.In this case, petitioner
knew that the financier of the respondent is Pua, and respondent knew that the borrowers are friends
of petitioner. It is sufficient that petitioner disclosed to respondent that the former

AIR FRANCE V CA
Civil Law Torts and Damages Negligence Malfeasance Quasi-Delict
Remedial Law Evidence Hearsay Rule Res Gestae Startling Event
In March 1958, Rafael Carrascoso and several other Filipinos were tourists en route to Rome
from Manila. Carrascoso was issued a first class round trip ticket by Air France. But during a stop-
over in Bangkok, he was asked by the plane manager of Air France to vacate his seat because a
white man allegedly has a better right than him. Carrascoso protested but when things got
heated and upon advise of other Filipinos on board, Carrascoso gave up his seat and was
transferred to the planes tourist class.
After their tourist trip when Carrascoso was already in the Philippines, he sued Air France for
damages for the embarrassment he suffered during his trip. In court, Carrascoso testified, among
others, that he when he was forced to take the tourist class, he went to the planes pantry where
he was approached by a plane purser who told him that he noted in the planes journal the
following:
First-class passenger was forced to go to the tourist class against his will, and that the captain
refused to intervene
The said testimony was admitted in favor of Carrascoso. The trial court eventually awarded
damages in favor of Carrascoso. This was affirmed by the Court of Appeals.
Air France is assailing the decision of the trial court and the CA. It avers that the issuance of a
first class ticket to Carrascoso was not an assurance that he will be seated in first class because
allegedly in truth and in fact, that was not the true intent between the parties.
Air France also questioned the admissibility of Carrascosos testimony regarding the note made
by the purser because the said note was never presented in court.
ISSUE 1: Whether or not Air France is liable for damages and on what basis.
ISSUE 2: Whether or not the testimony of Carrasoso regarding the note which was not presented
in court is admissible in evidence.
HELD 1: Yes. It appears that Air Frances liability is based on culpa-contractual and on culpa
aquiliana.
Culpa Contractual
There exists a contract of carriage between Air France and Carrascoso. There was a contract to
furnish Carrasocoso a first class passage; Second, That said contract was breached when Air
France failed to furnish first class transportation at Bangkok; and Third, that there was bad faith
when Air Frances employee compelled Carrascoso to leave his first class accommodation
berth after he was already, seated and to take a seat in the tourist class, by reason of which he
suffered inconvenience, embarrassments and humiliations, thereby causing him mental anguish,
serious anxiety, wounded feelings and social humiliation, resulting in moral damages.
The Supreme Court did not give credence to Air Frances claim that the issuance of a first class
ticket to a passenger is not an assurance that he will be given a first class seat. Such claim is
simply incredible.
Culpa Aquiliana
Here, the SC ruled, even though there is a contract of carriage between Air France and
Carrascoso, there is also a tortuous act based on culpa aquiliana. Passengers do not contract
merely for transportation. They have a right to be treated by the carriers employees with kindness,
respect, courtesy and due consideration. They are entitled to be protected against personal
misconduct, injurious language, indignities and abuses from such employees. So it is, that any
rule or discourteous conduct on the part of employees towards a passenger gives the latter an
action for damages against the carrier. Air Frances contract with Carrascoso is one attended with
public duty. The stress of Carrascosos action is placed upon his wrongful expulsion. This is a
violation of public duty by the Air France a case of quasi-delict. Damages are proper.
HELD: 2: Yes. The testimony of Carrascoso must be admitted based on res gestae. The subject
of inquiry is not the entry, but the ouster incident. Testimony on the entry does not come within
the proscription of the best evidence rule. Such testimony is admissible. Besides, when the
dialogue between Carrascoso and the purser happened, the impact of the startling occurrence
was still fresh and continued to be felt. The excitement had not as yet died down. Statements
then, in this environment, are admissible as part of the res gestae. The utterance of the purser
regarding his entry in the notebook was spontaneous, and related to the circumstances of the
ouster incident. Its trustworthiness has been guaranteed. It thus escapes the operation of the
hearsay rule. It forms part of the res gestae.

COSMIC LUMBER CORPORATION vs.CA and PEREZ, G.R. No. 114311 November

29, 1996
FACTS:
Cosmic Lumber Corporation through its General Manager executed on 28 January1985 a Special Power of
Attorney appointing Paz G. Villamil-Estrada as attorney-in-fact amongothers to initiate, institute and file any court
action for the ejectment of third persons and/or squatters of the entire lot 9127 and 443 and covered by TCT Nos.
37648 and 37649, for thesaid squatters to remove their houses and vacate the premises in order that the
corporationmay take material possession of the entire lot, and for this purpose, to appear at the
pre-trialconference and enter into any stipulation of facts and or compromise agreement so far as itshall protect
the rights and interest of the corporation in the aforementioned lots.On 11 March 1985 Paz G. Villamil-Estrada, by
virtue of her power of attorney, instituted anaction for the ejectment of private respondent Isidro Perez and recover
the possession of aportion of Lot No. 443. On November 25, 1985 Villamil-Estrada entered into a
Compromise Agreement with respondent Perez and on November
27, 1985 the "Compromise Agreement"was approved by the trial court and judgment was rendered in
accordance the terms. Althoughthe decision became final and executor, it was not executed within the 5-year
period from dateof its finality allegedly due to the failure of petitioner to produce the owner's duplicate copy of Title
No. 37649 needed to segregate from Lot No. 443 which is the portion sold by the attorney-in-fact, Paz G. Villamil-
Estrada, to private respondent under the compromise agreement. Thuson January 25, 1993 respondent filed a
complaint to revive the judgment, docketed as CivilCase No. D-10459Petitioner asserts that it was only when the
summons in Civil Case No. D-10459 for the revivalof judgment was served upon it that it came to know of the
compromise agreement entered intobetween Paz G. Villamil-Estrada and respondent Isidro Perez upon which
the trial court basedits decision of 26 July 1993 in Civil Case No. D-7750. Forthwith, upon learning of the
fraudulenttransaction, petitioner sought annulment of the decision of the trial court before respondentCourt of
Appeals on the ground that the compromise agreement was void.
ISSUE:
Whether Villamil-Estrada exceeded her authority as specified in the SPA.
DECISION:
The authority granted Villamil-Estrada under the special power of attorney wasexplicit and exclusionary. The
alienation by sale of an immovable certainly cannot be deemedprotective of the right of petitioner more so when
the land was being sold for a price of P80.00per square meter, much less than its assessed value of P250.00 per
square meter, which wasnot even received by the corporation.When the sale of a piece of land or any interest
thereon is through an agent, the authority of thelatter shall be in writing; otherwise, the sale shall be void. Thus the
authority of an agent toexecute a contract for the sale of real estate must be conferred in writing and must give
himspecific authority. A special power of attorney is necessary to enter into any contract by whichthe ownership of
an immovable is transmitted or acquired either gratuitously or for a valuableconsideration. The express mandate
required by law to enable an appointee of an agency(couched) in general terms to sell must be one
that expressly mentions a sale or that includes asale as a necessary ingredient of the act mentioned. For
the principal to confer the right upon anagent 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
usedconveys such power, no such construction shall be given the document. It is therefore clear thatby selling to
respondent Perez a portion of petitioner's land through a compromise agreement,Villamil-Estrada acted without
or in obvious authority. The sale
ipso jure
is consequently void.So is the compromise agreement. This being the case, the judgment based thereon
isnecessarily void. Antipodal to the opinion expressed by respondent court in resolvingpetitioner's motion for
reconsideration, the nullity of the settlement between Villamil-Estrada andPerez impaired the jurisdiction of the trial
court to render its decision based on the compromiseagreement. In
Alviar v
.
Court of First Instance of La Union,
the Court held --

As the judgment inquestion is null and void

ab initio
, it is evident that the court acquired no jurisdiction to render it,much less to o
rder the execution thereof . . .
Verily, when an agent is engaged in the perpetration of a fraud upon his principal for his ownexclusive benefit,
he is not really acting for the principal but is really acting for himself, entirelyoutside the scope of his
agency. Indeed, the basic tenets of agency rest on the highestconsiderations of justice, equity and fair play, and
an agent will not be permitted to pervert hisauthority to his own personal advantage, and his act in secret hostility
to the interests of hisprincipal transcends the power afforded him. WHEREFORE, the petition is GRANTED
AF Realty & Development, Inc. vs Dieselman Freight Services, Co.

In 1988, Manuel Cruz, Jr., a board member of Dieselman Freight Services, Co. (DFS) authorized
Cristeta Polintan to sell a 2,094 sq. m. parcel of land owned by DFS. Polintan in turn authorized
Felicisima Noble to sell the same lot. Noble then offered AF Realty & Development, Co.,
represented by Zenaida Ranullo, the land at the rate of P2,500.00 per sq. m. AF Realty accepted
the offer and issued a P300,000 check as downpayment.
However, it appeared that DFS did not authorize Cruz, Jr. to sell the said land. Nevertheless,
Manuel Cruz, Sr. (father) and president of DFS, accepted the check but modified the offer. He
increased the selling price to P4,000.00 per sq. m. AF Realty, in its response, did not exactly
agree nor disagree with the counter-offer but only said it is willing to pay the balance (but was not
clear at what rate). Eventually, DFS sold the property to someone else.
Now AF Realty is suing DFS for specific performance. It claims that DFS ratified the contract when
it accepted the check and made a counter-offer.
ISSUE: Whether or not the sale made through an agent was ratified.
HELD: No. There was no valid agency created. The Board of Directors of DFS never authorized
Cruz, Jr. to sell the land. Hence, the agreement between Cruz, Jr. and Polintan, as well as the
subsequent agreement between Polintan and Noble, never bound the corporation. Therefore the
sale transacted by Noble purportedly on behalf of Polintan and ultimately purportedly on behalf
of DFS is void.
Being a void sale, it cannot be ratified even if Cruz, Sr. accepted the check and made a counter-
offer. (Cruz, Sr. returned the check anyway). Under Article 1409 of the Civil Code, void
transactions can never be ratified because they were void from the very beginning.

Aurelio Litonjua Jr vs Eduardo Litonjua Sr. et al

June 24, 2012
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Business Organization Partnership, Agency, Trust Partnership, how formed
Aurelio and Eduardo are brothers. In 1973, Aurelio alleged that Eduardo entered into a contract
of partnership with him. Aurelio showed as evidence a letter sent to him by Eduardo that the latter
is allowing Aurelio to manage their family business (if Eduardos away) and in exchange thereof
he will be giving Aurelio P1 million or 10% equity, whichever is higher. A memorandum was
subsequently made for the said partnership agreement. The memorandum this time stated that
in exchange of Aurelio, who just got married, retaining his share in the family business (movie
theatres, shipping and land development) and some other immovable properties, he will be given
P1 Million or 10% equity in all these businesses and those to be subsequently acquired by them
whichever is greater.
In 1992 however, the relationship between the brothers went sour. And so Aurelio demanded an
accounting and the liquidation of his share in the partnership. Eduardo did not heed and so Aurelio
sued Eduardo.
ISSUE: Whether or not there exists a partnership.
HELD: No. The partnership is void and legally nonexistent. The documentary evidence presented
by Aurelio, i.e. the letter from Eduardo and the Memorandum, did not prove partnership.
The 1973 letter from Eduardo on its face, contains typewritten entries, personal in tone, but is
unsigned and undated. As an unsigned document, there can be no quibbling that said letter does
not meet the public instrumentation requirements exacted under Article 1771 (how partnership is
constituted) of the Civil Code. Moreover, being unsigned and doubtless referring to a partnership
involving more than P3,000.00 in money or property, said letter cannot be presented for
notarization, let alone registered with the Securities and Exchange Commission (SEC), as called
for under the Article 1772 (capitalization of a partnership) of the Code. And inasmuch as the
inventory requirement under the succeeding Article 1773 goes into the matter of validity when
immovable property is contributed to the partnership, the next logical point of inquiry turns on the
nature of Aurelios contribution, if any, to the supposed partnership.
The Memorandum is also not a proof of the partnership for the same is not a public instrument
and again, no inventory was made of the immovable property and no inventory was attached to
the Memorandum. Article 1773 of the Civil Code requires that if immovable property is contributed
to the partnership an inventory shall be had and attached to the contract.

Naguiat vs CA Credit Digest

Naguiat vs CA and Queao
GR No. 118375, 03 October 2003
412 SCRA 591

FACTS
Queao applied with Naguiat a loan for P200,000, which the latter granted. Naguiat indorsed to
Queao Associated bank Check No. 090990 for the amount of P95,000 and issued also her
own Filmanbank Check to the order of Queao for the amount of P95,000. The proceeds of
these checks were to constitute the loan granted by Naguiat to Queao. To secure the loan,
Queao executed a Deed of Real Estate Mortgage in favor of Naguiat, and surrendered the
owners duplicates of titles of the mortgaged properties. The deed was notarized and Queao
issued to Naguiat a promissory note for the amount of P200,000. Queao also issued a post-
dated check amounting to P200,000 payable to the order of Naguait. The check was
dishonoured for insufficiency of funds. Demand was sent to Queao. Shortly, Queao, and one
Ruby Reubenfeldt met with Naguiat. Queao told Naguiat that she did not receive the loan
proceeds, adding that the checks were retained by Reubenfeldt, who purportedly was Naguiats
agent.

Naguiat applied for extrajudicial foreclosure of the mortgage. RTC declared the Deed as null
and void and ordered Naguiat to return to Queao the owners duplicates of titles of the
mortgaged lots.

ISSUE
Whether or not the issuance of check resulted in the perfection of the loan contract.

HELD
The Court held in the negative. No evidence was submitted by Naguiat that the checks she
issued or endorsed were actually encashed or deposited. The mere issuance of the checks did
not result in the perfection of the contract of loan. The Civil Code provides that the delivery of
bills of exchange and mercantile documents such as checks shall produce the effect of payment
only when they have been cashed. It is only after the checks have been produced the effect of
payment that the contract of loan may have been perfected.

Article 1934 of the Civil Code provides: An accepted promise to deliver something by way of
commodatum or simple loan is binding upon the parties, but the commodatum or simple loan
itsel shall not be perfected until the delivery of the object of the contract. A loan contract is a real
contract, not consensual, and as such, is perfected only upon the delivery of the objects of the
contract.

ALFRED HAHN, petitioner, vs. COURT OF APPEALS and BAYERISCHE MOTOREN

WERKEAKTIENGESELLSCHAFT (BMW), respondents. January 22, 1997Mendoza, J.Facts:1.Alfred
Hahn is a Filipino citizen doing business under the name and style "Hahn-
Manila."2.Bayerische Motoren Werke Aktiengesellschaft (BMW) is a nonresident foreign corporationexisting
under the laws of the former Federal Republic of Germany, with principal office atMunich, Germany.3.In 1963,
Hahn executed in favor of BMW a Deed of Assignment with Special Power of Attorney which
essentially, makes Hahn as the exclusive dealer of BMW in the Philippines.Moreover, it stated there that Hahn
and BMW shall continue business relations as has beenusual in the past without a formal contract."4.In 1993,
BMW and Columbia Motors Corp (CMC) had a meeting which would grant CMCexclusive
dealership of BMW cars.5.Hahn was informed later that BMW was dissatisfied with how it carrying
its business.However, BMW expressed willingness to continue business relations with the petitioner onthe basis
of a "standard BMW importer" contract, otherwise, it said, if this was notacceptable to petitioner, BMW would
have no alternative but to terminate petitioner'sexclusive dealership effective June 30, 1993.6.Hahn
protested alleging that such termination is a breach of the Deed of Assignment. Hahninsisted that as long as
the assignment of its trademark and device subsisted, he remainedBMW's exclusive dealer in the Philippines
because the assignment was made inconsideration of the exclusive dealership.7.BMW, however, went on
to terminate its dealership with Hahn.8.Hahn filed a complaint for specific performance and damages in
the RTC. RTC issued a writpreliminary injunction.9.BMW appealed to the CA. CA reversed on the ground that
Hahn is not an agent of BMW andthat BMW is not doing business in the Phils. By virtue of the latter, the writ of
preliminaryinjunction should not have been issued since RTC did not have jurisdiction over it.Issues1.W/N
Hahn is agent or a distributor (or broker) in the Philippines of BMW.

He is an agent.2.W/N BMW is doing business here in the Philippines.

YESHeld/Ratio:1.There is nothing to support the appellate court's finding that Hahn solicited orders alone andfor
his own account and without "interference from, let alone direction of, BMW. To thecontrary, Hahn claimed he
took orders for BMW cars and transmitted them to BMW.
Uponreceiptoftheorders,BMWfixedthedownpaymentandpricingcharges,notifiedHahnofthescheduledproductionmonthforthe
orders,andreconfirmedtheordersbysigningandreturningtoHahntheacceptancesheets.Paymentwasmadebythebuyerdirectlyto
BMW.TitletocarspurchasedpasseddirectlytothebuyerandHahnneverpaidforthepurchasepriceofBMW carssoldinthePhilippines.
Hahnwascreditedwithacommissionequalto14%ofthepurchaseprice upon the invoicing of a vehicle order by BMW.
Upon confirmation in writing thatthe vehicles had been registered in the Philippines and serviced by him, Hahn
received anadditional 3% of the full purchase price. Hahn performed after-sale services, including,warranty
services, for which he received reimbursement from BMW. All orders were oninvoices and forms of BMW