MERCADO vs. ALLIED BANKING CORP. - CA reversed. Perla intended to include the property in the SPA.

Furthermore, her
GR NO. 171460 subsequent revocation of the SPA, not being contained in a public document, is not
July 24, 2007 binding to third persons.
By: Madrid
ISSUE:
Topic: Extinguishment of Agency W/N the REM’s over the subject property are void considering that the SPA was
Petitioners: Lillian Mercado, Cynthia Fekaris, and Julian Mercado Jr. revoked by Perla.
Respondents: Allied Banking Corp.
Ponente: HELD/RATIO:
No. It is unenforceable, not void.
- The subject property is not among those enumerated in the literal terms of the
RECIT-READY/SUMMARY: :3 SPA. There is no obvious reference to the subject property. Such alleged intention
to Perla who executed the SPA when the language of the instrument is bare of any
DOCTRINE: An agency may be extinguished by revocation. indication suggestive of such intention. Therefore, the REM’s are unenforceable
since it was not executed in accordance with the SPA.
FACTS: - An agency is extinguished, among others, by its revocation. The principal may
- Perla Mercado, mother of the petitioners, owned several parcels of land. revoke the agency at will, and compel the agent to return the document evidencing
- Perla executed an SPA in favor of her husband Julian Mercado Sr. over parcels of the agency. Such revocation may be express or implied.
land under her name, authorizing the latter “to sell, alienate, mortgage, lease, and - In this case, the revocation was expressed by a public document which was the
deal otherwise” such properties and even further authorizing him “to exercise any Revocation of SPA made by Perla. The Registry of Deeds was even notified that any
or all acts of strict dominion or ownership” over the same. attempt to mortgage the property must have the full-consented document in the
- Julian, under the SPA, obtained a loan worth P3 million from respondent ABC and form of an SPA made before the Phil. Consulate General in NY.
secured such with a REM on TCT 18206 which covers a land registered in QC.
13. INLAND REALTY INVESTMENT SERVICE INC. v. CA
Another loan was secured worth P5 million.
- However, the said land was not identified in the SPA. GR NO. 76969
- Julian defaulted in the payment. Thus respondent ABC foreclosed the property JUNE 9, 1997
and was auctioned. By: BEATRIZ A. NICOR
- Lillian filed an action for annulment of the REM and the foreclosure proceedings Topic: ATP – NATURE, FORM, AND KINDS OF AGENCY
since the subject property was not covered by the SPA, and at the time the loan Petitioners: INLAND REALTY INVESTMENT SERVICE, INC. and ROMAN
obligations were contracted, the SPA no longer had force and effect since it was M. DE LOS REYES
previously revoked. This was evidenced by the Revocation of the SPA by Perla. Respondents: HON. COURT OF APPEALS, GREGORIO ARANETA, INC.
- Furthermore, Perla notified the Registry of Deeds that any attempt to mortgage or
and J. ARMANDO EDUQUE
sell the property must be with Perla’s consent that is documented in the form of an
Ponente: HERMOSISIMA, JR.
SPA duly authenticated before the Phil. Consulate General in New York.
- Respondent ABC stated that property was included in the SPA although it was
covered by a different TCT and was registered in Pasig. This discrepancy is an RECIT-READY: Inland Realty was given a 30-day authority by Gregorio
apparent error which must not prevail over the real intent of Perla to include the Araneta, Inc. to sell its shares of stock. Inland found a prospective buyer,
property in the SPA. Stanford Microsystems, but was unable to successfully close the sale
- RTC declared the REM void since Julian was not authorized by the SPA to within the term although the 30-day authority to sell was extended thrice.
mortgage the same. 1 year and 5 months later, Inland sold the shares to Stanford. They are
now demanding that Araneta pay them their broker’s commission. The SC
 held that they are not entitled to receive the broker’s commission as they reserved nor extended, nor has there been any communication made to
failed to sell the shares within the predetermined terms and conditions set defendants that the plaintiff was actually negotiating with Stanford a
by Araneta. They were also not the efficient procuring cause of the sale better price than what was previously offered by it.
as Inland merely submitted Stanford’s name as a prospective buyer.  In fact, there was no longer any agency after the last extension. Certainly,
the length of time which had transpired from the date of last extension of
DOCTRINE: Where a party is not the efficient cause in bringing about a authority to the final consummation of the sale with Stanford of about 1
sale, he is not entitled to the stipulated broker’s fee. year and 5 months without any communication at all from plaintiffs to
defendants with respect to the suggestion of defendants that Stanford's
offer was too low and suggested if plaintiffs may make it better. We have
FACTS:
a case of proposal and counter-proposal which would not constitute a
 Gregorio Araneta, Inc. and its Assistant General Manager Armando definite closing of the transaction just because it was plaintiff who solely
Eduque granted Inland Realty Investment Service, Inc. a 30-day authority suggested to defendants the name of Stanford as buyer.
to sell on a first come-first served basis its 9,800 shares of stock in  As a general rule, regardless of whether or not their agency contract and
Architect’s Bldg. Inc. at the price of P1,500 per share. authority to sell had expired, they are automatically entitled to their
 Stanford Microsystems was one of the prospective buyers, however they broker’s commission merely upon securing for and introducing Gregorio
gave a counter-proposal with a lower sale price. This was relayed by Araneta Inc. to Stanford Microsystems. However, Inland Realty did
Inland Realty to Gregorio Araneta, Inc. The latter rejected the counter- nothing but submit Stanford’s name as prospective buyer. Inland Realty
proposal as it was too low and suggested that Inland see if they could did not succeed outright selling the shares under the predetermined
negotiate a better price. terms and conditions set out by Gregorio Araneta Inc
 The 30-day authority to sell was extended 3 times: Oct. 30, 1975, Oct. 28,  Petitioners were not the efficient procuring cause in bringing about the
1975, Dec. 2, 1975. Roman de los Reyes, manager of Inland Realty’s sale in question on July 8, 1977 and are, therefore, not entitled to the
brokerage division, asked for an exclusive authority and for a longer stipulated broker's commission of "5% on the total price.”
period but was denied by Eduque. The last period for them to have the
authority to sell was Jan. 1, 1976. WHEREFORE, the instant petition is HEREBY DISMISSED.
 On July 8, 1977, - 1 year and 5 months after the last extension – Inland
finally sold the shares of stock to Stanford Microsystems for 13.5M.
3. DANON v. BRIMO
 On Sept. 6, 1977, Inland formally demanded from defendants, through a
GR NO. 15823
demand letter, for their 5% broker’s commission amounting to 675,000.
Defendant declined on the ground that the claim has no factual or legal September 12, 1921
basis. By: Bea Nicor
 The RTC and CA both found that plaintiffs had no legal claim to the Topic: AGENCY – Extinguishment of Agency
commission as the authority to sell had already lapsed. Hence, this Petitioners: JULIO DANON
petition. Respondents: ANTONIO A. BRIMO & Co.,
Ponente: JOHNSON, J
ISSUE:
(1) WON petitioners are entitled to claim broker’s commission
DOCTRINE: 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
HELD/RATIO:
ordinary requirements of good faith.
(1) NO. They are not entitled to claim broker’s commission.

 There is nothing in the record or in the testimonial evidence that the FACTS:
authority extended 30 days from the last date of extension was ever
 Antonio A Brimo informed the Julio Danon that he desired to sell his factory,  There is bad faith when, in the midst of negotiations instituted by the broker,
the Holland American Oil Co., for the sum of P1,200,000. He agreed and and which were plainly and evidently approaching success, the seller should
promised to pay to the Danon a 5% commission provided the latter could sell revoke the authority of the broker, with the view of concluding the bargain
said factory for that amoun. No definite period of time was fixed within which without his aid and avoiding the payment of commission about to be earned,
the plaintiff should effect the sale. it might be well said that the due performance his obligation by the broker
 Immediately thereafter, Danon went to see Mauro Prieto and offered to sell was purposely prevented by the principal.
Brimo’s property for 1.2M. Prieto then instructed his employee to make an  But if the latter acts in good faith, not seeking to escape the payment of
appointment with Brimo to perfect the negotiation. commissions, but moved fairly by a view of his own interest, he has the
 However, it seems that another broker, Sellner, was also negotiating the sale. absolute right before a bargain is made while negotiations remain
He was able to find a purchaser for the same property, who ultimately unsuccessful, before commissions are earned, to revoke the broker's
bought it for P1,300,000. authority, and the latter cannot thereafter claim compensation for a sale
 For that reason, Prieto, the would-be purchaser found by the plaintiff, never made by the principal.
came to see Brimo to perfect the proposed negotiation.
 Danon then filed a case for damages for breach of contract. For the foregoing reasons the judgment appealed from is hereby
 The trial court ruled in favor of Danon and ordered Brimo pay. revoked and the defendant is hereby absolved from all liability under
 Hence, this appeal. the plaintiff's complaint, with costs in both instances against the
plaintiff. So ordered.
ISSUE:
(1) WON Brimo breached the contract by terminating the agency at will 11. REYES v. MOSQUEDA
G.R. NO. L-8669
HELD/RATIO:
MAY 25, 1956
(1) NO. There is no breach of contract.
BY: Enzo
 Although Danon could probably have effected the sale of the defendant's Topic: NATURE, KINDS AND FORMS OF AGENCY
factory had not the defendant sold it to someone else, he is not entitled to Petitioners: VICENTA REYES, ET AL.
the commissions agreed upon because he had no intervention whatever in, Respondents: GUARDALINO C. MOSQUEDA, and THE COURT OF APPEALS
and much sale in question. It must be borne in mind that no definite period Ponente: MONTEMAYOR, J.
was fixed by the defendant within which the plaintiff might effect the sale of
its factory. Nor was the plaintiff given by the defendant the exclusive agency
of such sale. Therefore, the plaintiff cannot complain of the defendant's SUMMARY: Petitioner Reyes claims that Mosqueda contracted her services to
conduct in selling the property through another agent before the plaintiff's sell his parcel of land with a 5% commission. Mosqueda refused to pay the
efforts were crowned with success. amount that led Reyes to file an action in the CFI of Iloilo. The trial court ruled in
 Where no time for the continuance of the contract is fixed by its terms either favor of Reyes but the CA reversed the decision and dismissed the complaint
party is at liberty to terminate it at will, subject only to the ordinary without costs. The issue was whether Reyes is entitled the 5% commission upon
requirements of good faith.
the sale. The Court ruled that the actual sale was perfected without the
 Usually the broker is entitled to a fair and reasonable opportunity to perform
his obligation, subject of course to the right of the seller to sell intervention of Reyes and that as the broker; she must find prospective buyers
independently. But having been granted him, the right of the principal to who will ACTUALLY BUY the property.
terminate his authority is absolute and unrestricted, except only that he may
not do it in bad faith, and as a mere device to escape the payment of the
broker's commissions.
DOCTRINE: Commission does not accrue unless the broker finds a prospective buyer ISSUE:
who will actually buy the property on the terms and conditions imposed by the Whether plaintiff Reyes is entitled the 5% commission upon the
owner. consummation of the sale of land? NO.

FACTS: HELD/RATIO:
● On February 18, 1949, Mosqueda sold to Jose Marquez Lim his parcel of ● Plaintiff Reyes was engaged only as a broker and in order to earn her
land in Iloilo, containing 9,640 sq.m for the amout of P65,605.00. commission, it was not sufficient for her to find a prospective buyer but
● Petitioner claims that Mosqueda previously contracted her services to to find one who will actually buy the property.
sell the same land with a commission of 5% on the sales price. o “The broker must be the efficient agent or the procuring cause
● She commenced this action in the CFI of Iloilo to recover from Mosqueda of the sale. He must find the purchaser, and the sale must
P3,280.25 with interest from the date of the filing of the complaint. proceed from his efforts acting as a broker.” (Danon v. Brimo &
● The trial court rendered judgment in her favor ordering Mosqueda to pay Co.)
her the amount with interest of 6% from March 7, 1949. CA reversed the
● The actual sale was perfected and consummated without the
decision and dismissed the complaint without costs.
intervention of Reyes, and her authority to sell the property had been
● CA thru Justice Dionisio de Leon states the evidence presented by both
withdrawn, at a time when there was still no meeting of the minds of
parties:
buyer and seller.
o Plaintiff Reyes alleges that on February 16, 1949, she was
contracted by Mosqueda to sell the land for the sum of P7.50
● There is nothing to show that bad faith was involved in the cancellation
of the authority of Reyes before the consummation of the sale.
per sq.m at a commission of 5% on the total price.
o She offered the sale to Lim who said that the price was high as ● As observed by the CA, Reyes did not explain how she came to know that
the land was covered with water. Mosqueda then reduced the defendant Mosqueda was interested in selling his land and was looking
price to P7.30 per sq.m for a buyer.
o Appellant Mosqueda said that on February 16, 1949, he went to o It is highly possible that after Reyes was commissioned by Lim
see Lim, Manager of the Philippine-American Insurance Co. to approach Mosqueda with a view to reduce the price of P8
about a loan offering his land. per sq.m, it was then that she came to know about the desire of
o Lim offered to buy Mosqueda’s land as it adjoined his own land Mosqueda to sell his land
and Mosqueda replied to sell to him at P8 per sq.m. o “Perhaps when she was requested by Lim to intercede in his
o Lim requested Reyes who were employees in his office to behalf with respect to the sale of Mosqueda’s land, Reyes
approach Mosqueda on his behalf and exact from him the last grabbed this opportunity to make spare money as a sideline.”
price he could offer.
o Reyes went to see Mosqueda without divulging the identity of #6 INFANTE vs. CUNANAN
her buyer. Mosqueda reduced it to P7.30 but Lim was still not GR # L-5180
agreeable. DATE: August 31, 1953
o Lim told Reyes to desist from further contracting Mosqueda on By: Julpha Policina
his behalf as he himself would directly deal as he had initially Topic:
done earlier on the same day. Petitioners: Consejo Infante
o Mosqueda informed Reyes that he was definitely cancelling her Respondents: Jose Cunanan, Juan Mijares, CA 2nd Division
authority to find a buyer for his land. Ponente: Bautista Angelo, J.
● On February 18, Lim went personally to Mosqueda resulting in the
execution of the deed of sale. SUMMARY:
Infante asked services of Cunana and Mijares to sell her lot on a HELD/RATIO:
commission basis. They found Noche as interested buyer but upon  Cunanan and Mijares claim that while they agreed to cancel the written
introduction to each other, Infante expressed that she is not interested to sell authority given to them, they did so merely upon the verbal assurance
the property anymore and made Cunanan and Mijares sign deed of given by Infante that should the property be sold to Noche, they would
cancellation of authority. After some time, Infante then sold her property to be given the commission agreed upon
the same Noche. Hence, the action for collection of commission of Cunanan  However, it is a well settled rule that “"When the terms of an agreement
and Mijares. SC ruled that even though there was a cancellation of the have been reduced to writing, it is to be considered as containing all
those terms, and, therefore, there can be, between the parties and their
authority already, it could be conculed that it was a strategy of Infante for her
successors in interest, no evidence of the terms of the agreement other
selfish interest. Infante still liable to pay.
than the contents of the writing."
DOCTRINE:  There are exceptions to this rule but this case doesn’t fall to any of the
The principal cannot deprive his agent of the commission agreed upon exceptions.
by cancelling the agency and, thereafter, dealing directly with the  YET, the court still held that perhaps it is by way of stratagem that Infante
buyer. advised that she was no longer selling the property and made them sign
Act of subversion cannot serve as basis to escape payment of commission the document for cancellation of authority then selling it to same
agreed upon by the principal to the agent. prospected buyer.
FACTS:  This constitutes of taking advantage of the benevolence of the other and
 Infante was the owner of 2 parcels of land with a house built thereon acts in a manner that would promote her own selfish interest.
 Infante contracted services of Cunanan and Mijares to sell the property  This act amounts to bad faith. She took advantage of the services
for P30k subject to condition that the purchaser would assume the rendered by Cunanan and Mijares believing she could evade payment of
mortgage existing in favor of Rehabilitation Finance Corp. infant to pay commission by inducing them to sign the cancellation.
5% commission on the purchase price plus whatever overprice they may
obtain for the property
 Cunanan and Mijares found Pio Noche but upon introducing Noche to
Infante, Infante informed them that she is not selling the property 15. Siasat V. IAC
anymore and made them sign a document cancelling the authority to sell GR NO. L-67889
 After some time, Infante dealt directly with Noche selling to him the October 10, 1985
property for P31k
By: Julpha Policina
 Cunanan and Mijares, upon learning about the sale, demanded for
payment of their commission but Infante refused Petitioners: PRIMITIVO SIASAT and MARCELINO SIASAT
 Cunanan and Mijares brought action for the sum of money Respondents: INTERMEDIATE APPELLATE COURT and TERESITA NACIANCENO
 Infante: admitted having contracted services of Cunanan and Mijares Ponente: GUTIERREZ, JR. , J.
o Stated she only agreed to pay P1.2k commission only when
they buy a property somewhere in Taft Ave. after selling her
SUMMARY: Respondent Nacianceno convinced the Department of Education
property
o That even they sold her property, they sold the property at Taft and Culture to purchase national flags without bidding. She then contacted
Ave. to another party therefore not entitled to commission United Flag Industry (Siasat were owners). She was then told by Siasat that she
 RTC: In favor of Cunanan and Mijares and ordered Infante to pay P2.5k would receive 30% commission. When the payment for the 1 st delivery was
 CA affirmed. made. Nacianceno was only given 5% commission and then 2 nd delivery she was
ISSUE: WON Cunanan and Mijares are still entitled of commission given none because Siasat was saying that her agency was revoked. RTC, IAC, SC
even after signing a document which involved the cancellation of their held that she was an agent and that she was entitled to the commission agreed
authority - YES
 upon and the 2 payments were indeed for one transaction only. that she later on learned that petitioner Siasat had already received
payment for the second delivery of 7,833 flags. When she confronted the
DOCTRINE: An agent may be (1) universal; (2) general, or (3) special. A universal petitioners, they vehemently denied receipt of the payment, at the same
agent is one authorized to do all acts for his principal which can lawfully be time claiming that the respondent had no participation whatsoever with
regard to the second delivery of flags and that the agency had already
delegated to an agent. So far as such a condition is possible, such an agent may be
been revoked.
said to have universal authority ● Malacñang did not respond to her complaint.
A general agent is one authorized to do all acts pertaining to a business of a certain ● CFI in favor of the respondent. Recover 25% as balance on the first
kind or at a particular place, or all acts pertaining to a business of a particular class delivery and 30% on the second delivery.
or series. He has usually authority either expressly conferred in general terms or in ● IAC: affirmed
effect made general by the usages, customs or nature of the business which he is
authorized to transact. ISSUE
(1) WON the authorization making Nacianceno an agent granting her 30%
commission for all the flags sold is valid on “all the transactions”? YES
FACTS
(2) WON the revocation of the agency by petitioners can be upheld? NO
● Sometime in 1974, respondent Teresita Nacianceno convinced the
Department of Education and Culture to purchase without public bidding,
P1M worth of national flags for the use of public schools throughout the
country. HELD/RATIO
● Nacianceno was able to expedite the approval of the purchase by (1) Yes. Nacianceno was a general agent. It can easily be seen by the way general
handcarrying the different indorsements from one office to another then words were employed in the agreement that no restrictions were intended as
all the legal requirements had been complied with, except the release of to the manner the agency was to be carried out or in the place where it was to
the purchase orders. be executed. The power granted to the respondent was so broad that it
● When Nacianceno was informed by the Chief of the Budget Division of practically covers the negotiations leading to, and the execution of, a contract
the Department that the purchase orders could not be released unless a of sale of petitioners' merchandise with any entity or organization.
formal offer to deliver the flags in accordance with the required Section 7 Rule 130 of our Revised Rules of Court states that "when the
specifications was first submitted for approval, she contacted the owners terms of an agreement have been reduced to writing, it is to be
of the United Flag Industry. considered as containing all such terms, and, therefore, there can be
● She was then informed by the UFI that she will be entitled to a between the parties and their successors-in-interest, no evidence of the
commission of thirty (30%) percent. terms of the agreement other than the contents of the writing", except in
● The first delivery of 7,933 flags was made by the United Flag Industry. The cases specifically mentioned in the same rule.
next day, on October 17, 1974, the respondent's authority to represent  Petitioners have failed to show that their agreement falls under any
the United Flag Industry was revoked by petitioner Primitivo Siasat (the of these exceptions. The respondent was given ample authority to
owner and General manager of UFI). transact with the Department in behalf of the petitioners.
● Siasat, after receiving the payment of P469,980.00 on October 23, 1974  Equally without merit is the petitioners' proposition that the
for the first delivery, tendered the amount of P23,900.00 or five percent transaction involved two separate contracts because there were
(5%) of the amount received, to the respondent as payment of her two purchase orders and two deliveries. The petitioners' evidence
commission. is overcome by other pieces of evidence proving that there was
● The Naciancenco protested. She refused to accept the said amount only one transaction.
insisting on the 30% commission agreed upon. The respondent was (2) No. Since only one transaction was involved, we deny the petitioners'
assured by the petitioners that they would pay the commission in full contention that respondent Nacianceno is not entitled to the stipulated
after they delivered the other half of the order. The respondent states commission on the second delivery because of the revocation of the
 agency effected after the first delivery. The revocation of agency could  On September 12, 1955, Simeon Rallos sold the undivided shares of his
not prevent the respondent from earning her commission because as the sisters Concepcion and Gerundia of the land to Felix Go Chan for
trial court opined, it came too late, the contract of sale having been P10,686.90.
already perfected and partly executed.  On May 18, 1956 Ramon Rallos as administrator of the Intestate Estate of
 There is no evidence on record from which to conclude that the Concepcion Rallos filed a complaint in the Court of First Instance of Cebu,
revocation of the agency was deliberately effected by the petitioners to praying (1) that the sale of the undivided share of the deceased
avoid payment of the respondent's commission. What appears before us Concepcion Rallos in lot 5983 be declared unenforceable, and said share
is only the petitioner's use in court of such a factual allegation as a be reconveyed to her estate; (2) that the Certificate of Title issued in the
defense against the respondent's claim. This alone does not per se make name of Felix Go Chan & Sons Realty Corporation be cancelled and
the petitioners guilty of bad faith for that defense should have been fully another title be issued in the names of the corporation and the
litigated "Intestate estate of Concepcion Rallos" in equal undivided shares;
 RTC - Declaring the deed of sale null and void insofar as the share of
Concepcion Rallos
Notes/Issue within the case:  CA - reversed. Deed of sale valid.
 There were two deliveries, on the 1st delivery she received 5%
commission and none on the 2 nd delivery. She did not allege in the initial ISSUE: W/N the sale of the undivided share of Concepcion valid although it was
complaint that she was not paid in full commission on the first delivery executed by the agent after the death of his principal - No
that was why the SC held that only 30% of the 2nd delivery was due to her.
 She was also saying that her signature was forged. SC denied this. HELD:
 "ART. 1919. Agency is extinguished: "xxx xxx xxx
12. RALLOS v. FELIX GO CHAN  "3. By the death, civil interdiction, insanity or insolvency of the principal
GR No. L-34332 or of the agent; . . . ."
January 31, 1978  ART. 1931. Anything done by the agent, without knowledge the death of
By: YRREVERRE the principal or of any other cause which extinguishes the agency, is valid
____________________________________________________________________ and shall be fully effective with respect to third persons who may have
Topic: Extinguishment of Agency contracted with him in good faith.
Petitioners: RAMON RALLOS  Article 1931 is the applicable law. Under this provision, an act done by
Respondents: FELIX GO CHAN & SONS REALTY CORPORATION and COURT OF the agent after the death of his principal is valid and effective only under
APPEALS two conditions, viz: (1) that the agent acted without knowledge of the
Ponente: MUNOZ-PALMA, J. death of the principal, and (2) that the third person who contracted with
____________________________________________________________________ the agent himself acted in good faith. Good faith here means that the
third son was not aware of the death of the principal at the time he
DOCTRINE: contracted with said agent. These two requisites must concur: the
absence of one will render the act of the agent invalid unenforceable.
 In the instant case, it cannot be questioned that the agent, Simeon Rallos,
FACTS
knew of the death of his principal at the time he sold the latter's share in
 Concepcion and Gerundia both surnamed Rallos were sisters and Lot No. 5983 to respondent corporation. The knowledge of the death is
registered co-owners of a parcel of land in Cebu clearly to be inferred from the pleadings filed by Simeon Rallos before the
 On April 21, 1954, the sisters executed a special power of attorney in trial court. 12 That Simeon Rallos knew of the death of his sister
favor of their brother, Simeon Rallos, authorizing him to sell for and in Concepcion is also a finding of fact of the court a quo 13 and of
their behalf the land. respondent appellate court when the latter stated that Simeon Rallos
 On March 3, 1955, Concepcion Rallos died.
 "must have known of the death of his sister, and yet he proceeded with ● CMS averred that the commission earned by SHINKO violated the agreement
the sale of the lot in the name of both his sisters Concepcion and with DRACOR hence CMS was had the right with respect to the proceeds of the
Gerundia Rallos without informing appellant (the realty corporation) of sales. CMS argued that since DRACOR has a 5% commission under the
the death of the former." agreement, it is not entitled to additional commission paid to SHINKO as this was
 Since the agent already know the death of the principal and still tantamount to double compensation. This prompted CMS to sell the logs directly
proceeded with the sale, making him no authority to enter such sale thus in Japan w/o DRACOR’s aid.
void. ● CMS sued DRACOR for the commission received by SHINKO while DRACOR
 Petitioner won. counterclaimed of P144K for its commission from the sales CMS made by selling
logs to Japanese firms w/o DRACOR’s aid.
IN VIEW OF ALL THE FOREGOING, We set aside the decision of respondent ● CMS replied that DRACOR’s counterclaim constitutes its commission hence CMS
appellate court, and We affirm en toto the judgment rendered by then Hon. demanded DRACOR return the money it unlawfully retained. DRACOR amended
Amador E. Gomez of the Court of First Instance of Cebu, quoted in pages 2 and 3 of its counterclaim to P42K thus impliedly admitting that it retained the amount
this Opinion, with costs against respondent realty corporation at all instances. alleged by CMS.
● TC: No proof was shown that SHINKO received commission arising from the sale
4. CMS LOGGING INC VS. CA and D.R. AGUINALDO CORP. of CMS’s logs even though it stated that SHINKO was able to collect $77K.
DRACOR’s counterclaim was dismissed as it was shown that DRACOR waived its
GR NO. L-41420
rights to the balance of its commission as evidenced by its letter to CMS.
JULY 10, 1992 ● CA: Affirmed the dismissal since the TC could not find that SHINKO indeed
BY: Ryan collected commissions from CMS’s buyer hence CMS was not entitled to recover
TOPIC: EXTINGUISHMENT OF AGENCY the amount from DRACOR.
PETITIONERS: CMS LOGGING CORP. o CA believed that SHINKO was paid by DRACOR out of its own 5% commission
as indicated in a letter of DRACOR to CMS.
RESPONDENTS: CA and D.R. AGUINALDO
o “I informed you that if you wanted to pay me for the service, then it would be
PONENTE: NOCON, J.
no more than at the standard rate of 5% commission because in our own case,
DOCTRINE: The principal may revoke a contract of agency at will, and such we pay our Japanese agents 2-1/2%. Accordingly, we would only add a similar
revocation may be express, or implied, and may be availed of even if the period amount of 2-1/2% for the service which we would render you in the
fixed in the contract of agency as not yet expired. As the principal has this absolute Philippines.
right to revoke the agency, the agent cannot object thereto; neither may he claim ISSUE: WON DRACOR is entitled to the commission from CMS’s direct selling of its
damages arising from such revocation, unless it is shown that such was done in logs
order to evade the payment of agent's commission.
HELD/RATIO: NO
FACTS: ● While its true that the evidenced establishes the fact that SHINKO is DRACOR’s
● CMS is engaged in logging while D.R. AGUINALDO CORP. (DRACOR) is engaged in agent in Japan, there is no proof which established that SHINKO received the
selling limber entered into a contract of agency wherein CMS appointed DRACOR amount of $77K as commission which allegedly arose from the sale of CMS’s
as its exclusive export and sales agent for all logs that CMS’s produces for 5 years logs.
with DRACOR with a 5% commission. Due to this agreement, CMS was able to ● The fact that SHINKO received the subject commissions was not established by
sell through DRACOR 77M board feet in Japan for several years. the testimony of Dominguez (CMS’s GM/counsel) to the effect that SHINKO’s
● However, 6 months before contract expiration, CMS found that DRACOR had President told Dominguez that SHINKO received a commission of $1/1,000 board
used Shinko Trading Ltd (SHINKO) as agent for selling their logs in Japan. SHINKO feet of logs it sold since the same is hearsay.
earned $1/1,000 board feet from buyers and overall, SHINKO was able to collect ● In the correspondence between the CMS and DRACOR, DRACOR’s response to
more than $77K. CMS’s demand letter cannot be categorized as admissions that SHINKO did not
receive the commissions in question.
 o The letters were statements in the context of questioning CMS’s tally of logs
delivered in Japan; and 5 Sanchez v Medicard Phil
o Neither did the letters categorically state that SHINKO received said GR # 141525
commission which arose from the sale CMS’s logs. Date: Sept 2, 2005
● CMS’s contention that DRACOR’s silence meant that SHINKO received By: Yen
commission is untenable when it fact, DRACOR replied that it had no record of Topic: ARTICLE 1924
payments to SHINKO. Just because SHINKO got $77K does not mean that it was Petitioner: Carlos Sanchez
from the sale of CMS’s logs. Respondent: Medicard Philippines, Inc., Dr. Nicanor Montoya and
● Even if indeed SHINKOO received said commissions, CMS is not entitled to it Carlos Ejercito
since it was SHINKO’s buyers paid for it for arranging the sale hence formed no Ponente: Sandoval-Gutierrez, J.
part of CMS’s gross sales.
Summary:
● However, DRACOR was not entitled to its commissions from the sales done by
Medicard appointed Carlos as its special corporate agent and gave him
CMS directly to Japanese firms.
o The principal may revoke a contract of agency at will, and such revocation commission based on the “cash brought in”. Through Carlos’ efforts,
may be express, or implied, and may be availed of even if the period fixed in Medicard and Unilab executed a Health Care Program Contract. Carlos was
the contract of agency as not yet expired. As the principal has this absolute given commission due to this transaction. Upon expiration of the contract,
right to revoke the agency, the agent cannot object thereto; neither may he Medicard proposed to Unilab an increase of the premium for the next year
claim damages arising from such revocation, unless it is shown that such was but Unilab rejected the proposal since it was too expensive. Thus, Nicanor,
done in order to evade the payment of agent's commission. Medicard’s president and general manager, asked Carlos to reduce his
o In this case, CMS appointed DRACOR as its agent yet during the agency’s commission but Carlos refused. In turn, Unilab also decided not to renew the
existence, DRACOR admitted that CMS sold its logs directly to Japanese health program. In order not to prejudice its personnel by the termination of
firms. their health insurance, Unilab and Nicanor discussed other ways to continue
o This act is an implied revocation of agency under NCC 1924: The agency is the insurance coverage of those personnel. For this transaction, Medicard
revoked if the principal directly manages the business entrusted to the did not give any commission to Carlos. Carlos demanded his commission
agent, dealing directly with third persons.
but Medicard refused to give it to him. Thus, Carlos filed a complaint for sum
● Since the contract of agency was revoked by CMS by directly selling the logs w/o
of money against Medicard. RTC dismissed the complaint and CA affirmed.
DRACOR’s aid hence DRACOR is has not right to its commission from said
proceeds and is not entitled to retain whatever money it may have received as SC: It is clear that since Carlos refused to reduce his commission, Medicard
its commission for said deals. DRACOR has no right to damages from CMS since directly negotiated with Unilab, thus revoking its agency contract with Carlos
said damages are generally not awarded to the agent for the revocation of the DOCTRINE:
agency "Art. 1924. The agency is revoked if the principal directly manages the
business entrusted to the agent, dealing directly with third persons."
DISPOSITIVE PORTION: In fine, We affirm the ruling of the Court of Appeals that FACTS:
there is no evidence to support CMS's contention that Shinko earned a separate ● Medicard Philippines, Inc. (Medicard), respondent, appointed Carlos as its
commission of U.S. $1.00 for every 1,000 board feet of logs from the buyer of special corporate agent.
CMS's logs. However, we reverse the ruling of the Court of Appeals with regard to o As such agent, Medicard gave him a commission based on the "cash
DRACOR's right to retain the amount of P101,536.77 as part of its commission from brought in."
the sale of logs by CMS, and hold that DRACOR has no right to its commission. ● Through Carlos' efforts, Medicard and United Laboratories Group of
Consequently, DRACOR is hereby ordered to remit to CMS the amount of Companies (Unilab) executed a Health Care Program Contract.
P101,536.77. WHEREFORE, the decision appealed from is hereby MODIFIED as o Under this contract, Unilab shall pay Medicard a fixed monthly premium
stated in the preceding paragraph. Costs de officio. SO ORDERED. for the health insurance of its personnel.
 ● Unilab paid Medicard P4,148,005.00 representing the premium for one ● In order for an agent to be entitled to a commission, he must be the
(1) year. procuring cause of the sale, which simply means that the measures employed by
● Medicard then handed Carlos 18% of said amount or P746,640.90 him and the efforts he exerted must result in a sale.
representing his commission. ● In other words, an agent receives his commission only upon the
● Prior to the expiration of the contract, Medicard proposed to Unilab, successful conclusion of a sale.
through Carlos, an increase of the premium for the next year. ● Conversely, it follows that where his efforts are unsuccessful, or there
● Unilab rejected the proposal "for the reason that it was too high," was no effort on his part, he is not entitled to a commission.
prompting Dr. Nicanor Montoya (Medicard's president and general manager), also ● It is clear that since Carlos refused to reduce his commission, Medicard
a respondent, to request Carlos to reduce his commission, but the latter refused. directly negotiated with Unilab, thus revoking its agency contract with Carlos
● In a letter, Unilab, through Carlos Ejercito, another respondent, ● We hold that such revocation is authorized by Article 1924 of the Civil
confirmed its decision not to renew the health program contract with Medicard. Code which provides:
● In order not to prejudice its personnel by the termination of their health o "Art. 1924. The agency is revoked if the principal directly manages the
insurance, Unilab, through respondent Ejercito, negotiated with Dr. Montoya and business entrusted to the agent, dealing directly with third persons."
other officers of Medicard, to discuss ways in order to continue the insurance ● Moreover, Carlos did not render services to Medicard, his principal, to
coverage of those personnel entitle him to a commission.
● Under the new scheme, Unilab shall pay Medicard only the amount ● There is no indication from the records that he exerted any effort in order
corresponding to the actual hospitalization expenses incurred by each personnel that Unilab and Medicard, after the expiration of the Health Care Program
plus 15% service fee for using Medicard facilities, which amount shall not be less Contract, can renew it for the third time.
than P780,000.00. ● In fact, his refusal to reduce his commission constrained Medicard to
● Medicard did not give Carlos any commission under the new scheme negotiate directly with Unilab.
● Carlos demanded from Medicard payment of P338,000.00 as his ● We find no reason in law or in equity to rule that he is entitled to a
commission plus damages, but the latter refused to heed his demand commission.
● Thus, Carlos filed a complaint for sum of money against Medicard and its ● Obviously, he was not the agent or the "procuring cause" of the third
co-respondents Health Care Program Contract between Medicard and Unilab.
● RTC: dismissed the complaint ● WHEREFORE, the petition is DENIED. The challenged Decision
● CA: affirmed RTC’s decision and Resolution of the Court of Appeals in CA-G.R. CV No. 47681 are
o Held that there is no proof that the execution of the new contract AFFIRMED I N T O T O . Costs against petitioner.
between the parties under the "cost plus" system is a strategy to deprive
petitioner of his commission
o That when Unilab rejected Medicard's proposal for an increase of
2. International Exchnage Bank vs. Sps. Briones
premium, their Health Care Program Contract on its third year was effectively
GR NO. 205657
revoked; and that where the contract is ineffectual, then the agent is not
March 29, 2017
entitled to a commission
● Hence this petition
Topic: ATP
ISSUE: Whether the contract of agency has been revoked by Medicard, hence, petitioner is Petitioners: International Exchange Bank
Respondents: SPS. BRIONES
not entitled to a commission.
Ponente: LEONEN, J
RATIO/ HELD: YES!
 RECIT-READY ● Petitioner maintains that the insurance coverage taken on the
vehicle is "only an aleatory alternative that respondents are entitled
to" if their claim is granted by the insurance company. Petitioner
asserts that it was the duty of Briones to file a claim with the
insurance company. Thus, they should not be allowed to pass on
that responsibility and they should be held liable for the loan taken
out on the lost vehicle.
DOCTRINE: Revocation as a form of extinguishing an agency under Article ● Moreover, petitioner posits that respondent Jerome's direct dealing
with the insurance company was a revocation of the agency
1924 of the Civil Code only applies in cases of incompatibility, such as when
relationship between petitioner and respondents
the principal disregards or bypasses the agent in order to deal with a third
person in a way that excludes the agent. ISSUE
(1) whether the agency relationship was revoked or terminated? (No)
FACTS
HELD/RATIO
● Sps. Briones contracted a loan in the amount of 3.8m with Ibank
with a monthly amortization of 79k. They used it to buy a BMW Z4 (1) No. The Spouses Briones' claim for loss cannot be seen as an
Roadster. implied revocation of the agency or their way of excluding
petitioner. They did not disregard or bypass petitioner when they
● The Spouses Briones executed a promissory note with chattel made an insurance claim; rather, they had no choice but to
mortgage that required them to take out an insurance policy on the personally do it because of their agent's negligence. This is not the
vehicle.The promissory note also gave iBank, as the Spouses implied termination or revocation of an agency provided for under
Briones' attomey-infact, irrevocable authority to file an insurance Article 1924 of the Civil Code. 
claim in case of loss or damage to the vehicle. The insurance
proceeds were to be made payable to iBank. (2) While a contract of agency is generally revocable at will as it is
● The BMW was carnapped and it was reported by Briones to the primarily based on trust and confidence, Article 1927 of the Civil
Police and eventually declared the loss to ibank. As a proof of good Code provides the instances when an agency becomes
faith, ibank told them to continue paying the installments for the irrevocable: 
next 3 months. “Article 1927. An agency cannot be revoked if a bilateral contract
● After 3 months, ibank sent them a letter demanding the full depends upon it, or if it is the means of fulfilling an obligation already
payment of the lost vehicle contracted, or if a partner is appointed manager of a partnership in the
contract of partnership and his removal from the management is
● On April 30, 2004, the Spouses Briones submitted a notice of claim unjustifiable. “
with their insurance company, which denied the claim on June 29, (3) A bilateral contract that depends upon the agency is considered an
2004 due to the delayed reporting of the lost vehicle. agency coupled with an interest, making it an exception to the
● RTC dismissed iBank's complaint. It ruled that as the duly general rule of revocability at will.Lim v. Sabanemphasizes that
constituted attorney-in- fact of the Spouses Briones, iBank had the when an agency is established for both the principal and the agent,
obligation to facilitate the filing of the notice of claim and then to an agency coupled with an interest is created and the principal
pursue the release of the insurance proceeds. cannot revoke the agency at will.
● The Regional Trial Court also pointed out that as the Spouses
Briones' agent, iBank prioritized its interest over that of its principal (4) In the promissory note with chattel mortgage, the Spouses Briones
when it failed to file the notice of claim with the insurance company authorized petitioner to claim, collect, and apply· the insurance
and demanded full payment from the spouses. proceeds towards the full satisfaction of their loan if the mortgaged
vehicle were lost or damaged. Clearly, a bilateral contract existed
 between the parties, making the agency irrevocable. Petitioner was  As security for the payment, he mortgaged the improvements of the
also aware of the bilateral contract; thus, it included the designation parcel of land in favor of the Primitivo.
of an irrevocable agency in the promissory note with chattel  Tiburcio executed an 'irrevocable special power of attorney coupled
mortgage that it prepared for the Spouses Briones to sign. with interest" in favor of Primitivo, authorizing him, among others, to
sell and convey the parcel of land.
8. Del Rosario v. Abad  In December 1945, Tiburcio died leaving the mortgage debt unpaid.
104 PHIL 648  Primitivo Abad, acting as attorney-in-fact of Tiburcio, sold the parcel
SEPT. 30, 1958 of land to his son Teodorico Abad for and in consideration of the
By: JANINE token sum of P1.00 and the payment by the vendee of the mortgage
debt of Tiburcio to Primitivo.
Topic: Extinguishment of Agency  Teodorico took possession of the parcel of land. Upon the filing and
Petitioners: EULOGIO DEL ROSARIO, AURELIO DEL ROSARIO, BENITO DEL registration of the last deed of sale, the Registrar of Deeds cancelled
ROSARIO, BERNARDO DEL ROSARIO, ISIDRA DEL ROSARIO, DOMINGA DEL the original certificate of title in the name of Tiburcio del Rosario and
ROSARIO and CONCEPCION BORROMEO issued a TCT in favor of Teodorico.
Respondents: PRIMITIVO ABAD and TEODORICO ABAD  Plaintiffs brought suit against the defendants to recover possession
Ponente: PADILLA, J. and ownership of the parcel of land, damages, attorney's fees and
costs.
____________________________________________________________________
 Trial Court held that the deed of sale executed by Primitivo in favor of
SUMMARY: Tiburcio was issued a homestead patent. He then obtained a loan Teodorico is null and void and ordered Teodorico to execute a deed of
from Primitivo. As security, he mortgaged the improvements of the land in reconveyance of the land in favor of the plaintiffs.
favor of Primitivo. Tiburcio executed an 'irrevocable special power of attorney
coupled with interest" in favor of Primitivo, authorizing him to sell and convey ISSUE:  WON Primitivo can convey the property to Teodorico.
the parcel of land. After Tiburcio died, Primitivo sold the land to Teodorico.
Plaintiffs, as heirs of Tiburcio, filed a suit against Primitivo and Teodorico. Trial HELD: NO
Court held that the sale was null and void. SC affirmed the Trial Court and held
The power of attorney executed by Tiburcio del Rosario in favor of
that the agency terminated upon the death of Tiburcio, the principal, and
Primitivo Abad providing, among others, that is coupled with an interest in the
Primitivo, the agent, could no longer validly convey the parcel of land to
subject matter thereof in favor of the said attorney and are therefore
Teodorico.
irrevocable, and . . . conferring upon my said attorney full and ample power and
____________________________________________________________________
authority to do and perform all things reasonably necessary and proper for the
DOCTRINE: A mere statement in the power of attorney that it is coupled with
due carrying out of the said powers according to the true tenor and purport of
an interest is not enough. In what does such interest consist must be stated in
the same, . . ." does not create an agency coupled with an interest nor does it
the power of attorney.
clothe the agency with an irrevocable character. A mere statement in the power
of attorney that it is coupled with an interest is not enough. In what does such
FACTS: interest consist must be stated in the power of attorney. The fact that Tiburcio
 Plaintiffs are the children and heirs of the late Tiburcio del Rosario. del Rosario, the principal, had mortgaged the improvements of the parcel of
 In December 1936, the Secretary of Agriculture and Commerce issued land to Primitivo Abad, the agent is not such an interest as could render
under the Public Land Act homestead patent to Tiburcio. The irrevocable the power of attorney executed by the principal in favor of the
homestead is in San José, Nueva Ecija. agent. In fact no mention of it is made in the power of attorney. The mortgage
 In February 1937, the Registrar of Deeds issued an original certificate on the improvements of the parcel of land has nothing to do with the power of
of title in the name of Tiburcio. attorney and may be foreclosed by the mortgagee upon failure of the mortgagor
 Tiburcio then obtained a loan from Primitivo Abad in the sum of to comply with his obligation. As the agency was not coupled with an interest, it
P2,000 with interest at the rate of 12% per annum, payable in was terminated upon the death of Tiburcio del Rosario, the principal, sometime
December 1941.
in December 1945, and Primitivo Abad, the agent, could no longer validly was not licensed real estate broker therefore was able to
convey the parcel of land to Teodorico Abad on 9 June 1947. convince to cancel the 4 checks
• That Ybañez and Lim connived to deprive him of his sales commission
The judgment appealed from is affirmed, with costs against the appellants. by withholding payment of the checks
• Ybañez: Saban was not entitled to any commission because he concealed the
#9 LIM vs. SABAN actual selling price from him and for not being a licensed real estate
GR # 163720 broker
DATE: Dec. 16, 2004 • Lim: she was not privy to the agreement between Ybañez and Saban; that she
By: Jus agreen with Ybañez for a purchase price of P200k only – reason for
Topic: cancelling the checks and since Ybañez requested to directly pay him
Petitioners: Genevieve Lim instead of Saban
Respondents: Florencio Saban • Yabñez dued during pendency
Ponente: Tinga, J. • RTC: dismissed Saban’s complaint
SUMMARY: • CA reversed – Saban entitle of commission amounting to P236k
Ybanez authorized Saban to look for a buyer of his lot for P200k and mark up for • Ybanez’s revocation of contract of agency was invalid because the
taxes and his commission. Consummation of sale was done with Lim and Sps. Lim agency was coupled with an interest and Ybanez effected the
wherein Lim remitted to Saban P600k constituting P200k for the lot, others for taxes revocation in bad faith in order to deprive Saban of his
and his commission. But the Ybanez asked Lim to cancel the postdated checks. commission and to keep the profits for himself
Upon encashment, checks were dishonored. Saban then filed for collection including • Ybanez and Lim connived to deprive Saban of his commission
Lim as the defendant for conniving with Ybanez. SC held that Saban is still entitled • Lim liable to pay Saban since she knew that the checks were for
of the commission; Lim is liable also to pay for conniving. Saban’s commission as agent of Ybanez therefore Lim acted as
DOCTRINE: Seller’s withdrawal in bad faith of the broker’s authority cannot accommodation party
unjustly deprive the brokers of their commissions as the seller’s duly constituted • Lim filed MR – DENIED
agents • Hence, this petition.
FACTS: ISSUE:
• Feb. 8, 1994: Late Eduardo Ybañez – owner of 1k-sqm lot – entered into • WON SABAN IS ENTITLED OF THE COMIMISSION – YES
Agreement and Authority to Negotiate and Sell [Agency Agreement] with • WON LIM IS LIABLE TO PAY SABAN HIS SALES COMMISSION
Saban CONSIDERING THE AGENCY AGREEMENT WAS BETWEEN
• Ybañez authorized Saban to look for a buyer of the lot for P200k and YBANEZ AND SABAN - YES
mark up the selling price to include the amounts needed for HELD/RATIO:
payment of taxes, transfer of title and other expenses incident to • SC held that the agency was not revoked since Ybanez requested Lim to stop
the sale including Saban’s commission payment orders for the checks payable to Saban only after the
• March 10, 1994: Able to sell to Genevieve Lim and Sps. Benjamin and Lourdes consummation of the sale and at that time, Saban had already performed
Lim; agreed to purchase the lot for P600k inclusive of the mentioned his obligation as Ybanez’s agent
expenses • To deprive Saban of his commission after sale has been consummated would
• After sale, Lim remitted to Saban P113k for payment of taxes and P50k as constitute breach of contract
broker’s commission; also issued 4 post-dated checks total of P236k in the • It would be injustice to permit the principal to terminate the contract of agency to
name of Saban the prejudice of the broker when had already reaped the benefits of the
• June 10, 1994: Ybañez sent letter to Lim asking to cancel all the checks issued broker’s efforts.
and to “extend another partial payment” in his (Ybañez’s) favor. • Seller’s withdrawal in bad faith of the broker’s authority cannot unjustly deprive
• Saban then presented the checks but were dishonored the brokers of their commissions as the seller’s duly constituted agents
• Saban filed complaint for collection of sum of money and damages against • ART 1927: an agency cannot be revoked if a bilateral contract depends upon it,
Ybañez and Lim alleging or if it is the means of fulfilling an obligation already contracted, or if a
• That Ybañez told Lim that Saban was not entitled for commission for partner is appointed manager of a partnership in the contract of partnership
concealing the actual selling price from Ybañez and because he and his removal from the management is unjustifiable.
• Lim is not a party to the contract but record reveals that she had knowledge that  petitioner Calimlim assigned about 80 military personnel to guard the
Ybanez set the price of the lot at P200k and that the P600k includes the area and encamp thereon to intimidate Legaspi and other occupants of
amount for payment of taxes and Saban’s commission as broker of the area from going near the subject land.
Ybanez.  Legaspi executed a SPA appointing his nephew, private respondent
• The change of mind of Lim that even after issuing the checks then cancelling it Gutierrez, as his attorney-in-fact. Gutierrez was given the power to deal
resulted to the prejudice of Saban whose efforts led to the completion of with the treasure hunting activities on Legaspis land and to file charges
the sale between Ybanez and Lim
against those who may enter it without the latters authority. Legaspi
• It was concluded that Lim and Ybanez connived to deprive Saban of his
agreed to give Gutierrez 40% of the treasure that may be found in the
commission by dealing with each other directly and reducing the purchase
price of the lot and leaving nothing to compensate Saban land.
• Court ruled it is just and proper that Saban would pay the balance which would  Gutierrez filed a case for damages and injunction against petitioners for
constitute as Saban’s compensation illegally entering Legaspis land. He hired the legal services of Atty.
Homobono Adaza. Their contract provided that as legal fees, Atty. Adaza
shall be entitled to 30% of Legaspis share in whatever treasure may be
7.) Republic vs. Evangelista found in the land. In addition, Gutierrez agreed to pay Atty.
GR NO.156015 Adaza P5,000.00 as appearance fee per court hearing and defray all
August 11, 2005 expenses for the cost of the litigation.
By: Martin  Petitioners filed a Motion to Dismiss contending: first, there is no real
Petitioner: Republic of the Philippines, represented by lt. gen. Jose m. Calimlim, in party-in-interest as the SPA of Gutierrez to bring the suit was already
revoked by Legaspi on March 7, 2000, as evidenced by a Deed of
his capacity as former chief of the intelligence service, armed forces of the
Revocation,
philippines (isafp), and former commanding general, presidential security group
 RTC ruled in favor of the private respondents. CA affirmed the decision.
(psg), and maj. david b. diciano, in his capacity as an officer of isafp and former ISSUE
member of the psg, Whether the contract of agency between Legaspi and Gutierrez has been
Respondent: Hon. victorino evangelista, in his capacity as presiding judge, regional effectively revoked by Legaspi.
trial court, branch 223, quezon city, and Dante Legaspi, represented by his HELD/RATIO
attorney-in-fact, Paul Gutierrez NO
DOCTRINE/LAWS  Petitioners claim that the special power of attorney of Gutierrez to
When an agency is constituted as a clause in a bilateral contract, that is, when the represent Legaspi has already been revoked by the latter. Private
respondent Gutierrez, however, contends that the unilateral revocation is
agency is inserted in another agreement, the agency ceases to be revocable at the
invalid as his agency is coupled with interest.
pleasure of the principal as the agency shall now follow the condition of the
 A contract of agency is generally revocable as it is a personal contract of
bilateral agreement. representation based on trust and confidence reposed by the principal
FACTS on his agent. As the power of the agent to act depends on the will and
 Respondent Legaspi is the owner of a land located in Bigte, Norzagaray, license of the principal he represents, the power of the agent ceases
Bulacan. Petitioner Calimlim, representing the Republic of the Philippines, when the will or permission is withdrawn by the principal. Thus,
and as then head of the ISAFP and the PSG, entered into a Memorandum generally, the agency may be revoked by the principal at will.
of Agreement (MOA) with one Ciriaco Reyes. The MOA granted Reyes a  However, an exception to the revocability of a contract of agency is
permit to hunt for treasure in a land in Bigte, Norzagaray, Bulacan. when it is coupled with interest, i.e.,  if a bilateral contract depends
 Reyes, together with petitioners, started, digging, tunneling and blasting upon the agency.The reason for its irrevocability is because the agency
works on the said land of Legaspi. becomes part of another obligation or agreement. It is not solely the
rights of the principal but also that of the agent and third persons which
 are affected. Hence, the law provides that in such cases, the agency Summary:
cannot be revoked at the sole will of the principal. DOCTRINE:
 In the case at bar, we agree with the finding of the trial and appellate A power of attorney although coupled with interest in a partnership can
courts that the agency granted by Legaspi to Gutierrez is coupled with be revoked for a just cause, such as when the attorney-in-fact betrays
interest as a bilateral contract depends on it. It is clear from the records the interest of the principal as happened in the case at bar.
that Gutierrez was given by Legaspi, inter alia, the power to manage FACTS:
the treasure hunting activities in the subject land; to file any case
 Claparols, operated a factory for the manufacture of nails, under the style of
against anyone who enters the land without authority from Legaspi; to
"Claparols Steel & Nail Plant"
engage the services of lawyers to carry out the agency; and, to dig for
any treasure within the land and enter into agreements relative o The raw material, nail wire, was imported from foreign sources
thereto. It was likewise agreed upon that Gutierrez shall be entitled to o The marketing of the nails was handled by the "ABCD Commercial" of
40% of whatever treasure may be found in the land. Bacolod, which was owned by a chinaman named Kho To.
 Pursuant to this authority and to protect Legaspis land from the alleged  Losses compelled Claparols to look for someone to finance his imports of nail
illegal entry of petitioners, agent Gutierrez hired the services of Atty. wire
Adaza to prosecute the case for damages and injunction against  Kho To introduced his compadre, appellant Vicente Coleongco, to Claparols,
petitioners. As payment for legal services, Gutierrez agreed to assign to recommending Coleongco to be the financier
Atty. Adaza 30% of Legaspis share in whatever treasure may be  Claparols agreed and a contract was perfected between them whereby
recovered in the subject land. Coleongco undertook to finance and put up the funds required for the importation
 It is clear that the treasure that may be found in the land is the subject
of the nail wire, which Claparols bound himself to convert into nails at his plant.
matter of the agency; that under the SPA, Gutierrez can enter into
 It was agreed:
contract for the legal services of Atty. Adaza; and, thus Gutierrez and
Atty. Adaza have an interest in the subject matter of the agency, i.e.,  in o That Coleongco would have the exclusive distribution of the product, and
the treasures that may be found in the land. This bilateral contract the "absolute care in the marketing of these nails and the promotion of sales all
depends on the agency and thus renders it as one coupled with interest, over the Philippines", except the Davao Agency;
irrevocable at the sole will of the principal Legaspi. o That Coleongco would "share the control of all the cash" from sales or
 When an agency is constituted as a clause in a bilateral contract, that is, deposited in banks;
when the agency is inserted in another agreement, the agency ceases to o That all contracts and transactions should be jointly approved by both
be revocable at the pleasure of the principal as the agency shall now parties;
follow the condition of the bilateral agreement. Consequently, the Deed  Claparols executed in favor of Coleongco a special power of attorney to open
of Revocation executed by Legaspi has no effect. The authority of and negotiate letters of credit, to sign contracts, bills of lading, invoices, and
Gutierrez to file and continue with the prosecution of the case at bar is
papers covering transactions; to represent Claparols and the nail factory; and to
unaffected.
accept payments and cash advances from dealers and distributors.
 Winner: Legaspi
 Thereafter, Coleongco also became the assistant manager of the factory, and
10 Coleongco b Claparols took over its business transactions, while Claparols devoted most of his time to
GR # L-18616 the nail manufacture processes.
Date: March 31, 1964  Claparols was surprised by service of an alias writ of execution to enforce a
By: Enzo judgment obtained against him by the Philippine National Bank, despite the fact
Topic: that on the preceding September he had submitted an amortization plan to settle
Plaintiff-Appellant: Vicente Coleongco the account
Defendant-Appellee: Eduardo Claparols  Claparols learned that the execution had been procured because of derogatory
Ponente: Reyes, J.B.L., J information against him that had reached the bank from his associate Coleongco
 Claparols managed to arrange matters with the bank and to have the execution IN VIEW OF THE FOREGOING, the decision appealed from is affirmed.
levy lifted Costs against appellant Vicente Coleongco.
 Claparols revoked the power of attorney and informed Coleongco
 Coleongco filed a suit against Claparols charging him of breach of contract
 Claparols answered, denying the charge, and counterclaiming for the rescission 11 BUASON v. PANUYAS
of the agreement with Coleongco G.R. No. 11415, Date
 CFI: ruled in favor of Claparols and ordered Coleongco to pay Claparols By: Iñigo Untalan
 Hence, this direct appeal to the SC Topic: Extinguishment of Agency
Petitioners: MANUEL BUASON & LOLITA REYES
ISSUE: Whether Claparols had legal power to revoke the special power of Respondents: MARIANO PANUYAS
attorney even though it was one coupled with an interest Ponente: Justice Padilla

RATIO/ HELD: YES!

 It must not be forgotten that a power of attorney can be made irrevocable by
contract only in the sense that the principal may not recall it at his pleasure; but DOCTRINE: Anything done by the agent, without knowledge of the death of the
coupled with interest or not, the authority certainly can be revoked for a just principal or of any other cause which extinguishes the agency, is valid and shall be
cause, such as when the attorney- in-fact betrays the interest of the principal fully effective with respect to 3rd persons who may have contracted with him in
 The irrevocability of the power of attorney may not be used to shield the good faith.
perpetration of acts in bad faith, breach of confidence, or betrayal of trust, by the
agent, for that would amount to holding that a power, coupled with an interest HELD/RATIO:
authorizes the agent to commit frauds against the principal
 Coleongco bad faith towards his principal Claparols is unquestionable
o His letters to the Philippine National Bank attempting to undermine the PRINCIPAL: Dayao & Vega
credit of the principal and to acquire the factory of the latter, without the AGENT: Bayuga
principal's knowledge; 3RD PARTIES: Panuyas, Buason & Reyes
o Coleongco's letter to his cousin, Kho To instructing the latter to reduce to
one-half the usual monthly advances to Claparols on account of nail sales in FACTS:
order to squeeze Claparols and compel him to extend the contract entitling  This is a dispute over a parcel of land whereby plaintiffs and defendant claim
Coleongco to share in the profits of the nail factory in better terms, and ownership over the the aforementioned.
ultimately "own his factory", a plan carried out by Kho's letter" reducing the  A 14.8414-hectare parcel of land in Nueva Ecija was acquired by Buenaventura
advances to Claparols Dayao and Eugenia Vega by homestead (they are spouses).
o Coleongco's attempt to have Romulo Agsam pour acid on the machinery  They executed a power of attorney authorizing Eustaquio Bayuga to prosecute
o His illegal diversion of the profits of the factory to his own benefit their case against Leonardo Gambito for annulment of a contract of sale of the
o And the surreptitious disposition of the Yates band resaw machine in favor parcel of land, and after the termination of the case in their favor, to sell it,
of his cousin's Hong Shing Lumber Yard, made while Claparols was in Baguio and from the proceeds of the sale, to deduct whatever litigation expenses he
had incurred.
 These are all plain acts of deliberate sabotage by the agent that fully justified
 Dayao died. All his four children executed a deed of sale conveying 12.8413
the revocation of the power of attorney by Claparols and his demand for an
hectares of the land to plaintiffs Spouses Buason & Reyes. Spouses Buason &
accounting from his agent Coleongco.
Reyes took possession of the land through their tenants.
 After 5 years, agent Bayuga sold 8 hectares to herein defendant Spouses  This is a case of double sale of land registered under the Land Registration Act,
Mariano Panuyas and Sotera Cruz. which provides that he who recorded the sale in the Registry of Deeds has a
 Plaintiffs Spouses Buason & Reyes and Defendant Panuyas claim ownership better right than he who did not Because the sale to Panuyas was registered,
over the same parcel of land. Arguments: he has the better right
o Spouses Buason & Reyes: prayed that Panuyas be ordered to deliver the
parcel of land; that the deed of sale of the land held by Panuyas be WINNER: Panuyas. Judgment appealed from is affirmed.
declared null and void as the death of Dayao ended the authority of
Bayuga. 12. RALLOS v. FELIX GO CHAN
o Panuyas: he and his wife were buyers in good faith and for valuable GR No. L-34332
consideration; that plaintiffs are guilty of laches; and that there is no January 31, 1978
cause of action. (Not expounded on)
By: YRREVERRE
____________________________________________________________________
o It was found that the land was not registered by Spouses Buason &
Topic: Extinguishment of Agency
Reyes. Whereas, the power of attorney executed by Dayao authorizing
Petitioners: RAMON RALLOS
Bayuga to sell the land and the sale executed by Bayuga in favor of
Respondents: FELIX GO CHAN & SONS REALTY CORPORATION and COURT OF
Panuyas were annotated or inscribed on the back of the OCT.
APPEALS
Ponente: MUNOZ-PALMA, J.
ISSUE: WON the death of Dayao ended the authority of the agent Bayuga
____________________________________________________________________
-> NO.
DOCTRINE:
Art. 1783, Old Civil Code: Anything done by the agent, without
knowledge of the death of the principal or of any other cause which
FACTS
extinguishes the agency, is valid and shall be fully effective with
respect to 3rd persons who may have contracted with him in good  Concepcion and Gerundia both surnamed Rallos were sisters and
faith. registered co-owners of a parcel of land in Cebu
 On April 21, 1954, the sisters executed a special power of attorney in
 The sale of 8 hectares of the parcel of land by agent Bayuga to Panuyas and his favor of their brother, Simeon Rallos, authorizing him to sell for and in
wife was valid their behalf the land.
o It was not shown that the agent had known of his principal’s  On March 3, 1955, Concepcion Rallos died.
(Dayao) demise  On September 12, 1955, Simeon Rallos sold the undivided shares of his
 Moreover, it was found that the land was not registered by Spouses Buason & sisters Concepcion and Gerundia of the land to Felix Go Chan for
Reyes P10,686.90.
 Whereas, the power of attorney executed by Dayao authorizing Bayuga to sell  On May 18, 1956 Ramon Rallos as administrator of the Intestate Estate of
the land and the sale executed by Bayuga in favor of Panuyas were annotated Concepcion Rallos filed a complaint in the Court of First Instance of Cebu,
or inscribed on the back of the OCT praying (1) that the sale of the undivided share of the deceased
 Also, it does not appear that Panuyas and his wife had knowledge of the Concepcion Rallos in lot 5983 be declared unenforceable, and said share
previous sale be reconveyed to her estate; (2) that the Certificate of Title issued in the
o In the absence of such knowledge, they have a right to rely on name of Felix Go Chan & Sons Realty Corporation be cancelled and
the face of the certificate of title of the registered owners and another title be issued in the names of the corporation and the
of the authority conferred by them upon the agent also "Intestate estate of Concepcion Rallos" in equal undivided shares;
recorded on the back of the certificate of title  RTC - Declaring the deed of sale null and void insofar as the share of
Concepcion Rallos
  CA - reversed. Deed of sale valid.

ISSUE: W/N the sale of the undivided share of Concepcion valid although it was
executed by the agent after the death of his principal - No

HELD:
 "ART. 1919. Agency is extinguished: "xxx xxx xxx
 "3. By the death, civil interdiction, insanity or insolvency of the principal
or of the agent; . . . ."
 ART. 1931. Anything done by the agent, without knowledge the death of
the principal or of any other cause which extinguishes the agency, is valid
and shall be fully effective with respect to third persons who may have
contracted with him in good faith.
 Article 1931 is the applicable law. Under this provision, an act done by
the agent after the death of his principal is valid and effective only under
two conditions, viz: (1) that the agent acted without knowledge of the
death of the principal, and (2) that the third person who contracted with
the agent himself acted in good faith. Good faith here means that the
third son was not aware of the death of the principal at the time he
contracted with said agent. These two requisites must concur: the
absence of one will render the act of the agent invalid unenforceable.
 In the instant case, it cannot be questioned that the agent, Simeon Rallos,
knew of the death of his principal at the time he sold the latter's share in
Lot No. 5983 to respondent corporation. The knowledge of the death is
clearly to be inferred from the pleadings filed by Simeon Rallos before
the trial court. 12 That Simeon Rallos knew of the death of his sister
Concepcion is also a finding of fact of the court a quo 13 and of
respondent appellate court when the latter stated that Simeon Rallos
"must have known of the death of his sister, and yet he proceeded with
the sale of the lot in the name of both his sisters Concepcion and
Gerundia Rallos without informing appellant (the realty corporation) of
the death of the former."
 Since the agent already know the death of the principal and still
proceeded with the sale, making him no authority to enter such sale thus
void.
 Petitioner won.

IN VIEW OF ALL THE FOREGOING, We set aside the decision of respondent

appellate court, and We affirm en toto the judgment rendered by then Hon.
Amador E. Gomez of the Court of First Instance of Cebu, quoted in pages 2 and 3 of
this Opinion, with costs against respondent realty corporation at all instances.