Pat 1
Pat 1
Pat 1
FACTS:
Respondents alleged that on a relevant date, spouses Tuazon purchased from their predecessor-in-
interest cavans of rice. That on the total number of cavans, only a certain portion has been paid for. In
payment thereof, checks have been issued but on presentment, the checks were dishonored.
Respondents alleged that since spouses anticipated the forthcoming suit against them, they made
fictitious sales over their properties. As defense, the spouses averred that it was the wife of Bartolome
who effected the sale and that Maria was merely her agent in selling the rice. The true buyer of the
cavans was Santos. The spouses further averred that when Ramos got the check from Santos, she took
it in good faith and didn't knew that the same were unfunded.
HELD:
First, there is no contract of agency.
If it was truly the intention of the parties to have a contract of agency, then when the spouses
sued Santos on a separate civil action, they should have instituted the same on behalf and for the
respondents. They didn't do so. The filing in their own names negate their claim that they acted as
mere agents in selling the rice.
As indorser, Tuazon warranted that upon due presentment, according to their tenor, and that in
case they were dishonored, she would pay the corresponding amount. After the instrument is
dishonored by non-payment, indorsers cease to be merely secondarily liable. They became
principal debtors whose liability becomes identical to that of the original obligor. The holder
of a negotiable instrument need not even proceed against the maker before suing the
indorser. Santos is not an indispensable party to the suit against the spouses.
Siy vs. Tomlin
Facts:
On July 2011, petitioner William Anghian Siy filed a Complaint for Recovery of Possession with
Prayer for Replevin against Frankie Domanog Ong (Ong), Chris Centeno (Centeno), John Co Chua
(Chua), and respondent Alvin Tomlin. The petition which was filed before the Quezon City RTC,
alleged the following:
Petitioner is the owner of a 2007 model Range Rover with Plate Number ZMG 272 which he
purchased from Alberto Lopez on July 22, 2009.
In 2010, he entrusted the said vehicle to Ong, a businessman who owned a second-hand car sales
showroom, after the latter claimed that he had a prospective buyer. Ong failed to remit the proceeds of
the purported sale nor return the vehicle. The petitioner found out that the vehicle had been transferred
to Chua, and later learned that the vehicle was being transferred to respondent.
On August 17, 2011, respondent filed an Omnibus Motion seeking to quash the Writ of Replevin,
dismiss the Complaint, and turn over the vehicle to him.
The RTC denied respondent’s Omnibus Motion while the CA reversed it.
Issue:
Whether or not the Writ of Replevin be issued for the return of the vehicle to petitioner.
Held:
No. “In a complaint of replevin, the claimant must convincingly show that he is the owner or clearly
entitled to the possession of the object sought to be recovered, and that the defendant, who is in actual
or legal possession thereof, wrongfully detains the same” (Superlines Transportation Company, Inc v.
Philippine National Construction Company, 548 Phil. 354,364).
From petitioner’s own account, he constituted and appointed Ong as his agent to sell the vehicle,
surrendering to the latter the vehicle, all documents of title pertaining thereto, and a deed of sale signed
in blank. Acting for and in petitioner’s behalf by virtue of the implied or oral agency, Ong was thus
able to sell the vehicle to Chua, petitioner thus ceased to be the owner thereof. Quite the contrary,
respondent who obtained the vehicle from Chua and registered the transfer with the Land
Transportation Office, is the rightful owner thereof, and as such, he is entitled to its possession.
Hence, the Supreme Court denied the petition, affirming the decision of the Court of Appeals.
Terp Construction vs. Banco Filipino
Facts: Sometime in 1995, Terp Construction planned to develop a housing project called the Margarita
Eastville and a condominium called Margarita Plaza. To finance the projects, Terp Construction, Home
Insurance Guaranty Corporation, and Planters Bank agreed to raise funds through the issuance of bonds
worth P400 million called the Margarita Bonds. The three companies entered into a Contract of
Guaranty in which they agreed that Terp Construction would sell the Margarita Bonds and convey the
funds generated into an asset pool named the Margarita Asset Pool Formation and Trust Agreement.
Planters Bank, as trustee, would be the custodian of the assets in the asset pool with the corresponding
obligation to pay the interests and redeem the bonds at maturity. Home Insurance Guaranty
Corporation, as guarantor, would pay investors the value of the bond at maturity plus 8.5% interest per
year. Banco Filipino purchased Margarita Bonds for P100 million. It asked for additional interest other
than the guaranteed 8.5% per annum, based on the letters written by Terp Construction Senior Vice
President Escalona.
Terp Construction began constructing Margarita Eastville and Margarita Plaza. After the economic
crisis in 1997, however, it suffered unrealized income and could not proceed with the construction.
When the Margarita Bonds matured, the funds in the asset pool were insufficient to pay the bond
holders. Pursuant to the Contract of Guaranty, Planters Bank conveyed the asset pool funds to Home
Insurance Guaranty Corporation, which then paid Banco Filipino interest earnings of 8.5% per year.
Banco Filipino, however, sent Terp Construction a demand letter alleging that it was entitled to a
15.5% interest on its investment and that it was entitled to a 7% remaining unpaid interest. Terp
Construction refused to pay the demanded interest.
Terp Construction filed a Complaint for declaration of nullity of interest, damages, and attorney's fees
against Banco Filipino. RTC ruled in favor of Terp Construction. CA set aside the RTC decision.
Issue: Whether or not the Terp Construction expressly agreed to be bound to respondent Banco Filipino
Savings Mortgage Bank for additional interest in the bonds it purchased.
Held: A corporation's repeated payment of an allegedly unauthorized obligation contracted by one of
its officers effectively ratifies that corporate officer's allegedly unauthorized act.
A corporation exercises its corporate powers through its board of directors. This power may be validly
delegated to its officers, committees, or agencies. "The authority of such individuals to bind the
corporation is generally derived from law, corporate bylaws or authorization from the board, either
expressly or impliedly by habit, custom or acquiescence in the general course of business[.]”
The authority of the board of directors to delegate its corporate powers may either be: (1) actual; or (2)
apparent. Actual authority may be express or implied. Express actual authority refers to the corporate
powers expressly delegated by the board of directors. Implied actual authority, on the other hand, "can
be measured by his or her prior acts which have been ratified by the corporation or whose benefits have
been accepted by the corporation.”
Petitioner's subsequent act of twice paying the additional interest Escalona committed to during the
term of the Margarita Bonds is considered a ratification of Escalona's acts. Petitioner's only defense
that they were "erroneous payment[s]" since it never obligated itself from the start cannot stand.
Corporations are bound by errors of their own making.
Calubad vs. Ricarcen
To prove her authority to execute the three (3) mortgage contracts in Ricarcen's behalf, Marilyn
presented Calubad with a Board Resolution dated October 15, 2001. This Resolution empowered her to
borrow moneyand use the Quezon City property covered by TCT No. RT-84937 (166018)as collateral
for the loans. Marilyn also presented two (2) Secretary's Certificates dated December 6, 2001 and May
8, 2002, executed by Marilyn's sister and Ricarcen's corporate secretary, Elizabeth.Sometime in 2003,
after Ricarcen failed to pay its loan, Calubad initiated extrajudicial foreclosure proceedings on the real
estate mortgage. The auction sale was set on March 19, 2003.Calubad was the highest bidder during
the scheduled auction sale; thus, on March 27, 2003, he was issued a Certificate of Sale.On April 10,
2003, the Certificate of Sale was annotated on TCT No. RT-84937 (166018).Ricarcen claimed that it
only learned of Marilyn's transactions with Calubad sometime in July 2003.On September 9, 2003,
Ricarcen filed its Complaint for Annulment of RealEstate Mortgage and Extrajudicial Foreclosure of
Mortgage and Sale with Damages against Marilyn, Calubad, and employees of the Registry of Deeds
of Quezon City and of the Regional Trial Court of Quezon City.
HELD:YES. When a corporation intentionally or negligently clothes its agent withapparent authority to
act in its behalf, it is estopped from denying its agent's apparent authority as to innocent third parties
who dealt with this agent in good faith.
Medrano vs. CA
Facts:
Bienvenido R. Medrano was the Vice-Chairman of Ibaan Rural Bank, a bank owned by the Medrano
family. In 1986, Mr. Medrano asked Mrs. Estela Flor, a cousin-in-law, to look for a buyer of a
foreclosed asset of the bank,[3] a 17-hectare mango plantation priced... at P2,200,000.00, located in
Ibaan, Batangas.
Lee, a businessman from Makati City, was a client of respondent Mrs. Pacita G. Borbon, a licensed real
estate broker. The two met through a previous transaction where Lee responded to an ad in a
newspaper put up by Borbon for an 8-hectare property in Lubo,... Batangas, planted with atis trees. Lee
expressed that he preferred a land with mango trees instead. Borbon promised to get back to him as
soon as she would be able to find a property according to his specifications.
Flor then advised her that her cousin-in-law owned a mango plantation which was up for sale. She told
Flor to confer with Medrano and to give them a written authority to... negotiate the sale of the property
Medrano issued the Letter of Authority... ocular inspection of the property together with Lee which
never materialized the first time was due to inclement weather; the next time, no car was available for
the tripping to Batangas.[7] Lee then called up Borbon and told... her that he was on his way to Lipa
City to inspect another property, and might as well also take a look at the property Borbon was
offering. Since Lee was in a hurry, the respondents could no longer accompany him at the time
Two days after the visit, respondent Josefina Antonio called Lee to inquire about the result of his
ocular inspection. Lee told her that the mango trees "looked sick" so he was bringing an agriculturist to
the property. Three weeks thereafter, Antonio called Lee again to... make a follow-up of the latter's
visit to Ibaan. Lee informed her that he already purchased the property
According to Antonio, Lee asked her if they had already received their commission. She answered
"no," and Lee expressed surprise over this
Since the sale of the property was consummated, the respondents asked from the petitioners their
commission, or 5% of the purchase price. The petitioners refused to pay and offered a measly sum of
P5,000.00 each
Flor was the only person known to Medrano, and he had never met Borbon and Antonio. Medrano had
asked that the... name of their prospective buyer be immediately registered so as to avoid confusion
later on, but Flor failed to do so. Furthermore, the other officers of the bank had never met nor dealt
with the respondents in connection with the sale of the property
The petitioners further contended that the letter of authority signed by Medrano... was not binding or
enforceable against the bank because the latter had a personality separate and distinct from that of
Medrano. Medrano, on the other hand, denied liability, considering that he was not the registered
owner of the property, but the bank.
trial court rendered a Decision in favor of the respondents. The petitioners were ordered to pay, jointly
and severally, the 5% broker's commission to herein respondents... letter of authority was valid and
binding as... against Medrano and the Ibaan Rural bank. Medrano signed the said letter for and in
behalf of the bank, and as owner of the property, promising to pay the respondents a 5% commission
for their efforts in looking for a purchaser of the property. He is, therefore, estopped from... denying
liability on the basis of the letter of authority he issued in favor of the respondents.
Ibaan Rural Bank filed its notice of appeal... petitioners pointed out that the respondents (1) did not
verify the real owner of the property; (2) never saw the property in question; (3) never got in touch
with the registered owner of the property; and (4) neither... did they perform any act of assisting their
buyer in having the property inspected and verified.
CA promulgated the assailed decision affirming the finding of the trial court... petitioners insist that the
respondents are not entitled to any commission since they did not actually perform any acts of
"negotiation" as required in the letter-authority
Issues:
Ruling:
petition is denied.
"Procuring cause" is meant to be the proximate cause.[26] The term "procuring cause," in describing a
broker's activity, refers to a cause originating a series of events which, without break in their
continuity, result in accomplishment of prime... objective of the employment of the broker producing a
purchaser ready, willing and able to buy real estate on the owner's terms.[27] A broker will be regarded
as the "procuring cause" of a sale, so as to be entitled to commission, if his efforts are the... foundation
on which the negotiations resulting in a sale are begun.[28] The broker must be the efficient agent or
the procuring cause of the sale. The means employed by him and his efforts must result in the sale. He
must find the purchaser, and the sale... must proceed from his efforts acting as broker.
respondents were instrumental in the sale of the property to Lee. Without their intervention, no sale
could have been consummated. They were the ones who set the sale of the subject land in motion... fact
that it was Lee who personally called Borbon and asked for directions... prove that it was only through
the respondents that Lee learned about the property for sale.
When there is a close, proximate and causal connection between the broker's efforts and the principal's
sale of his property, the broker is entitled to a commission
Certainly, it was not the intention of Medrano to expect the respondents to do just that (to negotiate)
when he issued the letter of authority. The clear intention is... to reward the respondents for procuring a
buyer for the property. Before negotiating a sale, a broker must first and foremost bring in a
prospective buyer. It has been held that a broker earns his pay merely by bringing the buyer and the
seller together, even if no... sale is eventually made.[35] The essential feature of a broker's
conventional employment is merely to procure a purchaser for a property ready, able, and willing to
buy at the price and on the terms mutually agreed upon by the owner and the purchaser. And... it is not
a prerequisite to the right to compensation that the broker conduct the negotiations between the parties
after they have been brought into contact with each other through his efforts.
the role of the respondents in the transaction is undisputed. Whether or not they participated in the
negotiations of the sale is of no moment. Armed with an authority to procure a purchaser and with a
license to act as broker, we see no reason why the... respondents can not recover compensation for their
efforts when, in fact, they are the procuring cause of the sale.[39]... the appellants cannot use the flimsy
excuse (only to evade liability) that "(w)hat Mr. Medrano represented to the plaintiffs-appellees,
without the knowledge or consent of the defendant Bank, did not bind the Bank... respondents are
indeed the procuring cause of the sale. If not for the respondents, Lee would not have known about the
mango plantation being sold by the petitioners. The sale was consummated. The bank had... profited
from such transaction. It would certainly be iniquitous if the respondents would not be rewarded their
commission pursuant to the letter of authority.
Principles:
A broker is generally defined as one who is engaged, for others, on a... commission, negotiating
contracts relative to property with the custody of which he has no concern; the negotiator between
other parties, never acting in his own name but in the name of those who employed him; he is strictly a
middleman and for some purposes the agent of both... parties. A broker is one whose occupation is to
bring parties together, in matters of trade, commerce or navigation.
Medrano's obligation to pay the respondents commission for their labor and effort in finding a
purchaser or a buyer for the described parcel of land is unquestionable. In the absence of fraud,
irregularity or illegality in its execution, such letter-authority... serves as a contract, and is considered
as the law between the parties. As such, Medrano can not renege on the promise to pay commission on
the flimsy excuse that he is not the registered owner of the property. The evidence shows that he
comported himself to be the owner of the... property.
While it may be true that technically the Ibaan Rural Bank did not authorize Bienvenido R. Medrano to
sell the land under litigation or that the latter was no longer an officer of the said bank,... still, these
circumstances do not convince this Court fully well to absolve the bank. Note that, as former President
of the said bank, it is improbable that he (Bienvenido R. Medrano) was completely oblivious of the
developments therein. By reason of his past association with... the officers of the said bank (who are, in
fact, his relatives), it is unbelievable that Bienvenido R. Medrano could simply have issued the said
letter of authority without the knowledge of the said officers. Granting por aguendo that Bienvenido R.
Medrano did not act on... behalf of the bank, however, We doubt that he had no financial and/or
material interest in the said sale a fact that could not possibly have eluded Our attention