DELA CRUZ V NORTHERN THEATRICAL

FACTS:

In 1941 the Northern Theatrical Enterprises Inc. operated a movie house in Laoag, Ilocos Norte and employed a certain Domingo de la Cruz as a special guard assigned at the main entrance. In the afternoon of July 4, 1941, Benjamin Martin (gate crasher) wanted to enter the movie house without a ticket but refused by De la Cruz. The former (Martin) attacked De la Cruz with a bolo. De la Cruz defended himself until he was cornered to save his life he shot Martin, which caused Martins death. He was charged of homicide (Criminal Case No. 8449) of the Court of First Instance of Ilocos Norte, but was granted a motion to dismiss on January 1943.

However, on July 8, 1947, he was again accused of homicide and was acquitted of the charge. In both cases De la Cruz employed a lawyer to defend himself. He demanded from Northern Theatrical Enterprises and to its three board members to recover reimbursement for Atty. Conrado Rubios fees as well as moral damages, a total of Php 15,000.00. Northern asked for the dismissal of the complaint. The CFI after rejecting the theory of De la Cruz that he was an agent and such was entitled to reimbursement of expenses incurred in connection with the agency.

ISSUE:

Whether the relationship was that of principal and agent?

Whether or not De la Cruz is entitled for reimbursement?

HELD:

NO. The Supreme Court held that the plaintiff was a mere employee hired to perform a specific task or duty.

NO. In terms of his reimbursement, an employee who in the line of duty may recover damages against his employer. However, the damages incurred consisting of the payment of lawyers fee did not flow directly from the performance of his duties.

TUAZON V. HEIRS OF BARTOLOME RAMOS

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 asmere agents in selling the rice.

Second, the spouses are liable on the check.

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 becameprincipal 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.

Victorias Milling Co., Inc. vs. CA and Consolidated Sugar Corp., [G.R. # 117356]

Facts: St. Therese Merchandising (hereafter STM) regularly bought sugar from petitioner Victorias Milling Co., Inc. In the course of their dealings, petitioner issued several Shipping List/Delivery Receipts to STM as proof of purchases. Among these was SLDR No. 1214M, which gave rise to the instant case. SLDR No. 1214M covers 25,000 bags of sugar. The transaction it covered was a "direct sale."

Thereafter, STM sold to private respondent Consolidated Sugar Corporation (CSC) its rights in SLDR No. 1214M. That same day, CSC wrote petitioner that it had been authorized by STM to withdraw the sugar covered by the SLDR. However, after 2,000 bags had been released, petitioner refused to allow further withdrawals of sugar. CSC thus inquired when it would be allowed to withdraw the remaining 23,000 bags. In its reply, petitioner said that it could not allow any further withdrawals of sugar because STM had already withdrawn all the sugar covered by the cleared checks. Petitioner also noted that CSC had represented itself to be STM's agent as it had withdrawn the 2,000 bags "for and in behalf" of STM.

As a result, CSC filed a complaint for specific performance. Petitioner's primary defense a quo was that it was an unpaid seller for the 23,000 bags. Since STM had already drawn in full all the sugar corresponding to the amount of its cleared checks, it could no longer authorize further delivery of sugar to CSC. Petitioner also contended that it had no privity of contract with CSC. Furthermore, the SLDRs prescribed delivery of the sugar to the party specified therein and did not authorize the transfer of said party's rights and interests.

The Trial Court rendered its judgment favoring the private respondent CSC. The appellate court affirmed said decision but modified the costs against petitioner.

Issue: Whether or not the Court of Appeals erred in not ruling that CSC was an agent of STM and hence, estopped to sue upon SLDR No. 1214M as an assignee.

Held: No. It is clear from Article 1868 that the basis of agency is representation. One factor which most clearly distinguishes agency from other legal concepts is control; one person - the agent - agrees to act under the control or direction of another - the principal

That the authorization given to CSC contained the phrase "for and in our (STM's) behalf" did not establish an agency. Ultimately, what is decisive is the intention of the parties. That no agency was meant to be established by the CSC and STM is clearly shown by CSC's communication to petitioner that SLDR No. 1214M had been "sold and endorsed" to it. The use of the words "sold and endorsed" means that STM and CSC intended a contract of sale, and not an agency. Hence, on this score, no error was committed by the respondent appellate court when it held that CSC was not STM's agent and could independently sue petitioner.

Loadmasters Customs Services Inc. vs. Glodel Brokerage Corporation DigestedLOADMASTERS CUSTOMS SERVICES, INC., vs. GLODEL BROKERAGE CORPORATION and R&B INSURANCE CORPORATION, / G.R. No. 179446 / January 10, 2011

FACTS:

The case is a petition for review on certiorari under Rule 45 of the Revised Rules of Court assailing the August 24, 2007 Decision of the Court of Appeals (CA) in CA-G.R. CV No. 82822. On August 28, 2001, R&B Insurance issued Marine Policy No. MN-00105/2001 in favor of Columbia to insure the shipment of 132 bundles of electric copper cathodes against All Risks. On August 28, 2001, the cargoes were shipped on board the vessel "Richard Rey" from Isabela, Leyte, to Pier 10, North Harbor, Manila. They arrived on the same date. Columbia engaged the services of Glodel for the release and withdrawal of the cargoes from the pier and the subsequent delivery to its warehouses/plants. Glodel, in turn, engaged the services of Loadmasters for the use of its delivery trucks to transport the cargoes to Columbias warehouses/plants in Bulacan and Valenzuela City. The goods were loaded on board twelve (12) trucks owned by Loadmasters, driven by its employed drivers and accompanied by its employed truck helpers. Of the six (6) trucks route to Balagtas, Bulacan, only five (5) reached the destination. One (1) truck, loaded with 11 bundles or 232 pieces of copper cathodes, failed to deliver its cargo. Later on, the said truck, was recovered but without the copper cathodes. Because of this incident, Columbia filed with R&B Insurance a claim for insurance indemnity in the amount ofP1,903,335.39. After the investigation, R&B Insurance paid Columbia the amount ofP1,896,789.62 as insurance indemnity. R&B Insurance, thereafter, filed a complaint for damages against both Loadmasters and Glodel before the Regional Trial Court, Branch 14, Manila (RTC), It sought reimbursement of the amount it had paid to Columbia for the loss of the subject cargo. It claimed that it had been subrogated "to the right of the consignee to recover from the party/parties who may be held legally liable for the loss." On November 19, 2003, the RTC rendered a decision holding Glodel liable for damages for the loss of the subject cargo and dismissing Loadmasters counterclaim for damages and attorneys fees against R&B Insurance. Both R&B Insurance and Glodel appealed the RTC decision to the CA. On August 24, 2007, the CA rendered that the appellee is an agent of appellant Glodel, whatever liability the latter owes to appellant R&B Insurance Corporation as insurance indemnity must likewise be the amount it shall be paid by appellee Loadmasters. Hence, Loadmasters filed the present petition for review on certiorari.

ISSUE:Whether or not Loadmasters and Glodel are common carriers to determine their liability for the loss of the subject cargo.

RULING:

The petition is PARTIALLY GRANTED. Judgment is rendered declaring petitioner Loadmasters Customs Services, Inc. and respondent Glodel Brokerage Corporation jointly and severally liable to respondentUnder Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or associations engaged in the business of carrying or transporting passenger or goods, or both by land, water or air for compensation, offering their services to the public. Loadmasters is a common carrier because it is engaged in the business of transporting goods by land, through its trucking service. It is a common carrier as distinguished from a private carrier wherein the carriage is generally undertaken by special agreement and it does not hold itself out to carry goods for the general public. Glodel is also considered a common carrier within the context of Article 1732. For as stated and well provided in the case of Schmitz Transport & Brokerage Corporation v. Transport Venture, Inc., a customs broker is also regarded as a common carrier, the transportation of goods being an integral part of its business.Loadmasters and Glodel, being both common carriers, are mandated from the nature of their business and for reasons of public policy, to observe the extraordinary diligence in the vigilance over the goods transported by them according to all the circumstances of such case, as required by Article 1733 of the Civil Code. When the Court speaks of extraordinary diligence, it is that extreme measure of care and caution which persons of unusual prudence and circumspection observe for securing and preserving their own property or rights. With respect to the time frame of this extraordinary responsibility, the Civil Code provides that the exercise of extraordinary diligence lasts from the time the goods are unconditionally placed in the possession of, and received by, the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them.The Court is of the view that both Loadmasters and Glodel are jointly and severally liable to R & B Insurance for the loss of the subject cargo. Loadmasters claim that it was never privy to the contract entered into by Glodel with the consignee Columbia or R&B Insurance as subrogee, is not a valid defense.For under ART. 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or omissions, but also for those of persons for whom one is responsible.x x x xEmployers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.It is not disputed that the subject cargo was lost while in the custody of Loadmasters whose employees (truck driver and helper) were instrumental in the hijacking or robbery of the shipment. As employer, Loadmasters should be made answerable for the damages caused by its employees who acted within the scope of their assigned task of delivering the goods safely to the warehouse.Glodel is also liable because of its failure to exercise extraordinary diligence. It failed to ensure that Loadmasters would fully comply with the undertaking to safely transport the subject cargo to the designated destination. Glodel should, therefore, be held liable with Loadmasters. Its defense of force majeure is unavailing.For the consequence, Glodel has no one to blame but itself. The Court cannot come to its aid on equitable grounds. "Equity, which has been aptly described as a justice outside legality, is applied only in the absence of, and never against, statutory law or judicial rules of procedure." The Court cannot be a lawyer and take the cudgels for a party who has been at fault or negligent.

Westmont Investment Corp. v Francia

FACTS:Amos Francia, convinced by the bank manager of Westmont Bank, made an investment in Westmont Investment. Amos also invited his siblings to join in the investment since the interest rate offered was impressive. They invested an aggregate amount of P3.9M. When the Francia siblings demanded the retirement of their investment on its maturity, Westmont Investment told them that they have no funds at the moment and requested for an extension. They also advised the Francias that their money was borrowed by Pearlbank. When the period of extension given to Westmont Investment expired, they were still not able to pay the Francias resulting to a suit filed by the latter against Westmont Investment, impleading Pearlbank as well in the complaint. Westmont Investment contends that they were merely acting as an agent of Pearlbank which authorizedthem to borrow money on its behalf. They averred that they merely brokered a loan transaction betweenPearlbank and the Francias. Westmont provided documents to support their claim showing that Pearlbank borrowed an amount equivalent to the investment of the Francias.

ISSUE:Whether or not Westmont Investment is an agent of Pearlbank.

HELD:No. The fact that Pearlbank questioned Westmont Investments practice of naming Pearlbank as a borrower of certain investments made by other investors with Westmont Investment only shows that AUTHORITY from Pearlbank is absent. The evidence presented is not sufficient to prove that Westmont Investment was authorized by Pearlbank to borrow money for it and that an agency existed therefrom. Neither was there a ratification, expressly or impliedly, that it had authorized or consented to said transaction. Also, the Francias had no personal knowledge of Pearlbank. The Francias maintained that they only transacted with Westmont Investment and Pearlbank was never mentioned by Westmont Investment until the time they knew that the latter does not have any funds pointing then Pearlbank as the borrower of their investment. The fact that the Francias impleaded Pearlbank in their suit does not defeat the fact that they only transact with Westmont Investment. They only did so to protect their interest when they found out that Westmont was already bankrupt.

Soriamont Steamship Agencies Inc. & Ronas v Sprint Transport Services, & PapaSprint led for a complaint for a sum of money against Soriamont and RonasSubject of dispute: ELA (EQUIPMENT LEASE AGREEMENT)Sprint alleges:It entered into a lease agreement for Equipment with SoriamontSprint agreed to lease chassis units for the transport of container vans Thru authorization letters, Ronas (on behalf of Soriamont andPAPA TRUCKING SERVICES [PTS]) were able to withdraw 2 chassis units from thecontainer yard of Sprint.Soriamont and Ronas failed to pay rental fees.Sprint was subsequently informed that the equipment was LOSTDespite demands, Soriamont and Ronas failed to pay rental fees and failed to replace equipment.Soriamont and Ronas alleges:It was [PTS] who withdrew the equipment.Soriamont and Ronas led a Third Party Complaint against[PTS], who failed to answer and thus was declared in default RTCfavored Sprint, held Soriamont liableCA-found that the contract contained an AUTOMATIC RENEWAL CLAUSE-Found that Soriamont authorized the withdrawal of [PTS] of the equipment-Armed RTC decisionISSUE: Whether or not PTS is an agent of Soriamont?Soriamont is essentially challenging court ndings that PTS withdrew the equipment as an agent of Soriamont.In eect, Soriamont is raising questions of fact which is NOT ALLOWEDRule 45 -> only questions of law may be raised in a petition for reviewEvidence shows that the preponderance of evidence supports the existence of anagency relationship between Soriamont and PTS.

The ELA explicitly authorized Soriamont to appoint a representative who shall withdraw and return the leased chassis units (which is PTS)Since the ELA was not shown to be terminated, its AUTOMATIC RENEWAL CLAUSE took eect pursuant to their contract. The settled rule is that persons dealing with an assumed agent are bound at their peril; and if they would hold the principal liable, they must ascertain not only the fact of agency, but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to prove it. Sprint has successfully discharged this burden. Alternatively, if PTS is found to be its agent, Soriamont argues that PTS is liablefor the loss of the subject equipment, since PTS acted beyond its authority asagent. Soriamont cites Article 1897 of the Civil Code, which provides: Art. 1897. The agent who acts as such is not personally liable tothe party with whom he contracts, unless he expressly binds himself orexceeds the limits of his authority without giving such party sucientnotice of his powers. The burden falls upon Soriamont to prove its armative allegation that PTSacted in any manner in excess of its authority as agent, thus, resulting in the loss ofthe subject equipment. To recall, the subject equipment was withdrawn and used byPTS with the authority of Soriamont. And for PTS to be personally liable, as agent, it is vital that Soriamont be able to prove that PTS damaged or lost the said equipment because it acted contrary to or in excess of the authority granted to it bySoriamont. As the Court of Appeals and the RTC found, however, Soriamont did notadduce any evidence at all to prove said allegation.

J-PHIL MARINE, INC. v. NLRCG.R. No. 175366; August 11, 2008Ponente: J. Carpio-Morales

FACTS: Warlito E. Dumalaog (respondent), who served as cook aboard vessels plying overseas, filed on March 4, 2002 before the National Labor Relations Commission (NLRC) a pro-forma complaint against petitioners manning agency J-Phil Marine, Inc. (J-Phil), its then president Jesus Candava, and its foreign principal Norman Shipping Services for unpaid money claims, moral and exemplary damages, and attorney's fees.

Respondent's total claim against petitioners was P864,343.30 plus P117,557.60 representing interest and P195,928.66 representing attorney's fees

By Decision of August 29, 2003, Labor Arbiter Fe Superiaso-Cellan dismissed respondent's complaint for lack of merit.

On appeal, the NLRC, by Decision of September 27, 2004, reversed the Labor Arbiter's decision.

During the pendency of the case before the Supreme Court, respondent, against the advice of his counsel, entered into a compromise agreement with petitioners. He thereupon signed a Quitclaim and Release subscribed and sworn to before the Labor Arbiter.

ISSUE: Whether the act of Dumalaog in entering into a compromise agreement without the assistance of a counsel is proper

HELD: Yes, the act of Dumalaog in entering into a compromise agreement without a lawyer is proper.

The Supreme Court held that the relation of attorney and client is in many respects one of agency, and the general rules of agency apply to such relation. The acts of an agent are deemed the acts of the principal only if the agent acts within the scope of his authority. The circumstances of this case indicate that respondent's counsel is acting beyond the scope of his authority in questioning the compromise agreement.

Dumalaog has undoubtedly the right to compromise a suit without the intervention of his lawyer cannot be gainsaid, the only qualification being that if such compromise is entered into with the intent of defrauding the lawyer of the fees justly due him, the compromise must be subject to the said fees.

In the case at bar, there is no showing that respondent intended to defraud his counsel of his fees.

Filipinas Life Assurance Co. (now Ayala Life Assurance, Inc.) v. Clemente Pedrosa, TeresitaPedrosa and Jennifer PalacioG.R. No. 159489, February 04, 2008Quisumbing, J.FACTS: Teresita Pedroso is a policyholder of a 20-year endowment life insurance issued by Filipinas LifeAssurance Co. Pedroso claims Renato Valle was her insurance agent since 1972 and Valle collectedher monthly premiums. In the first week of January 1977, Valle told her that the Filipinas Life EscoltaOffice was holding a promotional investment program for policyholders. It was offering 8% prepaidinterest a month for certain amounts deposited on a monthly basis. Enticed, she initially investedand issued a post-dated check for P10,000. In return, Valle issued Pedroso his personal check forP800 for the 8% prepaid interest and a Filipinas Life Agent receipt.Pedroso called the Escolta office and talked to Francisco Alcantara, the administrative assistant, whoreferred her to the branch manager, Angel Apetrior. Pedroso inquired about the promotionalinvestment and Apetrior confirmed that there was such a promotion. She was even told she couldpush through with the check she issued. From the records, the check, with the endorsement of Alcantara at the back, was deposited in the account of Filipinas Life with the Commercial Bank and Trust Company, Escolta Branch.Relying on the representations made by Filipinas Lifes duly authorized representatives Apetrior andAlcantara, as well as having known agent Valle for quite some time, Pedroso waited for the maturityof her initial investment. A month after, her investment of P10,000 was returned to her after shemade a written request for its refund. To collect the amount, Pedroso personally went to the Escoltabranch where Alcantara gave her the P10,000 in cash. After a second investment, she made 7 to 8more investments in varying amounts, totaling P37,000 but at a lower rate of 5% prepaid interest amonth. Upon maturity of Pedrosos subsequent investments, Valle would take back from Pedroso thecorresponding agents receipt he issued to the latter.Pedroso told respondent Jennifer Palacio, also a Filipinas Life insurance policyholder, about theinvestment plan. Palacio made a total investment of P49,550 but at only 5% prepaid interest.However, when Pedroso tried to withdraw her investment, Valle did not want to return some P17,000worth of it. Palacio also tried to withdraw hers, but Filipinas Life, despite demands, refused to returnher money.ISSUE:WON Filipinas Life is jointly and severally liable with Apetrior and Alcantara on the claim of Pedroso and Palacio or WON its agent Renato Valle is solely liable to Pedroso and PalacioHELD:Pedroso and Palacio had invested P47,000 and P49,550, respectively. These were received by Valleand remitted to Filipinas Life, using Filipinas Lifes official receipts. Valles authority to solicit andreceive investments was also established by the parties. When Pedroso and Palacio soughtconfirmation, Alcantara, holding a supervisory position, and Apetrior, the branch manager, confirmedthat Valle had authority. While it is true that a person dealing with an agent is put upon inquiry andmust discover at his own peril the agents authority, in this case, Pedroso and Palacio did exercisedue diligence in removing all doubts and in confirming the validity of the representations made byValle.Filipinas Life, as the principal, is liable for obligations contracted by its agent Valle. By the contract of agency, a person binds himself to render some service or to do something in representation or onbehalf of another, with the consent or authority of the latter. The general rule is that the principal isresponsible for the acts of its agent done within the scope of its authority, and should bear thedamage caused to third persons. When the agent exceeds his authority, the agent becomespersonally liable for the damage. But even when the agent exceeds his authority, the principal is stillsolidarily liable together with the agent if the principal allowed the agent to act as though the agenthad full powers. The acts of an agent beyond the scope of his authority do not bind the principal,unless the principal ratifies them, expressly or impliedly.Ratification adoption or confirmation by one person of an act performed on his behalf by anotherwithout authorityEven if Valles representations were beyond his authority as a debit/insurance agent, Filipinas Lifethru Alcantara and Apetrior expressly and knowingly ratified Valles acts. Filipinas Life benefited fromthe investments deposited by Valle in the account of Filipinas Life