Escueta vs. Lim Cervantes v.

CA
G.R No. 137162 Jan 24, 2007 GR No. 125138
First Division March 2, 1999

Facts: Facts:
Rufino Lim, herein respondent, averred that she had bought the Cervantes was issued a round ticket for Manila-Honolulu-Los
hereditary properties of the Petitioners Rubio and heirs of Baloloy. Angeles-Honolulu-Manila, which ticket expressly provided an expiry
On April 10, 1990 Petitioners executed a Contract of Sale and date of March 27, 1990. He was issued the said ticket following a
received from Respondent Lim a down payment of 102,169.86 and compromises agreement between the two parties from previous
450,000 respectively and the balance will be paid after the titles are lawsuits. On March 23, four days before its expiration, he used the
transferred into Lim’s name. ticket and went to Los Angeles. He booked a return ticket for the
April 2 flight which was confirmed by PAL personnel. On the day of
Rubio and the heirs of Baloloy refused to deliver the title to Lim his supposed return, he was not allowed to board because it was
despite her offer of the payment of the balance. Despite the already expired.
existence of a Contract of Sale between Lim and Rubio and the heirs
of Baloloy, Corazon Escueta having knowledge thereof executed a Issue:
simulated sale involving the lots. As for the Baloloys, they argued Whether or not the PAL agents (personnel), upon confirmation of
that they already withdrawn their offer to sell for the reason that Cervantes’ return ticket, extended the validity of the ticket.
respondent failed to pay the balance on time hence the Contract of
Sale has no more force and effect. As to Rubio, it alleged that Lim Held:
has no cause of action since, Rubio appointed her daughter Patricia No, PAL agents’ confirmation did not extend the validity of the
Llamas to be his attorney-in-fact, and not in favor of Victoria Laygo ticket. They did not have authority.
Lim who represented Rubio in the sale between the Respondent Ratio:
Rufina Lim. Since the PAL agents are not privy to the said agreement and
petitioner knew that a written request to the legal counsel of PAL
The RTC declared the Petitioners in default. CA affirmed RTC was necessary, he cannot use what the PAL agents did to his
decision with amendments. Hence, this petition. advantage. The said agents acted without authority when they
confirmed the flights of the petitioner. If the said third person is
Issue: Whether or not the Contract of Sale between Rufina Lim and aware of such limits of authority, he is to blame.
the Petitioners Rubio and Baloloys is valid.

Held:
Yes, the Contract of Sale is valid. Rural Bank of Bombon v CA
Ruling: The Court held that the Contract of Sale between the G.R. No. 95703 | August 3, 1992
petitioner and respondent is valid and binding. Rubio argued that
Victoria has no authority to represent him in the Sale of the disputed Quick Summary:
properties since Rubio appointed her daughter as his attorney-in- Ederlinda Gallardo transacted with Rufino Aquino, contracting him
fact and not Victoria. Art. 1892 provides: to be her agent and providing him with a Special Power of Attorney
authorizing him to mortgage her property in her behalf for the
Article 1892 of the Civil Code provides: purpose of securing loans from banks. She provided him with the
Art. 1892. The agent may appoint a substitute if the principal has not TCT to the property as well. Rufino Aquino secured a loan from Rural
prohibited him from doing so; but he shall be responsible for the Bank of Bombon for the amount of PhP350,000.00 as principal and
acts of the substitute: chargeable with a 14% interest per annum.
(1) When he was not given the power to appoint one
In the case above, Rubio made his daughter Patricia to be her In the contract of mortgage, he represented himself to be the
Attorney-in –fact, and according to the above article, Patricia is not attorney-in-fact of Gallardo, but proceeded to sign his name as
prohibited to appoint a substitute as a representative of Rubio. mortgagor. He even got his wife to sign the documents as wife of
Patricia, acting on the authority given to her, appointed Victoria as mortgagor. Gallardo, upon knowing of the transaction, went to court
her substitute hence the transaction between Victoria and to secure the annulment of such contract since she was allegedly
Respondent is valid. Art. 1317 further provides: surprised to find out that her property was already mortgaged and
correspondence regarding the contract of mortgage were not being
Art. 1317. x x x sent to her, and instead sent to the address of Aquino, who has
A contract entered into in the name of another by one who has no since disappeared from Bulacan and now resides in Camarines Sur.
authority or legal representation, or who has acted beyond his Further, the mortgage was secured to pay off personal loans of
powers, shall be unenforceable, unless it is ratified, expressly or Aquino and to establish his personal fishpond business. RTC issued a
impliedly, by the person on whose behalf it has been executed, TRO restraining Rural Bank of Bombon to foreclose the mortgage. In
before it is revoked by the other contracting party. his Answer, Aquino alleged that Gallardo owed him money and it
The acceptance of Rubio of the downpayment and encashment of was already the responsibility of Aquino to take care of payments
the said checks serves as the ratification of Rubio of the Sale of the due. RTC ruled in favor of Aquino and Bank of Bombon. CA reversed
Properties with the respondent Rufina Lim. the ruling of the RTC and held that the Dealof Real Estate Mortgage
was not valid. It is not binding on the principal Gallardo since it was
executed not in her name as principal but in the personal capacity of
the Aquino spouses.
Issue: WON the Deed of Real Estate Mortgage executed by Rufino S. Issue: WON Filipinas Life is jointly and severally liable with Apetrior
Aquino as attorney-in-fact of Ederlinda Gallardo in favor of the Rural and Alcantara on the claim of
Bank of Bombon is valid. Pedroso and Palacio or WON its agent Renato Valle is solely liable to
Pedroso and Palacio
Held:
No. Ruling:
Filipinas Life cannot profess ignorance of Valles acts. Even if Valles
Aquino signed the Deed of Real Estate Mortgage in his name alone representations were beyond his authority as a debit/ insurance
as mortgagor, without any indication that he was signing for and in agent, Filipinas Life thru Alcantara and Apetrior expressly and
behalf of the property owner, Ederlinda Gallardo. He bound himself knowingly ratified Valles acts. It cannot even be denied that Filipinas
alone in his personal capacity as a debtor of the petitioner Bank and Life benefited from the investments deposited by Valle in the
not as the agent or attorney-in-fact of Gallardo. Ratio: It is a general account of Filipinas Life. In our considered view, Filipinas Life had
rule in the law of agency that, in order to bind the principal by a clothed Valle with apparent authority; hence, it is now estopped to
mortgage on real property executed by an agent, it must upon its deny said authority.
face purport to be made, signed and sealed in the name of the
principal, otherwise, it will bind the agent only. It is not enough Innocent third persons should not be prejudiced if the principal
merely that the agent was in fact authorized to make the mortgage, failed to adopt the needed measures to prevent misrepresentation,
if he has not acted in the name ofthe principal. Neither is it much more so if the principal ratified his agents acts beyond the
ordinarily sufficient that in the mortgage the agent describes himself latter’s authority.
as acting by virtueof a power of attorney, if in fact the agent has
acted in his own name and has set his own hand and seal to the
mortgage.
CONSTANTE AMOR DE CASTRO and CORAZON AMOR DE CASTRO,
This is especially true where the agent himself is a party to the petitioners, vs. COURT OF
instrument. However clearly the body of the mortgage may show APPEALS and FRANCISCO ARTIGO, respondents.
and intend that it shall be the act of the principal, yet, unless in fact G.R. No. 115838
it is executed by the agent for and on behalf of his principal and as July 18, 2002
the act and deed of the principal, it is not valid as to the principal.
(Philippine Sugar Estates Development Co. vs. Poizat)Bank cannot
rely on Article 1883 to bind the principal Gallardo. It is not applicable Facts:
to the case at bar. Article 1883 states “in such case the agent is the Appellants5 were co-owners of four (4) lots located at EDSA corner
one directly bound in favor of the person with whom he has New York and Denver Streets in Cubao, Quezon City. In a letter
transacted, as if the transaction was his own, except when the dated January 24, 1984 appellee6 was authorized by appellants to
contract involves things belonging to the principal.” There is no act as real estate broker in the sale of these properties for the
principle of law by which a person can become liable on a real amount ofP23,000,000.00, five percent (5%) of which will be given
mortgage which she never executed either in person or by attorney to the agent as commission. It was appellee who first found Times
in fact. Here, Aquino acted purportedly as an agent of Gallardo, but Transit Corporation, represented by its president Mr. Rondaris, as
actually acted in his personal capacity. Involved herein are prospective buyer which desired to buy two (2) lots only, specifically
properties titled in the name of respondent Gallardo against which lots 14 and 15. Eventually, sometime in May of 1985, the sale of lots
the Bank proposes to foreclose the mortgage constituted by an 14 and 15
agent (Aquino) acting in his personal capacity. was consummated. Appellee received from appellants P48,893.76 as
commission.

Filipinas Life Assurance Co. v Pedroso It was then that the rift between the contending parties soon
Gr No. 159489 February 4, 2008 emerged. Appellee apparently felt short changed because according
to him, his total commission should be P352,500.00 which is five
Facts: percent (5%) of the agreed price of P7,050,000.00 paid by Times
Teresita O. Pedroso is a policyholder of a 20-year endowment life Transit Corporation to appellants for the two (2) lots, and that it was
insurance issued by petitioner Filipinas Life Assurance Company he who introduced the buyer to appellants and unceasingly
(Filipinas Life). Pedroso claims Renato Valle was her insurance agent facilitated the negotiation which ultimately led to the
since 1972 and Valle collected her monthly premiums. Valle told her consummation of the sale. Hence, he sued below to collect the
that the Filipinas Life Escolta Office was holding a promotional balance of P303,606.24 after having received P48,893.76 in advance.
investment program for policyholders. She called the Escolta office
and talked to Francisco Alcantara, the administrative assistant, who Issue:
referred her to the branch manager, Angel Apetrior. (1) whether the complaint merits dismissal for failure to implead
other co-owners as indispensable parties
Pedroso inquired about the promotional investment and Apetrior (2)whether Artigo's claim has been extinguished by full payment,
confirmed that there was such a promotion. She was even told she waiver or abandonment
could push through with the check she issued. From the records, the
check, with the endorsement of Alcantara at the back, was Held: (1) no, (2) no
deposited in the account of Filipinas Life with the Commercial Bank Ratio: Re first issue:
and Trust Company (CBTC), Escolta Branch. However, when Pedroso There is no dispute that Constante appointed Artigo in a
tried to withdraw her investment, Valle did not want to return some handwritten note dated January 24, 1984 to sell the properties of
P17,000 worth of it. the De Castros for P23 million at a 5 percent commission. The
authority was on a first come, first serve basis. Constante signed the
note as owner and as representative of the other co-owners. Under Mariano Diolosa & Alegria Villanueva-Diolosa v. CA and Quirino
this note, a contract of agency was clearly constituted between Baterna (as owner and proprietor of Quin Baterna Realty) (1984)
Constante and Artigo. Relova, J.

Whether Constante appointed Artigo as agent, in Constante's Facts:

individual or representative capacity, or both, the De Castros cannot Baterna is a licensed real estate broker. The spouses Biolosa owned
seek the dismissal of the case for failure to implead the other co- the Villa Alegre subdivision. June 20, 1968, they entered into an
owners as indispensable parties. The De Castros admit that the agreement: Baterna would be their exclusive sales agent to sell the
other co-owners are solidarily liable under the contract of agency,10 lots of the subdivision “until all the property is fully disposed.”
citing Article 1915 of the Civil Code, which reads: Sept 27, 1986 (about 3 mos later) the spouses terminated the
Art. 1915. If two or more persons have appointed an agent for a services of Baterna as because the remaining unsold lots were
common transaction or undertaking, they shall be solidarily liable to reserved for their 6 grandkids. (there were 27 lots which remained
the agent for all the consequences of the agency. unsold) Now, Baterna is claiming that under the terms of their
contract, he had unrevocable authority to sell the lots until all were
When the law expressly provides for solidarity of the obligation, as disposed. The rescission of the contract contravenes their
in the liability of co-principals in a contract of agency, each obligor agreement. He also claims to be entitled to a commission on the lots
may be compelled to pay the entire obligation.12 The agent may unsold because of the rescission.
recover the whole compensation from any one of the co-principals,
as in this case. The spouses argue that they are within their legal right to terminate
the agency because they needed the undisposed lots for the use of
Indeed, Article 1216 of the Civil Code provides that a creditor may their family. They also say that Baterna has no legal right to a
sue any of the solidary debtors. This article reads: commission to unsold lots.
Art. 1216. The creditor may proceed against any one of the solidary
debtors or some or all of them simultaneously. The demand made CFI dismissed. CA says that notwithstanding NCC 1920 (that the
against one of them shall not be an obstacle to those which may principal may revoke the agency at will) spouses could not terminate
subsequently be directed against the others, so long as the debt has the agency agreement without paying damages. o
not been fully collected.
Solidarity does not make a solidary obligor an indispensable party in The agency agreement expressly stipulated “until all the property as
a suit filed by the creditor. is fully disposed" o The testimony of a certain Roberto Malundo
that Baterna agreed to the intention of Mrs. Diolosa to reserve some
Re second issue: A contract of agency which is not contrary to law, lots cannot prevail over the clear terms of the agreement. o
public order, public policy, morals or good custom is a valid contract, Wanting to reserve the lots for the grandkids is not a legal reason to
and constitutes the law between the parties.14 The contract of rescind the agency agreement. (even if each kid would be given one
agency entered into by Constante with Artigo is the law between lot each, there would still be 21 lots available and the spouses have
them and both are bound to comply with its terms and conditions in other lands that can be reserved for the kids)
good faith. The mere fact that "other agents" intervened in the
consummation of the sale and were paid their respective Issue/Held: Can the spouses terminate the agency without paying
commissions cannot vary the terms of the contract of agency damages to Baterna, the real estate broker? NO. They have to pay
granting Artigo a 5 percent commission based on the selling price. damages. Ratio: Under the contract, the spouses allowed the real
These "other agents" turned out to be employees of Times Transit, estate broker to sell, cede, etc. until all lots are fully disposed. The
the buyer Artigo introduced to the De Castros. In any event, we find authority to sell is not extinguished until all lots are disposed.
that the 5 percent real estate broker's commission is reasonable and When they revoked the contract, they became liable to the real
within the standard practice in the real estate industry for estate broker for damages for breach of contract. Since the
transactions of this nature. Artigo's acceptance of partial payment of agency agreement is a valid contract, it may only be rescinded on
his commission neither amounts to a waiver of the balance nor puts grounds specified in NCC 1381-82.
him in estoppel. In this case, it is evident that Artigo merely received
the partial payment without waiving the balance. Thus, there is no ART. 1381. The following contracts are rescissible:
estoppel to speak of. (1) Those which are entered in to by guardians whenever the wards
whom they represent suffer lesion by more than one-fourth of the
value of the things which are the object thereof;
(2) Those agreed upon in representation of absentees, if the latter
suffer the lesion stated in the preceding number;
(3) Those undertaken in fraud of creditors when the latter cannot in
any other name collect the claims due them;
(4) Those which refer to things under litigation if they have been
entered into by the defendant without the knowledge and approval
of the litigants or of competent judicial authority;
(5) All other contracts specially declared by law to be subject to
rescission.

ART. 1382. Payments made in a state of insolvency for obligations to

whose fulfillment the debtor could not be compelled at the time
they were effected, are also rescissible. In this case, not one of
the grounds are present. Petition denied.
G.R. No. L-41420 July 10, 1992 are generally not awarded to the agent for the revocation of the
CMS LOGGING, INC., petitioner, 
 agency, and the case at bar is not one falling under the exception
vs.
 mentioned, which is to evade the payment of the agent's
THE COURT OF APPEALS and D.R. AGUINALDO CORPORATION, commission.
respondents.
NOCON, J.:

Facts: Valenzuela v Court of Appeals

Petitioner CMS is a forest concessionaire engaged in the logging G.R. No. 83122 October 19, 1990
business, while private respondent DRACOR is engaged in the J. Gutierrez Jr.
business of exporting and selling logs and lumber. On August 28,
1957, CMS and DRACOR entered into a contract of agency 1 Facts:
whereby the former appointed the latter as its exclusive export and Valenzuela, a General Agent of respondent Philippine American
sales agent for all logs that the former may produce, for a period of General Insurance Company, Inc (Philmagen), was authorized to
five (5) years. By virtue of the aforesaid agreement, CMS was able to solicit and sell all kinds of non-life insurance. He had a 32.5%
sell through DRACOR a total of 77,264,672 board feet of logs in commission rate. From 1973 to 1975, Valenzuela solicited marine
Japan, from September 20, 1957 to April 4, 1962. insurance from Delta Motors, Inc. from which he was entitled to a
commission of 32%.
About six months prior to the expiration of the agreement, while on
a trip to Tokyo, Japan, CMS's president, Atty. Carlos Moran Sison, However, Valenzuela did not receive his full commission. Philamgen
and general manager and legal counsel, Atty. Teodoro R. wanted to cut Valenzuela’s commission by 50% but he declined.
Dominguez, discovered that DRACOR had used Shinko Trading Co., When Philamgen offered again, Valenzuela firmly reiterated his
Ltd. (Shinko for brevity) as agent, representative or liaison officer in objection. Afterwards, Philamgen took drastic action against
selling CMS's logs in Japan for which Shinko earned a commission of Valenzuela. They reversed the commission due him, threatened the
U.S. $1.00 per 1,000 board feet from the buyer of the logs. Under cancellation of policies issued by his agency, and started to leak out
this arrangement, Shinko was able to collect a total of U.S. news that Valenzuela has a substantial debt with Philamgen. His
$77,264.67. agency contract was terminated.

After this discovery, CMS sold and shipped logs valued at U.S. The petitioners sought relief by filing the complaint against the
$739,321.13 or P2,883,351.90, 4 directly to several firms in Japan private respondents. The trial court found that the principal cause of
without the aid or intervention of DRACOR. the termination as agent was his refusal to share his Delta
commission.
CMS sued DRACOR for the commission received by Shinko and for The court considered these acts as harassment and ordered the
moral and exemplary damages, while DRACOR counterclaimed for company to pay for the resulting damage in the value of the
its commission, amounting to P144,167.59, from the sales made by commission. They also ordered the company to pay moral damages.
CMS of logs to Japanese firms. The company appealed. The CA ordered Valenzuela to pay the entire
amount of the commission.
Issue:
Whether or not DRACOR was entitled to its commission from the Hence, this appeal by Valenzuela.
sales made directly by CMS to Japanese firms.
Issue:
Held: No. WON the agency contract is coupled with interest on the part of
agent Valenzuela.
Ratio: The principal may revoke a contract of agency at will, and
such revocation may be express, or implied, and may be availed of Ratio:
even if the period fixed in the contract of agency as not yet expired. In any event the principal's power to revoke an agency at will is so
As the principal has this absolute right to revoke the agency, the pervasive, that the Supreme Court has consistently held that
agent cannot object thereto; neither may he claim damages arising termination may be effected even if the principal acts in bad faith,
from such revocation, unless it is shown that such was done in order subject only to the principal's liability for damages.
to evade the payment of agent's commission. In the case at bar,
CMS appointed DRACOR as its agent for the sale of its logs to The Supreme Court accorded great weight on the trial court’s factual
Japanese firms. Yet, during the existence of the contract of agency, findings and found the cause of the conflict to be Valenzuela’s
DRACOR admitted that CMS sold its logs directly to several Japanese refusal to share the commission. Philamgen told the petitioners of
firms. This act constituted an implied revocation of the contract of its desire to share the Delta Commission with them. It stated that,
agency under Article 1924 of the Civil Code, which provides: should Delta back out from the agreement, the petitioners would be
charged interests through a reduced commission after full payment
Art. 1924 The agency is revoked if the principal directly manages the by Delta.
business entrusted to the agent, dealing directly with third persons.
Philamgen proposed reducing the petitioners' commissions by half
Since the contract of agency was revoked by CMS when it sold its of the original thus giving them an agent's commission of 16.25%.
logs to Japanese firms without the intervention of DRACOR, the The company insisted on the reduction scheme. Also, the company
latter is no longer entitled to its commission from the proceeds of pressured the agents to share the income with the threat to
such sale and is not entitled to retain whatever moneys it may have terminate the agency. The petitioners were also told that the Delta
received as its commission for said transactions. Neither would commissions would not be credited to their account. This continued
DRACOR be entitled to collect damages from CMS, since damages until the agency was terminated.
Records also show that the agency is one "coupled with an interest," himself in the general treasury of the Spanish Government at an
and, therefore, should not be freely revocable at the unilateral will interest of 5% per annum, which interest on accrual was likewise to
of the company. be deposited in order that it also might bear interest; that Hidalgo
did not remit or pay to Gomiz, during his lifetime, nor to any
The records sustain the finding that the private respondent started representative of the said Gomiz, the sum aforestated nor any part
to covet a share of the insurance business that Valenzuela had built thereof with the sole exception of P1,289.03, nor has he deposited
up, developed and nurtured for years. The company appropriated the unpaid balance of said sum in the treasury, according to
the entire insurance business of Valenzuela. agreement, wherefore he has become liable to his principal and to
the administrator for the said sum, together with its interest
Worse, despite the termination of the agency, Philamgen continued amounting to P72,548.24
to hold Valenzuela jointly and severally liable with the insured for
unpaid premiums. The court ruled in favor of De la Pena and said that Hidalgo, as
administrator of the estate of deceased Gomiz, actually owed De la
Under these circumstances, it is clear that Valenzuela had an Pena
interest in the continuation of the agency when it was
unceremoniously terminated not only because of the commissions ISSUE: W/N Hidalgo is considered an agent of Gomiz and as such
he procured, but also Philamgen’s stipulation liability against him for must reimburse present administrator, De la Pena
unpaid premiums. The respondents cannot state that the agency
relationship between Valenzuela and Philamgen is not coupled with RULING: No
interest. Gomiz, before embarking for Spain, executed before a notary a
power of attorney in favor of Hidalgo as his agent and that he
There is an exception to the principle that an agency is revocable at should represent him and administer various properties he owned
will and that is when the agency has been given not only for the and possessed in Manila.
interest of the principal but also for the mutual interest of the
principal and the agent. The principal may not defeat the agent's After Hidalgo occupied the position of agent and administrator of De
right to indemnification by a termination of the contract of agency. la Pena y Gomiz’s property for several years, the former wrote to the
Also, if a principal violates a contractual or quasi-contractual duty latter requesting him to designate a person who might substitute
which he owes his agent, the agent may as a rule bring an him in his said position in the event of his being obliged to absent
appropriate action for the breach of that duty. Hence, if a principal himself from these Islannds
acts in bad faith and with abuse of right in terminating the agency,
then he is liable in damages. From the procedure followed by the agent, Hidalgo, it is logically
inferred that he had definitely renounced his agency and that the
agency was duly terminated according to the provisions of art 1782

Although the word “Renounce” was not employed in connection

DE LA PENA V HIDALGO with the agency executed in his favor, yet when the agent informs
his principal that for reasons of health and by medical advice he is
FACTS: about to depart from the place where he is exercising his trust and
De la Pena y de Ramon and De Ramon, in her own behalf and as the where the property subject to his administration is situated,
legal guardian of her son Roberto De la Pena, filed in the CFI a abandons the property, turns it over to a third party, and transmits
written complaint against Hidalgos to his principal a general statement which summarizes and
embraces all the balances of his accounts since he began to exercise
De La Pena y de Ramon, as the judicial administrator of the estate of his agency to the date when he ceased to hold his trust, it then
the deceased De la Pena y Gomiz, with the consent of the court filed reasonable and just to conclude that the said agent expressly and
a second amended complaint prosecuting his action solely against definitely renounced his agency.
Frederico Hidalgo

CFI ruled in favor of plainiff-administrator for the sum of P13, 606.19

and legal interest from the date of the filing of the complaint and Rallos v. Felix Go Chan & Realty Corp.
the costs of the trial.
FACTS:
De la Pena y Ramon filed a third amended complaint with the An SPA was executed by sisters Concepcion and Gerundia in favo of
permission of the court alleging, among other things, as a first cause their brother Simeon for the sale of a parcel of land co-owned by the
of action, when Frederico Hidalgo had possession of and two. Months after Conception died, Simeon sold the undivided
administered the following properties to wit, 1 house and lot; at shares of his sisters to herein respondent Felix Go Chan & Realty
Calle San Luis; another house and lot at Calle Cortada; another Corp. Petitioner Ramon Rallos, administrator of he late Concepcion's
house and lot at Calle San Luis, and a fenced lot on the same street, estate, prayed that the sale of the undivided share of the deceased
all of the district of Ermita, and another house and lot at Calle be invalidated and a new certificate be issued in the name of
Looban de Paco, belonging to his principal, De la Pena y Gomiz, respondent corporation and Concepion's intestate estate, plus
according to the power of attorey executed in his favor damages. CFI ruled in favor of petitioner and granted the payers but
CA reversed the decision. Respondent's MR was further denied.
Hidalgo, as such agent, collected the rents and income from said
properties, amounting to P50, 244, which sum, collected in partial ISSUE:
amounts and on different dates, he should have deposited, in Whete the sale entered into by an agent is valid alhough executed
accordance with the verbal agreement between the deceased and after death of the principal.
HELD:
No, the sale is void because Simeon's authority as an agent of (2) NO. Essentially, the contract of management and administration
Concepcion was extinguished upon her death. Article 1317 provides between the Municipality and Lacuesta is one of agency whereby a
that no one may contract inthe name of another without being person binds himself to render some service or to do something in
authorized or unless he has, by law, a right to represent him. Article representation or on behalf of another, with the consent or
1919 urthers hat the death of the princpal terminates the agency. authority of the latter. Lacuesta bound himself as Manager-
The case at bar is also not among the exceptions whereby an agent's Administrator of the Bayambang Fishing and Hunting Park and
acts bind the principal even after the latter's death because of Municipal Watershed to render service or perform duties and
Simeon's knowledge of Concepion's death is material. CA's decision responsibilities in representation or on behalf of the Municipality of
is reversed, CFI decision affimed. The sale was null and void. Bayambang, with the consent or authority of the latter. Under Art.
1919 of the Civil Code, agency is extinguished by the death of the
agent. His rights and obligations arising from the contract are not
TERRADO V CA (ART. 1919) transmittable to his heirs or predecessors-in-interest

FACTS: On January 21, 1973, the Philippine Legislature ceded a

certain portion of Bayambang Province of Pangasinan (which was
once public land) to the municipality of the Bayambang to be used
or disposed of in accordance with the general municipal law relative
to the letting of fisheries in municipal waters. On 1974, the
municipality of Bayambang enacted Ordinance No. 8, establishing
the Bayambang Fishery and Hunting Park and Municipal Water Shed.
Also in the said ordinance, the municipality appointed and
constituted private respondent Lacuesta as Manager-Administrator
of the watershed for a period of 25 years, renewable for another 25
years.

This is under the condition that said respondent shall pay the
municipality the sum equivalent to 10% of the annual gross income
that may be derived from the forest products, wild game and fish.
Such ordinance was approved by the Provincial Board of Pangasinan
but was disapproved by the Secretary of Agriculture and Natural
Resources as it “grants fishery privileges to respondent Lacuesta
without the benefit of competitive public hearing in contravention
to law.” The municipality then informed Lacuesta of the disapproval
of the ordinance and directed him to refrain and desist from acting
as Administrator-Manager. However, Lacuesta refused and insisted
on retaining possession of the fisheries. Despite such refusal, the
municipality of Bayambang passed another resolution resolving to
advertise for public bidding the said fishery area.

Among the winning bidders are herein petitioners. There was a long
line of petitions/motions filed in the RTC, CA, and SC filed by both
parties. What is important is that while the case was pending in the
CFI of Pangasinan, Lacuesta died. The judge of said court (Judge
Villalon, also a respondent) sided with Lacuesta.

As such, despite the fact that Lacuesta died, she still ordered the
restoration of the possession of all fisheries and areas covered by
the contract to Lacuesta and his party.

ISSUES:
(1) Whether or not the Management Administration contract
between the municipality and Lacuesta was valid

(2) Whether or not the Management-Administration contract still

stands even if Lacuesta already died

HELD:
(1) NO. The Management-Administration contract entered into by
Lacuesta and the municipalty was void as it lacked a vital procedural
aspect (public bidding) necessary for the validity of the contract.
Moreover, the Supreme Court held that the municipality had no
power to grant exclusive privileges of fishing for more than 5 years.