cases for agency.docx

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AGENCY:

G.R. No. L-67889 October 10, 1985

PRIMITIVO SIASAT an MAR!"LINO SIASAT, #et$t$oner%,

&%.

INT"RM"'IAT" APP"LLAT" !O(RTan T"R"SITA NA!IAN!"NO,re%#onent%.

Payawal, Jimenez & Associates for petitioners.

Nelson A. Loyola for private respondent.

G(TI"RR"), *R.,J.:

This is a petition for review of the decision of the Intermediate Appellate Court

arming in toto the judgment of the Court of First Instance of Manila, Branch

XXI, which ordered the petitioner to pa respondent the thirt percent !"#$%

commission on &',((( pieces of )hilippine *ags worth )+"(,+(###, moral

damages, attorne-s fees and the costs of the suit

.ometime in &+/0, respondent Teresita 1acianceno succeeded in convincing

ocials of the then 2epartment of 3ducation and Culture, hereinafter called

2epartment, to purchase without pu4lic 4idding, one million pesos worth of

national *ags for the use of pu4lic schools throughout the countr The

respondent was a4le to e5pedite the approval of the purchase 4 hand6

carring the di7erent indorsements from one oce to another, so that 4 the

8rst wee9 of .eptem4er, &+/0, all the legal re:uirements had 4een complied

with, e5cept the release of the purchase orders ;hen 1acianceno was

informed 4 the Chief of the Budget 2ivision of the 2epartment that the

purchase orders could not 4e released unless a formal o7er to deliver the *ags

in accordance with the re:uired speci8cations was 8rst su4mitted for approval,

she contacted the owners of the e our agreement for ou to represent ation, private or

government in connection with the mar9eting of our products6

*ags and all its accessories

For our service, ou will 4e entitled to a commission of thirt

!"#$% percent

.igned

Mr )rimitive .iasat

?wner and @en Manager

?n ?cto4er &(, &+/0, the 8rst deliver of /,+"" *ags was made 4 the


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she 8led an action in the Court of First Instance of Manila to recover the

following commissions= '$, as 4alance on the 8rst deliver and "#$, on the

second deliver

The trial court decided in favor of the respondent The dispositive portion of

the decision reads as follows=

;D3E3F?E3, judgment is here4 rendered sentencing )rimitivo

.iasat to pa to the plainti7 the sum of )&,+##, minus the

sum )",+####, with legal interest from the date of this

decision, and ordering the defendants to pa jointl and

solidaril the sum of )',##### as moral damages, and

)',##### as attorne-s fees, also with legal interest from the

date of this decision, and the costs

The decision was armed in toto 4 the Intermediate Appellate Court After

their motion for reconsideration was denied, the petitioners went to this Court

on a petition for review on August (, &+0

ISSUS:In assailing the appellate court-s decision, the petition tenders thefollowing arguments= 8rst, the authori>ation ma9ing the respondent the

petitioner-s representative merel states that she could deal with an entit in

connection with the mar9eting of their products for a commission of "#$

There was no speci8c authori>ation for the sale of &',((( )hilippine *ags to

the 2epartment second, there were two transactions involved evidenced 4

the separate purchase orders and separate deliver receipts, 35hi4it (6C for

the purchase and deliver on ?cto4er &(, &+/0, and 35hi4its / to /6C, for the

purchase and deliver on 1ovem4er (, &+/0 The revocation of agenc

e7ected 4 the parties with mutual consent on ?cto4er &/, &+/0, therefore,

forecloses the

respondent-s claim of "#$ commission on the second transaction and last,

there was no 4asis for the granting of attorne-s fees and moral damages4ecause there was no showing of 4ad faith on the part of the petitioner It was

respondent who showed 4ad faith in dening having received her commission

on the 8rst deliver The petitioner-s counterclaim, therefore, should have 4een

granted

This petition was initiall dismissed for lac9 of merit in a minute resolution?n

a motion for reconsideration, however,this Court give due course to the

petition on 1ovem4er &0, &+0

!L":

After a careful review of the records, we are constrained to sustain with some

modi8cations the decision of the appellate court

;e 8nd respondent-s argument regarding respondent-s incapacit to represent

them in the transaction with the 2epartment untena4le There are several

9inds of agents To :uote a commentator on the matter=

An agent ma 4e !&% universal= !% general, or !"% special A

universal agent is one authori>ed to do all acts for his principal

which can lawfull 4e delegated to an agent .o far as such a

condition is possi4le, such an agent ma 4e said to haveuniversal authorit !Mec .ec '%

A general agent is one authori>ed to do all acts pertaining to a

4usiness of a certain 9ind or at a particular place, or all acts

pertaining to a 4usiness of a particular class or series De has

usuall authorit either e5pressl conferred in general terms or

in e7ect made general 4 the usages, customs or nature of the

4usiness which he is authori>ed to transact

An agent, therefore, who is empowered to transact all the

4usiness of his principal of a particular 9ind or in a particular

place, would, for this reason, 4e ordinaril deemed a general

agent !Mec .ec ,"#%

A special agent is one authori>ed to do some particular act or

to act upon some particular occasion lie acts usuall in


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accordance with speci8c instructions or under limitations

necessaril implied from the nature of the act to 4e done !Mec

.ec (&% !)adilla, Civil Gaw The Civil Code Annotated, Hol HI,

&+(+ 3dition, p #0%

?ne does not have to underta9e a close scrutin of the document em4oding

the agreement 4etween the petitioners and the respondent to deduce that the

-latter was instituted as a general agent Indeed, it can easil 4e seen 4 the

wa general words were emploed in the agreement that no restrictions were

intended as to the manner the agenc was to 4e carried out or in the place

where it was to 4e e5ecuted The power granted to the respondent was so

4road that it practicall covers the negotiations leading to, and the e5ecution

of, a contract of sale of petitioners- merchandise with an entit or

organi>ation

There is no merit in petitioners- allegations that the contract of agenc

4etween the parties was entered into under fraudulent representation 4ecause

respondent would not disclose the agenc with which she was supposed to

transact and made the petitioner 4elieve that she would 4e dealing with The

Hisaas, and that the petitioner had 9nown of the transactions andJor project

for the said purchase of the )hilippine *ags 4 the 2epartment of 3ducation

and Culture and precisel it was the one 4eing followed up also 4 the

petitioner

If the circumstances were as claimed 4 the petitioners, the would have

e5erted e7orts to protect their interests 4 limiting the respondent-s authorit

There was nothing to prevent the petitioners from stating in the contract of

agenc that the respondent could represent them onl in the Hisaas ?r to

state that the 2epartment of 3ducation and Culture and the 2epartment of

1ational 2efense, which alone would need a million pesos worth of *ags, are

outside the scope of the agenc As the trial court opined, it is incredi4le that

the could 4e so careless after 4eing in the 4usiness for 8fteen ears

A cardinal rule of evidence em4odied in .ection / Eule &"# of our Eevised

Eules of Court states that when the terms of an agreement have 4een

reduced to writing, it is to 4e considered as containing all such terms, and,

therefore, there can 4e 4etween the parties and their successors6in6interest,

no evidence of the terms of the agreement other than the contents of the

writing, e5cept in cases speci8call mentioned in the same rule )etitioners

have failed to show that their agreement falls under an of these e5ceptions

The respondent was given ample authorit to transact with the 2epartment in

4ehalf of the petitioners 3:uall without merit is the petitioners- proposition

that the transaction involved two separate contracts 4ecause there were two

purchase orders and two deliveries The petitioners- evidence is overcome 4other pieces of evidence proving that there was onl one transaction

The indorsement of then Assistant 35ecutive .ecretar Eo4erto Eees to the

Budget Commission on .eptem4er ", &+/0 !35hi4it C% attests to the fact that

out of the total 4udget of the 2epartment for the 8scal ear &+/',

)&,###,##### is for the purchase of national *ags This is also re*ected in

the Financial and ;or9 )lan Ee:uest for Allotment !35hi4it F% su4mitted 4

.ecretar Kuan Manuel for 8scal ear &+/' which however, divided the

allocation and release of the funds into three, corresponding to the second,

third, and fourth :uarters of the said ear Gater correspondence 4etween the

2epartment and the Budget Commission !35hi4its 2 and 3% show that the

8rst allotment of )'####### was released during the second :uarter

Dowever, due to the necessit of furnishing all of the pu4lic schools in the

countr with the )hilippine *ag, .ecretar Manuel re:uested for the immediate

release of the programmed allotments intended for the third and fourth

:uarters These circumstances e5plain wh two purchase orders and two

deliveries had to 4e made on one transaction

The petitioners- evidence does not necessaril prove that there were two

separate transactions 35hi4it ( is a general indorsement made 4 .ecretar

Manuel for the purchase of the national *ags for pu4lic schools It contains no

reference to the num4er of *ags to 4e ordered or the amount of funds to 4e

released 35hi4it / is a letter re:uest for a similar authorit to purchase

*ags from the


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If the contracts were separate and distinct from one another, the whole or at

least a su4stantial part of the government-s suppl procurement process

would have 4een repeated In this case, what were issued were mere

indorsements for the release of funds and authori>ation for the ne5t purchase

.ince onl one transaction was involved, we den the petitioners- contention

that respondent 1acianceno is not entitled to the stipulated commission on

the second deliver 4ecause of the revocation of the agenc e7ected after the8rst deliver The revocation of agenc could not prevent the respondent from

earning her commission 4ecause as the trial court opined, it came too late, the

contract of sale having 4een alread perfected and partl e5ecuted

In Macondray & Co. v. Sellner!"" )hil "/#, "//%, a case analogous to this one

in principle, this Court held=

;e do not mean to :uestion the general doctrine as to the

power of a principal to revo9e the authorit of his agent at will,

in the a4sence of a contract 85ing the duration of the agenc

!su4ject, however, to some well de8ned e5ceptions% ?ur ruling

is that at the time 85ed 4 the manager of the plainti7

compan for the termination of the negotiations, the defendant

real estate agent had alread earned the commissions agreed

upon, and could not 4e deprived thereof 4 the ar4itrar action

of the plainti7 compan in declining to e5ecute the contract of

sale for some reason personal to itself

The principal cannot deprive his agent of the commission agreed upon 4

cancelling the agenc and, thereafter, dealing directl with the 4uer !Infante

v Cunanan, +" )hil (+&%

The appellate courts citation of its previous ruling in Heimbrod et al. v.

Ledesma !CA 0+ ?@ &'#/% is correct=

The appellee is entitled to recover 1o citation is necessar to

show that the general law of contracts the e:uita4le principle of

estoppel and the e5pense of another, uphold pament of

compensation for services rendered

There is merit, however, in the petitioners- contention that the agent-s

commission on the 8rst deliver was full paid The evidence does not sustain

the respondent-s claim that the petitioners paid her onl '$ and that their

right to collect another '$ commission on the 8rst deliver must 4e upheld

;hen respondent 1acianceno as9ed the Malacanang Complaints and

Investigation ?ce to help her collect her commission, her statement under

oath referred e5clusivel to the "#$ commission on the second deliver The

statement was emphatic that now her demand was for the "#$ commission

on the !second% release of )0(+,+### The demand letter of the respondent-s

lawer dated 1ovem4er &", &+0 as9ed petitioner .iasat onl for the "#$

commission due from the second deliver The fact that the respondent

demanded onl the commission on the second deliver without reference to

the alleged unpaid 4alance which was onl slightl less than the amount

claimed can onl mean that the commission on the 8rst deliver was alread

full paid, Considering the si>ea4le sum involved, such an omission is too

glaringl remiss to 4e regarded as an oversight

Moreover, the respondent-s authori>ation letter !35hi4it '% 4ears her

signature with the handwritten words Full )aid, inscri4ed a4ove it

The respondent contested her signature as a forger, Dandwriting e5perts

from two government agencies testi8ed on the matter The reason given 4

the trial court in ruling for the respondent is too *ims to warrant a 8nding of

forger

The court stated that in thirteen documents presented as e5hi4its, the private

respondent signed her name as Tessie 1acianceno while in this particular

instance, she signed as T 1acianceno

The stated 4asis is inade:uate to sustain the respondent-s allegation of

forger A variance in the manner the respondent signed her name can not 4e

considered as conclusive proof that the :uestioned signature is a forger The


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mere fact that the respondent signed thirteen documents using her full name

does not rule out the possi4ilit of her having signed the notation Full )aid,

with her initial for the given came and the surname written in full ;hat she

was signing was a mere ac9nowledgment

This leaves the e5pert testimon as the sole 4asis for the verdict of forger

In support of their allegation of full pament as evidenced 4 the signed

authori>ation letter !35hi4it '6A%, the petitioners presented as witness Mr

Francisco Cru> Kr, a senior document e5aminer of the )hilippine Consta4ular

Crime la4orator In re4uttal, the respondent presented Mr Arcadio Eamos, a

junior document e5aminer of the 1ational Bureau of Investigation

;e also rule against the respondent-s allegation that the petitioners acted in

4ad faith when the revo9ed the agenc given to the respondent

Fraud and 4ad faith are matters not to 4e presumed 4ut matters to 4e alleged

with sucient facts To support a judgment for damages, facts which justif

the inference of a lac9 or a4sence of good faith must 4e alleged and proven

!Bacolod6Murcia Milling Co, Inc vs First Farmers Milling Co, Inc, 3tc, "

.CEA 0"(%

There is no evidence on record from which to conclude that the revocation of

the agenc was deli4eratel e7ected 4 the petitioners to avoid pament of

the respondent-s commission ;hat appears 4efore us is onl the petitioner-s

use in court of such a factual allegation as a defense against the respondent-s

claim This alone does not per se ma9e the petitioners guilt of 4ad faith for

that defense should have 4een full litigated

Moral damages cannot 4e awarded in the a4sence of a wrongful act or

omission or of fraud or 4ad faith !E L B .uret L Insurance Co, Inc vs

Intermediate Appellate Court, &+ .CEA /"(%

;e therefore, rule that the award of )',##### as moral damages is without

4asis

The additional award of )',##### damages 4 wa of attorne-s fees, was

given 4 the courts 4elow on the 4asis of Article #, )aragraph , of the Civil

Code, which provides= ;hen the defendant-s act or omission has compelled

the plainti7 to litigate with third persons or to incur e5penses to protect his

interests attorne-s fees ma 4e awarded as damages !)irovano et al v 2e

la Eama .teamship Co, +( )hil ""'%

The underling circumstances of this case lead us to rule out an award ofattorne-s fees For one thing, the respondent did not come to court with

completel clean hands For another, the petitioners apparentl 4elieved the

could legall revo9e the agenc in the manner the did and deal directl with

education ocials handling the purchase of )hilippine *ags The had reason

to sincerel 4elieve the did not have to pa a commission for the second

deliver of *ags

;e cannot close this case without commenting adversel on the ine5plica4l

strange procurement policies of the 2epartment of 3ducation and Culture in its

purchase of )hilippine *ags There is no reason wh a shoc9ing "#$ of the

ta5paers- mone should go to an agent or facilitator who had no *ags to sell

and whose onl wor9 was to secure and handcarr the indorsements of

education and 4udget ocials There are onl a few manufacturers of *ags in

our countr with the petitioners claiming to have supplied *ags for our pu4lic

schools on earlier occasions If pu4lic 4idding was deemed unnecessar, the

2epartment should have negotiated directl with *ag manufacturers

Considering the sad plight of underpaid and overwor9ed classroom teachers

whose pitiful salaries and allowances cannot sometimes 4e paid on time, a

)"##,##### fee for a )&,###,##### purchase of *ags is not onl clearl

unnecessar 4ut a scandalous waste of pu4lic funds as well

;D3E3F?E3, the decision of the respondent court is here4 M?2IFI32 The

petitioners are ordered to pa the respondent the amount of ?13 D


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G"N"VI"V" LIM, #et$t$oner,&%./LOR"N!IO SAAN, re%#onent%.

TINGA,J.

Before the Court is a )etition for Eeview on Certiorari assailing the Decision&

dated ?cto4er /, ##" of the Court of Appeals, .eventh 2ivision, in CA6@E H1o (#"+

The late 3duardo 4ae> !4ae>%, the owner of a &,###6s:uare meter lot inCe4u Cit !the lot%, entered into an Agreement and Authority to Negotiateand Sell !Agenc Agreement% with respondent Florencio .a4an !.a4an% onFe4ruar , &++0 authori>ed .a4an toloo9 for a 4uer of the lot for Two Dundred Thousand )esos !)##,#####% andto mar9 up the selling price to include the amounts needed for pament ofta5es, transfer of title and other e5penses incident to the sale, as well as.a4anNs commission for the sale"

Through .a4anNs e7orts, 4ae> and his wife were a4le to sell the lot to thepetitioner @enevieve Gim !Gim% and the spouses Benjamin and Gourdes Gim

!the .pouses Gim% on March , &++0 The price of the lot as indicated in theDeed of Absolute Sale is Two Dundred Thousand )esos !)##,#####%0 Itappears, however, that the vendees agreed to purchase the lot at the price of.i5 Dundred Thousand )esos !)(##,#####%, inclusive of ta5es and otherincidental e5penses of the sale After the sale, Gim remitted to .a4an theamounts of ?ne Dundred Thirteen Thousand Two Dundred Fift .even )esos!)&&",'/##% for pament of ta5es due on the transaction as well as Fift

Thousand )esos !)'#,#####% as 4ro9erNs commission'Gim also issued in thename of .a4an four postdated chec9s in the aggregate amount of TwoDundred Thirt .i5 Thousand .even Dundred Fort Three )esos !)"(,/0"##%.u4se:uentl, 4ae> sent a letter dated Kune , &++0 addressed to Gim Inthe letter 4ae> as9ed Gim to cancel all the chec9s issued 4 her in .a4anNsfavor and to e5tend another partial pament for the lot in his !4ae>Ns%favor(

After the four chec9s in his favor were dishonored upon presentment, .a4an8led a Complaintfor collection of sum of mone and damages against 4ae>and Gim with the Eegional Trial Court !ETC% of Ce4u Cit on August ", &++0/

The case was assigned to Branch # of the ETC

In his Complaint .a4an alleged that Gim and the .pouses Gim agreed topurchase the lot for )(##,#####, i.e. with a mar96up of Four Dundred

Thousand )esos !)0##,#####% from the price set 4 4ae> ?f the totalpurchase price of )(##,#####, )##,##### went to 4ae>, )'#,#####allegedl went to GimNs agent, and )&&",'/## was given to .a4an to coverta5es and other e5penses incidental to the sale Gim also issued four !0%postdated chec9sin favor of .a4an for the remaining )"(,/0"##+

.a4an alleged that 4ae> told Gim that he !.a4an% was not entitled to ancommission for the sale since he concealed the actual selling price of the lotfrom 4ae> and 4ecause he was not a licensed real estate 4ro9er 4ae> wasa4le to convince Gim to cancel all four chec9s

.a4an further averred that 4ae> and Gim connived to deprive him of hissales commission 4 withholding pament of the 8rst three chec9s De alsoclaimed that Gim failed to ma9e good the fourth chec9 which was dishonored4ecause the account against which it was drawn was closed

In hisAns!er, 4ae> claimed that .a4an was not entitled to an commission4ecause he concealed the actual selling price from him and 4ecause he wasnot a licensed real estate 4ro9er

Gim, for her part, argued that she was not priv to the agreement 4etween4ae> and .a4an, and that she issued stop pament orders for the threechec9s 4ecause 4ae> re:uested her to pa the purchase price directl tohim, instead of coursing it through .a4an .he also alleged that she agreedwith 4ae> that the purchase price of the lot was onl ) ##,#####

4ae> died during the pendenc of the case 4efore the ETC


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?n ?cto4er /, ##", the appellate court promulgated its Decision& reversingthe trial courtNs ruling It held that .a4an was entitled to his commissionamounting to ) "(,/0"##&"

The Court of Appeals ruled that 4ae>Ns revocation of his contract of agencwith .a4an was invalid 4ecause the agenc was coupled with an interest and

4ae> e7ected the revocation in 4ad faith in order to deprive .a4an of hiscommission and to 9eep the pro8ts for himself&0

The appellate court found that 4ae> and Gim connived to deprive .a4an ofhis commission It declared that Gim is lia4le to pa .a4an the amount of thepurchase price of the lot corresponding to his commission 4ecause she issuedthe four chec9s 9nowing that the total amount thereof corresponded to.a4anNs commission for the sale, as the agent of 4ae> The appellate courtfurther ruled that, in issuing the chec9s in pament of .a4anNs commission,Gim acted as an accommodation part .he signed the chec9s as drawer,without receiving value therefor, for the purpose of lending her name to a thirdperson As such, she is lia4le to pa .a4an as the holder for value of thechec9s&'

Gim 8led a Motion for "econsiderationof the appellate courtNs Decision, 4uther Motionwas denied 4 the Court of Appeals in a "esolutiondated Ma (,

##0&(

1ot satis8ed with the decision of the Court of Appeals, Gim 8led the presentpetition

Gim argues that the appellate court ignored the fact that after paing heragent and remitting to .a4an the amounts due for ta5es and transfer of title,she paid the 4alance of the purchase price directl to 4ae> &/

.he further contends that she is not lia4le for 4ae>Ns de4t to .a4an underthe Agenc Agreement as she is not priv thereto, and that .a4an has no one4ut himself to 4lame for consenting to the dismissal of the case against

4ae> and not moving for his su4stitution 4 his heirs&

Gim also assails the 8ndings of the appellate court that she issued the chec9sas an accommodation part for 4ae> and that she connived with the latterto deprive .a4an of his commission&+

Gim pras that should she 4e found lia4le to pa .a4an the amount of hiscommission, she should onl 4e held lia4le to the e5tent of one6third !&J"% ofthe amount, since she had two co6vendees !the .pouses Gim% who shouldshare such lia4ilit#

In his Comment, .a4an maintains that Gim agreed to purchase the lot for)(##,#####, which consisted of the )##,##### which would 4e paid to

4ae>, the )'#,##### due to her 4ro9er, the )&&",'/## earmar9ed for

ta5es and other e5penses incidental to the sale and .a4anNs commission as4ro9er for 4ae> According to .a4an, Gim assumed the o4ligation to pa himhis commission De insists that Gim and 4ae> connived to unjustl deprivehim of his commission from the negotiation of the sale&

ISSUS:

The issues for the CourtNs resolution are whether .a4an is entitled to receivehis commission from the sale and, assuming that .a4an is entitled thereto,whether it is Gim who is lia4le to pa .a4an his sales commission

The Court gives due course to the petition, 4ut agrees with the result reached4 the Court of Appeals

!L":

The Court arms the appellate courtNs 8nding that the agenc was notrevo9ed since 4ae> re:uested that Gim ma9e stop pament orders for thechec9s paa4le to .a4an onl after the consummation of the sale on March ,&++0 At that time, .a4an had alread performed his o4ligation as 4ae>Nsagent when, through his !.a4anNs% e7orts, 4ae> e5ecuted the Deed of

Absolute Saleof the lot with Gim and the .pouses Gim

To deprive .a4an of his commission su4se:uent to the sale which wasconsummated through his e7orts would 4e a 4reach of his contract of agencwith 4ae> which e5pressl states that .a4an would 4e entitled to an e5cessin the purchase price after deducting the )##,##### due to 4ae> and thetransfer ta5es and other incidental e5penses of the sale

In Macondray & Co. v. Sellner,"the Court recogni>ed the right of a 4ro9er tohis commission for 8nding a suita4le 4uer for the sellerNs propert eventhough the seller himself consummated the sale with the 4uer0The Court
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held that it would 4e in the height of injustice to permit the principal toterminate the contract of agenc to the prejudice of the 4ro9er when he hadalread reaped the 4ene8ts of the 4ro9erNs e7orts

In #nfante v. Cunanan et al.'the Court upheld the right of the 4ro9ers to theircommissions although the seller revo9ed their authorit to act in his 4ehalfafter the had found a 4uer for his properties and negotiated the sale directlwith the 4uer whom he met through the 4ro9ersN e7orts The Court ruled that

the sellerNs withdrawal in 4ad faith of the 4ro9ersN authorit cannot unjustldeprive the 4ro9ers of their commissions as the sellerNs dul constitutedagents

The pronouncements of the Court in the aforecited cases are applica4le to thepresent case, especiall considering that .a4an had completel performed hiso4ligations under his contract of agenc with 4ae> 4 8nding a suita4le4uer to preparing the Deed of Absolute Sale4etween 4ae> and Gim andher co6vendees Moreover, the contract of agenc ver clearl states that.a4an is entitled to the e5cess of the mar96up of the price of the lot afterdeducting 4ae>Ns share of )##,##### and the ta5es and other incidentale5penses of the sale

Dowever, the Court does not agree with the appellate courtNs pronouncement

that .a4anNs agenc was one coupled with an interest arises from the Agenc Agreement 4etween them Gim is not a part to thecontract Dowever, the record reveals that she had 9nowledge of the fact that

4ae> set the price of the lot at )##,##### and that the )(##,#####Otheprice agreed upon 4 her and .a4anOwas more than the amount set 4

4ae> 4ecause it included the amount for pament of ta5es and for .a4anNscommission as 4ro9er for 4ae>

According to the trial court, Gim made the following paments for the lot=)&&",'/## for ta5es, )'#,##### for her 4ro9er, and )0####### directl to

4ae>, or a total of Five Dundred .i5t Three Thousand Two Dundred Fift.even )esos !)'(",'/##%/Gim, on the other hand, claims that on March ,&++0, the date of e5ecution of the Deed of Absolute Saleshe paid directl to

4ae> the amount of ?ne Dundred Thousand )esos !)#,#####% onl, andgave to .a4an )&&",'/## for pament of ta5es and )'#,##### as hiscommission,and ?ne Dundred Thirt Thousand )esos !)&"#,#####% on Kune, &++0,+or a total of Three Dundred 1inet Three Thousand Two DundredFift .even )esos !)"+",'/##% 4ae>, for his part, ac9nowledged that Gimand her co6vendees paid him )0##,##### which he said was the full amountfor the sale of the lot"#It thus appears that he received )#,##### on March, &++0, ac9nowledged receipt !through .a4an% of the )&&",'/##earmar9ed for ta5es and )'#,##### for commission, and received the 4alanceof )&"#,##### on Kune , &++0 Thus, a total of )"#,##### went directl to

4ae> Apparentl, although the amount actuall paid 4 Gim was)"+",'/##, 4ae> rounded o7 the amount to )0##,##### and waived thedi7erence

GimNs act of issuing the four chec9s amounting to )"(,/0"## in .a4anNs favor4elies her claim that she and her co6vendees did not agree to purchase the lotat )(##,##### If she did not agree thereto, there would 4e no reason for herto issue those chec9s which is the 4alance of )(##,##### less the amounts of)##,##### !due to 4ae>%, )'#,##### !commission%, and the )&&",'/##!ta5es% The onl logical conclusion is that Gim changed her mind a4outagreeing to purchase the lot at )(##,##### after tal9ing to 4ae> andultimatel reali>ing that .a4anNs commission is even more than what 4ae>received as his share of the purchase price as vendor ?4viousl, this changeof mind resulted to the prejudice of .a4an whose e7orts led to the completion

of the sale 4etween the latter, and Gim and her co6vendees This the Courtcannot countenance
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The ruling of the Court in #nfante v. Cunanan et al. cited earlier, isenlightening for the facts therein are similar to the circumstances of thepresent case In that case, Consejo Infante as9ed Kose Cunanan and KuanMijares to 8nd a 4uer for her two lots and the house 4uilt thereon for Thirt

Thousand )esos !)"#,#####% .he promised to pa them 8ve percent !'$% ofthe purchase price plus whatever overprice the ma o4tain for the propertCunanan and Mijares o7ered the properties to )io 1oche who in turn e5pressedwillingness to purchase the properties Cunanan and Mijares thereafter

introduced 1oche to Infante Dowever, the latter told Cunanan and Mijaresthat she was no longer interested in selling the propert and as9ed them tosign a document stating that their written authorit to act as her agents forthe sale of the properties was alread cancelled .u4se:uentl, Infante soldthe properties directl to 1oche for Thirt ?ne Thousand )esos !)"&,#####%

The Court upheld the right of Cunanan and Mijares to their commission,e5plaining thatO

PQInfanteR had changed her mind even if respondent had found a4uer who was willing to close the deal, is a matter that would not giverise to a legal conse:uence if QCunanan and MijaresR agreed to call o7the transaction in deference to the re:uest of QInfanteR But thesituation varies if one of the parties ta9es advantage of the4enevolence of the other and acts in a manner that would promote hisown sel8sh interest This act is unfair as would amount to 4ad faith

This act cannot 4e sanctioned without according the part prejudicedthe reward which is due him This is the situation in which QCunananand MijaresR were placed 4 QInfanteR QInfanteR too9 advantage of theservices rendered 4 QCunanan and MijaresR, 4ut 4elieving that shecould evade pament of their commission, she made use of a ruse 4inducing them to sign the deed of cancellationPThis act of su4versioncannot 4e sanctioned and cannot serve as 4asis for QInfanteR to escapepament of the commission agreed upon"&

The appellate court therefore had sucient 4asis for concluding that 4ae>and Gim connived to deprive .a4an of his commission 4 dealing with eachother directl and reducing the purchase price of the lot and leaving nothing tocompensate .a4an for his e7orts

Considering the circumstances surrounding the case, and the undisputed factthat Gim had not et paid the 4alance of )##,##### of the purchase price of)(##,#####, it is just and proper for her to pa .a4an the 4alance of)##,#####

Furthermore, since 4ae> received a total of )"#,##### from Gim, or ane5cess of )"#,##### from his as9ing price of )##,#####, .a4an ma claimsuch e5cess from 4ae>Ns estate, if that remed is still availa4le,"in view ofthe trial courtNs dismissal of .a4anNs complaint as against 4ae>, with.a4anNs e5press consent, due to the latterNs demise on 1ovem4er &&, &++0""

The appellate court however erred in ruling that Gim is lia4le on the chec9s4ecause she issued them as an accommodation part .ection + of the

1egotia4le Instruments Gaw de8nes an accommodation part as a personwho has signed the negotia4le instrument as ma9er, drawer, acceptor orindorser, without receiving value therefor, for the purpose of lending his nameto some other person The accommodation part is lia4le on the instrumentto a holder for value even though the holder at the time of ta9ing theinstrument 9new him or her to 4e merel an accommodation part Theaccommodation part ma of course see9 reim4ursement from the partaccommodated"0

As gleaned from the te5t of .ection + of the 1egotia4le Instruments Gaw, theaccommodation part is one who meets all these three re:uisites, vi$= !&% hesigned the instrument as ma9er, drawer, acceptor, or indorser !% he did notreceive value for the signature and !"% he signed for the purpose of lendinghis name to some other person In the case at 4ar, while Gim signed as drawer

of the chec9s she did not satisf the two other remaining re:uisites

The a4sence of the second re:uisite 4ecomes pellucid when it is noted at theoutset that Gim issued the chec9s in :uestion on account of her transaction,along with the other purchasers, with 4ae> which was a sale and, therefore,a reciprocal contract .peci8call, she drew the chec9s in pament of the4alance of the purchase price of the lot su4ject of the transaction And she hadto pa the agreed purchase price in consideration for the sale of the lot to herand her co6vendees In other words, the amounts covered 4 the chec9s formpart of the cause or consideration from 4ae>Ns end, as vendor, while the lotrepresented the cause or consideration on the side of Gim, as vendee"'%rgo,Gim received value for her signature on the chec9s

1either is there an indication that Gim issued the chec9s for the purpose ofena4ling 4ae>, or an other person for that matter, to o4tain credit or to

raise mone, there4 totall de4un9ing the presence of the third re:uisite ofan accommodation part

;D3E3F?E3, in view of the foregoing, the petition is 2I.MI..32
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