OBLIGATIONS OF THE PRINCIPAL new proposal and insisted Baluyot and MMPCI to

honor their undertaking.

Atty. Lins then filed for breach of contract and

MANILA MEMORIAL VS LINSANGAN damages against MMPCI and Baluyot.

FACTS: Baluyot did not file any evidence.

Sometime in 1984, Florencia Baluyot offered Atty.

Pedro L. Linsangan a lot called Garden State at the MMPCI CONTENTION: . For its part, MMPCI
Holy Cross Memorial Park owned by petitioner alleged that Contract No. 28660 was cancelled
(MMPCI). According to Baluyot, a former owner of conformably with the terms of the contract 8 because
a memorial lot under Contract No. 25012 was no of nonpayment of arrearages. 9 MMPCI stated that
longer interested in acquiring the lot and had opted to Baluyot was not an agent but an independent
sell his rights subject to reimbursement of the contractor, and as such was not authorized to
amounts he already paid. The contract was for represent MMPCI or to use its name except as to the
P95,000.00. Baluyot reassured Atty. Linsangan that extent expressly stated in the Agency Manager
once reimbursement is made to the former buyer, the Agreement.
contract would be transferred to him. Atty. Linsangan
agreed and gave Baluyot P35,295.00 representing the TRIAL COURT: MMPCI and Baluyot solidarily
amount to be reimbursed to the original buyer and to liable.
complete the down payment to MMPCI. 3 Baluyot
issued handwritten and typewritten receipts for these
payments. ON APPEAL: MMPCI further alleged that it cannot
be held jointly and solidarily liable with Baluyot as
Baluyot informed Atty. Linsangan that he would be the latter exceeded the terms of her agency, neither
issued new contract covering the subject lot in the did MMPCI ratify Baluyot's acts. It added that it
name of the latter instead of the old contract. cannot be charged with making any
However, Linsangan protested, but Baluyot reassured misrepresentation, nor of having allowed Baluyot to
him that he would still be paying the old price: P95K act as though she had full powers as the written
with 19, 838 credited as full down payment, balance contract expressly stated the terms and conditions
of 75K which Atty. Linsangan accepted and understood. In
canceling the contract, MMPCI merely enforced the
Baluyot brought an offer to purchase lot of the garden terms and conditions imposed therein.
estate denominated as the new contract, and receipt
for the amount of 19, 838. New contract listed the According to MMPCI, Atty. Linsangan did not even
price P132,250. Atty. Linsangan protested to the bother to verify Baluyot's authority or ask copies of
new contract, as it was not the amount previously official receipts for his payments.
agreed upon. Baluyot executed a document
confirming that while price was 132K, her balance MMPCI filed its Motion for Reconsideration, 24 but
was 95K. the same was denied for lack of merit.

Document reads: 1,800 as the monthly installment,

19K already paid, orig price is 132K, BUT the In the instant Petition for Review, MMPCI claims
undertaking is that she will only pay 95K, so the that the Court of Appeals seriously erred in
balance if 75K., payable for 5 years. disregarding the plain terms of the written contract
and Atty. Linsangan's failure to abide by the terms
By virtue of the letter, Atty Linsangan signed thereof, which justified its cancellation. In addition,
contract, issued 12 post dated checks in favor of even assuming that Baluyot was an agent of MMPCI,
MMPCI, and the next year another 12 postdated she clearly exceeded her authority and Atty.
checks. Linsangan knew or should have known about this
considering his status as a long-practicing lawyer.
1987, Baluyot said to Lins that the contract has been MMPCI likewise claims that the Court of Appeals
cancelled for reasons the latter could not explain, erred in failing to consider that the facts and the
presented to him another property. Lins refused the applicable law do not support a judgment against
Baluyot only "up to the extent of costs."
 MMPCI. The document/letter "confirming" the
According to Linsangan, MMPCI had practically agreement that Atty. Linsangan would have to pay
admitted in its Petition that Baluyot was its agent, the old price was executed by Baluyot alone.
and thus, the only issue left to be resolved is whether Nowhere is there any indication that the same came
MMPCI allowed Baluyot to act as though she had from MMPCI or any of its officers.
full powers to be held solidarily liable with the latter.

ISSUE: WON BALUYOT IS AN AGENT OF

MMPCI ***As noted by one author, the ignorance of a person
dealing with an agent as to the scope of the latter's
authority is no excuse to such person and the fault
cannot be thrown upon the principal. 41 A person
RULING: dealing with an agent assumes the risk of lack of
authority in the agent. He cannot charge the principal
In an attempt to prove that Baluyot was not its agent, by relying upon the agent's assumption of authority
MMPCI pointed out that under its Agency Manager that proves to be unfounded. The principal, on the
Agreement; an agency manager such as Baluyot is other hand, may act on the presumption that third
considered an independent contractor and not an persons dealing with his agent will not be negligent
agent. 35 However, in the same contract, Baluyot as in failing to ascertain the extent of his authority as
agency manager was authorized to solicit and remit well as the existence of his agency.
to MMPCI offers to purchase interment spaces
belonging to and sold by the latter. Notwithstanding In the instant case, it has not been established that
the claim of MMPCI that Baluyot was an Atty. Linsangan even bothered to inquire whether
independent contractor, the fact remains that she was Baluyot was authorized to agree to terms contrary to
authorized to solicit solely for and in behalf of those indicated in the written contract, much less bind
MMPCI. As properly found both by the trial court MMPCI by her commitment with respect to such
and the Court of Appeals, Baluyot was an agent of agreements. Even if Baluyot was Atty. Linsangan's
MMPCI, having represented the interest of the latter, friend and known to be an agent of MMPCI, her
and having been allowed by MMPCI to represent it in declarations and actions alone are not sufficient to
her dealings with its clients/prospective buyers. establish the fact or extent of her authority.

Nevertheless, contrary to the findings of the Court of As to the ratification issue and estoppel in
Appeals, MMPCI cannot be bound by the contract MMPCI’s act of accepting and encashing the
procured by Atty. Linsangan and solicited by checks issued by Atty. Linsangan
Baluyot. - Thus, if material facts were suppressed or
unknown, there can be no valid ratification
Baluyot was authorized to solicit and remit to and this regardless of the purpose or lack
MMPCI offers to purchase interment spaces obtained thereof in concealing such facts and
on forms provided by MMPCI. The terms of the offer regardless of the parties between whom the
to purchase, therefore, are contained in such forms question of ratification may arise.
and, when signed by the buyer and an authorized Nevertheless, this principle does not apply if
officer of MMPCI, becomes binding on both parties. the principal's ignorance of the material
facts and circumstances was willful, or that
The Offer to Purchase duly signed by Atty. the principal chooses to act in ignorance of
Linsangan, and accepted and validated by MMPCI the facts. However, in the absence of
showed a total list price of P132,250.00. circumstances putting a reasonably prudent
man on inquiry, ratification cannot be
*****By signing the Offer to Purchase, Atty. implied as against the principal who is
Linsangan signified that he understood its contents. ignorant of the facts.
That he and Baluyot had an agreement different from - Real contract was Linsangan 1,800 and
that contained in the Offer to Purchase is of no Baluyot will shoulder 1,455, to meet the
moment, and should not affect MMPCI, as it was 3,255. However, Baluyot failed to come up
obviously made outside Baluyot's authority. To with her part of the bargain.
repeat, Baluyot's authority was limited only to - Atty. Linsangan failed to show that MMPCI
soliciting purchasers. She had no authority to had knowledge of the arrangement. As far as
alter the terms of the written contract provided by MMPCI is concerned, the contract price was
 P132,250.00, as stated in the Offer to
Purchase signed by Atty. Linsangan and
MMPCI's authorized officer HARRY KEELER ELECTRIC VS DOMINGO
RODRIGUEZ

Neither is there estoppel in the instant case. The Doctrines:

essential elements of estoppel are
- Persons dealing with an assumed agent,
(i) conduct of a party amounting to false whether the assumed agency be a general or
representation or concealment of special one, rare bound at their peril, if they
material facts or at least calculated to would, if they would hold the principal, to
convey the impression that the facts are ascertain not only the fact of the agency but
otherwise than, and inconsistent with, the nature and extent of the authority, and in
those which the party subsequently case either is controverted, the burden of
attempts to assert; proof is upon them to establish it.
(ii) (ii) intent, or at least expectation, that - The agent alone removes limitations or
this conduct shall be acted upon by, or waives conditions imposed by his principal.
at least influence, the other party; and To charge the principal in such a case, the
(iii) (iii) knowledge, actual or constructive, principal's consent or concurrence must be
of the real facts. 51 shown.
- Where a person in making payment solely
While there is no more question as to the agency relied upon the representation of an agent a
relationship between Baluyot and MMPCI, there to his authority to receive and receipt for the
is no indication that MMPCI let the public, or money, such payment is made at his won
specifically, Atty. Linsangan to believe that risk, and where the agent was not so
Baluyot had the authority to alter the standard authorized, such payment is not a valid
contracts of the company. defense against the principal.

However, this does not preclude Atty. Linsangan FACTS:

from instituting a separate action to recover damages
from Baluyot, not as an agent of MMPCI, but in view Plaintiff is a domestic corporation with its principal
of the latter's breach of their separate agreement. To office in Manila, engaged in electric business, sale of
review, Baluyot obligated herself to pay P1,455.00 in what is known as the Matthews electric plant, while
addition to Atty. Linsangan's P1,800.00 to complete defendant is a resident of Talisay Negros Occidental,
the monthly installment payment under the contract, and AC Montelibano was a resident of Iloilo.
which, by her own admission, she was unable to do
due to personal financial difficulties. It is undisputed Montelibano approached plaintiff at its Manila office
that Atty. Linsangan issued the P1,800.00 as agreed claiming he was from Iloilo, lived with Gov Yulo;
upon, and were it not for Baluyot's failure to provide that he could find purchasers for the Matthews plant,
the balance, Contract No. 28660 would not have been was told by the plaintiffthat for any plant he could
cancelled. Thus, Atty. Linsangan has a cause of sell t the customers he find be paid a commission of
action against Baluyot, which he can pursue in 10% of his services, if sale was consummated. One
another case. was sold to the defendant, and was shipped from
MNL to ILO, later installed o defendant’s premises,
and without plaintiff’s knowledge, was paid.

As a result, plaintiff commenced action against the

defendant for payment of the electric plant.

It appears from the testimony of H. E. Keeler that he

was president of the plaintiff and that the plant in
question was shipped from Manila to Iloilo and
consigned to the plaintiff itself, and that at the time of
the shipment the plaintiff it sent Juan Cenar, one of
its employees, with the shipment, for the purpose of
installing the plant on defendant's premises. That
plaintiff gave Cenar a statement of the account,
including some extras and the expenses of the In Ormachea vs Tin-Congco: “And not only must
mechanic, making a total of P2,563.95. the person dealing with the agent ascertain the
existence of the conditions, but he must also, as in
That Montelibano had no authority from the other cases, be able to trace the source of his reliance
plaintiff to receive or receipt for money. That in to some word or act of the principal himself if the
truth and in fact his services were limited and latter is to be held responsible. As has often been
confined to the finding of purchasers for the pointed out, the agent alone cannot enlarge or extend
"Matthews" plant to whom the plaintiff would later his authority by his own acts or statements, nor can
make and consummate the sale. That Montelibano he alone remove limitations or waive condition
was not an electrician, could not install the plant and imposed by his principal's consent or concurrence
did not know anything about its mechanism. must be shown.”

Cenar made no effort to collect the amount from the

defendant because the ltter said that he would pay for RULING:
the plant in Manila.

When asked why he paid the money to This was a single transaction between the plaintiff
Montelibano: “Because he was the one who sold, and the defendant.
delivered, and installed the electrical plant, and he
presented to me the account, Exhibits A and A-1, and Applying the above rules, the testimony is
he assured me that he was duly authorized to collect conclusive that the plaintiff never authorized
the value to collect the value of the electrical plant."” Montelibano to receive or receipt for money in its
behalf, and that the defendant had no right to
assume by any act or deed of the plaintiff that
The answer alleges and the receipt shows upon its Montelibano was authorized to receive the money,
face that the plaintiff sold the plant to the and that the defendant made the payment at his
defendant, and that be bought it from the own risk and on the sole representations of
plaintiff. Montelibano that he was authorized to receipt for
the money.
**There was nothing of the face of the receipt to
show that Montelibano was the agent or that he was
acting for the plaintiff. Outside of the fact that
Montelibano received the money and signed this
receipt, there is no evidence that he had any
authority, real or apparent, to receive or receipt for
the money.
This claim must be for the expenses of Cenar in FILIPINAS LIFE ASSURANCE COMPANY vs
going to Iloilo from Manila and return, to install the CLEMENTE O PEDROSA
plant, and is strong evidence that it was Cenar and
not Montelibano who installed the plant. FACTS:

After Cenar's return to Manila, the plaintiff wrote a Respondent Teresita Pedroso is a policyholder of a
letter to the defendant requesting the payment of its 20-yr endowment life insurance issued by petitioner
account, in answer to which the defendant on Filipinas Life Assurance. Pedroso claims Renato
September 24 sent the following telegram: Valle was his insurance agentsince 1972, Valle
"Electric plant accessories and installation are paid collected monthly premiums.
to Montelibano about weeks Keeler Company did not
present bill." Jan 1977 – Valle told her that petitioner was holding
promotional investment program for policyholder,
offering 8% prepaid interest a month for certain
There is no evidence that the plaintiff ever delivered amounts deposited a monthly basis. In return, Valle
any statement to Montelibano, or that he was issued personal check for 800 for the 800 prepaid
authorized to receive or receipt for the money, and interest and Filipinas Life Agent’s receipt.
defendant's own telegram shows that the plaintiff
"did not present bill" to defendant.
Respondent called the Escolta office, inquire about and facilities were used in consummating the
the promotional investment, and Apetrior confimed transactions.
that there was such a promotion. She was even told
she could push through with the check she issued, Respondents assert they exercised all the diligence
which was deposited in the account of Filipinas Life required of them in ascertaining the authority of
with Commercial Bank. petitioner's agents; and it is Filipinas Life that failed
in its duty to ensure that its agents act within the
scope of their authority.
Relying on the representations made by the
representatives and Valle, Pedroso waited for the Investments of respondent and Palacio was received
maturity of her initial investment. A month after, by Valle and remitted to Filipinas Life, using FL’s
10,000 was returned to him as per her request. receipt, which authenticity was not disputed.

To collect the amount, Pedroso personally went to the While it is true that a person dealing with an agent is
Escolta branch where Alcantara gave her the P10,000 put upon inquiry and must discover at his own peril
in cash. After a second investment, she made 7 to 8 the gent's authority, in this case, respondents did
more investments in varying amounts, totaling exercise due diligence in removing all doubts and
P37,000 but at a lower rate of 5% 8 prepaid interest a in confirming the validity of the representations
month. made by Valle.

Filipinas Life, as the principal, is liable for

**** Pedroso told respondent Jennifer N. Palacio, obligations contracted by its agent Valle.
also a Filipinas Life insurance policyholder, about the
investment plan. Palacio made a total investment of In other words, the acts of an agent beyond the scope
P49,550 9 of his authority do not bind the principal, unless the
but at only 5% prepaid interest. However, when principal ratifies them, expressly or impliedly. 16
Pedroso tried to withdraw her investment, Valle did Ratification in agency is the adoption or
not want to return some P17,000 worth of it. Palacio confirmation by one person of an act performed on
also tried to withdraw hers, but Filipinas Life, despite his behalf by another without authority.
demands, refused to return her money. With the
assistance of their lawyer, they went to Filipinas Life **Filipinas Life cannot profess ignorance of
Escolta Office to collect their respective investments, Valle's acts. Even if Valle's representations were
and to inquire why they had not seen Valle for quite beyond his authority as a debit/insurance agent,
some time. Filipinas Life thru Alcantara and Apetrior
expressly and knowingly ratified Valle's acts. It
But their attempts were futile. Hence, respondents cannot even be denied that Filipinas Life benefited
filed an action for the recovery of a sum of money. from the investments deposited by Valle in the
account of Filipinas Life. In our considered view,
ISSUE: WON PETITIONER AND VALLE BE Filipinas Life had clothed Valle with apparent
HELD LIABLE SOLIDARILY authority; hence, it is now estopped to deny said
authority.
HELD:

Filipinas Life does not dispute that Valle was its

agent, but claims that it was only a life insurance
company and was not engaged in the business of
collecting investment money. It contends that the
investment scheme offered to respondents by Valle,
Apetrior and Alcantara was outside the scope of their
authority as agents of Filipinas Life such that, it
cannot be held liable to the respondents.

On the other hand, respondents contend that

Filipinas Life authorized Valle to solicit investments
from them. In fact, Filipinas Life's official documents
 property on September 14, 1998 from the highest
bidder, Thelma Jean Salvana, for P1.6 Million Pesos.
FARIDA YAP BITTE AND HEIRS OF
BENJAMIN BITTE VS SPS JONAS Thereafter, Sps Bitte sold the property to Ganzon
Yap.
FACTS:

This controversy stemmed from two civil cases filed In Rosa’s response – that the power of her mother to
by parties against each other relative to a purported sell was later on revoked by her, but Cip was still
contract of sale involving a piece of property. negotiating for the sale despite the revocation; that no
authority was given to Cipriano to receive any
Before going to Australia, Rosa Elsa executed SPA advance payment for the property; and that Andrea's
authorizing her mother Andrea Serrano to sell the authority was revoked through a Deed of Revocation
property. May 1996 – Cirpriano Serrano, son of of the Special Power of Attorney (SPA), dated
Andrea and brother of Rosa, offered the property to October 10, 1996.
Sps Bitte; and received P200K as advance payment
for theproperty. Later on, received additional 400K. Benjamin BItte manifested the withdrawal of their
counsel. RTC then cancelled the reception of Elsa’s
As to the final meeting, SPs Bitte paid for the round evidence without reconsidering dismissal of the
trip ticket of the registered owner Rosa. Shortly after complaint.
arrival, Rosa revoked the SPA, handed thereof to
Andrea. SECOND CIVIL CASE

Parties then met at Farida Bitte’s office; that an Sps Jonas filed a complaint for annulment of
agreement of sale of the subject property for the total absolute sale, cancellation of TCT, recovery of
purchase price of P6.2 Million Pesos was reached; possession, damages against Sps Bitte.
that P5 Million thereof would be paid on October 18,
1996 and the balance, thirty (30) days thereafter; but Sps Jonas alleged that Rosa acquired the property
no final agreement was reached. Rosa then before marriage; 1985, before leaving in Australia,
withdrew from the transaction. authorized Andrea SPA; but while in Australia,
decided that she no longer sell the property; upon
(FIRST CIVIL CASE) Sps Bitte then filed before arrival in PH, revoked the SPA; but was still sold to
RTC a complaint for specific performance with Sps Bitte. (merely repeated the facts)
Damages seeking to compel Rosa, Andrea and CIp to
transfer to their names the title over the property. Spouses Jonas eventually sought judicial recourse
through the filing of a complaint for the Annulment
While the case was pending, Andrea sold the of the Deed of Absolute Sale and Reconveyance of
property to Sps Bitte, through a deed of absolute sale the Property which was raffled to RTC-Branch 9.
– February 25, 1997.

Rosa Elsa asked Andrea about the sale. Her questions TWO CASES WERE CONSOLIDATED
about the sale, however, were ignored and her pleas
for the cancellation of the sale and restoration of the RULING:
property to her possession were disregarded.
Procedural issues:
Undisputed by the parties is the fact that Rosa Elsa The rule is that "right to appeal from the judgment by
earlier mortgaged the subject property to Mindanao default is not lost and can be done on grounds that the
Development Bank. Upon failure to pay the loan on amount of the judgment is excessive or is different in
maturity, the mortgage was foreclosed and sold at a kind from that prayed for, or that the plaintiff failed
public auction on December 14, 1998 as evidenced to prove the material allegations of his complaint, or
by the annotation on the title, Entry No. 1173153. that the decision is contrary to law."

Despite being burdened by the circumstances of

default, the petitioners may still use all other
Armed with the deed of absolute sale executed by remedies available to question not only the judgment
Andrea, Spouses Bitte were able to redeem the
of default but also the judgment on appeal before this appearance is that the principal has conferred
Court. authority on an agent.

Substantive Issues: ***** Apparent authority ends when it is no longer

reasonable for the third party with whom an agent
The Court agrees with the CA that the genuineness deals to believe that the agent continues to act with
and due execution of the deed of sale in favor actual authority." In Cervantes v. Court of Appeals ,
Spouses Bitte were not established. Indeed, a 25 the Court wrote that "when the third person,
notarized document has in its favor the presumption knows that the agent was acting beyond his power or
of regularity. authority, the principal cannot be held liable for the
acts of the agent." ITA
Not having been properly and validly notarized, the
deed of sale cannot be considered a public document. Generally, implied notice, also known as constructive
It is an accepted rule, however, that the failure to notice, is attributed to third persons through the
observe the proper form does not render the registration of the termination in the Registry of
transaction invalid. It has been settled that a sale of Deeds. Under Article 1924 of the New Civil Code,
real property, though not consigned in a public "an agency is revoked if the principal directly
instrument or formal writing is, nevertheless, valid manages the business entrusted to the agent,
and binding among the parties, for the time-honored dealing directly with third persons.”
rule is that even a verbal contract of sale or real estate
produces legal effects between the parties. In the case at bench, Rosa Elsa's act of taking over
in the actual negotiation for the sale of the
Accordingly, the party invoking the validity of the property only shows that Andrea's authority to
deed of absolute sale had the burden of proving its act has been revoked pursuant to Article 1924. At
authenticity and due execution. Unfortunately, that point, Spouses Bitte had information sufficient
Spouses Bitte were declared as in default and, for enough to make them believe that Andrea was no
said reason, they failed to discharge such burden longer an agent or should have compelled them to
in the court below. make further inquiries. No attempt was shown that
Spouses Bitte took the necessary steps to inquire if
The genuineness and due execution of the deed of Andrea was still authorized to act at that time.
sale in favor of Spouses Bitte not having been Despite their direct negotiation with Rosa Elsa, they
established, the said deed can be considered non- still entered into a contract with Andrea on February
existent. 25, 1997.

***Considering that the title was still registered in

DOCTRINE OF APPARENT AUTHORITY the name of Rosa Elsa when Spouses Yap bought it
from Spouses Bitte, the burden was on them to prove
Granting arguendo that the deed of sale may still be that they were purchasers in good faith. In this
considered, the transaction is, nevertheless, regard, they failed. Not an iota of evidence was
unenforceable. adduced by them to prove their ignorance of the true
situation.
Basic is the rule that the revocation of an agency
becomes operative, as to the agent, from the time it is Here, no evidence was presented to show that
made known to him. Third parties dealing bonafide Spouses Yap exerted that required diligence in
with one who has been accredited to them as an determining the factual circumstances relating to the
agent, however, are not affected by the title and authority of Spouses Bitte as sellers of the
revocation of the agency, unless notified of such property. The records are bereft of any proof that
revocation. This refers to the doctrine of apparent Spouses Yap showed eagerness to air their side
authority. Under the said doctrine, acts and contracts despite being impleaded.
of the agent within the apparent scope of the
authority conferred on him, although no actual
authority to do such acts or has been beforehand
withdrawn, revoked or terminated, bind the principal.
Thus, as to a third person, "apparent authority, when
present, trumps restrictions that the principal has
privately imposed on the agent. The relevant
 Because of Hahn's insistence on the former business
ALFREDO HAHN VS COURT OF APPEALS relations, BMW withdrew on March 26, 1993 its
offer of a "standard importer contract" and
FACTS: terminated the exclusive dealer relationship effective
June 30, 1993.
Petitioner is a Filipino citizen doing business under
the name and style Hahn-Manila. PR BMW is a Hahn found the proposal unacceptable. On May 14,
nonresident foreign corporation existing under the 1993, he filed a complaint for specific performance
laws of the former Federal Republic of Germany, and damages against BMW to compel it to continue
principal office at Munich, Germany. the exclusive dealership.

Petitioner executed in favor of private respondent a

"Deed of Assignment with Special Power of BMW moved to dismiss the case, contending that
Attorney, the trial court did not acquire jurisdiction over it
through the service of summons on the Department
1. the ASSIGNOR shall inform the of Trade and Industry, because it (BMW) was a
ASSIGNEE immediately of all such use or foreign corporation and it was not doing business in
infringement of the said trademark which the Philippines. It contended that the execution of the
comes to his knowledge and upon such Deed of Assignment was an isolated transaction; that
information the ASSIGNOR shall Hahn was not its agent because the latter undertook
automatically act as Attorney-In-Fact of the to assemble and sell BMW cars and products
ASSIGNEE for such case without the participation of BMW and sold other
2. That the ASSIGNOR and the ASSIGNEE products; and that Hahn was an indentor or
shall continue business relations as has been middleman transacting business in his own name
usual in the past without a formal contract, and for his own account.
and for that purpose, the dealership of
ASSIGNOR shall cover the ASSIGNEE s Petitioner Alfred Hahn opposed the motion. He
complete production program with the only argued that BMW was doing business in the
limitation that, for the present Philippines through him as its agent, as shown by the
fact that BMW invoices and order forms were used to
document his transactions; that he gave warranties as
Feb 16, 1993, in a meeting with BMW representative exclusive BMW dealer; that BMW officials
and Columbia Motors Corporation, petitioner was periodically inspected standards of service rendered
informed that BMW was arranging to grant the by him; and that he was described in service booklets
exclusive dealership of BMW and CMC. Petitioner and international publications of BMW as a "BMW
received the information and expressed Importer" or "BMW Trading Company" in the
dissatisfaction, mentioned the decline in sales, Philippines.
deteriorating services, inadequate showroom and
warehouse facilities.
ISSUE:
Nonetheless, BMW expressed willingness to The question is whether petitioner Alfred Hahn is
continue business relations with the petitioner on the the agent or distributor in the Philippines of
basis of a "standard BMW importer" contract, private respondent BMW. If he is, BMW may be
otherwise, it said, if this was not acceptable to considered doing business in the Philippines and the
petitioner, BMW would have no alternative but to trial court acquired jurisdiction over it (BMW) by
terminate petitioner's exclusive dealership effective virtue of the service of summons on the Department
June 30, 1993. of Trade and Industry.

Petitioner protested, claiming that the termination

of his exclusive dealership would be a breach of the CA: that Hahn acted in his own name and for his
Deed of Assignment. 3 Hahn insisted that as long as own account, not as agent or distributor in the PH
the assignment of its trademark and device subsisted, of BMW.
he remained BMW's exclusive dealer in the
Philippines because the assignment was made in RULING:
consideration of the exclusive dealership.
HAHN WORK:
To the contrary, Hahn claimed he took orders for
BMW cars and transmitted them to BMW. Upon
receipt of the orders, BMW fixed the down payment
and pricing charges, notified Hahn of the scheduled
production month for the orders, and reconfirmed the
orders by signing and returning to Hahn the
acceptance sheets. Payment was made by the buyer
directly to BMW. Title to cars purchased passed
directly to the buyer and Hahn never paid for the
purchase price of BMW cars sold in the Philippines.
Hahn was credited with a commission equal to
14% of the purchase price upon the invoicing of a
vehicle order by BMW. Upon confirmation in writing
that the vehicles had been registered in the
Philippines and serviced by him, Hahn received an
additional 3% of the full purchase price. Hahn
performed after sale services, including, warranty
services for which he received reimbursement from
BMW. All orders were on invoices and forms of
BMW.

Contrary to the appellate court's conclusion, this

arrangement shows an agency. An agent receives a
commission upon the successful conclusion of a sale.
On the other hand, a broker earns his pay merely by
bringing the buyer and the seller together, even if no
sale is eventually made.

*** The fact that Hahn invested his own money to

put up these service centers and showrooms does
not necessarily prove that he is not an agent of
BMW. For as already noted, there are facts in the
record which suggest that BMW exercised control
over Hahn's activities as a dealer and made
regular inspections of Hahn's premises to enforce
compliance with BMW standards and
specifications.

In addition, BMW held out private respondent Hahn

as its exclusive distributor in the Philippines. even as
it announced in the Asian region that Hahn was the
"official BMW “agent" in the Philippines.

WHEREFORE, the decision of the Court of Appeals

is REVERSED and the case is REMANDED to the
trial court for further proceedings.

DOMINION INSURANCE VS CA