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Sing Juco & Sing Bengco v. Sunyatong & Llorente (1922) (sale of land, was responsible for Maria Gay not accepting the terms proposed by the
employee) plaintiffs, because of being certain of another less exigent buyer. Such an act
of infidelity committed by a trusted employee calculated to redound to his
Doctrines: • "Equitable trust" by virtue of which the things acquired by an own benefit and to the detriment of his employers cannot pass without legal
employee is deemed not to have been acquired for his own benefit or that of sanction. In the North American law such sanction is expressly recognized,
any other person but for his principal, and held in trust for the latter and the transaction of this nature might be regarded as an "equitable trust"
by virtue of which the things acquired by an employee is deemed not to have
Facts: been acquired for his own benefit or that of any other person but for his
principal, and held in trust for the latter. (There is no assignment of errors in
On May 20, 1919, the plaintiffs obtained from Maria Gay a written option to this case.)
purchase an estate known as "San Antonio Estate." The term of the option
expired, but the plaintiffs had it extended verbally until 12 o 'clock noon of
FACTS
June 17, 1919. Antonio Sunyantong was at the time an employee of the
plaintiffs and that they reposed confidence in him and did not mind Sing Juco and Sing Bengco obtained from Maria Gay a written option
disclosing their plans to him, concerning the purchase of the aforesaid estate topurchase an estate known as "San Antonio Estate". The term of the
and the progress of their negotiations with Maria Gay. On a conference where optionexpired, but Sing Juco and Sing Bengco had it extended
Sing Juco, Sing Bengco and Antonio Sunyantong was present, the latter verbally.Sunyantong was an employee of Sing Juco and Sing Bengco, and
suggested that it would be better if they would wait for a few days elapse theevidence shows that they reposed confidence in him and did not
before accepting the terms of the transfer proposed by Maria Gay as not to minddisclosing to him their plans of purchasing the San Antonio estate and
give the impression that they are coveting the property. In the morning of the statusof their negotiations with Gay.In one of the meetings held by Sing
June 17, 1919, on the midday of which the term of plaintiff's option to Juco and Sing Bengco, Sunyantongwas present. At that time, Sunyantong remarked
purchase was to expire, said defendant Antonio Sunyantong called at the that it would be advisable to letsome days elapse before accepting the terms of the
house of Mari Gay when she was having breakfast, and offered to buy the transfer as proposed byMaria Gay, in order that the Gay might not think that
estate on the same terms proposed by her not yet accepted by the plaintiffs, they were desperate forthe said property.
making the offer to buy not for the benefit of the plaintiff's, but for own wife, On the day that Sing Juco and Sing Bengco’s option to purchase was to
his codefendant Vicenta Llorente de Sunyatong. In view of the opportunity expire, Sunyantong called at the house of Gay and offered to buy the estate onthe terms
that offered itself, but respecting the option granted the plaintiffs, Maria Gay she proposed, which were not yet accepted by Sing Juco and SingBengco.
communicated by telephone with Manuel Sotelo, who was acting as broker Sunyantong offered to buy not for the benefit of Sing Juco and SingBengco,
for the plaintiffs in these transactions, and told him that another buyer of the but for the benefit of his own wife.Maria Gay informed the broker of Sing
estate had presented himself who would accept the terms proposed by her Juco and Sing Bengco that therewas another interested buyer and that she
and that she would like to know immediately what decision had been reached would like to know immediately SingJuc
by the plaintiffs on the matter. For their reply, Sing Bengco instructed Sotelo o and Sing Bengco’s decision.
to inform her at the time that if she did not care to wait until 12 o'clock, "ella Sing Bengco instructed Sotelo to inform her, "siya ang bahala".Interpreting the phrase
cuidado" (equivalent to bahala siya/ ambut sa iya; may have different to mean that Sing Juco and Sing Bengco waived theiroption to buy, Maria
interpretations). Interpreting the phrase to mean that the plaintiffs waived Gay closed the sale of the estate in favor of Sunyantong.Sing Bengco and
their option to buy, Maria Gay closed the sale of the estate in favor of the Sing Juco then filed a case against Sunyantong. Thelower court ordering the
defendant Antonio Sunyantong. Sunyantong to execute a deed of conveyance to SingBengco and Sing Juco of
the San Antonio Estate for the same price and with thesame conditions as
Issue: those of the purchase thereof from Maria Gay
ISSUE
Does the plaintiff-petitioners have a remedy to acquire the property?
W/N Sunyantong must be held liable
HELD
Held/Ratio:
Yes. Even supposing that Sing Bengco intended to waive all claims to
the option when he said “bahala ka”, the action of the Sunyantong in
YES, the plaintiff-petitioners may acquire the property by virtue of an
intervening
equitable trust. The fact cannot be denied that he was the cause of the option
in the negotiations does not make him innocent of infidelity in view of the
having precipitously come to such an end. His disloyalty to his employers
factthat he was an employee of the plaintiffs to whom he owed loyalty
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andfaithfulnes.Despite the fact that when Sunyantong closed the contract of sale installments were to be paid. Sosa and Gilbert delivered the down payment of
withMaria Gay, Sing Juco and Sing Bengco option had expire P100,000.00 on June 15, 1989 and Bernardo accomplished a printed Vehicle
d, it can’t be denied that Sales Proposal (VSP) No. 928 which showed Sosa’s full name and home
he was the cause of the option having precipitously come to such an end. Hi disloyalty to address, that payment is by "installment," to be financed by "B.A.," and that
his employers was responsible for Maria Gay not accepting theterms the "BALANCE TO BE FINANCED" is "P274,137.00", but the spaces provided
proposed by Sing Juco and Sing Bengco, because of being certain ofanother for "Delivery Terms" were not filled-up.
less exigent buyer. Without such intervention on the part of theSunyantong it
is presumed, taking into account all the circumstances of the case,that the When June 17 came, however, petitioner Toyota did not deliver the Lite Ace.
sale of the estate in question would have been consummated betweenMaria Hence, Sosa asked that his down payment be refunded and petitioner Toyota
Gay and Sing Juco and Sing Bengco, perhaps with such advantages to SingJuco and issued also on June 17 a Far East Bank check for the full amount of
Sing Bengco, as they expected to obtain by prolonging negotiations.Such an P100,000.00, the receipt of which was shown by a check voucher of Toyota,
act of infidelity committed by a trusted employee calculated toredound to his which Sosa signed with the reservation, "without prejudice to our future
own benefit and to the detriment of his employers cannot passwithout legal claims for damages." Petitioner Toyota contended that the B.A. Finance
sanction. He shall be liable for the damage caused disapproved Sosa’s the credit financing application and further alleged that a
particular unit had already been reserved and earmarked for Sosa but could
DISSENTING OPINION BY VILLAMOR, J: not be released due to the uncertainty of payment of the balance of the
Sunyantong is held civilly liable for having purchased the land inquestion in purchase price. Toyota then gave Sosa the option to purchase the unit by
behalf of his wife, Vicenta Llorente, with knowledge of the fact thatSing paying the full purchase price in cash but Sosa refused.
Bengco and Sing Juco, by whom he was employed, were negotiating withthe
owner of the land for the purchase of the same.The liability of Sunyantong should The trial court found that there was a valid perfected contract of sale between
consist in the reparation of thedamage caused to the Sing Bengco and Sing Juco. Has any Sosa and Toyota which bound the latter to deliver the vehicle and that Toyota
damage been provento have arisen from the culpable act of the defendant acted in bad faith in selling to another the unit already reserved for Sosa,
Sunyantong? I do not thinkthat it has, and indeed no damage could have and the Court of Appeals affirmed the said decision.
been caused to the Sing Bengco.There is also no proof of Sunyantong having
acquired the land inquestion in the name or in behalf of Sing Bengco and Sing Juco, or ISSUE:
at the requestof the latter, or with funds furnished by them. Said defendants
had legalcapacity to buy (art. 1457, Civil Code) and are not within any of the Was there a perfected contract of sale between respondent Sosa and
casesprohibited by article 1459 of the same Code petitioner Toyota?

COURT RULING:
Toyota Shaw Inc. vs. Court of Appeals, and Sosa
244 SCRA 320 The Supreme Court granted Toyota’s petition and dismissed Sosa’s complaint
May 1995 for damages because the document entitled “Agreements Between Mr. Sosa &
Popong Bernardo of Toyota Shaw, Inc.,” was not a perfected contract of sale,
but merely an agreement between Mr. Sosa and Bernardo as private
FACTS: individuals and not between Mr. Sosa and Toyota as parties to a contract.

Luna L. Sosa and his son, Gilbert, went to purchase a yellow Toyota Lite Ace There was no indication in the said document of any obligation on the part of
from the Toyota office at Shaw Boulevard, Pasig (petitioner Toyota) on June Toyota to transfer ownership of a determinate thing to Sosa and neither was
14, 1989 where they met Popong Bernardo who was a sales representative of there a correlative obligation on the part of the latter to pay therefor a price
said branch. Sosa emphasized that he needed the car not later than June 17, certain. The provision on the downpayment of P100,000.00 made no specific
1989 because he, his family, and a balikbayan guest would be using it on reference to a sale of a vehicle. If it was intended for a contract of sale, it
June 18 to go home to Marinduque where he will celebrate his birthday on could only refer to a sale on installment basis, as VSP No.928 executed on
June 19. Bernardo assured Sosa that a unit would be ready for pick up on June 15, 1989 confirmed. The VSP also created no demandable right in favor
June 17 at 10:00 in the morning, and signed the "Agreements Between Mr. of Sosa for the delivery of the vehicle to him, and its non-delivery did not
Sosa & Popong Bernardo of Toyota Shaw, Inc.,” a document which did not cause any legally indemnifiable injury.
mention anything about the full purchase price and the manner the
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ISSUES:

The title of the agreement between the two parties was “AGREEMENTS (1) Whether or not the Management Administration contract between the
BETWEEN MR. SOSA AND POPONG BERNARDO OF TOYOTA SHAW INC”, municipality and Lacuesta was valid
therefore, Popong Bernardo was acting on his personal capacity and did not
represent Toyota in said agreement, something that Mr. Sosa should have (2) Whether or not the Management-Administration contract still stands even
been aware of. Mr. Sosa knew that Popong Bernado was only a sales if Lacuesta already died
representative of Toyota, and thus, a mere agent and was therefore limited in
his authority to enter into contracts of sale of Toyota’s vehicles. HELD:

A person dealing with an agent is put upon inquiry and must discover upon (1) NO. The Management-Administration contract entered into by Lacuesta
his peril the authority of the agent. 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.
TERRADO V CA (ART. 1919)
(2) NO. Essentially, the contract of management and administration between
FACTS: the Municipality and Lacuesta is one of agency whereby a person binds
himself to render some service or to do something in representation or on
On January 21, 1973, the Philippine Legislature ceded a certain portion of behalf of another, with the consent or authority of the latter. Lacuesta bound
Bayambang Province of Pangasinan (which was once public land) to the himself as Manager-Administrator of the Bayambang Fishing and Hunting
municipality of the Bayambang to be used or disposed of in accordance with Park and Municipal Watershed to render service or perform duties and
the general municipal law relative to the letting of fisheries in municipal responsibilities in representation or on behalf of the Municipality of
waters. On 1974, the municipality of Bayambang enacted Ordinance No. 8, Bayambang, with the consent or authority of the latter. Under Art. 1919 of
establishing the Bayambang Fishery and Hunting Park and Municipal Water the Civil Code, agency is extinguished by the death of the agent. His rights
Shed. Also in the said ordinance, the municipality appointed and constituted and obligations arising from the contract are not transmittable to his heirs or
private respondent Lacuesta as Manager-Administrator of the watershed for a predecessors-in-interest.
period of 25 years, renewable for another 25 years. This is under the
condition that said respondent shall pay the municipality the sum equivalent Manila Remnant vs. CA
to 10% of the annual gross income that may be derived from the forest G.R. No. 82978. November 22, 1990
products, wild game and fish. Such ordinance was approved by the Provincial Fernan
Board of Pangasinan but was disapproved by the Secretary of Agriculture
and Natural Resources as it “grants fishery privileges to respondent Lacuesta FACTS:
without the benefit of competitive public hearing in contravention to law.”  Manila Remnant Co. owns Capital Homes Subdivision with Artemio
The municipality then informed Lacuesta of the disapproval of the ordinance Valencia as President
and directed him to refrain and desist from acting as Administrator-Manager.  A.U. Valencia and Co., is the authorized agent of Manila Remnant to
However, Lacuesta refused and insisted on retaining possession of the develop the aforesaid subdivision with authority to manage the sales
fisheries. Despite such refusal, the municipality of Bayambang passed thereof, execute contracts to sell to lot buyers and issue official
another resolution resolving to advertise for public bidding the said fishery receipts. Artemio Valencia is also the president of this company.
area. Among the winning bidders are herein petitioners. There was a long line  Sometime in March 1970, Manila Remnant thru A.U. Valencia,
of petitions/motions filed in the RTC, CA, and SC filed by both parties. What executed contracts to sell with Ventanilla covering two lots
is important is that while the case was pending in the CFI of Pangasinan, amounting to P66k to paid monthly for 10 years. Ventanilla paid the
Lacuesta died. The judge of said court (Judge Villalon, also a respondent) downpayment.
sided with Lacuesta. As such, despite the fact that Lacuesta died, she still  After 10 days, Artemio Valencia sold the same lots without informing
ordered the restoration of the possession of all fisheries and areas covered by Ventanilla to Crisostomo, his sales agent without any consideration.
the contract to Lacuesta and his party.  Artemio Valencia then transmitted the fictitious Crisostomo
contracts to Manila Remnant while he kept in his files the contracts
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to sell in favor of the Ventanillas. All the amounts paid by the (1) The unique relationship existing between the principal and the agent
Ventanillas were deposited in Valencia's bank account and this is at the time of the dual sale must be underscored. Bear in mind that
remitted to Manila Remnant in favor of Crisostomo. Receipts issued the president then of both firms was Artemio U. Valencia, the
by Manila Remnant in favor of Crisostomo are kept by Valencia. individual directly responsible for the sale scam. Hence, despite the
Ventanilla is not aware of Valencia’s scheme and thus continued fact that the double sale was beyond the power of the agent, Manila
paying their monthly installments. Remnant as principal was chargeable with the knowledge or
 Sometime in May 1973, Manila Remnant terminated its collection constructive notice of that fact and not having done anything to
agreement with AU Valencia due to discrepancies and irregularities correct such an irregularity was deemed to have ratified the same.
discovered in its collections and remittances. Valencia was also
removed as the President of Manila Remnant. (2) The principle of estoppel, Manila Remnant is deemed to have
 The Ventanilla couple unaware of the circumstances happened allowed its agent to act as though it had plenary powers. Article 1911
continued paying their installments to Valencia. It is only in 1978 of the Civil Code provides:
they learned the termination of Valencia, thus they went immediately
to Manila Remnant to pay their balance but to their shock they "Even when the agent has exceeded his authority, the principal is
discovered from Gloria Caballes, an accountant of Manila Remnant, solidarily liable with the agent if the former allowed the latter to act
that their names did not appear in the records of A.U. Valencia and as though he had full powers."
Co. as lot buyers.
 Thus, the Ventanillas commenced an action for specific performance, Authority by estoppel has arisen in the instant case because by its
annulment of deeds and damages against Manila Remnant, A.U. negligence, the principal, Manila Remnant, has permitted its agent,
Valencia and Co. and Carlos Crisostomo. A.U. Valencia and Co., to exercise powers not granted to it.
 Lower court’s rendered judgment in favor of Ventanilla, and in the
decision, the court ordered defendants A.U. Valencia and Co. Inc.,
Manila Remnant and Carlos Crisostomo jointly and severally to pay
the Ventanillas the amount of P100,000.00 as moral damages,
P100,000.00 as exemplary damages, and P100,000.00 as attorney's
fees and in case the transfer of lots cannot be effected for any legal
reason, the defendants should reimburse jointly and severally to
the Ventanillas the total amount of P73,122.35 representing the total
amount paid for the two lots plus legal interest thereon from March
1970 plus damages.
 While petitioner Manila Remnant has not refuted the legality of the
award of damages per se, it believes that it cannot be made jointly
and severally liable with its agent A.U. Valencia and Co. since it was
not aware of the illegal acts perpetrated nor did it consent or ratify
said acts of its agent.

ISSUE:

Whether or not petitioner Manila Remnant should be held solidarily liable

RULING:

Yes. Due to the following: