Siasat v. Intermediate Appellate Court
REITERATIONFacts
The Antecedents: Respondent Teresita Nacianceno facilitated the purchase of Philippine flags worth P1,000,000.00 by the Department of Education and Culture without public bidding. She entered into an agreement with petitioners Primitivo and Marcelino Siasat (owners of United Flag Industry) on September 18, 1974, wherein she was to represent them in marketing their products for a 30% commission. The first delivery of 7,933 flags was made on October 16, 1974. On October 17, 1974, petitioner Primitivo Siasat revoked respondent's authority to represent them. After receiving payment for the first delivery, petitioners tendered P23,900.00 (5%) to respondent, which she protested, insisting on the 30% commission. Petitioners assured her they would pay the full commission after the second delivery. Respondent later learned petitioners received payment for the second delivery of 7,833 flags. When confronted, petitioners denied receipt of payment and claimed respondent had no participation in the second delivery due to the revocation. Procedural History: Respondent filed a complaint with the Court of First Instance (CFI) of Manila to recover commissions. The CFI ruled in favor of the respondent, ordering petitioners to pay P281,988.00 (less P23,900.00) with legal interest, plus moral damages and attorney's fees. The Intermediate Appellate Court (IAC) affirmed the CFI decision in toto. Petitioners appealed to the Supreme Court. The Petition: Petitioners argued that the authorization was not specific to the sale of flags to the Department, that there were two separate transactions foreclosing commission on the second delivery due to revocation, and that there was no basis for moral damages and attorney's fees as there was no bad faith.
Issue(s)
Whether the respondent, as agent, was authorized to represent the petitioners in the sale of Philippine flags to the Department of Education and Culture. Whether the revocation of the agency on October 17, 1974, barred the respondent from claiming her commission on the second delivery of flags. Whether the commission on the first delivery of flags was fully paid. Whether there was a basis for the award of moral damages and attorney's fees.
Ruling
The Supreme Court modified the decision of the appellate court. Petitioners were ordered to pay respondent P140,994.00 as her commission on the second delivery of flags with legal interest. The awards for moral damages and attorney's fees were deleted.
Ratio Decidendi
On the respondent's authority to represent the petitioners: The Court found the petitioners' argument that the respondent lacked specific authorization to represent them in the transaction with the Department of Education and Culture untenable. The document embodying the agreement used general words, indicating no restrictions on the manner or place of executing the agency. The respondent was instituted as a general agent, empowered to transact all business of the petitioners of a particular kind, which practically covered negotiations leading to and the execution of a contract of sale with any entity. The Court applied the rule that when the terms of an agreement are reduced to writing, the writing is considered to contain all the terms, and no evidence of other terms can be admitted unless it falls under specific exceptions, which the petitioners failed to establish. The broad power granted to the respondent was sufficient to cover the transaction with the Department. On the revocation of agency and entitlement to commission on the second delivery: The Court denied the petitioners' contention that the respondent was not entitled to the commission on the second delivery due to the revocation of the agency. The Court held that the revocation came too late, as the contract of sale had already been perfected and partly executed. Citing Macondray & Co. v. Sellner and Infante v. Cunanan, the Court reiterated the principle that a principal cannot deprive an agent of the commission agreed upon by cancelling the agency and thereafter dealing directly with the buyer. The revocation could not prevent the respondent from earning her commission because the contract of sale was already perfected and partly executed at the time of revocation. On the commission for the first delivery: The Court found merit in the petitioners' contention that the agent's commission on the first delivery was fully paid. The respondent's statement under oath to the Malacañang Complaints and Investigation Office and her lawyer's demand letter dated November 13, 1984, referred exclusively to the 30% commission on the second delivery, without mentioning any unpaid balance from the first delivery. This omission, considering the sizeable sum involved, indicated that the commission on the first delivery was fully paid. Furthermore, the respondent's authorization letter (Exhibit "5-A") bore her signature with the handwritten words "Fully Paid" inscribed above it. The Court found the trial court's basis for ruling forgery (a variance in signature style) inadequate and insufficient to overcome the expert testimony and the circumstances indicating full payment. On the award of moral damages and attorney's fees: The Court ruled against the award of moral damages, stating that they cannot be awarded in the absence of a wrongful act or omission, or of fraud or bad faith. There was no evidence on record to conclude that the revocation of the agency was deliberately effected by the petitioners to avoid payment. The Court also ruled against the award of attorney's fees. While the Civil Code allows attorney's fees when a party's act or omission compels the other to litigate, the Court found that the respondent did not come to court with completely clean hands, and the petitioners had a sincere belief that they did not have to pay commission for the second delivery. The Court also commented adversely on the procurement policies of the Department of Education and Culture, deeming the 30% commission scandalous waste of public funds.
Main Doctrine
A principal cannot deprive an agent of the commission agreed upon by cancelling the agency and thereafter dealing directly with the buyer, especially when the contract of sale has already been perfected and partly executed. The revocation of agency, if made after the perfection and partial execution of the contract, is too late to prevent the agent from earning the commission.