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

FACTS:

Respondent Nacianceno succeeded in convincing officials of then DECS to purchase, without public bidding, one million pesos worth of national flags for the use of public schools throughout the country. And for her service, she was entitled to a commission of thirty (30%) percent.

The first delivery was made by the United Flag Industry. The following day, the respondent’s authority to represent the United Flag Industry was revoked by petitioner Primitivo Siasat.

According to the findings of the court below, Siasat, after receiving the payment for the first delivery, tendered only 5% of the amount received, to the respondent as payment of her commission. The latter allegedly protested. She refused to accept the said amount insisting on the 30% commission agreed upon. The respondent was prevailed upon to accept the same because of the assurance of the petitioners that they would pay the commission in full after they delivered the other half of the order. The respondent state that she later on learned that petitioner Siasat had already received payment for the second delivery of 7.833 flags. When she confronted the petitioners, they vehemently denied receipt of her payment, at the same time claiming that the respondent had no participation whatsoever with regard to the second delivery of flags and that the agency had already been revoked. She then filed a case in court.

The trial court decided in favor of the respondent.

In assailing the appellate court’s decision, the petition tenders the following arguments: first, the authorization making the respondent the petitioner’s representative merely states that she could deal with any entity in connection with the marketing of their products for a commission of 30%. There was no specific authorization for the sale of 15,666 Philippine flags to the Department; second, there were two transactions involved evidenced by the separate purchase orders and separate delivery receipts. The revocation of agency effected by the parties with mutual consent, therefore, forecloses the respondent’s claim of 30% commission on the second transaction; and last, regarding damages and attorneys fees.

ISSUE:

Whether respondent is authorized to act as agent.

RULING:

We find respondent’s argument regarding respondent’s incapacity to represent them in the transaction with the Department untenable.

There is no merit in petitioners’ allegations that the contract of agency between the parties was entered into under fraudulent representation because respondent “would not disclose the agency with which she was supposed to transact and made the petitioner believe that she would be dealing with The Visayas”, and that “the petitioner had known of the transactions and/or project for the said purchase of the Philippine flags by the Department of Education and Culture and precisely it was the one being followed up also by the petitioner.”

If the circumstances were as claimed by the petitioners, they would have exerted efforts to protect their interests by limiting the respondent’s authority. There was nothing to prevent the petitioners from stating in the contract of agency that the respondent could represent them only in the Visayas. Or to state that the Department of Education and Culture and the Department of National Defense, which alone would need a million pesos worth of flags, are outside the scope of the agency. As the trial court opined, it is incredible that they could be so careless after being in the business for fifteen years.

If the contracts were separate and distinct from one another, the whole or at least a substantial part of the government’s supply procurement process would have been repeated. In this case, what were issued were mere indorsements for the release of funds and authorization for the next purchase.

Since only one transaction was involved, we deny the petitioners’ contention that respondent Nacianceno is not entitled to the stipulated commission on the second delivery because of the revocation of the agency effected after the first delivery. The revocation of agency could not prevent the respondent from earning her commission because as the trial court opined, it came too late, the contract of sale having been already perfected and partly executed.

*Case digest by Jhazeel Zhan Jebone, JD-IV, for Partnership and Agency, SY 2019-2020