Agency

Barretto v Santa Marina (1913) TorresUnder what topic: How is agency extinguished; Revocation.

Plaintiff-Appellee: Antonio Barretto

Defendant-Appellant: Jose Santa Marina

Synopsis: Barretto was agent/manager of Santa Marinas business. A Chinaman didnt pay his debt to the company, so Barretto felt responsible for the loss. He sent a letter to Santa Marina in this wise: I have always thought that when the manager of a business trips up in a matter like this, he should tender his resignationThe position is at your disposal as you like. Santa Marina did not reply; he eventually appointed another agent. Barretto seeks the payment of his salary. He claims that and that the revocation of his agency is in violation of the contract between him and Santa Marina. Court held that the agency was validly revoked. Barrettos resignation was freely and voluntarily made. Even if Santa Marina did not reply to Barrettos letter, the silence and lack of reply on his part was sufficient indication that the resignation had been virtually accepted. Barretto had no right to demand an indemnity, particularly since he acknowledged that he had been negligent in the discharge of his duties. Barretto voluntarily resigned and placed at Santa Marinas disposal the position of agent and manager. And if Santa Marina deemed it suitable to relieve him for his acts of negligence and overstepping, as well as of resigning, it cannot be explained how such a person can be entitled to indemnity for losses and damages from his principal who merely exercised his lawful right of relieving Barretto from the position which he had voluntarily given up.

Doctrine: In view of the resignation of the agent, the principal had to look for and appoint another a lawful act which cannot serve as a ground upon which to demand indemnity. The agent could not expect, nor ought to have expected, that the principal should have insisted on his unsuccessful continuance of his position or that the principal should not have accepted the resignation.

By the mere fact that the principal remained silent and later designated another person as agent, the agent (who resigned) should have understood that the resignation had been accepted. If the acceptance was not communicated to him immediately, it was owing to the circumstance that the owner did not have anyone else whom he could appoint. And as soon as the principal appointed another, the principal had revoked the agency.

Agency Bettina

Facts: Antonio Barretto filed suit against Jose Santa Marina, the owner and proprietor of La Insular Cigar and Cigarette Factory. Barretto, for many years prior, held the position of Agent of Santa Marina in the Philippines for the management of the business. His services were rendered pursuant to a contract whereby Santa Marina obligated himself to hire Barretto and pay him P37,000 per annum for so long as [Barretto] should not show discouragement.

Barretto alleged that Santa Marina, without reason, justification, or pretext and in violation of the contract mentioned, summarily and arbitrarily dispensed with his services and removed him from the management of the business. Since then, he refused to pay Barretto compensation due him for services rendered. Barretto stated that he suffered losses and damages in the sum of P100,000.

Santa Marina denied each and all allegations contained in the complaint. He set forth that the Barretto had no contract with him in which any period of time was stipulated. He said that he revoked for just cause the power conferred and that subsequent to the revocation of such power and on occasion of Barretto having sold his rights and interests in the business and in consideration of the sum he had received, Barretto had renounced all action, intervention, and claim that he might have had against Santa Marina.

Counsel presented to the court a stipulation from the will of Don Joaquin Sana Marina (predecessor of Jose Santa Marina) which provided for a salary, allotment or emolument for Barretto as judicial administration of Joaquins estate. This renumeration paid to him was independent to that which pertained to him as manager of La Insular factory before and after he was the judicial administrator.

Demand is made in the present suit for the sum of P137,000, together with legal interest P37,000 as salary for the year 1910 and P100,000 as an indemnity for losses and damages when he was unjustly removed.

Issue: Whether Barretto was entitled to the P100,000 (indemnity). NO.The most important fact of the case is Barrettos renunciation or resignation of the position he held as agent and manager of La Insular, which was freely and voluntarily made by him on the occasion of the insolvency and disappearance of Uy Yan, who bought from the factory products amounting to P97,000 without paying for his debt.

In a letter dated January 2, 1909 and addressed to Santa Marina, Barretto reported Uy Yans failure to pay the amount and how he acknowledged that he had been more generous to Uy Yan than he should have been. He then said that I have always thought that when the manager of a business trips up in a matter like this, he should tender his resignation The position is at your disposal as you like.

The letter is authentic and neither party denied nor rejected it. Santa Marina did not immediately reply to the letter and tell him what his opinion and decision was but it is no less true that the silence and lack of reply on the part of the chief owner of the factory were sufficient indications that the resignation had been virtually accepted. He intended to act cautiously. As the addressee, he knew, at that time, of no one who could relieve Barretto, who had resigned, and it was thereafter presumed that he was looking for someone to substitute the said agent and manager of La Insular. He later communicated to Barretto that he had revoked the power conferred and had appointed Mr. J. McGavin to substitute him in the position, whereby his resignation was expressly accepted.

Barretto had resigned his position and notwithstanding the lapse of several months before its express acceptance, it cannot be understood that he has any right to demand an indemnity for losses an damages, particularly since he ostensibly and frankly acknowledged that he had been negligent in the discharge of his duties and had overstepped his authority with respect to the said Chinaman.

Record does not show that Santa Marina required him to resign but that he voluntarily did so as stated by the letter. For the reasons therein mentioned, he resigned and placed at the latters disposal the position of agent and manager. And if Santa Marina deemed it suitable to relieve him for his acts of negligence and overstepping, as well as of resigning, it cannot be explained how such a person can be entitled to indemnity for losses and damages from his principal who merely exercised his lawful right of relieving Barretto from the position which he had voluntarily given up.

Barretto was thus not really dismissed or removed. What occurred was that in view of his resignation, the owner had to look for and appoint another agent and manager a lawful act performed by the principal owner and which cannot serve as a ground upon which to demand indemnity. The plaintiff could not expect, nor ought to have expected, that the defendant should have insisted on his unsuccessful continuance of his position or that the owner should not have accepted the resignation.

By the mere fact that he remained silent and later designate another person to discharge Barrettos previous duties, Barretto should have understood that the resignation had been accepted. If the acceptance was not communicated to him immediately, it was owing to the circumstance that the owner did not have anyone else whom he could appoint. As soon as he appointed McGavin, he revoked the power he revoked the power through a letter which was presented to him by McGavin himself.

Issue: Whether Barretto was entitled to the P37,000. NO.RE: Contract between Barretto and deceased Joaquin Santa Marina. Santa Marina acknowledged the verbal contract and its ratification by him. However, he denied that there was any stipulation therein that Barretto should hold his office for any specific period of time fixed by and between the contracting parties for the deceased Joaquin, in conferring power upon the plaintiff did not do so for any specific time, nor did he indicate a set period for which Barretto should be agent and manager. The date for termination was also not indicated.

Santa Marina, in executing the instruement whereby the agreement between Joaquin and Barretto was ratified, did no more than to accord to Barretto the same confidence that the defendants predecessor had in him.

Art. 1733 of the CC states that The principal may, at his will, revoke the power and compel the agent to return the instrument containing the same in which the authority was given. Art. 279 of the Code of Commerce provides that The principal may revoke the commission instructed to an agent at any stage of the transaction, advising him thereof, but always being liable for the result of the transactions which took place before the latter was informed of the revocation.,

From the above legal provisions it is clearly to be inferred that the contract of agency can subsist only so long as the principal has confidence in his agent, because, from the moment such confidence disappears and although there be a fixed period for the excercise of the office of agent, a circumstance that does not appear in the present case the principal has a perfect right to revoke the power that he had conferred upon the agent owing to the confidence he had in him and which for sound reasons had ceased to exist.

It would be improper, for the purpose of supplying such defect, to apply to the present case the provisions of article 1128 of the Civil Code. This article relates to obligation for which no period has been fixed for their fulfillment, but, which, from their nature and circumstances, allow the inference that there was an intention to grant such period to the debtor, wherefore the courts are authorized to fix the duration of the same, and the reason why it is inapplicable is that the rights and obligations existing between Barretto and Santa Marina are absolutely different from those to which it refers, for, according to article 1732 of the Civil Code, agency is terminated.

It is not incumbent upon the courts to fix the period during which contracts for services shall last. Their duration is understood to be implicity fixed, in default of express stipulation, by the period for the payment of the salary of the employee. Therefore the doctrine of the tacit renewal of leases of property, established in article 1566 of the Civil Code, is not applicable to the case at bar. And even though the annual salary fixed for the services to be rendered by the plaintiff as agent and manager of the La Insular factory, was P37,000, yet, in accordance with the custom universally observed throughout the world, salaries fixed for the year are collected and paid in monthly installments as they fall due, and so the plaintiff collected and was paid his remuneration; therefore, on the latter's discontinuance in his office as agent, he would at most be entitled to the salary for one month and some odd days, allowed in the judgment of the lower court.

From the mere fact that the principal no longer had confidence in the agent, he is entitled to withdraw it and to revoke the power he conferred upon the latter, even before the expiration of the period of the engagement or of the agreement made between them; but, in the present case, once it has been shown that, between the deceased Joaquin Santa Marina and the latter's heir, now the defendant, on the one hand, and the plaintiff Barretto, on the other, no period whatever was stipulated during which the last-named should hold the office and manager of the said factory, it is unquestionable that the defendant, even without good reasons, could lawfully revoke the power conferred upon the plaintiff and appoint in his place Mr. McGavin.