Republic of the Philippines vs. Evangelista

An agency coupled with interest, where a bilateral contract depends upon the agency, is irrevocable at the sole will of the principal. Legaspi's grant to Gutierrez of powers to manage treasure hunting, sue intruders and engage counsel, in consideration of 40% of any treasure found and implemented through counsel's 30% fee from Legaspi's share, constituted such an agency, so the unilateral Deed of Revocation did not terminate Gutierrez's authority to file and prosecute the damages and injunction suit.

Dante Legaspi claimed ownership of a parcel of land in Bigte, Norzagaray, Bulacan. Petitioners Lt. Gen. Jose M. Calimlim, then Chief of the Intelligence Service, Armed Forces of the Philippines and Commanding General of the Presidential Security Group, and Maj. David B. Diciano, an ISAFP officer and former PSG member, represented the Republic of the Philippines. Ciriaco Reyes was the private individual who obtained a treasure-hunting permit from Calimlim.

In November 1999, Calimlim, for the Republic, entered into a Memorandum of Agreement with Reyes granting Reyes a permit to hunt for treasure in land in Bigte, Norzagaray, Bulacan, with Diciano signing as witness. According to the complaint, Reyes together with petitioners thereafter commenced digging, tunneling and blasting works on Legaspi's land, while Calimlim assigned about 80 military personnel to guard and encamp on the area to intimidate Legaspi and other occupants from approaching. On February 15, 2000, Legaspi executed a special power of attorney appointing his nephew Paul Gutierrez as attorney-in-fact with power to deal with the treasure hunting activities, file charges against unauthorized entrants, engage lawyers, dig for treasure and enter into related agreements, in exchange for 40% of any treasure found. Pursuant thereto, Gutierrez engaged Atty. Homobono Adaza to prosecute the suit, agreeing that Adaza would receive 30% of Legaspi's share in any treasure recovered, plus ₱5,000.00 appearance fee per hearing and litigation expenses.

Thereafter, on February 29, 2000, Gutierrez filed the complaint for damages and injunction against petitioners, Ciriaco Reyes and others. Upon filing, a 72-hour temporary restraining order was issued, followed after raffle to Branch 223 by another 72-hour order on March 2, 2000. Petitioners moved on March 14, 2000 to dismiss on the grounds that Gutierrez's authority had been revoked by Legaspi's Deed of Revocation dated March 7, 2000 leaving no real party-in-interest, and that Gutierrez failed to prove the armed men acted on petitioners' orders, and moved on March 17, 2000 for inhibition of the respondent judge for alleged partiality. The trial court found prima facie that Legaspi held title to the subject land, that the diggings and blastings appeared to have been made within its enclosed area, and that the special power of attorney continued to be valid, warranting maintenance of the status quo pending trial on the exact boundaries and liability.

• Revocation of Agency: Petitioner argued that the special power of attorney of Gutierrez to represent Legaspi had already been effectively revoked by Legaspi through a Deed of Revocation dated March 7, 2000, leaving no real party-in-interest to prosecute the suit.
• Dismissal of Complaint: Petitioner maintained that the complaint should be dismissed because Gutierrez failed to establish that the alleged armed men guarding the area were acting on orders of petitioners.
• Inhibition for Partiality: Petitioner argued that respondent judge ought to have inhibited himself for lack of neutrality, faulting non-credence to petitioners' surveyor testimony that diggings were outside Legaspi's land and allegedly biased rulings on objections.

• Agency Coupled with Interest: Respondent countered that the unilateral revocation was invalid because his agency was coupled with interest and therefore irrevocable at the sole will of the principal.

• Revocation of Agency Coupled with Interest: Whether the contract of agency between Legaspi and Gutierrez had been effectively revoked by Legaspi.
• Propriety of Preliminary Injunction and Dismissal: Whether the complaint against petitioners should be dismissed and whether issuance of the writ of preliminary injunction was justified.
• Inhibition for Bias: Whether respondent judge ought to have inhibited himself from further proceeding with the case.

• Revocation of Agency Coupled with Interest: No. The agency was coupled with interest as a bilateral contract depended on it, so the unilateral Deed of Revocation had no effect and Gutierrez retained authority to sue.
• Propriety of Preliminary Injunction and Dismissal: No. Dismissal was unwarranted and the writ was properly issued, Legaspi having shown prima facie a right to peaceful possession violated by diggings within his enclosed land.
• Inhibition for Bias: No. Bias was not established, erroneous or adverse rulings without proof of extrajudicial source or malice being insufficient, and the plea became moot upon the judge's death.

• Revocation of Agency Coupled with Interest: Agency is generally revocable at the principal's will as a personal contract based on trust, the agent's power ceasing upon withdrawal of consent. An exception exists when the agency is coupled with interest, that is, when a bilateral contract depends upon the agency, because rights of the agent and third persons are also affected and the agency follows the condition of the bilateral agreement. Applied here, Gutierrez was empowered to manage treasure hunting, sue intruders, engage lawyers, dig and contract therefor, for 40% of any treasure found, and pursuant thereto engaged Atty. Adaza for 30% of Legaspi's share; the treasure was thus the subject matter in which Gutierrez and Adaza held an interest, rendering the agency irrevocable at Legaspi's sole will.
• Propriety of Preliminary Injunction and Dismissal: A writ of preliminary injunction preserves the status quo ante pending adjudication upon prima facie showing of (1) a right to be protected and (2) violative acts, under Section 3, Rule 58 of the 1997 Rules of Civil Procedure requiring only ostensible right to final relief, not conclusive proof of violation. Applied here, Legaspi's title established prima facie a right to peaceful possession pendente lite, while diggings were shown within the enclosed area claimed under that title; whether the fence exceeded titled area remained a factual issue for trial, making interim preservation necessary to prevent serious damage and ineffectual judgment.
• Inhibition for Bias: Bias and partiality can never be presumed and must overcome the presumption of impartiality by clear showing, not bare allegations. Appreciation of evidence, rulings on objections, and repeated adverse rulings, even if erroneous and vigorously expressed, do not prove disqualifying bias absent malice or proof that the opinion stemmed from an extrajudicial source rather than evidence learned in the proceedings. Applied here, no discernible pattern of bias appeared from discounting the defense surveyor or ruling on objections, and inhibition in any event became moot and academic upon respondent judge's death during pendency, with the main damages case to proceed before another judge.

• Agency; general revocability — By contract of agency the agent binds himself to render service or act in representation of the principal with the latter's consent. Because representation rests on trust and confidence and depends on the principal's will and license, the agency is generally revocable at the principal's will, the agent's power ceasing upon withdrawal.
• Agency coupled with interest; irrevocability — When a bilateral contract depends upon the agency, such that the agency is inserted as a clause in another agreement and the agent and third persons acquire an interest in its subject matter, the agency becomes part of that obligation and follows its condition. It is therefore irrevocable at the sole will of the principal, since revocation would affect not only the principal's rights but also those of the agent and third persons.
• Preliminary injunction; requisites and proof required — A writ of preliminary injunction is an ancillary preventive remedy to preserve the status quo and prevent threatened or continuous irremediable injury before full adjudication. It issues upon showing (1) a prima facie right to be protected and (2) acts sought to be enjoined violative of that right, as implemented by Section 3, Rule 58 of the 1997 Rules of Civil Procedure.
• (a) applicant is entitled to relief consisting in restraining continuance of complained acts or requiring performance;
• (b) continuance or non-performance during litigation would probably work injustice to applicant; or
• (c) a party, court, agency or person is doing, threatening or attempting acts probably in violation of applicant's rights respecting the subject matter and tending to render judgment ineffectual. Mere prima facie or ostensible right to final relief suffices; conclusive proof of violation is reserved for trial on the merits.
• Disqualification for bias and prejudice — Bare allegations do not overcome the presumption that justice was dispensed without fear or favor. Adverse or erroneous evidentiary appreciation and rulings on objections, without proof of malice, do not establish bias; disqualifying bias must stem from an extrajudicial source and produce an opinion on the merits on a basis other than what was learned from participation in the case.

• "A contract of agency is generally revocable as it is a personal contract of representation based on trust and confidence reposed by the principal on his agent." — States the general rule of revocability from which the exception for agency coupled with interest is derived.
• "When an agency is constituted as a clause in a bilateral contract, that is, when the agency is inserted in another agreement, the agency ceases to be revocable at the pleasure of the principal as the agency shall now follow the condition of the bilateral agreement." — Formulates the controlling test for irrevocability applied to Gutierrez's treasure-share and counsel-fee arrangement.
• "an applicant for a writ is required only to show that he has an ostensible right to the final relief prayed for in his complaint" — Defines the minimal prima facie threshold that justified the injunction to protect Legaspi's titled possession.
• "Bias and partiality can never be presumed." — Anchors the rejection of the inhibition plea absent clear proof overcoming the presumption of judicial impartiality.

• Webb vs. People, 276 SCRA 243 (1997) — Followed as controlling on disqualification; adverse and erroneous rulings on motions do not sufficiently prove bias, which must stem from an extrajudicial source.
• Saulog vs. Court of Appeals, 262 SCRA 51 (1996) — Followed for the proposition that only an ostensible right to final relief need be shown to obtain preliminary injunction.
• Buayan Cattle Co., Inc. vs. Quintillan, 128 SCRA 276 (1984) — Cited to support that mere prima facie evidence suffices at injunction hearing.
• Developers Group of Companies, Inc. vs. Court of Appeals, 219 SCRA 715 (1993) — Cited to support that conclusive showing of rights violation is not required before trial on merits.
• Philippine National Bank vs. Ritratto Group, Inc., 362 SCRA 216 (2001) — Cited to define preliminary injunction as ancillary or preventive remedy preserving rights during pendency.
• Republic of the Philippines vs. Silerio, 272 SCRA 280 (1997) — Cited to define injunction as prevention of threatened or continuous irremediable injury before full adjudication.
• Heirs of Joaquin Asuncion vs. Commission on Audit, 304 SCRA 322 (1999) — Cited for the two conditions for injunction: prima facie right and violative acts.

• Art. 1868, Civil Code — Defines agency as a contract where the agent binds himself to render service or act in representation of the principal with consent or authority; applied to characterize Gutierrez's special power of attorney.
• Art. 1927, Civil Code — Provides the exception that agency coupled with interest, where a bilateral contract depends upon it, is irrevocable; applied to sustain Gutierrez's continued authority despite Deed of Revocation.
• Section 3, Rule 58, 1997 Rules of Civil Procedure — Enumerates grounds for preliminary injunction including probable injustice or probable violation rendering judgment ineffectual; applied to justify preservation of Legaspi's possession pending damages trial.

Austria-Martinez, Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.