While researching for a case, you heard your secretary knocking. She then escorted to your law office a client. To your surprise, it was Sol Honey; the 27-year old popular local actress who rose to fame because of the television shows The Married World (2020), Nonetheless (2021), and Our Names(2021). You asked Sol to take her seat so the two of you can prepare for an intake interview. During the interview, you learned of the following information:

Sol recently found out that her mother, Divina, undertook several activities. She has visited you for a particular case where she is involved, but also wanted to raise some other concerns.

Sometime 2011, Divina borrowed from Mateo, her neighbor-friend, P500,000. She told him that this is to fund Sol's acting auditions, and requested that Mateo deposit the amount to Sol's bank account Divina opened for Sol when the latter was still 7 yearsold. After paying half of the amount a year after, Divine asked for additional P500,000 from Mateo for the same purpose. Mateo declined but referred Divine to his friend, Gerard. Using the same story, Divine secured another loan from Gerard. Both Mateo and Gerard asked Divine to pay the loan, and approached Sol. Sol mentioned that at that time, she was then working part-time in a coffee shop along Tomas Morato and appearing as extras and for minor roles in some television shows. She added that these loans were procured absolutely without her knowledge. Nevertheless, Sol shared that she tried to pay the loans as much as she could coming from her salaries from the coffee shop and acting gigs. In 2015, Divine approached Mateo and Gerard again. The two, however, declined since there was still an outstanding balance (P100,000 to Mateo, P300,000 to Gerard). They referred her to a common friend River, and even manifested to him that Sol was helping Divine pay the remaining debt. As a result, River lent Divine another P1 Million. According to Sol, all of these happened before she gained widespread recognition thanks to The Married Worldshow.

After sharing the above, Sol reached out to her bag and handed to you a photocopy of a contract entered into by Divine, to wit:

COMMISSION AGENCY AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This COMMISSION AGENCY AGREEMENT is entered into this 3^rd day of January, 2019, in Quezon City, Philippines, by and between:

GRILEE PHILIPPINES, INC.,a corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines, with office address at Core Central, 31^st Street, Bonifacio Global City, Taguig City, Philippines, herein represented by its President,Andrew Pratt King, hereinafter referred to as the"CAR COMPANY";

and

DIVINE G. HONEY, of legal age, Filipino, married, with residential address at Wharton St., Ferndale Villas, Pasong Tamo, Quezon City, sole proprietor of China Cars North QC, hereinafter referred to as the"CAR DEALER";

WITNESSETH:

WHEREAS, the CAR DEALER has offered to provide marketing and sales agency services, and the CAR COMPANY has confirmed the acceptance of the said offer, subject to the following terms and conditions:

1. The CAR COMPANYgrants the right to market and exclusively sell the motor vehicles in the Northern Quezon City area, particularly in North EDSA, under the following conditions:
   1. The CAR COMPANY shall furnish motor vehicles of his manufacture to the CAR DEALER for the latter's establishment in Quezon City, and shall invoice them at the same price it has fixed for sales and, in the invoices, shall make and allowance of a discount of twenty-five (25) per cent of the invoiced prices, as commission on the sale; a five (5) per cent guarantee commission; and the CAR DEALER shall order motor vehicles by two units, of the same variant of each model.
   2. The CAR DEALER binds itself to pay the CAR COMPANY for the motor vehicles received, within a period of sixty days from the date of their shipment.
   3. The expenses for transportation and shipment shall be borne by the CAR COMPANY, and the freight, insurance, and cost of unloading from the vessel at the point where the motor vehicles are received, shall be paid by the CAR DEALER.
   4. If, before an invoice falls due, the CAR COMPANY should request its payment, said payment when made shall be considered as a prompt payment, and as such a deduction of five (5) per cent shall be made from the amount of the invoice.The same discount shall be made on the amount of any invoice which the CAR COMPANY may deem convenient to pay in cash or in manager's check.
   5. The CAR DEALER binds itself to give notice at least fifteen (15) days beforehand of any changes in price which it may plan to make in respect to the motor vehicles, and agrees that if on the date when such change takes effect it should have any order pending to be served to the CAR DEALER, such order shall enjoy the advantage of the change if the price thereby be lowered, but shall not be affected by said change if the price thereby be increased, for, in this latter case, the CAR COMPANY assumed the obligation to invoice the motor vehicles at the price at which the order was given.
   6. The CAR DEALER binds itself not to sell any other kind except the motor vehicles of the CAR COMPANY.
2. In compensation for the expenses of advertisement which, for the benefit of both contracting parties, the CAR DEALER may find itself obliged to undertake, the CAR COMPANY assumes the obligation to offer and give the preference to the CAR DEALER in case anyone should apply for the exclusive agency for any districts not comprised with the Northern Quezon City area.
3. The CAR DEALER may sell, or establish branches of his agency for the sale of the motor vehicles in all the districts, municipalities or cities of the Philippines where there are no exclusive agents, and shall immediately report such action to the CAR COMPANY for its approval.
4. This contract is made for an unlimited period, and may be terminated by the CAR COMPANY or the CAR DEALER on a previous notice of one hundred twenty (120) days to the other party.

Sol learned that her mother was sued by the car company for damages for selling the motor vehicles on top of the fixed price, for not ordering motor vehicles by two units of the same variant of each model, and for operating a dealership, not in North EDSA, but along Quezon Avenue. When she called her mother to confirm this, Divine answered that there was no truth to the allegation. Nonetheless, Sol wanted you to get to the bottom of this since the car company is starting to get popular in the Philippines. She is closely watching this at it might be a source of a new controversy.

Sol also discovered that prior to Divine leaving for the United States, Divine undertook the following actions: (a) issued a power of attorney to her Aunt Deborah, Divine's sister; and (b) sold some properties of Eileen, Sol's friend and a famous comedian.

Sol shared that Deborah called her to mediate between her and Divine. Deborah explained that before Divine went to the United States, the latter issued a power of attorney. According to Deborah, Divine was threatening her for some acts she performed. Sol then proceeded to show you a screenshot of the document:

GENERAL POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

I, DIVINE G. HONEY, Filipino, of legal age, married, and resident ofWharton St., Ferndale Villas, Pasong Tamo, Quezon City,do hereby appoint, name and constitute DEBORAH G. ENCARNACION, Filipino, of legal age, married and resident of Loyola St., Sampaloc, Manila to be my true and lawful attorney to do the following:

1. To act in, manage and conduct all my affairs, exercise administration, control and supervision over my business, enterprises and property in the Philippines;
2. To act as my general representative and agent with full authority, and for that purpose in my name and on my behalf to execute any act which she may deem as appropriate;
3. To ask, demand, sue for, recover, and receive all sums of money, debts, dues, goods, wares, merchandise, chattels, effects and things of whatsoever nature or description, which now or hereafter shall be or become due, owing, payable or belonging to me, in or by any right, title, ways or means howsoever, and upon receipt thereof or any part thereof, to make, sign, execute and deliver such receipts, releases or other discharges;
4. To make, sign, seal, execute and deliver contracts, documents, agreements and other writings upon such terms and conditions acceptable to my said attorney; and
5. To acts, deeds, matters and things whatsoever, in or about my estate, property and affairs, or to concur with persons jointly interested with myself therein doing all acts, deeds, matters, and things herein, either particularly or generally described, as fully and effectually to all intents and purposes as I could do in my proper person if personally present;

HEREBY GIVING AND GRANTING unto my said attorney general power and authority whatsoever requisite or proper to be done in or about the premises, as fully to all intents and purposes as I might or could lawfully do if personally present, and hereby certifying and confirming all that my said attorney shall do or cause to be done under these presents.

IN WITNESS WHEREOF, we have hereunto set our hands this 1^st day of September 2021, in Quezon City, Manila.

In connection thereto, Sol requested you to set a meeting between Deborah and Divine to settle the matter.

Sol also learned that, in the first half of 2020, Divine was engaged by Eileen and her husband, Jerald, to sell their house in Tivoli Royale Subdivision, Quezon City, and their Hyundai Starex. At that time, the spouses knew that Sol was making both ends meet, juggling between showbiz and her part-time work in the coffee shop, and paying her mother's debts. Engaging Divine was their means to help Sol; besides Eileen and Jerald are planning to migrate to the United States for good. Divine respectfully declined the engagement. However, the spouses were insistent, and they delivered the Hyundai Starex and a power of attorney to Divine's house. Divine called Eileen to reiterate her decision to refuse.

Sometime January 2022, Eileen and Jerald went back to Manila for a vacation. Sol invited them for dinner in her townhouse in Ferndale, Quezon City. In the middle of their discussion, Eileen asked Sol what happened to the Starex she asked Divine to sell. Surprised, Sol commented that she did not know about this set-up, that she and Divine had a falling out, and that her estranged mother is now in the United States. Eileen narrated to Sol everything about the transaction. She discovered from Eileen that Divine sold the Starex for P1 Million, and the Tivoli Royale property for P40 Million. After Eileen tracked where Divine was staying in the United States, she paid Divine a visit and asked her what happened to the properties and to deliver the proceeds to her. Sol, ashamed of what happened, started to cry and begged for Eileen's forgiveness.

Sol requested you to look into this matter, as she tries to appease Eileen and Jerald who mentioned that they are exploring filing a case against Divine.

After sharing her concerns about her mother, Sol mentioned that the main reason why she visited you was because of her anticipated legal dispute with Vive, her former talent management company. Sol told you that she has received from the law firm of Vive of the latter's intention to sue her for breach of contract. Now self-managing, Sol was a former talent of Vive Entertainment. She initially signed a three-year exclusive talent management contract in 2011. This was renewed in 2014 for ten more years, which shall end in 2024. An addendum was made in 2015, effectively extending the contract until 29 June 2029.

Sol claimed that she was not assisted by her parents, nor was given a lawyer to help her understand the contract. She added that Vive took advantage of her circumstances when she was not in a good condition and mindset to understand their contract. Furthermore, Sol alleged that the 2014 contract gave Vive the sole prerogative to extend or renew the same, and any subsequent addendum has the potential to bind her until 2034. Disappointed, Sol also mentioned that the contract was grossly unfair to her since the talent management commission amounts to 40% of her total earnings, and that Vive neither actively scouted engagements for her nor prioritized her in giving projects. Sol added that Vive even neglected her educational welfare. Because of her commitments, she just finished high school. Lastly, despite wanting to have a tweetums and wholesome image, it was Vive who positioned her to be a local vixen. Nonetheless, she attributed her popularity to the television channel JTBCBN, which entrusted her the role of Alexa. Had it not been for this break, Sol will just be portraying minor sexy roles; considering the acting gigs usually procured by Vive.

Claiming that Vive was predatory, oppressive and abusive, Sol she cut her ties with the talent management agency and announced that she will be independently-managed. She then started negotiating with brands for product endorsements, changed her image to a more serious dramatic actress, and launched her music album Desire.

When Sol finished completed her story, she asked whether you can take the case, and how much it would cost her. You discussed the fee structure and the projected lawyer's fees, to which she immediately agreed. After escorting her out of your law office, you immediately started working.

I

River called up Sol's manager asking Sol to pay him her debt. Sol manifested that she has no plans to bail her mother out from the latter's debt to him, and even those she owed to Mateo or Gerard. River was aghast. He communicated this to Mateo and Gerard. The three of them threatened to sue Sol and make everything public.

Considering all known facts, will Sol be held liable? (4%)

II

During the Zoom meeting with Divine and Deborah, you learned that Deborah performed the following acts, as a result of the general power of attorney (GPA) given to her:

1. Engaged a consultant to conduct location analysis and territory planning for the proposed China Cars North QC, which shall be the site of the first Grilee dealership in Quezon City;
2. Leased a piece of land for a minimum of eighteen (18) months, and renewable for another eighteen (18) months with 30-day notice, on the site identified to be the most strategic location for the Grilee dealership;
3. Proceeded with the construction of the China Cars North QC, dubbed as Grilee Quezon Ave., based on the location analysis and territory planning her team conducted;
4. Bought two (2) units of Grilee Grand sedan from the car company to serve as service vehicles, with a 20% discount, at P800,000; and
5. Borrowed a Grilee Majesty SUV for personal and business use, at P20,000 per month.

Divine raised the argument that since the agency is a mere GPA, Deborah needed to secure a special power from her to effect the same. Since she issued no special power, Divine claims that only Deborah should be held liable for the foregoing acts, and that the debtors contracted by Deborah have no recourse against her. Deborah claims that everything she performed are in keeping with the contract agency, albeit a GPA.

1. Who between Divine and Deborah raised a correct argument? (3%)
2. Evaluate each act performed by Deborah and state whether Divine will be bound thereto. (5%)

III

In the same Zoom meeting, you inquired from Divine about the suit against her by Grilee Philippines, Inc. Divine admitted all allegations made by the car company. However, she manifested that she has no liability to the car company, and even if she has one, it should be Deborah who should be liable since she is the one operating the business without the benefit of a special power.

A day after, you were informed by Sol that the lawyer of Grilee Philippines, Inc. wrote another letter to Divine reminding her of the contract which was for commission agency, and that they are asking when will the unsold units be returned to them so they can arrange for the pick-up.

Immediately thereafter you called Deborah about this. She confirmed that every now and then, the car company allowed her to return unsold units. However, she has no idea of the contract for commission agency. She just manifested that the only document left to her by Divine was the GPA, and she was just instructed to carry out the car dealership business in North Quezon City.

1. Who between Divine and Grilee Philippines, Inc. raised a correct argument? (3%)
2. Will Divine be liable for the acts of Deborah? (3%)

IV

As the Zoom meeting approaches its end, you respectfully requested Divine to stay for a while; to which she agreed. When asked about the properties of Eileen and Jerald, Divine became dismissive. She mentioned that she had nothing to do with it since she already declined the engagement. Sensing that you will not be able to get anything from Divine, you ended the meeting and immediately called Deborah.

According to Deborah, Divine sold the Starex and used the proceeds to pay off her debt to River. As for the house in Tivoli Royale, she was able to sell it for P45 Million. However, she used the P5 Million as her start-up fund when migrating to the United States.

Shortly after your conversation with Deborah, you received a call from Jerald demanding the remittance of the proceeds of the sale of the properties. He told you that he will be filing a case against Divine and Sol.

1. Considering the entirety of the facts, what were the duties that Divine should have acted upon in connection with the properties of Eileen? (4%)
2. What is the effect of the demand made by Jerald? (2%)
3. What will be the liabilities of Sol, if any? (2%)

V

After the one-on-one conference with Divine, you turned on your television to watch some news. Alas! It was a press conference headed by Vive's lawyer. Claiming a valid and existing agency and management contract, the lawyer requested Sol to honor and respect the sanctity of contracts, and warned third parties that direct dealings with Sol as a performer or endorser are in violation of her contract with Vive. In order for Sol to honor her contract with Vive, and stop her from continuously violating the agreement, Vive will press charges against Sol for damages in the amount of P100 Million. This represents the commission Vive should have earned when Sol dealt with some brands, projected loss of earnings, and moral damages.

From the facts stated, identify all relevant legal issues and address all of them. (4%)