EUROTECH INDUSTRIAL TECHNOLOGIES, INC. v.

CUIZON

EUROTECH INDUSTRIAL TECHNOLOGIES, INC. v. CUIZON

G.R. No. 167552; April 23, 2007

Ponente: J. Chico-Nazario

FACTS:

From January to April 1995, petitioner sold to Impact Systems various products allegedly amounting to
P91,338.00 pesos. Subsequently, respondents sought to buy from petitioner one unit of sludge pump
valued at P250,000.00 with respondents making a down payment of P50,000.00. When the sludge
pump arrived from the United Kingdom, petitioner refused to deliver the same to respondents without
their having fully settled their indebtedness to petitioner. Thus, on 28 June 1995, respondent EDWIN
and Alberto de Jesus, general manager of petitioner, executed a Deed of Assignment of receivables in
favor of petitioner. Impact systems is owed by ERWIN Cuizon.

Despite the existence of the Deed of Assignment, respondents proceeded to collect from Toledo Power
Company the amount of P365,135.29. Alarmed by this development, petitioner made several demands
upon respondents to pay their obligations. As a result, respondents were able to make partial payments
to petitioner. On 7 October 1996, petitioner's counsel sent respondents a final demand letter wherein it
was stated that as of 11 June 1996, respondents' total obligations stood at P295,000.00 excluding
interests and attorney's fees. Because of respondents' failure to abide by said final demand letter,
petitioner instituted a complaint for sum of money, damages, with application for preliminary
attachment against herein respondents

By way of special and affirmative defenses, respondent EDWIN alleged that he is not a real party in
interest in this case. According to him, he was acting as mere agent of his principal, which was the
Impact Systems, in his transaction with petitioner and the latter was very much aware of this fact.

ISSUE:

Whether the act of Edwin in signing the Deed of Assignment binds his principal Impact Systems

HELD:

Yes, the act of Edwin in signing the Deed of Assignment binds Impact Systems
 The Supreme Court held that in a contract of agency, a person binds himself to render some service or
to do something in representation or on behalf of another with the latter's consent. Its purpose is to
extend the personality of the principal or the party for whom another acts and from whom he or she
derives the authority to act. It is said that the basis of agency is representation, that is, the agent acts for
and on behalf of the principal on matters within the scope of his authority and said acts have the same
legal effect as if they were personally executed by the principal.

In this case at hand, the parties do not dispute the existence of the agency relationship between
respondents ERWIN as principal and EDWIN as agent.

Eurotech Industrial Technologies, Inc. v. Edwin Cuizon and Erwin Cuizon G.R. No. 167552 April 23, 2007
FACTS:

Eurotech is engaged in the business of importation and distribution of various European industrial
equipment. It has as one of its customers Impact Systems Sales which is a sole proprietorship owned by
Erwin Cuizon. Petitioner sold to Impact Systems various products allegedly amounting to P91,338.00.
Cuizons sought to buy from Eurotech 1 unit of sludge pump valued at P250,000.00 with Cuizons making
adown payment of P50,000.00. When the sludge pump arrived from the United Kingdom,
Eurotechrefused to deliver the same to Cuizons without their having fully settled their indebtedness
toEurotech. Thus, Edwin Cuizon and Alberto de Jesus, general manager of Eurotech, executed a Deedof
Assignment of receivables in favor of Eurotech. Respondents, despite the existence of the Deed of
Assignment, proceeded to collect from Toledo Power Company the amount of P365,135.29. upon
learning this,Eurotech made several demands upon Cuizons to pay their obligations. As a result,

Cuizons were able to make partial payments to Eurotech. Cuizons

total obligations stood at P295,000.00 excluding interests and

attorneys fees.

Edwin Cuizon alleged that he is not a real party in interest in this case. According to him, he was acting
as mere agent of his principal, which was the Impact Systems, in his transaction with Eurotech and the
latter was very much aware of this fact.

ISSUE:

Whether or not Edwin exceeded his authority when he signed the Deed of Assignment thereby binding
himself personally to pay the obligations to Eurotech.
RULING:

No. Edwin insists that he was a mere agent of Impact Systems which is owned by Erwin and that his
status as such is known even to Eurotech as it is alleged in the Complaint that he is being sued in his
capacity as the sales manager of the said business venture. Likewise, Edwin points to the Deed of
Assignment which clearly states that he was acting as a representative of Impact Systems in said
transaction. In a contract of agency, a person binds himself to render some service or to do something in
representation

or on behalf of another with the latters consent. Its purpose

is to extend the personality of the principal or the party for whom another acts and from whom he or
she derives the authority to act. The basis of agency is representation, that is, the agent acts for and on
behalf of the principal on matters within the scope of his authority and said acts have the same legal
effect as if they were personally executed by the principal. An agent, who acts as such, is not personally
liable to the party with whom he contracts. There are 2 instances when an agent becomes personally
liable to a third person. The first is when he expressly binds himself to the obligation and the second is
when he exceeds his authority. In the last instance, the agent can be held liable if he does not give the
third party sufficient notice of his powers. Edwin does not fall within any of the exceptions contained in
Art. 1897. In the absence of an agreement to the contrary, a managing agent may enter into any
contracts that he deems reasonably necessary or requisite for the protection of the interests of his
principal entrusted to his management.

Edwin Cuizon acted well-within his authority when he signed the Deed of Assignment. Eurotech refused
to deliver the 1 unit of sludge pump unless it received, in full, the payment for Impact Systems

indebtedness. Impact Systems desperately needed the

sludge pump for its business since after it paid the amount of P50,000.00 as down payment it still
persisted in negotiating with Eurotech which culminated in the execution of the Deed of Assignment of
its receivables from Toledo Power Company. The significant amount of time spent on the negotiation for
the sale of the sludge pump underscores

Impact Systems perseverance to get hold of the said equipment. Edwins

participation

in the Deed of Assignment was reasonably necessary or was required in

order for him to protect the business of his principal

pouses Fernando Viloria and Lourdes Viloria
vs Continental Airlines, Inc.

In 1997, while the spouses Viloria were in the United States, they approached Holiday Travel, a travel
agency working for Continental Airlines, to purchase tickets from Newark to San Diego. The travel agent,
Margaret Mager, advised the couple that they cannot travel by train because it was already fully
booked; that they must purchase plane tickets for Continental Airlines; that if they wont purchase plane
tickets; theyll never reach their destination in time. The couple believed Magers representations and so
they purchased two plane tickets worth $800.00.

Later however, the spouses found out that the train trip wasnt really fully booked and so they
purchased train tickets and went to their destination by train instead. Then they called up Mager to
request for a refund for the plane tickets. Mager referred the couple to Continental Airlines. As the
couple were now in the Philippines, they filed their request with Continental Airlines office in Ayala. The
spouses Viloria alleged that Mager misled them into believing that the only way to travel was by plane
and so they were fooled into buying expensive plane tickets.

Continental Airlines refused to refund the amount of the tickets and so the spouses sued the airline
company. In its defense, Continental Airlines claimed that the tickets sold to them by Mager were non-
refundable; that, if any, they were not bound by the misrepresentations of Mager because theres no
contract of agency existing between Continental Airlines and Mager.

The trial court ruled in favor of spouses Viloria but the Court of Appeals reversed the ruling of the RTC.

ISSUE: Whether or not a contract of agency exists between Continental Airlines and Mager.

HELD: Yes. All the elements of agency are present, to wit:

there is consent, express or implied of the parties to establish the relationship;

the object is the execution of a juridical act in relation to a third person;

the agent acts as a representative and not for himself, and

the agent acts within the scope of his authority.

The first and second elements are present as Continental Airlines does not deny that it concluded an
agreement with Holiday Travel to which Mager is part of, whereby Holiday Travel would enter into
contracts of carriage with third persons on the airlines behalf. The third element is also present as it is
undisputed that Holiday Travel merely acted in a representative capacity and it is Continental Airlines
and not Holiday Travel who is bound by the contracts of carriage entered into by Holiday Travel on its
behalf. The fourth element is also present considering that Continental Airlines has not made any
allegation that Holiday Travel exceeded the authority that was granted to it.

Continental Airlines also never questioned the validity of the transaction between Mager and the
spouses. Continental Airlines is therefore in estoppel. Continental Airlines cannot be allowed to take an
altogether different position and deny that Holiday Travel is its agent without condoning or giving
imprimatur to whatever damage or prejudice that may result from such denial or retraction to Spouses
Viloria, who relied on good faith on Continental Airlines acts in recognition of Holiday Travels authority.
Estoppel is primarily based on the doctrine of good faith and the avoidance of harm that will befall an
innocent party due to its injurious reliance, the failure to apply it in this case would result in gross
travesty of justice.
Rallos vs. Felix Go Chan & Realty Corp., Munoz-Palma

March 25, 2016

Plaintiff: Ramon Rallos

Defendant: Felix Go Chan & Sons Realty Corporation

Facts: Concepcion and Gerundia Rallos were sisters and registered co-owners of a parcel of land known
as Lot No. 5983 of the Cadastral Survey of Cebu covered by Transfer Certificate of Title No. 11116 of the
Registry of Cebu.They executed a special power of attorney in favor of their brother, Simeon Rallos,
authorizing him to sell such land for and in their behalf. After Concepcion died, Simeon Rallos sold the
undivided shares of his sisters Concepcion and Gerundia to Felix Go Chan & Sons Realty Corporation for
the sum of P10,686.90. New TCTs were issued to the latter. Petitioner Ramon Rallos, administrator of
the Intestate Estate of Concepcion filed a complaint praying (1) that the sale of the undivided share of
the deceased Concepcion Rallos in lot 5983 be unenforceable, and said share be reconveyed to her
estate; (2) that the Certificate of title issued in the name of Felix Go Chan & Sons Realty Corporation be
cancelled and another title be issuedin the names of the corporation and the Intestate estate of
Concepcion Rallos in equal undivided and (3) that plaintiff be indemnified by way of attorneys fees and
payment of costs of suit.

Issues:

1) WON sale was valid although it was executed after the death of the principal, Concepcion.

2) WON sale fell within the exception to the general rule that death extinguishes the authority of the

agent

3) WON agents knowledge of the principals death is a material factor.

4) WON petitioner must suffer the consequence of failing to annotate a notice of death in the title
(thus there was good faith on the part of the Respondent vendee)

5) WON good faith on the part of the respondent in this case should be treated parallel to that of an

CFI: Sale of land was null and void insofar as the one-half pro-indiviso share of Concepcion Rallos
Ordered the issuance of new TCTs to respondent corporation and the estate of Concepcion in
theproportion of share each pro-indiviso and the payment of attorneys fees and cost of litigation
Respondent filed cross claim against Simon Rallos(*Simon and Gerundia died during pendency of case)
juan T. Borromeo, administrator of the Estate of Simeon Rallos was ordered to pay defendant the price
of the share of the land (P5,343.45) plus attorneys fees [Borromeo filed a third party complaint
against Josefina Rallos, special administratrix of the Estate of Gerundia] Dismissed without prejudice to
filing either a complaint against the regular administrator of the Estate of Gerundia Rallos or a claim in
the Intestate-Estate of Cerundia Rallos, covering the same subject-matter

CA: CFI Decision reversed, upheld the sale of Concepcions share.MR: denied.innocent purchaser for a
value of a land.
Case Name:

Country Bankers Insurance v. Keppel Cebu Shipyard Petitioner:

Country Bankers Insurance Corporation

Respondent:

Keppel Cebu Shipyard, Unimarine Shipping Lines, Inc., Paul Rodriguez

SCRA:

673 SCRA 427

G.R. No:

166044

Date:

June 18, 2012

FACTS:

Unimarine Shipping Lines, Inc. (Unimarine) is a corporation engaged in the shipping industry. Unimarine
contracted the services of Keppel Cebu Shipyard for dry-docking and ship repair works on its vessel, the
MV Pacific Fortune. Cebu Shipyard issued a bill to Unimarine in consideration for its services. They
negotiated to a reduction to P3.85M and

terms of this agreement were embodied in Cebu Shipyards letter to the President/GM of Unimarine.

In compliance with the agreement, Unimarine secured from Country Bankers Insurance Corp. (CBIC)

, through its agent, Bethoven Quinain

(Quinain), a Surety Bond of P3M. The expiration of the Surety Bond was extended through an
Endorsement attached to the Surety Bond. Cebu Shipyard sent Unimarine letters, demandi

ng it to settle its account. Due to Unimarines nonpayment, Cebu Shipyard

asked the surety CBIC to fulfill their obligations as sureties. However, CBIC alleged that the Surety Bond
was issued by its agent, Quinain, in excess of his authority.

ISSUE:

W/N the provisions of Article 1911 of the Civil Code is applicable in the present case to hold petitioner
liable for the acts done by its agent in excess of authority. YES

HELD:

CBIC is liable for the surety bond. CBIC could not be allowed to disclaim liabil

ity because Quinains actions were within the

terms of the special power of attorney given to him. Our law mandates an agent to act within the scope
of his authority.

The scope of an agents authority is what appears in the written terms of the power of at

torney granted upon him.

Under Articles 1898 and 1910, an agents act, even if done beyond the scope of his authority, may bind
the principal if he

ratifies them, whether expressly or tacitly. It must be stressed though that only the principal, and not
the agent, can ratify the unauthorized acts, which the principal must have knowledge of.

Neither Unimarine nor Cebu Shipyard was able to repudiate CBICs testimony that it was unaware of the
existence of

Surety Bond and Endorsement. There were no allegations either that CBIC should have been put on alert
with regard to

Quinains business transactions done on its behalf. It is clear, and undisputed therefore, that there can
be no ratification

in this case, whether express or implied. Article 1911, on the other hand, is based on the principle of
estoppel, which is necessary for the protection of third persons. It states that the principal is solidarily
liable with the agent even when the latter has exceeded his authority, if the principal allowed him to act
as though he had full powers. However, for an agency by estoppel to exist, the following must be
established: 1.

The principal manifested a representation of the agents authority or knowingly allowed the agent to
assume such authority

2.

The third person, in good faith, relied upon such representation 3.

Relying upon such representation, such third person has changed his position to his detriment. An
agency by estoppel, which is similar to the doctrine of apparent authority, requires proof of reliance
upon the representations, and that, in turn, needs proof that the representations predated the action
taken in reliance.

This Court cannot agree with the Court of Appeals pronouncement of negligence on CBICs part. CBIC
not only clearly

stated the limits of its ag

ents powers in their contracts, it even stamped its surety bonds with the restrictions, in order to
alert the concerned parties. Moreover, its company procedures, such as reporting requirements, show
that it has designed a system to monitor the insurance

contracts issued by its agents. CBIC cannot be faulted for Quinains deliberate failure to

notify it of his transactions with Unimarine. In fact, CBIC did not even receive the premiums paid by
Unimarine to Quinain.

DISPOSITION:

WHEREFORE, this petition is hereby GRANTED and the complaint against CBIC is DISMISSED for lack of
merit.