Eurotech Industrial Technologies v.

Cuizon

007

GR No. 167552, 23 Apr 2007, Chico-Nazario, J.

Digested by DEAN LOZARIE Law 173 - Agency
A companys manager signed a Deed assigning collectibles to pay a debt. The companys
proprietor later received the collectibles it already assigned. Its creditor sued,
impleading the manager on the claim that he had exceeded his authority as agent and
should be held personally liable. The SC held that he acted well within his authority.
FACTS
Petitioner EUROTECH is in the business of importing industrial equipment for
clients in the Philippines. Respondent ERWIN Cuizon is the sole proprietor of
IMPACT Systems, while his brother, co-respondent EDWIN, is the companys
sales manager.
The CA ordered the dropping of EDWIN as a defendant in the civil case. It is that
order which EUROTECH is assailing.
IMPACT bought a sludge pump from EUROTECH valued at P250,000. When the
unit arrived, EUROTECH demanded the balance of the price before delivery.
EDWIN executed a Deed of Assignment whereby it assigned P365,000 worth of
receivables to EUROTECH in payment of the balance. The sludge pump was
subsequently delivered to IMPACT.
However, afterwards, ERWIN still proceeded to collect debts covered by the said
Deed.
EUROTECH made several demands upon IMPACT for payment. The latter made
only partial payments.
When EUROTECH eventually sued in court, EDWIN was impleaded separately
in the suit.
EUROTECH argues that ERWINs subsequent act of collecting the debt
repudiated EDWINs agency insofar as signing the Deed of Assignment was
concerned. Thus, because EDWIN did not sufficiently notify EUROTECH of the
extent of his powers as an agent, he should be made personally liable for the
obligations of his principal, pursuant to Art. 1897 of the Civil Code.
EDWIN answers that he was a mere agent of Impact Systems, and that
EUROTECH knew this, proof being that he was sued in his capacity as sales
manager.
ISSUES & HOLDING
Did EDWIN exceed his authority when he signed the Deed of Assignment? NO.
RATIO
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.
The actual or real absence of the principal is converted into his legal or juridical
presencequi facit per alium facit per se.

Elements:
o Consent, express or implied
o Object is the execution of a juridical act in relation to a third person
o Agent acts as a representative, not for himself
o Agent acts within the scope of his authority
EDWIN does not fall under any of the exceptions of Art. 1897.
EDWIN signed the Deed as sales manager. Jurisprudence says that the position of
manager is unique because it presupposes the grant of broad powers with which to
conduct the business of the principal.
The facts show that IMPACT desperately needed the sludge pump for its business
because it spent a significant amount of time negotiating the terms of the sale.
Thus, EDWINs participation in the Deed of Assignment was required in order
for him to protect the business of his principal. Had he not acted in the way that
he did, IMPACTs business would have been adversely affected and he would
have violated his fiduciary relation.
Also, in case of excess of authority, the law does not authorize a plaintiff to
recover from both principal and agent.

DISPOSITIVE
EDWIN was acting within his authority as agent.