Murao v People

Facts:

Petitioner Murao is the sole owner of Lorna Murao

Industrial Commercial Enterprises, a company
engaged in the business of selling and refilling fire
extinguishers. Petitioner Huertazuela is the Branch
Manager.
Murao and Federico entered into a Dealership
Agreement for the marketing, distribution, and
refilling of fire extinguishers within Puerto
Princesa.
According to the dealership agreement, Federico,
as a dealer for LMICE, could obtain fire
extinguishers from LMICE at a 50% discount,
provided that he sets up his own sales force,
acquires and issues his own sales invoice, and
posts a bond with LMICE as security for the credit
line extended to him by LMICE.
Failing to comply with the conditions, Federico
was still allowed to act as a part-time sales agent
for LMICE entitled to a percentage commission
from the sales of fire extinguishers.
The amount of Federico's commission as sales
agent for LMICE was under contention. Federico
claimed that he was entitled to commission
equivalent to 50% of the gross sales he had made
on behalf of LMICE, while LMICE maintained that
he should receive only 30% of the net sales
because it is a company policy that part-time sales
agents were entitled to a commission of only 25%
of the net sales but since Federico helped in

establishing LMICE's branch in Puerto Princesa,

he was to receive the same commission as the
full-time sales agents which was 30%.
1st transaction: 2 fire extinguishers sold to LBP. A
check was issued pay to the order of LMICE c/o
Federico. Federico encashed the check at LB and
remitted only around 2k to LMICE, while he kept
around 3k for himself as his commission from the
sale.LMICE alleged that it was contrary to the
standard operating procedure of LMICE that
Federico was named payee of the check and that
he is not authorized to encash the said check.
Despite irregularities, LMICE forgave him because
he promised to make-up for his misdeeds in the
next transaction.
2nd transaction: with City Govt of Puerto Princesa
for the refill of 202 fire extinguishers. The govt
requested to split the transaction into 2 purchase
orders and shall be paid separately.
LMICE refilled and delivered all 202 fire
extinguishers. The govt issued a check to LMICE
and was deposited in the account of LMICE.
Federico went to see Huertazuela to demand his
commission from the payment of the City Govt,
Huertazuela refused to pay Federico since they
could not agree on the proper amount.
Federico filed a complaint for estafa against
LMICE, then an information was filed in RTC,
convicting Murao and Huertazuela for Estafa.
CA affirmed the RTC judgment with modification.
Hence, this petition for review.

ISSUE:
WON petitioners are liable for Estafa
RULING:
NO.
2 essential elements of Estafa are missing. (1.
That money be received in trust or on commission
and 2. There be misappropriation or conversion)
Federico's right to a commission does not make
him a joint owner of the money paid to LMICE but
merely establishes the relation of agent and
principal. As a sales agent, Federico entered into
negotiations with prospective clients for and on
behalf of his principal, LMICE.
All profits made and any advantage gained by
an agent in the execution of his agency should
belong to the principal.
Payments made by the clients for the fire
extinguishers pertained to LMICE. When
Huertazuela picked up the check and deposited
under the account of LMICE, he was merely
collecting what rightfully belonged to LMICE.
Federico may claim commission based on his right
to just compensation under his agency contract
with LMICE, but not as the automatic owner of the
50% portion of the said payment.
Since LMICE is the lawful owner of the entire
proceeds of the check payment, then Huertazuela
did not receive the same in trust or on commission
to return the same to Federico. There was no
fiduciary relationship between Federico and

Huertazuela so he could not have committed

estafa.
The obligation of LMICE to pay Federico his
commission does not arise from any duty to return
the money to its supposed owner but rather to give
just compensation to its agent for his services.
No estafa was committed, so there's no criminal
liability. Only civil liability for Federico's
commission (whether it be 30% or 50%) which is a
violation of thhe agency contract and thus subject
of a separate and independent civil action.

DBP vs CA
Facts:

Dans, together with his wife Candida, his son and

daughter-in-law, applied for a loan of 500k with
DBP.
As the principal mortgagor, Dans (76yrs old), was
advised by DBP to obtain a mortgage redemption
insurance with the DBP MRI Pool.
A loan, reduced to 300k, was approved by DBP
and was released. From the proceeds of the loan,
DBP deducted payment for the MRI premium.
Dans accomplished and submitted the MRI
application and Health Statement for MRI Pool.
The MRI premium of Dans was credited by DBP to
the savings account of the DBP MRI Pool and was
advised of the credit.
Dans died of cardiac arrest. The DBP, upon notice,
relayed this information to the DBP MRI Pool then

they notified DBP that Dans was not eligible for

MRI Coverage, being over the acceptance age
limit of 60 yrs at the time of application.
DBP told Candida of the disapproval of Dans' MRI
application. The DBP offered to refund the
premium which Dans paid but Candida refused to
accept it demanding payment of the face value of
the MRI or an amount equivalent to the loan. She
also refused to accept settlement of 30k which
DBP offered.
The estate, through Candida as administratrix,
filed a complaint with the RTC against DBP and
the insurance pool for "collection of sum of money
with damages".
Estate alleged that Dans became insured by the
DBP MRI pool when DBP, with full knowledge of
Dans' age at the time of application, required him
to apply for MRI and later collected the insurance
premium.
RTC ruled in favor of the estate and against DBP.
The DBP MRI Pool, however, was absolved from
liability, after finding that no privity of contract
between it and Dans. RTC declared DBP in
estoppel for having led Dans into applying for MRI
and actually collecting the premium and service
fee, despite knowledge of his age ineligibility.
DBP appealed, CA affirmed RTC. DBP's motion
for reconsideration was denied, hence, this
recourse.

ISSUE:
WON DBP is liable

RULING:
YES.
In dealing with Dans, DBP was wearing two
legal hats: As a lender, and as an insurance
agent.
As an insurance agent, DBP made Dans go
through the motion of applying for said insurance,
thereby leading him and his family to believe that
they had already fulfilled all the requirements for
the MRI and that the issuance of their policy was
forthcoming.
Apparently, DBP had full knowledge that Dan's
application was never going to be approved
because of his age.
Under Art 1897, "the agent who acts as such is not
personally liable to the party with whom he
contracts, unless he expressly binds himself or
exceeds the limits of his authority without giving
such party sufficient notice of his powers."
The DBP is not authorized to accept applications
for MRI when its clients are more than 60 yrs old.
Knowing that Dans is ineligible, DBP exceeded the
scope of its authority when it accepted Dans'
application for MRI by collecting insurance
premium, and deducting its agent's commission
and service fee.
The liability of an agent who exceeds the
scope of his authority depends upon whether
the third person is aware of the limits of the
agent' s powers. There is no showing that

Dans knew of the limitation on DBP' s authority

to solicit applications for MRI thus DBP is liable for

damages to Dans.