TOPIC: AGENT IS CRIMINALLY LIABLE FOR CRIME
DBP deducted the
COMMITTED IN THE PURSUIT OF AGENCY
Eurotech vs. Cuison
GR No. 167552
April 23, 2007
FACTS:
Petitioner is engaged in business of importation
and distribution of various European industrial
equipment for customers in the Philippines. One
of its customers Impact System Sales owned by
respondent Erwin Cuizon and its sales manager
is respondent Edwin Cuizon. Petitioner sold to
Impact Systems a sludge pump but refused to
deliver the same because respondents did not
fully settle their indebtedness to petitioner. On
June 1995, respondent Edwin and petitioner
executed a Deed of Assignment wherein
respondent assigned receivables to petitioner
for the delivery of the sludge pump. Unknown to
the petitioner, respondent still collected the
receivables despite the Assignment. Petitioner
filed an action against the respondents.
ISSUE:
Whether or not Edwin Cuizon is personally liable
in the indebtedness of the company
Held:
No. Article 1897 provides that an agent who acts
as such is not personally liable to party with
whom he contracts except when (1) he expressly
binds himself to the obligation and (2) when he
exceeded his authority. The Deed of Assignment
clearly states that respondent Edwin Cuizon
signed as the sales manager of Impact Systems.
DBP vs CA
449 SCRA 57
FACTS: Juan B. Dans, 76 years of age, together
with his family, applied for a loan worth Php 500,
000 at the Development Bank of the Philipppines
on May 1987. The loan was approved by the
bank dated August 4, 1987 but in the reduced
amount of Php 300, 000. Mr. Dans was advised
by DBP to obtain a mortgage redemption
insurance at DBP MRI pool.
amount to be paid for MRI Premium that is
worth Php 1476.00. The insurance of Mr. Dans,
less the DBP service fee of 10%, was credited by
DBP to the savings account of DBP MRI-Pool.
Accordingly, the DBP MRI Pool was advised of
the credit.
On September 3, 1987, Mr. Dans died of
cardiac arrest. DBP MRI notified DBP was not
eligible for the coverage of insurance for he was
beyond the maximum age of 60. The wife,
Candida, filed a complaint to the Regional Trial
Court Branch I Basilan against DBP and DBP MRI
pool for ‘Collection of Sum of Money with
Damages’. Prior to that, DBP offered the
administratrix (Mrs. Dans) a refund of the MRI
payment but she refused for insisting that the
family of the deceased must receive the amount
equivalent of the loan. DBP also offered and ex
gratia for settlement worth Php 30, 000. Mrs.
Dans refused to take the offer. The decision of
the RTC rendered in favor of the family of the
deceased and against DBP. However, DBP
appealed to the court.
ISSUE: Whether or not the DBP MRI Pool should
be held liable on the ground that the contract
was already perfected.
HELD: No. DBP MRI Pool is not liable. Though the
power to approve the insurance is lodged to the
pool, the DBP MRI Pool did not approve the
application of the deceased. There was no
perfected contract between the insurance pool
and Mr. Dans.
DBP was wearing two legal hats: as a
lender and insurance agent. As an insurance
agent, DBP made believed that the family
already fulfilled the requirements for the said
insurance although DBP had a full knowledge
that the application would never be approved.
DBP acted beyond the scope of its authority for
accepting applications for MRI. If the third
person who contracted is unaware of the
authority conferred by the principal on the agent
and he has been deceived, the latter is liable for
damages. The limits of the agency carries with it
the implication that a deception was
perpetrated—Articles 19-21 come into play.

However, DBP is not entitled to

compensate the family of the deceased with the
entire value of the insurance policy. Speculative
damages are too remote to be included in the
cost of damages. Mr. Dans is entitled only to
moral damages. Such damages do not need a
proof of pecuniary loss for assessment. The court
granted only moral damages (Php 50, 000) plus
attorney fees’s (Php 10, 000) and the
reimbursement of the MRI fees with legal
interest from the date of the filing of the
complaint until fully paid.