NATURE CONCEPT AND PURPOSE acted beyond the scope of his agency nor did he agent can be held
gency nor did he agent can be held liable if he does not give the third
EUROTECH VS ERWIN CUIZON AND EDWIN
CUIZON
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.
Lower court granted Edwin’s petition to be dropped as
party defendant.
Court of Appeals agreed. MR denied.
ISSUE:
WON Edwin, acting as agent of Impact Sales and Erwin
Cuizon, is not personally liable, because he has neither
participate in the perpetuation of fraud.
HELD:
Petitioner contends that the Court of Appeals failed to
appreciate the effect of ERWIN’s act of collecting the
receivables from the Toledo Power Corporation
notwithstanding the existence of the Deed of Assignment
signed by EDWIN on behalf of Impact Systems. While
said collection did not revoke the agency relations of
respondents, petitioner insists that ERWIN’s action
repudiated EDWIN’s power to sign the Deed of
Assignment.
Contention has no merit.
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.
The elements of the contract of agency are: (1) consent,
express or implied, of the parties to establish the
relationship; (2) the object is the execution of a juridical
act in relation to a third person; (3) the agent acts as a
representative and not for himself; (4) the agent acts
within the scope of his authority.
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.
Article 1897 reinforces the familiar doctrine that an agent,
who acts as such, is not personally liable to the party with
whom he contracts. The same provision, however,
presents two 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
party sufficient notice of his powers. We hold that
respondent EDWIN does not fall within any of the
exceptions contained in this provision.
Decision by the CA and LC are affirmed.
ESSENTIAL REQUISITES / ELEMENTS
RALLOS, as administrator of Concepcion Rallos VS
FELIX GO CHAN – 1978
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 attorney’s fees and payment of
costs of suit.
The complaint was amended twice; defendant
Corporation's Answer contained a crossclaim against its
co-defendant, Simon Rallos while the latter filed third-
party complaint against his sister, Gerundia Rallos While
the case was pending in the trial court, both Simon and
his sister Gerundia died and they were substituted by the
respective administrators of their estates.
LC ruled in favor of petitioner stating that half of the sale
was null and void. CA reversed the ruling. MR denied.
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
RULING:
It is a basic axiom in civil law embodied in our Civil Code
that no one may contract in the name of another without
being authorized by the latter, or unless he has by law a
right to represent him. 3 A contract entered into in the
name of another by one who has no authority or the legal
representation or who has acted beyond his powers, shall
be unenforceable, unless it is ratified, expressly or
impliedly, by the person on whose behalf it has been
executed, before it is revoked by the other contracting
party.4 Article 1403 (1) of the same Code also provides:
ART. 1403. The following contracts are unenforceable,
unless they are justified:
(1) Those entered into in the name of another person by
one who hi - been given no authority or legal
representation or who has acted beyond his powers; ...
Out of the above given principles, sprung the creation
and acceptance of the relationship of agency whereby
one party, caged the principal (mandante), authorizes
another, called the agent (mandatario), to act for and in
his behalf in transactions with third persons. The
essential elements of agency are: (1) there is consent,
express or implied of the parties to establish the
relationship; (2) the object is the execution of a juridical
act in relation to a third person; (3) the agents acts as a
representative and not for himself, and (4) the agent acts
within the scope of his authority. 5
Agency is basically personal representative,
and derivative in nature. The authority of the agent to act
emanates from the powers granted to him by his
principal; his act is the act of the principal if done within
the scope of the authority. Qui facit per alium facit se.
"He who acts through another acts himself"
Articles 1930 and 1931 of the Civil Code provide the
exceptions to the general rule afore-mentioned.
ART. 1930. The agency shall remain in full force and
effect even after the death of the principal, if it has been
constituted in the common interest of the latter and of
the agent, or in the interest of a third person who has
accepted the stipulation in his favor.
ART. 1931. Anything done by the agent, without
knowledge of the death of the principal or of any other
cause which extinguishes the agency, is valid and shall be
fully effective with respect to third persons who may have
contracted with him in good. faith.
LOADMASTERS CUSTOMS SERVICES VS GLODEL
BROKERAGE – 2011
FACTS:
R&B Insurance issued a Marine Policy in favor of
Columbia to insure the shipment of 132 bundles of
electric copper cathodes against All Risks.
Columbia engaged the services of Glodel for the release
and withdrawal of the cargoes from the pier and the
subsequent delivery to its warehouses/plants.
Glodel, in turn, engaged the services of Loadmasters for
the use of its delivery trucks to transport the cargoes to
Columbia’s warehouses/plants in Bulacan and Valenzuela
City.
The goods were loaded on board twelve trucks owned by
Loadmasters, driven by its employed drivers and
accompanied by its employed truck helpers.
The cargoes in six truckloads for Valenzuela City were
duly delivered. However, of the six trucks en route to
Bulacan, only five reached the destination. One truck
failed to deliver its cargo.
The said truck was later recovered but without the copper
cathodes. Columbia filed with R&B Insurance a claim for
insurance indemnity. R&B Insurance paid Columbia the
amount of ₱1,896,789.62 as insurance indemnity.
R&B Insurance, thereafter, filed a complaint for damages
against both Loadmasters and Glodel, seeking
reimbursement of the amount it had paid to Columbia for
the loss of the subject cargo.
The RTC held Glodel liable for damages for the loss of the
subject cargo and was ordered to pay R&B Insurance.
On appeal, the CA rendered the assailed decision holding
Loadmasters liable to appellant Glodel for the insurance
indemnity which Glodel had to pay to R&B Insurance
Corporation.
Hence, Loadmasters filed the present petition.
ISSUE:
Can petitioner Loadmasters be legally considered as an
Agent of respondent Glodel?
RULING:
At this juncture, the Court clarifies that there exists no
principal-agent relationship between Glodel and
Loadmasters, as erroneously found by the CA. Article
1868 of the Civil Code provides: "By the contract of
agency a person binds himself to render some service or
to do something in representation or on behalf of
another, with the consent or authority of the latter." The
elements of a contract of agency are: (1) consent,
express or implied, of the parties to establish the
relationship; (2) the object is the execution of a juridical
act in relation to a third person; (3) the agent acts as a
representative and not for himself; (4) the agent acts
within the scope of his authority.
Accordingly, there can be no contract of agency between
the parties. Loadmasters never represented Glodel.
Neither was it ever authorized to make such
representation. It is a settled rule that the basis for
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. On the
part of the principal, there must be an actual intention to
appoint or an intention naturally inferable from his words
or actions, while on the part of the agent, there must be
an intention to accept the appointment and act on
it.23 Such mutual intent is not obtaining in this case.
What then is the extent of the respective liabilities of
Loadmasters and Glodel? Each wrongdoer is liable for the
total damage suffered by R&B Insurance. Where there
are several causes for the resulting damages, a party is
not relieved from liability, even partially. It is sufficient
that the negligence of a party is an efficient cause
without which the damage would not have resulted. It is
no defense to one of the concurrent tortfeasors that the
damage would not have resulted from his negligence
alone, without the negligence or wrongful acts of the
other concurrent tortfeasor. As stated in the case of Far
Eastern Shipping v. Court of Appeals,24
MANILA MEMORIAL PARK CEMETERY,
INC.vs.
 PEDRO L. LINSANGAN - 2004
FACTS:
Florencia Baluyot offered Atty. Pedro L. Linsangan a lot
called Garden State at the Holy Cross Memorial Park
owned by petitioner (MMPCI). According to Baluyot, a
former owner of a memorial lot under Contract No. 25012
was no longer interested in acquiring the lot and had
opted to sell his rights subject to reimbursement of the
amounts he already paid. The contract was
P95,000.00. Baluyot reassured Atty. Linsangan that once
reimbursement is made to the former buyer, the contract
would be transferred to him.
Atty. Linsangan agreed and gave Baluyot P35,295.00
representing the amount to be reimbursed to the original
buyer and to complete the down payment
MMPCI. Baluyot issued handwritten and typewritten
receipts for these payments. Contract No. 28660 has a
listed price of P132,250.00. Atty. Linsangan objected to
the new contract price, as the same was not the amount
previously agreed upon. To convince Atty. Linsangan,
Baluyot executed a document confirming that while the
contract price is P132,250.00, Atty. Linsangan would pay
only the original price of P95,000.00.
Later on, Baluyot verbally advised Atty. Linsangan that
Contract No. 28660 was cancelled for reasons the latter
could not explain. For the alleged failure of MMPCI and
Baluyot to conform to their agreement, Atty. Linsangan
filed a Complaint for Breach of Contract and Damages
against the former.
MMPCI alleged that Contract No. 28660 was cancelled
conformably with the terms of the contract because of
non-payment of arrearages. MMPCI stated that Baluyot
was not an agent but an independent contractor, and as
such was not authorized to represent MMPCI or to use its
name except as to the extent expressly stated in the
Agency Manager Agreement. Moreover, MMPCI was not
aware of the arrangements entered into by Atty.
Linsangan and Baluyot, as it in fact received a down
payment and monthly installments as indicated in the
contract.
The trial court held MMPCI and Baluyot jointly and
severally liable. The Court of Appeals affirmed the
decision of the trial court.
for
ISSUES:
1. Whether or not there was a contract of agency
between Baluyot and MMPCI?
2. Whether or not MMPCI should be liable for Baluyot’s
act?
to
HELD:
First Issue. Yes. By the contract of agency, a person
binds himself to render some service or to do something
in representation or on behalf of another, with the
consent or authority of the latter. As properly found both
by the trial court and the Court of Appeals, Baluyot was
authorized to solicit and remit to MMPCI offers to
purchase interment spaces obtained on forms provided
by MMPCI. The terms of the offer to purchase, therefore,
are contained in such forms and, when signed by the
buyer and an authorized officer of MMPCI, becomes
binding on both parties.
Second Issue. No. While there is no more question as to
the agency relationship between Baluyot and MMPCI,
there is no indication that MMPCI let the public, or
specifically, Atty. Linsangan to believe that Baluyot had
the authority to alter the standard contracts of the
company. Neither is there any showing that prior to
signing Contract No. 28660, MMPCI had any knowledge
of Baluyot's commitment to Atty. Linsangan. Even
assuming that Atty. Linsangan was misled by MMPCI's
actuations, he still cannot invoke the principle of
estoppel, as he was clearly negligent in his dealings with
Baluyot, and could have easily determined, had he only
been cautious and prudent, whether said agent was
clothed with the authority to change the terms of the
principal's written contract.
To repeat, the acts of the agent beyond the scope of his
authority do not bind the principal unless the latter
ratifies the same. It also bears emphasis that when the
third person knows that the agent was acting beyond his
power or authority, the principal cannot be held liable for
the acts of the agent. If the said third person was aware
of such limits of authority, he is to blame and is not
entitled to recover damages from the agent, unless the
latter undertook to secure the principal's ratification.
TUAZON V. HEIRS OF BARTOLOME RAMOS
FACTS:
Respondents alleged that on a relevant date,
spouses Tuazon purchased from their predecessor-in-
interest 8,326 cavans of rice. That on the total number
of cavans, only a certain portion, 4,347, has been paid
for. In payment thereof, checks have been issued but on
presentment, the checks were dishonored. Respondents
alleged that since spouses anticipated the
forthcoming suit against them, they made fictitious sales
over their properties. For their part, defendants denied
having purchased x x x rice from [Bartolome] Ramos.
They alleged that it was Magdalena Ramos, wife of said
deceased, who owned and traded the merchandise and
Maria Tuazon was merely her agent. They argued that it
was Evangeline Santos who was the buyer of the rice and
issued the checks to Maria Tuazon as payments therefor.
This Court finds no reversible error in the findings of the
courts a quo that petitioners were the rice buyers
themselves; they were not mere agents of respondents in
their rice dealership. The question of whether a contract
is one of sale or of agency depends on the intention of
the parties.
The declarations of agents alone are generally insufficient
to establish the fact or extent of their authority.13 The
law makes no presumption of agency; proving its
existence, nature and extent is incumbent upon the
person alleging it.14 In the present case, petitioners raise
the fact of agency as an affirmative defense, yet fail to
prove its existence.

RTC: acquitted criminal liability but found guilty on civil
liability.
CA: affirmed ruling of the RTC stating that petitioners
failed to prove agency between respondent and
petitioner.
ISSUES:
Whether or not the Honorable Court of Appeals erred in
ruling that petitioners are not agents of the respondents.
The Court notes that petitioners, on their own behalf,
sued Evangeline Santos for collection of the amounts
represented by the bounced checks, in a separate civil
case that they sought to be consolidated with the current
one. If, as they claim, they were mere agents of
respondents, petitioners should have brought the suit
against Santos for and on behalf of their alleged principal,
in accordance with Section 2 of Rule 3 of the Rules on
Civil Procedure.15 Their filing a suit against her in their
own names negates their claim that they acted as mere
agents in selling the rice obtained from Bartolome Ramos.

HELD:

In a contract of agency, one binds oneself to render

some service or to do something in representation or on
behalf of another, with the latter’s consent or
authority.9 The following are the elements of agency: (1)
the parties’ consent, express or implied, to establish the
relationship; (2) the object, which is the execution of a
juridical act in relation to a third person; (3)
the representation, by which the one who acts as an
agent does so, not for oneself, but as a representative;
(4) the limitation that the agent acts within the scope of
his or her authority.10 As the basis of agency is
representation, there must be, on the part of the
principal, an actual intention to appoint, an intention
naturally inferable from the principal’s words or actions.
In the same manner, there must be an intention on the
part of the agent to accept the appointment and act upon
it. Absent such mutual intent, there is generally no
agency.11