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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.

RALLOS v FELIX GO CHAN & REALTY COPR., Munoz-Palma Plaintiff: Ramon Rallos Defendant: Felix Go
Chan & Sons Realty Corporation
Facts: Concepcion and Gerundia Rallos were sisters and registered co-owners of the parcel of land in
issue. 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 issued in 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.
Issues: Whether or not the sale fell within the exception to the general rule that death extinguishes the
authority of the agent
Held/Ratio: Yes the sale is void. The court held 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 (Art. 1317 of the
Civil Code). Simons authority as agent was extinguished upon Concolacions death. The sale did not fall
under the exceptions to the general rule that death ipso jure extinguishes the authority of the agent.
Art. 1930 inapplicable since SPA in favor of Simon Rallos was not coupled with interest and Art. 1931
inapplicable because Rallos knew of principal Concepcions death. For Art 1931 to apply, both
requirements must be present Laws on agency, the terms of which are clear and unmistakable leaving
no room for an interpretation contrary to its tenor, should apply, the law provides that death of the
principal ipso jure extinguishes the authority of the agent to sell rendering the sale to a third person in
good faith unenforceable unless at the agent had no knowledge of the principals death at that time
(exception under Art. 1931)

Loadmaster Customs vs Glodel Brokerage Corp.


Facts
R&B Insurance (respondent) insured Columbias shipment of its products against all risks. The
products were shipped by sea and arrived at the pier. From there, Columbia contracted Glodel
(respondent) to deliver the products to its warehouse. Glodel in turn contracted Loadmaster to
use its delivery trucks in transporting the products. Out of 12 trucks used, only 11 reached the
warehouse. Columbia sought reimbursement from R&B Insurance and the latter paid. R&B
Insurance then went after Loadmaster and Glodel.
Issue
Is there a principal-agent relationship between Glodel and Loadmasters?
Held
No. Loadmasters never represented Glodel because it was never authorized to make such
representation. The settled rule is the basis for agency is representation, 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 principals part,
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. In this case, theres no mutual intent.

MANILA MEMORIAL PARK CEMETERY, INC., petitioner, vs. PEDRO L. LINSANGAN, respondent.
G.R. No. 151319 November 22, 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 for 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 to MMPCI. Baluyot issued handwritten and
typewritten receipts for these payments. Baluyot verbally advised Atty. Linsangan that Contract No.
28660 was cancelled for reasons the latter could not explain, and presented to him another proposal for
the purchase of an equivalent property. He refused the new proposal and insisted that Baluyot and
MMPCI honor their undertaking. 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.
For its part, 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.
ISSUE: Whether or not a contract of agency exists between Baluyot and MMPCI.
RULING: NO. The acts of an agent beyond the scope of his authority do not bind the principal, unless he
ratifies them, expressly or impliedly. Only the principal can ratify; the agent cannot ratify his own
unauthorized acts. Moreover, the principal must have knowledge of the acts he is to ratify. No ratification
can be implied in the instant case. Atty. Linsangan failed to show that MMPCI had knowledge of the
arrangement. As far as MMPCI is concerned, the contract price was P132,250.00, as stated in the Offer
to Purchase signed by Atty. Linsangan and MMPCI's authorized officer. Likewise, this Court does not find
favor in the Court of Appeals' findings that "the authority of defendant Baluyot may not have been
expressly conferred upon her; however, the same may have been derived impliedly by habit or custom
which may have been an accepted practice in their company in a long period of time." A perusal of the
records of the case fails to show any indication that there was such a habit or custom in MMPCI that
allows its agents to enter into agreements for lower prices of its interment spaces, nor to assume a
portion of the purchase price of the interment spaces sold at such lower price. No evidence was ever
presented to this effect

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.

TUAZON V. HEIRS OF
BARTOLOME RAMOS
463 SCRA 408
FACTS:
Respondents alleged that on a relevant date, spouses Tuazon purchased from their
predecessor-in-interest cavans of rice. That on the total number of cavans, only a certain
portion 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. As defense, the spouses averred that it was
the wife of Bartolome who effected the sale and that Maria was merely her agent in selling the
rice. The true buyer of the cavans was Santos. The spouses further averred that when Ramos got
the check from Santos, she took it in good faith and didn't knew that the same were unfunded.

HELD:
First, there is no contract of agency.
If it was truly the intention of the parties to have a contract of agency, then when the
spouses sued Santos on a separate civil action, they should have instituted the same on behalf and
for the respondents. They didn't do so. The filing in their own names negate their claim that they
acted as
mere agents in selling the rice.
Second, the spouses are liable on the check.
As indorser, Tuazon warranted that upon due presentment, according to
their tenor, and that in case they were dishonored, she would pay the
corresponding amount. After the instrument is dishonored by nonpayment, indorsers cease to be merely secondarily liable. They became
principal debtors whose liability becomes identical to that of the original
obligor. The holder of a negotiable instrument need not even proceed
against the maker before suing the indorser.
Santos is not an indispensable party to
the suit against the spouses.

Yu Eng Cho vs PANAM


Facts
Cho purchased plane tickets from defendant Tagunicar who represented herself as defendant
Tourist World Services (TWSI) agent. The destinations are Hong Kong, Tokyo, then San
Francisco USA. The trips purpose is for Cho to buy equipment for its business from the USA.
Tagunicar told Cho his flight was confirmed all the way to the US. When Cho reached Tokyo, he
discovered his name wasnt in the manifest and he was constrained to reroute to Taipei instead.
In Taipei, he could find no flight going to the US and he was forced to go back to Manila. It
turned out Tagunicar was never able to confirm the flight from Tokyo to San Francisco. She
attached validation stickers on the ticket but she did so without authority and knowing the flight
wasnt confirmed yet. Due to Chos failure to get to the US, the US Company selling the
equipment cancelled the sale costing Cho profits. Cho then filed suit against Tagunicar as
TWSIs agent, TWSI as Pan Ams agent, and Pan Am itself.
Issue
Was Tagunicar an agent of TWSI?
Held
No.
A person dealing with an assumed agent is bound at his peril, if he would hold the principal
liable, to ascertain not only the fact of agency but also the nature and extent of authority. In case
agency is denied, the burden is upon the person to establish it. In this case, Cho relied on as
evidence Tagunicars affidavit that shes TWSIs agent. However, such affidavit has weak
probative value. First, Tagunicar herself contradicted the affidavit in her testimony in open court
when she stated she was in fact an independent travel agent. Second, Chos lawyer prepared
the affidavit making it doubtful she executed it voluntarily. More likely, Cho and his lawyer
prevailed upon Tagunicar to state in the affidavit shes TWSIs agent. Further, Tagunicar doesnt
receive commission from TWSI because she simply buys tickets from TWSI and sells them at a
premium, a simple contract of sale. Consequently, Cho failed to establish an agency between
TWSI and Pan Am in simply relying on his bare allegations. Tagunicar isnt TWSIs agent and
neither is TWSI an agent of Pan Am.

ORIENT AIR SERVICES v. CA

Facts:
American Air, an air carrier offering passenger and air cargo transportation, entered into a
General Sales Agency Agreement with Orient Air, authorizing the latter to act as its exclusive
general sales agent for the sale of air passenger transportation. Orient air failed to remit the net
proceeds of sales for several months prompting American Air to undertook the collection of the
proceeds of tickets sold originally by Orient Air and terminating their agreement. American air
instituted suit against Orient Air for the settlement of past outstanding funds in possession of the
latter. Orient Air contended that because of the unpaid overriding commissions it retained the
sales proceeds before remitting the balance to American Air. American Air contended that the
sale must be made by Orient Air and the sale must be done with the use of American Air's ticket
stocks in order for it to be entitled to the overriding commission. On the other hand, Orient Air
contends that the contractual stipulation of a 3% overriding commission covers the total revenue
of American Air and not merely that derived from ticketed sales undertaken by Orient Air
because it was an exclusive General Sales Agent. CA held that Orient Air is entitled to
commissions and ordered American Air to reinstate Orient Air as its General Sales Agent.
Issue:
Whether or not Orient Air is entitled to commissions.
Whether CA is correct in ordering reinstatement of Orient Air as an agent.
Held:
1. Yes. Orient Air was entitled to an overriding commission based on total flown revenue.
American Air's perception that Orient Air was remiss or in default of its obligations under the
Agreement was, in fact, a situation where the latter acted in accordance with the Agreement
that of retaining from the sales proceeds its accrued commissions before remitting the balance
to American Air. Since the latter was still obligated to Orient Air by way of such commissions.
Orient Air was clearly justified in retaining and refusing to remit the sums claimed by American
Air. The latter's termination of the Agreement was, therefore, without cause and basis, for which
it should be held liable to Orient Air.
2. No. CA in effect compels American Air to extend its personality to Orient Air. Such would be
violative of the principles and essence of agency, defined by law as a contract whereby "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. In an agent-principal
relationship, the personality of the principal is extended through the facility of the agent. In so
doing, the agent, by legal fiction, becomes the principal, authorized to perform all acts which the
latter would have him do. Such a relationship can only be effected with the consent of the
principal, which must not, in any way, be compelled by law or by any court.

1. BORDADOR V. LUZ
FACTS:
Petitioners(Bordadors) were engaged in the business of purchase and sale of jewelry and
respondent (Brigida D. Luz, also known as Aida D. Luz), was their regular customer.
On several occasions, respondent Narciso Deganos, the brother of Brigida D. Luz, received
several pieces of gold and jewelry from petitioners amounting to P382,816.00. [1]
These items and their prices were indicated in seventeen receipts covering the
same. Eleven of the receipts stated that they were received for a certain Evelyn Aquino, a niece
of Deganos, and the remaining six indicated that they were received for Brigida D. Luz. [2]
Deganos was supposed to sell the items at a profit and thereafter remit the proceeds and
return the unsold items to petitioners.
Deganos remitted only the sum of P53,207.00. He neither paid the balance of the sales
proceeds, nor did he return any unsold item to petitioners.
The total of his unpaid account to petitioners, including interest, reached the sum
ofP725,463.98. [3]
ISSUE:
The primary issue in the instant petition is whether or not herein respondent spouses are
liable to petitioners for the latters claim for money and damages in the sum of P725,463.98,
plus interests and attorneys fees, despite the fact that the evidence does not show that they
signed any of the subject receipts or authorized Deganos to receive the items of jewelry on their
behalf.
RULING:
No error having been committed by the Court of Appeals in affirming the judgment of the
court a quo, its challenged decision and resolution are hereby AFFIRMED and the instant
petition is DENIED, with double costs against petitioners
HELD:
No evidence support the theory of petitioners that Deganos was an agent of Brigida D. Luz
and that the latter should consequently be held solidarily liable with Deganos in his obligation to
petitioners. While the quoted statement in the findings of fact of the assailed appellate decision
mentioned that Deganos ostensibly acted as an agent of Brigida, the actual conclusion and
ruling of the Court of Appeals categorically stated that, (Brigida Luz) never authorized her
brother (Deganos) to act for and in her behalf in any transaction with Petitioners x x x.[15] It is
clear, therefore, that even assuming arguendo that Deganos acted as an agent of Brigida, the
latter never authorized him to act on her behalf with regard to the transactions subject of this
case.
The Civil Code provides:
Art. 1868. 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.

APEX MINING CO., INC., v. Southeast Mindanao Gold Mining Corp. et al.
G.R. Nos. 152613 & 152628,
November 20, 2009
FACTS
In its June 2006 decision, the Supreme Court held that

the assignment of Exploration Permit (EP) 133 in favor of SEM violated one of the
conditions stipulated in the permit, that the same shall be for the exclusive use and
benefit of Marcopper Mining Corporation (MMC) or its duly authorized agents. Because
SEM did not claim or submit evidence that it was a designated agent of MMC, the latter
cannot be considered as an agent of the former that can use EP 133 and benefit from it.
the transfer of EP 133 violated Presidential Decree No. 463, which requires that the
assignment of a mining right be made with the prior approval of the Secretary of the
Department of Environment and Natural Resources (DENR).
the EP 133 expired by non-renewal since it was not renewed before or after its
expiration.
Proclamation No. 297 is valid absent any question against its validity. IN relation, under
Section 5 of Republic Act No. 7942, mining operations in mineral reservations may be
undertaken directly by the State or through a contractor, the Court deemed the issue of
ownership of priority right as having been overtaken by the said proclamation.
It is now within the prerogative of the Executive Department to undertake directly the
mining operations of the disputed area or to award the operations to private entities
such as Apex, subject to applicable laws, rules and regulations, and provided that these
private entities are qualified.
Southeast Mindanao Gold Mining Corporation (SEM) filed a motion for reconsideration
of the0 Supreme Courts assailed decision. Apex filed a Motion for Clarification asking
that the Court elucidate on the Decisions pronouncement that mining operations, are
now, therefore within the full control of the State through the executive
branch. Moreover it asked the Court to order the Mines and Geosciences Board
(MGB) to accept its application for an exploration permit. Balite echoes the same
concern as that of Apex on the actual takeover by the State of the mining industry in the
disputed area to the exclusion of the private sector. In addition, Balite prayed that the
Court will direct MGB to accept its application for an exploration permit.
ISSUES

1. Whether the transfer or assignment of Exploration Permit (EP) 133 by MMC to SEM
was validly made without violating any of the terms and conditions set forth in
Presidential Decree No. 463 and EP 133 itself.
2. Whether Southeast Mindanao Mining Corp. acquired a vested right over the disputed
area, which constitutes a property right protected by the Constitution.

3. Assuming that the legality/constitutionality of Proclamation No. 297 was timely raised,
whether said proclamation violates Article XII, Section 4 of the Constitution.
4. Whether RA 7942 is the applicable law.

RULING

1. No, the assignment of EP 133 violated its terms and conditions and Sec. 97, PD 463.
Section 97 is entitled, Assignment of Mining Rights. This hints that before mining
rights namely, the rights to explore, develop and utilize are transferred or
assigned, prior approval must be obtained from the DENR Secretary. An exploration
permit, thus, cannot be assigned without the imprimatur of the Secretary of the DENR.
While Presidential Decree No. 463 has already been repealed by Executive Order No.
279, the administrative aspect of the former law nonetheless remains
applicable. Hence, the transfer or assignment of exploration permits still needs the prior
approval of the Secretary of the DENR.

VICTORIAS MILLING CO. vs. COURT OF APPEALS


FACTS:
St. Therese Merchandising (STM) regularly bought sugar from Victorias Milling Co (VMC). In the
course of their dealings, VMC issued several Shipping List/Delivery Receipts (SLDRs) to STM as proof of
purchases. Among these was SLDR No. 1214M.SLDR No. 1214M, dated October 16, 1989, covers 25,000
bags of sugar. Each bag contained 50 kg and priced at P638.00 per bag. The transaction covered was a
direct sale.
On October 25, 1989, STM sold to private respondent Consolidated Sugar Corporation (CSC) its
rights in the same SLDR for P14,750,000.00. CSC issued checks in payment. That same day, CSC wrote
petitioner that it had been authorized by STM to withdraw the sugar covered by the said SLDR. Enclosed
in the letter were a copy of SLDR No. 1214M and a letter of authority from STM authorizing CSC to
withdraw for and in our behalf the refined sugar covered by the SLDR On Oct. 27, 1989, STM issued
checks to VMC as payment for 50,000 bags, covering SLDR No. 1214M. CSC surrendered the SLDR No.
1214M and to VMCs NAWACO Warehouse and was allowed to withdraw sugar. But only 2,000 bags had
been released because VMC refused to release the other 23,000 bags.
Therefore, CSC informed VMC that SLDR No. 1214M had been sold and endorsed to it. But VMC
replied that it could not allow any further withdrawals of sugar against SLDR No. 1214M because STM
had already withdrawn all the sugar covered by the cleared checks. VMC also claimed that CSC was only
representing itself as STMs agent as it had withdrawn the 2,000 bags against SLDR No. 1214M for and
in behalf of STM. Hence, CSC filed a complaint for specific performance against Teresita Ng Sy (doing
business under STM's name) and VMC. However, the suit against Sy was discontinued because later
became a witness. RTC ruled in favor of CSC and ordered VMC to deliver the 23,000 bags left. CA
concurred. Hence this appeal.
ISSUES:

W/N CA erred in not ruling that CSC was an agent of STM and hence, estopped to sue upon SLDR No.
1214M as assignee.
HELD:

NO. CSC was not an agent of STM. VMC heavily relies on STMs letter of authority that said CSC is
authorized to withdraw sugar for and in our behalf. It is clear from Art. 1868 that the: basis of agency
is representation. On the part of the principal, there must be an actual intention to appoint or an
intention naturally inferable from his words or actions, and on the part of the agent, there must be an
intention to accept the appointment and act on it, and in the absence of such intent, there is generally
NO agency. One factor, which most clearly distinguishes agency from other legal concepts,
is control; one person the agent agrees to act under the control or direction of another the
principal. Indeed, the very word agency has come to connote control by the principal. The control
factor, more than any other, has caused the courts to put contracts between principal and agent in a

separate category. Where the relation of agency is dependent upon the acts of the parties, the law
makes no presumption of agency and it is always a fact to be proved, with the burden of proof resting
upon the persons alleging the agency, to show not only the fact of its existence but also its nature and
extent. It appears that CSC was a buyer and not an agent of STM. CSC was not subject to STMs control.
The terms for and in our behalf should not be eyed as pointing to the existence of an agency
relation. Whether or not a contract is one of sale or agency depends on the intention of the parties as
gathered from the whole scope and effect of the language employed. Ultimately, what is decisive is
the intention of the parties. (In fact, CSC even informed VMC that the SLDR was sold and endorsed to
it.)

DOMINION INSURANCE CORPORATION vs. COURT OF


APPEALS, RODOLFO S. GUEVARRA, and FERNANDO
AUSTRIA
FACTS:
Rodolfo Guevarra (Guevarra) filed a civil case for sum of money against Dominion Insurance Corp.
(Dominion) for the amount advanced by Guevarra in his capacity as manager of defendant to satisfy
certain claims filed by defendants client.

The pre-trial was always postponed, and during one of the pre-trial conference dominion failed to arrive
therefore the court declared them to be in default. Dominion filed several Motions to Lift Order of
Default but was always denied by the court. The RTC rendered its decision making Dominion liable to
repay Guevarra for the sum advanced and other damages and fees. Dominion appealed but CA affirmed
the decision of RTC and denied the appeal of Dominion.

ISSUE:
(a) W/N Guevarra acted within his authority as agent of petitioner.
(b) W/N Guevarra must be reimbursed for the amount advanced.

HELD:
(a) NO. Even though the contact entered into by Guevarra and Dominion was with the word special
the contents of the document was actually a general agency. A general power permits the agent to do
all acts for which the law does not require a special power and the contents in the document did not
require a special power of attorney.

Art 1878 of the civil code provides instances when a special power of attorney is required.:
1) To make such payment as are not usually considered as acts of administration.
15) any other act of dominion

The payment of claims is not an act of administration which requires a special power of attorney before
Guevarra could settle the insurance claims of the insured.

Also Guevarra was instructed that the payment for the insured must come from the revolving fund or
collection in his possession, Gueverra should not have paid the insured through his own capacity. Under
1918 of civil code an agent who acted in contravention of the principals instruction the principal will not
be liable for the expenses incurred by the agent.

(b) YES. Even if the law on agency prohibits Gueverra from obtaining reimbursement his right to recover
may be justified under the article 1236 of the civil code.[1] Thus Guevarra must be reimbursed but only
to the extent that Dominion has benefited without interest or demand for damages.

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