Eurotech Industrial Technologies Inc. vs.

Edwin Cuizon and Erwin Cuizon

G.R. No. 167552. April 23, 2007

Facts:
The petition assails the dropping of respondent Edwin Cuizon (EDWIN) as party defendant in a civil case
filed by Eurotech Industrial Technologies Inc. (Eurotech) against the respondents.

Eurotech is engaged in the business of importation and distribution of various European industrial
equipment. One of its costumers is Impact Systems Sales (Impact Systems) which is a sole proprietorship
owned by Erwin Cuizon (ERWIN) and where EDWIN is a sales manager.

The controversy sprang from a sale a sludge pump valued at P250,000. Respondents were able to make a
downpayment of P50,000.00. Since they could not pay the balance in cash, EDWIN executed ad Deed of
Assignment of Receivables in favor of petitioner as a consideration for the sludge pump. However,
despite the deed of assignment, Impact Systems collected from the said assigned receivables.

EDWIN upon Motion was dropped as party defendant on the ground that he was a mere agent of ERWIN.

Issue/s:
Whether or not EDWIN exceeded his authority when he signed the Deed of Assignment thereby binding
himself personally to pay the obligations of the petitioner.

Ruling:
In a contract of agency, a person binds himself to render some service or do something in representation
or behalf of another with the latters consent. Its purpose is to extend the personality of the principal. The
agent acts for and on behalf of the principal on matters within the scope of his authority and said acts have
the same effect as if they were personally executed by the principal.

It is undisputed in this case that there exists an agency relationship between respondents ERWIN as
principal and EDWIN as agent. Under Article 1897 of the New Civil Code provides that the agent who
acts as such is not personally liable to the party whom he contracts. The exceptions to this general rule are
that, first, when the agent expressly binds himself to the obligation and second, when the agent exceeds
his authority.

The Deed of Assignment clearly states that respondent EDWIN signed thereon as sales manager of
Impact Systems. The position of manager is unique in that it presupposes the grant of broad powers with
which to conduct the business of the principal. EDWINs persistence in negotiating with petitioner the
release of the sludge pump showed that the equipment is really needed by the business. Thus, the
execution of the Deed of Assignment was reasonably necessary in order to protect the business of the
principal. As such, EDWIN acted within his authority as agent, who did not acquire any right nor incur
any liability arising from the Deed of Assignment.
PETITION WAS DENIED.