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EUROTECH INDUSTRIAL TECHNOLOGIES, INC. VS.

EDWIN CUIZON
AND ERWIN CUIZON
G.R. No. 167552 APRIL 23, 2007
CHICO-NAZARIO, J.
FACTS:
Petitioner is engaged in the business of importation and distribution of various
european industrial equipment for Filipino Customers. One of its customers is Impact
Systems, which is a sole proprietorship and owned by Erwin Cuizon. Edwin is the Sales
Manager and was impleaded in the court in said capacity. In January-April 1995,
petitioner sold to Impact Systems various products amounting to 91, 338.00.
Subsequently, respondents sought to buy from petitioner 1 unit of sludge pump valued
at 250,000.00 and respondent made a down payment of 50, 000.00. When the sludge
dump arrived from the UK, petitioner refused to deliver the same to respondents their
having fully settled their indebtedness. In June 1995, Edwin and Alberto De Jesus
(general manager of petitioner) executed a deed of assignment of receivables in favor
of petitioner. Following its execution, petitioner delivered the sludge pump to
respondents. Unknown to the petitioner, despite the existence of the deed of
assignment, respondents proceeded to collect from Toledo power Company the amount
of 365,125.29. Alarmed by this development, petitioner made several demands upon
respondents to pay their obligations and respondents were able to make partial
payments because of respondents failure to abide by said final demand letter. Petitioner
instituted a complaint for sum of money, damages with application of preliminary
attachment against respondents before the Cebu City RTC. The trial court granted
petitioners prayer for the issuance of writ of preliminary attachment. In June 1997,
Edwin filed his answer and he admitted petitioners allegation with respect to the sale
transactions entered in by Impact Systems but disputed the amount and Alleged that he
is not a real party in interest in the case; he was acting as mere agent of his principal
(Impact Systems) in his transaction with petitioner. In June 1998, petitioner filed a
Motion to Declare Defendant Erwin in Default with Motion for Summary Judgment. The
court ganted motion to declare Erwin in default but denied motion for summary
judgment. After the filing of respondents Memorandum; trial court issued an order
dropping respondent as party defendant in the case. Petitioner brought the matter to the
CA. CA affirmed ruling of the court and petitioners motion for reconsideration was
denied by the appellate court.
ISSUE:
Whether or not the act of Edwin Cuizon signing the deed of assignment binds his
principal Impact Systems.
HELD:
Yes, the Deed of Assignment signed by Edwin in his capacity as the sales
manager binds Impact Systems.
The Civil Code provides 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 latters consent. The underlying principle of the contract of agency is to accomplish
results by using the services of others to do a great variety of things like selling, buying,
manufacturing, and transporting. 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 the case at bar, Edwin Cuizon acted well within his authority when he signed
the Deed of Assignment, A managerial position presupposes a degree of confidence
reposed with liberal powers for the exercise of the judgment and discretion in the
transactions and concerns incidental to the business entrusted to his management In
the absence of an agreement, a managing agent may enter into any contract he deems
reasonable necessary for the protection of the interests of his principal.
Given that Edwin Cuizon acted well within his authority, his act of signing the
deed of assignment in his capacity as sales manager of Impact Systems has the legal
effect as if they were personally executed by his principal and therefore it is binding
upon Impact Systems.

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