Carlo Digest Atp

FRESSEL V.
MARIANO UY
FACTS:
Defendant entered into a contract with E. Merritt, whereby the said Merritt
undertook and agreed with the defendant to build for the defendant a costly edifice in
the city of Manila. It was agreed that the defendant at any time, upon certain
contingencies, before the completion of said edifice could take possession of said edifice
in the course of construction and of all the materials in and about said premises acquired
by Merritt for the construction.
In August, the plaintiffs delivered to Merritt at the said edifice materials of the
value of P1, 381.21, which price Merritt had agreed to pay on the 1st day of September,
1914. August 28, 1914, the defendant under and by virtue of its contract with Merritt
took possession of the incomplete edifice in course of construction together with all the
materials on said premises including the materials delivered by plaintiffs.
Neither Merritt nor the defendant has paid for the materials. Plaintiffs demanded
of the defendant the return or permission to enter upon said premises and retake said
materials at the time still unused which was refused by defendant. Fressel et al, insist
that Merritt acted as the agent of the defendant in purchasing the materials in question
and that the defendant, by taking over and using such materials, accepted and ratified
the purchase, thereby obligating itself to pay for the same.
ISSUE: Whether or not Merritt acted as agent of Mariano Uy Chaco Sons & Co.
RULING: NO
The facts alleged do not even intimate that the relation existing between Merritt
and the defendant was that of principal and agent, but, on the contrary, they
demonstrate that Merritt was an independent contractor and that the materials
were purchased by him as such contractor without the intervention of the defendant. The
fact that "the defendant entered into a contract with one E. Merritt, whereby the said
Merritt undertook and agreed with the defendant to build for the defendant a costly
edifice" shows that Merritt was authorized to do the work according to his own method
and without being subject to the defendant's control, except as to the result of the work.
The mere fact that Merritt and the defendant had stipulated in their building contract that
the latter could, "upon certain contingencies," take possession of the incomplete building
and all materials on the ground, did not change Merritt from an independent contractor
to an agent.
DOMINION INSURANCE CORP. V. CA
DOCTRINE: When a special power of attorney is required for the agent to do a certain
act, the agent, in the performance of such act, must comply with the specifications
embodied in the special power of attorney giving him authority to do such.
FACTS:
Rodolfo Guevarra instituted a civil case for the recovery of a sum of money against
Dominion Insurance. He sought to recover P156,473.90, which he claimed to have
advanced in his capacity as manager of Dominion to satisfy claims filed by Dominions
clients. Dominion denied any liability to Guevarra and asserted a counterclaim for
premiums allegedly unremitted by the latter.
The pre-trial conference never pushed through despite being scheduled and postponed
nine times over the course of six months. Finally, the case was called again for pre-trial
and Dominion and counsel failed to show up. The trial court declared Dominion in default
and denied any reconsideration.
On the merits of the case, the RTC ruled that Dominion was to pay Guevarra the
P156,473.90 claimed as the total amount advanced by the latter in the payment of the
claims of Dominions clients. The CA affirmed.
ISSUES AND RULING:
1. Whether or not Guevarra acted within his authority as an agent for

Dominion NO
A perusal of the Special Power of Attorney would show that Dominion and
Guevarra intended to enter into a principal-agent relationship. Despite the word special,
the contents of the document reveal that what was constituted was a general agency.
The agency comprises all the business of the principal, but, couched in general terms, is
limited only to acts of administration. A general power permits the agent to do all acts
for which the law does not require a special power.
Art. 1878 enumerates the instances when a special power of attorney is required,
including (1) to make such payments as are not usually considered as acts of
administration; (15) any other act of strict dominion. The payment of claims is not
an act of administration. The settlement of claims is not included among the acts
enumerated in the Special Power of Attorney, neither is it of a character similar to the
acts enumerated therein. A special power of attorney would have been required before
Guevarra could settle the insurance claims of the insured.
Guevarras authority to settle claims is embodied in the Memorandum of
Management Agreement which enumerated the scope of Guevarras duties and
responsibilities. However, the Memorandum showed the instruction of Dominion
that payment of claims shall come from a revolving fund. Having deviated from
the instructions of the principal, the expenses that Guevarra incurred in the settlement of
the claims of the insured may not be reimbursed from Dominion.
2. Whether or not Guevarra is entitled to reimbursement of amounts he paid

out of his personal money - YES
However, while the law on agency prohibits Guevarra from obtaining

reimbursement, his right to recovery may still be justified under the general law
on Obligations and Contracts, particularly, Art. 1236. (see Art. 1236)
In this case, when the risk insured against occurred, Dominions liability as insurer
arose. This obligation was extinguished when Guevarra paid such claims. Thus, to the
extent that the obligation of Dominion had been extinguished, Guevarra may demand
reimbursement from his principal. To rule otherwise would result in unjust enrichment of
Dominion.
Dominion is ordered to pay Guevarra P112, 672.11, representing the total amount
advanced by the latter in the payment of the claims of the formers clients, minus the
amount in the revolving fund and the outstanding balance and remittance.
EUROTECH INDUSTRIAL TECHNOLOGIES, INC. v. CUIZON
DOCTRINE: The purpose of Agency is to extend the personality of the principal through
his agent. 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.
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.

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FRESSEL V.

ISSUES AND RULING:

1. Whether or not Guevarra acted within his authority as an agent for

2. Whether or not Guevarra is entitled to reimbursement of amounts he paid

However, while the law on agency prohibits Guevarra from obtaining

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