E. Macias v. Warner, Barnes & Co.

FACTS: 1.) Plaintiff E. Macias is a corporation duly registered and domiciled in Manila which imports textures and commercial articles for wholesale.2.) Def. Warner Barnes & Co. is a corp. duly licensed to do business in the Philippines, and is the resident agent of 3 foreign insurance companies (China Fire-HK, Yang Tsze-Shanghai, and State Assurance Company of Liverpool)2.) E. Macias obtained insurance policies. The policies were in writing and recite that a premium was paid by the plaintiff to the insurance company and that, in the event of loss, the insurance company which issued it will pay to the insured the amount of the policy.3.) While the policies were in force, a loss occurred wherein the insured property was damaged by fire and the use of water resulting from the fire.4.) E. Macias made a claim for damages but they could not agree as to the amount of loss sustained. 5.) It sold the insured property in its damaged condition, and an action was brought against Warner, in its capacity as agents, to recover the difference between the amount of the policies and the amount realized from the sale.6.) Defendant alleges that they were always willing to pay on behalf of the three. E. Macias only failed and refused to deliver any claim in writing specifying the items damaged and the amount of loss.7.) Before the trial, it was also alleged by defendant’s counsel they had no contractual relation with the plaintiff, and that action has not been brought against the real party in interest.8.) RTC ruled in favor of plaintiff so Warner, in its capacity as agent and representative, should pay. Defendant filed a motion to set aside judgment but was overruled so defendant appealed. Plaintiff also appealed.

ISSUE:WON Macias may recover from def., as principal or agent- NORATIO: 1. A resident agent of a foreign insurance company is not liable, as principal or agent, on insurance contracts issued in the name of the insurance company2. Defendant did not make any contract with the plaintiff and so are not liable on any contract either as principal or agent.3. There is no pretense that defendant had any authority to act for, and represent the insurance companies in the pending action, or to appear for them or make any admission which would bind them. As a local agent, it could not do that without express authority. 4. Judgment of LC reversed. SC: in favor of Warner.

Salonga v. Warner Barnes & Co.

FACTS: 1.) Westchester Fire Insurance Company of NY entered into a contract with Tina Gambao to insure 1 case of rayon yardage which will be shipped from California to Manila.2.) The insurance company undertook to pay Gamboa or her consignee, Salonga, the damages that may be caused to the goods shipped subj. to the condition that it will not exceed P2k3.) The shipment arrived, but when it was examined a shortage in the amount of P1723.12 was discovered. So, a claim for damages was made against American President Lines, agents of the ship Clovis Victory, demanding settlement. When no action was taken on this claim, plaintiff demanded from Warner, Barnes & Co., as agent of the insurance company in the Philippines. However, it refused to pay the claim so plaintiff instituted present action.4.) Meanwhile, American President Lines agreed to pay P1,021.25 leaving a balance of P717.82 as the ultimate liability of the defendant5.) CFI rendered judgment against defendants so it filed a MR but was denied. Thus, it was appealed to this court.

ISSUE: WON the defendant, an agent who acts within the scope of his authority, can assume personal liability for a contract entered into by him in behalf of his principal – NO, CFI decision reversed

RATIO: 1. A contractual obligation or liability, or an action ex-contractu, must be founded upon a contract, oral or written, either express or implied. If there is no contract, there is no liability, and no cause of action. 2. Defendant has not taken part, directly or indirectly, in the contract. The contract of marine insurance was made and executed only by and between Westchester and Gamboa. The defendant did not sign the contract as agent of the foreign insurance company and so the agent did not assume personal liability. The only party bound was the principal.3. E Macias & Co. v Warner, Barnes & Co. involves similar facts which calls for the application of a similar ruling.4. The defendant is a settlement and adjustment agent of the foreign insurance company. The scope and extent of the functions of an adjustment and settlement agent do not include principal liability. His functions are merely to settle and adjust claims in behalf of his principal if those claims are proven and undisputed, and if the claim is disputed by the principal, the agent does not assume any personal liability. The recourse of the insured is to press his claim against principal.Note: An action may be brought against foreign company through Sec. 14, Rule 7 of the ROC (Gen. Corp. vs Union Ins.)

Phil. Products Co. v Primateria Societe Anonyme

FACTS: 1.) Defendant Primateria Zurich is a foreign juridical entity and had its main office at Zurich, Switzerland. It was then engaged in “Transactions in int’l trade with agricultural products.2.) Defendant entered into an agreement with Phil. Products Company wherein the latter bought copra in the Philippines.3.) Plaintiff caused the shipment of copra to foreign countries pursuant to Primateria Zurich’s instructions thru Primateria Philippines with Baylin and Crame who were officers of said corp. The total amount due to the plaintiff was P31,009. 714.) Baylin acted indiscriminately in the transactions in dual capacities as agent of Zurich and executive VP of Primateria Phil which also acted as agent of Primateria Zurich.5.) RTC rendered judgment against the defendant ordering them to pay the entire amount; and absolving Primateria Phil, Baylin and Crame.6.) Plaintiff appealed saying that Primateria Zurich is a foreign corporation and since it has transacted in the Phil without necessary license as required by the corp. code, its agents here are personally liable for contracts made in its behalf. Plaintiff does not want that Primateria Phil and its officers be absolved.

ISSUE: WON Primateria Phil. May be held personally liable on contracts made in the name of Primateria Zurich with Phil Products – NO

RATIO: 1. Plaintiff alleges that the Primateria Phil as agents of Primateria Zurich are liable to it under Art. 1897 which says that an agent who acts as such is not personally liable to the party whom he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers. 2. There is no proof that Primateria Phil. exceeded the limits of their authorities. In fact, the principal who should be the one to raise this point never raised it. The principal denied its liability on the ground of excess authority. 3. At any rate, art. 1897 also does not hold that in cases of excess of authority, both the agent and the principal are liable to the other contracting party.Note: It was already held that such foreign corporation may be sued here (Gen. Corp. v. Union Ins.). And obviously, liability of the agent is necessarily premised on the inability to sue the principal or non-liability of such principal. [in the absence of express legislation]

Eurotech v. Cuizon

FACTS: 1.) Eurotech is engaged in the importation and distribution of various European industrial equipment for customers here in the Phil.2.) Impact Systems which is a sole proprietorship owned by resp. ERWIN is one of its customers. Respondent EDWIN is the sales manager.3.) Eurotech sold various products allegedly amounting to P91,338 to Impact Systems. Subsequently, it sought to by one unit of sludge pump valued at P250k with resp. making a DP of P50k4.) When the sludge pump arrived, Eurotech refused to deliver the same without fully settling the debt. So, EDWIN and the general manager of Eurotech (de Jesus) executed a Deed of Assignment of receivables in favor of Eurotech. Impact Systems’ outstanding receivables from Toledo Power Corp. in the amount of P365k shall be assigned to Eurotech. With this, the sludge pump was delivered.5.) Despite the existence of the Deed of Assignment, ERWIN proceeded to collect from Toledo. Alarmed by this, Eurotech made several demands upon resp. to pay. Respondents were able to make partial payments but failed to pay entire amount. Thus, Eurotech filed a complaint in RTC.6.) EDWIN admitted that sale transactions were entered into by Impact Systems. However, he alleged that he was merely acting as an agent of Impact Systems, and Eurotech was very much aware of this fact.7.) Eurotech also filed a motion to declare ERWIN in default and the court granted this but did not grant motion for summary judgment. The court directs that EDWIN be dropped as party defendant so Eurotech appealed because it wants to retain EDWIN as def. CA Affirmed RTC’s judgment.

ISSUE: WON EDWIN, as agent, is personally liable / WON Eurotech may recover from both principal and agent – NO, NORATIO: 1. To support its argument pet. Eurotech points Art. 1897 1897 which says that an agent who acts as such is not personally liable to the party whom he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers. 2. ERWIN’s act of collecting from Toledo despite existence of the DOA signed by EDWIN on behalf of Impact Systems did not revoke the agency relations of the respondents. ERWIN’s action did not repudiate EDWIN’s power to sign the DOA. – EDWIN acted well-within his authority. It can be assumed that Impact Systems desperately needed the sludge pump. Had he not acted in the way he did, the business of his principal would have been adversely affected.3. Also, in Art. 1897: In case of excess authority by the agent, the law does not say that a third person can recover from both the principal and the agent.

4. Petition denied. Case remanded to the RTC for the continuation of the proceedings against ERWIN.