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Eurotech Industrial Technologies, Inc. v. Cuizon

Eurotech Industrial Technologies, Inc. sued Edwin Cuizon for unpaid debts from Impact Systems Sales, a sole proprietorship owned by Cuizon. To settle prior debts and secure a new purchase, Cuizon signed a Deed of Assignment transferring Impact Systems' receivables to Eurotech. Cuizon later collected on receivables without paying Eurotech. The Supreme Court ruled that Cuizon did not exceed his authority as an agent for Impact Systems when he signed the Deed of Assignment. As an agent acting on behalf of his disclosed principal within the scope of his authority, Cuizon was not personally liable for Impact Systems' debts to Eurotech.

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128 views3 pages

Eurotech Industrial Technologies, Inc. v. Cuizon

Eurotech Industrial Technologies, Inc. sued Edwin Cuizon for unpaid debts from Impact Systems Sales, a sole proprietorship owned by Cuizon. To settle prior debts and secure a new purchase, Cuizon signed a Deed of Assignment transferring Impact Systems' receivables to Eurotech. Cuizon later collected on receivables without paying Eurotech. The Supreme Court ruled that Cuizon did not exceed his authority as an agent for Impact Systems when he signed the Deed of Assignment. As an agent acting on behalf of his disclosed principal within the scope of his authority, Cuizon was not personally liable for Impact Systems' debts to Eurotech.

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Eurotech Industrial Technologies, Inc.

v. Cuizon
jurist

G.R. No. 167552, 23 April 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.
Eurotech 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 a down payment. When the
sludge pump arrived from the United Kingdom, Eurotech refused to deliver
the same to Cuizons without their having fully settled their indebtedness to
Eurotech. Thus, Edwin Cuizon and Alberto de Jesus, general manager of
Eurotech, executed a Deed of Assignment of receivables in favor of
Eurotech.

Cuizons, despite the existence of the Deed of Assignment, proceeded to


collect from Toledo Power Company the amount of P365,135.29. Eurotech
made several demands upon Cuizons to pay their obligations 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.

The RTC dropped Edwin Cuizon as party defendant in the case. The Court of
Appeals, affirmed the trial court’s decision. Hence, the appeal.

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 did not exceEd his authority when he signed the Deed of
Assignment. As stated in Art. 1897, The agent who acts as such is not
personally liable to the party with whom he contracts, unless he expressly
binds himself or exceeds the limits of his authority without giving such party
sufficient notice of his powers. An agent, who acts as such, is not personally
liable to the party with whom he contracts. There are 2 instances when an
agent becomes personally liable to a third person. The first is when he
expressly binds himself to the obligation and the second is when he exceeds
his authority. In the last instance, the agent can be held liable if he does not
give the third party sufficient notice of his powers.

In this case, Edwin does not fall within any of the exceptions contained in Art.
1897. Edwin Cuizon acted well-within his authority when he signed the Deed
of Assignment. Edwin’s participation in the Deed of Assignment was
“reasonably necessary” or was required in order for him to protect the
business of his principal.

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. Therefore, Edwin
Cuizon acted within the scope of his authority and is not personally liable for
the obligations to Eurotech.

*Case digest by April Rose B. Tuanda, JD-IV, Andres Bonifacio Law School,
S.Y 2019-2020

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