TOPIC: AGENT IS CRIMINALLY LIABLE FOR CRIME insurance at DBP MRI pool.

DBP deducted the

COMMITTED IN THE PURSUIT OF AGENCY amount to be paid for MRI Premium that is
worth Php 1476.00. The insurance of Mr. Dans,
Eurotech vs. Cuison less the DBP service fee of 10%, was credited by
GR No. 167552 DBP to the savings account of DBP MRI-Pool.
April 23, 2007 Accordingly, the DBP MRI Pool was advised of
the credit.
FACTS: On September 3, 1987, Mr. Dans died of
Petitioner is engaged in business of importation cardiac arrest. DBP MRI notified DBP was not
and distribution of various European industrial eligible for the coverage of insurance for he was
equipment for customers in the Philippines. One beyond the maximum age of 60. The wife,
of its customers Impact System Sales owned by Candida, filed a complaint to the Regional Trial
respondent Erwin Cuizon and its sales manager Court Branch I Basilan against DBP and DBP MRI
is respondent Edwin Cuizon. Petitioner sold to pool for ‘Collection of Sum of Money with
Impact Systems a sludge pump but refused to Damages’. Prior to that, DBP offered the
deliver the same because respondents did not administratrix (Mrs. Dans) a refund of the MRI
fully settle their indebtedness to petitioner. On payment but she refused for insisting that the
June 1995, respondent Edwin and petitioner family of the deceased must receive the amount
executed a Deed of Assignment wherein equivalent of the loan. DBP also offered and ex
respondent assigned receivables to petitioner gratia for settlement worth Php 30, 000. Mrs.
for the delivery of the sludge pump. Unknown to Dans refused to take the offer. The decision of
the petitioner, respondent still collected the the RTC rendered in favor of the family of the
receivables despite the Assignment. Petitioner deceased and against DBP. However, DBP
filed an action against the respondents. appealed to the court.

ISSUE: ISSUE: Whether or not the DBP MRI Pool should

Whether or not Edwin Cuizon is personally liable be held liable on the ground that the contract
in the indebtedness of the company was already perfected.

Held: HELD: No. DBP MRI Pool is not liable. Though the
No. Article 1897 provides that an agent who acts power to approve the insurance is lodged to the
as such is not personally liable to party with pool, the DBP MRI Pool did not approve the
whom he contracts except when (1) he expressly application of the deceased. There was no
binds himself to the obligation and (2) when he perfected contract between the insurance pool
exceeded his authority. The Deed of Assignment and Mr. Dans.
clearly states that respondent Edwin Cuizon DBP was wearing two legal hats: as a
signed as the sales manager of Impact Systems. lender and insurance agent. As an insurance
agent, DBP made believed that the family
DBP vs CA already fulfilled the requirements for the said
449 SCRA 57 insurance although DBP had a full knowledge
that the application would never be approved.
FACTS: Juan B. Dans, 76 years of age, together DBP acted beyond the scope of its authority for
with his family, applied for a loan worth Php 500, accepting applications for MRI. If the third
000 at the Development Bank of the Philipppines person who contracted is unaware of the
on May 1987. The loan was approved by the authority conferred by the principal on the agent
bank dated August 4, 1987 but in the reduced and he has been deceived, the latter is liable for
amount of Php 300, 000. Mr. Dans was advised damages. The limits of the agency carries with it
by DBP to obtain a mortgage redemption
the implication that a deception was superiors, Mr. Emmanuel Geslani, the agency's
perpetrated—Articles 19-21 come into play. President and General Manager, and Mr.
UtkalChowdury, the agency's Managing
However, DBP is not entitled to Director.
compensate the family of the deceased with the The trial Court found Chowdury huilty beyond
entire value of the insurance policy. Speculative reasonable doubt of the crime of illegal
damages are too remote to be included in the recruitment in large scale.
cost of damages. Mr. Dans is entitled only to
moral damages. Such damages do not need a Issue: Whether or not accused-appellant
proof of pecuniary loss for assessment. The court knowingly and intentionally participated in the
granted only moral damages (Php 50, 000) plus commission of the crime charged.
attorney fees’s (Php 10, 000) and the
reimbursement of the MRI fees with legal Held
interest from the date of the filing of the No. The elements of illegal recruitment
complaint until fully paid. in large scale are:

People vs. Chowdury (1) The accused undertook any recruitment

325 SCRA 572 activity defined under Article 13 (b) or any
February 15, 2000 prohibited practice enumerated under Article 34
of the Labor Code;
Facts (2) He did not have the license or authority to
Bulu Chowdury was charged with the crime of lawfully engage in the recruitment and
illegal recruitment in large scale by recruiting placement of workers; and
Estrella B. Calleja, Melvin C. Miranda and Aser S. (3) He committed the same against three or
Sasis for employment in Korea. Evidence shows more persons, individually or as a group.
that accused –appellant interviewed private
complainant in 1994 at Craftrade’s office, and The last paragraph of Section 6 of
required them to submit requirements such as Republic Act (RA) 804219 states who shall be
passport, NBI clearance, ID pictures, medical held liable for the offense, thus: “The persons
certificate and birth certificate. Chowdury also criminally liable for the above offenses are the
required them to pay placements fee for a principals, accomplices and accessories. In case
certain amount. At that time, he was an of juridical persons, the officers having control,
interviewer of Craftrade which was operating management or direction of their business shall
under temporary authority given by POEA be liable.”
pending the renewal of license. He was charged An employee of a company or
based on the fact that he was not registered with corporation engaged in illegal recruitment may
the POEA as employee of Craftrade and he is not be held liable as principal, together with his
in his personal capacity, licensed to recruit employer, if it is shown that he actively and
overseas workers. The complainants also consciously participated in illegal recruitment.
averred that during their applications for The culpability of the employee therefore hinges
employment for abroad, the license of Craftrade on his knowledge of the offense and his active
was already expired. participation in its commission. Where it is
shown that the employee was merely acting
For his defense Chowdury testified that he under the direction of his superiors and was
worked as interviewer at Craftrade from 1990 unaware that his acts constituted a crime, he
until 1994. His primary duty was to interview job may not be held criminally liable for an act done
applicants for abroad. As a mere employee, he for and in behalf of his employer.
only followed the instructions given by his
In this case, Chowdury merely performed his contract is an agency to sell, Green Valley will be
tasks under the supervision of its president and liable to E.R. Squibb because in such contract, the
managing director. The prosecution failed to agent is liable to pay the principal for goods sold
show that the accused-appellant is conscious by the agent without the principal’s consent.
and has an active participation in the
DOCTRINE: In an agency to sell, the agent is
commission of the crime of illegal recruitment.
liable to pay the principal for goods sold by the
Moreover, accused-appellant was not aware of
agent without the principal’s consent. The
Craftrade's failure to register his name with the
commission agent cannot without the express or
POEA and the prosecution failed to prove that he
implied consent of the principal, sell on credit.
actively engaged in recruitment despite this
Should he do so, the principal may demand from
knowledge. The obligation to register its
him payment in cash, but the commission agent
personnel with the POEA belongs to the officers
shall be entitled to any interest or benefit, which
of the agency. A mere employee of the agency
may result from such sale.
cannot be expected to know the legal
requirements for its operation. The accused-
appellant carried out his duties as interviewer of FACTS:
Craftrade believing that the agency was duly
licensed by the POEA and he, in turn, was duly  On November 3, 1969, Squibb and Green
authorized by his agency to deal with the Valley entered into a letter agreement,
applicants in its behalf. Accused-appellant in fact which stipulates the following: (see notes for
confined his actions to his job description. He full letter)
merely interviewed the applicants and informed o E.R. Squibb & Sons Phil Corp. appoints
them of the requirements for deployment but he Green Valley Poultry as a non-exclusive
never received money from them. Chowdury did distributor for Squibb Veterinary
not knowingly and intentionally participated in Products, as recommended by Dr.
the commission of illegal recruitment being Leoncio Rebong Jr. and Dr. J.G. Cruz,
merely performing his task and unaware of Animal Health Division Sales Supervisor.
illegality of recruitment. o As a distributor, Green Valley is entitled
to a discounts
TOPIC: Commission Agent CANNOT SELL on o Green Valley Poultry will distribute only
credit without principal’s consent (Art. 1905). for the Central Luzon and Northern
Otherwise: Considered as Cash Sales Luzon including Cagayan Valley areas.
o Squibb will not allow any transfer or
Green Valley vs. IAC stocks in the said areas covered by
133 SCRA 697 Squibb’s other appointed Distributors.
1984 o The maximum discount that Green
Poultry can give to their direct and
FACTS: turnover accounts will not go beyond
SUMMARY: Green Valley Poulty and E.R. 10%
Squibb & Sons entered into a letter agreement. o Payment for purchases from Squibb will
The details of the agreement state that Green be due 60 days from date of invoice, etc.
Valley will be the nonexclusive distributor of the  Squibb filed a suit to collect for good
products of Squibb Veterinary Products. Squibb delivered to Green Valley but unpaid.
filed a suit to collect for goods delivered to Green  Trial court and CA ruled in favor of Squibb
Valley but unpaid. The trial court and CA ruled in o Ruled that the agreement between the
favor of E.R. Squibb, holding that the agreement parties was a sales contract.
was a sales contract. The Court upheld the ruling
of the TC and CA, but it discussed that even if the
RULING: Petition is dismissed Dr. Leoncio D. Rebong, Jr. and Dr. J.G. Cruz,
Animal Health Division Sales Supervisor.
As a distributor, Green Valley Poultry & Allied
Whether Green Valley is liable to Squibb – YES Products, Inc. wig be entitled to a discount as
follows:
Whether Green Valley is an agent of Squibb – Feed Store Price (Catalogue)
NO (Court did not answer categorically but it Less 10% - Wholesale Price
upheld the ruling of CA) Less 10% - Distributor Price
There are exceptions to the above price
structure. At present, these are:
 PETITIONER’S ARGUMENTS: 1. Afsillin Improved — 40 lbs. bag
o The contract is an agency to sell; hence, The distributor commission for this product size
it is not liable to Squibb is 8% off P120.00
 RESPONDENT’S ARGUMENTS: 2. Narrow — Spectrum Injectible Antibiotics
o Its relationship with Green Valley is a
These products are subject to price fluctuations.
mere contract of sale as evidenced by
Therefore, they are invoiced at net price per vial.
the stipulation that Green Valley was
obligated to pay for the goods received 3. Deals and Special Offers are not subject to the
upon the expiration of the 60-day credit above distributor price structure. A 5%
period. distributor commission is allowed when the
COURT distributor furnishes copies for each sale of a
complete deal or special offer to a feedstore,
 We do not have to categorize the contract. drugstore or other type of account.
Whether viewed as an agency to sell or as a Deals and Special Offers purchased for resale at
contract of sale, Green Valley is liable.
regular price invoiced at net deal or special offer
 If it is a contract of sale then the Green Valley
price.
is liable by just merely enforcing the clear
words of the contract. Prices are subject to change without notice.
 Adopting Green Valley’s theory that the Squibb will endeavor to advise you promptly of
contract is an agency to sell, it is liable any price changes. However, prices in effect at
because it sold on credit without authority the tune orders are received by Squibb Order
from its principal. Department will apply in all instances.
 Art. 1905. The commission agent cannot, Green Valley Poultry & Allied Products, Inc. win
without the express or implied consent of distribute only for the Central Luzon and
the principal, sell on credit. Should he do so, Northern Luzon including Cagayan Valley areas.
the principal may demand from him We will not allow any transfer or stocks from
payment in cash, but the commission agent Central Luzon and Northern Luzon including
shall be entitled to any interest or benefit, Cagayan Valley to other parts of Luzon, Visayas
which may result from such sale. or Mindanao which are covered by our other
appointed Distributors. In line with this, you will
NOTES: follow strictly our stipulations that the maximum
discount you can give to your direct and turnover
Letter Agreement: accounts will not go beyond 10%.
E.R. Squibb & Sons Philippine Corporation is It is understood that Green Valley Poultry and
pleased to appoint Green Valley Poultry & Allied Allied Products, Inc. will accept turn-over orders
Products, Inc. as a non-exclusive distributor for from Squibb representatives for delivery to
Squibb Veterinary Products, as recommended by
customers in your area. If for credit or other valid
reasons a turn-over order is not served, the
Squibb representative will be notified within 48
hours and hold why the order will not be served.
It is understood that Green Valley Poultry &
Allied Products, Inc. will put up a bond of
P20,000.00 from a mutually acceptable bonding
company.
Payment for Purchases of Squibb Products will
be due 60 days from date of invoice or the
nearest business day thereto. No payment win
be accepted in the form of post-dated checks.
Payment by check must be on current dating.
It is mutually agreed that this non-exclusive
distribution agreement can be terminated by
either Green Valley Poultry & Allied Products,
Inc. or Squibb Philippines on 30 days notice.
I trust that the above terms and conditions will
be met with your approval and that the
distributor arrangement will be one of mutual
satisfaction.
If you are agreeable, please sign the enclosed
three (3) extra copies of this letter and return
them to this Office at your earliest convenience.
Thank you for your interest and support of the
products of E.R. Squibb & Sons Philippines
Corporation.

TOPIC: Principal not bound to contracts done

outside of agent’s authority (Art. 1898 & 1910).

PNB vs. Agudelo

GR No. 39037
October 30, 1933

FACTS: