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 defendants 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- NO
RATIO: 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 company

2. 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 P2k
3.) 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 defendant
5.) 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 intl 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 Zurichs instructions thru Primateria Philippines with Baylin
and Crame who were officers of said corp. The total amount due to the
plaintiff was P31,009. 71
4.) 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 P50k
4.) 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 RTCs judgment.
ISSUE: WON EDWIN, as agent, is personally liable / WON Eurotech may
recover from both principal and agent NO, NO
RATIO: 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. ERWINs 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. ERWINs action did not repudiate EDWINs
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.