Case Digest (G.R. No. 167552)
Facts:
Eurotech Industrial Technologies, Inc. v. Edwin Cuizon and Erwin Cuizon, G.R. No. 167552, April 23, 2007, Supreme Court Third Division, Chico-Nazario, J., writing for the Court.Petitioner Eurotech Industrial Technologies, Inc. (petitioner) is an importer and distributor of European industrial equipment. Respondent Erwin Cuizon (Erwin) is the sole proprietor of Impact Systems Sales (Impact Systems), a single proprietorship; respondent Edwin Cuizon (Edwin) was impleaded in the trial court as Impact Systems’ sales manager and sued in that capacity. The dispute arose from petitioner’s sale of various goods to Impact Systems during January–April 1995 and from a later transaction for one unit of Selwood Spate 100D sludge pump (priced at P250,000) for which Impact Systems paid a P50,000 down payment.
When petitioner refused delivery of the sludge pump until Impact Systems settled its outstanding obligations (allegedly about P91,338 plus other indebtedness), Edwin (on behalf of Impact Systems) and petitioner’s general manager executed a Deed of Assignment of receivables dated 28 June 1995 assigning Impact Systems’ receivables from Toledo Power Corporation (P365,000) to petitioner; petitioner thereafter delivered the pump (Invoice No. 12034, 30 June 1995). Unknown to petitioner, Impact Systems (through Erwin) collected P365,135.29 from Toledo Power Company as shown by company vouchers and an official receipt dated 15 August 1995. Petitioner made demands; respondents made partial payments. On 7 October 1996 petitioner’s counsel sent a final demand stating total obligations as of 11 June 1996 amounted to P295,000 (exclusive of interest and attorneys’ fees).
Petitioner filed a complaint for sum of money, damages and application for preliminary attachment in the Regional Trial Court (RTC), Branch 8, Cebu City; the RTC granted the writ of preliminary attachment on 8 January 1997. Edwin filed an Answer (25 June 1997) admitting many sale transactions but claiming he was not a real party in interest and denying the full amount claimed; Erwin was later declared in default (Order dated 31 August 2001). Edwin moved that his affirmative defenses be treated as a Motion to Dismiss; after memoranda from the parties, the RTC issued an Order dated 29 January 2002 dropping Edwin as a defendant, reasoning that Edwin acted as agent of Impact Systems and that Impact Systems (through Erwin) ratified Edwin’s acts (including the down payment two days after the Deed of Assignment), thus Edwin had not exceeded his authority nor bound himself personally.
Petitioner appealed to the Court of Appeals (CA). In CA-G.R. SP No. 71397 the Court of Appeals affirmed the RTC Order in a Decision dated 10 August 2004 (opinion penned by Associate Justice Vicente L. Yap, with Associate Justices Arsenio J. Magpale and Ramon M. ...(Pro-only)
Issues:
- Was it proper for the RTC to drop Edwin Cuizon as a party defendant — i.e., is he a real party in interest?
- Did Edwin Cuizon expressly bind himself or exceed his authority such that he is personally liable under Article 1897 of the New Civil Code?
- Did respondents commit fraud or conspiracy that would render Edwin personally...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)