US v Kiene

DOCTRINE: Where nothing to the contrary appears, the provisions of article 1720 of the Civil Code
impose upon an agent the obligation to deliver to his principal all funds collected on his account.
FACTS
Kiene was an insurance agent. As such agent there was paid over to him for the account of his
employers, China Mutual Life Insurance Company (CMLIC), the sum of P1,539.20 which he failed
to turn over to them.
o He was convicted of the crime of Estafa.
On appeal, defendant alleges the failure of the prosecution to establish the existence of a duty or
obligation imposed on defendant to turn over to his principal the funds, which he is charged for
appropriating to his own use.
o His counsel contends that the trial court erroneously admitted in evidence a certain
document purporting to be a contract of agency signed by defendant.
o The name of the accused is attached to this document, and one of the witnesses, the
district agent of the CMLIC, stated that it was indeed the contract but failed to state
specifically that the signature attached thereto was the signature of defendant.
It is contended that that the trial court failed to establish the execution of such document and that
it erred in taking into consideration one of its provisions whereby the defendant appears to have
expressly obligated himself to deliver to CMLIC the funds collected on its account.
ISSUE + RULING
Should the document purporting to be the contract of agency have been admitted as evidence? Not
necessary.
The SC held that it is not necessary to review the action of the court in admitting the evidence
because the obligation of the defendant (agent) to deliver the funds in question to his employers
is determined by the provision of Art. 1720 of the CC:
Every agent is bound to give an account of his transactions and pay to the
principal all that he may have received by virtue of the agency, even though what
was received is not owed to the principal.
The existence of agency and the collection of funds on account of the principal having been
established, the obligation to deliver these funds to the principal must be held to have been
imposed upon the agent by virtue of the contract of agency.