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Philippine Products Company v Primateria

[G.R. No. L-17160] | [November 29, 1965] | [BENGZON, C.J]

Plaintiff-appellant: PHILIPPINE PRODUCTS COMPANY

Defendants-appellees: PRIMATERIA SOCIETE ANONYME POUR LE COMMERCE EXTERIEUR:
PRIMATERIA (PHILIPPINES) INC., ALEXANDER G. BAYLIN and JOSE M. CRAME

Doctrine: Article 1897 does not hold that in case of excess of authority, both the agent and the principal are
liable to the other contracting party.

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CASE SUMMARY
Trigger word/s: liability

FACTS: Defendant Primateria Zurich, through defendant Baylin, entered into an agreement with plaintiff
Philippine Products Company, whereby the plaintiff undertook to buy copra in the Philippines for the account of
Primateria Zurich. Pursuant to instructions from Primateria Zurich, plaintiff caused the shipment of copra to
foreign countries thru Primateria Philippines acting by defendant Baylin and Crame, officers of Primateria
Philippines. As a result, the total amount due to the plaintiff was P33,009.71 which the plaintiff sought to
recover from defendants, along with interest and attorney’s fees. The lower court held defendant Primateria
Zurich liable to the plaintiff for the sums of P31,009.71 (Since Primateria Zurich paid P2,000 of plaintiff’s
original claim), with legal interest from the date of the filing of the complaint, and attorney's fees; and absolved
defendants Primateria Philippines, Baylin, and Crame from any and all liability. Plaintiff appealed from the
portion of the judgment dismissing its complaint as regards the three defendants.

HELD: The judgment appealed from is affirmed. There is no proof that defendants exceeded the limits of their
authority as agents. Their principal, Primateria Zurich, never denied its liability on the ground of excess of
authority. At any rate, Article 1897 does not hold that in case of excess of authority, both the agent and the
principal are liable to the other contracting party.

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ISSUES & HELD

1. Whether defendant Primateria Zurich may be considered a foreign corporation within the meaning of
Sections 68 and 69 of the Corporation Law – NO
 Plaintiff: Primateria Zurich is a foreign corporation within the meaning of Sections 68 and 69 of the
Corporation Law
 SC: Lower court ruling affirmed: Primateria Zurich was not duly proven to be a foreign corporation; nor
that a societe anonyme ("sociedad anomima") is a corporation; and that failing such proof, the societe
cannot be deemed to fall within the proscription of Section 68 of the Corporation Law. The Corporation
Law recognizes the difference between sociedades anonimas and corporations
2. Whether the agents of Primateria Zurich are personally liable for contracts made in its behalf – NO
 Plaintiff: Defendants as agents of Primateria Zurich are liable to plaintiff under Art. 1897 of the New
Civil Code:
"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 power."
  SC: There is no proof that, as agents, they exceeded the limits of their authority. In fact, the principal —
Primateria Zurich — who should be the one to raise the point, never raised it, never denied its liability
on the ground of excess of authority. At any rate, the article does not hold that in case of excess of
authority, both the agent and the principal are liable to the other contracting party.
o Liability of the agent is necessarily premised on the inability to sue the principal or non-liability of
such principal. ICAB, plaintiff has already been given judgment against the principal for the
whole amount it seeks to recover.
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RULING: Petition dismissed (in favor of Defendants).

IN VIEW OF THE FOREGOING CONSIDERATIONS, the appealed judgment is affirmed, with costs against
appellant.
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NOTES

PRIMATERIA SOCIETE ANONYME POUR LE COMMERCE EXTERIEUR = Primateria Zurich = A foreign

juridical entity and, at the time of the transactions involved herein, had its main office at Zurich, Switzerland

societe anonyme ("sociedad anomima") - association