Title: EUGEN MARSCHALL, as judicial administrator of the estate of Walter Toehl,

deceased, plaintiff and appellant, vs.CARL ANTHOLTZ ET AL.. defendants. CARL

ANTHOLTZ. appellant.

1.
PRINCIPAL AND AGENT; DEATH OF PRINCIPAL; EFFECT ON AUTHORITY
OF AGENT.—Under article 280 of the Code of Commercea contract of agency
is not terminated by the death of the principal, though it may be revoked by his
representative; and one who is in charge of an oil mill in the character of
manager of the going concern may, under this provision, continue to exercise
his authority even after the death of the principal. In such case the agent, acting
in good faith, does not become liable for waste of the assets of the deceased
principal by continuing the business as a going concern and disposing of the
proceeds of the manufactured product in conformity with the contract of agency.

1. 2.ID.; ID.; LIABILITY OF AGENT UNDER SECTION 711, CODE OF CIVIL

PROCEDURE.—In the case above stated, the manager of the oil mill who
applies the proceeds of sales to the payment of debts contracted in running the
factory does not become liable for double the value of the property sold, as for
embezzlement or alienation of property pertaining to the estate of a deceased
person under section 711 of the Code of Civil Procedure. This section
contemplates an embezzlement or alienation which causes the estate to lose
the property converted by the wrongdoer; and it is not applicable to the acts of a
manager of a going concern who applies the proceeds of the manufactured
product to the expenses incurred in running the business.

Facts:

Walter Toehl was the manager of Behn, Meyer & Co and also its chemist. He was also
the owner of a parcel of land located in Sta. Ana, Manila. Toehl contracted Antholtz to
manage the land as oil mill. The two agreed that Antholtz would conduct the business in
his own name. Meanwhile, Antholtz was the owner of A. Murray & Co. Toehl assumed
possession of the corporation with a view to reviving it using the assets of the oil mill.
After Toehl’s death, it was found that he was short in his account with Behn to the
extent of P150 Million. A claim was made against the estate of Toehl. Marschall was
appointed administrator of the estate, and the present action was institute to recover
possession of the oil mill property and hold Antholtz personally liable. Behn
presupposes that Toehl and Antholtz were in collusion to put the money in the oil mill.

Issue:

Whether or not Antholtz is liable.

Ruling:

Yes , he is liable .

Any person, before the granting of letters testamentary or of administration on the

estate of a deceased person, embezzles, or alienates, any of the effects of such
deceased person, such person shall be liable to an action in favor of the executor or
administrator of such estate for double the value of the property sold, embezzled, or
alienated, to be recovered for the benefit of the estate. But this provision has reference
primarily to funds that are lost by embezzlement or alienation, and it cannot be
understood as making the manager of a going concern liable for proceeds of sales
applied by him to the proper uses of the business, as occurred in this case. The proof
shows that the personal property other than the products of the mill, sold by Antholtz in
the manner mentioned, was sold with the consent of the manager of Behn, Meyer &
Co., H. Mij., and with the consent of the administrator of Walter Toehl, and the proceeds
of these sales, as well as the proceeds of the products of the mill, were applied by
Antholtz to the obligations incurred by him in running the business, without theimproper
diversion of a single cent.

 In article 280 of the Code of Commerce, it is provided that a contract of agency shall
not be rescinded by the death or incapacity of the principal, although it may be revoked
by his representatives. As the oil mill in Santa Ana was a going concern, it was
apparently to the interest of all persons concerned that its operation should continue, at
least until the authority of Antholtz should be revoked by the representative of Toehl,
which does not appear to have been done prior to the accomplishment of the acts
complained of. Nor was there error in the action of the trial court in requiring the estate,
as a condition of the taking over of this property, that it should compensate or reimburse
Antholtz to the extent stated in compensate or reimburse Antholtz to the extent stated in
the dispositive part of the appealed decision.