Maxene Joi A.

Pigtain
LAW1101- Sec 16

Harry E. Keeler Electric Co. vs Rodriguez, 44 Phil 19

G.R. No. L-19001, November 11, 1922
Ross and Lawrence and Antonio T. Carrascoso, Jr.,

FACTS:

Plaintiff is Harry E. Keeler Electric Co., a domestic company based in Manila that is engaged in
the electrical business, including the selling of the "Matthews" electric factory, among other
items. Domingo Rodriguez, a native of Talisay, Occidental Negros, is the defendant.

Montelibano, an Iloilo resident, went to Keeler Electric and made an agreement with the latter in
which he believed that he could find a buyer for the "Matthews" factory, prompting Keeler
Electric to give him a 10% commission if the sale was completed. Keeler was able to sell one of
the "Matthews" plants to Rodriguez thanks to Montelibano's efforts.

Rodriguez paid Montelibano (the purchase price of P2,513.55) after the plant was built and
without Keeler Electric's knowledge. As a result, Keeler Electric filed a lawsuit against
Rodriguez to recover the purchase price.

Rodriguez countered that he had paid the plant's purchase price to Montelibano because the latter
was the one who sold, shipped, and built the electrical plant, and that he had been told that he
was duly allowed to receive the plant's value. He submitted proof in the form of a declaration and
receipt signed by Montelibano.

The Lower Court ruled in Rodriguez's favor, finding that Keeler Electric had provided
Montelibano to Rodriguez as a collection agent. As a result, Rodriguez is debt-free.

As a result, in this case, Keeler Electric lodged an appeal, arguing that Montelibano lacked the
authority to accept the funds. His services were limited to identifying potential buyers for the
“Matthews” plant. Montellibano was not an electrician, and he couldn't install the plant because
he didn't understand how it worked.

ISSUES:

1. Whether or not Keeler Electric gave Montelibano permission to accept or issue a receipt
for money on his behalf.
2. If Rodriguez had the right to believe that Montelibano was allowed to obtain the money
based on some act or deed by Keeler Electric.

RULING:

1. Montellibano was neither approved nor a Keeler Electric agent.

(1) The law makes no mere presumptions that an entity exists: it must be confirmed or assumed
by facts; (2) the agent cannot create his own authority, either by representations or by claiming to
exercise it; and so on.

The proof receipt showing Montelibano obtained the purchase payment was not dated, and only
displayed his own personal receipt and signature, which did not confirm or create any given
authority by Keeler Electric in the case at hand. In fact, Rodriguez's proof, the receipted
statement signed by Montelibano, is in direct conflict with the letter to Rodriguez demanding
payment of its account.

Also, Keeler Electric sold the plant to Rodriguez and had it delivered to Iloilo, where it was built
by Cenar, who was working for and representing Keeler Electric, and whose expenses for the trip
were included in, and made a part of, the bill that was receipted by Montelibano. Given the truth,
it's fair to say that Cenar, not Montelibano, represented Keeler Electric.

2. No, Rodriguez had no right to believe that Montelibano was allowed to obtain the funds
based on some act or deed by Keeler Electric.

Persons dealing with an assumed agent, if the assumed agency is general or special, are bound at
their peril, if they would hold the principal, to determine not only the truth of the agency, but
also the existence and degree of the authority, and if either is contested, they bear the burden of
proof to prove it.

In this case, the evidence indicates that the plaintiff – Keeler Electric – never gave Montelibano
permission to collect or accept money on its behalf. Rodriguez's dependence on Montelibano
lacked the normal caution and due diligence expected of a person dealing with a fictitious agent.

Payment must also be made to the individuals in whose favour the duty is constituted, or to
another permitted to obtain it in his name, according to Article 1162 of the Civil Code. Even if it
was Cenar who built the plant and was the first to demand payment in Iloilo; and even if he
obtained the letter from Keeler Electric demanding payment, Rodriguez made the payment at his
own expense and on the sole representations of Montelibano. As a result, Rodriguez remains
responsible for debt repayment, which must be made to the person in whose favor the duty is
constituted, or to another specifically allowed to collect payment in his name. (Trillana vs.
Ormachea Tin-Conco) (13 Phil., 194).

The lower court's judgment is reversed in favor of the plaintiff (Keeler Electric) and against the
defendant (Rodriguez) for the amount of P2,513.55 plus interest at the regular rate from January
10, 1921, plus costs in the appellant's favor.