Harry Keeler Electric Co. v. Rodriguez, G.R. No. L-19001, November 11, 1922 - DUENAS

HARRY E. KEELER ELECTRIC CO., INC.
, plaintiff-appellant, vs. DOMINGO
RODRIGUEZ, defendant-appellee
G.R. No. L-19001, November 11, 1922
Principal: Harry E. Keeler Electric Co. Inc.

Agent: A. C. MONTELIBANO
FACTS:
Plaintiff Harry E. Keller Electric Co. Inc. is a domestic corporation in the electrical business
based in Manila, engaged in the sale of the “Matthews” electric plant. Montelibano, an Iloilo
resident, went to Keeler Electric claiming he could find a purchaser for the plant and so Keeler
told him he would receive 10% per plant sold or customer found, if the sale is consummated.
Keeler was able to sell one of the "Matthews" plants to defendant Domigo Rodriguez. It was
delivered to Iloilo and installed. He then paid Montelibano without the knowledge of Keeler
Electric Inc,. Keeler then commenced the present action against Rodriguez for non-payment of
the agreed P2,513.55 price plus interest.
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. Rodriguez introduced in evidence as part of his deposition a
statement and receipt which Montelibano signed to whom he paid the money.
ISSUE: Whether or not Montelibano was the agent of Keeler Inc.
Ruling:
Nothing on the face of receipt to show Montelibano was the agent of, or that he was acting for,
the plaintiff. It is his own personal receipt and signature. Outside of the fact that Montelibano
received the money and signed this receipt, there is no evidence that he had any authority, real
or apparent, to receive or receipt for the money. Neither is there any evidence that Keeler ever
delivered the statement to Montelibano, or authorized anyone to deliver it to him. Testimony
shows the question of Montelibano's authority to receive the money must have been discussed
between the parties, and that, in making the payment, Rodriguez relied upon Montelibano's own
statements and representation, as to his authority, to receipt for the money.
There is no evidence that the plaintiff ever delivered any statements to Montelibano, or that he
was authorized to receive or receipt for the money.Article 1162 of the Civil Code provides that
payment must be made to the persons in whose favor the obligation is constituted, or to another
authorized to receive it in his name. And article 1727 provides that the principal shall be liable
as to matters with respect to which the agent has exceeded his authority only when he ratifies
the same expressly or by implication.
Mechem on Agency says that fundamental principles in determining whether or not there is
assumed authority :(1) that the law indulges in no bare presumptions that an agency exists: it
must be proved or presumed from facts; (2) that the agent cannot establish his own authority,
either by his representations or by assuming to exercise it; (3) that an authority cannot be
established by mere rumor or general reputation; (4)that even a general authority is not an
unlimited one; and (5) that every authority must find its ultimate source in some act or omission
of the principal. The person dealing with the agent must also act with ordinary prudence and
reasonable diligence. Obviously, if he knows or has good reason to believe that the agent is
exceeding his authority, he cannot claim protection.
Applying the above rules, the testimony is conclusive that the plaintiff never authorized
Montelibano to receive or receipt for money in its behalf, and that the defendant had no right to
assume by any act or deed of the plaintiff that Montelibano was authorized to receive the
money, and that the defendant made the payment at his own risk and on the sole
representations of Montelibano that he was authorized to receipt for the money.
The judgment of the lower court is reversed, and one will be entered here in favor of the plaintiff
and against the defendant for the sum of P2,513.55 with interest at the legal rate from January
10, 1921, with costs in favor of the appellant. So ordered.

Harry Keeler Electric Co. v. Rodriguez, G.R. No. L-19001, November 11, 1922 - DUENAS

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HARRY E. KEELER ELECTRIC CO., INC.

Principal: Harry E. Keeler Electric Co. Inc.

ISSUE: Whether or not Montelibano was the agent of Keeler Inc.

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