a. Tan vs.

Go Chiong Lee 46 Phil 200 (1924)

FACTS:
Go Bung iu !ie! in China on A"#il 1$% 1920. &n A"#il 26% 1920% Go Chiong
Lee 'as a""oin(e! s"e)ial a!*inis(#a(o# o+ (he es(a(e% 'i(h Tio Lio,% Ang Chang)o%
an! -anuel Go Tianu. as su#e(ies on his /on! in (he su* o+ P00%000. &n -a. 2$%
1920% Go Chiong Lee1s s(a(us 'i(h #e+e#en)e (o (he es(a(e 'as )hange! (o (ha( o+
a!*inis(#a(o#. &n (he sa*e !a(e% Go Chiong Lee 2le! a *o(ion in 'hi)h he "#a.e!
(ha( he /e allo'e! (o o"e#a(e ('o s(o#es /elonging (o (he es(a(e% one in (he Ci(. o+
Ce/u an! (he o(he# in (he *uni)i"ali(. o+ Tole!o% Ce/u. The "#a.e# 'as ans'e#e!
an! Lee 'as g#an(e! (he au(ho#i(. (o o"en (he s(o#es on (he )on!i(ion (ha( he 2les
ano(he# /on! an! (ha( he shall #en!e# *on(hl. a))oun(s o+ (he es(a(e.
The )o**i((ee on )lai*s #en!e#e! i(s #e"o#( on 3une 2% 1921% a!*i((ing as
"#ove!% )lai*s a*oun(ing (o P69%029.91. &ne *on(h la(e#% (he )ou#( issue! an o#!e#
!i#e)(ing (he "a.*en( /. (he a!*inis(#a(o# o+ (he )lai*s.
4es"on!ing (o (he o#!e# o+ (he )ou#(% Lee *a!e an a))oun(ing an! in+o#*e!
(he la((e# (ha( he ha! *a!e "a.*en(s in (he a*oun( o+ 16 099.05. 6e +u#(he#
e7"laine! (ha( he ha! *a!e "a.*en(s (o )#e!i(o#s 'ho )a*e (o )olle)( (hei# )lai*s.
The !e/(s (o (he es(a(e ha! no( /een )olle)(e! /. hi* .e( as (he !e/(o#s 'ill "a.
'hen (hei# e)ono*i) )on!i(ions 'ill i*"#ove.
8ue (o /a! e)ono*i) )on!i(ions% (he s(o#e in Tole!o Ce/u 'as ha#!l. *a,ing
an. sales an! ha! (o /e )lose! 'hile (ha( in Ce/u Ci(. ha! (o have i(s o"e#a(ions
e)ono*i9e!.
The inven(o#. o+ (he es(a(e *a!e /. (he a!*inis(#a(o# sho'e! (he value o+
(he *e#)han!ise on han! a( (he (i*e o+ (he !ea(h o+ (he !e)ease! (o /e
P09%2:1.$5% an! (he ou(s(an!ing )#e!i(s (o /e P61%$04.54% o# a )o*/ine! g#oss
value o+ P100%:16.01. Bu( a))o#!ing (o (he "u/li) a))oun(an( 4. C. Pangalinan% (he
es(a(e 'as 'o#(h on -a. 26% 1920% 'hen Go Chiong Lee /e)a*e a!*inis(#a(o#
P2:%465.$1% 'hile i( 'as 'o#(h on &)(o/e# 2$% 1921% 'hen he )ease! (o /e
a!*inis(#a(o# P:%690.56% o# a loss o+ P19%550.5$. The !e/(s o+ (he es(a(e allo'e! /.
(he )o**issione# on )lai*s #ea)he! (o P69%099.91. Si7(een (housan! seven
hun!#e! "esos an! (hi#(.;nine )en(avos 'e#e !is(#i/u(e! a*ong (he )#e!i(o#s /. (he
a!*inis(#a(o#% 'hile "#esu*a/l. (he #e*aining !e/(s have no( /een )an)elle!. The
las( #e"o#( *a!e /. (he a!*inis(#a(o# !is)loses% ho'eve#% (ha( (he#e *a. /e
P21%009.55 on han! 'hi)h )an /e use! (o sa(is+. (he )lai*an(s. The "#esen(
a!*inis(#a(#i7 is #unning (he es(a(e 'i(h a""a#en(l. "#o2(a/le #esul(s.
&n &)(o/e# 2:% 1921% -a7i*a Tan #elieve! Go Chiong Lee o+ his !u(ies as
a!*inis(#a(o# o+ (he es(a(e. As a!*inis(#a(o# o+ (he es(a(e% -a7i*a Tan 2le!
)o*"lain(s agains( Lee an! his su#e(ies +o# (he )olle)(ion o+ (he a*oun( o+ $4
500.49 'hi)h )o##es"on! (o (he losses in)u##e! /. (he es(a(e. Tan )lai*e! (ha( (he
losses 'e#e in)u##e! !ue (o (he a)( o+ Lee in o"ening (he ('o s(o#es 'i(hou(
au(ho#i(. +#o* (he )ou#(.
<SS=>: <s Lee lia/le +o# (he losses 'hi)h (he es(a(e in)u##e! +o# (he "e#io! !u#ing
'hi)h i( 'as un!e# his a!*inis(#a(ion.
6>L8: ?&
The (#ial )ou#( /ase! i(s !e)ision in *a,ing Lee lia/le on (he "#e*ise (ha( he
ha! no au(ho#i(. +#o* (he )ou#(. 6o'eve# as sho'n +#o* (he #e)o#!% Lee 'as given
au(ho#i(. (o o"e#a(e (he s(o#es. The losses 'hi)h (he s(o#e in)u##e! )anno( /e
i*"u(e! (o hi*.
The s(an!a#! o+ #es"onsi/ili(. o+ (he a!*inis(#a(o# is /es( *easu#e! as in
essen)e (he #es"onsi/ili(. o+ a /ailee. Li,e an. /ailee% he *us( "u#sue his !is)#e(ion
hones(l. an! in goo! +ai(h% o# he 'ill /e)o*e "e#sonall. lia/le% (o (hose 'ho a#e
in(e#es(e! in (he es(a(e% +o# 'as(e% )onve#sion% o# e*/e99le*en(. Bu( 'he#e an
a!*inis(#a(o#% en(#us(e! 'i(h (he )a##.ing on o+ an es(a(e% a)(s in goo! +ai(h an! in
a))o#!an)e 'i(h (he usual #ules an! *e(ho!s o/(aining in su)h /usiness% he 'ill no(
/e hel! lia/le +o# losses in)u##e!. (S)houle# on @ills% >7e)u(o#s an! A!*inis(#a(o#s%
Cha"(e# <<<A Allen an! 6ill vs. Shan,s B:91C% 90 Tenn.% 0$9.)
@e 2n! (ha( (he "e#sonal #es"onsi/ili(. o+ (he +o#*e# a!*inis(#a(o# an! (he su#e(ies
on his /on! +o# losses in)u##e! /. (he es(a(e !u#ing his a!*inis(#a(ion% has no( /een
"#ove!.