Gutierrez Hermanos v.

Oria Hermanos CFI Ruling

Doctrine: When an agent, in executing the orders and commissions of his  Ordering GH to render to OH an account supported by vouchers of the
principal, carries out the instructions he has received from his principal, and amounts charged against the latter acquired by GH in the name and for
does not appear to have exceeded his authority or to have acted with the account of the defendant company
negligence, deceit, or fraud, he cannot be held responsible for the failure of  Condemning OH to pay to the plaintiff the amount prayed for in the
his principal to accomplish the object of the agency. complaint after deducting therefrom whatever amount or amounts
would result in favor of the defendant company from the accounts to
be rendered by GH.
Facts: Counsel for the commercial firm of Gutierrez Hermanos filed a
Both parties appealed. The SC rendered judgment whereby the plaintiff was
complaint in the CFI-Manila seeking to recover from the firm of Oria
ordered to render to the defendant an account supported by vouchers of the
Hermanos & Co. the payment of P147,204.28.
price and other expenses incurred, and other goods the duties on which were
Agent Principal charged against the defendant.
Gutierrez Hermanos Firm (GH) Oria Hermanos & Co. Firm (OH)
With the case having been remanded to the lower court, GH presented to the
Theory Theory court a written statement of the accounts. Upon hearing OH, the court decreed
From a mutual current account Argued that GH, as a commission the disapproval of the accounts and notified GH to present to the court, within
between GH and OH, there agent, bound itself to buy and sell a short time, the vouchers supporting said accounts.
remained a balance standing against certain merchandise for the
OH. defendant. Moreover, OH claims Report on Rendition of Accounts
that GH had set higher prices than
By virtue of a written agreement between the parties, the judge appointed D.
GH had opportunely sent to OH an the price actually paid, thereby
M. Fleming as referee authorized to hear the parties respecting the rendition of
abstract of the current account which defrauding OH.
showed said balance for which the accounts. Fleming's report found discrepancies in the invoices and vouchers.1
OH is liable. For this reason, OH prayed that GH OH accepted this report, and asked the court to approve it, but the plaintiff
be ordered to render an account of its opposed. The court ordered the referee to file an amended report, which was
transactions as such commission
then submitted.
agent.
The lower court approved said report and rendered a judgment adjudicating to
GH the sum claimed in the complaint (less the sum of P36,744.49, or the net
balance of P110,459.79). OH appealed.
Issue: Whether or not OH is liable to GH for its unsettled account?

1 it was proved that in all of them, there were overcharges amounting to P78.63 as
Only 20 invoices of rice had been justified as correct; that 8 had been accepted as
transferred to Legaspi according to their entries; that 56 had been proved and the discounts not granted, and in one particular case, there was a recharge of the price. It
amount of P2,479.56 had been acknowledged as due to the defendant; that one valued was also found by him that there was no proof as regards the rest of the invoices which
at P110.30 was erroneously accepted in favor of the plaintiff; that 76 invoices of rice number 73.
have not been supported by vouchers; that of the invoices of kerosene oil only 5 had
been supported by vouchers; and that, as regards other invoices comprising 592 cans,
Ruling: YES. When an agent, in executing the orders and commissions of his
principal, carries out the instructions he has received from his principal, and
does not appear to have exceeded his authority or to have acted with
negligence, deceit, or fraud, he cannot be held responsible for the failure of his
principal to accomplish the object of the agency.
Since it was not proven that the prices of the goods were overstated, thereby
defrauding OH, OH cannot escape the liability of paying GH for performing
the task given to it, following from their principal-agent relationship.
Although OH cannot be held liable for the value of the invoices not duly
proved by GH, if the records show that OH had received the goods
consigned to it under invoices and the only defect was that excessive prices
were charged and certain amounts were unduly debited, it would not be
just, that for said failure on the part of GH to prove all of the invoices, OH
would deny liability to pay for the goods received by it, after deducting
from the price the excess and the quantities for which it was not liable.
From this it follows that the first report of the referee cannot be the proper
basis for the definite settlement of this case, and it is necessary to determine
the amount for which the defendant would be liable to pay in view of the
evidence adduced.
Considering the facts above set forth and the evidence furnished by the record,
we arrived at the conclusion that the defendant firm is only entitled to a
reduction of the sum of P37,063.57 from the amount of P147,204.28 adjudged
in favor of the plaintiff firm in the previous decision of this court under date
of March 30, 1915. For this reason, OH is found liable to pay GH the remaining
balance of P110,140.71 and the interest thereon at the rate of 8 %t per annum
from June 30, 1909, to the date of payment.
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