Cuison v.
Court of Appeals
G.R. No. 88539, 26 October 1993
Facts:
The case of "Cuison v. Court of Appeals" involves petitioner Kue Cuison, who operates under the business
name "Kue Cuison Paper Supply," and respondents, the Court of Appeals and Valiant Investment
Associates. The decision date is October 26, 1993, and the case is identified as G.R. No. 88539, with Justice
Bidin as the ponente. The dispute revolves around a sum of money amounting to P297,482.30, which
Valiant Investment Associates claims from Kue Cuison. The petitioner is a sole proprietorship engaged in
the purchase and sale of newsprint, bond paper, and scrap, with business locations in Baesa, Quezon City,
and Sto. Cristo, Binondo, Manila. The private respondent, Valiant Investment Associates, is a partnership
based in Kalookan City.
Between December 4, 1979, and February 15, 1980, Valiant Investment Associates delivered various paper
products worth P297,487.30 to Lilian Tan of LT Trading. These deliveries were made based on orders
allegedly placed by Tiu Huy Tiac, an employee at Cuison's Binondo office. Tiac instructed that the
merchandise be delivered to Lilian Tan, who paid for the goods with several checks payable to cash. Tiac
then issued nine postdated checks to Valiant Investment Associates, which were later dishonored by the
bank. Valiant Investment Associates demanded payment from Kue Cuison, asserting that Tiac was
authorized by Cuison to enter into the transactions. Cuison denied any involvement and refused to pay.
Valiant Investment Associates filed an action for collection of the amount in question. The trial court
dismissed the complaint for lack of merit, but the Court of Appeals reversed this decision, ordering Cuison
to pay the amount with interest and attorney's fees. Cuison then filed a petition for review, contending
that Tiac was not his agent and that he should not be held liable for Tiac's actions.
Issue:
1. Did Tiu Huy Tiac possess the required authority from Kue Cuison to hold the latter liable for the
disputed transaction?
Ruling:
The Supreme Court denied the petition for lack of merit, affirming the decision of the Court of Appeals.
The Court held that Kue Cuison is liable for the transaction entered into by Tiu Huy Tiac on his behalf.
The Supreme Court's decision was based on the principle of apparent authority and estoppel. The Court
found that Kue Cuison had held out Tiu Huy Tiac as the manager of his Binondo store, thereby giving him
apparent authority to act on his behalf. This was evidenced by Cuison's own admissions and the
testimonies of witnesses, including Bernardino Villanueva and Lilian Tan, who both believed Tiac to be the
manager. The Court noted that Cuison's failure to promptly disown the transactions and his subsequent
actions, such as notifying customers of Tiac's departure, further supported the finding of apparent
authority.
The Court emphasized that one who clothes another with apparent authority and holds him out to the
public as such cannot deny the authority to the prejudice of innocent third parties dealing in good faith.
The Court also cited Article 1911 of the Civil Code, which holds the principal solidarily liable with the agent
if the former allowed the latter to act as though he had full powers. The Court concluded that Cuison, by
his representations and omissions, was estopped from denying Tiac's authority, making him liable for the
transaction.
The Court also dismissed Cuison's arguments against the credibility of the witnesses and the alleged self-
serving nature of their testimonies, finding no merit in these contentions. The Court held that the
testimonies were credible and supported by other evidence, including Cuison's own admissions.
In summary, the Court ruled that Kue Cuison is liable for the transaction entered into by Tiu Huy Tiac, as
Tiac had apparent authority to act on Cuison's behalf, and Cuison is estopped from denying this authority.
