Yuseco v. Simmons
REITERATIONFacts
The Antecedents: Hortensia Zialcita was employed by the National City Bank of New York under a contract stipulating that her employment could be terminated upon marriage. She signed a resignation letter effective August 15, 1952, in contemplation of her upcoming marriage on July 13, 1952. She subsequently filed a suit for damages against William Simmons, the bank's general manager, alleging he forced her to sign the resignation letter due to a "distorted notion of a new policy" and an "immoral and illegal agreement in the contract of employment." Procedural History: The Court of First Instance of Manila absolved the defendant, holding that the plaintiff signed the contract voluntarily, the condition was valid and not repugnant to public policy, and that the plaintiff had no cause of action against the defendant personally as her employer was the bank, not the general manager. The Petition: The plaintiff appealed, arguing that the lower court erred in ruling she had no cause of action against the defendant and in upholding the validity of the employment condition. She also contended that the defense of failure to state a cause of action was waived as it was raised for the first time in the defendant's memorandum.
Issue(s)
Whether the defense of failure to state a cause of action was waived. Whether the plaintiff has a cause of action against the defendant manager for damages arising from her separation from employment. Whether the condition in the contract of employment, allowing termination upon marriage, is valid and not contrary to public policy.
Ruling
The judgment absolving the defendant is affirmed. The plaintiff's appeal is without merit.
Ratio Decidendi
On the waiver of the defense of failure to state a cause of action: The argument that the defense of failure to state a cause of action was waived is without merit. The defendant specifically alleged in his answer that "plaintiff has no cause of action against defendant; that the action instituted by her against defendant (is) unwarranted..." This sufficiently raised the issue in the pleadings, making it available for consideration by the court. On the cause of action against the defendant manager: The plaintiff does not have a cause of action against the defendant manager personally. The complaint itself states that the defendant acted "as manager" of the Bank when requiring her to sign the contract and her resignation. There is no allegation that he exceeded his authority as manager or that his actions were repudiated by his principal, the Bank. Under the principles of agency, an agent who acts within the scope of his authority is not personally liable to the party with whom he contracts, unless he expressly binds himself. The principal is liable for obligations contracted by the agent within the scope of his authority. Therefore, any claim for damages should be directed against the principal, the National City Bank of New York, not against its manager personally. On the validity of the employment condition: The Court found it unnecessary to decide the issue of whether the employment clause was in restraint of marriage or contravened public policy. This issue would be a proper subject for debate in a proceeding against the Bank, the true employer, which is not presently before the Court to defend its side. Deciding this point would be unfair to the Bank. The Court's decision to affirm the judgment absolving the defendant was based on the lack of a cause of action against him personally as an agent acting within his authority.
Main Doctrine
An agent acting within the scope of his authority is not personally liable for acts done in representation of his principal; the principal is liable for obligations contracted by the agent within the scope of his authority.