DY PEH v.

CIR
May 21, 1969 | Dizon | Agent has contracted within the scope of his authority

PETITIONER: Dy Peh, and/or Victory Rubber Manufacturing

RESPONDENTS: Collector of Internal Revenue

SUMMARY: Dy Peh employed Tan Chuan Liong as a business agent in the matter of payment of
his taxes. Tan Chuan Liong paid to the government less than the amounts of the taxes due from
Dy Peh. As a result the CIR assessed against, and demanded from Dy Peh the payment of
various sums of money based upon short payments in connection with taxes due from Dy Peh
during the periods covered by the assessment. SC held that Dy Peh is liable for the acts of Tan
Chuan Liong and that he is estopped from questioning the misapplication of his payments. His
remedy is to seek recourse against Tan Chuan Liong in an appropriate civil or criminal action.

FACTS:
1. Dy Peh was engaged in the business of manufacturing and selling rubber shoes and
allied products under the registered firm name Victory Rubber Manufacturing. Dy Peh
employed Tan Chuan Liong as a business agent in the matter of payment of his taxes.
2. BIR unearthed anomalies committed in the office of the City Treasurer in connection with
the payment of taxes Dy Peh.
○ Tan Chuan Liong, as Dy Peh’s agent, paid to the government less than the
amounts of the taxes due from Dy Peh.
○ The official receipts in Dy Peh’s possession were falsified by Tan Chuan Liong.
3. As a result the CIR assessed against, and demanded from Dy Peh the payment of
various sums of money based upon short payments in connection with taxes due from Dy
Peh during the periods covered by the assessment.
4. CTA: ruled against Dy Peh.
5. Dy Peh filed a petition for review of the CTA decision.

ISSUE/HELD:
W/N Dy Peh is estopped from questioning the misapplication of his payments.—YES

RATIO:
● Dy Peh is estopped from questioning the misapplication of his payments.
○ Tan Chuan Liong was Dy Peh’s agent
○ The agent's acts bind his principal, without prejudice to the principal seeking
recourse against the agent in an appropriate civil or criminal action.

DOCTRINE: Where a contract of agency exists, the agent's acts bind his principal, without
prejudice to the principal seeking recourse against the agent in an appropriate civil or criminal
action.