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Agency Reviewer

Agency Reviewer

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Finals Reviewer
A
GENCY
 
2
nd
Sem; 2003
 
Chapter 1. Nature, Form and Kinds of Agency
Art. 1868. By the contract of agency a personbinds himself to render some service or to dosomething in representation or on behalf of another, with the consent or authority of thelatter.
Agency: A relationship which implies a power in anagent to contract with a 3
rd
person on behalf of aprincipal.Kind of Contract: It is a preparatory contract. It is acontract entered not for its own end but to be able toenter into other contracts.Characteristics:1.)
 
Consensual
: perfected by mere consent;
 
2.)
 
Nominate
: it has its own name;
 
3.)
 
Principal
: does not depend on another contractfor its existence and validity;
 
4.)
 
Preparatory
: entered into as a means to an end;
 
5.)
 
Unilateral/Bilateral
:a.)
 
Unilateral
: if contract is gratuitous, itcreates obligations for only one of theparties, i.e. agent.b.)
 
Bilateral
: if for compensation, it givesrise to reciprocal rights and obligs.Basis: Representation.The acts of the agent on behalf of the principal withinthe scope of his authority produce the same legal andbinding effects as if the principal personally did them.Distinguishing Features:1.)
 
Representative character; and2.)
 
Derivative authority.Purpose: To extend the personality of the principalthrough the facility of the agent.Parties:1.)
 
Principal
; and2.)
 
Agent
.Who can be principal?The principal may be a natural person or a juridicalperson. He must be capacitated. The rule is if a personis capacitated to act for himself or in his own right, hecan act through an agent.Must the agent have capacity?Insofar as 3
rd
persons are concerned, it is enoughthat the principal is capacitated; but insofar as hisobligations to his principal are concerned, the agentmust be able to bind himself.Essential Elements of Agency:1.)
 
Consent,
express or implied;2.)
 
Object
of the contract is the execution of a juridical act in relation to 3
rd
persons;3.)
 
The agent acts as a
representative
and not forhimself;4.)
 
The agent acts
within the scope of his authority.
 Acts that cannot be done through an agent:1.)
 
Personal acts
: if personal performance is reqd bylaw or public policy or agreement;2.)
 
Criminal or illegal acts
: attempt to delegateanother authority to do an act which, if done bythe principal would be illegal, is void.Nature of Relation between Principal and Agent:Fiduciary, based on trust and confidence.Agency v. Lease of Work or Service
Agency Lease of Work/Service
Basis is representation. Basis is employmentAgent exercisesdiscretionary powers.Lessor only performsministerial functions.3 persons are involved:principal, agent & 3
rd
 person.Only 2 persons involved:lessor and lesseeCommercial or businesstransactions.Matters of mere manual ormechanical execution.Agency v. Guardianship
Agency Guardianship
Agent represents acapacitated person.Guardian represents anincapacitated person.Agent appointed byprincipal and can beremoved by him.Guardian appointed bycourt and stands in locoparentis.Agent subject to directionsof principal.Guardian not subject todirections of ward butmust act for his benefit.Agent can make principalpersonally liable.Guardian has no power toimpose personal liability onhis ward.Agency to Sell v. Sale
Agency to sell Sale
Agent receives the goodsas the goods of theprincipal.Buyer receives the goodsas owner.Agent delivers proceeds of the sale.Buyer pays the price.Agent can return object incase he is unable to sell toa 3
rd
person.Generally, buyer cannotreturn the object sold.Agent in dealing with thething received is bound toact accdg to theinstructions of his principalBuyer can deal with thething as he pleases, beingthe owner.
Helen C. Arevalo 1 Section II-D
 
Finals Reviewer
A
GENCY
 
2
nd
Sem; 2003
 
Agent v. Independent Contractor
Agent Independent Contractor
Represents the principal. Employed by employer.Acts under the control andinstructions of the principalActs according to his ownmethod.Principal liable for tortscommitted by agent w/inscope of authority.Employer not liable fortorts committed byindependent contractor.
Art. 1869. Agency must be express, or impliedfrom the acts of the principal, from his silence orlack of action, or his failure to repudiate theagency, knowing that another person is acting onhis behalf without authority.Agency may be oral, unless the law requires aspecific form.
Classifications of Agency: as to…1.)
 
Manner of Creation:a.)
 
Express
: actually authorized, eitherorally or in writing.
 
b.)
 
Implied
: implied from acts of principal,from his silence or lack of action or hisfailure to repudiate the agency knowingthat another person is acting on hisbehalf w/o authority.
 
2.)
 
Character:a.)
 
Gratuitous
: agent receives nocompensation for his services.
 
b.)
 
Onerous
: agent does receivecompensation.
 
3.)
 
Extent of business covered:a.)
 
General
: comprises all the business of the principal.
 
b.)
 
Special
: comprises one or more specifictransactions.
 
4.)
 
Authority conferred:a.)
 
Couched in
general terms
: deemed tocomprise only acts of administration.
 
b.)
 
Couched in
specific terms
: authorizesonly the performance of a specific act/s.
 
5.)
 
Nature and effects:a.)
 
Representative
: agent acts in name andrepresentation of principal.
 
b.)
 
Simple/Commission
: agent acts in hisown name but for the account of theprincipal.
 
Can agency be presumed?Generally NO because the relationship between theprincipal and agent must exist as a fact. The onlyexceptions to this rule are when agency arises byoperation of law or agency is presumed to preventunjust enrichment.Form: Generally, NO formal requirements. Agent’sauthority may be oral or written, it may be in public orprivate writings. The only exception is when the lawrequires a specific form (e.g. sale of real property or anyinterest therein by an agent.)
Art. 1870. Acceptance by the agent may also beexpress, or implied from his acts which carry outthe agency, or from his silence or inactionaccording to the circumstances.
Form of Acceptance by Agent:Acceptance may be express or implied; express whenit is oral or written; implied when it can be inferred fromthe acts of the agent which carry out the agency, orfrom his silence or inaction accdg to the circumstances.
Art. 1871. Between persons who are present,the acceptance of the agency may also be impliedif the principal delivers his power of attorney tothe agent and the latter receives it without anyobjection.
Between 2 persons who are present, when it acceptancedeemed implied?When the agent receives a power of atty from theprincipal himself personally without objection.Is this presumption conclusive?NO, it can be rebutted by contrary proof.Power of attorney: An instrument in writing by whichone person, as principal, appoints another as his agentand confers upon him the authority to perform certainspecified acts or kinds of acts on behalf of the principal.Its primary purpose is to evidence the authority of theagent to 3
rd
parties w/ whom the agent deals.ConstructionA power of atty is strictly construed and strictlypursued. The instrument will be held to grant only thosepowers which are specified, and the agent may neithergo beyond nor deviate from the power of atty. The onlyexception is when strict construction will destroy thevery purpose of the power.Meaning of “present” Not limited to face-to-face encounters. 2 personsconversing on the phone are also considered as both “present”.
Art. 1872. Between persons who are absent,the acceptance of the agency cannot be impliedfrom the silence of the agent, except:1.)
 
When the principal transmits his powerof attorney to the agent, who receives itwithout any objection;2.)
 
When the principal entrusts to him byletter or telegram a power of attorneywith respect to the business in which heis habitually engaged as an agent, and hedid not reply to the letter or telegram.
2 Ways of Giving Notice of Agency1.)
 
By special information; or2.)
 
By public advertisement.
Helen C. Arevalo 2 Section II-D
 
Finals Reviewer
A
GENCY
 
2
nd
Sem; 2003
 
Effects:1.)
 
Special information: the person appointed asagent is considered such with respect to theperson to whom it was given.2.)
 
Public advertisement: Agent is considered suchwith regard to any person.Revocation – An agency is revoked in the same manneras it was given.General rule: Special information needs specialinformation of revocation.Except: if you can prove that the 3
rd
person read thenotice in the newspaper.
Art. 1873. If a person specially informs anotheror states by public advertisement that he hasgiven a power of attorney to a third person, thelatter thereby becomes a duly authorized agent, inthe former case with respect to the person whoreceived the special information, and in the lattercase with regard to any person.The power shall continue to be in full force untilthe notice is rescinded in the same manner inwhich it was given.
Agency by Estoppel: There is really no agency at all, butthe alleged agent seemed to have apparent orostensible, although no real authority to representanother.1.)
 
Estoppel of Agent –
One professing to act asagent for another may be estopped to deny hisagency both as against his asserted principaland the 3
rd
persons interested in the transactionin which he is engaged.2.)
 
Estoppel of Principal –
 a.)
 
As to Agent –
One who knows thatanother is acting as his agent and failsto repudiate his acts, or accept thebenefits of them, will be estopped todeny the agency as against such other.b.)
 
As to sub-agent –
To estop the principalfrom denying his liability to a 3
rd
person,he must have known or be charged withknowledge of the fact of thetransmission and the terms of theagreement between the agent and sub-agent.c.)
 
As to 3
rd
persons –
One who knows thatanother is acting as his agent orpermitted another to appear as hisagent, to the injury of 3
rd
persons whohave dealt with the apparent agent assuch in good faith and in the exercise of reasonable prudence, is estopped todeny the agency.3.)
 
Estoppel of 3
rd
Persons –
A 3
rd
person, havingdealt with one as an agent may be estopped todeny the agency as against the principal, agentor 3
rd
persons in interest.4.)
 
Estoppel of the govt –
The govt is neitherestopped by the mistake or error on the part of its agents. But it may be estopped throughaffirmative acts of its officers acting within thescope of their authority.
Art. 1874. When a sale of a piece of land or anyinterest therein is through an agent, the authorityof the latter shall be in writing; otherwise, the saleshall be void.
A letter is sufficient
[Jimenez v. Rabot].
Art. 1875. Agency is presumed to be for acompensation, unless there is proof to thecontrary.
Broker: One who in behalf of others, and forcompensation or fee, negotiate contracts relative toproperty. He is the negotiator between the parties,never acting in his own name, but in the name of thosewho employ him. He is strictly a middleman and forsome purposes, the agent of both parties.When is a broker entitled to compensation?A broker is entitled to commission whenever he ringsto his principal a party who is able and willing to takethe property, and enter into a valid contract upon theterms named by the principal, although the particularsmay be arranged and the matter negotiated andcompleted between the principal and the purchaserdirectly. A broker is never entitled to commission forunsuccessful efforts.Does the law allow double agency?Such agency is disapproved by law for being againstpublic policy and sound morality. The exception is wherethe agent acted with full knowledge and free consent of the principals.In case the agent assumes a double agency, what is hisright to compensation?1.)
 
If with knowledge of both principals – recoverycan be had from both.2.)
 
If without knowledge of both – agent canrecover from neither.3.)
 
If with knowledge of only one – as to theprincipal who knew of that fact and as to theagent, they are in pari delicto and the courtsshall leave them as they were, the contractbetween them being void as against public polisyand good morals.
Art. 1876. An agency is either general orspecial.The former comprises all the business of theprincipal. The latter, one or more specifictransactions.
Classification of Agents:1.)
 
Universal agent
: One employed to do all actsthat the principal may personally do, and which
Helen C. Arevalo 3 Section II-D

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