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Agency

Agency

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Published by Ibp Cagayan

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Published by: Ibp Cagayan on Jun 15, 2012
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CIVIL LAW
100%UPLAW
U P B A R O P S 2 0 0 8 Page
196
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325
AGENCY
Agency
TABLE OF CONTENTS
Section 1.Nature, Form, and Kinds of Agency 197Section 2.Obligations of the Agent 202Section 3.Liabilities of the Agent 204Section 4.Obligations of the Principal 205Section 5.Extinguishment of Agency 206
 
CIVIL LAW
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AGENCYNATURE, FORM, AND KINDS OFAGENCY
Definition and concept
Contract of 
agency 
: where a person bindshimself,1. to render some service, or2. to do something in representationor on behalf of another, with thelatter’s consent or authority.
(Art.1868, CC)AGENCY
is a relationship which implies apower in an agent to contract with a 3rdperson on behalf of a principal. [
HumbleOil & Refining v Beu Tex. Cir. App.
]
AGENCY
is personal, representative, andderivative in nature. The authority to actemanates from the powers granted to himby his principal. His act is the act of theprincipal if done within the scope of theauthority. [
Rallos v Felix Go Chan & SonsRealty, 1978
]
Nature, basis and purposes
Since agency is a contract, there mustconsent, object, and cause.The purpose of agency is to extend theprincipal’s personality.
General rule:
What a man may do in person,he may do thru another.
Exceptions:
There are acts which the agentmay not do for the principal:1.
Personal 
acts, and
2. Crimina
acts.Knowledge of the agent is imputed to theprincipal.
Exceptions:
1. Agent’s interests are adverseto those of the principal;2. Agent’s duty is not to discloseinformation; and3. 3rd person claiming the benefitof the rule colludes with agent todefraud principal.The theory of imputed knowledge ascribes theknowledge of the agent, to the principal, notthe other way around. The knowledge of theprincipal cant be imputed to its agent(
Sunace Internat’l Mgt. Services v. NLRC,2006
).
Characteristics
1.
Consensual:
Perfected by mere consent.
General Rule:
On the part of the principal,there must be an actual intention to appointor an intention naturally inferable from hiswords or actions; and on the part of theagent, there must be an intention to acceptthe appointment and act on it, and in theabsence of such intent, there is generally noagency. [
Victorias Milling v CA, 2000
]
Exception:
One who clothes another withapparent authority as his agent, and holdshim out to the public as such, can’t bepermitted to deny the authority of suchperson to act as his agent, to the prejudice of innocent third parties dealing with suchperson in good faith. [
Macke v Camps, 1907 
]2.
Nominate:
Has its own name.3.
Preparatory:
Entered into as a means to anend.4.
Principal:
Can stand by itself without needof another contract:5. If gratuitous,
unilateral:
Creates obligationsfor only one of the parties. If forcompensation,
bilateral:
Gives rise toreciprocal rights and obligations.
(CNPPU/B)
Essential elements
1. Consent, express or implied2. Object of the contract, which is theexecution of a juridical act in relation tothird persons;3. Agent acts as a representative; and4. Agent acts within the scope of hisauthority.
(Rallos v Felix Go Chan & SonsRealty, 1978)
The agent may also be called an attorney,proxy, delegate or representative.
(Angelesv. PNR, 2006)
Relationship between the parties is
fiduciary:
With respect to the property that is subjectmatter of the agency, the agent is estoppedfrom asserting an interest adverse to theinterest of the principal. The agent cannotbind the principal where the agent has anadverse interest.
Exception:
1. If agent acts with the knowledgeand consent of both, in which caseeither party may repudiate thetransaction.2. If agent is mere intermediarywith no independent initiative.The agent must not use or divulge confidentialinformation. After agency terminates, theagent is no longer under a duty to abstainfrom competition and may use generalinformation (not acquired in violation of hisduty as agent).While acting as an agent of his employer, anemployee owes the duty of fidelity andloyalty. Being a fiduciary, he can’t solicit hisemployer’s customers or co-employees forhimself or for a business competitor of hisemployer. (
Molina v. Pacific Plans, 2006)
 
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AGENCY
The rules on service of process make serviceon "agent", whether general or special,sufficient even if agent has limited authority.An employee of a corporation may not bedeemed an agent under the above rule unlesshis/her duties are so integrated to thebusiness that his/her absence or presencewon’t toll the business’ operations
(Aboitiz Internat’l Forwarders, Inc. v. CA, 2006).
Determination of existence of agency
1.
Designation by parties
is notcontrolling.2.
Fact of existence:
if relations thatconstitute agency exist, there isagency regardless of WON partiesunderstood the exact nature of therelation.3.
No presumption of existence:
agencymust exist as a fact.
Exceptions:
a) When agency arises ipso jureb) To prevent unjust enrichment4.
Intention of the parties to createrelationship.
As between principal and3rd person, agency may exist withoutthe direct assent of the agent.Against the principal, the agent hasthe obligation to determineexistence and scope of agency…Against the agent, the third personhas the obligation to determineexistence and scope of agency…Theperson dealing with the agent mustalso act with ordinary prudence andreasonable diligence. If he knowsor has good reason to believe thatthe agent is exceeding hisauthority, he cannot claimprotection.
[Harry Keeler Electric Rodriguez, 1922]
Agency vs. similar contracts
1. Partnershipa. An agent acts only for his principal; apartner acts for his partners, thepartnership, and for himself.b.
Parity of standing test:
A partnershipgenerally presupposes a parity of standingbetween the partners-- equal proprietaryinterest in the capital or property andexercises equal rights in the conduct of thebusiness.2. Independent contractor
Agent independentcontractor
Represents hisprincipal.Employed by theemployer.Acts under theprincipal’s controland instruction.Acts according to hisown method.Principal is liable fortorts committed bythe agent within thescope of hisauthority.Employer not liablefor torts committedby the independentcontractor.3. Lease
agency lease of service
Based onrepresentation.Based onemployment.Agent exercisesdiscretionarypowers.Lessor ordinarilyperforms onlyministerialfunctions.3 parties: Principal,agent and the 3rdperson with whomthe agent contracts.2 parties: Lessorand lessee.Relates tocommercial orbusinesstransactions.Relates more tomatters of meremanual ormechanicalexecution.
agency lease of property
Agent is controlledby the principal.Lessee is notcontrolled by thelessor.Agency may involvethings other thanproperty.Lease of propertyinvolves property..Agent can bind theprincipal.Lessee cannot bindthe lessor.4. Contract of sale
agency to sell sale
Agent receives thegoods as theprincipal’s goods.Buyer receives thegoods as owner.Agent delivers theproceeds of the sale.Buyer pays the price.Agent can return theobject in case he isunable to sell thesame to a 3rdperson.Buyer, as a generalrule, cannot returnthe object sold.

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