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Published by: carllagrosaseclevia on Jun 20, 2012
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Civil Law
Dean Cynthia Roxas-Del Castillo
; Heads:
Joy Marie Ponsaran, Eleanor Mateo
; Understudies:
Joy StephanieTajan, John Paul Lim
; Subject Head:
Thea Jimenez
; Pledgees:
Naealla Rose Bainto
Sandra May Maclang
QuickTime™ and aTIFF (Uncompressed) decompressorare needed to see this picture.
is a contract whereby a person
binds himself to render some service or to dosomething in
on behalf of another 
,with the consent or authority of the latter. (
Art. 1868
 1. Consensual2. Nominate3. Preparatory4. Principal5. Unilateral;Bilateral (if agency is for compensation)
Since it is a contract there must be ameeting of the minds as to consent, object, andcause.
Exception to contractual nature:a.
When the agency is created
by operation of law 
Ex: Agency by Estoppel 
The acts of the agent on behalfof the principal within the scope of his authorityproduce the same legal and binding effects as ifthey were personally done by the principal.
Hence, the distinguishing features of agency areits
representative character 
& its
derivative authority.
Extend the personality of the principalthrough the facility of the agent
Capacity of the Parties: 
 1. Principal
a. He may be a natural or a juridical personb. He must be capacitated. The rule is if aperson is capacitated to act for himself orhis own right, he can act through anagent.
i. The agent is not liable where hewas ignorant of the principal’sincapacity
 2. Agent
a. Insofar as the third persons areconcerned, it is enough that the principalis capacitated.b. Insofar as his obligations to his principalare concerned, the agent must be able tobind himself.c. But as an agent, some mental capacity isnecessary, so, those who are absolutelyincapacitated (
ex. Insane persons 
)cannot be agents.
Essential Elements: 
of the parties to establish therelationship;2. Object of the contract is the
execution of a  juridical act 
in relation to third persons;3. Agent acts as a
and not forhimself; and4. Agent acts
within the scope of his authority.
Orient Air Services v. CA,
G.R. No. 76931, May 29,
1991An illegal termination of agency does not justify reinstatement of the agent as such. The agency cannot be compelled by the courts to be reinstated because such relationship can only be effected with the consent of the principal.
Acts That Cannot Be Done By Agent: 
1. Personal Acts – 
ex. Making of a will 
 2. Criminal or Illegal Acts
Nature of Relationship between Principal and Agent: 
- based on trust & confidence1. Agent is estopped from asserting interestadverse to his principal2. Agent must not act as an adverse party3. Agent must not act for an adverse party4. Agent must not use or disclose secretinformation5. Agent must give notice of material facts
Knowledge of the agent is imputed to the principal 
even though the agentnever communicated
 a. Where the interests ofthe agent are adverse tothose of the principal;b. Where the personclaiming the benefit of
Civil Law Summer Reviewer
Page 173 of 297
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the rule colludes with theagent to defraud theprincipal.
needed to see this picture.
Distinction between Agency & Lease of ServiceAgency Lease of Service
Representation EmploymentAgent exercises
discretionary powers
 Lessor ordinarilyperforms only
 3 persons are involved:principal, agent and the3
person with whom theagent contracts2 persons are involved:lessor and lesseeRelates to
commercialor businesstransactions
 Relates more to thematters of mere
manualor mechanicalexecution
Distinction between Agency & GuardianshipAgency Guardianship
Agent represents a
personA guardian represents an
Agent is
appointed by
the principal
and can be
removed by the latter.Guardian is
by the court
and standsin
loco parentis 
.Agent is subject to thedirections of the principal.Guardian is not subject tothe directions of the wardbut must act for thebenefit of the latterAgent can make theprincipal personallyliable.Guardian has no powerto impose personalliability on the ward.
Distinction between Agency & Lease of PropertyAgency Lease of property
Agent is controlled by theprincipal.Lessee is not controlledby the lessor.
Agency may involvethings other thanproperty.Lease of propertyinvolves property.Agent can bind theprincipal.Lessee cannot bind thelessor.
Distinction between Agency to Sell & SaleAgency to sell Sale
Agent receives the goodsas the principal’s goodsBuyer receives the goodsas ownerAgent delivers theproceeds of the saleBuyer pays the priceAgent can return theobject in case he isunable to sell the sameto a third personBuyer, as a general rule,cannot return the objectsoldAgent in dealing with thething received is boundto act according to theinstructions of hisprincipalBuyer can deal with thething as he pleases,being the owner
Distinction between Agent & ContractorAgent Independent Contractor
Represents his principal Employed by theemployer
Acts under the principal’scontrol and instructionActs according to his ownmethodPrincipal is liable for tortscommitted by the agentwithin the scope of hisauthorityEmployer not liable fortorts committed by theindependent contractor.
Distinction between Agency and PartnershipAgency Partnership
An agent must submit tothe principal’s right tocontrolA co-partner is notsubject to co-partner’sright to control, unlessthere is an agreement tothat effect
The agent assumes nopersonal liability wherehe acts within the scopeof his authorityThe partner binds notonly the firm membersbut himself as wellThe agent takes hisagreed share of profitsnot as owner but as anagreed measure ofcompensation for hisservicesThe profits belong to allthe partners as commonproprietors in agreedproportions
Art. 1869
Agency may be express, or implied 
from the acts of the principal, from his silence or 
lack of action, or his failure to repudiate the 
agency, knowing that another person is acting on 
his behalf without authority.Agency may be oral, unless the law requires a 
specific form. (1710a) 
Classifications of Agency1. As to manner of creationa. Express
– agent has been actuallyauthorized by the principal, eitherorally or in writing
b. Implied
– agency is implied from theacts of the principal, from his silenceor lack of action or his failure torepudiate the agency knowing that
Civil Law Summer Reviewer
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another person is acting on hisbehalf without authority, or from theacts of the agent which carry out theagency, or from his silence orinaction according to thecircumstances
2. As to charactera. Gratuitous
– agent receives nocompensation for his services
b. Onerous
– agent receivescompensation for his services
3. As to extent of business of the principala. General
– agency comprises all thebusiness of the principal
b. Special
– agency comprises one ormore specific transactions
4. As to authority conferreda. Couched in general terms
– agency is created in general termsand is deemed to comprise only actsin the name and representation ofthe principal.
b. Simple or Commission
– agentacts in his own name but for theaccount of the principal.
Forms of Agency:General Rule
: Appointment of an agent may be oralor written; no formal requirements
When the law requires a specificform (
agent’s sale of real property or any interest therein)
Art. 1875
Agency is presumed to be for a compensation, unless there is proof to the 
contrary. (n) 
The agent does not have to prove that theagency is for compensation.
But, the
prima facie 
presumption that theagency is for a compensation may becontradicted by contrary evidence
Negotiate contracts relative to property inbehalf of others and for a compensation/fee
When Broker Entitled to Compensation: 
Whenever he brings to his principal a party whois able and willing to take the property, andenter into a valid contract upon the termsnamed by the principal, although the particularsmay be arranged and the matter negotiated andcompleted between the principal and thepurchaser directly
However, a broker is never entitled tocommission for unsuccessful efforts.
Manotoc Brothers, Inc. v. CA
221 SCRA 224 
[1993] The broker should be paid his commission where he is the 
efficient procuring cause 
in bringing the sale.
Efficient procuring cause:
when there is a closeproximate and causal connection between the effortsand labor of the agent and the principal’s sale ofproperty.
Law on Double Agency: 
Disapproved by law for being against publicpolicy and sound morality
where theagent acted with full knowledge and consent ofthe principals
Right of agent to compensation in case of double agency: 
1. With knowledge of both principals
-recovery can be had from both principals
2. Without the knowledge of both principals
 - the agent can recover from neither
3. With knowledge of one principal
- 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 publicpolicy and good morals
Art. 1870
Acceptance by the agent may also be express, or implied from his acts which carry out 
the agency, or from his silence or inaction according to the circumstances. (n) 
Art. 1871
Between persons who are present, the 
acceptance of the agency may also be implied if 
the principal delivers his power of attorney to the 
agent and the latter receives it without any objection. (n) 
Art. 1872
Between persons who are absent, the 
acceptance of the agency cannot be implied from 
the silence of the agent, except: 
1. When the principal transmits his power of 
attorney to the agent, who receives it without any objection; 2. When the principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is habitually engaged as an agent, and he 

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